California Employment Law Update

July 2020 California Employment Law Notes

We invite you to review our newly-posted July 2020 California Employment Law Notes, a comprehensive review of the latest and most significant developments in California employment law. The highlights include:

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Class Action Claims Were Moot After Class Representative Settled His Individual Claims

Brady v. AutoZone Stores, 960 F.3d 1172 (9th Cir. 2020)

Michael Brady sued AutoZone Stores for alleged violations of Washington State’s meal break laws.  After several years of litigation, the district court denied Brady’s motion for class certification; Brady then settled his individual claims with AutoZone.  Although the settlement agreement stated that it was “not intended to settle or resolve Brady’s Class Claims,” it did not provide that Brady would be entitled to any financial reward if the unresolved class claims were ultimately successful.  The Ninth Circuit dismissed as moot Brady’s appeal from the district court’s denial of class certification:  “A class representative must … retain a financial stake in the outcome of the class claims.  Absent such a stake, a class representative’s voluntary settlement of individual claims renders class claims moot.” See also Williams v. U.S. Bancorp Investments, Inc., 50 Cal. App. 5th 111 (2020) (collateral estoppel doctrine does not bar an absent class member in a putative class that was initially certified, but later decertified, from subsequently pursuing an identical class action)

Hirer Of Independent Contractor Was Not Liable For Death Of Latter’s Employee

Horne v. Ahern Rentals, Inc., 50 Cal. App. 5th 192 (2020)

The surviving heirs of Ruben Dickerson sued Ahern Rentals, a company that leases forklifts and other heavy-duty construction vehicles to its customers.  Dickerson’s employer, 24-Hour Tire Service, provided tire repair and replacement services for Ahern’s equipment.  Dickerson was killed on Ahern’s premises while he was replacing the tires on one of its forklifts.  Dickerson’s heirs received workers’ compensation benefits from 24-Hour’s workers’ compensation insurer.  In this case, the heirs sued Ahern for wrongful death based upon Ahern’s alleged negligence in failing to provide a stable and level surface for the tire change that resulted in Dickerson’s death.  The trial court granted summary judgment to Ahern, and the Court of Appeal affirmed, holding that there is no evidence that Ahern affirmatively contributed to Dickerson’s death because a “hirer like [Ahern] may be liable for injury to an employee of a contractor only if the hirer actively directs the contractor or contractor’s employee to do the work in a particular way or fails to undertake a particular safety measure the hirer promised to do.  There is no such evidence in this case.”  Cf. Savaikie v. Kaiser Found. Hosps., 2020 WL 4013134 (Cal. Ct. App. 2020) (assisted living facility is not liable for death caused by volunteer who struck and killed a pedestrian while driving his vehicle home).

Trial Court Should Have Scrutinized Declarations Submitted By Employer In Wage Hour Case

Barriga v. 99 Cents Only Stores LLC, 2020 WL 3481717 (Cal. Ct. App. 2020)

Sofia Wilton Barriga filed this lawsuit against her employer, 99 Cents Only, alleging that the “zero-tolerance” policy requiring its stores to lock their doors at closing time forced nonexempt employees such as herself and those similarly situated to wait for as long as 15 minutes for a manager with a key to let them out of the store.  Plaintiff alleged that the zero-tolerance policy denies employees pay for the time they have to wait to be let out of the store, and it also denies some employees their full half-hour meal break.  In opposition to plaintiff’s motion to compel certification of two class actions, 99 Cents Only submitted 174 declarations from current and former nonexempt employees who declared that graveyard shift employees could leave the store immediately without waiting to be let out and that those employees who did have to wait were let out promptly and paid for the time they waited.  Only 53 of the 174 declarants were members of the putative class.  Plaintiff took the depositions of 12 of the declarants, and although most testified they understood what they were signing and did so freely and without coercion or promise of promotion or a pay raise, others testified they “had no idea what the lawsuit was about or even why they had been called upon to testify.”  Plaintiff moved to strike all 174 declarations on the ground that the process by which they were obtained was improper.  The trial court concluded it lacked the “statutory authority” to strike the declarations and denied plaintiff’s motion to strike and also the class certification motion.

