recent employment law decisions - California Employment Lawyers

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CALIFORNIA EMPLOYMENT LAWYERS ASSOCIATION
Published
Monthly
BULLETIN
EDITOR: CHRISTOPHER BELLO
RECENT EMPLOYMENT LAW DECISIONS
UNITED STATES
SUPREME COURT
OPPOSITION CLAUSE OF TITLE
VII’s RETALIATION PROVISION
PROTECTS EMPLOYEE WHO
SPEAKS OUT ABOUT
DISCRIMINATION IN ANSWERING
QUESTIONS DURING INTERNAL
INVESTIGATION
CRAWFORD v METROPOLITAN
GOV’T OF NASHVILLE COUNTY.
Reversing the Sixth Circuit, (211 Fed
Appx 373), the United States Supreme
Court held in a unanimous opinion by
Souter filed on January 26 that the
protection of Title VII’s anti-retaliation
provision extends to an employee who
speaks out about discrimination not
on his or her own initiative, but in
answering questions during an
employer’s internal investigation.
During an internal investigation into
rumors of sexual harassment by Gene
Hughes, the defendant school district’s
employee relations director, petitioner
Crawford, a 30-year employee, reported
that Hughes had sexually harassed
her. The employer took no action
against Hughes, but soon fired
Crawford, alleging embezzlement. Affirming summary judgment on
Crawford’s retaliation claim, the Sixth
Circuit reasoned: (1) that the opposition clause demanded “active, consistent” activities, whereas Crawford had
not initiated any complaint; and (2) the
participation clause did not cover the
internal investigation because it was
not conducted pursuant to a Title VII
charge pending with the EEOC. Disagreeing with that reasoning, Souter’s
opinion reads in part as follows:
“The statement Crawford says she gave
to [the investigator] is ... covered by the
opposition clause, as an ostensibly
disapproving account of sexually obnoxious behavior toward her by a fellow
employee... [¶] There is ... no reason to
doubt that a person can ‘oppose’ 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 her a
question.
“[W]e find it hard to see why the Sixth
Circuit’s rule would not itself largely
undermine the Ellerth-Faragher
scheme... The appeals court’s rule
would ... create a real dilemma for any
knowledgeable employee in a hostile
work environment if the boss took steps
to assure a defense under our cases. If
the employee reported discrimination
in response to the enquiries, the employer might well be free to penalize her
for speaking up. But if she kept quiet
about the discrimination and later filed
a Title VII claim, the employer might
well escape liability, arguing that ... the
plaintiff unreasonably failed to take advantage of preventive or corrective opportunities...
“Because Crawford’s conduct is covered by the opposition clause, we do
not reach her argument that the Sixth
Circuit misread the participation clause
as well.”
In an opinion concurring in the judgment, joined by Thomas, Alito explained
January 2009
Vol. 23, No. 1
that he wrote separately “...to emphasize my understanding that the Court’s
holding does not and should not extend
beyond employees who testify in internal investigations or engage in analogous purposive conduct.... [¶] An interpretation of the opposition clause that
protects conduct that is not active and
purposive would have important practical implications... [A]n employee claiming retaliation [might then] be able to
establish causation simply by showing
that, within some time period prior to
the adverse action, the employer, by
some indirect means, became aware
of the views that the employee had
expressed [informally while chatting
with co-workers].”
For petitioner: Eric Schnapper, Seattle.
For respondent: Francis H. Young.
For NELA as amicus: Bruce Elfvin
(OH), Gregory A. Gordillo (OH), Christina Royer (OH), Stefano G. Moscato
(SF), Catherine Ruckelshaus (NYC).
For United States as amicus supporting petitioner: Lisa S. Blatt.
USSC, 1/26/09; opinion by Souter;
opinion concurring in judgment by
Alito joined by Thomas; 2009 DAR
1172, 2009 WL 160424.
EXISTENCE OF TITLE IX
REMEDIES DOES NOT
PRECLUDE § 1983 SUITS
BASED ON EQUAL PROTECTION
CLAUSE ALLEGING GENDER
DISCRIMINATION IN SCHOOLS
FITZGERALD v BARNSTABLE
SCHOOL COMMITTEE. “The issue in
this case of peer-on-peer sexual harassment,” Alito wrote in a unanimous
January 21 opinion, “is whether Title IX
of the Education Amendments of 1972,
(Cont'd on Page 2, DECISIONS)
DECISIONS
(From Page 1)
86 Stat. 373, 20 U.S.C. §1681(a), precludes an action under Rev. Stat. §1979,
42 U.S.C. §1983, alleging unconstitutional gender discrimination. The Court
of Appeals for the First Circuit held that
it does. 504 F.3d 165 (2007). We reverse.
and (2) the charge must be reciprocal in
nature, i.e., the contributing local reasonably expects other locals to contribute similarly to the national’s resources
used for costs of similar litigation on
behalf of the contributing local if and
when it takes place.
“The Court of Appeals’ decision deepened a conflict among the Circuits regarding whether Title IX precludes use
of §1983 to redress unconstitutional
gender discrimination in schools. [cites
omitted from Second, Third, and Seventh Circuits holding Title IX remedies
exclusive, and from Sixth, Eighth, and
Tenth Circuits holding contra.]
USSC, 1/21/09; opinion by Breyer
with concurring opinion by Alito
joined by Roberts and Scalia; 2009
DAR 907, 2009 WL 128435.
“In light of the divergent coverage of Title
IX and the Equal Protection Clause, as
well as the absence of a comprehensive
remedial scheme..., we conclude that
Title IX was not meant to be an exclusive
mechanism for addressing gender discrimination in schools, or a substitute
for §1983 suits as a means of enforcing
constitutional rights. Accordingly, we
hold that §1983 suits based on the
Equal Protection Clause remain available to plaintiffs alleging unconstitutional gender discrimination in schools.”
MFAA’S RIGHT TO TRIAL DE
NOVO DOES NOT OVERRIDE
CONTRACTUAL OBLIGATION TO
ARBITRATE DISPUTES
PURSUANT TO CAA
USSC, 1/21/09; unanimous opinion
by Alito; 2009 DAR 913, 2009 WL
128173.
FIRST AMENDMENT PERMITS
LOCAL UNION TO CHARGE NONMEMBERS FOR NATIONAL
LITIGATION EXPENSES THAT ARE
COLLECTIVE-BARGAINING
RELATED
LOCKE v KARASS. Affirming a First
Circuit decision, (498 F3d 49), the
United States Supreme Court held in an
opinion filed on January 21 that the First
Amendment permits a local union to
charge non-members for national litigation expenses as long as they meet the
criteria established in Lehnert v Ferris
Faculty Assn.(1991) 500 US 507 relative to local litigation expenses: (1) the
subject matter of the litigation must be
appropriately related to collective bargaining rather than political activities,
CALIFORNIA
SUPREME COURT
SCHATZ v ALLEN MATKINS LECK
GAMBLE & MALLORY. “Under the
mandatory fee arbitration act (MFAA,
Bus. & Prof. Code § 6200 et seq),"
Moreno wrote in a unanimous January
26 opinion, “when there is a fee dispute
between an attorney and a client, the
client may choose to submit the matter
to arbitration by a local bar association.
If the client elects such arbitration, the
attorney must agree to arbitrate. The
arbitration will be binding, however, only
if the attorney and client so agree in
writing after the dispute has arisen.
Otherwise, either party may request a
trial de novo after the arbitration has
concluded.
“We consider in this case the relationship between arbitration under the MFAA
... and a predispute contractual arbitration agreement ... pursuant to the California Arbitration Act (CAA, Code Civ.
Proc., § 1280 et seq.). In Aguilar v.
Lerner (2004) 32 Cal.4th 974 ... we
determined that a client who had not
chosen MFAA arbitration could not oppose a motion to compel arbitration
under the CAA by invoking the MFAA’s
right to a trial de novo... We left undecided the issue of whether a client who
does choose MFAA arbitration may
-2-
CALIFORNIA
EMPLOYMENT
LAWYERS ASSOCIATION
The CELA Bulletin is published monthly
for CELA members. Send membership
inquiries and changes of address to
office of Executive Board Chair:
David J. Duchrow
11340 W. Olympic Blvd.
Suite 305
Los Angeles, CA 90064
Tel: (310) 479-5303
FAX: (310) 479-5306
E-mail:
[email protected]
For help with the CELA List, the CELA
Website, and other administrative
matters, contact CELA's Administrative
Director:
Christina Krasomil
16133 Ventura Blvd., Suite 625
Encino, CA 91436-2412
Tel: (818) 907-7895
FAX: (818) 907-7474
E-mail: [email protected]
EXECUTIVE BOARD
J. Bernard Alexander III
(Los Angeles)
Dolores Leal
(Los Angeles)
David DeRubertis
(Woodland Hills)
Steven Pingel
(Long Beach)
Kathy Dickson
(Oakland)
Michelle A. Reinglass
(Laguna Hills)
David Duchrow
(Los Angeles)
Cynthia Rice
(San Francisco)
Wilmer Harris
(Pasadena)
Mika Spencer
(San Diego)
Phil Horowitz
(San Francisco)
James P. Stoneman
(Claremont)
Jean K. Hyams
(Oakland)
Christopher Whelan
(Gold River)
Toni Jaramilla
(Los Angeles)
Jeffrey Winikow
(Los Angeles)
Virginia Keeny
(Pasadena)
Bulletin Editor
Christopher Bello
35116 Reith-Larson Lane
Astoria, OR 97103
Ph: (503) 338-3891
DECISIONS
(From Page 2)
request a trial de novo after that arbitration has concluded, when to do so
would defeat the attorney’s motion to
compel arbitration under the CAA.
“The [Fourth District] in the present
case ... held that the MFAA’s right to a
trial de novo after statutory arbitration
defeats any contractual obligation to
arbitrate attorney-client fee disputes...
[53 CR3d 173] [¶] We conclude that
the Court of Appeal is incorrect. Although the language of the statute is
not entirely free from ambiguity, construing the statute in light of the presumption against implied repeal leads
to the conclusion that the MFAA does
not limit the ability of attorneys and
clients to enter into binding contractual
arbitration. We reverse the judgment of
the Court of Appeal.”
For plaintiff: Joseph L. Schatz.
For defendant: Howard Rice Nemerovski
Canady Falk & Rabkin, Pamela Phillips,
Ethan P. Schulman, Sean M. SeLegue,
Jonas M. Nahoum; Rogers Joseph
O’Donnell & Phillips and Zachary M.
Radford.
Cal SC, 1/26/09; unanimous opinion by Moreno; 2009 WL 161199.
SUPREME COURT WILL REVIEW
SECOND DISTRICT DECISION
THAT HELD THAT EMPLOYERS
MUST ONLY MAKE BREAKS
AVAILABLE; ACTION IS
DEFERRED PENDING REVIEW IN
BRINKER
BRINKLEY v PUBLIC STORAGE. On
January 14, the Supreme Court announced that it will review the October
28 decision in which the Second District, Division Three, held that employers must only make meal and rest
breaks available, not ensure that they’re
taken. The Supreme Court deferred
further action pending consideration
and disposition of a related issue in
Brinker Restaurant Corp. v Superior
Court (Hohnbaum) 80 CR3d 781, in
which review was granted on October
22. (The Second District’s opinion in
Brinkley was summarized in CELA
Bulletin, Nov 08, p.5. The Fourth
District’s decision in Brinker was summarized in an addendum to the CELA
Bulletin for July of 2008.)
For plaintiff: Joseph Antonelli and Janelle
C. Carney; Kevin T. Barnes and Gregg
Lander.
For defendant: Freeman, Freeman &
Smiley, Bradley D. Ross and Azadeh
Allayee.
Cal SC, 1/14/09; 2009 DAR 721 (granting review).
CALIFORNIA COURTS
OF APPEAL
SECOND DISTRICT UPHOLDS
DISCOVERY ORDER REQUIRING
PRODUCTION OF NAMES AND
CONTACT INFORMATION OF
CLASS MEMBERS WITHOUT
EITHER OPT-IN OR OPT-OUT
PROCEDURE
CRAB ADDISON, INC. v SUPERIOR
COURT (MARTINEZ). In a class action
alleging the misclassification of employees for purposes of overtime entitlement, and the failure to provide meal
and rest breaks, the Second District,
Division Seven, in a December 30 opinion, denied the employer’s petition for a
writ of mandate directing the trial court
to vacate two orders granting discovery
to real party in interest Roberto Martinez.
The Court of Appeal wrote in part:
“About December 14, 2007, Martinez
served CAI with its first set of special
interrogatories. At issue here are three
of these... Interrogatory No. 33 asks
CAI to ‘IDENTIFY each CLASS MEMBER.’ ‘Class member’ is defined as
‘any person who was and/or is employed in any restaurants owned, operated, and/or acquired by [CAI] in the
State of California in a salaried restaurant position between September 7,
2003, and the present date.’ Identification of the class members includes
providing their names, addresses and
telephone numbers.
“Interrogatory No. 34 asks that if CAI
‘contend[s] that this action is not appro-3-
priate for class certification then please
state all facts that support [CAI’s] contention.’ Interrogatory No. 36 asks CAI
to ‘IDENTIFY EACH PERSON who has
knowledge of the facts set forth in response to interrogatory Number 34.’
“CAI filed its answer to Martinez’s complaint about Fedruary 28, 2008. In addition to denying the allegations of the
complaint, CAI set forth a number of
affirmative defenses. Among these were
allegations that the case was not appropriate for class certification.
“Thereafter..., CAI objected to all three
interrogatories on numerous grounds.
One ground was that the interrogatories
sought ‘confidential and private information.’
“Martinez filed a motion to compel further responses to his special interrogatories about March 25, 2008. This motion was based on CAI’s ‘refusal to
disclose the identities of witnesses, including the names and contact information of the putative class members.’
