California Employment Law Update

California Class Actions and PAGA (“Prettymuch All is Going to the Attorneys”) Claims Continue to Overwhelm the State

We have reported before about the huge jury verdicts that get handed out in California with alarming regularity and California’s sustained #1 ranking as the “Top Judicial Hellhole” in the nation. A corollary problem continues unabated: The prevalence of class actions and lawsuits under the Private Attorneys General Act (PAGA).

Though California accounts for 12% of the population of the United States (yes, one in eight Americans lives in the Golden State), currently more than 50% of all class actions in the country are filed here. Further, PAGA claims, which operate essentially like sloppy class actions with far fewer procedural hurdles for the plaintiff and far less oversight by judges, have flooded the courts since PAGA was enacted in 2004 – since then, more than 35,000 PAGA lawsuits have been filed and thousands more are filed each year against employers great and small.

Like most litigated claims, PAGA actions usually get settled – and that’s when the mischief really kicks in. Once a settlement amount is agreed upon, it’s a relatively common practice for the plaintiff’s attorney to allocate as little as possible to the PAGA claim because, after all, 75% of that amount must be paid to the California Labor and Workforce Development Agency (LWDA).  No one wants that!

So, in reality, “PAGA” stands for “Prettymuch All is Going to the Attorneys.”

Not surprisingly, plaintiffs’ attorneys really like PAGA because they can have it both ways: Use the threat of outsize costs, penalties and attorney’s fees to drive up the settlement value, then once a settlement amount has been extracted, allocate as little as possible to that pesky PAGA claim, which requires the 75% payment to the state.

We’ve blogged previously about how even small businesses are hurt by PAGA – read more here.

LA Times Wins Lawsuit Against Former Freelancer

The California Court of Appeal affirmed dismissal of a former freelancer’s defamation and employment-related claims against the Times. Frederick Theodore Rall III, a political cartoonist and blogger for the paper, brought claims for defamation, wrongful termination, intentional infliction of emotion distress, and retaliation, among others, stemming from the Times’ decision to disassociate itself with Rall and issue a “note to readers,” questioning the accuracy of a blog post in which Rall described an interaction with police in which he claimed he had been handcuffed, thrown up against a wall, and that resulted in his ID being thrown into the gutter.

Following an investigation, the Times determined that it had “serious questions about the accuracy” of Rall’s allegations against the police. The note to readers described Rall’s blog post and its factual inconsistencies and concluded that the Times would no longer publish Rall’s content. In response to questions from readers, the Times also published a piece that provided a more detailed analysis of the matter, including the findings of its investigation, Rall’s contentions and responses, and the LAPD records of the incident.

In response to Rall’s lawsuit, the Times filed an anti-SLAPP (“Strategic Lawsuit Against Public Participation”) motion to strike the complaint, which the trial court granted. The California Court of Appeal affirmed the dismissal, holding that the Times had sufficiently established that its report to readers and its decision not to continue to publish Rall’s work were protected activities under the First Amendment and the “fair report privilege” (Civil Code § 47(d)).

Rall illustrates once again the power of an appropriately filed anti-SLAPP motion, which can immediately defeat a lawsuit filed against an employer (especially a media defendant) that is exercising its right to Free Speech in connection with an adverse job action against an employee.

Read the full decision here.

January 2019 California Employment Law Notes

We invite you to review our newly-posted January 2019 California Employment Law Notes, a comprehensive review of the latest and most significant developments in California employment law. The highlights include:

View PDF

A California Jury Strikes Again – Hands Out $11 Million Verdict

A Los Angeles jury awarded more than $11 million to two former employees who claimed they were sexually harassed and retaliated against for complaining about the harassment.

Megan Meadowcroft and Amber Brown, who worked at the Keyways Vineyard and Winery in Temecula, California, alleged they had been harassed by the general manager, Carlos Pineiro.

Meadowcroft and Brown filed an FEHA sexual harassment and retaliation lawsuit, claiming that Pineiro made sexually inappropriate comments to Brown, touched her on the knee, was drunk at work, and threated to harm Brown if she complained about his behavior. Meadowcroft alleged that Pineiro also made sexually explicit comments, took pictures of her rear, touched her rear and vagina, and pushed her against a wall and told her that he would make her a manager if she had sex with him. After complaining, the two were taken off the work schedule.

Brown claimed panic disorder and post-traumatic stress disorder, while Meadowcroft also described symptoms consistent with post-traumatic stress disorder.

A jury sided with Meadowcroft and Brown on all causes of action for harassment, retaliation, failure to prevent harassment/retaliation, and negligent in supervision, retention or hiring. The jury awarded each of the women $1 million for past emotional distress damages, $1.5 million for future emotional distress damages, and $3 million in punitive damages, for a total verdict of $11 million. Added to that amount will be a substantial amount of prevailing-party attorney’s fees as well.

We’ve reported on massive verdicts against employers in California again and again. With massive punitive damages accounting for more than half of the total award in this case, this is yet another example of why California sits atop the judicial hellhole list year in and year out.

The Coming Battle Over ‘Implicit Bias’ in Employment Discrimination Cases

 

 

 

 

 

Employers are facing the growing threat of “implicit bias” evidence in employment discrimination cases.  Employment partner Tony Oncidi explains how to meet the challenge: https://www.proskauer.com/uploads/the-coming-battle-over-implicit-bias-in-employment-discrimination-cases

 

 

 

We’re #1 Again! California Tops “Judicial Hellhole” List!

The American Tort Reform Foundation has just released its annual report on “Judicial Hellholes.”  The Report claims that in California, the legislature and courts “extend liability at almost every given opportunity,” including fostering “no-injury” litigation in the form of class action and PAGA (Private Attorneys General Act) lawsuits in the workplace. California takes the number one spot for the fourth time in the last seven years.

Excessive employment-related lawsuits and ubiquitous PAGA claims in particular continue to plague both large and small employers in California  — the Los Angeles Times published a piece on this shortly after California was crowned top “Judicial Hellhole.”

Read the full report here.

The Cost of PAGA to Small Businesses (Los Angeles Times op-ed)

A small business owner wrote an op-ed piece for the Los Angeles Times, explaining how the Private Attorneys General Act (PAGA) hurts employees as well as employers – and primarily benefits lawyers. He uses his own experience defending such a case to demonstrate how PAGA is forcing him to operate his business in a way that benefits neither him nor his employees.

Read the full opinion here: https://www.latimes.com/opinion/op-ed/la-oe-monroe-paga-small-businesses-20181206-story.html

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