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

We invite you to review our newly-posted January 2012 California Employment Law Notes – a comprehensive review of the latest and most significant developments in California employment law. The highlights include:

• Insurance Claims Adjusters May Be Exempt Administrative Employees
• Attorney Was Properly Denied Precertification Discovery To Find A New Class Representative
• Employee-Attorney’s $440,000 Verdict Against LA Housing Authority Is Affirmed
• $160,000 Sexual Harassment Verdict And Attorney’s Fee Award Of $677,000 Affirmed
• Supervisors Cannot Be Held Individually Liable For Military Leave Discrimination/Retaliation
• Teacher With Expired Teaching Certificate Was Not “Qualified” Within The Meaning Of The ADA
• Injunction Against Workplace Violence May Be Supported By Hearsay Evidence
• Claims For Reporting Time Pay And Split Shifts Were Properly Dismissed
• Ministerial Exception Barred School Employee’s Wrongful Termination Claims Against Church
• Nonexclusive Insurance Agent Was An Independent Contractor
• Hirer Of Independent Contractor May Not Be Sued For Injuries Sustained By Worker
• California Overtime Requirements Apply To Work Performed By Non-Resident Employees
   

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Sullivan v. Oracle Corp., 2011 WL 6156942 (9th Cir. 2011)

Three Oracle instructors (all non-residents of California) filed this class action to recover allegedly unpaid overtime under California law for work they performed while in California. Two of the instructors were residents of Colorado and one was a resident of Arizona; all of them worked in their home states and, from time to time, in California. The district court granted Oracle’s motion for summary judgment, but the Ninth Circuit reversed in part, holding that the California overtime requirements (which are stricter than the overtime requirements of Arizona and Colorado) apply to work performed in California by residents of other states. The Court of Appeals affirmed dismissal of the claim made by two of the plaintiffs who asserted a violation of California’s Unfair Competition Law (Bus. & Prof. Code § 17200) for alleged violations of the federal Fair Labor Standards Act outside California on the ground that Section 17200 does not have extraterritorial application. (The Ninth Circuit cited and adopted the California Supreme Court’s determination of these legal issues in Sullivan v. Oracle Corp., 51 Cal. 4th 1191 (2011).)
 

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Gravelin v. Satterfield, 200 Cal. App. 4th 1209 (2011)

Gary Gravelin was injured while installing a satellite dish on the roof of a residence. Although Gravelin received workers’ compensation benefits from his employer, he sued the homeowners. The trial court granted summary judgment to the homeowners on the ground that in the absence of an exception to the doctrine enunciated in Privette v. Superior Court, 5 Cal. 4th 689 (1993), Gravelin was limited to the remedy provided by workers’ compensation. Gravelin argued that the “preexisting hazardous condition” exception applied, but the trial court disagreed. The Court of Appeal affirmed dismissal on summary judgment. Cf. Castillo v. Toll Bros., Inc., 197 Cal. App. 4th 1172 (2011) (minimum wage – not the prevailing wage – is the standard for determining whether hirer of independent contractor is liable for violating Labor Code § 2810).
 

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Arnold v. Mutual of Omaha Ins. Co., 2011 WL 6849652 (Cal. Ct. App. 2011)

Kimbly Arnold filed a complaint against Mutual of Omaha on her behalf and on behalf of a putative class of similarly situated “licensed agents” and “sales representatives” of the company, alleging violations of the California Labor Code, including provisions governing expense reimbursement of employees and timely payment of final wages to employees who have quit their employment. Mutual argued that Arnold was an independent contractor under the common law test, and the trial court agreed, granting Mutual’s summary judgment motion. The Court of Appeal affirmed, holding that the common law test (not the test found in Labor Code § 2750) is to be used to determine if a worker is an independent contractor or an employee. The Court further held that the trial court properly applied the common law test in determining that Arnold was an independent contractor (e.g., Arnold used her own judgment in determining whom to solicit as well as the time, place and manner of the solicitation; her appointment was nonexclusive, and she in fact solicited for other insurance companies during her appointment with Mutual; her Mutual manager did not evaluate her performance or monitor or supervise her work; training was voluntary except as required by law; and agents who used Mutual’s office were required to pay a fee for the workspace and telephone service).
 

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Henry v. Red Hill Evangelical Lutheran Church, 201 Cal. App. 4th 1041 (2011)

Sara Henry taught preschool children at the Red Hill Evangelical Church of Tustin; she was also the director of the preschool. Henry, who is Catholic, was not required to be Lutheran (only a practicing Christian) and was aware of the “Christian-based, Bible-based values of the school.” Henry was married when she was hired but later divorced and gave birth to a child fathered by her boyfriend. The church terminated Henry’s employment because her “living arrangements were contrary to the religious beliefs of the church and school.” Henry sued the church for marital status discrimination under the Fair Employment and Housing Act and for violation of the public policy embodied in that statute, Title VII and the state constitution. The trial court bifurcated the trial and, after hearing the church’s defenses first, entered judgment in favor of the church because Henry was terminated for violating a church precept. The Court of Appeal affirmed, holding that the church is exempt from the FEHA and that the termination did not violate any public policy rooted in Title VII. The Court also held the ministerial exception doctrine barred Henry’s claims.
 

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Aleman v. AirTouch Cellular, 2011 WL 6383963 (Cal. Ct. App. 2011)

Daniel Krofta and Mary Katz filed this putative class action against their employer, alleging reporting time pay violations and seeking additional compensation for working split shifts. Krofta sought reporting time pay for days he attended meetings at work even though he was furnished work (and was paid) for at least half of the scheduled work time. (All of the meetings in question were listed on Krofta’s schedule, had certain start times, expected topics and durations and lasted at least half of the expected duration.) The trial court granted summary judgment to AirTouch because “when an employee is scheduled to work, the minimum two-hour pay requirement applies only if the employee is furnished work for less than half of the scheduled time.” The trial court also dismissed Krofta’s claim for split-shift compensation because every time Krofta worked a split shift (a work schedule interrupted by “non-paid, nonworking periods”), he was paid a total amount greater than the minimum wage for all hours worked plus one additional hour. The Court of Appeal affirmed summary judgment of Krofta’s claims (on the grounds relied upon by the trial court) and of Katz’s claims on the ground that she had entered into an enforceable settlement agreement and release. The appellate court reversed the award of $286,000 in attorney’s fees to AirTouch because plaintiffs’ claims were subject to Labor Code § 1194 (not section 218.5) and thus only a prevailing plaintiff could recover his or her fees.
 

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Kaiser Found. Hospitals v. Wilson, 201 Cal. App. 4th 550 (2011)

The trial court considered hearsay evidence in issuing injunctions under Cal. Code Civ. Proc. § 527.8, prohibiting Jeff Wilson (the husband of a terminated Kaiser employee) from committing acts of violence or making threats of violence against two Kaiser employees. The trial court considered hearsay evidence that Wilson had threatened to “put [the Kaiser employees] down” and that he had threatened to shoot one of them. The Court of Appeal affirmed, holding that it was not error for the trial court to consider hearsay in determining whether to issue an injunction under this statute.
 

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Johnson v. Board of Trustees, 2011 WL 6091313 (9th Cir. 2011)

Patricia Johnson, who had a history of depression and bipolar disorder, taught special education for a school district in Idaho for a decade. Before her teaching certificate expired in 2007, Johnson failed to take sufficient college courses to obtain a renewal of the certificate because she experienced a “major depressive episode.” As a result, the school district terminated Johnson’s employment. Johnson sued for discrimination under the Americans with Disabilities Act, claiming that her disability led to her inability to timely obtain the appropriate certification. The Ninth Circuit held that because Johnson was not a “qualified individual with a disability” under the ADA (because of her failure to obtain the certificate), the school district had no obligation to reasonably accommodate her alleged disability.
 

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Haligowski v. Superior Court, 200 Cal. App. 4th 983 (2011)

While employed by Safway Services, Inc., Lieutenant Mario Pantuso was called to active duty with the United States Navy. When Pantuso returned from his six-month deployment in Iraq and asked for his job back, his immediate supervisor and the regional manager informed him that he was terminated from employment. Pantuso sued Safway and the two managers for discrimination and retaliation in violation of Cal. Military & Veterans Code § 394. The two managers demurred to the complaint on the ground that only an employer could be held liable under the statute. The trial court overruled their demurrers, but the Court of Appeal granted the managers’ petition for writ of mandate, ordering the trial court to enter a new order sustaining the demurrers without leave to amend based on a similar interpretation of the California Fair Employment and Housing Act exempting supervisors from liability for discrimination and retaliation.
 

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Fuentes v. AutoZone, Inc., 200 Cal. App. 4th 1221 (2011)

Marcela Fuentes worked as a part-time customer service representative (cashier) for AutoZone. Fuentes alleged that two managers (Melvin Garcia and Gonzalo Carrillo) had spread rumors that Fuentes had sexually transmitted herpes; that she and a coworker were engaged in a sexual relationship; and that she could make more money working as a stripper. On one occasion, Garcia physically moved Fuentes to turn her around and display her buttocks to customers, while laughing and clapping and commenting that Garcia and Fuentes would be rich if they owned the store because all that Fuentes had to do was “just turn around and show them her butt.” Fuentes asked for and received a transfer to another store before quitting two years later for unrelated reasons. Garcia and Carrillo were terminated. At trial, the jury awarded Fuentes $160,000, and the trial court awarded her $677,000 in attorney’s fees. The Court of Appeal affirmed the judgment, finding substantial evidence to support the jury’s verdict in favor of Fuentes.
 

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Cordero-Sacks v. Housing Authority of Los Angeles, 200 Cal. App. 4th 1267 (2011)

Ada Cordero-Sacks was terminated from her position as an attorney in the Los Angeles Housing Authority’s Office of Internal Control following her investigation of alleged internal misconduct and fraud within the Authority. Cordero-Sacks’s claim for retaliatory discharge under the California False Claims Act (the “FCA”) was tried to a jury, which resulted in a verdict in her favor in the amount of $440,000. The Court of Appeal affirmed the judgment on the grounds that Cordero-Sacks was a proper plaintiff under the FCA even though she was not pursuing a qui tam action when she was subjected to retaliation. The Court further held that Cordero-Sacks had not wrongfully disclosed confidential attorney-client information in prosecuting this case or that there was insufficient evidence in the absence of such privileged information. The Court further held that the Authority was properly barred from offering evidence of Cordero-Sacks’s alleged poor performance because the Authority had refused to produce such information during discovery based upon the attorney-client privilege. The Court also held that Cordero-Sacks’s self-employment was a reasonable, good faith exercise of diligence in attempting to mitigate her damages. Finally, the Court affirmed the trial court’s award of $415,000 in attorney’s fees to Cordero-Sacks.
 

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Pirjada v. Superior Court, 201 Cal. App. 4th 1074 (2011)

Putative class representative Obaidul H. Pirjada filed a complaint on behalf of himself and a putative class of all security guards who had been employed in California by Pacific National Security, Inc. during the preceding four years. The complaint alleged a failure to provide meal-and-rest periods and various other wage-and-hour violations as well as a claim under the Unfair Competition Law. After Pirjada settled his individual claims through direct negotiations with Pacific National’s CEO, Pirjada’s counsel was granted leave to amend the complaint to name a new class representative but his motion to compel precertification discovery in order to identify a suitable class representative was denied. The Court of Appeal denied Pirjada’s counsel’s petition for a writ of mandate challenging the discovery order and vacated the previously ordered stay of the order to show cause regarding dismissal. In so ruling, the Court held that the trial court did not abuse its discretion to deny precertification discovery to Pirjada’s counsel in light of the trial court’s granting leave for counsel to use “informal means to identify potential replacement class representatives.”
 

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Harris v. Superior Court, 2011 WL 6823963 (Cal. S. Ct. 2011)

Plaintiffs in this case are claims adjusters employed by two insurance companies. They filed four putative class actions, claiming they had been erroneously classified as exempt administrative employees and seeking damages based upon unpaid overtime. The court of appeal held as a matter of law that plaintiffs were non-exempt employees who were entitled to overtime pay. In this opinion, the California Supreme Court reversed the court of appeal and remanded the action with directions that the appellate court apply the appropriate legal standard. The Supreme Court stated that “[t]he precise question here is whether plaintiffs’ work as claims adjusters is encompassed by the expanded language of the statute, wage orders, and federal regulations that delineate what work qualifies as administrative.” The Court further held that while the “administrative/production worker dichotomy” (cited by the lower court) may be used as an “analytical tool,” it was improperly applied in this case as a “dispositive test.” Finally, the Supreme Court noted that it was “express[ing] no opinion on the strength of the parties’ relative positions.”
 

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Comite de Jornaleros de Redondo Beach v. City of Redondo Beach, 657 F.3d 936 (9th Cir. 2011) (en banc)

In May 1987, the City of Redondo Beach adopted an ordinance that prohibits any person to "stand on a street or highway and solicit…employment, business, or contributions from an occupant of any motor vehicle." In 2004, the city initiated the "Day Labor Enforcement Project" in which undercover officers, posing as potential employers, arrested 35 day laborers "for soliciting from stopped vehicles." In response to the arrests, the Comite de Jornaleros and the National Day Laborer Organizing Network filed suit, alleging that the ordinance is a facially unconstitutional restriction on day laborers' and others' first amendment rights. The Ninth Circuit affirmed the district court's judgment (over a "deep dissent" from Chief Judge Kozinski and Judge Bea), holding the ordinance to be facially unconstitutional because it was not narrowly tailored to achieve the city's goals.

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In re Roman Catholic Archbishop of Portland, 2011 WL 5304130 (9th Cir. 2011)

Documents that were produced in discovery and filed in the bankruptcy court contained allegations that Fathers "M" and "D" (two priests who were not parties to the Portland Archdiocese's bankruptcy case) had sexually abused children. The bankruptcy court held that the discovery documents could be disclosed to the public because the public's interest in disclosure outweighed the priests' privacy interests and that the documents filed in court could be disclosed to the public because they did not contain "scandalous" allegations for purposes of 11 U.S.C. § 107(b). The district court affirmed, but the Ninth Circuit reversed in part, holding that the bankruptcy court should have redacted the name of one of the two priests (who is 88 years old and has been retired since 1989). However, the Court upheld disclosure of the information relating to the other priest, who is not retired and who continues to work as a priest in his community, where his clerical duties may bring him into contact with children.

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Solis v. State of Washington, 656 F.3d 1079 (9th Cir. 2011)

The U.S. Secretary of Labor filed a complaint against the State of Washington's Department of Social and Health Services ("DSHS"), alleging a violation of the Fair Labor Standards Act of 1938 ("FLSA") based upon the DSHS's classification of its social workers as "learned professionals" exempt from the FLSA's overtime pay requirements. The district court granted DSHS's motion for summary judgment, but the Ninth Circuit reversed. In order to satisfy the "learned professional" exemption, an employer must show that a position requires advanced knowledge customarily acquired by a prolonged course of specialized intellectual instruction. The Ninth Circuit held that because the social worker positions at issue in this case require only a degree in one of several diverse academic disciplines or sufficient coursework in any of those disciplines, DSHS had failed to meet its burden of showing the social work positions "plainly and unmistakably" met the regulatory requirement. See also Kairy v. SuperShuttle Int'l, 2011 WL 5222891 (9th Cir. 2011) (federal district court has subject matter jurisdiction to determine whether passenger stage corporation drivers are employees or independent contractors under California law).

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Nicholas Labs., LLC v. Chen, 2011 WL 4823329 (Cal. Ct. App. 2011)

Nicholas Labs sued its former employee, Christopher Chen, for breach of contract, conversion, negligence, money had and received, unjust enrichment, etc., after discovering that, while employed by Nicholas Labs, Chen had engaged in a business that made him a competitor of Nicholas Labs and that Chen had diverted business opportunities away from Nicholas Labs, stolen personal property of the company and misused company credit cards. Chen responded with a cross-complaint in which he claimed he had incurred and would continue to incur damages, including attorney's fees and costs, in defending himself against Nicholas Labs' claims. Chen invoked the indemnity provisions of Cal. Labor Code § 2802 and Cal. Corp. Code § 317 as the basis for his cross-complaint. On the eve of trial, the parties filed a stipulation in which Nicholas Labs dismissed its complaint without prejudice and Chen submitted his cross-complaint (in which he sought $90,000 in attorney's fees) to be determined by the trial court exclusive of a jury and without the presentation of live testimony. The trial court rejected Chen's claim for indemnity, holding that Section 2802 is applicable to third-party claims against an employee and not claims by an employer against its own employee. The Court of Appeal affirmed and further held that Chen was not entitled to indemnity under the Corporations Code because Nicholas Labs is an LLC and not a corporation. See also CDF Firefighters v. Maldonado, 2011 WL 5079589 (Cal. Ct. App. 2011) (union member was entitled to recover his attorney's fees as prevailing party in breach of contract action prosecuted against him by union).

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Brennan v. Townsend & O'Leary Enter., Inc., 199 Cal. App. 4th 1336 (2011)

Stephanie Crowley Brennan sued her former employer and a manager who was not her supervisor (Scott Montgomery) for sexual harassment. A jury awarded Brennan $200,000 against the agency and $50,000 against Montgomery, but the trial court granted defendants' motion for judgment notwithstanding the verdict and entered a judgment in their favor. The Court of Appeal affirmed, holding that insufficient evidence supported the jury's finding that Brennan had been subjected to severe or pervasive sexual harassment in the workplace. Specifically, the Court held that an email that Montgomery sent but did not direct to Brennan (referring to her as "big-titted" and "mindless") did not constitute "severe" sexual harassment. The Court also reviewed the trial evidence as to the nature, timing, frequency and context of each of the incidents Brennan claimed supported a finding of "pervasive" sexual harassment and found there to be a lack of substantial evidence to support the jury's verdict. Specifically, the Court noted that Brennan saw the email only after Montgomery inadvertently sent it to another employee who was leaving the agency and that employee in turn forwarded it to Brennan. The Court also found insufficient to prove pervasiveness, evidence of several sex-based comments and activities over the course of a number of years, as well as evidence of alleged retaliation following Brennan's complaint about the email.

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Ellis v. Costco Wholesale Corp., 657 F.3d 970 (9th Cir. 2011)

In this appeal, Costco challenged the district court's order granting class certification in an action in which Costco's promotional practices were alleged to have discriminated against female employees. The district court's order granting class certification preceded the United States Supreme Court's opinion in Wal-Mart Stores v. Dukes, 131 S. Ct. 2541 (2011). In this opinion, the Ninth Circuit recognized that the Wal-Mart opinion "altered existing law" and, accordingly, vacated the lower court's order granting class certification. Specifically, the Court: (i) vacated and remanded the district court's ruling as to commonality under Fed. R. Civ. P. 23(a) because the lower court had failed to conduct the required "rigorous analysis" to determine whether there were common questions of law or fact among the class members' claims; (ii) vacated and remanded the district court's ruling as to "typicality" under Fed. R. Civ. P. 23(a) because the district court failed to consider the effect that defenses unique to the named plaintiffs' claims might have on that question; (iii) affirmed the district court's ruling as to the adequacy of the one class representative who was a current employee allegedly being denied promotion; and (iv) vacated and remanded the district court's certification of the class pursuant to Rule 23(b)(2) based upon the Supreme Court's unanimous rejection of the predominance test for determining whether monetary damages may be included in a 23(b)(2) class certification.

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We invite you to review our newly posted September 2011 California Employment Law Notes -- a comprehensive review of the latest and most significant developments in California employment law.  The highlights include: 

• Employee Who Provided False SSN and Other Information Was Barred from Suing for Disability Discrimination
• Employer Did Not Violate CFRA by Transferring Employee upon Her Return from 19-Week Stress Leave
• Employer's Anti-SLAPP Motion Was Properly Denied
• "Me Too" Evidence Was Relevant to and Admissible in Discrimination Lawsuit
• Unlicensed Law Clerk Was Properly Classified as Exempt Professional
• Prevailing Employer Should Have Been Permitted To Recover Its Costs from Employee
• Offer of Judgment for Full Amount of Class Rep's Claim Did Not Moot Class Action
• Section 1981 Claim Is Subject to Four-Year Statute of Limitations
• Injunction Upheld Prohibiting Former Employee from Competing
• Employee of Independent Contractor Cannot Sue Company That Hired Contractor for Negligence

 

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SeaBright Ins. Co. v. US Airways, Inc., 2011 WL 3655109 (Cal. S. Ct. 2011)

US Airways uses a conveyor to move luggage at San Francisco International Airport. US Airways hired independent contractor Lloyd W. Aubry Co. to maintain and repair the conveyor and did not direct Aubry's employees in their work. The conveyor lacked certain safety guards in violation of various Cal-OSHA regulations. After one of Aubry's employees, Anthony Verdon Lujan, was injured while inspecting the conveyor, the employee and Aubry's workers' compensation carrier (SeaBright) sued US Airways. US Airways filed a summary judgment motion based on Privette v. Superior Court, 5 Cal. 4th 689 (1993), in which the California Supreme Court held that an employee of an independent contractor is generally precluded from suing the party that hired the contractor. The question in this case was whether the Privette rule applies when the party that hired the contractor failed to comply with workplace safety requirements. The Supreme Court held the Privette rule does apply in such circumstances and ordered that summary judgment be granted in favor of US Airways.

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NewLife Sciences, Inc. v. Weinstock, 197 Cal. App. 4th 676 (2011)

NewLife terminated the employment of Ronald Weinstock, the purported inventor of a Therapeutic Magnetic Resonance Device ("TMRD"), which NewLife had purchased approximately one year before the termination. In connection with its purchase of the TMRD, NewLife had obtained a non-compete covenant, which prohibited Weinstock from competing for five years after the termination of his employment. NewLife subsequently filed a complaint against Weinstock in which it alleged breach of contract, conversion, fraud, and misappropriation of trade secrets, and sought injunctive relief, among other things. During the course of the litigation, discovery disputes arose, and the trial court ordered Weinstock to comply with several discovery orders. After Weinstock failed to comply with the trial court's discovery orders, the court entered an order awarding issues sanctions, which included a determination that the non-compete was enforceable. The court later entered a preliminary injunction prohibiting Weinstock from competing with NewLife. The Court of Appeal in this opinion affirmed the trial court's order granting the preliminary injunction.

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Johnson v. Lucent Techs. Inc., 2011 WL 3332368 (9th Cir. 2011)

In 2008, Russell H. Johnson, III, an African-American, sued Lucent and the administrator of his disability insurance benefits for retaliation in violation of Title VII, violation of 42 U.S.C. § 1981 and intentional infliction of emotional distress in retaliation for his filing suit against Lucent in 2005 for stopping payment of his disability benefits. In an amended pleading, Johnson added the LAPD as a defendant and added claims for medical benefits malpractice, violation of RICO, extortion, psychiatric coercion, etc. The district court dismissed Johnson's claims, but the Ninth Circuit reversed in part, holding that Johnson's Section 1981 claim (guaranteeing all persons the same right to make and enforce contracts as is enjoyed by white citizens) was subject to a four-year (not a two-year) statute of limitations. The court further held that although Johnson's claim for intentional infliction of emotional distress was subject to a two-year statute of limitations, it was possible that he "experienced severe harm when Lucent filed its petition to terminate benefits, when [another court in which Johnson was litigating against Lucent] granted the petition, or when Lucent actually stopped payment" – all of which occurred fewer than two years before Johnson filed his latest lawsuit. The Ninth Circuit affirmed dismissal of Johnson's Title VII claim (no equitable tolling was applicable) and his fraudulent concealment and abuse of process claims. See also Withrow v. Bache Halsey Stuart Shield, Inc., 2011 WL 3672778 (9th Cir. 2011) (claim for unpaid ERISA benefits was not barred by statute of limitations).

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Pitts v. Terrible Herbst, Inc., 2011 WL 3449473 (9th Cir. 2011)

Gareth Pitts filed a class action against his employer, Terrible Herbst, Inc., alleging a collective action under the Fair Labor Standards Act for failure to pay overtime and minimum wages, a class action for violations of Nevada labor laws and a class action for breach of contract. Although Pitts claimed only $88 in damages for himself, the employer made an offer of judgment to him pursuant to FRCP 68, offering to allow judgment to be taken against it in the total amount of $900, plus costs and reasonable attorney's fees. After Pitts refused the offer of judgment, Terrible filed a motion to dismiss for lack of subject matter jurisdiction on the ground that the offer of judgment rendered the entire case moot. The district court granted the motion on the ground that the offer mooted the action because Pitts had failed to timely seek class certification. The Ninth Circuit reversed, holding that the district court abused its discretion in finding that Pitts could no longer file a timely motion for class certification. The court further held that the district court should have permitted Pitts to abandon his federal claims so that there would be no incompatibility between his FRCP 23 class action and an FLSA collective action.

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Plancich v. UPS, Inc., 2011 WL 3506066 (Cal. Ct. App. 2011)

Larry Plancich sued UPS for failure to pay overtime, meal and rest breaks; failure to keep, maintain and furnish accurate wage statements, and unfair competition, among other claims. The trial court ruled in favor of UPS on the unfair competition claim and a jury found in favor of UPS on the remaining claims. The trial court awarded costs to UPS but then granted Plancich's motion to strike costs. On appeal, the Court of Appeal reversed the judgment, holding that Code of Civil Procedure § 1032(b) permits a prevailing employer to recover its costs, notwithstanding the one-way fee-shifting provision of Labor Code § 1194, which permits a prevailing employee to recover his or her fees. See also Securitas Sec. Servs. USA, Inc., 197 Cal. App. 4th 115 (2011) (employees who work consecutive overnight shifts do not work a "split shift"); Paton v. Advanced Micro Devices, Inc., 197 Cal. App. 4th 1505 (2011) (genuine issue of material fact existed as to whether a paid eight-week sabbatical was subject to vacation-pay anti-forfeiture rules); Foust v. San Jose Constr. Co., 198 Cal. App. 4th 181 (2011) (employee's appeal from adverse judgment in breach of contract case was frivolous and warranted entry of sanctions in employer's favor).

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Zelasko-Barrett v. Brayton-Purcell, LLP, 2011 WL 3594015 (Cal. Ct. App. 2011)

Following his graduation from law school but before he had passed the California bar examination, Matthew Zelasko-Barrett worked for the law firm of Brayton-Purcell, LLP as a Law Clerk II. After his voluntary departure from the firm, Zelasko-Barrett filed this lawsuit claiming he was misclassified as an exempt employee while he worked for the firm as a Law Clerk II because he was not at that time "licensed or certified" to practice law by the State of California. The trial court granted the firm's summary judgment motion, and the Court of Appeal affirmed, holding that although the employee was not yet licensed to practice law, he was nonetheless a law school graduate and performed duties that brought him within an exemption for those engaged in a learned profession. See also Soderstedt v. CBIZ S. Cal., LLC, 197 Cal. App. 4th 133 (2011) (trial court properly denied class certification to former accountants where common questions did not predominate and they could not satisfy numerosity requirement or establish they were adequate class representatives).

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Pantoja v. Anton, 198 Cal. App. 4th 87 (2011)

Lorraine Pantoja sued attorney Thomas J. Anton and his firm for wrongful termination, violation of the Fair Employment and Housing Act ("FEHA"), battery, sexual battery and intentional infliction of emotional distress. By the time of the trial, only the FEHA claims remained. In their motions in limine, defendants sought to exclude any reference to the term "Mexicans" because Pantoja had only heard Anton use that word one time. Defendants also sought to exclude all evidence of acts of discrimination or harassment unless Pantoja had "personally witnessed such acts" and the acts "adversely affected her working environment." The trial court granted both motions. The jury found for the defense. The Court of Appeal reversed the judgment, holding that the trial court erred by excluding so called "me-too" evidence of sexual harassment by Anton of other employees that occurred outside Pantoja's presence or that did not affect her working environment. The court also concluded the trial court erred by excluding evidence of Anton's references to "Mexicans" and other evidence of Anton's alleged racial discrimination. Finally, the court found error in the trial court's jury instruction concerning a hostile work environment because it was not accompanied by additional special instructions. See also Life Techs. Corp. v. Superior Court, 197 Cal. App. 4th 640 (2011) (employer should not have been ordered to provide further answers to plaintiff's special interrogatories seeking identities and circumstances regarding termination of third parties in the absence of procedural and substantive safeguards designed to protect third parties' privacy interests).

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Martin v. Inland Empire Utilities Agency, 2011 WL 3621599 (Cal. Ct. App. 2011)

Dean Martin, who worked as the executive manager of finance and administration of the municipal water district for the City of Chino, alleged retaliation, racial and age discrimination and harassment, defamation and constructive wrongful termination. In response, defendants filed a demurrer and an anti-SLAPP ("strategic lawsuit against public participation") motion. The trial court granted the anti-SLAPP motion with leave to amend but only as to the defamation claim. On appeal, defendants challenged the denial of the motion with respect to the other claims in the lawsuit and also challenged the grant of leave to amend the complaint. The Court of Appeal affirmed, holding that defendants had failed to make a prima facie showing that Martin's causes of action were based on an act in furtherance of defendants' right of petition and free speech. The court further held that the granting of the motion with leave to amend was the "functional equivalent" of an order denying the motion. See also Fremont Reorganizing Corp. v. Faigin, 2011 WL 3806350 (Cal. Ct. App. 2011) (former in-house counsel's anti-SLAPP motion filed in response to cross-complaint against him was properly granted in part); Bailey v. Brewer, 197 Cal. App. 4th 781 (2011) (statements made threatening litigation were not contemplated in good faith and thus were not protected under the anti-SLAPP statute); U.S. ex rel. Lee v. Corinthian Colleges, 2011 WL 3524208 (9th Cir. 2011) (former employee and independent contractor should have been permitted to amend their False Claims Act claims).

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Rogers v. County of Los Angeles, 2011 WL 3570494 (Cal. Ct. App. 2011)

After 19 weeks of medical leave, Katrina L. Rogers returned to her job as the personnel officer in the executive office responsible for rendering administrative and other support services to the Los Angeles County Board of Supervisors. During her LOA, Rogers' doctor told her that she could not perform her duties because "she could not think clearly and had headaches." Rogers' stress allegedly resulted from "an attack on [her] integrity." When Rogers returned to work, she learned that she had been transferred to the Internal Services Department, which Rogers considered to be a "demotion" and a "slap in the face." That same day, Rogers left the office early, called in sick for the rest of the week and then submitted notice of her retirement. Rogers then filed a lawsuit for violation of her rights under the California Family Rights Act ("CFRA"), which went to trial. The jury awarded Rogers $356,000 in damages for lost earnings and emotional distress. The Court of Appeal reversed the judgment, holding that Rogers was not entitled to reinstatement because she had failed to return to work at the end of the 12-week CFRA-protected leave period. The court further held there was insufficient evidence of retaliation against Rogers for having exercised her rights under CFRA because Rogers failed to establish the requisite causal connection between her protected actions in taking CFRA medical leave and the decision to transfer her to another position. See also Walls v. Central Contra Costa Transit Authority, 2011 WL 3319442 (9th Cir. 2011) (discharged employee could not assert FMLA claim because he had not yet been reinstated as of the time he requested the leave).

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Salas v. Sierra Chem. Co., 198 Cal. App. 4th 29 (2011)

Vicente Salas worked on Sierra Chemical's production line, filling containers with various chemicals. At the time of his hire, Salas provided Sierra with a resident alien card and a Social Security card and signed an Employment Eligibility Verification Form (I-9 Form). After allegedly injuring his back several times and presenting doctors' notes restricting his ability to lift, stoop and bend, Salas was laid off in December 2006 as part of Sierra's annual reduction in its production line staff. Salas received a recall-to-work letter in May 2007, but Sierra did not permit him to return to work after he told the company he was "not completely healed." Salas subsequently filed a lawsuit against Sierra, alleging disability discrimination and denial of employment in violation of public policy. After filing an in limine motion stating that he would assert his Fifth Amendment right against self-incrimination to any questions concerning his immigration status, Sierra discovered that the Social Security number ("SSN") used by Salas to secure employment belonged to a man in North Carolina named Kelley R. Tenney. Sierra then moved for summary judgment on the ground that it never would have hired or recalled Salas if it had known he was using a counterfeit SSN. After its motion was initially denied, Sierra filed a petition for writ of mandate with the Court of Appeal, which directed the trial court to grant the motion or show cause why the motion should not be granted. The trial court subsequently granted the motion, and the Court of Appeal affirmed summary judgment in this opinion based upon the after-acquired evidence and unclean hands doctrines.

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We invite you to review our newly posted July 2011 California Employment Law Notes -- a comprehensive review of the latest and most significant developments in California employment law.  The highlights include: 

• Class Of 1.5 Million Female Wal-Mart Employees Was Improperly Certified
• Arizona Law Requiring Use Of E-Verify Is Upheld
• U.S. Court Has Jurisdiction Over Argentinean Employees' Claims Against Mercedes-Benz Argentina
• Employee Was Not Sexually Harassed By His Male Supervisor, But Could Proceed With Retaliation Claim
• ADA "Impliedly Amended" The National Bank Act's Termination-at-Pleasure Clause
• Auto Sales Consultants' Class Action Was Properly Dismissed
• California Overtime Rules Apply To Out-of-State Residents Who Work In The State
• Unlicensed Junior Accountants May Be Exempt From Overtime
• Attorney Who "Excessively Reviewed" Privileged Documents Misappropriated By His Client Was Properly Disqualified
• $22.5 Million Verdict Reversed Where Employer Admitted Its Vicarious Liability For Employee's Negligence
• Manager's Defamation Action Against Striking Union Could Proceed
• Termination Of Employee On FMLA Leave Who Submitted Inadequate Medical Information Did Not Violate Federal Law
• False Claims Act Lawsuit Was Barred By Public Disclosure Of Records

 

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Schindler Elevator Corp. v. United States ex rel. Kirk, 563 U.S. ___, 131 S. Ct. 1885 (2011)

Daniel Kirk, a former employee of Schindler Elevator Corporation, filed this lawsuit under the False Claims Act (“FCA”), alleging Schindler had submitted false or fraudulent claims for payment to the United States. Kirk alleged the company had falsely certified its compliance with the Vietnam Era Veterans’ Readjustment Assistance Act of 1972. To support his allegations, Kirk relied upon information that his wife had received from the Department of Labor (“DOL”) in response to three Freedom of Information Act (“FOIA”) requests she had made. Schindler moved to dismiss Kirk’s lawsuit on a number of grounds, including that the FCA’s public disclosure bar deprived the district court of jurisdiction. The Supreme Court resolved a conflict among the circuit courts of appeals and held that a “report” as used in the FCA’s public disclosure bar carries its ordinary meaning and that the DOL’s written responses to Mrs. Kirk’s FOIA requests were therefore “reports.” See also County of Kern v. Jadwin, 2011 WL 2611819 (Cal. Ct. App. 2011) (employer’s state law FCA claim that was filed against former employee who had successfully sued for violation of his employment rights was frivolous and brought to harass employee).

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Lewis v. United States, 641 F.3d 1174 (9th Cir. 2011)

Janet Lewis worked for the United States Air Force as the director of a child development center on the Elmendorf Air Force Base. In 2006, Lewis requested 120 days of leave without pay pursuant to the Family Medical Leave Act (“FMLA”). The employer requested a medical certification to support Lewis’s request for FMLA leave. In response, Lewis submitted three documents: (1) a prescription from her psychiatrist; (2) a letter from her psychiatrist; and (3) a WH-380 (medical leave form). Although Lewis’s supervisor told her the documents she had submitted were insufficient to support her request for FMLA leave, Lewis refused to submit more information. The employer converted Lewis’s status to absent without leave (“AWOL”) and subsequently terminated her employment. Lewis sued for unlawful removal from employment pursuant to 5 U.S.C. § 7702. The district court granted summary judgment to the employer, and the Ninth Circuit affirmed, holding that because Lewis’s WH-380 form stated only that she was diagnosed with “Post-Traumatic Stress Disorder and needed therapy, medical treatment, bed rest, two prescription medications, and 120 days off work,” she had failed to provide a “summary of the medical facts that support the diagnosis.” The Court noted that “the form contains no explanation as to why Lewis was unable to perform her work duties and no discussion about whether additional treatments would be required for her condition. When Lewis refused to submit any further documentation, her medical certification remained deficient.” See also Davis v. Superior Court, 196 Cal. App. 4th 669 (2011) (granting petition for writ of mandate directing trial court to enter its final judgment so that employee could file a notice of appeal).

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Price v. Operating Eng’rs Local Union No. 3, 195 Cal. App. 4th 962 (2011)

During the course of a strike, members of the union placed copies of a flyer on the doors and cars of the neighbors of the employer’s vice president and general manager Jim Price that said: “Neighbors, beware of this man: Jim Price”; “protect your family, safeguard your property”; and “complain to [his apartment complex] about the sort of person they’ve let in your community.” The flyer listed Price’s business cell phone number and his apartment number and encouraged Price’s neighbors to complain to him directly. Another flyer stated: “Resident Jim Price tried to take away workers’ pension benefits”; “threatened workers with arrest for publicizing their fight for workplace justice”; and “threatened to use armed guards against the workers to shut down their strike.” In response to Price’s lawsuit against the union for defamation and violation of Civil Code §§ 51.7 and 52.1, the union moved to strike the complaint under the anti-SLAPP statute (Cal. Code Civ. Proc. § 425.16). The trial court denied the motion on the ground that the union’s disparaging statements about Price involved an issue of private as opposed to public interest. The Court of Appeal affirmed the judgment. See also Fox v. Vice, 563 U.S. ___, 131 S. Ct. 2205 (2011) (when a lawsuit involves both frivolous and non-frivolous claims, a court may grant reasonable fees to the defendant, but only for fees the defendant incurred as a result of the frivolous claims).