Martinez argued that this information
was necessary to meeting his burden of
proving class certification was appropriate, he was entitled to the information,
and production of the information would
not violate the witnesses’ right to privacy.
“CAI filed opposition [arguing] ... that its
employees had a heightened expectation of privacy as to their contact information based on forms they signed
regarding release of their contact information. Based on this heightened expectation of privacy, CAI claimed, if the
court were to consider disclosure of the
employees’ contact information, it should
do so subject to an ‘opt-in’ notice requirement... [¶] According to the declaration of ... CAI’s Director of Human
Resources, most of the salaried employees in California either did not want
their contact information disclosed or
wanted to consider disclosure on a caseby-case basis. ‘Only a few’ said that CAI
could release their contact information.
“In response, Martinez argued that an
‘opt-out’ procedure should be used. In
DECISIONS
(From Page 3)
order to prevent abuse of the employee
information, Martinez stated that he
was willing to enter into a protective
order.
“Prior to the April 30, 2008 hearing, the
trial court issued its tentative ruling. It
stated that ‘...[t]his court has weighed
the privacy interests of potential class
members against the compelling need
for discovery of their names and contact
information, and finds that plaintiffs are
entitled to the requested information
subject to an ‘opt-out’ notice... Following the May 19, 2008 hearing ..., the trial
court adopted its tentative as the final
ruling on the motion. [Editor’s note:
although the opinion is unclear on this
point, counsel for the plaintiffs has confirmed that the trial court omitted the
requirement of any opt-out notice from
its final order, as approved by the Court
of Appeal. The defendant has filed a
petition for rehearing, which could produce some changes in the opinion,
though not in the judgment.]
“There are two significant differences
between Puerto [v Superior Court (Wild
Oats Markets, Inc.) (2008) 158 CA4th
1242, 70 CR3d 701; summarized in
CELA Bulletin, Jan 08, p.3] and the
instant case. First, in Puerto, the employer voluntarily disclosed the identities of the witnesses but sought to
protect addresses and telephone numbers. Here, CAI seeks to protect identities as well... Second, in Puerto there
was no release form like the one utilized
by CAI.
“We attach no great significance to the
fact that CAI did not voluntarily disclose
the identities of the witnesses... Therefore, we can find no rationale for refusing
to apply our holding in Puerto to the
instant case... [¶] Indeed, since our
decision in Puerto, we have upheld the
right of an employee to obtain contact
information in order to indentify potential class members. [Lee v Dynamex,
Inc. (2008) 166 CA4th 1325, 83 CR3d
241; summarized in CELA Bulletin,
Sep 08, p.11.]
“This brings us to the key question in
this case: the effect of the release
forms. CAI argues that these forms give
their employees a heightened expectation of privacy in their contact information, requiring that the contact information be given greater protection and
making an ‘opt in’ notice procedure
proper. We are unconvinced by this
argument.
“We first address the question whether,
as a matter of public policy, we should
enforce a release form that may have
the effect of waiving an employee’s right
to notice of a pending class action
concerning the employer’s alleged violation of overtime and wage statutes.
While not determinative, the Supreme
Court’s recent opinion in Gentry v. Superior Court (2007) 42 Cal.4th 443 ... is
instructive... [¶] Gentry highlights the
importance placed on the rights of employees to bring class action lawsuits to
enforce their statutory rights to overtime
pay.... [¶] Gentry also highlights the
dangers of placing in the employer’s
hands the responsibility for notifying
employees of the pending litigation and
requiring employees to opt in to the
litigation...
“The language of the release forms [in
the present case] was not sufficient to
apprise employees that by checking
the ‘no’ box they were declining to have
their contact information released to
‘plaintiffs seeking relief for violations of
employment laws in the workplace that
they shared.’ (Puerto, 158 Cal.App.4th
at p.1253)
“We conclude that the release forms
utilized by CAI do not compel a different
result than in Puerto for two reasons.
First, public policy concerns weigh in
favor of enforcing unwaivable statutory
wage and overtime rights through class
action litigation over a right to privacy in
‘relatively nonsensitive [contact] information.’ (Puerto, 158 Cal.App.4th at
p.1259).
“Second, to the extent the right to privacy is based on the release forms,
there are strong reasons for not giving
effect to those forms...
“Under Puerto, the procedure chosen
by the trial court was appropriate. The
violation of the employees’ right to pri-4-
vacy did not outweigh Martinez’s right
to discovery.”
For employees: Matthew Righetti and
John Glugoski; Ellen Lake.
For employer: Epstein Becker & Green,
Michael S. Kun and Ted A. Gehring.
Second Dist Div Seven, 12/30/08;
opinion by Jackson with Perluss and
Zelon concurring; 2008 DAR 18908,
2008 WL 5401587.
FEHA CLAIMS BY CIVIL
SERVICE EMPLOYEE WERE
BARRED BECAUSE HE DID NOT
CHALLENGE BOARD’S ADVERSE
FINDINGS BY MANDAMUS
ACTION
MILLER v CITY OF LOS ANGELES. In
an opinion filed on December 22 and
certified for publication on January 7,
the Second District, Division Seven,
affirmed the dismissal of a former city
Construction and Maintenance
Supervisor’s FEHA claims for racial
discrimination, harassment, and retaliation, agreeing with the trial court that
the complaint was barred because the
plaintiff had failed to timely file a petition
for administrative mandamus after an
adverse decision by the Board of Civil
Service Commissioners. After summarizing the conclusions of the hearing
officer appointed by the Board who had
found credible evidence that the plaintiff
had been fired for misconduct, and after
noting that after the transmission of the
hearing examiner’s report the plaintiff
had filed a “Notice of Withdrawal and/or
Dismissal of Appeal from Discharge,”
the Court of Appeal wrote in part:
“In a letter dated June 22, counsel for
Miller (David Peter Cwiklo) stated that
the hearing examiner had a conflict of
interest, Miller had been deprived of due
process in ‘star chamber proceedings’
and fabricated evidence had been used
as a ‘ruse to mask the longstanding
custom, practice and policy of LADWP
Caucasian management discriminating
against Owens Valley Native Americans.’ He said the Board had taken
DECISIONS
(From Page 4)
action on a matter that ‘simply did not
exist’ in an effort to ‘stack the predetermined results of the kangaroo court
down his throat.’
“According to Miller, his complaint was
not barred because the Commission
had no jurisdiction to decide a dismissed action until City set aside his
dismissal of his appeal. Rather, he
says, he had an ‘absolute right to choose
his FEHA remedies and was not required to exhaust the City internal remedies.’ We disagree.
“In Johnson v. City of Loma Linda (2000)
24 Cal.4th 61, our Supreme Court determined: ‘[U]nless a party to a quasijudicial proceeding challenges the
agency’s adverse findings made in that
proceeding, by means of a mandate
action in superior court, those findings
are binding in later civil actions.’
“Later, in Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074..., the Court
rejected a rule requiring city employees
to exhaust administrative remedies before filing a discrimination claim under
FEHA... [¶] [But] [t]he Schifando court
clarified that its holding did not disturb
the principles set forth in Johnson... [¶]
‘Though a public employee may choose
to bypass the administrative process, if
he pursues it through evidentiary hearings to a proposed decision, then he
has the burden to exhaust administrative and judicial remedies...’ Page [v
Los Angeles County Probation Department (2004) 123 CA4th 1135] at pp.
1143-1144. italics added).
“Miller’s reliance on his notice of ‘withdrawal/dismissal’ misses the mark. By
the time he submitted this document he
... had participated in multiple hearings,
cross-examined witnesses, presented
evidence and received the lengthy report and recommendation of the hearing
examiner. Under these circumstances,
just as in Page, Miller was obligated to
exhaust his judicial remedies, yet failed
to do so... Under the applicable case
law, the trial court properly sustained
the City’s demurrer to the entirety of his
complaint without leave to amend.”
For plaintiff: David Peter Cwiklo.
For defendant: Rockard J. Delgadillo,
City Attorney, Richard M. Brown, General Counsel, Water and Power, and
Cecil W. Marr, Senior Assistant City
Attorney.
Second Dist Div Seven, 12/22/08,
cert’d for pub 1/7/09; opinion by
Woods with Perluss and Zelon concurring; 2009 DAR 277, 2009 WL
5393762.
IN DENYING CLASS
CERTIFICATION, TRIAL COURT
ERRONEOUSLY TREATED CLASS
SUITABILITY AS DEPENDENT ON
DETERMINATION OF MERITS
GHAZARYAN v DIVA LIMOUSINE,
LTD. In an opinion filed on December 22
and certified for publication on January
12, the Second District, Division Seven,
reversed the superior court’s denial of a
motion to certify a class of limousine
drivers allegedly under-compensated by
Diva in violation of California’s wage and
hour laws. “Ghazaryan’s lawsuit contests Diva’s policy of paying its drivers
an hourly rate for assigned trips but
failing to pay for on-call time between
assignments,” the Court of Appeal explained. “Because the trial court incorrectly focused on the potential difficulty
of assessing the validity of Diva’s compensation policy in light of variations in
how drivers spend their gap time, we
reverse the court’s denial of the motion
and remand with directions to certify
Ghazaryan’s two proposed subclasses.”
The court continued in part as follows:
“Ghazaryan filed his lawsuit in May
2006 alleging Diva by its practice of
paying drivers by the job, not by the
hour, had failed to pay earned wages
and overtime or to provide required rest
breaks and meal periods in violation of
multiple provisions of the Labor Code
and implementing administrative regulations. He also alleged Diva had engaged in unlawful business practices
under Business and Professions Code
section 17200 et seq.... [H]is motion
sought to certify ... two overlapping
subclasses: (1) based on Diva’s alleged
failure to pay earned overtime and
straight time, ‘All current and former
-5-
employees who worked as Limousine
Drivers during the period of May 10,
2002 to the present’; and (2) targeting
Diva’s failure to provide mandatory rest
breaks, ‘All current and former employees of Defendant who worked as Limousine Drivers at any time during the
period of May 10, 2002 to the present,
worked one or more four-hour increments of time without being given a rest
break for each such increment and who
were not properly compensated therefor[ ].’
“Diva opposed class certification principally because of the purported difficulties in identifying eligible members of
the class and assessing the validity of
Diva’s compensation policy as applied
to different drivers who may or may not
have used their gap time for personal
pursuits... [¶] The trial court ... denied
the motion on the ground certification
would raise too many individualized issues...
“[T]he trial court fundamentally misconceived the import of the rule against
evaluating the merits of the plaintiff’s
claims in deciding whether class treatment is appropriate. Rather than denying certification because it cannot reach
the merits, as the court did here, the
trial court must evaluate whether the
theory of recovery advanced by the
plaintiff is likely to prove amenable to
class treatment...
“Having begun its analysis of
Ghazaryan’s motion from the improper
assumption the class could not be certified if the underlying conduct had not
yet been shown to be illegal, the trial
court offered, in concluding the class
proposed by Ghazaryan was not properly ascertainable, the legally correct
but factually inapposite statement, ‘It is
error to certify a class if that class is
defined in terms of ultimate liability
questions.’ As this court explained in
Hicks v. Kaufman & Broad Home Corp
(2001) 89 Cal.App.4th 908, a class is
properly defined in terms of ‘objective
characteristics and common transactional facts,’ not by identifying the ultimate facts that will establish liability.
DECISIONS
(From Page 5)
(Id. at p. 915.) This is precisely what
Ghazaryan has done.
“Diva also argues the proposed class is
not ascertainable because determination of the legality of Diva’s policy, as
well as damages flowing from any illegality, would require highly individualized assessments resulting from variations in the amount of each drivers
accumulated gap time and his or her
use of that time. But this objection is
simply not relevant to the question of
the ascertainability of the proposed
class.
“Diva contended, and the trial court
agreed, Ghazaryan did not satisfy the
community of interest requirement because of the inherent differences among
employees in the amount of gap time
accumulated and how that time was
spent... [¶] Determining whether a sufficient community of interest exists to
warrant class certification, however,
depends not on the differences among
individual drivers’ use of their gap time
but on the reasonableness of Diva’s
policies as applied to its drivers as a
whole...
“The record before the trial court ...
established, as Diva asserts, that individual drivers accumulate gap time at
varying rates and utilize that time in
different ways. But the record also reveals that Diva dictates to a large extent
how drivers use their on-call time...
[T]he common legal question remains
the overall impact of Diva’s policies on
its drivers, not whether any one driver,
through the incidental convenience of
having a home or gym nearby to spend
his or her gap time, successfully finds a
way to utilize that time for his or her own
purposes...
“There is no question class treatment
constitutes the superior mode of resolving Ghazaryan’s claims in this action.
Based on the evidence submitted by
Diva in opposition to the motion, its
compensation policy has been carefully drafted; and Diva very well may find
its policy upheld as reasonable under
the existed DLSE standard. We see no
advantage to either party to resolution of
this question on a piecemeal basis and
agree with Ghazaryan such a prospect
would jeopardize the ability of employees to find competent representation if
restricted to their own individual claims.”
dismissed the action. After extensive
analysis, the Fourth District agreed,
writing in conclusion in part as follows:
For plaintiff: Arias, Ozzello & Gignac,
H. Scott Leviant, Mike Arias, Mark A.
Ozzello, Mikael Stahle, and Jason E.
Barsanti.
For defendant: David W. Affeld.
cert’d for pub 1/12/09; opinion by
Perluss with Zelon and Jackson concurring; 2009 DAR 443, 2008 WL
5279762.
“In the present case, Congress has
replaced California’s prohibition against
asking about a certain class of prior
convictions with an express right to ask
about those convictions, thereby effecting a partial repeal of the remedial statute that forms the basis of this action,
and did so without any express saving
clause... We conclude ... that Rankin’s
pending action to enforce the repealed
statutory remedy is abated...”