The majority of the Court of Appeal panel reversed, holding that “California courts have recognized the trial court has both the duty and the authority to exercise control over precertification communications between the parties and putative class members to ensure fairness in class actions.”  The Court reversed the orders denying plaintiff’s motion to strike the declarations and the class certification motion.  In dissent, Justice Slough questioned why the Court had reversed the denial of the motion to strike the declarations, which plaintiff had not challenged, and further why the Court had not analyzed whether the denial of said motion prejudiced the outcome of the case:  “This is a first.  Every court that has found an abuse of discretion in an evidentiary ruling has gone on to determine whether the error was prejudicial to the trial court’s certification decision” (emphasis in original).

Service Technicians May Be Entitled To Compensation For Travel Time

Oliver v. Konica Minolta Bus. Solutions USA, Inc., 2020 WL 3446865 (Cal. Ct. App. 2020)

In this putative class action, plaintiffs Michael Oliver and Norris Cagonot sued their employer for compensation for the time they and other service technicians spent driving their own personal vehicles to the first customer site in the morning and from the last customer site in the evening.  Service technicians did not report to an office for work, and they carried the employer’s tools and parts with them in their vehicles.  The trial court determined that plaintiffs’ commute time was not compensable as hours worked.  The Court of Appeal reversed, holding that there are triable issues of fact whether the technicians were subject to the employer’s control during their commute time and also whether they were entitled to reimbursement for commute mileage.  See also Gutierrez v. Brand Energy Servs. of Cal., Inc., 2020 WL 3249043 (Cal. Ct. App. 2020) (Wage Order does not permit employer subject to a collective bargaining agreement not to pay at least minimum wage for compensable travel time).

Non-Severability Clause In Arbitration Agreement Invalidated Entire Agreement

Kec v. Superior Court, 2020 WL 3869721 (Cal. Ct. App. 2020)

Nichole Kec brought individual, class and Private Attorneys General Act (PAGA) claims against her employer, R.J. Reynolds Tobacco Co., et al.  Kec had signed a predispute contractual waiver of class actions and any “other representative action,” including a PAGA claim. The arbitration agreement further stated that it was “not modifiable nor severable” and that if the representative waiver is found to be invalid, “the Agreement becomes null and void as to the employee(s) who are parties to that particular dispute,” which the court characterized as a “blow-up provision.”  The trial court granted the employer’s motion to compel arbitration of Kec’s individual claims except the PAGA claim.  Kec petitioned the Court of Appeal to issue a writ of mandate overturning the trial court’s order compelling arbitration of her individual claims.  The Court of Appeal issued the writ, holding that the employer could not selectively enforce the arbitration agreement by asking the court to sever the unenforceable PAGA waiver.  See also Aixtron, Inc. v. Veeco Instruments Inc., 2020 WL 4013981 (Cal. Ct. App. 2020) (arbitrator did not have authority to issue pre-hearing discovery subpoenas under California Arbitration Act).

Class Action Was Improperly Removed To Federal Court Under CAFA

Adams v. West Marine Prods., Inc., 958 F.3d 1216 (9th Cir. 2020)

Adrianne Adams filed a putative wage and hour class action in state court, which her former employer (West Marine) removed to federal court under the federal Class Action Fairness Act “CAFA”.  Invoking the discretionary home state controversy exception to CAFA jurisdiction, the district court declined to exercise jurisdiction and ordered the case remanded to state court.  On appeal, West Marine argued that the district court erred because Adams did not meet her burden of showing that greater than one-third of the putative class members were California citizens at the time of removal; West Marine also argued that the district court erred when it sua sponte invoked the discretionary home state exception to CAFA jurisdiction without giving West Marine the opportunity to brief or argue the issue.  The Ninth Circuit affirmed the district court’s order remanding the action to state court, holding that the district court was permitted to infer that more than one-third of the putative class members were California citizens because the last known addresses of over 90% of the putative class members are in California.  The Court also rejected West Marine’s argument that it was not afforded the opportunity to fully brief the issue before the district court.  See also Canela v. Costco Wholesale Corp., 2020 WL 3866577 (9th Cir. 2020) (suitable seating case brought under PAGA ordered remanded to state court because amount in controversy failed to meet $75,000 jurisdictional threshold and PAGA claims do not trigger CAFA jurisdiction).