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Diaz v. Carcamo, 2011 WL 2473597 (Cal. S. Ct. 2011)

Jose Carcamo, a truck driver for defendant Sugar Transport, caused Dawn Renae Diaz to suffer severe permanent injuries as a result of a traffic accident on Highway 101. Diaz sued Carcamo and Sugar Transport, alleging that Sugar Transport was both vicariously liable for Carcamo’s negligent driving and directly liable for its own negligence in hiring and retaining Carcamo. At trial, Sugar Transport offered to admit vicarious liability if Carcamo were found negligent. Sugar Transport contended that such an admission should bar Diaz from further pursuing her claims for negligent entrustment, hiring and retention of Carcamo. Over Sugar Transport’s objection, the trial court admitted evidence of Carcamo’s two prior accidents; that he was in the U.S. illegally; that he had used a phony Social Security number to obtain employment; that he had been fired from or quit without good reason three of his last four driving jobs; that he had lied on his application; and that the only reference from his prior employers consisted of a “very negative evaluation.” The California Supreme Court reversed the judgment (over $22.5 million in damages) after concluding Sugar Transport was prejudiced by admission of evidence concerning Carcamo after it admitted to vicarious liability for his actions.

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Clark v. Superior Court, 196 Cal. App. 4th 37 (2011)

While he worked as VeriSign’s chief administrative officer, Grant Clark signed VeriSign’s nondisclosure agreement, which included a provision that he would not remove VeriSign’s confidential or privileged information and that he would return any such documents in his possession upon termination of his employment. Clark was terminated effective December 31, 2008, and in January 2009 he filed a lawsuit against VeriSign through his attorneys, Higgs, Fletcher & Mack LLP. The trial court disqualified the Higgs firm from continuing to represent Clark after Clark conceded in his deposition that he used privileged VeriSign documents as the basis for his securities fraud and breach of contract claims. The Court of Appeal denied Clark’s petition for a writ of mandate after determining that Higgs received and “excessively reviewed” privileged documents from Clark. See also Moody v. Staar Surgical Co., 195 Cal. App. 4th 1043 (2011) (employer’s attorney was properly sanctioned $1,500 for asking a question of a witness at trial after being instructed by the judge not to inquire into a particular area).

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Campbell v. PricewaterhouseCoopers, 2011 WL 2342740 (9th Cir. 2011)

Two thousand unlicensed junior accountants brought this wage-and-hour class action against PwC, alleging they were improperly classified as exempt from overtime. The parties filed cross-motions for partial summary judgment, and the district court granted the employees’ motion, holding as a matter of law that they were not exempt under the professional or administrative exemptions. The Ninth Circuit reversed on the ground that a material question of fact existed as to whether the employees’ duties met the requirement of a “learned” or “artistic” profession (and are therefore exempt) even though they are not licensed. The Court also held there were “numerous factual disputes in the record” that precluded summary judgment with respect to the administrative exemption.

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Sullivan v. Oracle Corp., 2011 WL 2569530 (Cal. S. Ct. 2011)

In this case, the California Supreme Court answered three questions certified to it by the United States Court of Appeals for the Ninth Circuit as follows: (1) California’s overtime law applies to work performed in California for a California employer by nonresident workers; (2) the Unfair Competition Law (“UCL”) applies to violations of the overtime law; and (3) the UCL does not apply to claims brought under the federal Fair Labor Standards Act (“FLSA”) for overtime work performed in other states by nonresidents. See also Probert v. Family Centered Servs. of Alaska, 2011 WL 2473954 (9th Cir. 2011) (FLSA does not cover homes where “severely emotionally disturbed” children reside).

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Areso v. CarMax, Inc., 195 Cal. App. 4th 996 (2011)

Leena Areso, who worked as a commissioned sales consultant for CarMax, filed this class action lawsuit, asserting that she and the members of the putative class were owed unpaid overtime. Areso argued that CarMax’s uniform payment of approximately $150 per vehicle is piece-rate compensation rather than a commission because it is not based on a percentage of the sale amount. The Court of Appeal affirmed summary judgment in favor of CarMax, concluding that the payment system was a commission within the meaning of Labor Code § 204.1 because “[p]aying salespeople a uniform fee for each vehicle is proportionate – a one to one proportion. The compensation will rise and fall in direct proportion to the number of vehicles sold.” See also Flores v. Lamps Plus, Inc., 195 Cal. App. 4th 389 (2011) (yet another opinion concluding that the “provide” rather than “ensure” standard governs an employer’s obligation with respect to meal and rest breaks); United Parcel Service, Inc. v. Superior Court, 196 Cal. App. 4th 57 (2011) (employees who miss both meal and rest breaks in a single workday may be entitled to up to two premium payments under Labor Code § 226.7).

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Quinn v. U.S. Bank, N.A., 196 Cal. App. 4th 168 (2011)

Robert Quinn, a former senior vice president of U.S. Bank, alleged he was denied accommodation, harassed and terminated because of a physical disability in violation of the Fair Employment and Housing Act. U.S. Bank obtained summary judgment from the trial court on the ground that Quinn’s FEHA claims were preempted by the dismissal-at-pleasure clause of the National Bank Act, 12 U.S.C. § 24. The Court of Appeal determined that the “seminal California case” on the subject, Peatros v. Bank of America, 22 Cal. 4th 147 (2000), is not “binding precedent” because the lead opinion was a plurality, not a majority opinion. Consequently, the Court held that “to the extent FEHA is not inconsistent with section 24 as impliedly amended by the ADA, it is not preempted” and, therefore, FEHA’s longer statute of limitations applies, but Quinn’s claims against his supervisor are preempted because there is no individual supervisor liability under the ADA. See also People ex rel. Harris v. Pac Anchor Transp., Inc., 195 Cal. App. 4th 765 (2011) (California’s Unfair Competition Law is not preempted by the Federal Aviation Administration Authorization Act).

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Kelley v. The Conco Cos., 196 Cal. App. 4th 191 (2011)

Patrick Kelley, an apprentice ironworker, complained to his employer, Conco, that he had been subjected to a “barrage of sexually demeaning comments and gestures by his male supervisor” (David Seamen). After Kelley’s union suspended him from its apprenticeship program, he was not rehired by Conco. Kelley sued for sexual harassment and retaliation in violation of the Fair Employment and Housing Act. The trial court granted summary judgment to the employer, but the Court of Appeal reversed the dismissal of Kelley’s claim of retaliation. However, with respect to the claim of sexual harassment, the Court affirmed dismissal: “Unquestionably, the language used by both Seaman and by one of Kelley’s coworkers… was graphic, vulgar, and sexually explicit. The literal statements expressed sexual interest and solicited sexual activity. There was however, ‘no credible evidence that the harasser was homosexual’ or that the harassment was ‘motivated by sexual desire.’” The Court further held that Kelley had failed to establish he was subjected to harassment that was so severe and pervasive as to alter the conditions of his employment or that he suffered severe emotional distress as a result of Seaman’s conduct. With respect to the retaliation claim, the Court held that Kelley’s evidence established a clear inference that he was subjected to retaliation by at least some of his coworkers as a result of his complaints about Seaman.

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Bauman v. Daimler Chrysler Corp., 2011 WL 1879210 (9th Cir. 2011)

In this case, 22 Argentinian residents (including a Chilean national) sued DaimlerChrysler Aktiengesellschaft (“DCAG”) in federal court in California, alleging that one of DCAG’s subsidiaries, Mercedes-Benz Argentina (“MBA”), collaborated with state security forces to kidnap, detain, torture and kill plaintiffs and their relatives during Argentina’s “Dirty War” in the 1970s. (Some of the plaintiffs are former employees of MBA.) In an opinion by Judge Reinhardt, the Ninth Circuit held that the district court has personal jurisdiction in California over DCAG through the contacts of its subsidiary and agent, Mercedes-Benz USA, in view of the “interest of California in adjudicating important questions of human rights….” See also McCollum v. California Dep’t of Corrections and Rehabilitation, 2011 WL 2138221 (9th Cir. 2011) (court has no jurisdiction over Wiccan chaplain’s claim that he should be eligible for employment in the paid-chaplaincy program).

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Chamber of Commerce v. Whiting, 563 U.S. ___, 131 S. Ct. 1968 (2011)

In 1996, Congress created E-Verify, which is “an internet-based system that allows an employer to verify an employee’s work-authorization status.” In 2007, Arizona enacted the Legal Arizona Workers Act, which allows Arizona to suspend or revoke the licenses necessary to do business in the state if an employer knowingly or intentionally employs an unauthorized alien. Among other things, the Arizona law also requires that “every employer, after hiring an employee, shall verify the employment eligibility of the employee” by using E-Verify. In this case, the Chamber of Commerce challenged the Arizona law on the ground that it is expressly and impliedly preempted by federal immigration law, but the Supreme Court rejected those claims, upholding the statute.

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Wal-Mart Stores, Inc. v. Dukes, 564 U.S. ___, 2011 WL 2437013 (2011)

The United States Supreme Court held that this class of as many as 1.5 million current and former female Wal-Mart employees was improperly certified by the lower court. The three lead plaintiffs claimed they were discriminated against on the basis of their gender and that Wal-Mart’s policy of providing deference to local managers’ subjective pay and promotion decisions satisfied the commonality test for certifying a class action under Fed. R. Civ. P. 23(a)(2). Plaintiffs sought injunctive and declaratory relief, punitive damages and backpay for the class members. In a 5-to-4 majority opinion, the Court rejected plaintiffs’ showing of commonality, including the fact that they submitted only 120 affidavits (one for every 12,500 class members) purportedly evidencing gender discrimination. In the second part of the opinion, the Court unanimously held that plaintiffs’ claims for backpay were improperly certified under Fed. R. Civ. P. 23(b)(2) because the monetary relief was not incidental to the injunctive or declaratory relief sought.

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We invite you to review our newly posted May 2011 California Employment Law Notes -- a comprehensive review of the latest and most significant developments in California employment law.  The highlights include: 

• State Limitations On Arbitration Agreements Are Preempted By Federal Law
• State Farm Had No Duty To Defend Employer Against Employee's Sexual Battery Claim
• Class Certification Was Properly Denied To Retail Store Managers
• Employees May Have Committed A Crime By Violating Employer's Computer Use Policy
• Engineer Of Iranian Descent Can Proceed With Race And National Origin Discrimination Claims
• Jury Should Have Been Instructed That Employer Had Burden Of Proof On FMLA Reinstatement Claim
• Telecommunications Installer's Disability Discrimination Claim Was Properly Dismissed On Summary Judgment
• Employee With Bipolar Disorder Who Threatened Co-Workers Was Not Discriminated Against On The Basis Of Her Disability
• Employee Who Complained Orally About FLSA Violation Is Protected From Retaliation

 

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AT&T Mobility v. Concepcion, 563 U.S. ___, 2011 WL 1561956 (2011)

In this landmark new opinion, the United States Supreme Court held that the Federal Arbitration Act (“FAA”) prohibits states from conditioning the enforceability of an arbitration agreement on the availability of class action arbitration procedures. Although this case arose in the consumer context (it involved AT&T’s charging sales tax for “free phones”), it has far-reaching implications for employers in California and elsewhere. In recent years, the California Supreme Court has fashioned special rules for the enforceability of employment arbitration agreements, including in Gentry v. Superior Court, 42 Cal. 4th 443 (2007) (subjecting class action waivers to a rigorous, four-factor test) and Armendariz v. Foundation Health Psychcare Servs., Inc., 24 Cal. 4th 83 (2000) (requiring employers to pay all costs and expenses unique to arbitration such as the arbitrator’s fees). The continued viability of these and similar rules is now in serious doubt. In the wake of this important new opinion, employers are well advised to reconsider the relative costs and benefits of adopting a mandatory arbitration regime for their workforce.

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Shanahan v. State Farm Gen. Ins. Co., 193 Cal. App. 4th 780 (2011)

Cheryl Skigin (an attorney) sued her employer John M. Shanahan and various companies he owned for sexual battery, among other things. Shanahan settled the lawsuit for $700,000. Shanahan, who had a renter’s insurance policy with State Farm, sued State Farm for breach of contract and breach of the covenant of good faith and fair dealing based upon State Farm’s refusal to defend Shanahan against Skigin’s lawsuit. State Farm asserted it had no duty to defend a charge of sexual battery because intentional acts are not covered by Shanahan’s policies. The trial court granted State Farm’s summary judgment motion, and the Court of Appeal affirmed. See also, Lemmer v. Charney, 2011 WL 1679858 (Cal. Ct. App. 2011) (attorney’s claim against former client for fraud associated with client’s representation that he would proceed with wrongful termination case against his former employer “to either settlement or trial” was properly dismissed).

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Mora v. Big Lots Stores, Inc., 194 Cal. App. 4th 496 (2011)

Putative class representatives Ana Mora, et al., asserted claims for unpaid overtime, meal and rest periods and related wage-and-hour violations against their former employer Big Lots Stores, Inc. and its affiliate PNS Stores, Inc. Plaintiffs asserted that they and similarly situated Big Lots store managers were misclassified as exempt employees because the actual work performed involved a significant amount of time spent on non-exempt tasks. The trial court denied the motion to certify the class on the ground that the company does not operate its stores in a standardized manner and has no systematic practice of misclassification of its managers. The Court of Appeal affirmed, holding that plaintiffs’ reliance on job descriptions rather than an analysis of the actual work performed by the managers, which varied among the 178 stores in question, was insufficient to support certification of a class. See also Starbucks Corp. v. Superior Court, 2011 WL 1535268 (Cal. Ct. App. 2011) (trial court improperly ordered Starbucks to randomly review job applications in an effort to assist plaintiffs’ counsel in finding a “suitable” class representative to sue Starbucks for alleged violation of the statute protecting job applicants from having to disclose minor marijuana convictions more than two years old).

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U.S. v. Nosal, 2011 WL 1585600 (9th Cir. 2011)

In this criminal proceeding brought under the Computer Fraud and Abuse Act (“CFAA”), the United States government filed a 20-count indictment against David Nosal (a former employee of Korn/Ferry International) and his accomplices (also from Korn/Ferry) as a result of their obtaining information from their employer’s computer system for the purpose of defrauding Korn/Ferry and helping Nosal set up a competing business. The government contended that under the CFAA, an employee exceeds authorized access when he or she obtains information from the computer and uses it for a purpose that violates the employer’s restrictions on the use of such information. The Ninth Circuit Court of Appeals agreed with the government’s interpretation of the CFAA, which distinguished earlier Ninth Circuit authority on the grounds that Korn/Ferry (unlike the employer in the other case) had a computer use policy that placed clear and conspicuous restrictions on the employees’ access both to the system in general and to the particular database in question

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Zeinali v. Raytheon Co., 636 F.3d 544 (9th Cir. 2011)

Hossein Zeinali, who is of Iranian descent, sued Raytheon for race and national origin discrimination under the Fair Employment and Housing Act when it terminated his employment after he was denied a security clearance by the Department of Defense. The district court granted summary judgment to Raytheon, but the Ninth Circuit Court of Appeals reversed, holding that federal courts do have jurisdiction over employment discrimination claims that are brought against a private employer that was not responsible for the executive branch’s security clearance decision. The Court further held that summary judgment was improperly granted against Zeinali in view of the evidence he submitted that Raytheon terminated him while retaining at least two similarly situated non-Iranian engineers who lacked security clearances. The Court rejected Raytheon’s distinction between the other two engineers whose security clearances were revoked and Zeinali whose clearance was denied. See also Hall v. Goodwill Indus. of S. Cal., 193 Cal. App. 4th 718 (2011) (FEHA claim was barred by statute of limitations, which begins to run from the date of the right-to-sue letter and not from the date plaintiff receives the letter).

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Sanders v. City of Newport, 2011 WL 905998 (9th Cir. 2011)

Diane Sanders, a utility billing clerk for the City of Newport, Oregon, began suffering health problems, which (according to her doctor) were due to “multiple chemical sensitivity” triggered by handling low-grade paper at work and poor air quality in her work area. Sanders took an FMLA leave, but the city refused to return her to work because it could not guarantee that her workplace would be safe for her due to her “sensitivity to chemicals and the lack of knowledge as to the chemicals or concentrations that may cause a reaction.” After the jury found in favor of the city, Sanders appealed, asserting that the trial court’s FMLA jury instruction improperly placed the burden on her to prove that she was denied reinstatement without cause. The Ninth Circuit Court of Appeals agreed with Sanders and reversed the judgment, holding that “the plain language of the pertinent DOL regulations provides that the burden is on the employer to show that he had a legitimate reason to deny an employee reinstatement.” See also Leek v. Cooper, 194 Cal. App. 4th 399 (2011) (sole shareholder of corporate employer cannot be liable for discrimination under the California Family Rights Act in the absence of pleading and proof under alter ego doctrine).

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DFEH v. Lucent Technologies, Inc., 2011 WL 1549232 (9th Cir. 2011)

The California Department of Fair Employment and Housing and Steven Carauddo alleged Lucent violated the Fair Employment and Housing Act when it terminated Carauddo’s employment as an installer because he could not lift more than 30 pounds due to a back injury. The district court granted summary judgment to Lucent, and the Ninth Circuit Court of Appeals affirmed, holding that Lucent had not violated the FEHA by (1) failing to interact with Carauddo (it was Carauddo’s fault, not Lucent’s, if there was a failure to interact); (2) failing to reasonably accommodate the disability (the installer position required lifting and carrying up to 50 pounds, and Lucent was not required to modify the position or extend the disability period indefinitely); (3) discriminating against Carauddo (there was a legitimate, nondiscriminatory reason for Lucent’s actions); and (4) failing to prevent discrimination. The Court also affirmed summary judgment of Carauddo’s claim for wrongful termination in violation of public policy on the same grounds. Compare Cuiellette v. City of Los Angeles, 2011 WL 1522390 (Cal. Ct. App. 2011) ($1.57 million judgment upheld in favor of disabled LAPD officer who was able to perform the essential functions of a position into which he had been placed before being terminated).

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Wills v. Superior Court, 194 Cal. App. 4th 312 (2011)

Linda Wills, who worked as a clerk for the Orange County Superior Court, was terminated from her employment after she told co-workers she was going to add them to her “Kill Bill” list and forwarded a cell phone ringtone to several people, including a co-worker, that said in a “shrieking directive”: “I’m going to blow this b_ _ _ _ up if you don’t check your messages right now!... F_ _ _ you!” She also sent “disturbing and threatening” emails to co-workers. After Wills’s “manic episode” ended, her doctor submitted a letter to the employer explaining that Wills suffered from bipolar disorder and that at no time did she pose a danger to anyone. After Wills’s employment was terminated for threatening and having inappropriate communications with co-workers, she sued for disability discrimination. The trial court granted summary judgment to the employer, and the Court of Appeal affirmed, holding that Wills had failed to exhaust administrative remedies under the Fair Employment and Housing Act when she filed a claim with the DFEH for “denial of family/medical leave” and made no mention of disability discrimination, harassment or retaliation. The Court of Appeal also concluded that even if Wills had exhausted administrative remedies as to her disability discrimination claim, it was properly dismissed because under FEHA, an employer may “distinguish between disability-caused misconduct and the disability itself in the narrow context of threats or violence against co-workers.” In so holding, the Court distinguished several opinions of the United States Court of Appeals for the Ninth Circuit construing the Americans with Disabilities Act.

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Kasten v. Saint-Gobain Performance Plastics Corp., 563 U.S. ___, 131 S. Ct. 1325 (2011)

Kevin Kasten alleged that his former employer, Saint-Gobain, terminated his employment because he orally complained to Saint-Gobain about the location of its time clocks, which prevented workers from receiving credit for the time they spent putting on and taking off their work clothes (in violation of the Fair Labor Standards Act). The sole question presented by the case is whether an oral complaint of a violation of the FLSA is “protected conduct” under the Act’s anti-retaliation provision, which prohibits retaliation against an employee who “has filed any complaint… under or related to [the Act].” The United States Supreme Court concluded that “[s]everal functional considerations indicate that Congress intended the anti-retaliation provision to cover oral, as well as written, ‘complaints.’” Compare Tides v. The Boeing Co., 2011 WL 1651245 (9th Cir. 2011) (whistleblower provision of the Sarbanes-Oxley Act protects employees who disclose certain types of information to federal regulatory and law enforcement agencies, Congress and employee supervisors – but not to the media); Cafasso v. General Dynamics C4 Sys., Inc., 2011 WL 1053366 (9th Cir. 2011) (former employee’s claim against government contractor for violation of the False Claims Act was properly dismissed pursuant to Fed. R. Civ. P. 9(b)).

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We invite you to review our newly posted March 2011 California Employment Law Notes -- a comprehensive review of the latest and most significant developments in California employment law.  The highlights include: 

• NASA Employees' Privacy Was Not Invaded By Background Check
• Pregnancy Harassment Claim Was Properly Dismissed, And Employee Waived Attorney-Client Privilege By Using Employer's Computer
• U.S. Supreme Court Recognizes "Cat's Paw" Liability Theory
• U.S. Supreme Court Recognizes Third Party Retaliation Claim
• Sexual Harassment Claim Was Barred By Statute Of Limitations
• Studio That Provided Financing For Motion Picture Is Not Liable For Injury To Production Company Employee
• Gay Employee Could Proceed With Retaliation But Not Harassment Claim Under Title VII
• Rehabilitated Drug Addict's Disability Claims Were Properly Dismissed
• Employees Who Quit Company That Was Closing Suffered "Employment Loss" Under WARN Act
• Two One-Hour Premium Payments May Be Owed Per Day For Missed Meal And Rest Periods
• Claims Adjusters Were Properly Classified As Exempt Administrative Employees
• Pharmaceutical Sales Reps Were Properly Classified As Exempt Outside Sales Employees
• Offshore Oil Crews Were Not Entitled To 24 Hours Of Compensation During Each Work Day
• Employer's Failure To Provide Itemized Wage Statements Was Not "Inadvertent"
• Former Starbucks Barista May Not Proceed With Putative Class Action
• "Explicit Mutual Wage Doctrine" Barred Janitor's Claim For Additional Unpaid Overtime

 

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Arechiga v. Dolores Press, Inc., 192 Cal. App. 4th 567 (2011)

Carlos Arechiga worked as a janitor for Dolores Press for almost seven years at which time his employment was terminated. Although Arechiga filed a complaint alleging various causes of action, only his claim for violation of the Unfair Competition Law went to trial. Arechiga, a non-exempt employee, claimed the $880 that he received per week was not a salary (as the employer contended) but was the amount he was to be paid for 40 hours of work per week (i.e., $22 per hour) and did not include payment for his regularly scheduled 26 hours of weekly overtime. The employer argued that under California’s “explicit mutual wage agreement” doctrine, an employer and a non-exempt employee may lawfully agree to a guaranteed fixed salary so long as the employer pays the employee for all overtime. The trial court determined that the $880 weekly payment lawfully compensated Arechiga for both his regular and overtime work based on a regular hourly wage of $11.14 and an overtime hourly wage of $16.71. The Court of Appeal affirmed, holding that Labor Code § 515(d) did not “outlaw” explicit mutual wage agreements such as the one proven in this case, rejecting the Labor Commissioner’s contrary interpretation.

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Price v. Starbucks Corp., 192 Cal. App. 4th 1136 (2011)

Drake Price worked as an entry-level Starbucks barista for approximately 13 shifts before he was fired. Following his termination, he sued Starbucks on behalf of himself and a putative class of employees seeking to recover unpaid wages, penalties and damages for Starbucks’ alleged failure to timely pay him wages upon termination, failure to pay an additional hour of reporting time pay on the day he was fired and failure to issue a wage statement that complied with the Labor Code. Starbucks successfully demurred to the wage-statement claim on the ground that Drake had failed to allege any injury arising from the allegedly non-compliant wage statement, and it successfully moved to strike the allegations concerning the alleged failure to timely pay final wages because Price admitted in the complaint that he was paid his final wages on the day his employment was terminated. Finally, the trial court dismissed on summary judgment Price’s claim seeking reporting-time pay and penalties based on Starbucks’ paying him for only two hours instead of 3.3 hours (the average number of hours of his scheduled shifts) on the ground that “if an employee is not scheduled to work or does not work his usual shift, but must report to work for a meeting, the employee falls into the regulatory category of those employees called to work on their day off for a scheduled meeting” and who receive a two-hour minimum payment. The trial court also dismissed the derivative claims for violation of the Unfair Competition Law and the Private Attorneys General Act. The Court of Appeal affirmed dismissal of all claims.

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Heritage Residential Care, Inc. v. Division of Labor Standards Enforcement, 192 Cal. App. 4th 75 (2011)

Heritage Residential, a company that operates seven residential care facilities, employed 24 workers, 16 of whom lacked social security numbers. Heritage treated the 16 employees who did not have social security numbers as independent contractors and issued them 1099 statements rather than itemized wage statements. Following a workplace inspection of Heritage’s premises, the DLSE issued a citation for a $72,000 civil penalty for violation of Labor Code § 226, which requires an employer to issue itemized wage statements. During a subsequent administrative hearing, Heritage argued that it had treated those employees without social security numbers as independent contractors, and, therefore, its noncompliance with the statute had been “inadvertent.” The DLSE affirmed the citation and rejected Heritage’s defense of “inadvertence” – as did the trial court where Heritage filed a petition for writ of administrative mandamus. The Court of Appeal affirmed the denial of the petition, holding that “inadvertent” as used in the statute means “unintentional, accidental or not deliberate,” and Heritage’s failure to provide itemized wage statements was an intentional act on its part. See also Arzate v. Bridge Terminal Transp., 192 Cal. App. 4th 419 (2011) (owner/operators of transport cargo trucks may have been employees and not independent contractors of company that is in the business of arranging for the transportation of its customers’ cargo between ports or terminals and the customers’ facilities); Kullar v. Foot Locker Retail, Inc., 191 Cal. App. 4th 1201 (2011) (motion to disqualify employees’ counsel who filed a second wage-and-hour class action against employer after objecting to a proposed settlement of another class action was properly denied); Mayo Found. v. United States, 562 U.S. ___, 131 S. Ct. 704 (2011) (doctors who serve as medical residents are not students exempt from FICA taxes).

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Seymore v. Metson Marine, Inc., 2011 WL 680344 (Cal. Ct. App. 2011)

Plaintiffs Andrew Seymore and Kenneth Blonden were employed by Metson Marine as crew members on Metson’s offshore oil spill recovery vessels. Crew members worked 14-day rotational hitches, alternating with 14-day rest periods and were paid to work a 12-hour daily shift during the two-week period, except on crew-change days, when they worked only six hours. Crew members were paid an hourly rate for the full 12-hour shift regardless of whether they actually performed any work during those 12 hours, and they received a regular hourly rate for the first eight hours, time and one-half for the next four hours and, on those occasions that they actually worked more than 12 hours in a day, they were paid double time for all hours worked in excess of the usual 12-hour shift. The remaining 12 hours were designated as “off duty” even though crew members (who slept on the vessels) remained on stand by in that they were required to be able to return to the ship within 30 to 45 minutes of an emergency call. Plaintiffs sued Metson for one additional day of premium pay per hitch, based on their working seven consecutive days in a workweek, and additional compensation for the 12 hours they were on call during the 14-day hitches. The trial court granted summary judgment to Metson, but the Court of Appeal reversed, holding that Metson had violated Labor Code § 510 by not paying the employees incremental overtime compensation for one additional day of every 14-day hitch they worked. The Court further held the employees were entitled to be compensated for four (but not 12) hours of standby time during each 24-hour working day. See also Sonic-Calabasas A, Inc. v. Moreno, 2011 WL 651877 (Cal. S. Ct. 2011) (employee’s waiver in arbitration agreement of right to file a wage claim with the Labor Commissioner is contrary to public policy and is unconscionable).

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Christopher v. SmithKline Beecham Corp., 2011 WL 489708 (9th Cir. 2011)

Michael Christopher and Frank Buchanan were employed as pharmaceutical sales representatives (“PSRs”) of SmithKline d/b/a GlaxoSmithKline (“Glaxo”) and were classified as outside salesmen exempt from the Fair Labor Standards Act. PSRs work outside of a Glaxo office and spend much of their time traveling to the offices of and working with physicians within their assigned geographic territories. The PSRs make calls on physicians to encourage them to prescribe Glaxo products to their patients. After the district court granted summary judgment to Glaxo, plaintiffs moved unsuccessfully to alter or amend the judgment based on the district court’s failure to consider an amicus brief filed by the current Secretary of the Department of Labor in a similar case pending before the Second Circuit Court of Appeals, In re Novartis Wage & Hour Litigation, 611 F.3d 141 (2d Cir. 2010). In affirming summary judgment for Glaxo, the Ninth Circuit concluded “we owe no deference to the Secretary’s current interpretation of the regulations, and, in any event, we respectfully disagree with that interpretation.” The Court concluded that “[w]hile not all steps in the PSR’s daily activities constitute ‘selling,’ that fact does not render the totality of those activities non-exempt promotion.”

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Hodge v. Aon Ins. Servs., 2011 WL 311169 (Cal. Ct. App. 2011)

Plaintiffs in this case are claims adjusters employed by a third party administrator (Cambridge Integrated Services Group, Inc.). Depending on the entity with which it contracts and the terms of the contract, Cambridge adjusts general liability, vehicle-related and workers’ compensation claims. In their claim alleging violation of the Unfair Competition Law, plaintiffs alleged they had been misclassified as exempt administrative employees and that they were owed unpaid overtime. After a bench trial (plaintiffs chose to proceed without a jury following an initial jury trial in which they did not “fare well”), the trial court entered a judgment in favor of Cambridge. The Court of Appeal affirmed the judgment after concluding that the work performed by the adjusters is “directly related to management policies or general business operations” of Cambridge’s self-insured, noninsurance-related clients. The Court also concluded the adjusters exercised sufficient discretion and independent judgment to qualify for the exemption and that they are involved in work of substantial importance to the company’s clients. See also In re United Parcel Serv. Wage & Hour Cases, 2011 WL 653863 (Cal. Ct. App. 2011) (although it was the prevailing party in various wage/hour claims, employer was entitled only to recovery of litigation costs and not attorney’s fees).

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United Parcel Serv., Inc. v. Superior Court, 192 Cal. App. 4th 1043 (2011)

Pursuant to Labor Code § 226.7(b), “[i]f an employer fails to provide an employee a meal period or rest period… the employer shall pay the employee one additional hour of pay at the employee’s regular rate of compensation for each work day that the meal or rest period is not provided.” In this case, UPS argued that only one premium payment is allowable per work day regardless of the number or type of breaks that were not provided. The trial court disagreed with UPS, and the company filed a petition for writ of mandate challenging the trial court’s ruling. Relying upon an unpublished federal district court opinion, the Court of Appeal denied the petition for writ of mandate, holding that employees may recover up to two additional hours of pay on a single work day for meal period and rest break violations – one for failure to provide a meal period and another for failure to provide a rest period. See also Tien v. Tenet Healthcare Corp., 2011 WL 523611 (Cal. Ct. App. 2011) (trial court properly denied class certification for missed meal periods and rest breaks, following Brinker/Brinkley’s “provide not ensure” standard); Coleman v. Estes Express Lines, Inc., 631 F.3d 1010 (9th Cir. 2011) (district court is limited to consideration of the complaint in determining whether to remand wage-and-hour class action that was removed to federal court under the Class Action Fairness Act of 2005).

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Collins v. Gee West Seattle LLC, 631 F.3d 1001 (9th Cir. 2011)

On September 26, 2007, Gee West informed its 150 employees that although it was actively pursuing the sale of the business, it would be closing its doors and would terminate all but a few business office employees on October 7, 2007 if a buyer was not found by then. Between the time of the announcement and the day operations ceased on October 5, 2007, 120 of the 150 employees stopped reporting to work. The plaintiff employees in this lawsuit alleged Gee West had violated the WARN Act because it had failed to give 60-days’ notice to the employees before closing its doors. The district granted summary judgment to the employer on the ground that the employees had voluntarily departed, but the Ninth Circuit Court of Appeals reversed, holding that the term “voluntary departure” as used in the WARN Act does not include an employee’s departure from a job because the business is closing. Cf. Candari v. Los Angeles Unified School Dist., 2011 WL 783587 (Cal. Ct. App. 2011) (employer has the burden of demonstrating the availability of comparable employment positions before projected earnings of alternative employment opportunities not sought by the discharged employee are considered for purposes of mitigation).

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Lopez v. Pacific Maritime Ass’n, 2011 WL 711884 (9th Cir. 2011)

When Santiago Lopez first applied to be a longshoreman in 1997, his application was rejected because he tested positive for marijuana. The PMA, which represents the shipping lines, stevedore companies and terminal operators that run the ports along the west coast, follows a “one-strike rule,” which eliminates from consideration for employment any applicant who tests positive for drug or alcohol during a pre-employment screening process. After he became “clean and sober” in 2004, Lopez reapplied but was rejected because of the one-strike rule. In response, Lopez filed this action, alleging a violation of the Americans with Disabilities Act and the Fair Employment and Housing Act. The district court granted summary judgment to the employer, and the Ninth Circuit affirmed on the ground that “nothing about the history of the one-strike rule leads us to conclude that [the PMA] adopted the rule with a discriminatory purpose.” The Ninth Circuit also rejected Lopez’s argument that the one-strike rule had a disparate impact upon recovering drug addicts. See also Harris v. Maricopa County Superior Court, 631 F.3d 963 (9th Cir. 2011) (award of $125,000 in prevailing party attorney’s fees to defendant employer was improperly calculated).

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Dawson v. Entek Int’l, 630 F.3d 928 (9th Cir. 2011)

Shane Dawson, a former temporary production line worker for Entek, ran a production line that rolled up battery separators. Dawson, who is gay, worked with 24 other male employees. Dawson’s employment was terminated two days after he had complained to human resources that he was being called “a homo and a fag and a queer” by other employees at Entek. Although the district court granted summary judgment to the defendants, the Ninth Circuit Court of Appeals reversed the dismissal, concluding that the “gravity of Dawson’s complaints coupled with the time frame are such that a reasonable trier of fact could find in favor of Dawson on his retaliation claim.” Accordingly, the Ninth Circuit reversed the dismissal of the Title VII retaliation claim. However, the Court affirmed dismissal of the Title VII hostile work environment claim on the ground that Dawson was not verbally harassed for appearing non-masculine or for otherwise not fitting the male stereotype. See also Green v. Laibco, LLC, 192 Cal. App. 4th 441 (2011) (employer that failed to produce meaningful evidence of its financial condition at trial is not entitled to reversal of $1.2 million punitive damages award against it in wrongful termination case).

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Angelotti v. The Walt Disney Co., 2011 WL 653812 (Cal. Ct. App. 2011)

Anthony Angelotti was injured while rehearsing a stunt for a film that was being produced by Second Mate Productions, Inc. Angelotti sued Second Mate as well as The Walt Disney Company, which provided the financing for the film. Angelotti alleged that Disney had assumed a duty to ensure that the production complied with occupational safety regulations, that it had retained control over the film production and affirmatively contributed to his injury by providing unsafe equipment and failing to ensure his safety. The trial court granted summary judgment to Second Mate on the ground that the workers’ compensation exclusivity rule precluded any recovery against the production company. The court granted summary judgment to Disney on the ground that Disney did not assume a duty of care and did not affirmatively contribute to Angelotti’s injury. The Court of Appeal affirmed. See also Cortez v. Abich, 51 Cal. 4th 285 (2011) (employee of unlicensed contractor may sue homeowner under Cal-OSHA for injuries he sustained during residential remodeling project in which significant portions of the house were demolished and rebuilt and new rooms were added); Cabral v. Ralphs Grocery Co., 2011 WL 677396 (Cal. S. Ct. 2011) (Ralphs was liable for death of driver who suddenly veered off the freeway and collided with the rear of a Ralphs tractor-trailer that was parked alongside an interstate highway where truck driver was having a snack).

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Trovato v. Beckman Coulter, Inc., 192 Cal. App. 4th 319 (2011)

Irene Trovato, who was employed as a sales representative for Beckman Coulter, submitted a letter of resignation on May 14, 2007, with an effective date of May 25, 2007. On May 8, 2008, Trovato filed an administrative complaint against Beckman and her former supervisor, Michael Allyn. On May 22, 2008, Trovato sued Beckman and Allyn, alleging sexual harassment and retaliation in violation of the Fair Employment and Housing Act (“FEHA”). Beckman and Allyn filed a motion for summary based on FEHA’s one-year statute of limitations on the ground that the undisputed evidence established that the last act of harassment and retaliation occurred on or about January 31, 2007, when Allyn gave Trovato her 2006 performance review. The trial court granted the motion for summary judgment, and the Court of Appeal affirmed, rejecting Trovato’s assertion that the “continuing violation” doctrine saved her claim.

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Staub v. Proctor Hosp., 562 U.S. ___, 131 S. Ct. 1186 (2011)

Vincent Staub, a former angiography technician for Proctor Hospital, was a member of the United States Army Reserve. Staub alleged that his employment was terminated in violation of the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”) because his supervisor (Janice Mulally) and her supervisor (Michael Korenchuk) were hostile to Staub’s military obligations (e.g., Staub’s absence from work to attend monthly drill and training sessions). Mulally complained that “everyone else [had] to bend over backwards to cover [Staub’s] schedule for the Reserves,” and Korenchuk referred to Staub’s military obligations as “a bunch of smoking and joking and a waste of taxpayers’ money.” Staub was issued a Corrective Action disciplinary warning for purportedly failing to stay in his work area when he was not working with a patient, and his employment was eventually terminated by Linda Buck (the vice president of human resources) based on Staub’s ignoring the directive in the Corrective Action. Although Staub convinced a jury that he was terminated in violation of the statute, the Seventh Circuit Court of Appeals reversed, holding that an employer is not liable for the anti-military animus of a supervisor who was not charged with making the ultimate employment decision, and in this case, Buck had that responsibility. The United States Supreme Court disagreed and reversed the Seventh Circuit, holding that “if a supervisor performs an act motivated by antimilitary animus that is intended by the supervisor to cause an adverse employment action, and if that act is a proximate cause of the ultimate employment action, then the employer is liable under USERRA.”