CLASS CLAIMS FOR VIOLATION
OF LABOR CODE’S PROHIBITION
AGAINST ASKING APPLICANTS
ABOUT OLD DRUG CONVICTIONS
WERE “ABATED” BY FEDERAL
STATUTE PERMITTING SUCH
QUESTIONS BY RETAIL
PHARMACIES
For plaintiffs: Terry J. Chapko; Goldstein,
Demchak, Baller, Borgen & Dardarian,
David Borgen, Laura L. Ho, Heather
Mills; A. Eric Aguilera.
For defendant: Orrick, Herrington &
Sutcliffe, Timothy J. Long, Michael D.
Weil, and Mary K. DuBose.
Fourth Dist Div One, 1/6/09; opinion
by McDonald with Benke and Irion
concurring; 2009 DAR 232, 2009 WL
26748.
RANKIN v LONGS DRUG STORES
CALIFORNIA, INC. In an opinion filed
on January 6, the Fourth District, Division One, affirmed the dismissal of
claims by a class of job applicants who
alleged that the defendant had violated
Labor Code § 432.7, as amplified by §
432.8, because its employment application form contained a question asking whether the applicant had been
convicted of a crime involving the use or
possession of illegal drugs during the
preceding seven years. (Those Labor
Code sections prohibit an employer
from asking about convictions for certain drug offenses more than two years
old.)
The trial court had invited the parties to
address whether enactment of the federal Combat Methamphetamine Epidemic Act of 2005 should operate to
abate any action against Longs alleging
violation of § 432.7. (The CMA, as
amended by Congress in March of 2006,
contained a provision permitting retail
pharmacies to ask applicants drug conviction questions “notwithstanding state
law.”) The trial court found the enactment of the CMA did so operate and
-6-
IN TIP POOLING CASE, SECOND
DISTRICT REJECTS EXISTENCE
OF PRIVATE RIGHT OF ACTION
UNDER LAB CODE § 351, BUT
HOLDS THAT STATUTE MAY
SERVE AS PREDICATE FOR SUIT
UNDER UCL
LU v HAWAIIAN GARDENS CASINO,
INC. Reversing summary judgment in
part in a tip pooling case brought by
casino dealers, the Second District,
Division Three wrote in part as follows in
an opinion filed on January 22:
“In Leighton v. Old Heidelberg, Ltd.
(1990) 219 Cal.App.3d 1062, this District Court of Appeal held that tip pooling
in restaurants is not prohibited by Labor
Code section 351, a statute precluding
employers from obtaining access to
employees’ tips and gratuities. Plaintiff,
a former casino dealer on behalf of a
class of dealers, challenges the legality
of a casino’s policy requiring dealers to
contribute part of the gratuities they
DECISIONS
(From Page 6)
receive to a tip pool for employees who
provide service to casino patrons. No
California case addresses tip pooling in
casinos. Distinguishing Leighton, plaintiff
argues that unlike restaurants where
tips are left on the tables, in casinos,
gratuities are handed directly to dealers, with the result that such gratuities
belong solely to the dealers. The trial
court granted judgment on the pleadings ruling that Labor Code sections
351 and 450 do not provide for a private
cause of action. The court then granted
the casino’s summary judgment motions and dismissed plaintiff’s causes
of action under Labor Code sections
221, 1197, 2802, and the unfair competition law (Bus. & Prof. Code, § 17200,
the UCL) on the basis there being no
factual dispute, as a matter of law, the
casino’s mandatory tip pooling policy
did not violate these statutes.
“We hold that nothing in Labor Code
section 351 prohibits tip pooling in casinos. We further hold, although sections
351 and 450 contain no private right to
sue, that they nonetheless serve as
predicates for suits under the UCL. A
triable factual issue about whether some
of the tip pool recipients are ‘agents’ in
contravention of section 351 precludes
summary judgment of the UCL cause of
action based on that statute only. In all
other respects, summary judgment was
properly granted. Accordingly, we affirm the judgment in part and reverse it
in parts.
“While employer-mandated tip pooling
policies are not forbidden by Labor Code
section 351..., the arrangement must
nonetheless not run afoul of the prohibitions in that statute... ‘Tip pooling is
permissible ... if an employer or agent
does not take any part of a gratuity given
to an employee by a patron.’ [cite omitted.] [¶] Here, in opposing summary
judgment, Lu demonstrated a dispute of
fact about whether some of the tip pool
recipients are Casino ‘agents.’”
For plaintiffs: Dennis F. Moss.
For defendant: Sheppard, Mullin, Richter & Hampton and Tracey A. Kennedy;
Michael St. Denis.
Second Dist Div Three, 1/22/09; opinion by Aldrich with Croskey and
Kitching concurring; 2009 DAR 1027,
2009 WL 143907.
SUBSTANTIAL EVIDENCE
SUPPORTED DEFENSE VERDICT
ON CLAIMS FOR FAILURE TO
INTERACT AND TO
ACCOMMODATE
WILSON v COUNTY OF ORANGE. In
an opinion filed on January 6, the Fourth
District, Division Three, wrote in part as
follows: “Julie Ann Wilson [a sheriff’s
department radio dispatcher] appeals
from a judgment [on a jury verdict] in
favor of her employer... She sued the
County under [FEHA] contending it failed
to make reasonable accommodation
for her medical condition that necessitated she avoid the most stressful aspects of her job. Specifically, Wilson
sought to be excused from staffing the
pursuit desk, the communication channel that assists officers who leave their
jurisdictions during a pursuit or emergency. Although the County accommodated Wilson in precisely the manner
she sought, she contends it nonetheless violated FEHA by not providing her
the accommodation earlier and by not
initiating an ‘interactive process’ sooner
to determine whether she could be accommodated.
“There is abundant evidence supporting
a finding the County provided Wilson a
reasonable accommodation and engaged in a good faith interactive process to arrive at that accommodation...
[¶] The real gist of Wilson’s complaint is
... that it took too long for her supervisors to finally agree to a permanent
arrangement... [¶] The ‘interactive process’ required by the FEHA is an informal process... Ritualized discussions
are not necessarily required... [¶] Here,
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.”
For plaintiff: Shuff Law Firm and John J.
Gulino.
-7-
For defendant: Lewis Brisbois Bisgaard
& Smith, Nancy E. Zeltzer and Gary M.
Lape.
Fourth Dist Div Three, 1/6/09; opinion by O’Leary with Aronson and
Fybel concurring; 2009 DAR 249,
2009 WL 27253.
NINTH CIRCUIT
LOS ANGELES COUNTY DEPUTY
DISTRICT ATTORNEY ENGAGED
IN PROTECTED SPEECH IN
CONNECTION WITH HIS ROLE IN
“BELMONT TASK FORCE” THAT
DISPLEASED D.A. STEVE
COOLEY
ENG v COOLEY. “We must determine,”
the Ninth Circuit wrote in a January 14
opinion, “whether [Los Angeles County
District Attorney] Steve Cooley, Steven
Sowders, Curt Livesay, Anthony
Patchett, and Curtis Hazell ... are entitled in their individual capacities to
qualified immunity in this § 1983 First
Amendment retaliation case. Resolving
this question involves, in part, David
Eng’s claim that he was retaliated
against by the Defendants for an interview given by his lawyer on his behalf to
the press. Concluding that we lack
jurisdiction to address whether Eng has
third party standing to vindicate the
constitutional rights of his lawyer, but
that he may nevertheless claim a personal First Amendment interest in his
lawyer’s advocacy on his behalf, we
affirm the district court’s partial denial of
qualified immunity.
“Eng, a Los Angeles County Deputy
District Attorney, was assigned to the
Belmont Task Force to investigate allegations of fraud and environmental
crimes related to the planning and construction of the Los Angeles Unified
School District’s Belmont Learning
Complex. The Task Force was established by newly-elected District Attorney Steve Cooley, who had campaigned
on a promise to reform the Belmont
project. The Task Force was headed by
Special Assistant Anthony Patchett,
DECISIONS
(From Page 7)
who emphasized from the beginning
that the Task Force would deliver ‘slam
dunk’ indictments against prominent
individuals involved with the Belmont
project.
turn to work until the following month.
“Following an extensive seven-month
investigation, the Task Force concluded
that the building site was and had always been environmentally safe and
that no indictments should issue. Hours
before the Task Force presented its
findings ..., Eng briefed Patchett about
the report. Patchett threatened Eng
with ‘severe [personal] consequences’
if the Task Force did not say what
Patchett believed Cooley ‘wanted to
hear.’ Eng nevertheless presented his
report recommending that no criminal
charges be brought. Following Eng’s
discussion of the Task Force’s findings,
Patchett made his own presentation
opposing Eng’s report and distributed
proposed indictments against several
prominent individuals. Cooley’s executive staff considered both recommendations and declined to adopt Patchett’s.
“About five months later, Eng was suspended with pay and instructed not to
return to work without further notice, at
which point he retained attorney Mark
Geragos. Eng was subsequently served
with a Notice of Intent to Suspend,
which stated that misdemeanor charges
had been filed against him for using an
office computer to access private information...
“In the same meeting, the Task Force
also discussed a Los Angeles Times
article reporting that the Los Unified
School District’s lease-purchase agreements used to finance the Belmont
project were being canceled... According to Eng, the agreements were cancelled because Patchett had improperly leaked to the IRS that the School
District had committed fraud in purchasing the Belmont property. Eng argued that the lease-purchase agreements had been legal and that Patchett’s
contrary report to the IRS was ‘wrong
and should be rectified.’ Cooley, who
had become angry with Eng, told him to
‘shut up.’
“Over the next several months, Cooley
and members of his staff met frequently
to discuss ‘a method of forcing David
Eng out of the District Attorney’s office.’
First... Eng [was placed] under investigation for sexual harassment of a Task
Force law clerk... [who insisted] that
Eng had not sexually harassed her, nor
had she told anyone he had... The
investigation nevertheless proceeded...
Eng was told to work from home until
further notice and not permitted to re-
“Next, in what Eng asserts was a ‘clear
demotion,’ Cooley reassigned him to
the Pomona Juvenile Division...
“When the misdemeanor charges
against Eng went to trial some two
months later, they were dismissed when
the only potential witness against Eng
invoked his First Amendment right to
remain silent, evidently having misused
office computers himself. [Head Deputy]
Sowders still refused to allow Eng to
return to work. Eng and Geragos appealed to the County Civil Service Commission, which ordered that Eng be
allowed to return to work and that his
lost pay and benefits be restored.
Sowders refused to follow the order and
extended Eng’s suspension...
“Around the same time, the Los Angeles Times published a prominent article
... which included an interview with
Geragos, [and] detailed Eng’s allegations that he had been prosecuted because he refused to file criminal charges
against individuals involved in the
Belmont School Project...
“Shortly after the article went to press,
Sowders informed Eng and Geragos
that Eng ‘would never be allowed to
come back’ to the District Attorney’s
Office and that ‘they would come up
with additional things to charge Eng
with...
“Two weeks after the Los Angeles Times
article appeared, Sowders met with Eng
and served him with a second Notice of
Intent to Suspend... In a subsequent
meeting..., Sowders offered to ‘resolve
matters’ if Eng agreed to tell the Los
Angeles Times that Geragos’s comments were unauthorized and inaccu-8-
rate, and if he would publicly apologize
to Cooley...
“In a second hearing before the Civil
Service Commission, the Commission
resolved all outstanding allegations in
Eng’s favor... Eng later returned to work
once again but discovered that he was
not receiving full benefits. He has since
been passed over for promotion.
“Eng filed suit under 42 U.S.C. § 1983...
[¶] The district court granted summary
judgment with respect to Eng’s recommendation that no criminal charges be
filed... According to the court, ‘Eng was
merely fulfilling his job duties when he
gave his Task Force recommendation,’
and therefore those statements were
‘not protected under the First Amendment.’ [¶] The district court denied the
remainder of the Defendants’ motion for
summary judgment...
“The district court granted qualified immunity with respect to certain of Eng’s
statements, which it determined were
constitutionally unprotected. Generally,
‘a challenge to the grant of qualified
immunity [is] not independently
interlocutorily appealable.’ [cite omitted.]... We therefore lack jurisdiction to
review the district court’s partial grant of
qualified immunity and will consider
only those statements with respect to
which the district court denied qualified
immunity.
“Before addressing whether Eng has
demonstrated that the Defendants violated his constitutional rights, we must
first decide as a threshold matter
whether he has a first person interest, or
third-party standing to vindicate
Geragos’s interest, in Geragos’s interview with the Los Angeles Times... [¶]
[We conclude that] [b]ecause Geragos
spoke on Eng’s behalf in his capacity
as Eng’s lawyer, his words were Eng’s
words as far as the First Amendment is
concerned. Eng himself therefore had a
personal First Amendment interest in
Geragos’s speech.
“Applying [the] five-step First Amendment retaliation test [set forth in
DECISIONS
(From Page 8)
Pickering v Bd of Education (1968) 391
US 563 and its progeny], we conclude
the allegations here demonstrate that
Eng’s First Amendment rights were
violated with respect to both Eng’s comments about the leak to the IRS and
Geragos’s statements on Eng’s behalf
to the press.
“The Defendants expend great effort
arguing that Eng’s speech with respect
to the IRS leak was ‘inextricably related
to his work’... [¶] [But] there can be no
doubt that Eng’s version of the facts
plausibly indicates he had no official
duty to complain about any leak to the
IRS or to authorize Geragos to speak to
the press about the retaliation being
taken against him...
“Defendants ... do not argue ... that their
interest in regulating Eng’s speech was
sufficient to outweigh Eng’s free speech
interest. They have therefore waived
this argument. [¶] In any event, Eng’s
allegations show that ... the full range of
adverse employment action appears to
have been a politically-motivated effort
to silence Eng... [T]he Defendants have
not met their burden under the Pickering
balancing test.
“[In addition] [t]aking Eng’s version of
the facts as true, the Defendants have
not met their burden to show that Eng’s
protected speech was not a but-for
cause of the adverse employment actions taken against him...
est) is beyond dispute.
“With respect to Eng’s personal interest, by 2003, the right to retain and
consult an attorney ‘implicate[d] ...
clearly established First Amendment
rights or association and free speech.
[cite omitted.] ... An individual’s personal First Amendment interest in his
or her lawyer’s speech on his or her
behalf is a natural corollary of the First
Amendment right to retain counsel. Any
other conclusion would eviscerate that
right.”
For plaintiff: D. Jay Ritt, Bensinger, Ritt,
Tai & Thvedt, Pasadena.
For defendant: Jin Suk Choi, Franscell,
Strickland, Roberts & Lawrence, Glendale.
Ninth Circuit, 1/14/09; opinion by
Hawkins joined by Cudahy and
Pregerson; 2009 DAR 664, 2009 WL
81870.
ENFORCEMENT OF CLAUSE
SPECIFYING VIRGINIA COURTS
AS FORUM FOR CLAIMS
AGAINST INTERNET SERVICE
PROVIDER WOULD VIOLATE
CALIFORNIA PUBLIC POLICY
BECAUSE VIRGINIA LAW DOES
NOT ALLOW FOR CONSUMER
CLASS ACTIONS
“Prior to Garcetti ... there could be no
confusion ... that when Eng
‘comment[ed] upon matters of public
concern’ ‘as a citizen’ and not pursuant
to his job responsibilities, his speech
was protected by the First Amendment—
that rule had long been the law of the
land. [cite omitted.] Thus, assuming
Eng’s version of the facts to be true, he
had a clearly established right to comment on the leak to the IRS.
DOE 1, DOE 2 and RAMKISSOON v
AOL. In a January 16 opinion in a
consumer class action, the Ninth Circuit held that the enforcement of a forum
selection clause specifying “the courts
of Virginia” would violate California public policy because Virginia law does not
allow for consumer class actions. Enforcement of the forum selection clause
would deprive California residents of
their rights and remedies under California consumer law, the court emphasized.
“Geragos’s and Eng’s respective First
Amendment interests in Geragos’s
speech to the press were also clearly
established at the time of the alleged
retaliation. The clarity of Geragos’s interest in his own speech (regardless of
Eng’s standing to vindicate that inter-
The Ninth Circuit also held that the
Northern District had erred in interpreting the forum selection clause to permit
actions in either state or federal court in
Virginia. (The district court had granted
AOL’s motion to dismiss without preju-9-
dice to plaintiffs refiling it in a state or
federal court in Virginia.) “The plain
language of the clause,” the Ninth Circuit wrote, demonstrates the parties
chose Virginia state courts as the only
fora for any disputes.”
For plaintiffs: Joseph J. Tabacco, Jr.,
Christopher T. Heffelfinger, Berman
DeValerio Pease Tabacco Burt & Pucillo,
San Francisco; Richard R. Wiebe, San
Francisco; James K. Green, West Palm
Beach, Florida.
For defendant: Patrick J. Carome, Samir
C. Jain, D. Hien Tran, Wilmer Cutler
Pickering Hale & Dorr, Washington DC.
Ninth Circuit, 1/16/08; before
Reinhardt, Bea, and Nelson; concurrences by Nelson and Bea; 2009
DAR 756, 2009 WL 103657.
IN ERISA ACTION CHALLENGING
BENEFITS DENIAL, NORTHERN
DISTRICT SHOULD HAVE
APPLIED TRADITIONAL RULES OF
SUMMARY JUDGMENT WITH
RESPECT TO PLAINTIFF’S
EVIDENCE OUTSIDE
ADMINISTRATIVE RECORD
NOLAN v HEALD COLLEGE. Reversing summary judgment on an ERISA
claim challenging a denial of benefits, a
Ninth Circuit panel wrote in part as
follows in an opinion by Nelson filed on
January 13:
“After suffering injuries in a workplace
fall, Jeanne Nolan applied for and received long-term disability benefits from
Metropolitan Life Insurance Company.
After paying benefits for approximately
two years, however, MetLife reviewed
Nolan’s file in June 2004 and determined that Nolan no longer qualified for
benefits. Nolan twice appealed this decision, but MetLife denied both appeals
in reliance on two independent physician opinions that MetLife had requested... Nolan thereafter filed this
action... The district court granted summary judgment in favor of MetLife, concluding that the abuse of discretion
standard tempered with no skepticism
DECISIONS
(From Page 9)
applied, and that MetLife did not abuse
its discretion in denying benefits.
“As permitted by Abatie v. Alta Health
& Life Ins. Co., 458 F.3d 955, 970 (9th
Cir. 2006), Nolan submitted evidence
outside of the administrative record at
summary judgment. The evidence bore
on MetLife’s structural conflict of interest, and more specifically, suggested
that Drs. Silver and Jares—the opinions
of whom MetLife relied on to deny benefits—were biased in favor of MetLife...
[Nolan’s evidence indicated that Drs.
Silver and Jares had received substantial work and monies from MetLife in the
three-to-four years preceding and including Nolan’s benefits denial.] In examining the evidence, however, the district court did not apply the traditional
rules of summary judgment and/or view
that evidence in the light most favorable
to Nolan. [For the erroneous proposition
that the traditional rules of evidence did
not apply, the district court cited
Bendixen v Standard Ins. Co. (9th Cir
1999) 185 F3d 939.]
“We conclude that a district court must
apply the traditional rules of summary
judgment when examining evidence
outside of the administrative record in
an ERISA case, including the requirement that the evidence must be viewed
in the light most favorable to the
nonmoving party. As the district court
failed to apply the traditional rules of
summary judgment in examining
Nolan’s evidence, we reverse and remand for further proceedings.”
For plaintiff: Geoffrey V. White, San
Francisco, Cassie Springer Sullivan,
Oakland.
For defendant: Rebecca A. Hull,
Sedgwick, Detert, Moran & Arnold, San
Francisco.
Nelson joined by Fernandez and
Thomas; 2009 DAR 586, 2009 WL
69238.
UNPUBLISHED
CALIFORNIA COURT OF
APPEAL DECISIONS
IN SEX HARASSMENT CASE,
SECOND DISTRICT HOLDS THAT
FEE MULTIPLIERS AND PUNITIVE
DAMAGES WERE WARRANTED,
BUT THAT REDUCTION OF
PUNITIVES FROM ALMOST $17
MILLION TO $1.2 MILLION WAS
REASONABLE
STEVENS v VONS COMPANIES. In
an unpublished opinion by Yegan filed
on January 20, the Second District,
Division Six, wrote in part as follows:
“James Stevens, respondent, brought
an action ... alleging sexual harassment and retaliation in violation of [FEHA].
Appellant appeals from that portion of
the judgment awarding respondent punitive damages. It contends that punitive damages are unwarranted because
the evidence is insufficient to establish
that a managing agent of the corporation ratified or engaged in oppressive or
malicious conduct. Appellant also ...
contends that the trial court erroneously applied a multiplier to the lodestar
calculation of attorney fees. Respondent cross-appeals from the judgment,
challenging a new trial order that reduced the jury’s award of punitive damages ($16,729,880) by way of remittitur.
We affirm the judgment which awards
respondent Stevens $1.2 million in compensatory damages, $1.2 million punitive damages, $300,709.50 to the Allred
law firm and $343,265.60 to the Davis
law firm.
“[W]e conclude that the record contains
substantial evidence to support a determination that [District Manager William] Tarter was a managing agent... As
one of appellant’s 17 district managers,
Tarter supervised ‘a significant aspect
of [the company’s] business’: 20 stores
in Ventura County... He was the highest
ranking company official in the district...
“The record contains substantial evidence ... that Tarter ratified [co-worker
Laura] Marko’s sexual harassment...
[¶] An employer’s failure to discipline or
reprimand an employee for known misconduct may reasonably be construed
as a ratification of that misconduct...
“The record contains substantial evidence ... that (1) Tarter fired respondent
in retaliation for his complaints of sexual
harassment, and (2) Tarter relied on [a
pretext] to justify the firing. Such conduct by Tarter constitutes sufficient evidence of oppression and malice to support an award of punitive damages...
“Appellant ... argues that the multipliers
applied to the lodestar figures ‘should
be eliminated.’ For the attorneys from
the firm of Allred, Maroko & Goldberg,
the court applied a multiplier of 1.4...
For the attorneys from the firm of
Davis*Gavsie, the court applied a multiplier figure of 1.6... [¶] The trial court did
not abuse its discretion...
“[Concerning the reduction of the punitive damages award] [r]espondent’s reliance on Simon [v San Paolo U.S.
Holding Co., Inc. (2005) 35 C4th 1159]
is misplaced. Simon did not hold that
when a trial court orders a remittitur of
punitive damages its authority is limited
to reducing the award to the absolute
constitutional maximum... [¶] The reasonableness of the trial court’s selection of a 1:1 ratio is supported by Exxon
Shipping Co. v. Baker (2008) 128 S.Ct.
2605...”
For plaintiff: Nathan Goldberg and John
West, Allred, Maroki & Goldberg;
Roxanne A. Davis, Davis*Gavsie; Donna
Bader.
For defendant: Paul W. Cane, Jr.,
Heather N. Mitchell, Gregory W. Dalton,
Paul, Hastings, Janofsky & Walker.
Second Dist Div Six, 1/20/09; opinion by Yegan with Gilbert and Coffee concurring; 2009 WL 117902 (unpublished).
-10-
DECISIONS
(From Page 10)
REVERSING SUMMARY
JUDGMENT, SECOND DISTRICT
UPHOLDS ADMISSIBILITY OF
DECLARATIONS OF OTHER
WOMEN FIRED AFTER
DISCLOSING PREGNANCY
JOHNSON v UNITED CEREBRAL
PALSY FOUNDATION. In an unpublished opinion filed on January 23, the
Second District, Division Three, reversed
summary judgment on pregnancy discrimination and related claims by a
former United Cerebral Palsy Foundation counselor. The Court of Appeal
identified as the primary issue the admissibility of declarations by other
women who had been fired after disclosing their pregnancies. “We conclude
that the contested declarations are admissible,” the court wrote, “and constitute substantial circumstantial evidence
presented by plaintiff, which is sufficient
to raise triable issues of fact as to the
reason for plaintiff’s termination. Therefore, the summary judgment must be
reversed and the matter remanded for
further proceedings.
“[C]ourts have routinely sanctioned use
of this ‘me too’ type of evidence. Nevertheless, relying on Beyda v. City of Los
Angeles (1998) 65 Cal.App.4th 511 and
other cases, defendant filed written objections... [¶] The Beyda court stated
that rather than lacking probative value,
the evidence was actually too relevant
and had too much probative value. However, Beyda did not address whether the
evidence could be admitted under the
provisions of subdivision (b) of Evidence
Code section 1101... [M]any courts
have held that evidence of [this] type is
admissible under subdivision (b) of section 1101 (and under its federal rules of
evidence counterpart), to show intent or
motive, for the purpose of casting doubt
on an employer’s stated reason for an
adverse employment action, and thereby
creating a triable issue of material fact
as to [pretext].
“Most recently, the United States Supreme Court, in an age discrimination
case, took up the question... (Sprint/
United Management Co. v. Mendelsohn
(2008) 128 S.Ct. 1140). Unlike the case
before us, these other employees had
not worked in the same department, nor
been supervised by the same people,
as the plaintiff... The court’s answer
was that admissibility ‘is fact based and
depends on many factors...’ Thus, contrary to the analysis of the Supreme
Court’s holding that is proffered by the
defendant in the instant case, there was
no wholesale rejection of such ‘me too’
evidence by the court, and the case
does not support defendant’s assertion
that the ‘me too’ evidence presented by
plaintiff in this case should be rejected.
“Defendant presented a legitimate reason for firing plaintiff. It asserted that
plaintiff falsified time records. Plaintiff,
in turn, presented evidence of a prima
facie case that she was fired for an
impermissible reason—her pregnancy.
Because she also presented substantial evidence of pretext or discriminatory
animus in her firing, she raised a triable
issue of material fact regarding the true
reason that she was fire. Therefore, the
summary judgment must be reversed.”
For plaintiff: V. James DeSimone and
Twila S. White.
For defendants: Howard M. Knee and
Melanie C. Ross.
Second Dist Div Three, 1/23/09; opinion by Croskey with Kitching and
Aldrich concurring; 2009 WL 153822
(unpublished).
PAGA ACTION WAS BARRED BY
RES JUDICATA EVEN THOUGH
PRIOR SETTLEMENT OF WAGE
AND HOUR CLASS ACTION
BASED ON SAME “PRIMARY
RIGHT” HAD INVOLVED NO
PAGA ALLEGATIONS
DELEON v VERIZON WIRELESS. In
an opinion filed on December 29, the
Second District, Division Three discussed the res judicata effect of the
earlier settlement of class wage and
hour claims on a subsequent class
action brought by employees who had
not opted out of that settlement but
were now making PAGA allegations
and seeking to recover PAGA’s civil
-11-
penalties. Both cases alleged Labor
Code violations in connection with
Verizon’s “chargeback” procedure according to which salespersons forfeited
sales commissions if a new customer
cancelled his or her wireless service
within the first year.
“Deleon’s complaint pleads the same
set of operative facts violating the same
primary right as raised in the Evenson...,”
the court wrote. “It is not significant to
our analysis that the two operative complaints seek different forms of relief...
California law approaches the [res judicata] issue by focusing on the ‘primary
right’ at stake...