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Thompson v. North Am. Stainless, LP, 562 U.S. ___, 131 S. Ct. 863 (2011)

Eric Thompson and his fiancée, Miriam Regalado, were both employees of North American Stainless (“NAS”). Three weeks after Regalado filed a charge with the EEOC against NAS, alleging sex discrimination, NAS fired Thompson. Thompson subsequently filed a lawsuit against NAS, claiming the company had fired him in order to retaliate against Regalado for filing her charge with the EEOC. The district court dismissed Thompson’s claim on the ground that Title VII “does not permit third party retaliation claims.” The Sixth Circuit Court of Appeals affirmed the dismissal. The United States Supreme Court reversed the Sixth Circuit, finding it “obvious that a reasonable worker might be dissuaded from engaging in protected activity if she knew that her fiancé would be fired.” Compare Munoz v. Mabus, 630 F.3d 856 (9th Cir. 2010) (naval employee failed to establish that denial of training was in retaliation for his having filed age and race discrimination claims against the Navy).

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Holmes v. Petrovich Dev. Co., 191 Cal. App. 4th 1047 (2011)

Gina Holmes sued her employer for harassment based on pregnancy, retaliation, constructive discharge, violation of the right to privacy and intentional infliction of emotional distress. The trial court granted summary adjudication to the defendants with respect to the claims for harassment, retaliation and constructive discharge, and a jury decided against Holmes with respect to the claims for invasion of privacy and intentional infliction of emotional distress. The Court of Appeal affirmed the judgment in favor of the employer, concluding there was “an absence of evidence from which a reasonable jury could objectively find that Petrovich created a hostile work environment for a reasonable pregnant woman.” The Court also concluded there was not sufficient evidence of constructive discharge or retaliation. Finally, the Court held that the trial court did not abuse its discretion by denying Holmes’ motion in limine to prevent defendants from introducing at trial emails that she had sent to her attorney on the company’s computer. Noting that Holmes had used her employer’s email account to communicate with her attorney after she was warned that it was to be used only for company business and that emails were not private, the Court affirmed that Holmes had no reasonable expectation of privacy in the emails she sent to her attorney any more than she would have if she were “consulting her attorney in her employer’s conference room, in a loud voice, with the door open, so that any reasonable person would expect that [her] discussion of her complaints about her employer would be overheard by him.” See also People v. Nazary, 191 Cal. App. 4th 727 (2011) (videotape from a hidden camera of employee being confronted by management for suspected embezzlement and theft were properly shown to the jury because employee “could reasonably expect that [the confrontation] might be overheard or recorded”).

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NASA v. Nelson, 562 U.S. ___, 131 S. Ct. 746 (2011)

Twenty-eight contract employees of the Jet Propulsion Laboratory (“JPL”), which is owned by NASA but operated by Cal Tech, had never been subjected to a government background investigation. In 2004, a recommendation of the 9/11 Commission prompted the President to order new, uniform identification standards for federal employees, including contractor employees. The Department of Commerce implemented this directive by mandating that contract employees with long-term access to federal facilities complete a standard background check. JPL informed employees that anyone failing to complete the background check process would be denied access to JPL and would face termination by Cal Tech. The JPL employees in this case filed suit challenging the background-check process as a violation of their constitutional right to informational privacy. The district court denied the employees’ motion for a preliminary injunction, but the Ninth Circuit Court of Appeals reversed the district court. In this opinion, the United States Supreme Court reversed the Ninth Circuit, holding unanimously that the government has an interest in conducting basic background checks in order to ensure the security of its facilities and to employ a competent, reliable workforce to carry out the people’s business.

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Coppinger-Martin v. Solis, 2010 WL 4925414 (9th Cir. 2010)

Carole Coppinger-Martin alleged that Nordstrom, Inc. violated the whistle-blower-protection provision of the Sarbanes-Oxley Act of 2002 (“SOX”), 18 U.S.C. § 1514A, by terminating her employment in retaliation for her reporting to supervisors conduct she believed violated the rules and regulations of the SEC. The United States Department of Labor’s Administrative Review Board (“ARB”) dismissed Coppinger-Martin’s complaint as untimely. The Ninth Circuit denied Coppinger-Martin’s petition for review, holding that her complaint was filed more than 90 days after she was notified that her job was being eliminated as well as more than 90 days after her last day of employment. The Court rejected Coppinger-Martin’s contention that equitable tolling should extend the 90-day filing period because she was not aware of Nordstrom’s retaliatory motive until after her employment ended and she learned for the first time that other Nordstrom employees were performing many of her former job duties. The Court also rejected her assertion that equitable estoppel should prevent Nordstrom from asserting the statute of limitations defense. See also BBA Aviation PLC v. Superior Court, 190 Cal. App. 4th 421 (2010) (writ of mandate issued to quash service of summons on English parent company of California employer).

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County of Los Angeles v. Los Angeles County Employee Relations Comm’n, 190 Cal. App. 4th 178 (2010)

During the course of collective bargaining, the Service Employees International Union asked the county for the personal contact information (names, home addresses and home telephone numbers) of county employees who are in the bargaining unit but who are not members of the union. When the county refused to disclose that information based on the employees’ right to privacy, the union filed an unfair employee-relations practice charge with the Los Angeles County Employee Relations Commission. The Commission agreed with the union and ordered the county to release the information. The trial court upheld the Commission’s decision but on different grounds. In this opinion, the Court of Appeal considered the non-members’ state constitutional right to privacy, reversed the trial court’s order and remanded with directions to the trial court to enter a new order directing the county and union to meet and confer on a proposed notice that includes notice to non-member county employees and an opportunity for them to object to disclosure. See also Krottner v. Starbucks Corp., 2010 WL 5141255 (9th Cir. 2010) (Starbucks employees whose names, addresses and social security numbers were stored on a stolen laptop had standing to sue under Article III of the U.S. Constitution).

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Toyota v. Superior Court, 189 Cal. App. 4th 1391 (2010)

Steven Braun sued Toyota Motor Sales and his supervisor Randall Bauer for gender discrimination, sexual harassment, defamation, constructive discharge and intentional and negligent infliction of emotional distress. Toyota and Bauer filed a motion to compel Braun to submit to an independent psychiatric examination, which the trial court granted, but it also permitted Braun’s attorney to be present during the exam in an adjoining room. Toyota and Bauer challenged in this writ proceeding the trial court’s order permitting Braun’s attorney to be present at an adjacent location to monitor the exam. The Court of Appeal granted the peremptory writ of mandate after concluding the trial court had erred in permitting Braun’s attorney to listen to and monitor the examination: “Braun demonstrated no legitimate need for his attorney to attend the psychiatric examination so as to monitor it from a separate room. Toyota produced evidence that such monitoring might compromise the integrity of the examination.” See also San Francisco Unified School Dist. v. WCAB, 190 Cal. App. 4th 1 (2010) (employee whose psychiatric injury was not “substantially caused” (35-to-40 percent) by good-faith personnel actions was entitled to workers’ compensation benefits).

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Grobeson v. City of Los Angeles, 2010 WL 4888251 (Cal. Ct. App. 2010)

A jury rejected Mitchell Grobeson’s claims against the City of Los Angeles and Daniel Watson for alleged unlawful discrimination, harassment, retaliation and constructive discharge. The trial court granted Grobeson’s motion for a new trial based on juror misconduct, and the Court of Appeal affirmed except that it ordered the unlawful retaliation claim that was asserted against Watson to be dismissed under the authority of Jones v. Lodge at Torrey Pines P’ship, 42 Cal. 4th 1158 (2008). In support of the motion for a new trial, Grobeson presented a declaration from one of the jurors who said she had heard another juror say during a break in the testimony of Watson that she “liked Watson’s voice” and that she had “made up [her] mind already. I’m not going to listen to the rest of the stupid argument.” Grobeson submitted another declaration from his lawyer who had interviewed the juror in question over the telephone after the trial concluded. The juror told the lawyer, “I made up my own opinion [to vote against Grobeson] in the second week of trial” and “I was very irritated when you were conducting the case.” The Court of Appeal affirmed the grant of a new trial after concluding that the juror’s statement during the trial was a “statement of bias” and that the juror’s prejudgment of the case improperly influenced the verdict. See also Turman v. Turning Point of Central Cal., Inc., 2010 WL 5158351 (Cal. Ct. App. 2010) (jury verdict in employer’s favor reversed and new trial ordered in absence of substantial evidence that employer took corrective action to alleviate hostile work environment, but punitive damages allegations were properly stricken).

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Coleman v. Estes Express Lines, Inc., 2010 WL 4925407 (9th Cir. 2010)

Bradford Coleman sued his employer, Estes Express Lines and its regional division Estes West, in state court for alleged violations of California wage and hour statutes. Estes Express removed the action to federal court under the Class Action Fairness Act of 2005 (“CAFA”), and Coleman filed a successful motion to remand it back to state court on the ground that the case was a “local controversy” in which at least one of the primary defendants was from the same state as more than two-thirds of the members of the proposed class. Estes Express (not a citizen of California) argued that its employees, and not Estes West’s, would have been responsible for the alleged violations and that only it had the ability to satisfy any judgment, and, therefore, this was not a “local controversy.” The district court granted Coleman’s motion to remand based on the pleadings alone, and Estes Express sought leave from the Ninth Circuit to appeal the remand order, which the Ninth Circuit granted given the “presence of an important CAFA-related question”– namely, whether the district court must rely only upon the pleadings as the district court did in this case or whether it can consider extrinsic evidence in deciding a motion to remand the case to state court. Compare Dalton v. Lee Publ’ns, 625 F.3d 1220 (9th Cir. 2010) (dissent from order denying petition for permission to appeal district court order granting class action certification).

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Futrell v. Payday Cal., Inc., 2010 WL 5117629 (Cal. Ct. App. 2010)

Payday provides payroll processing and related services for companies that produce television commercials. In this putative class action, the employees were “freelance crewmembers” whom Reactor Films retained to complete its production activities. John Futrell worked in a private police capacity, providing traffic and crowd control services on various commercials produced by Reactor. On behalf of the putative class, Futrell alleged that Reactor and Payday were his joint employers and that they had failed to pay statutorily required double-time wages when he worked more than 12 hours in a day, failed to pay him within the statutorily prescribed time periods and failed to provide pay stubs that conformed to the statutory requirements. The trial court granted summary adjudication to Payday, and the Court of Appeal affirmed, holding that Payday was not Futrell’s employer because it did not control wages, hours or working conditions, and it did not have the power to cause Futrell to work or prevent him from doing so. The Court further concluded that the existence of payroll documents was not sufficient to establish a triable issue of fact as to whether Payday was a joint employer along with Reactor. See also Employment Dev. Dep’t v. California Unemployment Ins. Appeals Bd., 190 Cal. App. 4th 178 (2010) (EDD properly issued assessment against employer for underpaying its unemployment insurance contributions by “dumping” employees into another (commonly owned) employer’s unemployment insurance account).

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In re United Parcel Service Wage & Hour Cases, 2010 WL 4983586 (Cal. Ct. App. 2010)

At various times during his employment with UPS, David Taylor held three different jobs, including hub supervisor, on-road supervisor and center manager/business manager, in which he supervised numerous hourly employees and lower level supervisors. In all three jobs, Taylor worked in excess of eight hours per day and often skipped breaks and took “working lunches.” The trial court granted summary judgment to UPS, and the Court of Appeal affirmed, holding that even though Taylor did not perform some traditional management duties, he was primarily engaged in performing management or supervisory duties or work directly related thereto. The Court also concluded that Taylor customarily and regularly exercised discretion and independent judgment in performing his duties and thus was subject to the administrative exemption.

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Parth v. Pomona Valley Hosp., 2010 WL 5064380 (9th Cir. 2010)

The Fair Labor Standards Act required Pomona Valley Hospital Medical Center (“PVHMC”) to pay its employees 1-1/2 times the employees’ regular rate for any employment in excess of eight hours in any workday and in excess of 80 hours in a 14-day period. However, many of PVHMC’s nurses preferred working 12-hour shifts in order to have more days away from the hospital. In response to the nurses’ requests to work 12-hour shifts, PVHMC developed and implemented an optional 12-hour shift schedule that lowered the base hourly salary so that nurses who worked overtime (in excess of eight hours in a day) would end up making approximately the same amount of money as they would make working an eight-hour shift (i.e., without any overtime). In this putative class action, Louise Parth alleged that PVHMC’s use of different base hourly rates violated the FLSA. Although the district court found that Parth met the requirements for conditional class certification to bring the FLSA claim, the court granted the hospital’s motion for summary judgment. The Ninth Circuit affirmed, holding that “Parth failed to adduce any evidence or authority to support her claim that PVHMC’s pay plan violates the FLSA. We conclude that PVHMC was justified in responding to its employees’ requests for an alternative work schedule by adopting the sought-after schedule and paying the employees the same wages they received under the less-desirable schedule.” See also Gordon v. City of Oakland, 2010 WL 4673695 (9th Cir. 2010) (city employer did not violate FLSA by withholding from police officer’s vacation accrual and compensatory time off, sums necessary to partially repay city for training costs owed due to officer’s resignation after only two years on the job).
 

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Bright v. 99¢ Only Stores, 189 Cal. App. 4th 1472 (2010)

One of the requirements of the wage orders promulgated by the Industrial Welfare Commission is that “[a]ll working employees shall be provided with suitable seats when the nature of the work reasonably permits the use of seats…” Cashier Eugina Bright filed this putative class action against 99¢ Only Stores based on its alleged failure to provide suitable seating for her and similarly situated employees. Bright sued under the Private Attorneys General Act of 2004 (“PAGA”) and sought civil penalties pursuant to that statute. The trial court sustained the employer’s demurrer and dismissed the case, but the Court of Appeal reversed, holding that suitable seating is a standard condition of labor encompassed by Cal. Labor Code § 1198 and is, therefore, subject to the civil penalties provided under PAGA ($100 for each aggrieved employee per pay period for the initial violation and $200 for each aggrieved employee per pay period for each subsequent violation). See also Home Depot v. Superior Court, 2010 WL 5175194 (Cal. Ct. App. 2010) (same).

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Rosas v. Corporation of the Catholic Archbishop, 2010 WL 5029533 (9th Cir. 2010) (en banc)

Cesar Rosas and Jesus Alcazar were Catholic seminarians who sued the Corporation of the Catholic Archbishop for, among other things, failure to pay them overtime wages under Washington state law. Based on the ministerial exception, the district court dismissed the case on the pleadings. A three-judge panel of the Ninth Circuit affirmed, holding that the Religion Clauses of the First Amendment require a “ministerial exception” to the employment statutes if the statute’s application would interfere with a religious institution’s employment decisions concerning its ministers. Sitting en banc, the Ninth Circuit affirmed the judgment of the three-judge panel, but vacated that part of the earlier opinion in which the court announced a new test for determining whether a person is a “minister” for purposes of the ministerial exception. The en banc Court held that “we need not and do not adopt a general test for determining whether a person is a ‘minister’ because, on the facts as alleged, Rosas is a minister under any reasonable interpretation of the exception.” See also Stahl v. U.S., 2010 WL 4840090 (9th Cir. 2010) (a member of a “religious or apostolic” corporation, which is subject to 26 U.S.C. § 501(d), may be considered a common law employee of the entity for tax purposes).

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Overhill Farms, Inc. v. Lopez, 2010 WL 4619906 (Cal. Ct. App. 2010)

After the IRS notified Overhill Farms that 231 of its then-current employees had provided invalid social security numbers, Overhill contacted the employees identified by the IRS, advised them that their social security numbers were invalid according to the IRS, and provided them with the opportunity to correct the erroneous information in order to avoid termination of their employment. All but one of the employees either ignored Overhill’s repeated requests for information or admitted they had submitted an invalid social security number and that they were not authorized to work in the United States. Overhill terminated the 230 employees. Thereafter, several of the terminated employees, led by Nativo Lopez (a self-described “community activist”), participated in protests outside of Overhill’s two plants and outside of one of Overhill’s customer’s place of business. They asserted Overhill had used a “supposed discrepancy” in social security numbers as a pretext for “racist firings” and a targeted attack on older and more senior employees and that Overhill had exploited part-time workers “visciously [sic] as if modern slavery were in place.”

In response, Overhill sued the protestors for defamation, intentional interference with contractual relations, extortion and unfair competition. The defendants filed a special motion to strike Overhill’s lawsuit against them under the anti-SLAPP law, asserting their statements and actions were taken in furtherance of their right of free speech in connection with a public issue. The trial court denied the protestors’ motion, except as it related to the unfair competition claim because there was no evidence the protestors were engaged in a business act or practice in connection with their protests. As for the other claims, the trial court determined Overhill had established a probability of prevailing on the merits of its claims against the protestors and on that basis denied the motion to strike. The Court of Appeal affirmed the order.

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Pineda v. Bank of America, 50 Cal. 4th 1389 (2010)

Although plaintiff Jorge A. Pineda gave two weeks’ notice of his resignation from Bank of America, the bank did not pay him his final wages on his last day of employment, as required by Cal. Labor Code § 202, but instead paid him four days late. In this putative class action, Pineda sued for waiting-time penalties under section 203 and also sought restitution of the unpaid penalties under the Unfair Competition Law (the “UCL”). The trial court dismissed the action on the grounds that it was barred by a one-year statute of limitations and that section 203 penalties are not recoverable as restitution under the UCL. The court of appeal affirmed dismissal, but the California Supreme Court reversed, holding that a three-year statute of limitations applies even though plaintiff was seeking only penalties and not payment of any unpaid wages. However, the Supreme Court affirmed dismissal of the UCL claim on the ground that an employee may not recover section 203 penalties as restitution under the UCL because those penalties are not designed to compensate employees for work performed (as wages are), but instead are intended to punish employers who fail to pay such wages.
 

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California has enacted the “California Transparency in Supply Chains Act of 2010” (S.B. 657), which will require retail sellers and manufacturers that do business in California and that have over $100 million in annual worldwide gross receipts to publicly disclose their efforts to eradicate slavery and human trafficking from their direct supply chains for tangible goods offered for sale. (The new law becomes effective on January 1, 2012.)

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Garcia v. Four Points Sheraton LAX, 188 Cal. App. 4th 364 (2010)

In 2006, the City of Los Angeles enacted the Hotel Service Charge Reform Ordinance, which required non-unionized hotels in the Century Boulevard Corridor near LAX to pass along mandatory service charges to the workers who rendered the services for which the charges were collected. (The service workers alleged their income had declined as a result of the hotels’ practice of imposing mandatory service charges because patrons assumed the charges would be distributed to the workers, and, as a result, the patrons left fewer and smaller gratuities.) The hotels challenged the Ordinance on the grounds that it was preempted by Labor Code sections 350 to 356 (regulating gratuities) and that it violated the equal protection clauses of the state and federal constitutions, among other grounds. The trial court sustained the hotels’ demurrers, but the Court of Appeal reversed, holding that the Ordinance is not preempted by the Labor Code because the latter does not conflict with the former. The Court of Appeal further held that the Ordinance is not unconstitutional under either the federal or state constitutions.

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Sullivan v. Dollar Tree Stores, Inc., 2010 WL 3733576 (9th Cir. 2010)

Christina Sullivan was the manager of a Factory 2-U store before it filed for Chapter 11 bankruptcy. Dollar Tree later purchased Factory 2-U’s existing leasehold on the store where Sullivan was employed. Prior to the anniversary of her hire by Dollar Tree, Sullivan’s mother became ill but Dollar Tree did not provide Sullivan with family leave under the Family Medical Leave Act (FMLA). Following the termination of her employment, Sullivan filed this lawsuit in which she alleged that Dollar Tree was the successor in interest to Factory 2-U and that she was entitled to FMLA leave even though she had worked for Dollar Tree for fewer than 12 months. The district court granted summary judgment to Dollar Tree and the Ninth Circuit affirmed, holding that Dollar Tree was not a successor in interest to Factory 2-U.

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Wang v. Chinese Daily News, 2010 WL 3733568 (9th Cir. 2010)

Plaintiffs (reporters for the Chinese Daily News) alleged they were non-exempt employees entitled to overtime pay under the Fair Labor Standards Act (FLSA) and California state law. The district court granted summary judgment in favor of the reporters, finding journalists are not subject to the creative professional exemption to the FLSA or California law. The Ninth Circuit affirmed and further held the district court had properly (1) certified a class under FRCP 23(b)(2); (2) invalidated certain opt outs from that class (in light of evidence of coercive behavior by the employer); (3) deferred a second opt out procedure until after trial on the merits; (4) determined the employer had failed to provide class members with meal breaks (the Court said it did not need to decide whether the provide or ensure standard applied); (5) held the FLSA does not preempt an unfair competition claim brought under Cal. Bus. & Prof. Code § 17200; (6) exercised supplemental jurisdiction over the 17200 claim; and (7) awarded attorneys’ fees to plaintiffs. See also Lazarin v. Superior Court, 2010 WL 3912499 (Cal. Ct. App. 2010) (unionized employees subject to Industrial Wage Commission Order No. 16 (governing on-site construction operations, etc.) could proceed with claim for employer’s failure to compensate for missed second meal periods).

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Hernandez v. Chipotle Mexican Grill, Inc., 2010 WL 4244583 (Cal. Ct. App. 2010)

Rogelio Hernandez worked as a non-exempt employee at Chipotle Mexican Grill. In this putative class action, Hernandez alleged that Chipotle violated California wage and hour law by failing to ensure that its employees took their meal breaks. The trial court granted Chipotle’s motion to deny class certification and to strike the class allegations on the ground that individual issues predominated over common issues and class treatment was not superior to individual actions. The trial court determined that individual inquiry was required to determine Chipotle’s alleged liability because “even if an employee’s time record indicated a break was missed, that in and of itself did not establish that Chipotle failed to provide, authorize or permit the employee to take a meal or rest break.” The Court of Appeal affirmed, holding the trial court had applied the proper legal analysis (predicting a similar result from the California Supreme Court in the still pending Brinker/Brinkley cases) and finding substantial evidence that individual issues predominated. See also Villacres v. ABM Indus., Inc., 2010 WL 4142264 (Cal. Ct. App. 2010) (PAGA claim filed after settlement and dismissal of wage and hour class action was barred by res judicata).

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Stiefel v. Bechtel Corp., 2010 WL 4273357 (9^th Cir. 2010)

James Richard Stiefel worked for Bechtel as an ironworker at a power plant. Five weeks before he was laid off, Stiefel injured his left hand while on the job. In his lawsuit, Stiefel alleged Bechtel laid him off as part of a “medical reduction in force,” which would result in cost savings to Bechtel under its workers’ compensation plan. Stiefel further alleged that during his employment, Bechtel harassed, discriminated and retaliated against him because of his disability and that it failed to reasonably accommodate his disability. He also claimed he was laid off and not subsequently rehired because of his disability. The district court granted Bechtel’s motion for summary judgment, but the Ninth Circuit reversed as to the pre-termination claims. The Court held that contrary to the lower court’s ruling, Stiefel had not failed to exhaust administrative remedies by not filing a separate complaint with the EEOC because there was a worksharing agreement in effect at the time he filed a complaint with the DFEH. The Court affirmed summary judgment of Stiefel’s post-termination claims on the ground that he failed to take the steps necessary to give Bechtel a chance to rehire him and thereby rejected Stiefel’s argument that attending roll calls at the union hall would have been a “futile gesture.”

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Sandell v. Taylor-Listug, Inc., 188 Cal. App. 4th 297 (2010)

Robert Sandell began his employment as vice president of sales with Taylor-Listug in February 2004. Six months later, while on a six-month sabbatical from work, Sandell suffered a stroke (following a chiropractic adjustment). When Sandell returned to work in October, he was using a cane and had noticeably slower speech. Taylor-Listug terminated Sandell’s employment three years later (when he was 60 years old) because of his “lack of leadership in providing direction to the sales team and in producing satisfactory sales results.” Sandell sued for age and disability discrimination. The trial court granted summary judgment to Taylor-Listug, but the Court of Appeal reversed, finding evidence of pretext for the termination given Sandell’s relatively favorable performance evaluations. The Court also discounted declarations from employees who criticized Sandell’s management because none of these employees had ever brought those complaints to the attention of management while Sandell was still working for the company. Relying upon Reid v. Google, Inc., 50 Cal. 4th 512 (2010), the Court of Appeal refused to label as “stray remarks” certain comments management personnel made directly to Sandell about his disability. As for the age claim, the Court determined the delay in replacing Sandell with a significantly younger employee (18 months after Sandell’s termination) and the fact that Sandell was hired and fired by the same person within a short period of time did not entitle the employer to summary adjudication of this claim. See also Steller v. Sears, Roebuck & Co., 2010 WL 4010602 (Cal. Ct. App. 2010) (parties’ settlement of disability discrimination claim impliedly included settlement of outstanding workers’ compensation claims but also was impliedly conditioned upon the WCAB’s approval of the settlement of the workers’ compensation claim).

 

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McCaskey v. California State Auto. Ass’n, 2010 WL 4261437 (Cal. Ct. App. 2010)

Charles Luke, Francis McCaskey and John Mellen filed this lawsuit against CSAA, alleging breach of contract and age discrimination. The contract claim was based on an alleged breach by CSAA of a promise to permit senior sales agents to continue in their employ under relaxed sales quotas (minimum production requirements or “MPR’s”). Plaintiffs also alleged that CSAA’s elimination of the policy permitting the relaxation of MPR’s for senior agents had a disparate impact on employees over age 40. The trial court granted summary judgment to CSAA, but the Court of Appeal reversed, finding a triable issue of fact regarding whether CSAA honored the policy for an agreed time (or in the absence of an agreed time, for a reasonable time). The Court rejected CSAA’s statute of limitations defense, holding the alleged breach occurred not when CSAA first adopted a compensation plan omitting the MPR reductions (2001), but when CSAA in fact applied the policy to plaintiffs (2002). The Court also held there was “no basis to conclude CSAA had honored the policy for a reasonable time when it renounced its undertaking, denied plaintiffs its benefits and ultimately discharged them for invoking it.” As for the age discrimination claim, the Court of Appeal found sufficient evidence in the record to raise a triable issue of fact concerning CSAA’s “real motivation” for terminating plaintiffs’ employment. The Court did, however, affirm summary adjudication of plaintiffs’ disparate impact and retaliation claims.

 

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California has enacted the "California Transparency in Supply Chains Act of 2010" (S.B. 657), which will require retail sellers and manufacturers that do business in California and that have over $100 million in annual worldwide gross receipts to publicly disclose their efforts to eradicate slavery and human trafficking from their direct supply chains for tangible goods offered for sale. The new law becomes effective on January 1, 2012.

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EEOC v. Prospect Airport Servs., 2010 WL 3448119 (9th Cir. 2010)

Rudolpho Lamas and Sylvia Munoz were co-workers employed by Prospect Airport Services, Inc. at McCarran Airport in Las Vegas. Lamas, whose wife died in September 2001, began working at Prospect in the spring of 2002. During the fall of 2002, Munoz, who was married, began a series of rejected sexual overtures toward Lamas. Over the course of several months, Munoz handed Lamas three or four “flirtatious notes,” stating that she was “turned on” by Lamas and that she wanted to “go out” with him. When Lamas informed their boss, Patrick O’Neill, about Munoz’s overtures, O’Neill advised Lamas to tell Munoz the romantic interest was not mutual and to notify management if Munoz “kept it up” so they could “take care of it.” Lamas followed O’Neill’s advice and told Lamas he was not interested, but Munoz did not stop and in fact increased her romantic overtures toward him, handing him a revealing picture of herself while telling him about her “crazy dreams about us in the bathtub” and confirming to Lamas – lest there be any doubt – that “seriously, I do want you sexually and romantically!” Lamas complained to another manager who did nothing to stop Munoz’s unwelcome advances, while yet another told Lamas he did not want to get involved in “personal matters.” Lamas’ co-workers made remarks to him suggesting he was gay. After four or five months of harassment and no protection from management, Lamas’ performance began to deteriorate and eventually he was terminated for “complaints about [his] job performance and negative attitude.”

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Reid v. Google, Inc., 50 Cal. 4th 512 (2010)

Brian Reid worked as Google’s director of operations and director of engineering for fewer than two years before he was terminated due to job elimination and poor performance. Reid, who was 52 years old at the time of his hire, reported to Wayne Rosing (age 55) and at times to Urs Hölzle (age 38), though he regularly interacted with other high-level employees of the company, including some who were in their late 20’s. Reid alleged that Hölzle and other employees made derogatory age-related remarks to him, saying that his ideas were “obsolete” and “too old to matter,” that he was “slow,” “fuzzy,” “sluggish,” and “lethargic” and that he did not “display a sense of urgency.” Other co-workers allegedly called Reid an “old man” and “old guy,” an “old fuddy-duddy,” told him his knowledge was “ancient” and joked that Reid’s CD jewel case office placard should be an “LP” instead of a “CD.” When Reid was informed no other positions were available for him at Google, he was told he was not a “cultural fit” at the company. 

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Mattel, Inc. v. MGA Entm’t, Inc., 2010 WL 2853761 (9th Cir. 2010)

In 2000, during his employment with Mattel, Carter Bryant pitched his idea for the Bratz line of dolls to MGA, which was one of Mattel’s competitors. The year before, Bryant had signed an employment agreement with Mattel pursuant to which he agreed to disclose and assign to Mattel all “inventions” conceived or reduced to practice at any time during his employment with Mattel. After it learned of Bryant’s involvement in the Bratz line of dolls, Mattel sued MGA, Bryant and others. Prior to the trial, which resulted in (among other things) a $10 million jury award to Mattel for copyright damages and the imposition of a constructive trust in favor of Mattel over all Bratz trademarks, the judge determined that under the employment agreement, Bryant had assigned his “ideas” (not just his “inventions”) to Mattel. 

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Narayan v. EGL, Inc., 2010 WL 3035487 (9th Cir. 2010)

Mohit Narayan and two other drivers for EGL (a global transportation, supply chain management and information services company headquartered in Texas) were California residents who provided services to EGL pursuant to independent contractor agreements that contained a Texas choice-of-law provision. Narayan and the other drivers filed a lawsuit against EGL in California alleging they were in fact employees of EGL who were deprived of overtime wages, reimbursement for business expenses, meal compensation, etc. EGL removed the case to federal court and obtained summary judgment after the district court applied Texas law and concluded plaintiffs were independent contractors and not employees. The district court also concluded the result would be the same under California law. 

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Morgan v. United Retail Inc., 186 Cal. App. 4th 1136 (2010)

Amber Morgan filed this class action lawsuit against her former employer under Cal. Lab. Code § 226, alleging United Retail had violated the law because the wage statements issued by the employer listed the total number of regular hours and overtime hours separately and did not provide the sum of the regular and overtime hours as a separate line item. During her deposition, Morgan testified she was injured by United Retail’s failure to include an additional line item showing the sum of hours worked because “[i]t makes it a little difficult to count how many hours I have been working.” 

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Lu v. Hawaiian Gardens Casino, Inc., 2010 WL 3081272 (Cal. S. Ct. 2010)

Louie Hung Kwei Lu, a card dealer at Hawaiian Gardens Casino, filed this class action challenging the casino’s tip-pooling policy that required dealers to set aside 15 to 20 percent of the tips they received, which the casino distributed to other employees who provided service to casino customers. The Supreme Court granted review in this case to determine the narrow issue of whether Cal. Lab. Code § 351 provides employees with a private right of action or whether, instead, the labor commissioner is charged with enforcing the statute. The Supreme Court held there is no private right of action under the statute but observed that a common law claim for conversion may be available to employees under appropriate circumstances. See also Gutierrez v. California Commerce Club, 2010 WL 2991875 (Cal. Ct. App. 2010) (dismissal of wage-and-hour class action on demurrer is reversed because it was “premature to make determinations pertaining to class suitability on demurrer”).

 

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Silguero v. Creteguard, Inc., 187 Cal. App. 4th 60 (2010)

Shortly after Creteguard hired Rosemary Silguero, her former employer (FST) contacted Creteguard and “requested the cooperation and participation of [Creteguard] in enforcing the confidentiality agreement [between Silguero and FST], including those provisions prohibiting Silguero from all sales activities for 18 months following Silguero’s departure or termination from FST.” In response to the letter from FST, Creteguard terminated Silguero’s employment even though “we believe that non-compete clauses are not legally enforceable here in California.” In her lawsuit against Creteguard, Silguero alleged the non-compete that Creteguard enforced violated Cal. Bus. & Prof. Code § 16600 and that her termination, therefore, violated the public policy of the State of California. The trial court sustained Creteguard’s demurrer to the complaint, but the Court of Appeal reversed, holding that Creteguard’s decision to honor an unenforceable non-compete violated the public policy of California as expressed in Section 16600.

 

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Hawn v. Executive Jet Mgmt., Inc., 2010 WL 3218520 (9th Cir. 2010)

Gregory Hawn, Michael Prince and Aric Aldrich (all pilots) were terminated by Executive Jet Management after a female flight attendant, Robin McCrea, alleged they had sexually harassed her and created a hostile work environment involving an array of conduct including sexualized banter, crude jokes and the sharing of crude and/or pornographic emails and websites. Following their terminations, plaintiffs filed this lawsuit alleging discrimination on the basis of race, sex and national origin. Plaintiffs alleged that a group of female flight attendants (that included McCrea) also traded sexual emails and participated in sexual discussions but that the employer considered the pilots’ terminations to be relatively “risk free” because the pilots were “young, white, American males.” The district court granted the employer’s motion for summary judgment, and the Ninth Circuit affirmed, holding that plaintiffs had failed to show that similarly-situated employees (the female flight attendants) had engaged in similar conduct but had received more favorable treatment by the employer. The Ninth Circuit affirmed summary judgment on one of the two grounds cited by the lower court – that the two groups were not similarly situated because the pilots’ conduct gave rise to a complaint of sexual harassment, while the flight attendants’ alleged conduct did not. (The Ninth Circuit rejected the district court’s conclusion that the two groups were not similarly situated because they reported to different supervisors.) See also Spencer v. World Vision, Inc. 2010 WL 3293706 (9th Cir. 2010) (faith-based humanitarian organization is exempt from Title VII’s prohibition against religious discrimination).

 

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Milan v. City of Holtville, 186 Cal. App. 4th 1028 (2010)

Tanya Milan, who worked as a water treatment operator for the City of Holtville, was injured on the job while moving a large piece of metal. After Milan applied for workers’ compensation benefits, a physician who had been retained on behalf of the city, examined her and concluded she would not be able to return to work at the water treatment plant. Shortly thereafter, the city notified Milan that because she would be unable to return to work, it had decided to offer her rehabilitation benefits, which she accepted before taking an online real estate course. Milan continued to receive a regular paycheck from the city until she was notified 18 months after the injury had occurred that the city was terminating her employment. Milan filed this lawsuit against the city, alleging it had violated the Fair Employment and Housing Act by failing to determine whether it could provide effective accommodations for her disability. 

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Thompson v. City of Monrovia, 186 Cal. App. 4th 1860 (2010)

Officer Matthew Donald Thompson sued the Monrovia Police Department for harassment and a hostile work environment arising from offensive remarks and behavior that were allegedly directed at an African-American colleague. Thompson also alleged he suffered retaliation for having reported the racism. The trial court granted summary judgment to the police department, and the Court of Appeal affirmed, holding there was no material factual dispute as to whether the department had retaliated against him. Similarly, the court affirmed summary judgment of Thompson’s claim of harassment on the grounds that he had failed to produce evidence that “he was subjected to harassing comments or conduct because of his association with or advocacy on behalf of African Americans,” that the incidents about which Thompson had complained were neither severe nor pervasive enough to be actionable and because Thompson’s racial harassment claim was barred by the statute of limitations. Finally, the court held the claim involving the department’s alleged failure to investigate harassment and retaliation had to be dismissed because it was not the basis for a “stand-alone tort” and, in any event, there was uncontroverted evidence the department had conducted an appropriate investigation. See also Henderson v. Pacific Gas & Elec. Co., 187 Cal. App. 4th 215 (2010) (plaintiff’s counsel who failed to file timely opposition to summary judgment motion could not rely on Cal. Code Civ. Proc. § 473(b) for relief); Murray v. Alaska Airlines, Inc., 2010 WL 3292968 (Cal. S. Ct. 2010) (federal agency’s investigative findings concerning whistleblower complaint should be given collateral estoppel effect when a complainant elects not to invoke his right to challenge such findings but instead initiates a separate lawsuit).

 

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 City of Ontario v. Quon, 560 U.S. ___, 2010 WL 2400087 (2010)

The City of Ontario’s Computer Usage, Internet and E-mail Policy provides that use of the city’s computers and other electronic equipment, networks, etc., is limited to city-related business, that access is not confidential and “users should have no expectation of privacy or confidentiality when using these resources.” Sergeant Jeff Quon, a member of the city’s SWAT team, signed an employee acknowledgement of the Policy and attended a meeting in which he and others were informed that text messages were considered to be the same as e-mail and could be audited by the department. However, Quon was later told that the content of his text messages would not be audited so long as he paid the department for any charges associated with texting more than 25,000 characters in a billing cycle. When a lieutenant in the department “grew weary” of being a bill collector for officers who exceeded the 25,000 character limit, the department contacted Arch Wireless and requested transcripts of the text messages. After the department received the transcripts from Arch, internal affairs conducted an investigation to determine “if someone was wasting city time not doing work when they should be.” The investigation revealed that many of Quon’s messages were personal in nature and sexually explicit.