“Deleon’s central contention is that there
was no privity here because the State of
California is the ‘Principal’ or ‘real party
in interest’ in a PAGA action... [But]
PAGA’s language is clear and unambiguous: In a PAGA representative action, plaintiffs sue on behalf of themselves and other aggrieved employees,
not on behalf of the State... [T]he ‘aggrieved employees’ in Deleon who did
not opt out of the Evenson settlement
are barred from bringing this action...
“Deleon correctly argues that he should
be given the opportunity to amend his
complaint to allege violations of the
Labor Code that accrued after the
Evenson release period... We agree...
The Evenson plaintiffs did not release
Verizon Wireless for violations that occurred after April 1, 2006.”
For plaintiff: Marc Primo, Joseph Cho,
and Shawn Westrick.
For defendant: Jones Day, Deborah C.
Saxe and Matthew M. Yu.
Second Dist Div Three, 12/29/08;
opinion by Aldrich with Croskey and
Kitching concurring; 2009 DAR 1035,
2008 WL 5391936 (unpublished).
DECISIONS
(From Page 11)
CALIFORNIA
SUPERIOR COURTS
“non-performance” of Reynolds’s staff
as a reason to suggest that Reynolds
should retire.
LOS ANGELES JURY FINDS FOR
FORMER COUNTY LAW
LIBRARIAN ON AGE
DISCRIMINATION CLAIMS
On more than four occasions, Koslov
asked Reynolds whether or not she had
decided to retire, and in February of
2007 gave her three options: retire and
come back on a part-time temporary
basis; be demoted; or be terminated.
Reynolds accepted none of those
choices, and on March 9, 2007, Koslov
sent an email to the entire staff announcing Reynolds’s demotion—an
action Reynolds learned about only thirdhand. She then resigned, citing stress
in the work environment.
REYNOLDS v LOS ANGELES
COUNTY LAW LIBRARY. On December 9, 2008, a Los Angeles County
Superior Court jury returned verdicts for
the plaintiff on causes of action for age
discrimination (poll: 9-3) and failure to
prevent age discrimination (poll: 12-0),
awarding $86,000 in past lost wages
and $60,000 in future lost wages. (Lost
on summary judgment were additional
claims for harassment, retaliation,
wtvpp, and breach of implied contract.)
The following summary of the allegations and evidence has been provided
by counsel for the plaintiff:
Diane Reynolds had been employed for
38 years at the Los Angeles County
Law Library. She holds a MLS from
USC and has been an attorney licensed
to practice since 1975. She was a high
ranking, high performing manager when
a new Executive Director, Marcia Koslov,
was named in 2005 and immediately
began making changes that targeted
older employees. Koslov told the Human Resources Manager of a “Master
Plan” to get older employees to leave
the library, and she changed the retirement plan so that older employees
would be induced to leave. Koslov specifically asked the Human Resource
Manager to force Diane Reynolds to
take retirement, and when the HR Manager refused, Koslov set out to make
Reynolds so uncomfortable that she
would leave the library.
Koslov took duties away from Reynolds
and gave them to a much younger
librarian who had once been Reynolds’s
subordinate. Koslov often demeaned
Reynolds and treated her as if she were
incompetent. She undermined
Reynolds with her staff, assigning them
tasks without telling Reynolds, and
assigning them unmanageable and unreachable goals. Koslov then used the
At trial, the defense claimed that
Reynolds was simply a bad manager,
and brought out that the majority of the
Library’s staff was over 40, with quite a
few members over 60. Several witnesses,
howver, testified to hearing Koslov make
ageist comments.
For plaintiff: Carol Gilliam, Shawna
Rasul.
For defendant: Linda Miller Savitt,
Katherine Hren.
Los Angeles County Superior Court,
No. BC381575; 12/9/08; Judge Ruth
Ann Kwan; information provided by
counsel.
CONTRA COSTA COUNTY
SUPERIOR COURT FINDS
COUNTRYWIDE’S ARBITRATION
AGREEMENT UNCONSCIONABLE
AND UNENFORCEABLE
THOMPSON v COUNTRYWIDE FINANCIAL CORP. On January 7, the
Contra Costa County Superior Court
issued an order, in a race discrimination
and whistleblower retaliation case, finding unconscionable and unenforceable
the arbitration agreement that Countrywide Home Loans requires its employees to sign as a condition of employment. The Court found two substantively unconscionable provisions: a provision giving the arbitrator exclusive
authority to determine arbitrability, and
a provision giving Countrywide the unilateral right to modify the agreement. In
addition, the Court found no evidence
that the Bank of America, which had
recently acquired Countrywide, was a
successor in interest to the arbitration
agreement.
For plaintiff: Gay C. Grunfeld, Rosen,
Bien & Galvan, San Francisco.
Contra Costa County Superior Court,
No. MSC 08-01910; 1/7/09; information as reported by counsel in January 16 CELA Listserv message.
PLANS ARE ANNOUNCED FOR PRE-CONFERENCE
SEMINAR
The following CELA Listserv message
from Executive Board Member Jean
Hyams was posted on January 21.
Plans are well underway for this year’s
Pre-Conference Seminar—an all-day
Trial Practice Seminar taking place on
October 1 at the Oakland Marriott, (the
Conference site). You won’t want to
miss this event. The Seminar will be
structured as a live mock trial, with
actual lay-person jurors and real-life
judges, based on a sexual harassment
and retaliation fact pattern. The trial will
include voir dire, opening, direct and
cross examination of the plaintiff, the
harasser, a human resource person,
and an expert, and closing argument.
-15-
At the end of the day, the jurors’ deliberations will be videotaped and edited
for presentation during the Conference.
We’re pleased to announce that Sonia
Chopra of the National Jury Project
West is working with us and will be
present as a trial consultant. At various
points during the day, Sonia and members of the trial teams will serve as
panelists to analyze and comment on
the trial’s progress, to discuss strategic
issues, and to field questions. The plaintiff and defense teams are already hard
at work, headed by lead plaintiff’s counsel Kathy Dickson and lead defense
counsel David deRubertis. Stay tuned
for more news about how things are
shaping up.
NELA NEWS
—On January 27, 2009, the House
passed the Lily Ledbetter Fair Pay
Act by a vote of 250-177. And, as you
know, on January 22 the Senate passed
the identical bill by a vote of 61-36. All
the Democratic Senators present voted
for the bill, joined by Independent Senators Joseph Lieberman (ID-CT) and
Bernard Sanders (I-VT), and by Republican Senators Susan Collins (R-ME),
Kay Bailey Hutchison (R-TX), Lisa
Murkowski (R-AK), Olympia Snowe (RME), and Arlen Specter (R-PA). President Obama, who endorsed the bill
during his campaign, is expected to
sign the Act promptly—in fact, the Lily
Ledbetter Fair Pay Act is likely to be
the very first bill that he signs into law.
Thank you all for rallying to action around
this historic piece of legislation!
—On January 9, the House also passed
the Paycheck Fairness Act, (H.R. 12),
which would provide much-needed updates to the 45-year-old Equal Pay Act
by strengthening the penalties for equal
pay violations; allowing the option of optout class actions; and providing uncapped damages. The Paycheck Fairness Act also would prohibit employers
from punishing employees who share
pay information with co-workers.
—Note that the date for Arbitration Fairness Day in Washington DC has been
changed from March 11, 2009, to
Wednesday, April 29, 2009. [See CELA
Bulletin, Dec 08, p.15, for general information concerning this lobbying event.]
—NELA’s Nominating Committee is
C O M I N G
seeking nominations for NELA’s Executive Board for 2009. The Executive
Board has twenty-four members. Our
general membership will elect four Board
members in April 2009, and the Executive Board will appoint two members at
its summer meeting at the NELA National Convention in June 2009. The
Nominating Committee will develop a
slate of candidates for both selection
processes. Please send your recommendations as soon as possible, but
no later than February 13, 2009, to
Terisa E. Chaw, Executive Director,
National Employment Lawyers Association, 44 Montgomery Street, Suite
2080, San Francisco CA 94104. (Include the person’s address, telephone
number, fax number, and e-mail address.)
E V E N T S
February 20, 2009
CELA Webinar:
Effective Strategies for Conducting Electronic Discovery
(see page 14 for details)
March 20-21, 2009
NELA SPRING SEMINAR:
TAKING AND DEFENDING DEPOSITIONS IN EMPLOYMENT LITIGATION
Sheraton Denver Hotel
Denver, Colorado
(See www.nela.org for information)
April 29, 2009
ARBITRATION FAIRNESS DAY
Washington DC
(Note change of date; see www.nela.org for details)
May 20, 2009
CELA’S THIRD ANNUAL LOBBY DAY
Sacramento
June 24-27, 2009
NELA’S TWENTIETH ANNUAL CONVENTION
The Westin Mission Hills Resort
Rancho Mirage, California
October 1, 2009
CELA’s PRE-CONFERENCE SEMINAR
Oakland Marriott
(See page 15 for details)
October 2-3, 2009
CELA’S ANNUAL CONFERENCE
Oakland Marriott
-16-
Published
Monthly
BULLETIN
CALIFORNIA
SUPREME COURT
STATE EMPLOYEE MAY FILE
ACTION FOR DAMAGES UNDER
WHISTLEBLOWER PROTECTION
ACT AFTER PERSONNEL BOARD
HAS ISSUED FINDINGS,
FAVORABLE OR UNFAVORABLE,
WITHOUT NEED TO CHALLENGE
ADVERSE FINDINGS BY WRIT
OF MANDATE
STATE BOARD OF CHIROPRACTIC
EXAMINERS v SUPERIOR COURT
(ARBUCKLE). Reversing the Third District in a unanimous opinion by Kennard
filed on February 26, the Supreme
Court held as follows concerning exhaustion requirements in connection
with a state employee’s cause of action for damages under the California
Whistleblower Protection Act, (Gov
Code § 8547 et seq.):
“[T]he Act authorizes a state employee
who is the victim of whistleblower retaliation to bring ‘an action for damages’ in superior court ... and to recover, if appropriate, punitive damages
and attorney fees, but the employee
must ‘first file[] a complaint with the
State Personnel Board ..., and the
board [must] ... issue, or fail to issue,
findings pursuant to Section 19683...
“Here, the employee filed a complaint
with the State Personnel Board, and
the board issued adverse findings. The
Court of Appeal held that the employee
had to succeed in having those adverse findings set aside before she
could proceed with her court action for
damages under section 8547.8(c), because otherwise the adverse findings
would be binding in the damages action, precluding recovery. Because this
holding undermines the Act’s purpose
of protecting whistleblower employees
by assuring them the procedural guarantees and independent fact-finding of
a superior court damages action, we
reverse.
“We conclude ... that section 8547.8(c)
means what it says: An employee complaining of whistleblower retaliation may
bring an action for damages in superior
court, but only after the employee files
a complaint with the State Personnel
Board and the board ‘has issued, or
failed to issue, findings.’ So long as the
board has issued findings (or the deadline for issuing findings has passed),
the employee may proceed with a damages action in superior court regardless of whether the board’s findings are
favorable or unfavorable to the employee. Moreover, once the board has
issued findings, the employee need not
pursue additional administrative remedies and need not challenge the findings by way of a petition for a writ of
administrative mandate. In concluding
to the contrary, the Court of Appeal
erred.”
The Third District’s February 28, 2007,
opinion appeared at 148 CA4th 142, 55
CR3d 374, and was summarized in
CELA Bulletin, March 07, p.1. Review
was granted on June 27, 2007.
February 2009
Vol. 23, No. 2
LEGISLATIVE UPDATE
By Regina Banks, CELA’s
Legislative Director
A certain kind of tempered relief has
fallen over the capitol city of late. For a
record-breaking 85 days, an axe loomed
over head in the form of a $16 billion
shortfall in a $42 billion budget package. But now that the axe has fallen,
citizens can begin tending to the wounds
felt throughout the state, including in
sectors of the employment community.
Several ideas were bandied about during the negotiations. Luckily for California employees—and no doubt due in
large part to the efforts of the many who
contacted their lawmakers—no substantive changes were made to the
meal and rest period laws. Changes
were made, however, to the rules governing “alternative workweek” schedules.
Despite ardent opposition by many
groups, including CELA, AB 5b (Gaines)
passed the legislature and was signed
by the governor as a part of the budget
negotiation. Significantly eroding overtime rights, it purports to define “work
unit” as it relates to elections regarding
workweek schedules. It authorizes employees, with the consent of their employer, to move weekly from one workweek schedule to another, from a menu
of possible schedule options.
For real party in interest: Gaspar Garcia
II.
Cal SC, 2/26/09; unanimous opinion
by Kennard; 2009 DAR 2799, 2009
WL 466696.
Additionally, Gov. Schwarzenegger did
not rescind his executive order terminating roughly 10,000 temporary and
part-time state employees, and eliminating overtime until at least July 1,
2009. Further, the budget bills themselves, SB 1c (Ducheny), SB 2c
(Cont'd on Page 3, LEGISLATURE)
DECISIONS
(From Page 1)
PUBLIC EMPLOYEE MAY BE
COMPELLED BY THREAT OF JOB
DISCIPLINE TO ANSWER
QUESTIONS ABOUT JOB
PERFORMANCE AS LONG AS HE
OR SHE IS NOT REQUIRED TO
WAIVE PROTECTION AGAINST
CRIMINAL USE OF THOSE
ANSWERS
SPIELBAUER v COUNTY OF SANTA
CLARA. “Plaintiff, a deputy public defender, was investigated by his employer, the county, upon allegations
that he had made deceptive statements
to the court while representing a criminal defendant. During each of several
attempts to interview plaintiff in the
matter, a supervising attorney directed
plaintiff to answer questions about the
incident, told plaintiff that his refusal to
cooperate would be deemed insubordination warranting ... dismissal, but advised plaintiff—accurately— that no use
in a criminal proceeding ... could be
made of his answers. Nonetheless, on
advice of counsel, plaintiff declined to
answer, invoking his privilege against
compelled self-incrimination... He was
terminated from employment on grounds
of the deceptive court conduct, and for
disobeying the employer’s orders to
answer questions.
“Plaintiff sought mandate to obtain reinstatement, urging, among other things,
that he could not be compelled, on pain
of dismissal, to answer potentially incriminating questions unless he received, in advance, a formal grant of
immunity from direct or derivative use of
his answers in any criminal case against
him. The trial court upheld the termination, but the [Sixth District] reversed.
[146 CA4th 914, 53 CR3d 357.] The
appellate court ... agreed with plaintiff’s
contention that, having invoked his constitutional right against self-incrimination, he could not be compelled, by
threat of job discipline, to answer his
employer’s questions unless his constitutional privilege was first supplanted
by an affirmative grant of criminal use
immunity coextensive with the constitutional protection...
“We conclude that the Court of Appeal
erred. United States Supreme Court
decisions, followed for decades both in
California and elsewhere, establish that
a public employee may be compelled,
by threat of job discipline, to answer
questions about the employee’s job
performance, so long as the employee
is not required, on pain of dismissal, to
waive the constitutional protection
against criminal use of those answers.
Here, plaintiff was not ordered to choose
between his constitutional rights and
his job. On the contrary, he was truthfully told that, in fact, no criminal use
could be made of any answers he gave
under compulsion by the employer. In
the context of a non-criminal public
employment investigation, the employer
was not further required to seek, obtain,
and confer a formal guarantee of immunity before requiring its employee to
answer questions related to that investigation. [¶] Accordingly, we will reverse
the judgment of the Court of Appeal.”
For plaintiff: Douglas B. Allen.
For defendant: Ann Miller Ravel, County
Counsel; Lori E. Pegg, Lead Deputy
County Counsel; Marcy L. Berkman,
Deputy County Counsel.
by Baxter; 2009 DAR 1851, 2009 WL
291191.
SUPREME COURT WILL
ADDRESS WHISTLEBLOWER
ACT’S EXHAUSTION
REQUIREMENTS FOR CSU
EMPLOYEES
RUNYON v CALIFORNIA STATE UNIVERSITY. On January 28, the Supreme
Court granted review in a case in which
the Second District, Division One, affirmed summary judgment on the ground
that the plaintiff university professor was
barred from pursuing a claim under the
California Whistleblower Act because
he had failed to exhaust his judicial
remedies by first seeking writ relief to
overturn an adverse determination in the
University’s internal grievance procedure. The Second District’s unpublished
opinion appears at 2008 WL 4741061.
-2-
CALIFORNIA
EMPLOYMENT
LAWYERS ASSOCIATION
David J. Duchrow
Suite 305
Tel: (310) 479-5303
FAX: (310) 479-5306
E-mail:
[email protected]
Director:
Christina Krasomil
Encino, CA 91436-2412
Tel: (818) 907-7895
FAX: (818) 907-7474
EXECUTIVE BOARD
(Los Angeles)
Dolores Leal
(Los Angeles)
David DeRubertis
(Woodland Hills)
Steven Pingel
(Long Beach)
Kathy Dickson
(Oakland)
(Laguna Hills)
David Duchrow
(Los Angeles)
Cynthia Rice
(San Francisco)
Wilmer Harris
(Pasadena)
Mika Spencer
(San Diego)
Phil Horowitz
(San Francisco)
James P. Stoneman
(Claremont)
Jean K. Hyams
(Oakland)
Christopher Whelan
(Gold River)
Toni Jaramilla
(Los Angeles)
Jeffrey Winikow
(Los Angeles)
Virginia Keeny
(Pasadena)
Bulletin Editor
Christopher Bello
842 Irving Avenue
Astoria, OR 97103
Ph: (503) 338-3891
DECISIONS
(From Page 2)
As in Ohton v Board of Trustees of
California State University (2007) 148
CA4th 749, (summarized in CELA Bulletin, March 07, p.5), the case turns on
the construction of the uniquely worded
exhaustion provision of the Act that
covers CSU employees.
[In a January 28 CELA Listserv message, plaintiff’s attorney Phil Ganz
noted that the Petition for Review, (soon
to be posted), by Laurie Susan Gorsline
convincingly argues that “...unlike the
statute applicable to University of California employees which was addressed
in Miklosy v Regents (2008) 44 C4th
876, 80 CR3d 690, the statute applicable to CSU employees provides a
direct right of action for damages.”]
For plaintiff: Philip J. Ganz, Jr. and
Laurie Susan Gorsline.
For defendant: Goldman, Magdalin &
Krikes, Robert W. Conti.
Cal SC, 1/28/09; 2009 DAR 1473
(granting review).
CALIFORNIA COURTS
OF APPEAL
FOURTH DISTRICT AFFIRMS
JUDGMENT ON DEFENSE
VERDICTS ON CLASS CLAIMS
INVOLVING INDEPENDENT
CONTRACTOR CLASSIFICATION
CRISTLER v EXPRESS MESSENGER
SYSTEMS, INC. In an opinion filed on
January 23, the Fourth District, Division
One, affirmed a judgment on jury verdicts for the defendant on several claims
based on the contention that the defendant had improperly classified its employees as independent contractors.
The court wrote in part:
“In December 2004, Cristler [and other
named plaintiffs] filed a complaint
against Express Messenger on behalf
of themselves and other similarly situated employees/independent contractors... In the complaint, Cristler alleged
causes of action for: (1) unfair and
unlawful business practices in violation
of Business and Professions Code section 17200; (2) failure to pay overtime
compensation in violation of Labor Code
sections 510, 515, and 1194; (3) failure
to provide properly itemized wage statements in violation of section 226; (4)
failure to fully compensate for business
expenses in violation of section 2802;
and (5) wrongful termination in violation
of public policy.
“At the outset of the litigation, the trial
court granted Cristler’s motion to pursue
the litigation as a class action. The case
was then tried to a jury in January 2007.
At the conclusion of the trial, the jury
returned a special verdict, finding that
‘the drivers in the Plaintiff-Class are
Independent Contractors,’ not employees. As a result of the special verdict,
the class members’ claims with respect
to failure to pay overtime compensation,
failure to provide properly itemized wage
statements and failure to fully compensate for business expenses were denied. The trial court then independently
LEGISLATURE
(From Page 1)
(Ducheny), and AB 3c (Evans), authorize the continuation of mandatory furlough days—a measure that effectively
cuts employee income by ten percent—elimination of two state holidays,
and a recalculation of pay for work done
on the remaining state holidays. SEIU
Local 1000, (comprising a majority of
state employees), worked a separate
agreement for their members that calls
for only one furlough day a month, the
equivalent of a five percent pay cut.
One bright spot may be the passage of
SB 9b (Padilla). This dense bill essentially assesses a surcharge on all bonds
issued by the state for public works
projects. The surcharge is deposited in
a fund administered by the Department
of Industrial Relations for the enforcement of prevailing wage requirements
on those public works projects.
As the rest of the state moves on in its
work, so too does CELA and its Legislative Committee.
Excitingly, the first of our bills is in print.
AB 335 (Fuentes) seeks to ensure that
employees working here in California
have access to California courts in the
event of a dispute, and that a dispute
arising from work done in California is
governed by California employment law.
Those are major issues whose time has
come again. (CELA tried to tackle them
once before, in 2007.) Particularly in
this economic and political climate,
Californians need the protection of
knowing that they won’t be forced into
the courts of another state, or be subject to another state’s laws for work
they do here at home. This is one of the
many issues we’ll be discussing during
Lobby Day this year.
Registration for Lobby Day is open!
Mark your calendar for Wednesday,
May 20, 2009. The conference hotel is
the Sterling, and we’ll have plenty to
talk about. CELA has more than 800
members, and we’re looking for at least
80 of you to participate. That seems like
-3-
a modest and reasonable goal for our
largest legislative undertaking of the year.
Please RSVP with Legislative Director
Regina Q. Banks at [email protected], or
(916) 442-5788. We’ll need your name,
your state Assembly Member for both
your office and home address, (or the zip
codes for both addresses if you’re not
sure of your assembly district). Please
plan on being one of the dedicated 80!
[Editor’s note: Additional recently-introduced bills of particular interest or concern include: AB 298 (Tran), to add
orders granting or denying class certification to the list, in Code of Civ Proc §
904.1, of the types of judgments and
orders from which an appeal may be
taken; SB 287 (Calderon) and SB 380
(Dutton), providing for weakening and
waivability of meal period rights, and
specifying that penalty of one hour’s pay
does not constitute additional wages.]
DECISIONS
(From Page 3)
determined that the remaining causes
of action for unfair and unlawful business practices, and unlawful termination were without merit...
“Cristler first contends that the trial
court abused its discretion ‘by neglecting its duty to continuously monitor
class certification and refusing to amend
or modify the class definition.’ Specifically, Cristler argues the trial court
should have narrowed certain exemptions to the class definition to ensure
that the definition did not needlessly
exclude other eligible class members
and that class membership was not
manipulated by Express Messenger.
“[R]egardless of whether the trial court
erred in defining the class, Cristler fails
to carry its burden of establishing reversible error as there is no showing of
prejudice... [¶] Had the class been expanded, as Cristler now urges, to include drivers less likely to be considered employees, the verdict would have
been the same. The only difference in
the outcome ... would be that a larger
group of drivers would have had their
contentions considered and rejected,
by the triers of fact. We see no basis on
which to construe this consequence as
in any way prejudicial to Cristler or
otherwise constituting a miscarriage of
justice.
“[T]he instructions in their entirety were
sufficiently clear in establishing that
Express Messenger bore the burden of
establishing Cristler’s independent contractor status, and that the class members ... did not have the burden of
disproving such status.
“Cristler highlights the fact that the trial
court’s instruction emphasized the importance of the right of an employer to
control the details of the work, without
explaining that, in Borello [v Department of Industrial Relations (1989) 48
C3d 341], the Supreme Court concluded
that the control of the details factor was
not necessarily dispositive in every circumstance... [T]he trial court, after listing the pertinent factors [to consider in
assessing the plaintiffs’ status] was
permitted to allow the jury to apply the
factors as it saw fit and was not required
to frame the jury’s deliberations in precisely the fashion preferred by Cristler.
“Cristler contends that the trial court
abused its discretion in allowing testimony regarding the ability of the class
members ... to earn increased profit as
independent contractors. We conclude
that Cristler has failed to carry [the]
burden of demonstrating reversible error... [¶] If the appellant fails, as here,
even to identify the specific testimony
that was allegedly erroneously admitted, much less craft an argument intended to show why that testimony was
both objectionable and sufficiently prejudicial to warrant reversal, the challenge
must fail.”
For plaintiffs: Pope, Berger & Williams,
A. Mark Pope and Aaron A. Hayes; Jon
R. Williams.
For defendant: Littler Mendelson, Robert G. Hulteng and Damon M. Ott.
by Irion with Nares and Aaron concurring; 2009 DAR 2132, 2009 WL
154801.
THERAPIST DISCHARGED FOR
COMPLAINING OF UNSAFE
WORK CONDITIONS AT JUVENILE
GROUP HOME COULD ASSERT
WTVPP CLAIM WITHOUT
EXHAUSTING ADMINISTRATIVE
REMEDIES OF CHILD DAY CARE
ACT
BOSTON v PENNY LANE CENTERS,
INC. “In this wrongful termination lawsuit,” the Second District, Division Four,
wrote in an opinion filed on January 27,
“the jury returned a verdict for plaintiff
and respondent LaToya Boston. Defendant ... moved for [JNOV] or, alternatively, a new trial; the trial court denied
both motions. Penny Lane appeals from
the final judgment on two grounds. It
contends, first, that Boston’s claim is
barred by her failure to exhaust the
administrative remedy set forth in Health
and Safety Code section 1596.882, and,
second, that the trial court committed
reversible error by allowing Boston’s
expert witnesses to testify at trial.”
The case was brought by a therapist
formerly employed by a social services
agency that operates group homes for
juveniles with criminal histories and histories of violent behavior. The plaintiff
had been terminated after she was injured in a fight and complained that
understaffing had created an unsafe
work environment. After a jury trial, a
special verdict was returned finding for
the plaintiff on a wtvpp claim and awarding her $500,000 in compensatory and
$200,000 in punitive damages. The court
continued:
“We conclude that Boston did not bring
her claim under Health and Safety Code
sections 1596.881 and 1596.882, and
therefore is not limited to the administrative remedy set forth in section
1596.882. We also conclude that the
trial court acted within its discretion by
admitting the testimony of Boston’s
expert witnesses. We shall affirm the
judgment.
“Boston does not reference Health and
Safety Code sections 1596.881 and
1596.882 [provisions of the California
Child Day Care Act], nor did her case at
trial rely on Penny Lane having violated
the law governing staff-child ratios. Nonetheless, Penny Lane reasons that because Boston’s workplace safety concerns had to do with inadequate staffing, Boston is limited as a matter of law
to pursuing her claim under [those statutes].
“We note at the outset that the record is
unclear as to whether Penny Lane is
subject to the Act... The record ... is
inadequate to resolve this question;
however, we need not resolve it in light
of our conclusion that the Act, even if
applicable, does not bar Boston’s action for wrongful discharge in violation of
the public policy favoring workplace
safety...
“The heart of Boston’s claim is not
whether she was retaliated against for
objecting to Penny Lane’s noncompliance with staffing ratios; it is whether
Boston was retaliated against for objecting to an unsafe working environment... [¶] Boston could, and did, vindi(Cont'd on Page 5, DECISIONS)
-4-
DECISIONS
(From Page 4)
cate her right to a safe workplace using
the common law tort of wrongful discharge, which preexisted and was separate from the cause of action created by
Health and Safety Code sections
1596.881 and 1596.882.