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 Lewis v. City of Chicago, 560 U.S. ___, 130 S. Ct. 2191 (2010)

Plaintiffs in this case (more than 6,000 African-Americans) had applied to serve in the Chicago Fire Department. They challenged as discriminatory the city’s decision to hire only applicants who had scored 89 or above on a written examination. The city stipulated that the 89-point cutoff had a “severe disparate impact against African Americans,” but argued that the cutoff score was justified by business necessity. Although plaintiffs won at the district court level, the Seventh Circuit Court of Appeals reversed the judgment on the ground that plaintiffs’ suit was untimely because the earliest EEOC charge was filed more than 300 days after the only discriminatory act – sorting the scores into the “well-qualified,” “qualified” and “not-qualified” categories.

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 Hernandez v. Tanninen, 604 F.3d 1095 (9th Cir. 2010)

Rolando Hernandez alleged claims of race and national origin discrimination based on disparate treatment, retaliation, and a hostile work environment while he was employed as a mechanic in the Fire Shop of the City of Vancouver, Washington. Hernandez sued the city and another employee, Mark Tanninen. Hernandez was initially represented by attorney Gregory Ferguson. Hernandez told Ferguson that Tanninen had witnessed the discrimination and would corroborate his story. Ferguson interviewed Tanninen, who did initially corroborate Hernandez’s story, but after speaking with the Deputy Fire Chief, Tanninen decided his getting involved would not be good for the Deputy Fire Chief and “everyone involved.” Since Ferguson was a witness to Tanninen’s original statements corroborating the allegations, Ferguson referred the case to another attorney.  

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 Bowman v. Wyatt, 2010 WL 2613079 (Cal. Ct. App. 2010)

Plaintiff Barry A. Bowman filed this case after suffering devastating injuries when his motorcycle collided with a dump truck owned and operated by Tommie Wyatt, Jr. The collision occurred shortly after Wyatt had delivered a load of asphalt to a work site of the City of Los Angeles with which Wyatt was under contract. The jury found that Wyatt was an employee of the city and returned a verdict in Bowman’s favor in the amount of $15.7 million. On appeal, the city argued that the trial court had misinstructed the jury on the factors it should consider in determining whether Wyatt was an employee or independent contractor of the city.

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Baker v. American Horticulture Supply, Inc., 2010 WL 2523638 (Cal. Ct. App. 2010)

Edwin Baker worked as an independent wholesale sales representative for American Horticulture Supply, Inc. (“AHS”). A jury returned verdicts in Baker’s favor on his breach of contract and fraud claims, but the trial court ordered a new trial on the grounds of insufficiency of evidence, excessive damages and juror misconduct. The trial court granted AHS’s motion for directed verdict as to Baker’s statutory claim for violation of the Independent Wholesale Sales Representatives Contractual Relations Act of 1990 (Cal. Civ. Code § 1738.10, et seq.) on the ground that there was no evidence that AHS’s violation of the statute was “willful.” The Court of Appeal affirmed the trial court’s ordering a new trial on the non-statutory claims, but reversed its dismissal of the statutory claim after concluding that “there is no evidence … the Legislature intended to immunize a nonwillful violation of the Act.”

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Singh v. Southland Stone, U.S.A., Inc., 2010 WL 2613089 (Cal. Ct. App. 2010)

Gurpreet Singh moved from India to California to work as a general manager for Southland Stone. After Singh resigned and returned to India, he filed suit against Southland and its president (Ravinder S. Johar), alleging various contract and tort claims. The jury awarded Singh more than $980,000 for past and future noneconomic damages, economic damages, unpaid wages and punitive damages. The Court of Appeal affirmed the judgment in part (as to the denial of the breach of contract claim and the award of $6,800 in wages whose payment defendants conditioned upon Singh’s signing a release), but otherwise reversed the judgment. The Court reversed the judgment on the claim for breach of the implied covenant of good faith and fair dealing (because Singh was employed at will) and the claim for intentional infliction of emotional distress (because it was barred by the exclusive remedy of the Workers’ Compensation Act) and ordered the trial court to enter judgment for defendants on those claims.

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Faulkinbury v. Boyd & Assocs., Inc., 2010 WL 2525710 (Cal. Ct. App. 2010)

Plaintiffs sought to represent and certify a class of 4,000 current and former employees of Boyd & Associates, which provides security guard services throughout Southern California. Plaintiffs alleged that Boyd denied the putative class members off-duty meal periods and rest breaks and that it had failed to include certain reimbursements and an annual bonus payment in calculating the employees’ hourly rate of overtime pay.

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Martinez v. Combs, 49 Cal. 4th 35 (2010)

Plaintiffs are seasonal agricultural workers whom Munoz & Sons had employed during the 2000 strawberry season. The employees sued Munoz and two produce merchants (through whom Munoz sold strawberries) for alleged minimum wage violations. Following Munoz’s bankruptcy, plaintiffs contended that the produce merchants were joint employers along with Munoz; that plaintiffs were the third-party beneficiaries of the contract between Munoz and the merchants; and that they were parties to an oral employment agreement with one of the merchants. The California Supreme Court held that although the Industrial Wage Commission’s (“IWC”) wage orders do generally define the employment relationship in actions to recover unpaid minimum wages, the IWC’s definition of “employer” does not impose liability on individual corporate agents acting within the scope of their agency.

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Rodriguez v. Maricopa County Cmty. Coll., 605 F.3d 703 (9th Cir. 2010)

Professor Walter Kehowski sent three racially-charged emails over a distribution list maintained by the college district where he teaches math. Every district employee with an email address received Kehowski’s messages, including plaintiffs in this case – a certified class of the district’s Hispanic employees. Plaintiffs sued the district, its governing board and two district administrators, claiming their failure to properly respond to the emails created a hostile environment in violation of Title VII and the Equal Protection Clause.

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The California Division of Labor Standards Enforcement opined that an intensive educational and training program designed for young urban adults (18-24 years old) that places these individuals in internships with non-profit and for-profit businesses is exempt from the minimum wage law (interns receive a stipend but not a salary or wages). DLSE Opinion Letter (Apr. 7, 2010), available at http://www.dir.ca.gov/dlse/OpinionLetters-byDate.htm.

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Rosas v. The Corporation of the Catholic Archbishop of Seattle, 598 F.3d 668 (9th Cir. 2010)

Cesar Rosas and Jesus Alcazar were Catholic seminarians who sued the Corporation of the Catholic Archbishop for, among other things, failure to pay them overtime wages under Washington state law. Based on the ministerial exception, the district court dismissed the case on the pleadings. The Ninth Circuit affirmed, holding that the Religion Clauses of the First Amendment require a “ministerial exception” to employment statutes if the statute’s application would interfere with a religious institution’s employment decisions concerning its ministers.

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Bamonte v. City of Mesa, 598 F.3d 1217 (9th Cir. 2010)

The plaintiffs in this case are employed as police officers for the City of Mesa, Arizona. They contended that the city violated the Fair Labor Standards Act (“FLSA”) by failing to compensate them for the time spent donning and doffing their uniforms and accompanying gear. The district court dismissed the lawsuit on summary judgment, and the Ninth Circuit affirmed, holding that because “[n]o requirement of law, rule, the employer, or the nature of the work mandates donning and doffing at the employer’s premises” rather than at home, the time spent doing so was not compensable under the FLSA.

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Arenas v. El Torito Restaurants, Inc., 183 Cal. App. 4th 723 (2010)

The plaintiffs in this case are salaried managers at El Torito, El Torito Grill and GuadalaHarry’s restaurants in California from May 2002 to the present. Plaintiffs alleged they were misclassified as employees exempt from overtime because they routinely spent more than half of their working hours performing duties delegated to non-exempt employees such as operating and closing cash registers, preparing food products, cooking, preparing drinks, tending bar, etc. In support of their motion to certify the class, plaintiffs alleged common questions of law and fact, including that all managers share the same or similar employment duties and activities, are automatically classified as exempt, and are denied the benefits and protections of the employment laws and regulations in the same manner. Plaintiffs moved for certification of three subclasses of employees: kitchen managers, department managers and general managers. The trial court denied class certification after determining that resolution of the common issues would require mini-trials concerning the circumstances of each individual’s job duties. The Court of Appeal affirmed, agreeing with the trial court’s conclusion that “managers, based solely on their job descriptions, were as a rule misclassified was not amenable to common proof.” See also Weigele v. FedEx Ground Package Sys., 2010 WL 1337031 (S.D. Cal. 2010) (granting FedEx’s motion to decertify class of former managers).

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Wald v. Truspeed, 2010 WL 1744893 (Cal. Ct. App. 2010)

Alex Wald, who is in the business of “finding, buying and then selling again used Porsches,” found 11 Porsches for Truspeed (a car dealer), which Truspeed sold without paying Wald the finder’s fee. In response to Wald’s lawsuit against Truspeed alleging breach of contract, unjust enrichment and fraud, Truspeed asserted that Wald lacked a dealer’s license and a salesperson’s license and, therefore, he was barred from recovering against Truspeed. Wald argued that he was really a salesperson and not a dealer and that he should be able to recover against Truspeed. The trial court sustained Truspeed’s demurrer without leave to amend, but the Court of Appeal reversed, holding that Wald was “in substance a salesperson” for Truspeed. As for the fact that Wald also lacked a salesperson’s license, the Court held that the licensing requirement exists to protect the public from unscrupulous dealers and not dealers from their own salespeople. The Court also held that Wald could proceed with his fraud claim.

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Ventress v. Japan Airlines, 2010 WL 1729705 (9th Cir. 2010)

Martin Ventress, a flight engineer for Japan Airlines (“JAL”), alleged his employment was terminated in violation of the California whistleblower statute (Labor Code § 1102.5(b)) for allegedly reporting safety violations six months after they occurred. JAL moved for judgment on the pleadings, asserting complete federal preemption by the Federal Airline Deregulation Act of 1978, as amended by the Whistleblower Protection Program. The Ninth Circuit held that because Ventress did not interrupt “service” (i.e., “the prices, schedules, origins and destinations of the point-to-point transportation of passengers, cargo or mail”), his claim was not preempted by federal law. Compare Wise v. Verizon Communications Inc., 600 F.3d 1180 (9th Cir. 2010) (employee’s claims arising from denial of disability benefits were preempted by ERISA).

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Mendoza v. ADP Screening & Selection Servs., Inc., 182 Cal. App. 4th 1644 (2010)

William Mendoza sued ADP Screening and Selection Services, Inc. (“SASS”) for violations of Penal Code §§ 290.4 and 290.46, the Investigative Consumer Reporting Agencies Act and declaratory relief based upon SASS’s apparent disclosure to a prospective employer of information uncovered during a background check conducted on Mendoza, indicating his status as a registered sex offender listed on the Megan’s Law website. (Mendoza’s complaint implied these facts but did not affirmatively allege them.) In response to Mendoza’s complaint, SASS filed a special motion to strike pursuant to California’s anti-SLAPP statute. The trial court granted SASS’s motion to strike the complaint after concluding the conduct alleged by Mendoza arose in furtherance of SASS’s First Amendment rights of commercial speech on a matter of public interest and that Mendoza could not establish a probability that he would prevail on the merits. The trial court’s decision also included a mandatory award of attorney’s fees in the amount of $42,593.75 in favor of SASS. The Court of Appeal affirmed, holding that the anti-SLAPP statute is available to SASS even though it is a commercial enterprise and that providing employee screening reports is a “protected activity” under the statute.

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JustMed, Inc. v. Byce, 600 F.3d 1118 (9th Cir. 2010)

Michael Byce developed the source code used in the software of a digital audio larynx device that JustMed owned. JustMed contended that Byce was its employee when he developed the code and that the code, therefore, belonged to JustMed under the work-for-hire doctrine of the federal Copyright Act. Byce, however, contended he was an independent contractor and that he expected to receive shares in JustMed upon transferring ownership of the source code to JustMed. The district court found that Byce was an employee of JustMed when he wrote the software and that JustMed owned the copyright to the software under the work-for-hire doctrine. The district court also found Byce liable for misappropriation of JustMed’s trade secrets. The Ninth Circuit affirmed the district court’s judgment regarding violation of the Copyright Act, noting that although “JustMed [as a start-up company] did not comply with federal and state employment or tax laws… the remedy for these failings lies not with denying the firm its intellectual property but with enforcing the relevant laws.” However, the Court reversed the judgment insofar as the district court had determined Byce had violated Idaho’s version of the Uniform Trade Secrets Act because Byce had neither “used” nor “disclosed” JustMed’s trade secrets. The Ninth Circuit remanded the case for the district court to determine whether and in what amount JustMed could recover damages on its conversion and breach of fiduciary duty claims and whether an injunction to prevent further misappropriation was warranted. See also Thomas Weisel Partners LLC v. BNP Paribas, 2010 WL 1267744 (N.D. Cal. 2010) (company’s director breached fiduciary duty by facilitating en masse defection of 26 employees to competitor).

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Gutierrez v. G&M Oil Co., 2010 WL 1818904 (Cal. Ct. App. 2010)

Maria Gutierrez filed a wage-and-hour class action lawsuit against G&M Oil Company, an operator of a chain of gas stations throughout California. Michael Gray was G&M’s vice president and general counsel and its registered agent for service of process Gray agreed to accept service of the complaint from Gutierrez’s attorney and decided to handle the defense of the case himself. Gray did not send a copy of the pleadings to anyone else at G&M and kept the existence of the lawsuit to himself. Over the course of the next 12 months, there were no fewer than three separate requests for default, based on a lack of response to the operative complaint. Finally, a default judgment of $4 million was obtained against G&M. After Gray was removed from his position and outside counsel was retained to defend G&M, the company filed a motion to vacate the default judgment, relying upon Code Civ. Proc. § 473 (relieving a party from a default based upon an attorney’s “mistake, inadvertence, surprise or neglect”). The trial court granted G&M’s motion to vacate the default, holding that Section 473 applies to in-house counsel such as Gray as well as outside counsel. The Court of Appeal affirmed even though Gray was not only G&M’s general counsel but also one of its corporate officers.

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Dukes v. Wal-Mart Stores, 2010 WL 1644259 (9th Cir. 2010) (en banc)

The district court certified a class encompassing all women employed by Wal-Mart at any time after December 26, 1998 who claimed gender discrimination under Title VII and who sought injunctive and declaratory relief, back pay and, in a separate opt-out class, punitive damages. Among other things, plaintiffs claim they received lower pay and fewer and slower promotions than did their male counterparts. In this en banc decision, the Ninth Circuit affirmed the district court in a narrow 6-5 ruling. The class includes as many as 1.5 million women who worked at over 3,400 stores throughout the United States. The Court affirmed certification under Fed. R. Civ. P. 23(b)(2), which imposes less stringent requirements for class certification and applies to cases in which the injunctive relief sought predominates over the monetary relief sought. See also Porter v. Winter, 2010 WL 1780864 (9th Cir. 2010) (federal courts have subject matter jurisdiction over claims brought solely to recover attorney’s fees incurred in Title VII administrative proceedings); United Steel, Paper & Forestry, etc. v. Shell Oil Co., 2010 WL 1571190 (9th Cir. 2010) (denial of Rule 23 class certification in removed action does not divest district court of jurisdiction).

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Cumbie v. Woody Woo, Inc., 2010 WL 610603 (9th Cir. 2010)

Misty Cumbie worked as a waitress at the Vita Café (owned and operated by Woody Woo, Inc.). Woo required its servers to contribute their tips to a “tip pool” that was redistributed to all restaurant employees, including the kitchen staff (dishwashers and cooks). Cumbie filed this putative collective and class action against Woo, alleging that its tip-pooling arrangement violated the minimum wage provisions of the federal Fair Labor Standards Act (“FLSA”). The district court dismissed Cumbie’s complaint for failure to state a claim, and the Ninth Circuit affirmed, holding that “nothing in the text of the FLSA purports to restrict employee tip-pooling arrangements when no tip credit is taken” by the employer.

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Pellegrino v. Robert Half Int’l, Inc., 181 Cal. App. 4th 713 (2010)

Maria Pellegrino and other account executives of temporary staffing firm Robert Half International (“RHI”) filed this action against RHI for its failure to pay overtime compensation and commissions and to provide meal periods and itemized wage statements and for unfair competition. RHI had classified Pellegrino and the other account executives as administratively exempt employees. Among other things, the account executives’ duties included recruiting, interviewing and evaluating candidates to be placed as temporary employees. RHI relied upon two principal affirmative defenses, including an agreement by which the account executives purportedly agreed to limit the time period within which to file any claims against RHI to six months and, secondly, that plaintiffs were exempt from overtime. The trial court bifurcated the unfair competition claims and ordered that those claims first be tried to the court (without a jury). After 17 days of trial and at the end of RHI’s case in chief on the exemption defense, plaintiffs moved for judgment pursuant to Cal. Code Civ. Proc. § 631.8, which the trial court granted before entering a judgment in favor of plaintiffs in the amount of $615,000. The Court of Appeal affirmed, holding that the six-month purported limitation on plaintiffs’ claims was unenforceable under Labor Code § 219. The Court further held the administrative exemption was inapplicable to plaintiffs because their work did not directly relate to management policies or general business operations of RHI or its customers. See also Pellegrino v. Robert Half Int’l, Inc., 2010 WL 336687 (Cal. Ct. App. 2010) (attorney’s fees award of $978,122 remanded to trial court for recalculation); Villalobos v. Guertin, 2009 WL 4718721 (E.D. Cal. 2009) (prevailing party employer’s motion for $21,000 in attorney’s fees granted against attorney of former employees in wage­-and-hour class action).

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Jaimez v. DAIOHS U.S.A., Inc., 181 Cal. App. 4th 1286 (2010)

Alex Jaimez, a former Route Sales Representative (RSR) for DAIOHS U.S.A., Inc., dba DAIOHS First Choice Services (First Choice), filed this putative class action alleging that First Choice deliberately misclassified employees as exempt from overtime, failed to provide them with meal and rest break periods, and failed to provide legally compliant paystubs. The trial court denied the motion to certify the class on the ground that Jaimez’s claims were not typical, that common issues of law and fact did not predominate, and that Jaimez was not an adequate class representative because he had lied on his First Choice employment application about his felony conviction and incarceration and had purportedly falsified time records and other documents. The Court of Appeal reversed the trial court’s order denying class certification on the ground that nine of the RSR declarations that Jaimez provided were sufficient to demonstrate certification was appropriate – and the 25 declarations First Choice submitted only suggested that the potential damages to individual RSRs might vary. The Court did, however, affirm the trial court’s determination that Jaimez was not an adequate class representative and ordered that a new class representative be appointed. See also United Steel Workers v. ConocoPhillips Co., 593 F.3d 802 (9th Cir. 2010) (district court improperly denied class certification on claims arising from alleged failure to provide duty-free meal periods despite possibility that plaintiffs could not satisfy requirement that questions of law and fact common to class members predominated over individual questions).

 

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Lara v. WCAB, 2010 WL 654379 (Cal. Ct. App. 2010)

The Metro Diner hired Luis Lara as a gardener twice during a 12-month period to prune the bushes around the diner. Lara fell off the roof of the diner while pruning the bushes and injured his head, back, neck and other parts of his body. After the fall, Lara filed a workers’ compensation claim against Metro and its owner and also joined the Uninsured Employers Benefits Trust Fund in the action because Metro had no workers’ compensation insurance. The Workers’ Compensation Judge determined that Lara was an employee of Metro and that he was entitled to benefits. However, the Workers’ Compensation Appeals Board (the “WCAB”) determined that Lara was an independent contractor who paid his own taxes and contracted with numerous individuals to perform different types of jobs. Further, the Board found “no evidence that Metro had the power to control the details of [Lara’s] work in pruning the bushes or the method by which he performed the task.” The Court of Appeal affirmed the WCAB’s decision. See also Merchandising Concept Group, Inc. v. CUIAB, 181 Cal. App. 4th 1274 (2010) (company improperly challenged determination that workers were employees subject to unemployment insurance deductions rather than independent contractors by failing to exhaust administrative remedies).

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Diaz v. Carcamo, 2010 WL 654346 (Cal. Ct. App. 2010)

Dawn Diaz was seriously injured when she was struck by a car that jumped a freeway center divider following its collision with a truck that was driven by Jose Carcamo (a truck driver who was employed by Sugar Transport). Diaz sued both drivers as well as Sugar Transport and obtained a jury verdict in the amount of approximately $23 million. Diaz alleged that Sugar Transport was vicariously liable for Carcamo’s negligence as well as for its own direct negligence in hiring Carcamo, who had been involved in other accidents before Sugar Transport hired him and who had been terminated from his prior employment. On appeal, Sugar Transport argued that the jury should not have been permitted to find it liable for negligent hiring after it conceded at trial that it was vicariously liable for Carcamo’s negligence. The Court of Appeal affirmed the judgment in favor of Diaz and held that the jury was permitted to find Sugar Transport liable on both negligence theories. In addition, the Court held that the trial court properly instructed the jury about Sugar Transport’s willful suppression of evidence involving a missing tachograph chart which would have shown whether Carcamo sped up immediately before the accident. See also Lobo v. Tamco, 2010 WL 625805 (Cal. Ct. App. 2010) (employee who was on his way home may have been acting within the course and scope of his employment when his negligent driving resulted in the death of a deputy sheriff who was on a motorcycle).

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McCarther v. Pacific Telesis Group, 48 Cal. 4th 104 (2010)

Plaintiffs in this case worked as service representatives for different Pacific Telesis companies, which are signatories to various collective bargaining agreements (“CBAs”). The applicable CBA in this case provides employees with paid time off for any day in which they miss work due to their own illness or injury for up to five consecutive days in any seven-day period so long as the employee returns to work (even for a partial day) following any period of absence. The employer did not pay employees for absences to care for ill family members. In 1999, California enacted the so-called “kin-care” statute (Labor Code § 233), which requires employers that provide sick leave to permit the employees to use up to half of their annual accrued and available sick leave entitlement to attend to an illness of a child, parent, spouse, or domestic partner of the employee. The legal question in this case was whether the statute applied to policies that provide for an uncapped number of days off, and the Supreme Court held that it does not. See also Traxler v. Multnomah County, 2010 WL 669251 (9th Cir. 2010) (the court not the jury should determine the amount of front pay damages in an FMLA action).

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Harris v. City of Santa Monica, 181 Cal. App. 4th 1094 (2010)

During her six-month tenure as a bus driver for the City of Santa Monica, Wynona Harris had two preventable traffic accidents and two “miss-outs” (tardies or unexcused absences). The city decided to terminate Harris (who was still a probationary driver) before she had informed her supervisor she was pregnant, but it did not communicate the decision to Harris until four days later. Harris sued for pregnancy discrimination under the Fair Employment and Housing Act. At trial, the city requested that the court instruct the jury on the city’s “mixed motive” defense, relying upon BAJI No. 12.26, which provides that the employer must establish that a “legitimate reason was present [for the employment decision], and standing alone, [it] would have induced the employer to make the same decision.” The court refused to give the city’s requested instruction, and the jury awarded Harris $178,000 in damages. The Court of Appeal reversed the judgment, holding that the jury instruction the trial court did give (CACI No. 2500) was deficient because it permitted Harris to prevail by showing her pregnancy led to her termination, even if other factors contributed to it. See also Wells v. CIR, T.C. Memo. 2010-5, 2010 WL 23333 (2010) (payment received for alleged emotional distress in settlement of sex discrimination and retaliation claims was not excludable from income).

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Chavez v. City of Los Angeles, 47 Cal. 4th 970 (2010)

Over the course of six years, Robert Chavez, a Los Angeles Police Department officer, and his wife filed multiple lawsuits against the LAPD and other members of the LAPD, alleging a variety of claims involving discrimination, harassment and retaliation. In this particular lawsuit, Chavez alleged the city and three of his supervisors had harassed, discriminated and retaliated against him based upon a perceived mental disability and for filing previous state and federal discrimination claims. The jury determined that Chavez’s protected activity was a motivating factor in the decision to rescind his transfer and awarded him $1,500 in lost wages and $10,000 for emotional distress. After the trial, Chavez’s attorney submitted a request for $871,000 in attorney’s fees incurred during five years of litigation against the city on Chavez’s behalf. Even though Chavez was technically the “prevailing party” in the litigation, the trial court denied the fee request on the ground that the court has discretion to deny fees and costs if the matter could have been but was not brought as a “limited civil case” in which the amount in controversy does not exceed $25,000. Although the court of appeal reversed on the ground that the limited civil case rules are inapplicable to a claim filed under the Fair Employment and Housing Act, the Supreme Court reversed the court of appeal and reinstated the trial court’s order denying the recovery of fees “in light of plaintiff’s minimal success and grossly inflated attorney fee request.”

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Narouz v. Charter Communications, LLC, 591 F.3d 1261 (9th Cir. 2010)

Hani Narouz filed a complaint against Charter Communications in which he alleged causes of action for wrongful termination in violation of public policy, as well as statutory violations of the California Labor Code for failure to pay wages, provide meal periods, maintain accurate itemized wage statements, and unfair competition under Business & Professions Code § 17200. The wage claims were asserted as a putative class action on behalf of Charter’s non-exempt employees. Following extensive discovery and a mediation, Narouz settled his individual claims. After settling his own claims, Narouz filed a motion to certify the class for settlement purposes, which was denied by the district court because it could not “ascertain a class.” Narouz subsequently appealed the denial of class certification, and the Ninth Circuit reversed the district court, holding that when a class representative voluntarily settles his or her individual claims but specifically retains a personal stake in a putative class action, he or she retains jurisdiction to appeal the denial of class certification. The Ninth Circuit also held the district court erred by failing to certify a class for settlement purposes. See also Hertz Corp. v. Friend, 559 U.S. ___, 130 S. Ct. 1181 (2010) (“nerve center” approach used to determine company’s principal place of business for purposes of establishing diversity in removed case).

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D’Este v. Bayer Corp., 565 F.3d 1119 (9th Cir. 2009)

The Ninth Circuit has certified two questions of law to be answered by the California Supreme Court pursuant to Cal. Rule of Court 8.548: (1) Does a pharmaceutical sales representative (“PSR”) qualify as an “outside salesperson” under Industrial Welfare Commission Wage Orders 1-2001 and 4-2001 if the PSR spends more than half the working time away from the employer’s place of business and personally interacts with doctors and hospitals on behalf of drug companies for the purpose of increasing individual doctors’ prescriptions of specific drugs? (2) In the alternative, is a PSR involved in duties and responsibilities that meet the requirements of the administrative exemption under California law?

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FLIR Sys., Inc. v. Parrish, 2009 WL 1653103 (Cal. Ct. App. 2009)

FLIR Systems purchased Indigo Systems, which manufactures and sells microbolometers (a device used in connection with infrared cameras, night vision and thermal imaging), for $185 million in 2004. William Parrish and Timothy Fitzgibbons were shareholders and officers of Indigo before the company was sold to FLIR; after the sale, they continued working for Indigo. In 2005, Parrish and Fitzgibbons decided to start a new company (Thermicon) to mass produce bolometers, and they gave notice to Indigo that they would quit their employment in January 2006. When Parrish and Fitzgibbons entered into negotiations with Raytheon to acquire licensing, technology and manufacturing facilities for Thermicon, they assured FLIR that they would not misappropriate any of Indigo’s trade secrets and that the new company would use an intellectual property filter similar to the one used at Indigo to prevent the misuse of trade secrets. In response, FLIR sued for injunctive relief on the theory that Thermicon could not mass produce low-cost microbolometers without misappropriating FLIR’s trade secrets. The trial court found no misappropriation of FLIR’s trade secrets and determined that the action had been brought in bad faith on a theory of “inevitable disclosure” – a doctrine not recognized by California courts because “it contravenes a strong public policy of employee mobility that permits exemployees to start new entrepreneurial endeavors.” The trial court awarded Parrish and Fitzgibbons $1,641,261.78 in attorney’s fees and costs pursuant to Cal. Civ. Code § 3426.4 (misappropriation of trade secrets claim made in bad faith). The Court of Appeal affirmed and further awarded respondents the costs and attorney’s fees they incurred in connection with the appeal.

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Haro v. City of Rosemead, 174 Cal. App. 4th 1067 (2009)

Randy Haro and Robert Ballin filed an action against the city of Rosemead alleging a violation of the federal Fair Labor Standards Act (“FLSA”). The trial court denied plaintiffs’ motion to have the class certified pursuant to Cal. Code Civ. Proc. § 382 (the California class action statute) on the ground that an FLSA collective action (which requires members of the collective action to affirmatively opt-in) cannot be prosecuted as a class action under California law (which requires class members to opt-out). The Court of Appeal dismissed the appeal from the trial court’s orders denying class certification and denying leave to amend the complaint, holding that “an FLSA action has to be litigated according to rules that are specifically applicable to these actions and if litigants do not like these rules, they should not file under the FLSA.” Cf. Smith v. T-Mobile USA Inc., 2009 WL 1651531 (9th Cir. 2009) (plaintiffs who had voluntarily settled their FLSA claims before appeal was filed could not continue to prosecute action, rendering appeal moot).

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Martorana v. Marlin & Saltzman, 2009 WL 1875681 (Cal. Ct. App. 2009)

Ron Martorana was a class member in a wage and hour class action that had been filed against his former employer, Allstate Insurance Company. The Los Angeles Superior Court approved a settlement of the class action, but Martorana did not recover any portion of the settlement because he had failed to timely submit a claim form. Although Martorana received notice of the settlement and the accompanying claim form, he failed to submit the form because he had been diagnosed with prostate cancer and was experiencing the physical effects of his diagnosis and treatment. Martorana subsequently filed this action against Allstate and the various law firms that had prosecuted the class action, alleging that defendants were negligent in failing to take reasonable steps to contact him about his failure to file a claim and to make sure his claim form was timely submitted. The trial court dismissed that action against Allstate and granted Allstate’s request for sanctions against Martorana and his attorney. Martorana filed an amended complaint asserting malpractice against class counsel, but the trial court sustained class counsel’s demurrer to Martorana’s amended complaint as well, finding that “it would defeat the purpose of mass notification to a large number of class members if, after written notice, Class Counsel were required to follow up…with every class member who neglected to file a timely claim.” The Court of Appeal affirmed dismissal of Martorana’s claims but reversed the award of sanctions to Allstate because of its failure to comply with the safe harbor provisions of Cal. Code Civ. Proc. § 128.7. Cf. In re Consumer Privacy Cases, 2009 WL 1863730 (Cal. Ct. App. 2009) (trial court did not abuse its discretion in approving attorney’s fees award to class counsel and in using lodestar method); Hernandez v. Vitamin Shoppe Indus. Inc., 2009 WL 1679937 (Cal. Ct. App. 2009) (class counsel’s communications with conditionally certified and separately represented class members urging them to opt-out of settlement were properly enjoined by trial court).

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Arias v. Superior Court, 2009 WL 1838973 (Cal. S. Ct. 2009)

Jose Arias sued his former employer, Angelo Dairy, for a number of alleged violations of the California Labor Code, including five claims that he asserted on behalf of himself as well as other current and former employees under the Unfair Competition Law (“UCL”). The trial court granted the employer’s motion to strike all five claims that Arias purported to assert on behalf of himself and others on the ground that he had failed to comply with the pleading requirements of a class action (Code Civ. Proc. § 382). The Court of Appeal held that all causes of action brought in a representative capacity alleging violations of the UCL (with the exception of the claim asserting a violation of the Labor Code Private Attorneys General Act of 2004 (“PAGA”)) were subject to the class action pleading requirements. The California Supreme Court affirmed, holding that although Proposition 64 (passed by the voters in 2004) requires that a private party asserting a UCL claim in a representative capacity satisfy the class action requirements, an aggrieved employee need not satisfy those requirements in order to assert a representative action under PAGA. Cf. Amalgamated Transit Union v. Superior Court¸ 2009 WL 1838972 (Cal. S. Ct. 2009) (labor union could not bring a representative action under PAGA either as an assignee or association whose members had suffered actual injury); In re Tobacco II Cases, 46 Cal. 4th 298 (2009) (class action standing requirements for UCL claim need only be satisfied by class representatives and not unnamed class members); Sanders Constr. Co. v. Cerda, 2009 WL 1844280 (Cal. Ct. App. 2009) (employees of unlicensed subcontractor may assert wage claims against general contractor pursuant to Labor Code § 2750.5).

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Oravecz v. New York Life Ins. Co., 95 Cal. Rptr 3d 1 (Cal. Ct. App. 2009)

Paul Oravecz sued Steve Roth and New York Life (which was allegedly Roth’s employer) after losing money in an investment in an offshore foreign currency trading fund, which Oravecz alleged was a “Ponzi scheme.” Among the claims Oravecz alleged against New York Life were negligent misrepresentation, failure to adequately train Roth, breach of fiduciary duty, securities law violations, negligent hiring (Roth was a convicted criminal) and negligent interference with prospective economic advantage. The trial court dismissed all of Oravecz’s claims against New York Life on demurrer and summary judgment after determining that Roth was an independent contractor and not an employee, that New York Life was unaware of Roth’s sale of non-approved investment products or that he was unfit for his position, that New York Life had no duty to supervise Roth, and that the securities fraud claims were barred by the applicable two-year statute of limitations. The Court of Appeal affirmed dismissal of all claims against New York Life except the claim for breach of fiduciary duty because the company relied exclusively on inapplicable federal authority rather than controlling California law to support its demurrer. Cf. Zaragoza v. Ibarra, 174 Cal. App. 4th 1012 (2009) (worker who was hired by an unlicensed contractor was not limited to workers’ compensation remedy but could not recover from homeowner because his injuries were entirely his own fault).

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Nein v. HostPro, Inc., 174 Cal. App. 4th 833 (2009)

Randy Nein was employed by HostPro as a salesperson. In December 2000, he approached AT&T and suggested that HostPro provide web-hosting services to some of AT&T’s business customers. The transaction was still being negotiated a year later when Nein’s employment was terminated. He filed this lawsuit to recover commissions associated with the AT&T transaction, which was completed shortly after Nein’s termination. The trial court granted summary judgment to HostPro on the ground that Nein was not a licensed business opportunity broker and because his termination cut off his right to receive any additional commission payments under the plain language of the written employment agreement. The Court of Appeal affirmed summary judgment on the second but not the first ground, holding that the employment agreement clearly provided that Nein would “be eligible for commission pay…so long as [he] remains employed with the Company as a Sales Representative.” Accordingly, the Court affirmed dismissal of Nein’s claims for breach of contract, breach of the implied covenant of good faith and fair dealing, violation of Labor Code §§ 2926, 206 and the Unfair Competition Law. Finally, the Court affirmed an award of attorney’s fees in favor of HostPro.

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Owen v. Macy’s, Inc., 2009 WL 1844338 (Cal. Ct. App. 2009)

Lisa Owen worked as a sales associate at Robinsons-May until it was acquired by Macy’s in August 2005. In January 2006, employees at the Arcadia store where Owen worked were informed that the store would close by April. After the store closed on March 18, 2006, Owen received her final pay, which included no pay for unused vacation benefits. The somewhat unconventional Robinsons vacation policy provided that employees would not earn or vest vacation benefits until they had completed six months of continuous employment and, thereafter, employees earned vacation during the “vacation year” that ran from May 1 through April 30 – with 50 percent of the annual benefits accruing and vesting on May 1 and the remaining 50 percent accruing and vesting on August 1. According to a Robinsons executive, this meant that employees’ annual vacation benefits vested before they were actually earned. However, employees like Owen who left the company before May 1 would not receive the first half of their vacation entitlement for the vacation year beginning on May 1. Owen challenged this policy under Labor Code § 227.3 on the ground that new employees were denied vacation benefits for six months and because she was terminated just six weeks before vesting in the 50% of the vacation benefits that she would have earned between May 1, 2006 and April 30, 2007. The Court of Appeal affirmed summary judgment in favor of the employer, finding no violation of the statute.

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Chau v. Starbucks Corp., 174 Cal. App. 4th 688 (2009)

Jou Chau, a former Starbucks “barista,” brought a class action against the company, challenging Starbucks’ policy of permitting shift supervisors to share in tips that customers place in a collective tip box. Chau alleged the policy violated California’s Unfair Competition Law based on a violation of Labor Code § 351. The trial court certified a class consisting of thousands of current and former baristas from 1,350 Starbucks stores in California and, after finding liability, awarded the class $86 million in restitution. The Court of Appeal reversed the judgment, concluding that Starbucks had not violated the statute by allowing the shift supervisors (who spent more than 90 percent of their time performing the same service tasks as the baristas) to keep a portion of the collective tips merely because those employees also had limited supervisory duties.

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Scott v. Phoenix Schools, Inc., 2009 WL 1877532 (Cal. Ct. App. 2009)

Jennifer Scott was terminated from her position as director of one of Phoenix Schools’ preschools. Her responsibilities included assigning personnel in compliance with the state regulations that set the minimum teacher-student ratios for child care centers. Scott was terminated shortly after she informed the parents of a prospective student that the school had no room for the child. Scott sued Phoenix Schools for wrongful termination in violation of the public policy embodied in the state regulations setting teacher-student ratios. A jury awarded Scott more than $1.1 million in compensatory and $750,000 in punitive damages. The Court of Appeal affirmed the compensatory damages award, but reversed the award of punitive damages on the ground that there was insufficient evidence of malice or oppression on the school’s part. Cf. McConnell v. Innovative Artists Talent & Literary Agency, Inc., 2009 WL 737714 (Cal. Ct. App. 2009) (employer’s anti-SLAPP motion to strike former employees’ retaliation and wrongful termination claims was properly denied because the claims did not arise from employer’s protected First Amendment activity).