“Penny Lane next contends that ...
Boston failed to timely produce her
experts’ reports and writings in compliance with Code of Civil Procedure section 2034.270... [¶] In this case, the trial
court specifically found that Boston’s
production of expert reports and writings after the specified date was not
unreasonable. Penny Lane does not
contend that Boston engaged in a pattern of behavior designed to impede
expert discovery. Nor does the record
indicate that Boston was acting in bad
faith when she was examined by her
experts after the specified date or that
she instructed her experts to delay the
creation of their reports and writings.
Once Boston’s attorneys received the
reports and writings from their experts,
they turned them over to Penny Lane
within about a day.
“Penny Lane was given timely notice of
the identity of Boston’s experts and the
general substance of their expected
testimony... Nonetheless, Penny Lane
opted not to depose the experts and did
not counter-designate any experts of its
own... [¶] Penny Lane admitted it had
made a strategic choice not to depose
Boston’s expert witnesses for financial
reasons. The trial court appropriately
considered this, along with Boston’s
prompt production of the reports once
received, and concluded that Boston
had not unreasonably failed to produce
her experts’ reports and writings. Under
the circumstances, we do not find that
it was an abuse of discretion to deny
Penny Lane’s motion to exclude
Boston’s expert witnesses’ opinions.”
For plaintiff: Carney R. Shegerian, Alfred
Hakim, and Norman Pine.
For defendant: Littler Mendelson,
Dominic J. Messiha, Elizabeth Nguyen,
and Meredith Snyder.
Second Dist Div Four, 1/27/09; opinion by Epstein with Manella and
Suzukawa concurring; 2009 DAR
1348, 2009 WL 179799.
TRIAL COURT CORRECTLY
GRANTED ANTI-SLAPP MOTION
DIRECTED AT DEFAMATION
CLAIM BY PSYCHOTHERAPIST
WHOSE DISCHARGE HAD BEEN
ATTRIBUTED TO HER
NEGLIGENCE IN CONNECTION
WITH JAIL INMATE’S SUICIDE
DIBLE v HAIGHT ASHBURY FREE
CLINICS. In an opinion filed on January
26, the First District, Division One, held
that the trial court had correctly granted
an anti-SLAPP motion directed at a
defamation claim by a jail psychotherapist who had been told she was being
discharged for negligence in connection with an inmate’s suicide. Statements to that same effect—that she
was responsible for the inmate’s death—
were made to the Employment Development Department in connection with
her unemployment insurance claim. The
First District wrote in part:
“Plaintiff Leah Dible, a former employee
of defendant ... brings this action alleging, amongst other things, defamation
regarding the termination of her employment. She appeals from the granting of
defendants’ motion brought pursuant to
the anti-SLAPP statute, Code of Civil
Procedure section 425.16. The trial court
found that the alleged conduct arose
from defendants’ exercise of the right of
free speech, passing to plaintiff the
burden of establishing a likelihood of
prevailing upon the merits. It then concluded that plaintiff could not establish
such a likelihood and granted the motion.
“[The alleged communication to the
EDD] was part of an ‘official proceeding.’ [¶] Plaintiff suggests that defendants’ motivations were not solely to
avoid her receiving unemployment compensation, but were ‘intended to silence
me or to discredit me if there were any
investigations and were motivated by a
desire to deflect responsibility as an
institution for the death of [an] inmate...’
Even if that allegation is true, it is
irrelevant to the determination of its
status as protected speech. If the actionable communication fits within the
-5-
definition contained in the statute, the
motive of the communicator does not
matter.
“It is the claim of plaintiff that the EDD
communication is merely ‘collateral’ in
that its real effect is to require her to
republish the claim should she apply for
a new position. While we find no appellate authority upon the issue of whether
republication of a communication otherwise qualifying for section 425.16 protection loses the protection, in this
instance we need not reach that question because there has been no republication. A defamation action does not
exist, of course, for a statement that
one might make in the future.
“[Concerning the plaintiff’s likelihood of
prevailing on the merits,] had EDD concluded from [the employer’s allegedly
defamatory account of the inmate’s
suicide] that plaintiff was not entitled to
unemployment benefits, a cause of
action for damages could most surely
be stated. However, EDD did the opposite. Within a few weeks of receiving the
information, EDD sent to the parties a
notice that it found plaintiff eligible for
benefits because ‘the reasons for ...
discharge did not meet the definition of
misconduct connected with her work.’
Plaintiff presents us with no evidence of
any further action or republication by
EDD.... [¶] Based upon ... the inability
to establish that any damage occurred,
we conclude that plaintiff has not met
her burden of proof as to the merits of
her claim...
“[Concerning the alleged communications to the plaintiff herself,] plaintiff
contends that the possibility of her ‘republishing’ the statement makes it actionable... [¶] Applying the McKinney [v
County of Santa Clara (1980) 110 CA3d
787, 168 CR 89] rule of compulsory selfpublication here..., we see that the
missing element in the instant case is
the lack of any republication... [¶] Here
we are clearly being asked to create a
wider exception for claimants who have
not republished where it is foreseeable
that they might do so in the future. We
decline to do so.”
DECISIONS
(From Page 5)
For plaintiff: Julian T. Lastowski, San
Francisco.
For defendant: Timothy C. Davis, Marguerite E. Meade, El Cerrito.
First Dist Div One, 1/26/09; opinion
by Flinn with Marchiano and
Margulies concurring; 2009 DAR
1291, 2009 WL 161863.
FOURTH DISTRICT REJECTS
ARGUMENT THAT SETTLEMENT
OF DISPUTES ABOUT OVERTIME
COMPENSATION WAS NULL AND
VOID UNDER LABOR CODE
§ 206.5
CHINDARAH v PICK UP STIX, INC. In
an opinion filed on February 26, the
Fourth District, Division Three, wrote in
part as follows:
“In February 2003, two former employees of Pick Up Stix filed a complaint ...
alleging claims for unpaid overtime,
penalties and interest due to the
misclassification of their jobs as exempt from overtime pay. The complaint
was amended in July 2003 to allege a
proposed class action to recover unpaid
overtime on behalf of the plaintiffs and all
other current and former general managers, assistant managers, and lead
cooks employed by Stix between February 28, 1999 through September 2003.
“Stix’s attempt to settle the lawsuit
through mediation failed. Stix then decided to attempt settlement with as
many putative class members as possible. It offered each of them an ‘amount
... based upon a figure ... Stix had
previously offered at the mediation.’ Over
two hundred former and current employees accepted the offer and signed a
settlement agreement, which included
a general release. By signing the agreement, the employee acknowledged that
he or she had spent more than 50% of
the time performing managerial duties,
released Stix from all claims for unpaid
overtime and any other Labor Code
violations during the relevant time period, and agreed ‘not to participate in
any class action that may include ...
any of the released claims...’
“Shortly after the settlement agreements
were signed, the original plaintiffs filed a
second amended complaint including
allegations that the settlement agreements violated numerous provisions of
the Labor Code. Eight current and former
Stix employees who had signed the
settlement agreements joined the proposed class action as plaintiffs (the
Chindarah plaintiffs). Stix filed a crosscomplaint against them, alleging breach
of contract and breach of the settlement
agreement and seeking declaratory relief. Stix then filed its answer to the
second amended complaint, pleading
the release as an affirmative defense.
a civil action the unpaid balance...’
“The Chindarah plaintiffs moved for summary adjudication of the cross-complaint, claiming the releases they signed
were void under Labor Code sections
206 and 206.5. Stix moved for summary
judgment of the complaint, claiming the
releases barred recovery by the
Chindarah plaintiffs. The trial court found
the Labor Code did not prohibit the
release of a claim for unpaid wages
where there is a bona fide dispute over
whether any wages were owed. The trial
court found that because Stix ‘produced
evidence showing a good faith dispute
with regard to classification of the employees,’ it had ‘produced evidence ...
creating a triable issue of fact as to
whether or not [plaintiffs] were owed any
additional wages.’ Finding the releases
valid as a matter of law, the trial court
granted Stix’s motion for summary judgment and denied the motion by the
Chindarah plaintiffs.
“There are no California cases directly
on point. The two that come close are
Reid v. Overland Machined Products
(1961) 55 Cal.2d 203 and Sullivan v. Del
Conte Masonry Co. (1965) 238
Cal.App.2d 630... [¶] In dicta, the [Reid]
court added the language relevant to the
dispute before us: ‘An employer and
employee may of course compromise a
bona fide dispute over wages but such
a compromise is binding only if it is
made after the wages concededly due
have been unconditionally paid.’
“Labor Code section 206.5 provides:
‘An employer shall not require the execution of a release of a claim or right on
account of wages due, or to become
due, or made as an advance on wages
to be earned, unless payment of those
wages has been made. A release required or executed in violation of the
provisions of this section shall be null
and void... Violation of the provisions of
this section by the employer is a misdemeanor.’ Section 1194, subdivision (a)
provides: ‘Notwithstanding any agreement to work for a lesser wage, any
employee receiving less than the legal
minimum wage or the legal overtime
compensation ... is entitled to recover in
-6-
“The Chindarah plaintiffs contend the
release is void as a matter of law to the
extent it releases claims for any wages
actually due and unpaid and to the
extent it constitutes an agreement to
work for less than the overtime compensation actually due and unpaid. The
Plaintiffs claim ‘wages actually due and
unpaid’ means wages that are disputed,
if they are ultimately found to be owing.
In other words, the Plaintiffs claim any
settlement of a dispute over overtime
compensation runs afoul of sections
206.5 and 1194.
“The Chindarah plaintiffs ... point out
that Reid did not mention section 206.5,
reasoning that it had been enacted after
the underlying events in the case. And
although Sullivan mentioned section
206.5, they contend it did not rely on it
for the result. Consequently, they dismiss the language in both cases about
the ability to compromise a bona fide
dispute over wages as dicta. They argue because section 206.5 does not
use the phrase ‘concededly due,’ it
must refer to all disputed wages... [¶]Federal courts applying California law have
used Reid and Sullivan to uphold releases of disputed wage claims. (cites
omitted.)
“Section 1194 embodies a public policy
... to protect workers from employer
coercion to forego overtime. (Gentry v.
Superior Court, supra, 42 Cal.4th at
p.456.) This public policy is not violated
by a settlement of a bona fide dispute
over wages already earned. The releases here settled a dispute over
DECISIONS
(From Page 6)
whether Stix had violated wage and
hour laws in the past; they did not
purport to exonerate it from future violations. Neither did the releases condition
the payment of wages concededly due
on their executions. The trial court correctly found the releases barred the
Chindarah plaintiffs from proceeding with
the lawsuit against Stix.”
[Editor’s note: in a CELA Listserv posting on February 26, Michael Walsh
wrote concerning the Pick Up Stix decision: “If the employer pays employees
a pittance in exchange for a release, the
wage claims are gone. This opinion is a
disaster. Every employer is going to be
trying this tactic now if it doesn’t get
depublished or reviewed.”]
For plaintiffs: Joseph J. Gigliotti; Rudolfo
Ginez and John F. Grotz.
For defendants: Shea Stokes, Maria C.
Roberts, Shirley A. Gauvin, Stacey M.
Cooper, and Arch Y. Stokes.
For CELA as amicus: Employment
Rights Attorneys and Richard D.
Schramm.
Fourth Dist Div Three, 2/26/09; opinion by Sills with Rylaarsdam and
Moore concurring; No. G037190,
2009 DAR____, 2009 WL ____.
NINTH CIRCUIT
WITHOUT DECIDING
RETROACTIVITY OF ADAAA,
NINTH CIRCUIT HOLDS THAT
DISTRICT COURT ERRED IN
CONCLUDING THAT PLAINTIFF’S
DIABETES DID NOT CREATE
SUBSTANTIAL LIMITATION IN
MAJOR LIFE ACTIVITY OF EATING
ROHR v SALT RIVER PROJECT
AGRIC. IMPROVEMENT AND POWER
DIST. Reversing summary judgment in
an opinion filed on February 13, the
Ninth Circuit held that the district court,
(D Ariz), erred in concluding that the
plaintiff, an insulin-dependent type 2
diabetic, was neither “disabled” nor a
“qualified individual” under the ADA.
(The district court’s unpublished opinion appears at 2006 WL 1990844). The
Ninth Circuit wrote in part:
“At the outset, we note that on September 25, 2008, while this decision was
pending, the ADA Amendments Act of
2008 (‘ADAAA’) was signed into law...
[¶] Although the ADAAA, if applicable,
would provide additional support for
Rohr’s claims in this case, we hold that,
even under pre-ADAAA case law, Rohr
provided sufficient evidence that he was
a ‘qualified individual’ with a ‘disability’
under the ADA to survive summary
judgment. We therefore need not decide whether the ADAAA, which took
effect on January 1, 2009, applies retroactively to Rohr’s claims.
“Diabetes is ‘physical impairment’ because it affects the digestive, hemic
and endocrine systems, and eating is a
‘major life activity.’ [cite omitted.]
Whether Rohr’s diabetes substantially
limits his eating is an ‘individualized
inquiry.’ [cite omitted.] Once an impairment is found, the issue is whether
Rohr’s diabetes substantially limits his
activity of eating. We find that the district court erred in concluding that it did
not.
“The record is replete with statements,
both by Rohr and his doctors, that to
manage his disease Rohr is required to
strictly monitor what, and when, he
eats. Rohr stated that these restrictions constrain him every day... [¶] The
district court oversimplified Rohr’s condition when it opined that ‘if he stays on
his medicines and watches what and
when he eats the only limitation on his
activities are the work-related restrictions recommended by his physicians...’