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Hughes v. Pair, 2009 WL 1886877 (Cal. S. Ct. 2009)

Suzan Hughes, the third wife of Herbalife founder Mark Hughes, sued Christopher Pair, one of the three trustees of Mark’s estate, for sexual harassment under Civil Code § 51.9 (which prohibits sexual harassment in certain business, service and professional relationships) and for intentional infliction of emotional distress. (Although this case does not involve an employment relationship, the California Supreme Court held that the Legislature intended Section 51.9 to be applied in a fashion consistent with the FEHA and Title VII.) The Court affirmed summary judgment in favor of Pair after concluding that Hughes had failed to establish either quid pro quo sexual harassment or conduct that was so severe or pervasive as to constitute sexual harassment. As for the latter form of harassment, the Court noted that Pair had not physically touched Hughes and that Pair’s “vulgar and highly offensive” comments to Hughes were ambiguous and part of an isolated incident. Similarly, the Court held that Pair’s actions were not sufficiently extreme or outrageous and Hughes’s alleged emotional injuries were not severe enough to result in liability for intentional infliction of emotional distress.

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Scotch v. Art Inst. of Cal.-Orange County, Inc., 173 Cal. App. 4th 986 (2009)

Carmine Scotch sued his former employer, the Art Institute of California-Orange County, Inc. (“AIC”) for discrimination based on his disability (HIV), failure to make reasonable accommodation, failure to engage in the required interactive process, failure to maintain a workplace free of discrimination, and retaliation. The Court of Appeal affirmed summary judgment in favor of AIC on all counts, holding that Scotch had failed to prove a causal link between his revelation that he was HIV-positive and the challenged adverse employment decision (assigning him to teach fewer than five course sections during an academic term). The Court further held the accommodation that Scotch sought (giving him priority in assignment of courses to ensure that he would teach five courses during the term) was not reasonable. Finally, the Court held that Scotch had failed to identify a reasonable accommodation that would have been available at the time the interactive process should have occurred, so any failure on AIC’s part to engage in that process was not “material.” The Court also found no evidence of constructive termination of Scotch’s employment or illegal retaliation. Cf. Knappenberger v. City of Phoenix, 566 F.3d 936 (9th Cir. 2009) (plaintiff failed to allege facts which, if true, would establish his early retirement from police department was involuntary and a violation of 42 U.S.C. § 1983).

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Gross v. FBL Fin. Servs., Inc., 557 U.S. ___, 129 S. Ct. 2343 (2009)

Jack Gross worked for FBL as a claims administration director until he was reassigned to the position of claims project coordinator. At the time of his reassignment, many of Gross’s job responsibilities were transferred to a newly created position (claims administration manager) that was filled by Lisa Kneeskern, one of Gross’s former subordinate employees who was then in her early 40’s. Gross was 54 years old at the time. Although Gross and Kneeskern received the same compensation after the reassignment, Gross considered the job action to be a demotion because of FBL’s reallocation of some of his job responsibilities to Kneeskern. At trial, the jury returned a verdict for Gross in the amount of $46,945 in lost compensation after receiving a “mixed motive” instruction from the judge (i.e., that Gross was required to prove that “age was a motivating factor” in FBL’s decision to demote him). The Supreme Court vacated the lower court opinion and held that under the Age Discrimination in Employment Act the plaintiff must prove by a preponderance of the evidence that age was the “but-for” cause of the challenged adverse employment action, and the burden of persuasion does not shift to the employer to show that it would have taken the action regardless of age, even when a plaintiff has produced some evidence that age was one motivating factor in the employer’s decision. Compare Browning v. United States, 567 F.3d 1038 (9th Cir. 2009) (district court did not err in failing to give jury instruction explicitly addressing pretext in race discrimination case).

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Ricci v. DeStefano, 557 U.S. ___, 2009 WL 1835138 (2009)

One hundred eighteen firefighters took written examinations administered by the city of New Haven, Connecticut in order to qualify for promotion to the rank of lieutenant or captain. When the examination results showed that white candidates had outperformed minority candidates, the mayor and other local politicians opened a public debate that “turned rancorous.” Some firefighters argued the tests should be discarded because the results proved the tests were discriminatory; others argued the exams were neutral and fair. The City sided with those who protested the results and threw out the examinations. Several white and Hispanic firefighters challenged that decision under Title VII of the Civil Rights Act of 1964 and the Equal Protection Clause of the Constitution, asserting they had been discriminated against on the basis of their race. In reversing the United States Court of Appeals for the Second Circuit, the Supreme Court held that the City had violated Title VII: “We conclude that race-based action like the City’s in this case is impermissible under Title VII unless the employer can demonstrate a strong basis in evidence that, had it not taken the action, it would have been liable under the disparate-impact statute.” Cf. AT&T Corp. v. Hulteen, 556 U.S. ___, 129 S. Ct. 1962 (2009) (employer did not violate Pregnancy Discrimination Act by paying pension benefits calculated in part under an accrual rule that gave less retirement credit for pregnancy than for medical leave generally).

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Gross v. FBL Fin. Servs., Inc., 557 U.S. ___, 129 S. Ct. 2343 (2009)

Jack Gross worked for FBL as a claims administration director until he was reassigned to the position of claims project coordinator. At the time of his reassignment, many of Gross’s job responsibilities were transferred to a newly created position (claims administration manager) that was filled by Lisa Kneeskern, one of Gross’s former subordinate employees who was then in her early 40’s. Gross was 54 years old at the time. Although Gross and Kneeskern received the same compensation after the reassignment, Gross considered the job action to be a demotion because of FBL’s reallocation of some of his job responsibilities to Kneeskern. At trial, the jury returned a verdict for Gross in the amount of $46,945 in lost compensation after receiving a “mixed motive” instruction from the judge (i.e., that Gross was required to prove that “age was a motivating factor” in FBL’s decision to demote him). The Supreme Court vacated the lower court opinion and held that under the Age Discrimination in Employment Act the plaintiff must prove by a preponderance of the evidence that age was the “but-for” cause of the challenged adverse employment action, and the burden of persuasion does not shift to the employer to show that it would have taken the action regardless of age, even when a plaintiff has produced some evidence that age was one motivating factor in the employer’s decision. Compare Browning v. United States, 567 F.3d 1038 (9th Cir. 2009) (district court did not err in failing to give jury instruction explicitly addressing pretext in race discrimination case).

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Ricci v. DeStefano, 557 U.S. ___, 129 S. Ct. 2658 (2009)

One hundred eighteen firefighters took written examinations administered by the city of New Haven, Connecticut in order to qualify for promotion to the rank of lieutenant or captain. When the examination results showed that white candidates had outperformed minority candidates, the mayor and other local politicians opened a public debate that “turned rancorous.” Some firefighters argued the tests should be discarded because the results proved the tests were discriminatory; others argued the exams were neutral and fair. The City sided with those who protested the results and threw out the examinations. Several white and Hispanic firefighters challenged that decision under Title VII of the Civil Rights Act of 1964 and the Equal Protection Clause of the Constitution, asserting they had been discriminated against on the basis of their race. In reversing the United States Court of Appeals for the Second Circuit, the Supreme Court held that the City had violated Title VII: “We conclude that race-based action like the City’s in this case is impermissible under Title VII unless the employer can demonstrate a strong basis in evidence that, had it not taken the action, it would have been liable under the disparate-impact statute.” Cf. AT&T Corp. v. Hulteen, 556 U.S. ___, 129 S. Ct. 1962 (2009) (employer did not violate Pregnancy Discrimination Act by paying pension benefits calculated in part under an accrual rule that gave less retirement credit for pregnancy than for medical leave generally).

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D’Este v. Bayer Corp., 565 F.3d 1119 (9th Cir. 2009)

The Ninth Circuit has certified two questions of law to be answered by the California Supreme Court pursuant to Cal. Rule of Court 8.548: (1) Does a pharmaceutical sales representative (“PSR”) qualify as an “outside salesperson” under Industrial Welfare Commission Wage Orders 1-2001 and 4-2001 if the PSR spends more than half the working time away from the employer’s place of business and personally interacts with doctors and hospitals on behalf of drug companies for the purpose of increasing individual doctors’ prescriptions of specific drugs? (2) In the alternative, is a PSR involved in duties and responsibilities that meet the requirements of the administrative exemption under California law?
 

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FLIR Sys., Inc. v. Parrish, 2009 WL 1653103 (Cal. Ct. App. 2009)

FLIR Systems purchased Indigo Systems, which manufactures and sells microbolometers (a device used in connection with infrared cameras, night vision and thermal imaging), for $185 million in 2004. William Parrish and Timothy Fitzgibbons were shareholders and officers of Indigo before the company was sold to FLIR; after the sale, they continued working for Indigo. In 2005, Parrish and Fitzgibbons decided to start a new company (Thermicon) to mass produce bolometers, and they gave notice to Indigo that they would quit their employment in January 2006. When Parrish and Fitzgibbons entered into negotiations with Raytheon to acquire licensing, technology and manufacturing facilities for Thermicon, they assured FLIR that they would not misappropriate any of Indigo’s trade secrets and that the new company would use an intellectual property filter similar to the one used at Indigo to prevent the misuse of trade secrets. In response, FLIR sued for injunctive relief on the theory that Thermicon could not mass produce low-cost microbolometers without misappropriating FLIR’s trade secrets. The trial court found no misappropriation of FLIR’s trade secrets and determined that the action had been brought in bad faith on a theory of “inevitable disclosure” – a doctrine not recognized by California courts because “it contravenes a strong public policy of employee mobility that permits exemployees to start new entrepreneurial endeavors.” The trial court awarded Parrish and Fitzgibbons $1,641,261.78 in attorney’s fees and costs pursuant to Cal. Civ. Code § 3426.4 (misappropriation of trade secrets claim made in bad faith). The Court of Appeal affirmed and further awarded respondents the costs and attorney’s fees they incurred in connection with the appeal.
 

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Haro v. City of Rosemead, 174 Cal. App. 4th 1067 (2009)

Randy Haro and Robert Ballin filed an action against the city of Rosemead alleging a violation of the federal Fair Labor Standards Act (“FLSA”). The trial court denied plaintiffs’ motion to have the class certified pursuant to Cal. Code Civ. Proc. § 382 (the California class action statute) on the ground that an FLSA collective action (which requires members of the collective action to affirmatively opt-in) cannot be prosecuted as a class action under California law (which requires class members to opt-out). The Court of Appeal dismissed the appeal from the trial court’s orders denying class certification and denying leave to amend the complaint, holding that “an FLSA action has to be litigated according to rules that are specifically applicable to these actions and if litigants do not like these rules, they should not file under the FLSA.” Cf. Smith v. T-Mobile USA Inc., 2009 WL 1651531 (9th Cir. 2009) (plaintiffs who had voluntarily settled their FLSA claims before appeal was filed could not continue to prosecute action, rendering appeal moot).
 

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Martorana v. Marlin & Saltzman, 2009 WL 1875681 (Cal. Ct. App. 2009)

Ron Martorana was a class member in a wage and hour class action that had been filed against his former employer, Allstate Insurance Company. The Los Angeles Superior Court approved a settlement of the class action, but Martorana did not recover any portion of the settlement because he had failed to timely submit a claim form. Although Martorana received notice of the settlement and the accompanying claim form, he failed to submit the form because he had been diagnosed with prostate cancer and was experiencing the physical effects of his diagnosis and treatment. Martorana subsequently filed this action against Allstate and the various law firms that had prosecuted the class action, alleging that defendants were negligent in failing to take reasonable steps to contact him about his failure to file a claim and to make sure his claim form was timely submitted. The trial court dismissed that action against Allstate and granted Allstate’s request for sanctions against Martorana and his attorney. Martorana filed an amended complaint asserting malpractice against class counsel, but the trial court sustained class counsel’s demurrer to Martorana’s amended complaint as well, finding that “it would defeat the purpose of mass notification to a large number of class members if, after written notice, Class Counsel were required to follow up…with every class member who neglected to file a timely claim.” The Court of Appeal affirmed dismissal of Martorana’s claims but reversed the award of sanctions to Allstate because of its failure to comply with the safe harbor provisions of Cal. Code Civ. Proc. § 128.7. Cf. In re Consumer Privacy Cases, 2009 WL 1863730 (Cal. Ct. App. 2009) (trial court did not abuse its discretion in approving attorney’s fees award to class counsel and in using lodestar method); Hernandez v. Vitamin Shoppe Indus. Inc., 2009 WL 1679937 (Cal. Ct. App. 2009) (class counsel’s communications with conditionally certified and separately represented class members urging them to opt-out of settlement were properly enjoined by trial court).
 

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Arias v. Superior Court, 2009 WL 1838973 (Cal. S. Ct. 2009)

Jose Arias sued his former employer, Angelo Dairy, for a number of alleged violations of the California Labor Code, including five claims that he asserted on behalf of himself as well as other current and former employees under the Unfair Competition Law (“UCL”). The trial court granted the employer’s motion to strike all five claims that Arias purported to assert on behalf of himself and others on the ground that he had failed to comply with the pleading requirements of a class action (Code Civ. Proc. § 382). The Court of Appeal held that all causes of action brought in a representative capacity alleging violations of the UCL (with the exception of the claim asserting a violation of the Labor Code Private Attorneys General Act of 2004 (“PAGA”)) were subject to the class action pleading requirements. The California Supreme Court affirmed, holding that although Proposition 64 (passed by the voters in 2004) requires that a private party asserting a UCL claim in a representative capacity satisfy the class action requirements, an aggrieved employee need not satisfy those requirements in order to assert a representative action under PAGA. Cf. Amalgamated Transit Union v. Superior Court¸ 2009 WL 1838972 (Cal. S. Ct. 2009) (labor union could not bring a representative action under PAGA either as an assignee or association whose members had suffered actual injury); In re Tobacco II Cases, 46 Cal. 4th 298 (2009) (class action standing requirements for UCL claim need only be satisfied by class representatives and not unnamed class members); Sanders Constr. Co. v. Cerda, 2009 WL 1844280 (Cal. Ct. App. 2009) (employees of unlicensed subcontractor may assert wage claims against general contractor pursuant to Labor Code § 2750.5).
 

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Oravecz v. New York Life Ins. Co., 95 Cal. Rptr 3d 1 (Cal. Ct. App. 2009)

Paul Oravecz sued Steve Roth and New York Life (which was allegedly Roth’s employer) after losing money in an investment in an offshore foreign currency trading fund, which Oravecz alleged was a “Ponzi scheme.” Among the claims Oravecz alleged against New York Life were negligent misrepresentation, failure to adequately train Roth, breach of fiduciary duty, securities law violations, negligent hiring (Roth was a convicted criminal) and negligent interference with prospective economic advantage. The trial court dismissed all of Oravecz’s claims against New York Life on demurrer and summary judgment after determining that Roth was an independent contractor and not an employee, that New York Life was unaware of Roth’s sale of non-approved investment products or that he was unfit for his position, that New York Life had no duty to supervise Roth, and that the securities fraud claims were barred by the applicable two-year statute of limitations. The Court of Appeal affirmed dismissal of all claims against New York Life except the claim for breach of fiduciary duty because the company relied exclusively on inapplicable federal authority rather than controlling California law to support its demurrer. Cf. Zaragoza v. Ibarra, 174 Cal. App. 4th 1012 (2009) (worker who was hired by an unlicensed contractor was not limited to workers’ compensation remedy but could not recover from homeowner because his injuries were entirely his own fault).
 

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Nein v. HostPro, Inc., 174 Cal. App. 4th 833 (2009)

Randy Nein was employed by HostPro as a salesperson. In December 2000, he approached AT&T and suggested that HostPro provide web-hosting services to some of AT&T’s business customers. The transaction was still being negotiated a year later when Nein’s employment was terminated. He filed this lawsuit to recover commissions associated with the AT&T transaction, which was completed shortly after Nein’s termination. The trial court granted summary judgment to HostPro on the ground that Nein was not a licensed business opportunity broker and because his termination cut off his right to receive any additional commission payments under the plain language of the written employment agreement. The Court of Appeal affirmed summary judgment on the second but not the first ground, holding that the employment agreement clearly provided that Nein would “be eligible for commission pay…so long as [he] remains employed with the Company as a Sales Representative.” Accordingly, the Court affirmed dismissal of Nein’s claims for breach of contract, breach of the implied covenant of good faith and fair dealing, violation of Labor Code §§ 2926, 206 and the Unfair Competition Law. Finally, the Court affirmed an award of attorney’s fees in favor of HostPro.
 

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Owen v. Macy’s, Inc., 2009 WL 1844338 (Cal. Ct. App. 2009)

Lisa Owen worked as a sales associate at Robinsons-May until it was acquired by Macy’s in August 2005. In January 2006, employees at the Arcadia store where Owen worked were informed that the store would close by April. After the store closed on March 18, 2006, Owen received her final pay, which included no pay for unused vacation benefits. The somewhat unconventional Robinsons vacation policy provided that employees would not earn or vest vacation benefits until they had completed six months of continuous employment and, thereafter, employees earned vacation during the “vacation year” that ran from May 1 through April 30 – with 50 percent of the annual benefits accruing and vesting on May 1 and the remaining 50 percent accruing and vesting on August 1. According to a Robinsons executive, this meant that employees’ annual vacation benefits vested before they were actually earned. However, employees like Owen who left the company before May 1 would not receive the first half of their vacation entitlement for the vacation year beginning on May 1. Owen challenged this policy under Labor Code § 227.3 on the ground that new employees were denied vacation benefits for six months and because she was terminated just six weeks before vesting in the 50% of the vacation benefits that she would have earned between May 1, 2006 and April 30, 2007. The Court of Appeal affirmed summary judgment in favor of the employer, finding no violation of the statute.

 

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Chau v. Starbucks Corp., 174 Cal. App. 4th 688 (2009)

Jou Chau, a former Starbucks “barista,” brought a class action against the company, challenging Starbucks’ policy of permitting shift supervisors to share in tips that customers place in a collective tip box. Chau alleged the policy violated California’s Unfair Competition Law based on a violation of Labor Code § 351. The trial court certified a class consisting of thousands of current and former baristas from 1,350 Starbucks stores in California and, after finding liability, awarded the class $86 million in restitution. The Court of Appeal reversed the judgment, concluding that Starbucks had not violated the statute by allowing the shift supervisors (who spent more than 90 percent of their time performing the same service tasks as the baristas) to keep a portion of the collective tips merely because those employees also had limited supervisory duties.
 

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14 Penn Plaza LLC v. Pyett, 556 U.S. ___, 129 S. Ct. 1456 (2009)

Plaintiffs, members of the Service Employees International Union (the “SEIU”), filed a complaint with the EEOC alleging age discrimination under the Age Discrimination in Employment Act and, after receiving their right-to-sue letters, filed suit against their employer alleging age discrimination. In response, the employer filed a motion to compel arbitration of the claims pursuant to the Federal Arbitration Act on the ground that the collective bargaining agreement negotiated by the SEIU required union members to submit all claims of employment discrimination to binding arbitration. The district court denied the employer’s motion to compel arbitration on the ground that “even a clear and unmistakable union-negotiated waiver of a right to litigate certain federal and state statutory claims in a judicial forum is unenforceable.” The Court of Appeals for the Second Circuit affirmed the ruling, but the United States Supreme Court reversed, holding that such a provision is enforceable as a matter of federal law. (Paul Salvatore of Proskauer Rose LLP’s New York office successfully argued this case on behalf of the employer.)

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Day v. American Seafoods Co., 557 F.3d 1056 (9th Cir. 2009)

Jesse Day entered into a contract to work for American Seafoods Co. for one fishing voyage. In this lawsuit, Day sought payment for “unearned wages” for a period of time longer than the single voyage and contended that extrinsic evidence would establish an oral understanding for a longer period. The district court declined to admit parol evidence on the question, and the Ninth Circuit affirmed, holding that “on the basis of the explicit contractual language and the integration clause, the district court [correctly] held that Day could not offer extrinsic evidence to rebut the unambiguous duration agreed upon in the contract.”
 

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Naranjo v. Spectrum Sec. Services, 172 Cal. App. 4th 654 (2009)

Gustavo Naranjo worked as a detention officer for Spectrum, which provides security services in holding facilities and detention centers throughout Los Angeles County under a contract with federal Immigration and Customs Enforcement (“ICE”). The terms of Spectrum’s contract with ICE rely on wage and fringe benefit determinations by the Secretary of the U.S. Department of Labor pursuant to the McNamara-O’Hara Service Contract Act of 1965 (“SCA”). In this putative class action, Naranjo alleged violations of the California Labor Code involving meal and rest period requirements, failure to pay additional compensation upon the resignation or discharge of employees, and failure to provide employees with itemized records of their wages and deductions. Spectrum defended on the ground that Naranjo’s claims were preempted by the SCA. The trial court agreed and granted Spectrum’s motion for summary judgment, but the Court of Appeal reversed, holding that Naranjo’s claims neither conflicted with nor hindered the achievement of the SCA’s goals. Cf. Solis v. Matheson, 2009 WL 1036083 (9th Cir. 2009) (overtime provisions of FLSA apply to a business located on an Indian reservation and owned by Indian tribal members); Ahlmeyer v. Nevada Sys. of Higher Educ., 555 F.3d 1051 (9th Cir. 2009) (the ADEA is the exclusive federal remedy for age discrimination in employment).
 

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Gomez v. Lincare, Inc., 2009 WL 1124268 (Cal. Ct. App. 2009)

Lincare provides respiratory services and medical equipment setup to patients in their homes. Plaintiffs were Lincare service representatives who drove vans containing liquid and compressed oxygen (defined by the federal government as “hazardous materials”) and worked on call in the evenings and on weekends. Plaintiffs sought compensation for the on-call time they spent resolving customer questions by telephone and for all the time they were on call, even when they were not responding to customer calls. The trial court granted Lincare’s motion for summary adjudication on the ground that plaintiffs were covered by the motor carrier exemption and therefore were exempt from California’s overtime law. The Court of Appeal reversed, holding that Lincare had failed to prove that each plaintiff drove a vehicle containing hazardous materials for some period of time on each and every workday. The Court also held that plaintiffs had sufficiently alleged the breach of an express contract (so Lincare’s demurrer should not have been sustained). The Court affirmed summary adjudication of plaintiffs’ claims for failure to pay for on-call time worked after a less-than-eight-hour-weekday shift and for breach of an implied-in-fact contract.
 

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Grodensky v. Artichoke Joe’s Casino, 171 Cal. App. 4th 1399 (2009)

Card dealer Harvey Grodensky filed a putative class action challenging a mandatory tip-pooling policy that Artichoke Joe’s Casino had implemented for its dealers. The trial court determined (and the Court of Appeal affirmed) that the casino had not violated the minimum wage law by the tip-pooling arrangement but had violated Labor Code § 351 by requiring the dealers to share their tips with shift managers. The Court of Appeal found no error in the trial court’s issuance of a pre-trial protective order prohibiting any communications regarding the lawsuit between the casino and dealers while determination of the class certification motion was pending. The Court also affirmed that Grodensky and the putative class had a private right of action under Labor Code § 351 and that the trial court did not abuse its discretion by ordering the disgorgement of the sums taken from the dealers’ tips and distributed to the shift managers. Compare Etheridge v. Reins Int’l Cal., Inc., 172 Cal. App. 4th 908 (2009); Budrow v. Dave & Buster’s of Cal., Inc., 171 Cal. App. 4th 875 (2009) (restaurant employees who do not provide direct table service may share in tip pool).
 

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The Nethercutt Collection v. Regalia, 172 Cal. App. 4th 361 (2009)

Michael Regalia sued The Nethercutt Collection for wrongful termination and slander after he was terminated as its president. The jury rejected the wrongful termination claim, but awarded Regalia $750,000 in damages for “assumed harm” to his reputation arising from two statements attributable to the employer: (1) that Regalia had demanded a commission or finder’s fee of about $230,000 to which he was not entitled and (2) that Regalia was fired because other employees would not work for him and/or would leave if he remained employed. The Court of Appeal reversed the judgment on the ground that because Regalia had not proved slander per se (i.e., statements that would injure him in respect to his office, profession, trade or business, etc.) he was required but had failed to prove actual damages.

 

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World Fin. Group, Inc. v. HBW Ins. & Fin. Services, Inc., 2009 WL 1019118 (Cal. Ct. App. 2009)

WFG filed a complaint against its direct competitor, HBW, and six of its agents for alleged breach of contract, misappropriation of trade secrets, conversion, unfair competition, interference with prospective economic advantage and unjust enrichment. In response, HBW filed a motion to dismiss the complaint as a SLAPP suit pursuant to Code of Civil Procedure § 425.16. In its anti-SLAPP motion, HBW asserted that all of WFG’s claims were based on defendants’ speech and conduct in furtherance of the exercise of their right to free speech in connection with a public issue (i.e., “the pursuit of lawful employment pursuant to Bus. & Prof. Code § 16600” as well as “workforce mobility and free competition”). The trial court denied HBW’s anti-SLAPP motion, and the Court of Appeal affirmed, holding that because the statements at issue were “merely incidental to WFG’s claims, they are insufficient to subject any cause of action, much less the entire complaint, to the anti-SLAPP law.” Compare Hansen v. California Dep’t of Corrections and Rehabilitation, 171 Cal. App. 4th 1537 (2009) (former employee’s whistleblower lawsuit was properly stricken under anti-SLAPP statute).
 

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Phillips v. TLC Plumbing, Inc., 172 Cal. App. 4th 1133 (2009)

Trisha Phillips, the daughter and successor in interest of decedent Judith Phillips, filed a complaint against TLC, alleging negligent hiring and retention of James Joseph Cain after Cain, a former employee of TLC, murdered Judith. While Cain was employed as a plumbing service repairman for TLC, he was dispatched on a service call to Judith’s residence on two separate occasions. Shortly thereafter, Cain and Judith began a social relationship that evolved into a romantic one. Approximately a month later, TLC terminated Cain (who was on parole after having been convicted of domestic violence and/or an arson offense involving his wife) for misuse of a company vehicle, drug and alcohol use and for apparently threatening a coworker. Some two years after his termination from TLC, Judith ended the relationship and applied for a restraining order against Cain, who subsequently shot and killed her. The trial court granted TLC’s motion for summary judgment on the ground that there was no employment relationship between TLC and Cain at the time he shot and killed Judith and because “it was not reasonably foreseeable that Cain would enter into a personal relationship with Judith which would later lead to Cain’s shooting and killing her years after he provided plumbing services to her.” The Court of Appeal affirmed. Cf. Burns v. The Neiman Marcus Group, Inc., 2009 WL 1126948 (Cal. Ct. App. 2009) (plaintiff, whose secretary spent in excess of $1 million at Neiman Marcus with unauthorized checks drawn on plaintiff’s personal bank account, could not proceed with negligence claim against Neiman Marcus).
 

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Johnson v. United Cerebral Palsy/Spastic Children’s Found., 2009 WL 1154132 (Cal. Ct. App. 2009)

Dewandra Johnson, who was employed as a counselor for this charitable foundation, alleged that she had been terminated while and because she was pregnant. Johnson also alleged that her supervisor (Raquel Jiminez) had a discriminatory animus against pregnant and heterosexual women and that Jiminez gave preferential treatment to gay and lesbian employees and specifically recruited gays and lesbians to fill positions within the Foundation. In its summary judgment motion, the Foundation asserted that it had conducted a good faith investigation into Johnson’s time sheets and billing records and concluded that Johnson had falsified such records and that that was the basis for the termination of her employment. The trial court granted the Foundation’s motion for summary judgment, but the Court of Appeal reversed, holding that Johnson had produced substantial evidence that the stated reason for her firing was pretextual and/or that the employer had acted with discriminatory animus in firing her. Further, the appellate court held that the declarations Johnson had submitted from other employees recounting alleged pregnancy discrimination at the hands of defendants required reversal of the summary judgment.
 

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Chindarah v. Pick Up Stix, Inc., 171 Cal. App. 4th 706 (2009)

Two former employees of Pick Up Stix (a restaurant) filed a complaint seeking unpaid overtime, penalties and interest due to the misclassification of their jobs as exempt from the overtime pay requirements of state law. The putative class included current and former general managers, assistant managers and lead cooks employed during the four years preceding the filing of the complaint. After the employer’s attempt to settle the lawsuit through mediation failed, it settled directly with as many putative class members as possible, offering each of them an amount based upon a figure that had been offered during the unsuccessful mediation. Those who settled were required to sign a release of claims and agreement not to participate in any class action involving such claims. Eight current and former employees who had signed the settlement agreements joined the putative class action, alleging that Labor Code §§ 206 and 206.5 prohibited the release of a claim for unpaid wages. The trial court disagreed and granted the employer’s motion for summary judgment on the ground that there was a bona fide dispute over whether any wages were owed and thus the Labor Code provisions did not void the releases. The Court of Appeal affirmed the judgment. See also Watkins v. Wachovia Corp., 2009 WL 1019560 (Cal. Ct. App. 2009) (employees who had released their claims could not pursue class action seeking allegedly unpaid overtime from employer); cf. Safeco Ins. Co. of Am. v. Superior Court, 2009 WL 1153433 (Cal. Ct. App. 2009) (class representative who is not a member of the class she purports to represent may obtain precertification discovery for the purpose of finding a new class representative).
 

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Sullivan v. Oracle Corp., 2009 WL 367626 (9th Cir. 2009)

The Ninth Circuit has withdrawn its published opinion in this case and certified the following questions to the California Supreme Court: (1) Does the California Labor Code apply to overtime work performed in California for a California-based employer by out-of-state plaintiffs in the circumstances of this case, such that overtime pay is required for work in excess of eight hours per day or in excess of forty hours per week? (2) Does Business & Professions Code § 17200 apply to the overtime work described in question one? and (3) Does Section 17200 apply to overtime work performed outside California for a California-based employer by out-of-state plaintiffs in the circumstances of this case if the employer failed to comply with the overtime provisions of the FLSA?

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People v. Tabb, 88 Cal. Rptr. 3d 789 (Cal. Ct. App. 2009)

Edward Nathaniel Tabb, Sr. was convicted by a jury for grand theft of his employer’s property. Tabb worked as a “runner or helper for pipe fitters” at BAE Systems. Over a period of approximately two months, Tabb brought new or used ship parts to A to Z Auto Dismantling, a recycling company, and sold them as scrap metal. During this period, Tabb’s daily recycling income increased from approximately $10 to $100 per day. A to Z’s office manager kept a log of all of the items Tabb brought in, and she calculated that A to Z had paid Tabb more than $31,000 for the materials he brought in for recycling. The jury convicted Tabb, and the Court of Appeal affirmed, concluding that the evidence at trial “amply warrants an inference that the items Tabb brought to A to Z were materials he stole from BAE.” Cf. People v. Scott, 2009 WL 397966 (Cal. S. Ct. 2009) (all employees on the premises have constructive possession of the employer’s property and thus may be separate victims of a robbery of the employer’s business); United States v. SDI Future Health, Inc., 553 F.3d 1246 (9th Cir. 2009) (an employee who challenges the government’s search of workplace areas must generally show some personal connection to the places searched and the materials seized).

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Cristler v. Express Messenger Systems, Inc., 2009 WL 154801 (Cal. Ct. App. 2009)

James Cristler and others sued Express Messenger, a parcel delivery service, for violations of California law based upon Express’ allegedly illegal classification of its workers as independent contractors and not employees. Among other things, plaintiffs alleged violations of the California overtime requirements, as well as requirements to properly itemize wages and to reimburse employees for business expenses. The trial court granted plaintiffs’ motion to certify the class, but the jury determined that plaintiffs were independent contractors and not employees. The trial court entered judgment in favor of Express. On appeal, plaintiffs alleged abuse of discretion by the trial court for failing to amend the class definition as well as other legal errors. The Court of Appeal affirmed the judgment in favor of Express.

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Ghazaryan v. Diva Limousine, Ltd., 169 Cal. App. 4th 1524 (2009)

Sarkis Ghazaryan filed this class action lawsuit alleging that Diva Limousine had failed to pay wages, overtime compensation, and to provide meal periods and rest breaks in violation of California law. Diva followed a policy of paying its drivers an hourly rate of pay for assigned trips but it failed to pay them for on-call time between assignments (referred to by the drivers as “gap time”). During gap time, the drivers were not permitted to use the vehicles for personal use and were required to stay near the vehicle (to be available for assignments) and to remain in uniform. Drivers also were required to use gap time for their rest and lunch breaks, which could be interrupted if they were dispatched on an assignment. The trial court denied class certification after determining there were too many individualized issues. The Court of Appeal reversed the order, holding that Ghazaryan’s proposed subclass consisting of all Diva drivers would satisfy the ascertainability, numerosity, community of interest and superiority requirements of a class action. Cf. Deleon v. Verizon Wireless, 88 Cal. Rptr. 3d 29 (Cal. Ct. App. 2009) (trial court properly dismissed Labor Code Private Attorneys General Act claims, which had been settled in a prior class action, but the court should not have denied plaintiff leave to amend his complaint to state claims that accrued after the date of the earlier action).

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Pineda v. Bank of Am., N.A., 170 Cal. App. 4th 388 (2009)

Jorge Pineda filed this class action against Bank of America for unpaid wages and for “waiting-time” penalties under Labor Code § 203. Although Pineda gave the bank two weeks’ advance notice of his resignation, the bank failed to pay him his final pay until four days after his employment had ended. Pineda acknowledged that all wages due to him were paid before this action was filed. The trial court granted the bank’s motion for judgment on the pleadings after applying a one-year statute of limitations, but Pineda asserted that a four-year statute of limitations should be applied pursuant to the Unfair Competition Law. The trial court and the Court of Appeal disagreed with Pineda, holding that “continuation wages made payable by section 203 are a penalty, rather than wages, the recovery of which does not constitute restitution within the meaning of Business and Professions Code section 17203.” Cf. Blanks v. Seyfarth Shaw, 2009 WL 417261 (Cal. Ct. App. 2009) (in this legal malpractice action involving the Talent Agencies Act, the Court held the plaintiff should have filed his case with the Labor Commissioner within the Act’s one-year statute of limitations); Lu v. Hawaiian Gardens Casino, Inc., 2009 WL 325544 (Cal. Ct. App. 2009) (Labor Code § 351 does not prohibit tip pooling in casinos, but triable issue of fact existed as to whether some tip pool recipients were “agents” of the employer within the meaning of the statute).

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Nigg v. United States Postal Serv., 2009 WL 251950 (9th Cir. 2009)

Robert Nigg, a postal inspector currently employed by the United States Postal Service (“USPS”), and Keith Lewis, a retired postal inspector, sued the USPS alleging postal inspectors are entitled to overtime pay under the Fair Labor Standards Act (“FLSA”). The district court granted summary judgment to the USPS after concluding that another federal statute (39 U.S.C. § 1003(c)) governs the pay of postal inspectors. The Court of Appeals for the Ninth Circuit reversed the judgment, holding that the FLSA and § 1003(c) are not in “irreconcilable conflict” and ordering the district court to further analyze the two statutes. The Ninth Circuit also ordered the district court to determine on remand whether postal inspectors are administratively exempt from the requirements of the FLSA. Cf. Moore-Thomas v. Alaska Airlines, Inc., 553 F.3d 1241 (9th Cir. 2009) (Railway Labor Act did not completely preempt Oregon state-law claims for failure to pay all wages due to customer service agent and other members of the class).

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Boston v. Penny Lane Centers, Inc., 170 Cal. App. 4th 936 (2009)

LaToya Boston worked as a therapist and treatment coordinator for Penny Lane, a social services agency that operates group homes for juveniles and offers therapy for children and families. When Boston was first hired, Penny Lane maintained staffing ratios of one staff member for every three clients, but in time the number of clients increased, making it difficult for Boston to do her job and adhere to safety guidelines. After Boston was injured when a fight broke out between clients in her group therapy, she complained that “my work environment is no longer safe.” Following Boston’s termination a month later (ostensibly for poor performance), she sued for tortious termination in violation of the public policy contained in Labor Code §§ 6310-6312 (prohibiting retaliation for refusal to work in violation of health and safety standards, among other things). At trial, the jury awarded Boston $500,000 in compensatory damages and $200,000 in punitive damages. The Court of Appeal affirmed the judgment in Boston’s favor, rejecting Penny Lane’s assertion that she was limited to an exclusive remedy under Health & Safety Code § 1596.882 (protecting from discrimination employees who make a good faith complaint to a regulatory agency or the employer regarding violations of the Health & Safety Code). The Court also held the trial court did not abuse its discretion by admitting testimony from Boston’s expert witnesses, whose expert reports and writings Penny Lane contended had not been timely produced prior to trial. Cf. Rankin v. Longs Drug Stores Cal., Inc., 169 Cal. App. 4th 1246 (2009) (federal Combat Methamphetamine Epidemic Act operated to abate any action against employer for its alleged violation of Labor Code § 432.7, which prohibits an employer from asking applicants about convictions for certain drug offenses more than two years old); Gibson v. Office of the Attorney Gen., 2009 WL 174915 (9th Cir. 2009) (California OAG did not violate attorney-employee’s First Amendment rights or breach its contract with her by insisting that she cease to represent another OAG employee in a private legal malpractice case).

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Dible v. Haight Ashbury Free Clinics, Inc., 170 Cal. App. 4th 843 (2009)

Leah Dible, who was employed by the Haight Ashbury Free Clinics as a psychiatric counselor, was terminated after a jail inmate as to whom she had some level of responsibility committed suicide. Dible alleged that when she was terminated, she was told that her negligence had resulted in the inmate’s suicide and that statements to that effect were made to the Employment Development Department (“EDD”) in connection with her claim for unemployment benefits. In response to Dible’s defamation claim, defendants filed a demurrer and an anti-SLAPP (strategic lawsuits against public participation) motion. The trial court granted the motion, and the Court of Appeal affirmed, holding that defendants’ statements to the EDD were “protected activity” within the meaning of the anti-SLAPP statute and that Dible could not establish a probability of success on her defamation claim because there was no alleged publication or republication to a third person as is required to establish such a claim. See also Miller v. City of Los Angeles, 169 Cal. App. 4th 1373 (2008) (employee’s claims of intentional infliction of emotional distress and defamation arose out of protected activity and were properly dismissed under the anti-SLAPP statute).

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C.R. v. Tenet Healthcare Corp., 169 Cal. App. 4th 1094 (2009)

In this class action, C.R. sued Tenet Healthcare for sexual harassment in violation of Civil Code § 51.9 (prohibiting sexual harassment by a health care provider), negligence and intentional infliction of emotional distress based upon nursing assistant Ramon Eduardo Gaspar’s alleged sexual touching of her and other patients while they were in a state of diminished capacity due to their illness and were unable to resist his assaults. The trial court sustained Tenet’s demurrer to the complaint and ruled that Tenet’s motion to strike was moot. The Court of Appeal reversed the judgment, holding that certain business licenses (of which Tenet asked the trial court to take judicial notice because they purportedly established Tenet did not employ or supervise Gaspar) did not negate the allegations that Tenet was legally responsible for Gaspar’s actions. The Court similarly rejected Tenet’s other arguments that the statute could not apply to its actions vis-à-vis the plaintiff.

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Wilson v. County of Orange, 169 Cal. App. 4th 1185 (2009)

Julie Ann Wilson worked as a radio dispatcher for the Orange County Sheriff’s Department’s emergency communications system. Wilson sued the County for disability discrimination under the Fair Employment and Housing Act (“FEHA”) on the ground that it allegedly had failed to make reasonable accommodation for her medical condition (antiphospholipid antibody syndrome or “thick blood”) that necessitated she avoid the most stressful aspects of her job. Although the County accommodated Wilson in precisely the manner she sought, she contended it had violated the FEHA by not providing her the accommodation earlier and by not initiating an “interactive process” with her sooner. The case was tried to a jury, and the jury returned a verdict for the County. The Court of Appeal affirmed the judgment in favor of the County, holding that “the record demonstrates the County engaged in a process aimed at trying to accommodate Wilson. Indeed, the success of its process is borne out by the fact that in the end, Wilson got exactly what she wanted – albeit after a series of temporary accommodations.”

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Rohr v. Salt River Project Agric. Improvement & Power Dist., 2009 WL 349798 (9th Cir. 2009)

Larry Rohr, an insulin-dependent type 2 diabetic, brought suit for employment discrimination under the Americans with Disabilities Act (“ADA”). The district court granted the employer’s motion for summary judgment on the grounds that he failed to raise a material issue of fact concerning whether he had a disability within the meaning of the ADA and because of his inability to complete a certification test, which rendered him unqualified for his position as a welding metallurgy specialist. The Court of Appeals for the Ninth Circuit reversed the judgment, holding that “diabetes is a ‘physical impairment’ because it affects the digestive, hemic and endocrine systems, and eating is a ‘major life activity.’” Further, the Court held that Rohr had raised a genuine issue of material fact as to whether he is “significantly restricted as to the condition, manner or duration” in which he can eat, compared to the general population. (Although the Court did not have to decide whether the ADA Amendments Act (“ADAAA”), which became effective on January 1, 2009, applied to this case, it noted that the ADAAA “sheds light on Congress’ original intent when it enacted the ADA.”) Finally, the Court held that Rohr also raised a genuine issue as to whether he was “qualified” for his position within the meaning of the ADA, “since with the exception of the respirator certification requirement, which may itself be found to be discriminatory, he provided sufficient evidence that he satisfied all of Salt River’s job-related requirements and could perform the essential functions of his position.”

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Crawford v. Metropolitan Gov’t of Nashville & Davidson County, 555 U.S. ___, 129 S. Ct. 846 (2009)

Vicky Crawford was interviewed during the course of an investigation into “rumors of sexual harassment” involving the Metro School District’s employee relations director, Gene Hughes. Crawford described several instances of sexually harassing behavior that Hughes allegedly directed at her; two other employees also reported being sexually harassed by Hughes. Although Metro took no action against Hughes, it fired Crawford and the two other accusers soon after completing the investigation, saying in Crawford’s case that she was terminated for embezzlement. Crawford filed suit under Title VII, which prohibits retaliation against an employee who “opposes” an unlawful employment practice or who “participated” in an investigation thereof. The district court granted summary judgment in Metro’s favor on the ground that Crawford had not “instigated or initiated any complaint” and that she had “merely answered questions by investigators in an already-pending internal investigation initiated by someone else.” The Court of Appeals for the Sixth Circuit affirmed the judgment. The Supreme Court unanimously reversed, holding that “[t]here is… no reason to doubt that a person can ‘oppose’ [within the meaning of the statute] by responding to someone else’s question just as surely as by provoking the discussion, and nothing in the statute requires a freakish rule protecting an employee who reports discrimination on her own initiative but not one who reports the same discrimination in the same words when her boss asks a question.” Cf. Lakeside-Scott v. Multnomah County, 2009 WL 331460 (9th Cir. 2009) (final decision maker’s wholly independent, legitimate decision to terminate employee is insulated from liability even though lower-level supervisor who was involved in the process had a retaliatory motive to have the employee fired).

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In an opinion letter issued on November 25, 2008, the DLSE determined that an employer may make deductions from wages to reflect predictable and expected wage overpayments made in the immediately prior paycheck so long as the employer has obtained the employee’s voluntary, written authorization to do so. See http://www.dir.ca.gov/dlse/OpinionLetters-byDate.htm.

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Vondjidis v. Hewlett Packard Corp., 168 Cal. App. 4th 921 (2008)

Alexander Vondjidis was employed by Hewlett Packard at HP’s Athens, Greece office in the 1970s. He purchased shares through HP’s employee stock purchase plan and left HP in 1978. Although HP was aware of Vondjidis’s home address in Athens (the address was listed in HP’s personnel records), HP listed its Athens office (which closed in 1982) as Vondjidis’s shareholder address of record. In 1993, HP transferred Vondjidis’s shares to the State of California as unclaimed property. When Vondjidis learned of the transfer in 2001, he sued HP for breach of contract, negligence, breach of fiduciary duty, conversion and fraud. HP obtained summary judgment on the ground that it was immune from liability under California’s unclaimed property statute. The Court of Appeal reversed the summary judgment, holding that HP was not entitled to immunity because HP knew of the owner’s location (which had not changed since he left HP) and despite that knowledge transferred the shares to the state. The Court also held that HP was not entitled to summary judgment based on the applicable statute of limitations.
 

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Wallis v. PHL Associates, Inc., 2008 WL 4989118 (Cal. Ct. App. 2008)

The trial court imposed approximately $43,000 in sanctions against Hygieia Biological Laboratories, its principals and their attorney in this case involving alleged misappropriation of trade secrets. During the course of the litigation, the parties agreed to a protective order, which the trial court issued, allowing the parties to file under seal certain confidential documents containing alleged trade secrets. PHL’s attorney filed under seal a declaration in the case, including attachments which PHL contended were trade secrets. When the document later appeared in the court’s publicly available file, Hygieia’s attorney notified her clients of the accessibility of the information; in an attempt to defeat PHL’s claim that the information contained trade secrets, Hygieia had third parties view and copy the declaration and the attachments. In response, PHL filed a motion for sanctions pursuant to Cal. Code Civ. Proc. § 128.5 on the ground that Hygieia and its attorney’s actions were frivolous and taken in bad faith, which the trial court granted and the Court of Appeal affirmed.

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Starbucks Corp. v. Superior Court, 168 Cal. App. 4th 1436 (2008)

Plaintiffs filed a class action lawsuit on behalf of themselves and approximately 135,000 other Starbucks applicants who had sought jobs at some 1,500 Starbucks locations throughout California. Plaintiffs contended that the Starbucks application violated California Labor Code §§ 432.7 and 432.8, prohibiting employers from asking about marijuana-related convictions that are more than two years old, seeking statutory damages of $200 per applicant – a “whopping $26 million.” The trial court denied Starbucks’ motion for summary judgment, but the Court of Appeal granted its petition for a writ of mandate directing the trial court to enter summary judgment for Starbucks. The Court of Appeal held that plaintiffs’ lawsuit suffered from two “fundamental flaws” – first, Starbucks attempted to disclaim an interest in the prohibited information in language contained in the application itself; and, second, none of the plaintiffs had any marijuana-related convictions to reveal. As for the first point, the Court did note that while it had no problem with the language of the California disclaimer (advising California applicants that they could omit any marijuana-related convictions that were more than two years old), there was a “significant problem with its placement…[because it was] submerged in a veritable sea of boldface type.” Said the Court, “the unintended consequence of Starbucks’ one-size-fits-all style for its employment applications is a lack of clarity for which California law strives.” Cf. Crab Addison v. Superior Court, 2008 WL 5401587 (Cal. Ct. App. 2008) (employer required to provide plaintiff with names and contact information of putative class members).
 

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Dominguez v. Washington Mut. Bank, 168 Cal. App. 4th 714 (2008)

Yoko Dominguez, a former temporary employee of Washington Mutual assigned to processing outgoing mail, alleged that a co-worker (Javier Gutierrez) had made crude and offensive comments to her after learning that Dominguez was a lesbian. Dominguez complained about Gutierrez’s comments to her supervisor’s supervisor (who was also a lesbian) as well as to her direct supervisor who “might have given” Gutierrez verbal warnings about his conduct. Shortly thereafter, Dominguez’s supervisor invited her to apply to become a full-time, regular employee, but two days after she applied, she was fired because she was “frequently late for work.” In her lawsuit, Dominguez alleged discrimination, harassment and retaliation in violation of the Fair Employment and Housing Act; the trial court granted defendants’ summary judgment motions on statute of limitations grounds and because Dominguez had no evidence to rebut WaMu’s claim that it fired Dominguez for a legitimate nondiscriminatory reason (her tardiness). The Court of Appeal reversed in part, holding that Dominguez timely filed her administrative complaint with the California Department of Fair Employment and Housing (“DFEH”). Although Gutierrez’s verbal taunts ceased in May of 2002 and Dominguez did not file her DFEH complaint until August of 2003, Gutierrez’s post-May 2002 conduct (e.g., jamming the wheels of Dominguez’s pallet jack, blocking her access to her work stations with heavy boxes and otherwise interfering with the performance of her job) may have constituted a continuing violation that extended through August of 2002 (when her employment was terminated). Further, the Court held that triable issues of fact existed as to whether Gutierrez’s conduct was sufficiently hostile and pervasive and whether the stated reason for terminating Dominguez was a pretext (given the almost contemporaneous invitation to apply for full-time employment with WaMu). Finally, the Court held that Dominguez had waived her punitive damages claim against WaMu by failing to properly address it on appeal and that her retaliation claim against Gutierrez was improper in light of Jones v. The Lodge at Torrey Pines P’ship, 42 Cal. 4th 1158 (2008). Cf. Young v. Exxon Mobil Corp., 168 Cal. App. 4th 1467 (2008) (supervisor whose defense was paid by employer was entitled to recover only $1.00 in attorney’s fees even though employee’s claims against supervisor were frivolous and brought in bad faith).
 

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DeJung v. Superior Court, 2008 WL 5265525 (Cal. Ct. App. 2008)

Theodore DeJung, a former part-time commissioner of the Sonoma County Superior Court, filed a lawsuit alleging age discrimination after he was not selected to become a full-time commissioner. Before DeJung’s application was denied (in favor of a 43 year old), the Court’s presiding judge told him that the executive committee “want[s] somebody younger [for the fulltime commissioner’s position], maybe in their 40’s.” In addition, the presiding judge told DeJung’s former bailiff that “we’re looking for someone younger [than DeJung for the position].” The trial court (the Sonoma County Superior Court) granted the Superior Court’s motion for summary judgment based on the doctrine of discretionary immunity for public employers and because DeJung had failed to raise a triable issue of material fact regarding his claim. The Court of Appeal reversed, holding that discretionary immunity does not apply to discrimination actions brought under the Fair Employment and Housing Act. Further, the Court held that under the “cat’s paw” doctrine, evidence of discriminatory animus by a significant participant in the employment decision (the presiding judge) raised an inference that the employment decision itself was discriminatory, even absent evidence that others in the process harbored such animus.
 

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People v. Roscoe, 2008 WL 5378254 (Cal. Ct. App. 2008)

John and Ned Roscoe, officers, directors, and shareholders of a family company (The Customer Company) whose underground storage tank leaked over 3,000 gallons of gasoline into the ground, were found liable along with the company for $2,493,250 in civil penalties under the state’s “tank laws.” The Court of Appeal affirmed the judgment, holding that under the responsible corporate officer doctrine, an officer may be considered an “operator” of the tank and can incur personal liability. The Court further held that the penalties were proportional and not excessive. Cf. Tverberg v. Fillner Constr., Inc., 168 Cal. App. 4th 1278 (2008) (general contractor owed duty of care to independent contractor hired by subcontractor).
 

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Larner v. Los Angeles Doctors Hosp. Associates, LP, 168 Cal. App. 4th 1291 (2008)

Josephine Larner, a nurse, sued her former employer, a hospital, for allegedly unpaid overtime. Larner brought the action on behalf of herself and all current and former nonexempt workers employed by defendants who failed to receive required premium overtime wages for the previous four years. The hospital successfully moved for summary adjudication of Larner’s claim after which she filed an amended complaint. The trial court subsequently denied Larner’s motion to certify two separate classes – one for improper calculation of overtime rates and one for failure to keep accurate and complete wage records – on the grounds that the motion was unduly tardy, Larner’s claims were not typical of those of the proposed classes and the class definitions were overbroad. The parties then reached a settlement of Larner’s individual claims two days before the trial date, but they agreed Larner could reserve her right to seek appellate review of the trial court’s orders granting summary adjudication to the hospital and denying class certification. The Court of Appeal held that the settlement between the parties rendered Larner’s appeal moot. Cf. United Steel Workers, AFL-CIO v. Shell Oil Co., 2008 WL 5143873 (9th Cir. 2008) (rule requiring unanimous consent to removal of multi-defendant action is inapplicable under the Class Action Fairness Act).
 

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Brewer v. Premier Golf Properties, LP, 168 Cal. App. 4th 1243 (2008)

Christine Brewer, a waitress who had been employed at the Cottonwood Golf Club, quit her job and filed a complaint seeking damages for various alleged violations of the California Labor Code. After a jury trial, Brewer was awarded less than $1,000 for unpaid regular and overtime wages, $6,000 for unpaid meal and rest breaks, $4,000 for pay stub violations, and $15,300 for minimum wage penalties. In a second phase of the trial, the jury awarded $195,000 in punitive damages to Brewer. In addition, the trial court awarded Brewer $64,710 in attorney’s fees (less than half of what she had requested). On appeal, the Court of Appeal held that “punitive damages are not recoverable when liability is premised solely on the employer’s violation of the Labor Code statutes that regulate meal and rest breaks, pay stubs, and minimum wage laws.” The Court also reversed the attorney’s fee award and ordered that the amount be reconsidered by the trial court. Cf. Marin v. Costco Wholesale Corp., 2008 WL 5341848 (Cal. Ct. App. 2008) (DLSE Manual section regarding calculation of overtime on “flat sum bonuses” is disregarded as not having the force of law).
 

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EEOC v. Federal Express Corp., 543 F.3d 531 (9th Cir. 2008)

Tyrone Merritt filed this putative class action on behalf of himself and similarly situated African American and Latino employees, alleging that FedEx’s Basic Skills Test had a statistically significant adverse impact on African American and Latino employees. After issuing a right-to-sue notice to Merritt at his counsel’s request, the EEOC issued an administrative subpoena requiring FedEx to identify basic information about the computer files that it maintains. FedEx refused to comply with the subpoena, arguing that the EEOC was divested of investigatory authority once the party alleging the discriminatory practice initiates or (as in this case) joins a private action. The Ninth Circuit held: (1) Notwithstanding FedEx’s compliance with an administrative subpoena in another case, the EEOC was permitted to seek the same information in the subpoena that was issued in this case; (2) the EEOC retains the authority to issue an administrative subpoena against an employer after a charging party has been issued a right-to-sue notice and instituted a private action; and (3) an administrative subpoena, which does not seek direct evidence of discrimination, but instead seeks general employment files in order to help the EEOC draft future information requests, seeks evidence that is “relevant” to a charge of systemic discrimination.
 

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Chicanos Por La Causa, Inc. v. Napolitano, 2008 WL 4225536 (9th Cir. 2008)

In 2007, Arizona enacted the Legal Arizona Workers Act (the “Act”), which targets employers that hire illegal aliens and provides a principal sanction in the form of a revocation of state licenses to do business in Arizona. Various businesses and civil-rights organizations filed this lawsuit, asserting that the Act is preempted by the federal Immigration Reform and Control Act of 1986 (“IRCA”), which expressly preempts any state regulation “other than through licensing and similar laws.” The district court and the Ninth Circuit held that because the Act is a licensing law within the meaning of IRCA, it was, therefore, not preempted by it. Cf. Golden Gate Restaurant Ass’n v. San Francisco, 2008 WL 4401387 (9th Cir. 2008) (San Francisco Health Care Security Ordinance is not preempted by ERISA); Dumontier v. Schlumberger Tech. Corp., 543 F.3d 567 (9th Cir. 2008) (employee claims for sub-cellular damage from exposure to cesium were preempted by the Price-Anderson Act).
 

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Gunn v. Mariners Church, Inc., 167 Cal. App. 4th 206 (2008)

Robert Gunn sued the church for defamation, invasion of privacy and intentional infliction of emotional distress after the senior pastor announced to the congregation that the church had terminated Gunn from his pastoral position because he had admitted to (homosexual) acts, which the church considered to be a sin. The trial court granted the church’s motion for summary judgment on the ground that the church’s acts were in furtherance of established church policy regarding termination of employment of a leader within the church, and the Court of Appeal affirmed.
 

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McDonald v. Antelope Valley Cmty. Coll. Dist., 2008 WL 4694301 (Cal. S. Ct. 2008)

Plaintiffs in this case alleged racial harassment, discrimination and retaliation against the District. The trial court granted summary judgment to the employer with regard to Sylvia Brown’s claims on the ground they were barred by the statute of limitations applicable to claims asserted under the California Fair Employment and Housing Act (“FEHA”). The court of appeal and the California Supreme Court in this opinion reversed the dismissal, holding that the statute of limitations was tolled while Brown was voluntarily pursuing internal administrative remedies against the District.
 

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Asset Marketing Systems, Inc. v. Gagnon, 542 F.3d 748 (9th Cir. 2008)

Kevin Gagnon, doing business as “Mister Computer,” alleged that his former customer, Asset Marketing Systems (“AMS”), infringed his copyright in six computer programs that he wrote for AMS by continuing to use and modify them without his consent and that AMS misappropriated trade secrets contained in the programs’ source code. After AMS terminated its contract with Gagnon, it hired seven of Gagnon’s 12 employees to provide directly to AMS the same services they previously provided to AMS through Gagnon. The Ninth Circuit affirmed summary judgment in AMS’s favor, holding that the non-compete covenants contained in the employment contracts of Gagnon’s former employees were unenforceable under Cal. Bus. & Prof. Code § 16600.
 

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Nadaf-Rahrov v. Neiman Marcus Group, Inc., 166 Cal. App. 4th 952 (2008)

Forough Nadaf-Rahrov worked as a clothes fitter for Neiman Marcus in Dallas before transferring to San Francisco in the mid- 1990s. She suffered from recurrent back and joint pain and was diagnosed with carpal tunnel syndrome and osteoarthritis. In November 2003, she commenced a requested family medical leave of absence, which was extended at least four times over the following nine months. By the time Neiman Marcus terminated Nadaf-Rahrov’s employment, after several leave extensions, she did not have a release from her doctor to perform her job duties, and she had exhausted her remaining sick and vacation benefits. After her termination, Nadaf-Rahrov sued Neiman Marcus for disability discrimination under the California Fair Employment and Housing Act (“FEHA”) and for wrongful termination in violation of public policy. Although the trial court granted the employer’s motion for summary judgment, the Court of Appeal reversed, holding that there was a triable issue of fact whether Neiman Marcus could have but did not provide her with a reasonable accommodation in the form of a reassignment to a vacant position. Similarly, the Court held the employer may have caused a breakdown in the interactive process by failing to provide information to the employee about available positions that might have assisted her and her physician in preparing a list of workrelated medical restrictions. The Court affirmed dismissal of the employee’s claim for retaliation, but reversed dismissal of her claims for national origin and ethic discrimination and ruled that she was entitled to additional discovery responses concerning available positions. Cf. Mangano v. Verity, Inc., 84 Cal. Rptr. 3d 526 (Cal. Ct. App. 2008) (employer that served plaintiff with a Code of Civ. Proc. § 998 settlement offer before obtaining summary judgment of disability discrimination claims was properly awarded its expert witness fees, but it was not entitled to recover its attorneys’ fees); Anthony v. City of Los Angeles, 166 Cal. App. 4th 1011 (2008) (prevailing plaintiff in FEHA retaliation case was properly awarded expert witness fees).
 

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Kullar v. Foot Locker Retail, Inc., 2008 WL 4561629 (Cal. Ct. App. 2008)

Crystal Echeverria and two other objectors challenged the fairness and adequacy of a settlement of a class action lawsuit involving approximately 18,000 Foot Locker employees who were required to “purchase and wear shoes of a distinctive design or color as a term and condition of their employment” (the “uniform class”) as well as employees who were subject to security searches for which they were not compensated (the “security check class”). Following a successful mediation with Mark Rudy, Esq., the parties agreed to a stipulation of settlement, which was submitted to the trial court for approval. After Echeverria filed a separate class action alleging meal break violations and wages due to terminated employees, she filed written objections to the settlement in this case, asserting that there was insufficient investigation and discovery prior to settlement to allow counsel or the trial court to act intelligently in valuing the case. The Court of Appeal reversed the judgment approving the settlement and held “the fact that the settlement was reached during mediation to which Evidence Code § 1119 applies does not eliminate the court’s obligation to evaluate the terms of the settlement and to ensure that they are fair, adequate and reasonable.”
 

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Varisco v. Gateway Science & Eng’g, Inc., 166 Cal. App. 4th 1099 (2008)

Gateway engaged Al Varisco to provide construction inspection services on two projects it was doing for the Los Angeles Unified School District (“LAUSD”). Gateway retained Varisco pursuant to a letter agreement whereby he was to be paid $75 per hour for the inspection services, which he performed directly for the LAUSD. Varisco received a 1099 reflecting his compensation and was responsible for providing his own equipment, hardhat, and work boots. He only visited Gateway’s offices to pick up his paycheck, and he received no direction from Gateway on how to perform his duties. Gateway terminated the relationship when Varisco refused to sign a new contract after he learned he was going to be responsible for paying his own automobile and workers’ compensation insurance. The Court of Appeal affirmed summary judgment in favor of Gateway after determining that Varisco was an independent contractor and not an employee of Gateway, thus barring his wrongful termination of employment claims as a matter of law. Cf. Chin v. Namvar, 166 Cal. App. 4th 994 (2008) (worker who misrepresented himself as a licensed contractor could not rely on Labor Code presumption that he was an employee and not an independent contractor).
 

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Stillwell v. The Salvation Army, 167 Cal. App. 4th 360 (2008)

Arthur Stillwell sued The Salvation Army (“TSA”) for breach of an implied agreement to terminate his employment only for good cause. The jury found that TSA breached an implied agreement with Stillwell and awarded him more than $155,000 – but it also determined that Stillwell had executed an enforceable agreement that rendered his employment terminable at will. Both parties conceded on appeal that the jury’s verdicts were inconsistent. The Court of Appeal held the trial court had erred in choosing as a matter of law one of the jury’s inconsistent verdicts over the other and ordered, instead, that a new trial be held.
 

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Brinkley v. Public Storage, Inc., 2008 WL 4716800 (Cal. Ct. App. 2008)

Fred Brinkley, a property manager for Public Storage, asserted class action and individual claims for violations of Labor Code § 226 (requiring accuracy of paystubs) and § 226.7 (meal and rest period requirements). The trial court granted summary adjudication in favor of the employer on these claims, which the Court of Appeal affirmed. With respect to the alleged paystub violations, the Court held that although there was an erroneous rate of pay (for mileage) included on the paystubs, the error was corrected and none of the employees suffered any injury as a result of the error. With respect to the allegedly unpaid meal periods, the employer had not violated Section 226.7 because it was able to establish it had made meal periods available to employees. The Court rejected Brinkley’s assertion that an employer must ensure (and not just make available) the required meal and rest periods. Cf. Lee v. Dynamex, Inc., 166 Cal. App. 4th 1325 (2008) (order denying class certification is reversed because trial court improperly denied plaintiff’s motion to compel employer to identify and provide contact information for potential putative class members).

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Sullivan v. Oracle Corp., 2008 WL 4811911 (9th Cir. 2008)

Three Oracle instructors (all non-residents of California) filed this class action to recover allegedly unpaid overtime under California law for work they performed while in California. Two of the instructors were residents of Colorado and one was a resident of Arizona; all of them worked in their home states and, from time to time, in California. The district court granted Oracle’s motion for summary judgment, but the Ninth Circuit reversed in part, holding that the California overtime requirements (which are stricter than the overtime requirements of Arizona and Colorado) apply to work performed in California by residents of other states. However, the Court of Appeals affirmed dismissal of the claim made by two of the plaintiffs who asserted a violation of California’s Unfair Competition Law (Bus. & Prof. Code § 17200) for alleged violations of the federal Fair Labor Standards Act (“FLSA”) outside California on the ground that Section 17200 does not have extraterritorial application.
 

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Mora v. Hollywood Bed & Spring, 164 Cal. App. 4th 1061 (2008)

Salvador Mora sued his former employer and its president after his arm was crushed in a power press machine. Mora alleged the machine lacked an adequate guard to protect against injury and, therefore, pursuant to Cal. Lab. Code § 4558, he was not limited to a remedy provided under the Workers’ Compensation Act. The trial court granted the employer’s motion for summary judgment, and the Court of Appeal affirmed, holding there was no evidence that the employer specifically authorized the failure to install or removal of a point of operation guard on the machinery. Cf. Ramirez v. Nelson, 44 Cal. 4th 908 (2008) (homeowners breached no special duty of care to unlicensed contractor or his worker who was electrocuted); Los Angeles County Professional Peace Officers’ Ass’n v. County of Los Angeles, 165 Cal. App. 4th 63 (2008) (county’s policies concerning cash-out of vacation benefits discriminated against disabled public safety officers in violation of Cal. Lab. Code § 132a and equal protection guarantees).
 

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United States v. Easterday, 2008 WL 3876593 (9th Cir. Aug. 22, 2008)

Jack Easterday operated a chain of nursing homes. Between 1998 and 2005, the payroll taxes for his company and its subsidiaries were approximately $45 million of which only $26 million was paid to the IRS. In his criminal trial for failure to pay over payroll taxes, Easterday did not dispute that he failed to pay the taxes – his defense was that he lacked the financial ability to comply with his tax obligations. During the trial, the district court refused Easterday’s request that the jury be instructed that in order to prove a willful failure to pay taxes, the government must prove that Easterday had the ability to pay the tax obligation. The jury convicted Easterday, and he was sentenced to 30 months of prison and three years of supervised release. In this appeal, the Ninth Circuit affirmed the judgment and sentence and held the district court had not erred in refusing the jury instruction that Easterday had sought. Cf. Kadillak v. CIR, 534 F.3d 1197 (9th Cir. 2008) (taxpayer’s election to recognize AMT income on his unvested shares of company stock was proper, but he was not entitled to a claim of right deduction when unvested shares were later forfeited upon termination).
 

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Avila v. Continental Airlines, Inc., 2008 WL 3272183 (Cal. Ct. App. Aug. 11, 2008)

Henry Avila sued his employer, Chelsea Food Services (a division of Continental Airlines), following his termination for excessive absences from work. Avila sued for disability discrimination and for violation of his rights under the California Family Rights Act (“CFRA”). The trial court granted summary judgment to Continental, but the Court of Appeal reversed the summary adjudication of the CFRA claim. The Court affirmed dismissal of the disability discrimination claim on the ground that there was no evidence that Continental was aware of Avila’s alleged disability because the forms he submitted to the company did not contain sufficient information to put Continental on notice of his alleged disability – although the forms referenced Avila’s hospitalization they gave Continental no details about the reason for the hospitalization. Evidence that Avila told other employees (but not his supervisors) about his acute pancreatitis before his termination and that he informed the company after his termination of the nature of his illness did not save his claim. However, the Court reversed the dismissal of Avila’s CFRA claim in light of the fact that Avila did submit forms from Kaiser regarding his absence, which was sufficient to put Continental on notice that he might have been suffering from a “serious health condition” sufficient to trigger family medical leave rights under CFRA. (In a dissenting opinion (as to the reversal of the summary adjudication), Justice Kriegler noted that there was no evidence that Avila ever requested family leave under the CFRA or that the individuals who made the decision to terminate had any knowledge of Avila’s hospitalization.)
 

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Mamou v. Trendwest Resorts, Inc., 165 Cal. App. 4th 686 (2008)

Tamer Mamou was employed as a project director for Trendwest (a company that sells timeshares at various resort locations) when he was terminated after approximately 12 years of employment. Trendwest terminated Mamou after it became aware that he had filed documents with the California Secretary of State in which it appeared Mamou was seeking to establish a competing resale company. Mamou testified, however, that his attempts to explain the situation were rebuffed and that one of the supervisors who was in the termination meeting said to him, “I’m disappointed in you, my Arab friend.” Another supervisor who was involved in the termination testified that although Mamou was not terminated for performance-related reasons, he had instructed HR to “take the lead on building a file relating to Tamer’s performance over the last six months” – and that specific areas to be addressed included “disability claims” and other “HR related claims.” Mamou also offered evidence of negative references and allusions to his Middle Eastern national origin and of various disparaging comments that were made about him after his termination. Mamou sued for national origin discrimination and retaliation for having opposed the company’s adverse treatment of employees who exercised their right to take family medical leave, and he also asserted a defamation claim. Although the trial court granted summary judgment to Trendwest, the Court of Appeal reversed, holding that “there was ample evidence to support…an inference [that Trendwest’s claimed reason for the firing] was false, beginning with the fact that Trendwest never rested on a single coherent explanation for its firing of Mamou, and that several if not all of its explanations were, to put it mildly, questionable.” The Court also found a triable issue of material fact as to whether malice existed, thus vitiating the qualified privilege defense to the alleged defamation. Cf. Parra v. Bashas’, Inc., 2008 WL 2891234 (9th Cir. July 29, 2008) (district court abused its discretion in failing to certify plaintiffs’ class action alleging national origin discrimination in pay practices); Lukovsky v. City and County of San Francisco, 535 F.3d 1044 (9th Cir. 2008) (national origin and race discrimination claims based on failure to hire were barred by statute of limitations).
 

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Alch v. Superior Court, 2008 WL 3522099 (Cal. Ct. App. Aug. 14, 2008)

In this on-going putative class action filed by television writers alleging “industry-wide” age discrimination, the writers served subpoenas on the Writers Guild of America (“WGA”) and other third parties, seeking demographic information, including dates of birth, employment data such as writers’ employers, job titles, credits and dates of employment, and anecdotal evidence of age discrimination. The writers contended this information was the “bare minimum necessary to litigate their claims of systemic practices of age discrimination.” In response to a privacy notice that went to 47,000 WGA members, 7,700 individuals filed objections to the production of this information. The trial court sustained the privacy objections, but the Court of Appeal reversed, holding in a two-to-one ruling that the trial court “gave short shrift to the public interest in pursuing the litigation,” and granted the writers’ petition for a writ of mandate. Cf. Hurlic v. Southern Cal. Gas Co., 2008 WL 3852685 (9th Cir. Aug. 20, 2008) (cash balance pension plans do not violate the anti-age discrimination provision of ERISA, and ERISA preempts state law discrimination claim); Whitman v. Mineta, 2008 WL 4014446 (9th Cir. Sept. 2, 2008) (federal employee failed to show he was qualified or eligible for promotion to a position that was filled by a younger employee).
 

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Brinker Restaurant Corp. v. Superior Court, 165 Cal. App. 4th 25 (2008)

In this case, the Court of Appeal decided a number important issues concerning employee class action claims for alleged rest break violations, meal period and “early lunching” violations and off-the-clock/“time shaving” violations. The Court of Appeal determined the claims were not amenable to class treatment because individual issues predominated and, accordingly, granted the employer’s petition for a writ of mandate compelling the trial court to vacate its order certifying the class action. Among the Court’s holdings were the following: (1) while employers cannot impede, discourage or dissuade employees from taking rest periods, employers need only provide, not ensure, rest periods are taken; (2) employers need only authorize and permit rest periods every four hours or major fraction thereof and such rest periods need not, where impracticable, be in the middle of each work period; (3) employers are not required to provide a meal period for every five consecutive hours worked; (4) while employers cannot impede, discourage or dissuade employees from taking meal periods, employers need only provide meal periods and need not ensure they are taken; and (5) while employers cannot coerce, require or compel employees to work off the clock, an employer can only be held liable for employees’ working off the clock if it knew or should have known the employees were doing so. (The Brinker decision was quickly followed by a laudatory press release from the governor and a memorandum to the DLSE staff from the labor commissioner stating that the opinion is binding on the DLSE and should be applied in all pending matters. www.dir.ca.gov/DLSE/ Brinker_memo_to_staff-7-25-08.pdf. Cf. Mark v. Spencer, 2008 WL 3877735 (Cal. Ct. App. Aug. 22, 2008) (plaintiffs’ attorney’s failure to disclose fee-splitting arrangement with another attorney in a class action barred his subsequent action against former co-counsel to enforce the agreement); Hoffman v. Construction Protective Services, Inc., 2008 WL 4070195 (9th Cir. Sept. 4, 2008) (trial court properly excluded evidence of damages as a sanction for failure to disclose damage calculations under FRCP 26(a)).
 

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Edwards v. Arthur Andersen LLP, 44 Cal. 4th 937 (2008)

CPA Raymond Edwards II was hired in 1997 as a tax manager for the Los Angeles office of the now defunct accounting firm Arthur Andersen LLP (“Andersen”). As a condition of his employment, Edwards was required to execute a noncompetition agreement that prohibited his (1) “perform[ing] professional services” for 18 months post-termination on behalf of any client whose account he had handled during the final 18 months of his employment with Andersen; (2) soliciting for 12 months any of the clients he had serviced during his final 18 months at Andersen; and (3) soliciting other Arthur Andersen employees to work for another employer for 18 months posttermination. Edwards signed the agreement and remained employed through May 2002 when, in the wake of its Enron indictment and pending dissolution, Andersen sold a portion of its Los Angeles tax practice to Wealth and Tax Advisory Services (“WTAS”), a newly formed subsidiary of HSBC Bank. The closing of the HSBC transaction was conditioned in part on Andersen’s requiring its employees to sign a “Termination of Non-Compete Agreement” (“TONC”) drafted by Andersen, which in relevant part required that they voluntarily resign from Andersen and release the firm from “any and all” claims in exchange for Andersen’s agreement to forgo enforcement of the original noncompetition agreement. In turn, HSBC conditioned its planned hiring of former Andersen employees, including Edwards, on their execution of the TONC. Edwards signed and returned HSBC’s written employment offer, but he refused to sign the TONC (in large part because he was reluctant to sign a waiver that might affect his right to indemnification). As a result, Andersen terminated Edwards’s employment and withheld severance benefits, while HSBC withdrew its offer of employment to Edwards. In his lawsuit against Andersen, HSBC and WTAS, Edwards alleged, among other things, intentional interference with prospective economic advantage. On Andersen’s motion, the lower court severed the trial on the issue of the enforceability of the noncompetition agreement and the TONC and ruled in favor of Andersen, finding the agreement to be enforceable under the so-called “narrow restraint” exception to Cal. Bus. & Prof. Code § 16600. The court of appeal reversed the judgment, holding that the non-solicitation covenant violated Section 16600. The Supreme Court affirmed that portion of the lower court’s judgment, but held that the broad general release (“any and all claims”) was not invalid just because it failed to carve-out non-waivable statutory claims for indemnity under Cal. Lab. Code § 2802.
 

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Chamber of Commerce v. Brown, 554 U.S. 60, 128 S. Ct. 2408 (2008)

Assembly Bill 1889, enacted in 2000, prohibited private employers that receive state funds – whether by reimbursement, grant, contract, use of state property or pursuant to a state program – from using such funds to “assist, promote, or deter union organizing.” Violators were to be liable to the state for the amount of funds used for the prohibited purposes plus a civil penalty equal to twice the amount of those funds. The Chamber of Commerce challenged the law on the ground that it was preempted by the National Labor Relations Act. The Ninth Circuit held the law was not preempted by the NLRA, but the United States Supreme Court reversed, holding by a vote of 7 to 2 (Breyer and Ginsburg, JJ., dissenting) that the state statute was preempted by federal labor law. Cf. Adkins v. Mireles, 526 F.3d 531 (9th Cir. 2008) (Labor Management Relations Act preempted employees’ claims against their union).

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Steele v. Youthful Offender Parole Bd., 162 Cal. App. 4th 1241 (2008)

Lisa Steele worked as an office assistant/receptionist for the YOPB. In her spare time, Steele competed in several bikini contests that were sponsored by a local radio station. On the day of the final contest, Raul Galindo, chairman of the YOPB, asked Steele if she was going to participate in any other bikini contests, and Steele told Galindo that there was one scheduled for that night. Galindo attended the contest and, after it was over, tried to kiss Steele on the mouth. Steele told a co-worker about the incident who in turn told another co-worker (Kym Kaslar) who later filed a DFEH complaint, claiming she was retaliated against for reporting the incident. Although Steele told the YOPB that she was not offended by Galindo’s behavior, Galindo was reprimanded for fraternizing with the staff and for being involved in a “social situation of questionable taste.” Steele was subsequently reprimanded for various performance deficiencies and misconduct. Eventually, Steele resigned her employment but before she left, she was asked to and did sign statements denying the kissing incident and any inappropriate conduct on Galindo’s part. In her subsequent lawsuit, Steele alleged she had been constructively terminated because she was a potential witness in Kaslar’s retaliation case and because the YOPB wanted the DFEH investigators to rely exclusively on the (false) statements Steele had been asked to sign before she quit. The jury awarded Steele $9,046 in lost wages and $146,705 in attorney’s fees. The Court of Appeal affirmed the judgment, finding substantial evidence of constructive termination of Steele’s employment that was causally linked to her potential participation as a witness in Kaslar’s DFEH proceeding. Cf. CBOCS West, Inc. v. Humphries, 553 U.S. 442, 128 S. Ct. 1951 (2008) (retaliation claim may be asserted under 42 U.S.C. § 1981); Gómez-Pérez v. Potter, 553 U.S. 474, 128 S. Ct. 1931 (2008) (federal employee may sue for retaliation under ADEA).

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Meacham v. Knolls Atomic Power Lab., 554 U.S. 84, 128 S. Ct. 2395 (2008)

When the United States government ordered Knolls (one of the contractors that maintains the nation’s fleet of nuclear-powered warships) to reduce its workforce, the company conducted an involuntary reduction in force, resulting in the layoff of 31 employees, 30 of whom were age 40 or older. Twenty-eight of the laid-off employees filed suit asserting a disparate impact claim under the Age Discrimination in Employment Act. At trial, the employees prevailed by showing that Knolls’ layoff criteria failed the “business necessity” test and because there existed alternative criteria that could have achieved the same results without disadvantaging a protected group of employees. After an earlier review by the Supreme Court, the Second Circuit Court of Appeals reversed the judgment, holding that the burden remained with the employees who were required to prove (and did not) that Knolls’ reasons for the layoff were unreasonable. In a 7-to-1 ruling, the Supreme Court reversed the Second Circuit and held that when an employer defends against a disparateimpact claim on the basis of “reasonable factors other than age” (“RFOA”), the employer must not only produce evidence raising the defense, but also must persuade the factfinder of its merit. See also Kentucky Retirement Systems v. EEOC, 554 U.S. ___, 128 S. Ct. 2361 (2008) (disability benefits formula did not discriminate against older workers who became disabled after retirement age); cf. Hearns v. San Bernardino Police Dep’t, 2008 WL 2579243 (9th Cir. July 1, 2008) (discrimination complaint containing excessively detailed factual allegations was improperly dismissed under F.R.C.P. 8).

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CypressSemiconductor Corp. v. Superior Court, 163 Cal. App. 4th 575 (2008)

The trade secret owner in this case, Silvaco Data Systems, develops and licenses electronic design automation software. In late 1998, a former Silvaco employee, working for Circuit Systems, Inc. (“CSI”), incorporated Silvaco’s “SmartSpice” trade secrets into CSI’s product, “DynaSpice.” Silvaco sued the employee as well as CSI and in 2003 entered into a settlement agreement and stipulated judgment. CypressSemiconductor (“Cypress”), one of CSI’s customers that had purchased DynaSpice, learned of the judgment against CSI in August of 2003. In September 2003, Silvaco contacted Cypress directly and demanded that it cease its use of Silvaco’s trade secrets (as incorporated in the DynaSpice software). When Cypress continued to use the product after receiving notice from Silvaco, the latter company sued the former for trade secret misappropriation under the California Uniform Trade Secrets Act (“CUTSA”). Cypress defended in part based on CUTSA’s three-year statute of limitations, which it contended commenced running in 2000 when Silvaco discovered CSI’s misappropriation. Silvaco, however, argued that because Cypress did not know of CSI’s misappropriation until August of 2003, the statute of limitations did not commence running until that date because one of the elements of a trade secret misappropriation claim is the defendant’s knowledge of the wrongfulness of its conduct. The Court of Appeal held that a plaintiff may have more than one claim for misappropriation, each with its own statute of limitations, when more than one defendant is involved. However, the Court further held that the statute commences running when the plaintiff knows or has reason to know the third party has knowingly acquired, used or disclosed its trade secrets. In this case, the Court held that Cypress was entitled to a jury trial to determine when Silvaco first had reason to know that a CSI customer such as Cypress had obtained or used DynaSpice knowing, or with reason to know, that the software contained Silvaco’s trade secrets.
 

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Westrec Marina Mgmt., Inc. v. Arrowood Indemn. Co., 163 Cal. App. 4th 1387 (2008)

Westrec sued its insurance carrier, Arrowood, after the carrier refused to provide a defense to an employment discrimination lawsuit on the ground that Westrec had failed to timely report the third-party claim as required under the terms of two successive directors and officers liability insurance policies issued by Arrowood. Bette Clark filed a complaint with the California Department of Fair Employment and Housing on April 14, 2003, alleging gender bias by Westrec and requesting a right-to-sue letter. On June 23, 2003, Clark’s attorney sent a letter to Westrec “alleging discriminatory and demeaning treatment by male employees based upon sex.” Westrec failed to notify Arrowood of the DFEH filing or the attorney’s letter within 30 days after the expiration of the policy. Clark filed her lawsuit on December 19, 2003, and Westrec notified Arrowood of the action on January 30, 2004, tendered its defense and requested indemnity. Arrowood declined to defend or indemnify on the ground that Westrec had not timely notified it of the “claim,” which it deemed to be the DFEH filing and/or the attorney’s letter. Arrowood prevailed following a nonjury trial on Westrec’s breach of contract claim. The Court of Appeal affirmed, holding that Westrec had failed to timely report the claim to its insurance carrier and thereby waived coverage.
 

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Caso v. Nimrod Productions, Inc., 163 Cal App. 4th 881 (2008)

Christopher Caso, a professional stuntman, suffered severe head injuries while performing a stunt during the production of a television show. Caso and his wife (who sought damages for loss of consortium) sued defendants (the director and the stunt coordinators and their respective loan-out corporations) for negligence. The trial court granted defendants’ motion for summary judgment on the ground that the individual defendants were special employees of Touchstone Television Productions who had been acting within the scope of that employment at the time of the accident. Accordingly, the Casos’ lawsuit was barred by the California Workers’ Compensation Act, Cal. Labor Code § 3601. Further, the trial court concluded the loan-out corporations had relinquished all control over their employees and could not be held vicariously liable for the employees’ acts. The Court of Appeal affirmed summary judgment in favor of defendants. See also Antelope Valley Press v. Poizner, 162 Cal App. 4th 839 (2008) (newspaper deliverers were employees and not independent contractors for purposes of workers’ compensation coverage); Tomlin v. WCAB, 162 Cal. App. 4th 1423 (2008) (police officer who was injured while training during his vacation for an upcoming department physical fitness test was eligible for workers’ compensation benefits); Golden v. CH2M Hill Hanford Group, Inc., 528 F.3d 681 (9th Cir. 2008) (Price- Anderson Act preempted Hanford Nuclear Reservation employee’s claim for injuries arising from exposure to radioactive materials but his claim for emotional distress associated with exposure to non-radioactive heavy metals would not be preempted); cf. Ericson v. Federal Express Corp., 162 Cal. App. 4th 1291 (2008) (property owner was not liable for injuries sustained by employee of independent contractor who was injured during assault on the premises).
 

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Aramark Facility Services v. SEIU, 2008 WL 2405677 (9th Cir. June 16, 2008)

Aramark received letters from the Social Security Administration indicating that information relating to 48 of Aramark’s employees at Staples Center did not match the SSA’s database. Suspecting immigration violations, Aramark told the employees they had three days to correct the mismatches by proving they had begun the process of applying for a new social security card. Seven to 10 days later, Aramark fired 33 employees who had failed to timely comply. Local 1877 of the employees’ union, the Service Employees International Union, filed a grievance on behalf of the fired workers, contending the terminations were without just cause and in breach of the CBA. An arbitrator ruled for SEIU and awarded the workers back pay and reinstatement, finding there was no convincing information that any of the workers were undocumented. The district court vacated the award on the ground that it violated public policy as expressed in the Immigration Reform and Control Act of 1986. The Ninth Circuit reversed the district court, holding that Aramark had failed to establish constructive knowledge of any immigration violations particularly in light of the short notice that had been provided to the workers.
 

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Arteaga v. Brink’s, Inc., 163 Cal. App. 4th 327 (2008)

Brink’s employee Carlos Arteaga was the subject of an internal investigation into various shortages totaling $7,668 that occurred while he was acting in his capacity as an ATM messenger. The investigation was conducted after one of Arteaga’s managers noticed there had been 16 shortages in five months on runs in which Arteaga had been the messenger. Shortly after he learned of the investigation, Arteaga informed Brink’s for the first time that he was feeling a combination of “pain” and “numbness” in his arms, fingers, shoulders and feet and that he was feeling “stress” after being “accused over and over of stealing money.” Arteaga filed a workers’ compensation claim. Following the investigation, Arteaga’s employment was terminated as a result of the multiple shortages. Arteaga then sued Brink’s for disability discrimination and for failure to engage in a good-faith interactive process with him in order to determine effective reasonable accommodations for his alleged disability. The trial court granted summary judgment to Brink’s, and the Court of Appeal affirmed, holding that (1) Arteaga was not disabled because his symptoms (pain and numbness) did not make it difficult for him to achieve the life activity of working and (2) Brink’s terminated him for a legitimate, nondiscriminatory reason – “the closeness in time between Arteaga’s disclosure of his symptoms and his subsequent termination does not create a triable issue as to pretext, especially since his performance had been questioned before he disclosed his symptoms, and he was eventually terminated for those performance issues.” Compare Gribben v. United Parcel Serv., 528 F.3d 1166 (9th Cir. 2008) (employee with congestive heart failure and cardiomyopathy may have been disabled under the ADA, but was not retaliated against).
 

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In re BCBG Overtime Cases, 163 Cal. App. 4th 1293 (2008)

BCBG Maxazria filed a motion to strike class allegations from the complaint Christina Denkinger filed in which she and other putative class representatives alleged that BCBG misclassified its managers and assistant managers as exempt from overtime because they spend more than 50 percent of their time performing duties delegated to non-exempt employees. In support of its motion to strike, BCBG submitted declarations from 25 current and former managers and assistant managers in support of its contention that plaintiffs could not prove the elements of typicality or commonality necessary for class certification. Plaintiffs asserted the motion to strike was an improper attempt to circumvent the class certification process, but the trial court granted the motion because “class certification may be determined at any time during the litigation.” The Court of Appeal affirmed dismissal of the class allegations after concluding that the motion to strike was not filed before plaintiffs had had a chance to conduct discovery on class certification issues. Compare Bufil v. Dollar Fin. Group, Inc., 162 Cal. App. 4th 1193 (2008) (employee is not collaterally estopped from prosecuting new suit alleging meal and rest break violations involving subclasses following denial of certification of larger class); Sharp v. Next Entm’t, Inc., 163 Cal. App. 4th 410 (2008) (conflict-of-interest rules did not bar union’s law firm from representing a class of non-unionized employees in prosecuting wage-and-hour claims).
 

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City of Oakland v. Hassey, 2008 WL 2428205 (Cal. Ct. App. June 17, 2008)

The city sued Kenny D. Hassey for breach of contract after he failed to reimburse it for the costs of training him to become a police officer with the Oakland Police Department. Oakland had entered into a memorandum of understanding with the Oakland Police Officers’ Association authorizing the city to require employees who went through training at its academy to reimburse the city for those costs if the employee left the department before completing five years of service. Hassey resigned from the department after he was told he was “not performing to standards and that he should consider resigning in lieu of termination.” Hassey signed a document titled “training costs repayment agreement” in which he acknowledged he owed repayment of $8,000 of his training costs, to be paid in 24 monthly installments of $333.34. Oakland withheld Hassey’s final paycheck and his retirement balance to cover some of the money he owed for the training costs. The Court of Appeal held that Oakland had not violated federal or state law by requiring Hassey to repay the training costs, although it may have done so by withholding his final paycheck to offset part of the debt. Cf. Curcini v. County of Alameda, 2008 WL 2310283 (Cal. Ct. App. June 5, 2008) (overtime, meal and rest break compensation requirements of Labor Code do not apply to county employees).
 

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Advanced-Tech Sec. Services, Inc. v. Superior Court, 163 Cal. App. 4th 700 (2008)

Ester Roman, who was employed as a security guard for Advanced-Tech, worked 12 hours on Labor Day 2006 and eight hours on Memorial Day 2007. Advanced-Tech’s employee handbook stated that employees who worked on designated holidays, including Labor Day and Memorial Day, would be paid 1.5 times their regular rate of pay for all hours worked on such holidays. Roman contended that on holidays, the premium rate (1.5 times her regular rate) was in fact her regular rate and that any overtime she was owed for work on such days should be paid at 1.5 times the higher rate. Relying on the Fair Labor Standards Act, which specifically exempts premium holiday pay from inclusion in the calculation of the regular rate, the Court of Appeal issued a writ of mandate directing the superior court to set aside its order denying Advanced-Tech’s motion for summary adjudication and to enter a new order granting the motion in favor of the employer.
 

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Quon v. Arch Wireless Operating Co., 2008 WL 2440559 (9th Cir. June 18, 2008)

Arch Wireless contracted to provide wireless text-messaging services for the City of Ontario, including its police department. Pursuant to the city’s general Computer Usage, Internet and E-mail Policy, the use of the city’s computers and other electronic equipment, networks, etc., was limited to city-related business, access was not confidential and “users should have no expectation of privacy or confidentiality when using these resources.” Sergeant Jeff Quon, a member of the city’s SWAT team, signed an employee acknowledgement of the Policy; he also attended a meeting in which he and others were informed that text messages were considered to be the same as e-mail and could be audited by the department. Quon was later told that the content of his text messages would not be audited so long as he paid the department for any charges associated with texting more than 25,000 characters in a billing cycle. When a lieutenant in the department “grew weary” of being a bill collector for officers who exceeded the 25,000 character limit, the department contacted Arch Wireless and requested transcripts of the text messages. After the department received the transcripts from Arch, an investigation was conducted by internal affairs to determine “if someone was wasting city time not doing work when they should be.” The investigation revealed that many of Quon’s messages were personal in nature and were sexually explicit. Quon (and those with whom he had texted) sued Arch for violation of the Stored Communications Act (“SCA”) and the Ontario Police Department and its chief for violating the Fourth Amendment and the privacy protection provision of the California Constitution. The Ninth Circuit held that Arch violated the SCA by turning over the text transcripts to the city, which was only a “subscriber” and not “an addressee or intended recipient of such communication.” The Court further determined that Quon and those with whom he texted had a reasonable expectation of privacy in the text messages given the informal policy and “operational reality” of the department. Although the chief of police was shielded from liability by qualified immunity, the city and department were not. See also Nelson v. NASA, 2008 WL 2468884 (9th Cir. June 20, 2008) (“low-risk” NASA contract employees were entitled to injunction precluding in-depth background investigations).
 

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McCarther v. Pacific Telesis Group, 163 Cal. App. 4th 176 (2008)

Kimberly McCarther alleged that her employer, SBC Services, violated Cal. Labor Code § 233 (the “kin care” leave statute) when it failed to pay her for her absence for seven consecutive workdays in 2004 to care for two of her children who were ill. McCarther and another employee sued on behalf of themselves and all similarly situated employees. Section 233 states that an employee may use in any calendar year the amount of sick leave accrued by the employee during a six-month period “to attend to an illness of a child, parent, spouse, or domestic partner of the employee.” The collective bargaining agreement between plaintiffs’ union and the employer provided that “there is no cap or limit on the number of days that employees may be absent from work and receive full sickness absence payments…” In interpreting the statute, the Court of Appeal held that Section 233 plainly applies to the “sickness absence” policy at issue in this case even though that policy provided employees with an unlimited number of days of paid sick leave. Cf. Farrell v. Tri-County Metro. Transp. Dist., 2008 WL 2552261 (9th Cir. June 27, 2008) (employee was properly awarded lost wages for absences from work that were caused by emotional condition that resulted from employer’s wrongful denial of FMLA leave).
 

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Profit Concepts Mgmt., Inc. v. Griffith, 2008 WL 1932427 (Cal. Ct. App. May 5, 2008)

Profit Concepts sued Greg Griffith, a former employee, for breach of contract and misappropriation of trade secrets in Orange County Superior Court. Griffith, who was an Oklahoma resident at the time, moved to quash service for lack of personal jurisdiction. (The contract contained a prevailingparty attorney’s fees provision.) Profit Concepts filed a notice of non-opposition to Griffith’s motion to quash, and the trial court granted the motion. Griffith then filed a motion to recover his attorney’s fees in the action ($3,400.78) on the ground that he was the prevailing party. The trial court granted Griffith’s motion, and the Court of Appeal affirmed.
 

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Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097 (9th Cir. 2008)

Marie Bernadette Mendiondo, who worked as a nurse at the medical center, alleged she was terminated in retaliation for her complaints regarding allegedly false billing and reimbursement practices and substandard patient care in violation of the Federal and California False Claims Acts. Although the district court dismissed her claims, the Ninth Circuit reversed, holding that the heightened pleading requirements of Fed. R. Civ. P. 9(b) do not apply to FCA retaliation claims – instead, an FCA retaliation claim must only meet the Fed. R. Civ. P. 8(b) notice pleading requirement.

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SDV/ACCI, Inc. v. AT&T Corp., 522 F.3d 955 (9th Cir. 2008)

SDV/ACCI (a consulting and staffing service company) and its principals sued AT&T after one of AT&T’s employees sent several e-mails in and outside the company stating that SDV/ACCI would no longer be providing services to AT&T because SDV/ACCI was having “financial difficulties.” The district court granted summary judgment to AT&T, but the Ninth Circuit reversed in part, holding that the common interest privilege (Cal. Civ. Code § 47(c)) did not bar the defamation action because there was enough circumstantial evidence to permit a reasonable trier of fact to find that malice primarily motivated the publication regarding SDV/ACCI’s alleged financial difficulties and that the AT&T employee did not have a good faith belief in the truth of the statements she had made.
 

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Diaz v. Eagle Produce, 521 F.3d 1201 (9th Cir. 2008)

Phoenix Agro Invest, Inc. and SAM Management, Inc. operate a commercial broccoli and melon farm in Arizona and usually lay-off workers during the winter months. Among others, the company laid off plaintiffs, four workers over the age of 50 years old, who challenged the lay off under the Age Discrimination in Employment Act (“ADEA”). The district court granted summary judgment to the employer, but the Ninth Circuit reversed the dismissal as to one of the four workers based on evidence of satisfactory job performance and an accumulation of circumstantial evidence that could lead reasonable jurors to draw an inference of age discrimination. Among other things, the Court considered statistical evidence that showed a drop in the average age of workers hired after a particular supervisor took over, while the average age of workers who were laid off rose.
 

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Flores v. Autozone West, Inc., 161 Cal. App. 4th 373 (2008)

Juan Rodriguez Flores was injured by Erwin Gomez, an Autozone employee, when Gomez struck Flores on the head with a steel pipe. Flores sued Autozone for assault and battery based on a respondeat superior theory and for negligent hiring and related torts. The trial court granted Autozone’s motion for summary judgment, but the Court of Appeal reversed the judgment, holding that an employee’s physical eruption, stemming from his interaction with a customer, may be a predictable risk of retail employment. The Court affirmed summary adjudication in favor of Autozone of the direct liability negligence claims on the ground that Autozone did not have a legal duty to conduct a background check or to administer a personality screening test of Gomez before hiring him or to have terminated his employment because he had raised his voice at a customer three years earlier. The Court also affirmed dismissal of Flores’ punitive damages claim against Autozone. Cf. Lyons v. Fire Ins. Exch., 161 Cal. App. 4th 880 (2008) (insurance carrier properly denied coverage for claims arising out of alleged sexual attack and false imprisonment).
 

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Miller v. American Greetings Corp., 161 Cal. App. 4th 1055 (2008)

Holly and Paul Miller sued Christopher Magdaleno and American Greetings, his employer, for injuries Holly sustained when Magdaleno hit her with his pick-up truck while she stood next to her car on a road in Pasadena. The Millers subpoenaed Magdaleno’s cellphone records, which indicated that Magdaleno had been speaking to his crew chief approximately eight minutes before the accident occurred at 9:35 a.m.; Magdaleno testified that he was on his way to meet with a probate attorney in Pasadena when he hit Holly. The trial court granted American Greetings’ motion for summary judgment, which the Court of Appeal affirmed based on the absence of a triable issue of material fact that Magdaleno was acting within the course and scope of his employment with American Greetings at the time of the accident. Cf. Rodriguez v. Bank of the West, 2008 WL 1822793 (Cal. Ct. App. Apr. 24, 2008) (banks where defalcating employee deposited checks payable to her employer (an attorney) owed no duty of care to the attorney).
 

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Harvey v. Sybase, Inc., 2008 WL 1765025 (Cal. Ct. App. Apr. 18, 2008)

Marietta Harvey was hired and supervised by Nita White-Ivy in the human resources departments of two different companies, including Sybase. When Sybase terminated Harvey, she alleged discrimination on the basis of race or gender. The jury agreed and returned a verdict in Harvey’s favor in the amount of $1.3 million in compensatory damages and $500,000 in punitive damages. In its unsuccessful motion for judgment notwithstanding the verdict, Sybase argued the jury’s verdict was not supported by substantial evidence because the “same actor rule” raised a strong inference that White-Ivy did not discriminate against Harvey in terminating her since she had also hired her. The Court of Appeal affirmed the trial court’s denial of Sybase’s motion, holding that “same actor” evidence is simply evidence and should be treated like any other piece of proof – but it is not a “rule” or “presumption” in the employer’s favor. The Court of Appeal affirmed dismissal of Harvey’s public policy claims founded upon Labor Code § 232 (prohibiting discharge for disclosing the amount of wages) and § 232.5 (prohibiting discharge for disclosing information about “working conditions”) in the absence of evidence to support the former claim and a “well established public policy” to support the latter. Cf. Davis v. Team Elec. Co., 520 F.3d 1080 (9th Cir. 2008) (summary judgment in favor of employer in Title VII gender discrimination, hostile work environment and retaliation case is reversed).
 

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Bradstreet v. Wong, 161 Cal. App. 4th 1440 (2008)

Toha Quan and Anna Wong owned the capital stock and served as corporate officers or directors of three San Francisco garment manufacturing companies (the “Wins Corporations”). For several months during the summer of 2001, the Wins Corporations failed to meet their payroll obligations, and the owners encouraged the employees to continue working without pay. After the Labor Commissioner paid wage claims from an account established pursuant to Labor Code § 2675.5, the Commissioner filed this lawsuit against the owners, seeking to hold them personally liable for unpaid wages owed by the bankrupt Wins Corporations. Following the California Supreme Court’s opinion in Reynolds v. Bement, 36 Cal. 4th 1075 (2005), the trial court held that Quan and Wong could not be held personally liable for the employer’s unpaid wages and related penalties. The Court of Appeal affirmed the judgment in favor of Quan and Wong. See also Costco Wholesale Corp. v. Superior Court, 161 Cal. App. 4th 488 (2008) (employer would not be irreparably harmed by production of redacted version of letter from employer’s counsel regarding alleged misclassification of managers).
 

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Lonicki v. Sutter Health Central, 43 Cal. 4th 201 (2008)

Antonina Lonicki, a certified technician of sterile processing, was fired when she failed to return to her job at Sutter, following a leave of absence. During the leave, Lonicki continued to perform the same job duties at Kaiser in the same geographic area. In her lawsuit, Lonicki alleged Sutter had violated the California Family Rights Act (CFRA) by denying her request for a medical leave, which was based upon her belief that her shift at Sutter was “too stressful.” The trial court granted summary judgment to Sutter on the ground that Lonicki could not have been suffering from a “serious health condition” because throughout the relevant time period she was successfully performing the functions of an identical job at Kaiser. In a 4-to-3 ruling, the California Supreme Court reversed the court of appeal’s judgment affirming summary judgment for Sutter on the ground that the part-time job at Kaiser was only evidence of Lonicki’s ability to do similar work for Sutter, but it was not conclusive. The Supreme Court also held that Sutter’s failure to invoke the CFRA’s dispute-resolution mechanism of having a health care provider who has been jointly chosen by the parties determine the employee’s entitlement to medical leave did not bar Sutter from later claiming Lonicki did not suffer from a serious health condition.
 

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Federal Express Corp. v. Holowecki, 552 U.S. 389, 128 S. Ct. 1147 (2008)

Patricia Kennedy submitted a “Form 283” (an intake questionnaire) and an accompanying affidavit to the EEOC before filing suit against Federal Express, alleging age discrimination under the Age Discrimination in Employment Act (“ADEA”). Federal Express moved to dismiss the lawsuit on the ground that Kennedy had not filed a “charge” with the EEOC at least 60 days before filing suit as required in 29 U.S.C. § 626(d). The district court granted the motion to dismiss, but the United States Court of Appeals for the Second Circuit reversed, holding that although the term “charge” is not specifically defined in the ADEA, the forms that Kennedy did file were sufficient. The United States Supreme Court affirmed, deferring to the EEOC’s interpretation, but noting “the employer’s interests… were given short shrift, for it was not notified of respondent’s complaint until she filed suit.” (Justices Scalia and Thomas dissented.) Cf. Sprint/United Mgmt. Co. v. Mendelsohn, 552 U.S. ___, 128 S. Ct. 1140 (2008) (appellate court erred in failing to remand case to district court for statement of whether it had applied a per se rule excluding evidence from employees of other supervisors (so-called “me-too” evidence) in age discrimination case).

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LaRue v. DeWolff, Boberg & Associates, Inc., 552 U.S. 248, 128 S. Ct. 1020 (2008)

James LaRue directed DeWolff, his former employer, to make certain changes to the investments in his individual 401(k) account, but DeWolff failed to effect those changes as directed. LaRue alleged that DeWolff breached its fiduciary duty to him under ERISA by failing to carry out his instructions, which resulted in a loss to his 401(k) account of approximately $150,000. Although the lower courts concluded LaRue had no claim for relief under ERISA, the United States Supreme Court reversed, holding that Section 502(a)(2) of ERISA provides for suits to enforce the liability-creating provisions of Section 409 (concerning breaches of fiduciary duty that harm plans such as LaRue’s defined contribution plan).

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Isner v. Falkenberg/Gilliam & Associates, Inc., 2008 WL 712045 (Cal. Ct. App. Mar. 18, 2008)

Ron and Sharon Isner were resident employees of Falkenberg — a property management company specializing in managing nonprofit housing for the elderly. Although the Isners were required to remain on the premises and be on call on designated evenings from 5:00 p.m. until 8:00 a.m., they were otherwise free to use the on-call time as they wished. In their class action lawsuit, the Isners sought compensation not just for the hours they spent responding to emergencies but for all the hours they were on call and “confined to their apartment or the building office so as to remain within audible range of the telephone and alarm.” The Court of Appeal affirmed summary judgment in favor of the employer, holding that “employees who are required to reside where they work are entitled to be compensated for time spent performing their assigned duties; they are not entitled to be compensated for time spent simply being available to perform those duties.”
 

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Villanueva v. City of Colton, 2008 WL 638269 (Cal. Ct. App. Mar. 11, 2008)

After Daniel Villanueva was demoted from Lead Operator to Operator II, he sued the city for discrimination based on race, national origin, ethnicity or skin color and for retaliation for his having complained about the alleged discrimination. The trial court granted summary judgment to the city after concluding Villanueva had made “unsupported charges of race discrimination against a number of people” based on hearsay and after finding no evidence of racial animus or other impermissible employment activity — and, in particular, noting that in two prior grievances he had lodged he failed to allege any discrimination or harassment based on his race. The trial court also ordered Villanueva to pay the city’s attorney’s fees in the amount of $39,472.30. The Court of Appeal affirmed dismissal of the lawsuit and the award of attorney’s fees under Cal. Gov’t Code § 12965(b) because the action was “unreasonable, frivolous and meritless” and because Villanueva offered no evidence of his alleged inability to pay the city’s fees. Compare Chavez v. City of Los Angeles, 160 Cal. App. 4th 410 (2008) (trial court erred in denying employee’s motion for $871,000 in attorney’s fees after recovering $11,500 from a jury after five years of litigation); Harrington v. Payroll Entm’t Services, Inc., 72 Cal. Rptr. 3d 922 (Cal. Ct. App. Feb. 28, 2008) (employee entitled to $500 in attorney’s fees after settling claim involving $44.63 in unpaid overtime for $10,500); Lussier v. Dollar Tree Stores, Inc., 2008 WL 614407 (9th Cir. Mar. 7, 2008) (putative class representatives were not entitled to recover their attorney’s fees following their successful motion to remand wage and hour class action that employer removed to federal court under the Class Action Fairness Act of 2005).
 

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Alliant Ins. Services, Inc. v. Gaddy, 159 Cal. App. 4th 1292 (2008)

Alliant Insurance Services purchased a competing insurance brokerage company from G. Scott Gaddy for $4.1 million and then employed him under a senior management agreement. Both the purchase and employment agreements contained covenants whereby Gaddy agreed not to compete with Alliant or to solicit Alliant’s or Gaddy’s clients for three years following termination of employment. Once Gaddy’s employment was terminated, he began soliciting clients in violation of the non-solicitation provision. The trial court granted a preliminary injunction against Gaddy on the ground that the nonsolicitation covenant was enforceable and in view of the evidence that Gaddy had misappropriated Alliant’s trade secrets in violation of the Uniform Trade Secrets Act. The Court of Appeal affirmed, holding the non-solicitation covenant was not overly broad even though it extended to all 58 counties within the state. The Court further held that because Gaddy became an employee of Alliant following the sale of the business, the scope of the non-solicitation covenant could properly extend beyond those clients Gaddy had transferred to Alliant in the transaction.
 

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Johnson v. Riverside Healthcare Sys., 516 F.3d 759 (9th Cir. 2008)

Christopher Lynn Johnson alleged he was discriminated against on the basis of his race and sexual orientation and asserted claims under 42 U.S.C. § 1981, the Unruh Civil Rights Act and the California Fair Employment and Housing Act. The district court granted defendants’ motion to dismiss, and the Ninth Circuit affirmed, holding that Johnson had failed to plead a hostile work environment because the two incidents he alleged (only one of which he witnessed) were isolated in time and occurred over a 28-month period. The Court affirmed dismissal of Johnson’s Unruh Act claim on the ground that he was more like an employee than a customer and his FEHA claim on the ground that it was barred by the applicable statute of limitations. See also Surrell v. California Water Serv. Co., 2008 WL 638369 (9th Cir. Mar. 11, 2008) (summary judgment affirmed for employer in race and disability discrimination case in absence of evidence to support claims); Williams v. The Boeing Co., 2008 WL 509229 (9th Cir. Feb. 27, 2008) (Section 1981 compensation discrimination claim was subject to four-year statute of limitations); compare Hammond v. County of Los Angeles, 2008 WL 740375 (Cal. Ct. App. Mar. 20, 2008) (nursing instructor’s claims of race discrimination and harassment under FEHA were improperly dismissed and were not barred by the statute of limitations).
 

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Combs v. Skyriver Communications, Inc., 159 Cal. App. 4th 1242 (2008)

Mark Combs sued his former employer, Skyriver Communications, and Skyriver’s former interim CEO, Massih Tayebi, for violations of the California Labor Code, the Unfair Competition Law and the Private Attorneys General Act of 2004. Combs, who was employed as the manager of capacity planning and later as the director of network operations, alleged he had been misclassified as an exempt employee. The trial court granted Tayebi’s motion for summary judgment and dismissed Combs’ remaining claims in response to Skyriver’s motion for nonsuit. As part of his case in chief, Combs produced evidence that he was responsible for maintaining, developing and improving Skyriver’s computer network. Although he supervised “one or two employees,” Combs testified he spent the majority of his time performing the same functions as the employees who reported to him. The Court of Appeal affirmed dismissal, holding that the “administrative-production worker dichotomy” was inapplicable in this case because Combs performed “specialized functions” that were unlike the “routine and unimportant” functions performed by the insurance claims representatives in Bell v. Farmers Ins. Exch., 87 Cal. App. 4th 805 (2001).
 

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Nygård, Inc. v. Uusi-Kerttula, 159 Cal. App. 4th 1027 (2008)

After quitting his employment with Nygård, Timo Uusi-Kerttula gave an interview about his work experiences to a Finnish magazine. Nygård then sued Timo and the magazine for a variety of claims, including breach of contract and defamation. The trial court granted defendants’ motion to strike pursuant to the anti-SLAPP statute, Cal. Code Civ. Proc. § 425.16. The Court of Appeal affirmed dismissal of the complaint, holding that defendants had met the criteria of the statute and had established a probability of prevailing in their defenses against Nygård’s claims. See also Neville v. Chudacoff, 2008 WL 650658 (Cal. Ct. App. Mar. 12, 2008) (employer’s attorney’s letter to customers accusing former employee of misappropriation of trade secrets was protected by anti-SLAPP statute); cf. Burdette v. Carrier Corp., 158 Cal. App. 4th 1668 (2008) (some of employee’s defamation claims were precluded by prior federal court judgment).
 

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Bradley v. California Dep’t of Corrections & Rehabilitation, 158 Cal. App. 4th 1612 (2008)

Sallie Mae Bradley worked temporarily at a California prison as a licensed clinical social worker. Bradley sued the California Department of Corrections (“CDC”) for sexual harassment directed at her by the prison’s Muslim chaplain, Omar Shakir. The jury awarded her $300,000 in non-economic damages and $139,000 in past and future economic damages. The Court of Appeal held that Bradley was a special employee of the CDC within the meaning of the Fair Employment and Housing Act. Further, the Court held that the jury’s conclusion that the CDC did not take immediate corrective action to end Shakir’s harassment was supported by substantial evidence. The Court noted that “Shakir was engaged in classic stalking behavior, terrorizing, intimidating and humiliating Bradley and taking full advantage of his free access to her at work to accomplish his inappropriate goals. The sum total of CDC’s [inadequate] response was to refer the complaint to a bogged-down investigative process and to caution Bradley to protect herself.” Cf. Fichman v. Media Ctr., 512 F.3d 1157 (9th Cir. 2008) (directors of a non-profit organization are not employees within the meaning of the ADEA and ADA).
 

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Verga v. WCAB, 159 Cal. App. 4th 174 (2008)

Rosemary Verga sought workers’ compensation benefits for an alleged psychiatric injury she sustained while working for United Airlines. However, the WCAB found Verga was not actually subjected to harassment or persecution. Instead, she was “a difficult person to get along with [who was] impolite, unpleasant, and co-workers never knew when she might get upset.” The Court of Appeal affirmed the WCAB’s order denying compensation, holding that “to allow an employee to harass co-workers and, when they respond unfavorably, to claim a stress-related injury to the employee’s psyche would increase, not reduce, workers’ compensation claims and create the potential for abuse of the system.”
 

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Marathon Entm’t, Inc. v. Blasi, 42 Cal. 4th 974 (2008)

Marathon Entertainment and Rosa Blasi entered into an oral contract by which Marathon would serve as Blasi’s personal manager in exchange for 15% of Blasi’s earnings from entertainment employment obtained during the course of the contract. Marathon sued Blasi after she reneged on her agreement to pay 15% of her earnings to Marathon. Blasi obtained a stay of the action and filed a petition with the Labor Commissioner alleging that Marathon had violated the Talent Agencies Act by soliciting and procuring employment for Blasi without a talent agency license. The Labor Commissioner agreed with Blasi, voided the parties’ contract and barred Marathon from recovery. Marathon appealed the Labor Commissioner’s ruling to the superior court for a trial de novo where Blasi’s motion for summary judgment was granted. The court of appeal reversed in part, holding that under the law of severability of contracts, it was possible that Blasi’s obligation to pay Marathon could be severed from any unlawful parts of the management agreement. The California Supreme Court agreed and affirmed the appellate court’s judgment, remanding the action for further proceedings.
 

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Schachter v. Citigroup, Inc., 159 Cal. App. 4th 10 (2008)

During his employment, David B. Schachter, a former securities salesperson for Salomon Smith Barney, participated in Smith Barney’s voluntary Capital Accumulation Plan, which allowed him to direct Smith Barney to pay him five percent of his total compensation in the form of restricted stock; the stock was purchased at a 25% discount below its then-current market price. Pursuant to the Plan, if the participating employee remained employed for two years from the time the shares issued, title to the shares fully vested with the employee. However, if the employee voluntarily terminated his or her employment or was terminated for cause during the two-year period, he or she forfeited the shares as well as the money that was used to purchase them. When Schachter later voluntarily terminated his employment, he forfeited the shares and filed suit, alleging the forfeiture violated Labor Code §§ 201 and 202 (requiring immediate payment of all wages due upon termination of employment). The trial court granted defendants’ motion for summary judgment, and the Court of Appeal affirmed, holding that Schachter was paid all the wages he was owed and that in any event the Plan’s forfeiture provisions are lawful. Cf. Noble v. Draper, 159 Cal. App. 4th 810 (2008) (fraud claims are not precluded by plaintiffs’ prior pursuit of wage claims before the Labor Commissioner).
 

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Nelson v. NASA, 512 F.3d 1134 (9th Cir. 2008)

NASA began requiring plaintiffs (long-time, “low-risk” contract employees of the Jet Propulsion Laboratory) to undergo a National Agency Check with Inquiries (“NACI”), which includes, among other things, a request for background information, the names of three references and disclosure of any illegal drug use within the past year, along with any treatment or counseling received for such use. Plaintiffs also were asked to sign a general waiver for release of additional information. The questionnaire and wavier were adopted to implement Homeland Security Presidential Directive 12 for the purpose of obtaining “secure and reliable forms of identification.” The district court denied plaintiffs’ motion for a preliminary injunction, but the Ninth Circuit granted the injunction and prohibited NASA from obtaining the requested information because plaintiffs were scheduled to lose their jobs if they failed to provide the information NASA had requested. In this subsequent opinion on the merits, the Ninth Circuit reviewed and reversed the district court’s denial of preliminary injunctive relief and held plaintiffs have “demonstrated serious questions as to certain of their claims on which they are likely to succeed on the merits, and the balance of hardships tips sharply in their favor.” Cf. Lanier v. City of Woodburn, 2008 WL 659551 (9th Cir. Mar. 13, 2008) (city’s policy requiring job applicants to pass a pre-employment drug test violated the Fourth Amendment); CashCall, Inc. v. Superior Court, 159 Cal. App. 4th 273 (2008) (precertification discovery appropriate for purpose of identifying class members who may become substitute plaintiffs in place of named plaintiffs who were not members of the purported class in case involving alleged violation of privacy rights).
 

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Hicks v. KNTV Television, Inc., 2008 WL 585033 (Cal. Ct. App. Mar. 5, 2008)

Bradford Hicks, a white man, was the 5:00 p.m. weeknight news anchor for KNTV. After KNTV chose not to renew Hicks’ contract, it selected an African-American man to fill the position Hicks had vacated. Hicks alleged race discrimination and wrongful termination, asserting that KNTV was under “pressure in the industry to hire minorities and KNTV was bound by the affirmative action programs of General Electric, NBC’s parent company, and by its own affirmative action program.” The trial court granted summary judgment in favor of KNTV, and the Court of Appeal affirmed, holding that KNTV produced sufficient unrebutted evidence that its reason for refusing to negotiate a new contract with Hicks was unrelated to his race and instead had to do with KNTV’s perception that his on-air style was “aloof, distant, standoffish, unapproachable, stiff and too anchor-like.” The Court held the fact that KNTV’s assessment of Hicks was based upon subjective criteria did not demonstrate pretext for discrimination — “absent some evidence that the station made its decision based upon race, the mere use of subjective criteria does not permit us to second guess the employer’s business judgment.” Cf. Jones v. Lodge at Torrey Pines P’ship, 42 Cal. 4th 1158 (2008) (individual supervisors and managers may not be held personally liable for retaliation under FEHA).

 

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Golden Gate Restaurant Ass’n v. City & County of San Francisco, 512 F.3d 1112 (9th Cir. 2008)

In 2006, the San Francisco Board of Supervisors passed and the mayor signed into law the San Francisco Health Care Security Ordinance which, among other things, requires employers with more than 20 employees to make healthcare expenditures on behalf of their employees. The ordinance was scheduled to go into effect on January 1, 2008 before the district court determined that it was preempted by federal law, specifically the Employee Retirement Income Security Act of 1974 (“ERISA”), and enjoined its implementation. Two weeks later, the Ninth Circuit concluded the City has a “probability, even a strong likelihood, of success in their argument that the ordinance is not preempted by ERISA” and, therefore, ordered that the district court’s judgment be stayed pending resolution of the City’s appeal on the merits. Compare Luke v. Collotype Labels USA, Inc., 159 Cal. App. 4th 1463 (2008) (maintenance engineer’s wrongful termination claim was preempted by NLRA).
 

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Ross v. Ragingwire Telecommunications, Inc., 42 Cal. 4th 920 (2008)

In accordance with the Compassionate Use Act of 1996 (Proposition 215), Gary Ross had a physician’s recommendation to use marijuana for his chronic back pain. Ragingwire offered Ross a job as a lead systems administrator subject to his passing a drug test, which he failed when he tested positive for THC (the active chemical found in marijuana). Ragingwire terminated Ross’ employment because he failed the drug test. Ross sued Ragingwire for disability discrimination (on the theory that marijuana use is a reasonable accommodation for his back pain), wrongful termination in violation of public policy and breach of contract. The Court of Appeal affirmed dismissal on demurrer of Ross’ complaint, holding that an employer need not accommodate a disability by allowing an employee to use a drug that is illegal under federal if not state law. Similarly, the Court held there was good cause as a matter of law to terminate Ross’ employment. The California Supreme Court affirmed. Cf. Dible v. City of Chandler, 515 F.3d 918 (9th Cir. 2008) (police officer’s First Amendment rights were not violated when he was terminated for participating in a sexually explicit website with his wife).
 

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Mokler v. County of Orange, 157 Cal. App. 4th 121 (2007)
Pamela Mokler was employed as the executive director of the County’s Office on Aging (“OoA”). Following her termination, she sued the County for breach of contract, wrongful termination, hostile work environment and unlawful retaliation under Labor Code § 1102.5 (the “whistleblower statute”). The jury awarded Mokler $14,089.60 in past economic damages and $1,681,823 in past and future emotional distress damages (which the trial court reduced to $125,000 if Mokler would not agree to a new trial on damages). Although the jury found in favor of Mokler on the sexual harassment/hostile work environment claim, it awarded her no damages on that claim. Both sides appealed. The Court of Appeal ordered the trial court to enter judgment in favor of defendants on the sexual harassment claim, holding that County Supervisor Chris Norby’s acts vis-à-vis Mokler (making various rude and inappropriate comments and placing his arm around Mokler while rubbing against her breast) were not sufficiently severe or pervasive to establish a hostile work environment. The Court found that substantial evidence supported Mokler’s retaliation claim, which was based on her termination following her complaint to her supervisors that the County had engaged in illegal activity by reorganizing the OoA. Finally, the Court affirmed the new trial order, holding that the non-economic damages were excessive in light of the fact that Mokler had no trouble finding a new job (two weeks later) and her reputation was not damaged.

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Wysinger v. Automobile Club of S. Cal., 69 Cal. Rptr. 3d 1 (Cal. Ct. App. 2007)
Guy Wysinger, a former district manager for ACSC’s Santa Barbara office, filed a complaint with the EEOC in 1999 in which he alleged that ACSC had discriminated against him on the basis of his age. Thereafter, Wysinger’s work environment changed – he was no longer invited to be on management committees or to apply for management positions; he was treated “coldly” and ignored at management meetings; ACSC ignored requests to accommodate his disabilities (lupus, a heart condition and rheumatoid arthritis); he received unfavorable job evaluations; and staff was transferred from his office, creating a hardship for Wysinger. The jury found that ACSC had retaliated against Wysinger because he had filed the EEOC complaint and that it had failed to engage in the interactive process in connection with Wysinger’s disability – though the jury also found that ACSC had not discriminated against Wysinger on the basis of his disability or his age. The jury awarded Wysinger economic damages of $204,000, non-economic damages of $80,000, and punitive damages of $1 million. In addition, the trial court awarded attorney’s fees to Wysinger in the amount of $978,791. The Court of Appeal affirmed the judgment, holding that substantial evidence supported the finding of retaliation and failure to engage in the interactive process.

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Gattuso v. Harte-Hanks Shoppers, Inc., 42 Cal. 4th 554 (2007)
Frank Gattuso is an outside sales representative for Harte-Hanks, a California corporation that prepares and distributes advertising booklets and leaflets, including the PennySaver and the California Shopper. Rather than separately reimburse outside sales representatives for their automobile expenses, Harte-Hanks paid them higher salaries and commissions than it paid its inside sales representatives. Gattuso and Ernest Sigala filed this class action lawsuit, seeking indemnification under Labor Code § 2802 for the expenses they incurred in using their own automobiles to perform their employment duties. The trial court denied the motion to certify the class and determined that the employer had properly indemnified the employees by paying them an increased amount of base salary and commission compensation. The California Supreme Court agreed with the lower courts’ ruling in part, holding that “an employer may satisfy its statutory business expense reimbursement obligation under section 2802 by paying employees enhanced compensation… provided the employer establishes some means to identify the portion of overall compensation that is intended as expense reimbursement, and provided also that the amounts so identified are sufficient to fully reimburse the employees for all expenses actually and necessarily incurred.” However, the Supreme Court reversed the judgment to the extent it denied class certification on the ground that the lower courts had failed properly to analyze whether common issues predominated. Cf. Solis v. The Regis Corp., 2007 WL 4328806 (N.D. Cal. Dec. 10, 2007) (company violated Labor Code § 212 by paying its subsidiaries’ employees with checks drawn from an out-of-state bank).

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Gonzalez v. Beck, 2007 WL 4532647 (Cal. Ct. App. Dec. 27, 2007)
Josepha Gonzalez worked as a caregiver and housekeeper for the Beck Family. Upon the termination of her employment, she filed a claim for unpaid wages with the California Labor Commissioner. When the Becks failed to answer or appear at the administrative hearing, Gonzalez obtained an award of $70,238.54 (including interest and penalties) from the Commissioner upon which judgment was subsequently entered. The Becks’ motion to set aside the judgment was denied by the trial court on the ground that they had failed to exhaust their administrative remedies under Labor Code § 98(f), which requires defendants to move to set aside the award before the Commissioner prior to seeking judicial relief from a default. The Court of Appeal affirmed the judgment. Cf. McCoy v. Superior Court, 157 Cal. App. 4th 225 (2007) (claim for waiting-time penalties is subject to one-year rather than four-year statute of limitations).

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Bell v. Superior Court, 2007 WL 4127646 (Cal. Ct. App. Nov. 21, 2007)
Four employees of H.F. Cox Inc. d/b/a Cox Petroleum Transport filed this wage and hour class action challenging their employer’s failure to pay overtime; its requirement of off-the-clock work; its failure to provide meal and rest periods; its incorrect calculation of vacation pay; and its failure to pay pro rata vacation pay upon termination. The trial court granted plaintiffs’ motion to certify a class but only with respect to the last category of claims. In response, plaintiffs filed a petition for writ of mandate, which the Court of Appeal granted, holding that the trial court had erred in failing to certify a class for the overtime pay and the vacation pay calculation claims. The appellate court reasoned that the trial court’s determination that individual issues predominated over common ones was not supported by substantial evidence. Cf. Fireside Bank v. Superior Court, 40 Cal. 4th 1069 (2007) (trial court erred in ruling on the substantive merits of class action while concurrently certifying the class).

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Golden Gate Restaurant Ass’n v. City and County of San Francisco, No. C 06-06997-JSW (N.D. Cal. filed Dec. 26, 2007)
In 2006, the San Francisco Board of Supervisors passed and the Mayor signed into law the San Francisco Health Care Security Ordinance which, among other things, would have required employers with more than 20 employees to make health care expenditures on behalf of their employees. The ordinance was scheduled to go into effect on January 1, 2008. The District Court held that the ordinance is preempted by federal law, specifically the Employee Retirement Income Security Act of 1974 (ERISA), and enjoined its implementation.

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Vaught v. State of Cal., 2007 WL 4395435 (Cal. Ct. App. Dec. 18, 2007)

Marck Vaught was employed as a resource ranger for the State. His position required him to be on call “all the time.” As an inducement to accept the position, the State offered Vaught and his wife the use of a residence located in the district in which Vaught worked. Vaught subsequently slipped and fell in the bathroom of the residence and sued the State for negligence and failure to make the house habitable for human occupation. Vaught’s wife sued for loss of consortium. The trial court granted the State summary judgment on the ground that the Vaughts’ claims were subject to the exclusive remedies provided by the Workers’ Compensation Act. The Court of Appeal affirmed. Cf. Millard v. Biosources, 156 Cal. App. 4th 1338 (2007) (general contractor had no duty of care to injured employee of subcontractor).
 

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Soremekun v. Thrifty Payless, Inc., 2007 WL 4168339 (9th Cir. Nov. 27, 2007)

Adediji Adesola Soremekun, who was employed as a pharmacist at Thrifty Payless d/b/a Rite Aid, was subject to a collective bargaining agreement that existed between Rite Aid and the United Food and Commercial Workers Union. After resigning his employment, Soremekun filed a lawsuit in which he alleged claims for breach of contract, failure to pay wages in violation of the California Labor Code and related claims. The Ninth Circuit affirmed summary judgment of Soremekun’s contract and related claims on the ground that he had failed to exhaust the grievance procedures that were available to him under the collective bargaining agreement. Further, the Court affirmed summary judgment of the Labor Code claims on the ground that those claims had not been filed prior to the expiration of the 6-month limitations period set forth in the collective bargaining agreement. Compare Ortega v. Contra Costa Cmty. College Dist., 156 Cal. App. 4th 1073 (2007) (public employee’s claims for race discrimination and infliction of emotional distress were improperly dismissed for failure to exhaust administrative remedies provided by a collective bargaining agreement).
 

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Harman v. City and County of San Francisco, 2007 WL 4465750 (Cal. Ct. App. Dec. 21, 2007)

This case, which was originally filed in federal court in 1999, involved allegations of race and sex discrimination by Allen Harman and two other white males who were employed as airfield safety officers at the San Francisco International Airport. After the case went to trial, a jury awarded Harman $15,300 as damages for economic harm and another $15,000 for emotional distress. The trial court subsequently awarded Harman attorney’s fees in the amount of $1.1 million. The Court of Appeal affirmed the award of substantially all of the attorney’s fees that were awarded by the trial court notwithstanding the relatively small amount of the underlying judgment. Cf. Engle v. Copenbarger & Copenbarger, 157 Cal. App. 4th 165 (2007) (former legal assistant who accepted law firm’s offer to compromise sexual harassment claims pursuant to Code Civ. Proc. § 998 was entitled to recover her attorney’s fees on top of the settlement amount that was offered – because the offer failed expressly to exclude fees and costs).
 

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Perez v. Uline, Inc., 68 Cal. Rptr. 3d 872 (Cal. Ct. App. Dec. 6, 2007)

On the day that Brian Perez, a captain in the United States Marine Corps Reserves, returned to work after duty with the Reserves, his employment with Uline, Inc. was terminated. He was presented with a “Severance Agreement and Release,” offering him severance in the amount of six weeks’ salary in exchange for his execution of the release. The agreement stated that Perez had seven days to accept it and advised him “to consult with an advisor of his choice prior to executing it.” On the seventh day, Perez signed the release. Perez subsequently sued Uline and three of its employees, alleging wrongful termination in violation of the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”), breach of oral contract, defamation and failure to pay overtime in violation of the California Labor Code. The Court of Appeal enforced the release and affirmed dismissal of Perez’s claims with the exception of the claim arising under USERRA, which expressly states that a contract may not limit the protections of the statute.

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Bernard v. State Farm Mut. Auto. Ins. Co., 2007 WL 4465075 (Cal. Ct. App. Dec. 21, 2007)

William Bernard had an insurance agency, representing certain State Farm insurance companies. Bernard alleged he was forced to resign when he was unable to carry out the physical requirements of the sales program following injuries he sustained in a car collision. Among other things, Bernard sued State Farm for breach of the implied covenant of good faith and fair dealing based on certain misrepresentations that allegedly had been made by his supervisors. The agency agreement in question provided that “You or State Farm have the right to terminate this Agreement by written notice delivered to the other or mailed to the other’s last known address.” The Court of Appeal held that this provision rendered Bernard’s employment terminable at will – even in the absence of more precise language. Therefore, Bernard’s claim for breach of the implied covenant of good faith and fair dealing had been properly dismissed by the trial court.

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Casella v. SouthWest Dealer Services, 2007 WL 4328440 (Cal. Ct. App. Dec. 12, 2007)

Zachary Casella was employed as a sales representative for SouthWest Dealer Services, which sells its aftermarket auto products to auto dealerships and helps train auto dealership finance and insurance salespeople on how to promote and sell SouthWest’s products. Casella moved from New York to California to accept the position. After his employment was terminated approximately five months later, Casella sued SouthWest for wrongful termination in violation of public policy, fraud, and fraudulent inducement in violation of Labor Code § 970. Casella alleged that his employment was terminated in retaliation for his having reported SouthWest’s participation in some of its car dealership clients’ fraudulent business practices known as “payment packing” (which involved dealership sales personnel quoting inflated monthly payment amounts in order to hide the true cost of aftermarket products). Casella also alleged that he was fraudulently induced to move to California to take the job because SouthWest had failed to disclose its involvement in these fraudulent activities. The jury found in favor or Casella, awarding him $240,000 in compensatory damages and $240,000 in punitive damages. The Court of Appeal affirmed the judgment on the grounds that Casella’s public policy claim was “tethered” to Penal Code § 487 (criminal fraud) and that the Section 970 verdict was supported by substantial evidence. Finally, the Court affirmed an award of $12,500 in attorney’s fees to Casella associated with his successful defense against SouthWest’s cross-complaint for breach of contract – however, he could not recover any attorney’s fees associated with the prosecution of his affirmative claims against SouthWest since he did not allege a breach of the contract that contained the prevailing-party attorney’s fees provision.
 

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United States v. Betts, 2007 WL 4355365 (9th Cir. Dec. 14, 2007)

Marcus Brandon Betts, who worked for TransUnion (one of the three major credit reporting agencies), took bribes to conspire with his co-defendants to falsely improve credit scores. According to the Ninth Circuit, “it was a kind of private sector ticket-fixing scheme.” Betts falsified 654 credit histories, which generated about a million dollars in losses to lenders. He pled guilty to conspiracy but challenged some of the conditions of his supervised release, including a restriction that Betts “shall not be employed in any capacity wherein he has custody, control, or management, of his employer’s funds, lines of credit, or any similar sources of money.” Betts argued that the restriction was an abuse of discretion by the trial court because his crime did not involve stealing from his employer. The Ninth Circuit disagreed and held that “as an employee, he owed [TransUnion] a fiduciary duty of loyalty. An employee’s duty of loyalty includes a duty to act solely for the interests of his employer within the business area for which he is employed, account to the employer for money received in connection with his work, and avoid undisclosed interests that might affect his conduct as an employee.” Cf. Otsuka v. Polo Ralph Lauren Corp., 2007 WL 3342721 (N.D. Cal. Nov. 9, 2007) (employer stated claim against employee for breach of duty of loyalty associated with allegedly fraudulent transactions).
 

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Bates v. United Parcel Serv., 2007 WL 4554016 (9th Cir. Dec. 28, 2007) (en banc)

One of the requirements applied by UPS to those applicants seeking to drive the familiar brown “package cars” was that they pass the physical examination (including a hearing exam) that the DOT requires of drivers of commercial vehicles of a gross vehicle weight rating (GVWR) of at least 10,001 pounds. (UPS’s vehicles had a GVWR of 9,318 pounds or less.) Plaintiffs in this case (a class of deaf UPS applicants and employees) challenged the company’s application of the DOT standard, which did not apply to the vehicles in question. The Ninth Circuit, sitting en banc, reversed the district court’s judgment that was rendered in favor of plaintiffs because it had failed to analyze whether plaintiffs were “qualified individuals” capable of performing the “essential function” of safely driving a package car. The Court overruled its earlier opinion in Morton v. United Parcel Serv., 272 F.3d 1249 (9th Cir. 2001), to the extent that that opinion imported into the analysis of an ADA claim the bona fide occupational qualification defense found in Title VII and the ADEA. Further, the Court reversed the judgment with respect to plaintiffs’ claim for violation of the Unruh Act on the ground that it does not incorporate the employment discrimination provisions found under Title I of the ADA.

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deVillers v. County of San Diego, 2007 WL 3036789 (Cal. Ct. App. Oct. 19, 2007)

Kristin Rossum, who was employed as a toxicologist for the County of San Diego, took toxic materials from the Office of Medical Examiner (“OME”) and used them to murder her husband, Greg deVillers. After Rossum was convicted of murdering deVillers, his survivors sued the County for negligently hiring Rossum and for breaching its duty to guard against the theft of drugs from the OME. The jury awarded damages to deVillers’ survivors, but the Court of Appeal reversed the judgment, holding that there were no legally cognizable claims that could be maintained against the County nor was there a breach of any duty it owed to the survivors.
 

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Bader v. Northern Line Layers, Inc., 2007 WL 2581110 (9th Cir. Sept. 10, 2007)

The Worker Adjustment and Retraining Notification Act (“WARN”) requires employers to give employees at least 60 days’ notice in the event of a plant closing or mass layoff at a “single site of employment.” The issue in this case was whether the site of employment of the construction worker-plaintiffs was the company’s headquarters or the workers’ actual work sites. The Ninth Circuit affirmed summary judgment for the employer after concluding that the plaintiffs had failed to raise a genuine issue of material fact whether 50 or more people were laid off at a single site of employment. The Court concluded the remote construction locations where plaintiffs worked did not qualify as a single site of employment under the applicable regulations.
 

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Ramanathan v. Bank of America, 155 Cal. App. 4th 1017 (2007)

Padmanabhan Ramanathan alleged he was discriminated against and harassed as a result of his religion (Hindu), race (Asian) and national origin. In its summary judgment motion, the Bank asserted that Ramanathan was a “Vice President” who served “at the pleasure” of the board of directors pursuant to the National Bank Act (12 U.S.C. § 24 (Fifth)). The Bank described Ramanathan’s job as being a “web architect” who provided and evaluated technology solutions for the Bank’s business operations. The Court of Appeal reversed the summary judgment that had been granted in favor of the Bank, holding that notwithstanding his title, Ramanathan was essentially a “computer programming consultant” and not an “officer” within the meaning of the statute. Compare Fitz-Gerald v. SkyWest Airlines, Inc., 155 Cal. App. 4th 411 (2007) (flight attendants’ claims for Labor Code violations were preempted by the Railway Labor Act).
 

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Nilsson v. City of Mesa, 2007 WL 2669788 (9th Cir. Sept. 13, 2007)

Christine Nilsson applied for a position as a police officer with the City of Mesa, Arizona. In conjunction with her application, Nilsson signed a waiver of any and all claims against the police department. During the application process, Nilsson disclosed that she had been involved in an EEOC dispute with the Tempe police department (a prior employer), that she had been involved in civil proceedings in 1983, 1988, 1991 and 1992, that she had filed a workers’ compensation claim and that she had been involved in a labor board proceeding. When Nilsson later failed a psychological evaluation, she was not hired by the Mesa police department. The district court granted summary judgment to the City, and the Ninth Circuit affirmed, holding that the waiver barred Nilsson’s claims for violation of the Americans with Disabilities Act and 42 U.S.C. § 1983. Although the waiver did not bar Nilsson’s retaliation claims under state or federal law, the Court held she had failed to prove that the reason the City gave for not hiring her (her failure to pass the psychological evaluation) was pretextual. Cf. Dent v. Cox Communications Las Vegas, Inc., 2007 WL 2580754 (9th Cir. Sept. 10, 2007) (Department of Labor supervised settlement of overtime claim did not bar claim for unpaid wages from an earlier period).
 

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Metoyer v. Screen Actors Guild, 2007 WL 2781909 (9th Cir. Sept. 26, 2007)

SAG terminated the employment of Dr. Patricia Heisser Metoyer (SAG’s national executive director of affirmative action) after PricewaterhouseCoopers concluded she had authorized payment of $30,000 of funds available for Guild use to friends, business partners and her husband’s production company. Metoyer responded by filing a lawsuit alleging race discrimination, wrongful termination and retaliation in violation of 42 U.S.C. § 1981 and violation of state anti-discrimination law. Although the district court granted summary judgment to SAG, the Ninth Circuit reversed in part and held Metoyer could proceed with her claims for wrongful termination and retaliation under state and federal law. Cf. Beck v. UFCW, 2007 WL 3197089 (9th Cir. Nov. 1, 2007) (employee’s $191,000 gender discrimination judgment against union is affirmed).
 

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Guglielmino v. McKee Foods Corp., 2007 WL 2916193 (9th Cir. Oct. 9, 2007)

Plaintiffs sued McKee Foods in this putative class action in state court, alleging violation of the California Labor Code, fraud, breach of contract and related claims. McKee timely removed the action to federal court and asserted that even though plaintiffs affirmatively alleged that the damages suffered by each of them were less than $75,000 (the jurisdictional minimum for federal court jurisdiction in a diversity case such as this), the damages in fact exceeded $75,000 when alleged economic damages, attorneys’ fees and punitive damages were included. The district court denied plaintiffs’ motion to remand on the ground that McKee had established by a preponderance of the evidence that the damages exceeded $75,000 for each plaintiff. The Ninth Circuit affirmed the judgment. Cf. Ryman v. Sears, Roebuck & Co., 2007 WL 2964370 (9th Cir. Oct. 12, 2007) (when a federal court is required to apply state law and there is no relevant precedent from the state’s highest court, the federal court should follow the law as indicated by the state’s intermediate appellate court).
 

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San Jose Constr., Inc. v. S.B.C.C., Inc., 2007 WL 2965616 (Cal. Ct. App. Oct. 12, 2007)

Richard Foust was a project manager for San Jose Construction (“SJC”) for 4½ years before he became dissatisfied with his job and accepted a position at a higher salary with South Bay Construction (“South Bay”), one of SJC’s competitors. Foust believed that SJC’s clients would follow him to another company, so he took information regarding pending projects to enable him to “move forward with those projects” at South Bay. Foust’s assistant copied documents and downloaded data from SJC’s files and computers, which were subsequently uploaded onto South Bay’s computers and placed into its project binders. At the direction of South Bay, Foust returned some documents to SJC and “erased” some data from South Bay’s computers. In the ensuing litigation against South Bay, SJC alleged misappropriation of its trade secrets, interference with contract and prospective economic advantage and unfair competition. The trial court granted South Bay’s motion for summary judgment, but the Court of Appeal reversed, finding triable issues of material fact regarding whether South Bay misappropriated SJC’s trade secrets by using or acquiring them through Foust. Cf. Venhaus v. Shultz, 155 Cal. App. 4th 1072 (2007) (neither willful nor intentional conduct must be proved to prevail on claim for negligent interference with prospective economic advantage).
 

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Reid v. Google, Inc., 155 Cal. App. 4th 1342 (2007)

Brian Reid, who was employed for fewer than two years as Google’s Director of Operations and its Director of Engineering, sued Google after his termination, alleging age and disability discrimination, intentional and negligent infliction of emotional distress and related claims. Reid was 54 years old at the time of his termination. Although the trial court granted Google’s motion for summary judgment, the Court of Appeal reversed. The Court considered the statistical evidence Reid submitted that showed a “statistically significant negative correlation between age and performance rating” and observed that Google had failed to offer conflicting expert testimony to dispute Reid’s expert’s statistical findings. Google’s counsel’s arguments about why the statistics were not sound were insufficient to overcome the evidence itself. Further, evidence of a “youthful atmosphere,” allegedly ageist comments, a demotion and “changed rationales” for Reid’s termination supported reversal of the summary judgment.
 

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Sumuel v. ADVO, Inc., 155 Cal. App. 4th 1099 (2007)

In this class action, Tiffany Sumuel and Rudy Halim sued ADVO for unpaid overtime, asserting that ADVO’s policy in California of not paying supplemental salary replacement benefits to its sick or disabled managers until after they supplied proof of receipt of SDI benefits violated the “salary basis test” applicable to determining exemption from overtime. The Court affirmed summary judgment in ADVO’s favor, holding that ADVO’s policy qualified as a “bona fide plan, policy or practice of providing compensation for loss of salary occasioned by both sickness and disability” and that it did not violate the salary basis test. Cf. Thomas v. Home Depot USA, Inc., 2007 WL 2854259 (N.D. Cal. Sept. 27, 2007) (Private Attorney General Act claims are subject to one-year statute of limitations).
 

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United States v. Sutcliffe, 2007 WL 2948662 (9th Cir. Oct. 11, 2007)

Sutcliffe, a computer technician, was convicted of three counts of making interstate threats (via the Internet) to injure another and five counts of transferring social security numbers with the intent to aid and abet unlawful activity. Global Crossing terminated Sutcliffe’s employment shortly after he was hired because he had failed to provide his social security number or disclose past criminal convictions on his job application. He also threatened the HR director. After his termination, he began picketing outside Global Crossing’s building with a sign referring to a website he had created. On the website, Sutcliffe displayed the personal information of over 1,000 employees, including their payroll information, social security numbers, birthdates and residential addresses; some of this information was hyperlinked to an article about identity theft. After Global Crossing obtained a restraining order against Sutcliffe, he added content to his website in which he threatened the process server, the company’s assistant general counsel (to whom he said he was “dead-icated”) and the chairman of the company. The Ninth Circuit affirmed the criminal conviction and the sentence of 46 months of imprisonment. Cf. People v. Ayala, 155 Cal. App. 4th 604 (2007) (upholding $171,000 restitution payment to restaurant employees who lost wages after defendant falsely claimed to have found a severed finger in a bowl of chili).
 

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McGarry v. University of San Diego, 2007 WL 2040578 (Cal. Ct. App. July 17, 2007)

Following the termination of Kevin McGarry’s employment as head coach of USD’s football team, two university officials allegedly commented to the San Diego Union Tribune newspaper about the reasons for the termination. In response to these statements, McGarry sued the university and the officials for defamation. Defendants responded with successful motions to strike the defamation claims pursuant to the anti-SLAPP provisions of California law (Cal. Code Civ. Proc. § 425.16). The Court of Appeal affirmed the dismissal of the defamation claims, holding that the alleged statements constituted speech in connection with a public issue within the meaning of the statute. Once the burden shifted to McGarry, the Court of Appeal agreed with the trial court that he had failed to show the likelihood of success on the merits in light of the standards applicable to a limited purpose public figure like himself. The Court further determined that one of the alleged statements was not a provably false assertion of fact. Moreover, since the trial court had denied McGarry’s motion to compel the depositions of the newspaper’s reporters, he had no competent evidence that the university or its officials were the source of the statements that were published in the newspaper.
 

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Yield Dynamics, Inc. v. TEA Systems Corp., 2007 WL 2396109 (Cal. Ct. App. Aug. 23, 2007)

Yield Dynamics, which develops and markets software products designed to facilitate the fabrication of microchips, sued its former employee, Terrence Zavecz, and two business entities of which he is a principal for breach of contract, violation of the Uniform Trade Secrets Act and related claims. After a non-jury trial, the trial court granted judgment for defendants. The Court of Appeal affirmed the judgment, holding that the eight segments of source code that were allegedly misappropriated did not possess the independent value necessary to constitute a trade secret. Further, the Court held that Yield had failed to prove any damages, any unjust enrichment or provide any evidence regarding what a reasonable royalty might be. The Court affirmed judgment for defendants on the various breach of contract, fraud, and unfair competition claims as well as an award of $175,000 in attorneys’ fees to defendants.
 

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Poland v. Chertoff, 2007 WL 2069651 (9th Cir. July 20, 2007)

James R. Poland, a former employee of the U.S. Customs Service, alleged age discrimination in violation of the ADEA, retaliation and constructive discharge resulting from his transfer to a new job in a new location. After a bench trial, the district court entered a $339,000 judgment in favor of Poland. The Ninth Circuit affirmed the determination that Poland was retaliated against for filing an EEO complaint regarding age discrimination and for filing subsequent retaliation complaints. Further, the Court recognized that this was a case in which an employee with bias precipitated an investigation that led to adverse action being taken against the plaintiff by another employee who did not have bias—the so-called “cat’s paw” theory. However, the Court reversed the district court’s judgment that the Customs Service’s transfer of Poland from Oregon to Virginia amounted to a constructive discharge that resulted in his early retirement. Accordingly, the Court vacated the judgment and remanded the action so Poland could amend his complaint to seek remedies available under a retaliation theory rather than one involving alleged constructive discharge.
 

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E-Fab, Inc. v. Accountants, Inc. Services, 64 Cal. Rptr. 3d 9 (Cal. Ct. App. Aug. 2, 2007)

E-Fab designs and manufactures precision components and tools. When in 1996 E-Fab needed a temporary accountant, it contacted defendant Accountants, Inc. Services. Accountants represented to E-Fab that it had screened Vickie Hunt and had confirmed and verified her qualifications, credentials and accomplishments. From 1996 to 2003, Hunt embezzled approximately $1 million from EFab. After discovering the embezzlement, E-Fab contacted law enforcement, which informed E-Fab that Hunt had prior criminal convictions for theft and welfare fraud, that she had been incarcerated and had falsified her academic credentials — facts the agency had failed to uncover during its “screening process.” E-Fab filed suit against Accountants within two years of learning of Hunt’s criminal record from the police and, over the objection of Accountants, successfully invoked the “discovery rule,” contending it was unable to have made earlier discovery despite reasonable diligence: “Vickie Hunt appeared to be a competent and honest employee,” said E-Fab.
 

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Williams v. United Airlines, Inc., 2007 WL 2458504 (9th Cir. Aug. 31, 2007)

Anthony L. Williams, a maintenance worker, sued United Airlines and his former supervisor, alleging retaliatory discrimination under the Federal Airline Deregulation Act’s Whistleblower Protection Program (WPP) and related state law claims. Williams claimed that he was terminated in retaliation for a dispute related to an alleged safety violation. Although United did not challenge the district court’s exercise of jurisdiction, the Ninth Circuit nonetheless raised the issue of subject matter jurisdiction sua sponte and concluded that the district court lacked jurisdiction because the WPP does not create a right of action – it merely confers authority on the Secretary of Labor to accept complaints from aggrieved employees. Compare Ventress v. Japan Airlines, 486 F.3d 1111 (9th Cir. 2007) (California's whistleblower protection laws are not preempted by international treaty between the United States and Japan); cf. AmerisourceBergen v. Roden, 2007 WL 2296775 (9th Cir. Aug. 13, 2007) (district court erroneously applied Younger abstention doctrine in dismissing employer’s breach of contract claim filed against its former CEO).
 

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Payan v. Aramark Mgmt. Services Ltd. P’ship, 2007 WL 2199270 (9th Cir. Aug. 2, 2007)

In response to a charge of discrimination and retaliation that Martha E. Payan filed with the EEOC, the agency issued a right-tosue letter on September 26, 2003. Payan asserted that the date she received the letter was “unknown.” However, it was undisputed that she failed to file her Title VII complaint in federal court until January 2, 2004 – 98 days after the EEOC had issued the letter. Pursuant to 42 U.S.C. § 2000e-5(f)(1), Payan had only 90 days in which to file the action, which Aramark contended barred her claim. The Ninth Circuit affirmed the district court’s dismissal on summary judgment of Payan’s claim after presuming that Payan received the right-to-sue letter by mail no later than three days after the EEOC had issued it. Compare Holland v. Union Pac. R.R. Co., 2007 WL 2446250 (Cal. Ct. App. Aug. 29, 2007) (summary judgment in favor of employer reversed where employee said he relied upon DFEH’s oral assurance that timely submission of a precomplaint questionnaire would satisfy the filing deadline); Forester v. Chertoff, 2007 WL 2429374 (9th Cir. Aug. 29, 2007) (dismissal of discrimination claims filed by U.S. Border Patrol agents vacated even though they failed to wait 30 days after filing a notice of intent to sue with the EEOC before filing suit).
 

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Jones v. California Dep’t of Corrections and Rehabilitation, 152 Cal. App. 4th 1367 (2007)

Kim C. Jones worked as a correctional officer at the R.J. Donovan Correctional Facility for approximately 16 years before experiencing alleged gender discrimination, sexual harassment, race discrimination, assault and battery and intentional and negligent infliction of emotional distress. The trial court granted summary judgment to the defendants, including her supervisors and the warden of the facility. In affirming summary judgment for defendants, the Court of Appeal concluded that Jones failed to present a triable issue of material fact from which it reasonably could be inferred that she suffered harassment proscribed by the FEHA. Jones repeatedly testified in her deposition that she did not believe that, or did not know whether, the comments and complaints that formed the basis of her action were motivated by race or gender. Additionally, the alleged incidents were so few and trivial that they were not sufficiently severe or pervasive enough to constitute harassment or actionable discrimination. Finally, the Court concluded the causes of action for assault and battery, infliction of emotional distress and negligent supervision were barred by the workers’ compensation exclusivity rule. Compare Craig v. M&O Agencies, Inc., 2007 WL 2264635 (9th Cir. Aug. 9, 2007) (summary judgment dismissing sexual harassment, assault and battery and infliction of emotional distress claims reversed).
 

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Estrada v. FedEx Ground Package Sys., Inc., 64 Cal. Rptr. 3d 327 (Cal. Ct. App. Aug. 13, 2007)

Anthony Estrada, a former driver for FedEx, alleged unfair business practices under Business & Professions Code § 17200, contending that the pick-up and delivery drivers were improperly classified as “independent contractors” rather than employees and, as a result, they were owed reimbursement for employment-related expenses as required by Labor Code § 2802. The Court of Appeal agreed, concluding that the drivers were “totally integrated into the FedEx operation,” that they performed work essential to FedEx’s core business, that their customers were those assigned to them by FedEx, that no specialized skills were required, that they were required to wear uniforms and conform absolutely to FedEx’s standards and, in the end, each driver had a job with “little or no entrepreneurial opportunities.” Therefore, the drivers were entitled to recover reasonable compensation for the business expenses they had incurred. However, the Court of Appeal reversed the trial court’s award of $12.4 million in attorneys’ fees as “excessive.”
 

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