“If daily insulin injections alone more or
less stabilized Rohr’s blood sugar levels, such that any limitation imposed on
his diet would be minor, then Rohr’s
major life activity of eating might not be
substantially limited... However, Rohr
has alleged substantial limitations on
his eating in spite of his medicine and
insulin... [¶] It is simply no answer to
say that ‘if he strictly controls his diet’
he is not substantially limited; for Rohr,
the effort required to control his diet is
itself substantially limiting.
“Because we have reached our conclusions separate and apart from the
ADAAA, we need not determine whether
the amendment has retroactive effect.
Nevertheless, because the ADAAA
sheds light on Congress’ original intent
when it enacted the ADA, a brief discussion of the amendment is appropriate.
“[P]erhaps most significantly, the
ADAAA rejects the requirement in
Sutton [v United Air Lines, Inc. (1999)
527 US 471] that whether an impairment substantially limits a major life
activity is to be determined with reference to mitigating measures. The
ADAAA makes explicit that ...
[i]mpairments are to be evaluated in
their unmitigated state, so that, for example, diabetes will be assessed in
terms of its limitations on major life
activities when the diabetic does not
take insulin injections or medicine and
does not require behavioral adaptations
such as a strict diet... [¶] While we
decide this case under the ADA, and
not the ADAAA, the original congressional intent as expressed in the amendment bolsters our conclusions.
“The district court [also] concluced that
Rohr was not qualified for his position as
a welding metallurgy specialist because
beginning in 2003 he did not obtain the
required annual respirator certification.
We disagree... [¶] Salt River has failed
to show that the respirator certification
test was job-related and a business
necessity, and because the test tended
to screen out an individual with diabetes-related high blood pressure, Salt
River has not established that it is
entitled to summary judgment...”
For plaintiff: Linda D. Skon, Mesa.
For defendant: John J. Egberg, Phoenix.
Baer joined by Paez and Berzon;
2009 DAR 2196, 2009 WL 349798.
-7-
DECISIONS
(From Page 7)
NINTH CIRCUIT SUBMITS
CERTIFIED QUESTIONS TO
CALIFORNIA SUPREME COURT
REGARDING APPLICATION OF
LABOR CODE AND UCL TO
WORK PERFORMED IN
CALIFORNIA BY NON-RESIDENTS
SULLIVAN v ORACLE CORP. On February 17, the Ninth Circuit withdrew its
November 6, 2008 opinion, (547 F3d
Nov 08, p.7), and issued an order requesting the California Supreme Court
to answer the following three certified
questions of California law:
(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 Bus & Prof Code § 17200 apply
to the overtime work described in question one?
(3) Does § 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?
The November 6 panel decision by W.
Fletcher had concluded that the Labor
Code’s overtime provisions and
California’s Unfair Competition Law do
apply to work performed in California by
non-residents. The case involves overtime claims by three workers, residents
of Colorado and Arizona, employed to
train Oracle customers in the use of its
software, who had been misclassified
for a number of years as exempt teachers. “California ... has an interest,”
Fletcher wrote, “in the effect compensation for nonresidents working in California will have on the compensation for
California residents... [¶] Oracle argues
that California’s Labor Code may not be
applied to Plaintiffs’ work in California
without violating the Due Process Clause
of the Fourteenth Amendment and Dormant Commerce Clause. Neither argument has merit.”
For plaintiffs: Charles Scott Russell,
Robert Thompson, Callahan McCune &
Willis, Tustin.
For defendants: Stephen L. Berry, Paul
W. Cane, Jr., Paul, Hastings, Janofsky
& Walker, Costa Mesa.
Ninth Circuit, 2/17/09; 2009 WL 367626
(submitting certified questions).
REHEARING EN BANC IS DENIED
IN CASE IN WHICH PANEL HELD
THAT STORED COMMUNICATIONS
ACT AND CONSTITUTIONAL
PRIVACY PROVISIONS WERE
VIOLATED BY REVIEW OF
POLICE OFFICER’S TEXT
MESSAGES
QUON v ARCH WIRELESS, INC. On
January 27, the Ninth Circuit denied a
petition for rehearing en banc, letting
stand the June 18 panel decision that
held that the Stored Communications
Act, (18 USC §§ 2701-2711), as well as
constitutional privacy provisions, were
violated by the Ontario Police
Department’s review of a police
sergeant’s text messages. The panel
decision by Wardlaw, joined by
Pregerson and Leighton, appears at
529 F3d 892, and was summarized in
CELA Bulletin, July 08, p.3.
The Central District, (445 FS2d 1116),
had granted summary judgment for the
wireless provider on the SCA claim, and
had entered judgment in favor of the
remaining defendants on Fourth Amendment and related state law claims, following a jury’s determination that the
Police Chief’s intent in ordering review
of the text messages had been merely
to determine the efficacy of the usage
limit imposed upon employees, not to
uncover misconduct.
Affirming and reversing the Central District in parts, the Ninth Circuit panel
held: (1) Arch was an “electronic communication service” under the SCA, not
a ‘remote computing service’ as the
-8-
district court had found, and had violated the SCA by releasing archived
transcripts to the City; (2) Quon had a
reasonable expectation of privacy in his
text messages; (3) the scope of the
department’s search was unreasonable
and violative of the Fourth Amendment;
(4) the police chief was entitled to qualified immunity on the Fourth Amendment claim; and (6) the City and the
department were not protected by statutory immunity against a California Constitutional privacy claim.
Circuit Judge Ikuta filed an opinion dissenting from the denial of rehearing en
banc, in which he was joined by
O’Scannlain, Kleinfeld, Tallman,
Callahan, Bea, and N. R. Smith. The
dissent disagreed with the panel’s conclusion that Quon had a reasonable
expectation of privacy in the text messages at issue, and insisted that the
Fourth Amendment does not require
the government to use the “least intrusive means” when conducting a “special needs” search.
Concurring in the denial of rehearing en
banc, Wardlaw responded to Ikuta’s
dissent in part as follows: “No poet ever
interpreted nature as freely as Judge
Ikuta interprets the record on this appeal. The dissent is not bound by the
facts, even those found by the jury... I
write only to correct the seriously flawed
underpinnings of the dissent and to
demonstrate that our opinion carefully
and correctly applied the tests set forth
in O’Connor v. Ortega, 480 U.S. 709
(1987).”
For plaintiffs: Zahra Khoury, Michael A.
McGill, Lackie & Dammeier, Upland.
For defendants: Barry J. Blonien, Matthew A. Brill, Latham & Watkins, Washington DC; Kent J. Bullard, Greines
Martin Stein & Richland, Los Angeles;
Dimitrios C. Rinos, Tustin; Bruce E.
Disenhouse, Kinkle Rodiger & Spriggs,
Riverside.
Ninth Circuit, 1/27/09; 2009 DAR 1356,
2009 WL 224544 (denying petition for
reh’g en banc).
DECISIONS
(From Page 8)
OAG’s OFFICE DID NOT VIOLATE
STAFF ATTORNEY’S
CONSTITUTIONAL RIGHTS WHEN
IT DENIED HER PERMISSION TO
REPRESENT CO-WORKER IN
PRIVATE MALPRACTICE ACTION
GIBSON v OFFICE OF THE ATTORNEY GENERAL. In an opinion filed on
January 27, a Ninth Circuit panel affirmed the Central District’s granting of
a motion to dismiss a § 1983 claim
brought by a lawyer with the Office of the
Attorney General of the State of California challenging an internal policy of the
OAG according to which its lawyers
must obtain permission in advance to
engage in the private practice of law.
The OAG had informed the plaintiff that
she would be fired if she continued the
private representation of an OAG paralegal in a malpractice action against the
paralegal’s divorce lawyer. The court
wrote in part as follows:
“Filing a legal malpractice claim against
a private lawyer in connection with a
private divorce matter is not an ‘issue of
public concern.’ The malpractice action
did not involve any suggestion of government malfeasance; nor did it purport to
inform the public about the operation of
government; nor was it relevant to the
public’s evaluation of a governmental
agency’s performance; nor did it challenge the conduct of any government
official or agency, but only that of GoodeParker’s divorce lawyer... The mere fact
that the action potentially could have
affected the divorce lawyer’s bar disciplinary record does not transform the
litigation into a matter of political, social, or other concern to the public at
large. The action remained an individual
grievance that did not bear on the public’s
evaluation of a public agency.
“Because Plaintiff’s speech here, filing
a private malpractice action, does not
qualify as an ‘issue of public concern,’
it is not constitutionally protected
speech in the context of public employment... Therefore we hold that Defendants did not violate Plaintiffs’ constitutional rights when they denied Gibson
permission to represent Goode-Parker
in her private malpractice action.
“Plaintiffs also argue more generally
that the OAG’s policy regarding outside
litigation by its public lawyers who wish
to represent themselves or others in
private litigation ... constitutes an improper prior restraint on their speech by
‘chilling’ the speech of others who are
not before the court. We are not persuaded... [¶] Because the OAG’s policy
serves legitimate government interests
and does not unduly restrict its employees’ constitutional rights, we hold that
the policy is not an improper prior restraint on speech.
“The district court, holding that Plaintiffs’ action was ‘frivolous’ or ‘meritless’
... awarded attorney fees to Defendants
pursuant to 42 U.S.C. § 1988. We hold
that the district court erred in so characterizing Plaintiffs’ claims... [¶] [N]o precedent in our circuit would have signaled to Plaintiffs that they should not
bring this claim at all. Because Plaintiffs raised a question that was not
answered clearly by our precedent, we
hold that their claim was not frivolous...”
For plaintiff: Paula Lauren Gibson, Los
Angeles, in pro per.
For defendants: Stephanie L. Quinn,
Randolph Cregger & Chalfant, Sacramento.
Graber joined by Reed; concurring
and dissenting opinion by Clifton;
2009 WL 174915.
“Ahlmeyer filed a complaint ... alleg[ing]
that Ahlmeyer, who was over forty years
old, was not allowed to take classes
during work hours and was denied requests for an assistant, unlike her
younger coworkers. Ahlmeyer also contended she was written up and given
substandard evaluations based on actions for which younger employees were
not reprimanded. The complaint contained three claims, only one of which is
at issue in this appeal: the NSHE violated the ADEA.
“The NHSA and [supervisor] Reed moved
for partial summary judgment on
Ahlmeyer’s ADEA claim, on the basis
that the claim was barred by the Eleventh Amendment... In response,
Ahlmeyer moved to amend her complaint and replace the ADEA claim with
a § 1983 claim against Reed personally, based on claimed age discrimination in violation of the Equal Protection
Clause. Under Kimel v. Florida Board of
Regents, 528 U.S. 62 (2000), the district court concluded Ahlmeyer’s ADEA
claim was barred by the Eleventh
Amendment... The district court also
denied Ahlmeyer’s motion to amend
her complaint, holding the ADEA creates an exclusive remedy for age discrimination by employers; no claim for
relief for age discrimination exists under
§ 1983... [¶] Ahlmeyer contends the
ADEA does not preclude her § 1983
claim against Reed individually.
STATE EMPLOYEE WHOSE
ADEA CLAIM WAS BARRED BY
ELEVENTH AMENDMENT COULD
NOT ASSERT AGE
DISCRIMINATION CLAIM UNDER
42 USC § 1983
“While this court has not ruled whether
the ADEA is the exclusive remedy for
age discrimination in employment
claims, every other circuit to consider
the question has so held. The leading
case ... is Zombro v. Baltimore City
Police Department, 868 F.2d 1364 (4th
Cir. 1989). We find the reasoning of
Zombro particularly persuasive.
AHLMEYER v NEVADA SYSTEM OF
HIGHER EDUCATION. A state employee whose ADEA claims had been
dismissed on Eleventh Amendment
grounds could not assert a parallel claim
under 42 USC § 1983, the Ninth Circuit
held in an opinion filed on February 18.
The panel opinion by Bea reads in part
as follows:
“We hold the ADEA is the exclusive
remedy for claims of age discrimination
in employment, even those claims with
their source in the Constitution. Therefore, the district court did not abuse its
discretion by dismissing Ahlmeyer’s
motion to amend her complaint as futile.”
-9-
DECISIONS
(From Page 9)
For plaintiff: Jeffrey A. Dickerson, Reno.
For defendant: Mary Phelps Dugan,
General Counsel, Nevada System of
Higher Education.
Bea joined by Noonan and W.
Fletcher; 2009 DAR 2308, 2009 WL
385875.
PUBLIC EMPLOYEE’S EVIDENCE
DID NOT SUPPORT REASONABLE
FINDING THAT BIASED
SUPERVISOR’S ANIMUS WAS
SUBSTANTIAL FACTOR IN
TERMINATION DECISION
LAKESIDE-SCOTT v MULTNOMAH
COUNTY. “This appeal involves an alleged retaliatory discharge of an employee after she complained about coworkers and one of her supervisors and
presents a question that this circuit has
not yet answered: Can a final decision
maker’s wholly independent, legitimate
reason to terminate an employee insulate from liability a lower-level supervisor involved in the process who had a
retaliatory motive to have the employee
fired? We conclude that, on the record
in this case, the answer must be yes,
because the termination decision was
not show to be influenced by the
subordinate’s retaliatory motives.
“The plaintiff-appellee, Lea LakesideScott, was fired from her position as an
information systems specialist ... ostensibly for her improper use of DCJ’s
computers and email system. Scott
then brought this lawsuit alleging that
her termination was actually in retaliation for her engaging in speech protected under the First Amendment and
by Oregon’s whistleblower protection
statute. While she was employed at
DCJ, Scott had complained about coworkers’ violations of County policies,
including by one of her supervisors—
Jann Brown—whom she also accused
of favoring gay and lesbian employees
in hiring and promotion decisions. Brown
played a role in the process that led to
Scott’s termination, although the ultimate decision was made independently
by Joanne Fuller, director of DCJ’s information systems department. Scott con-
tends that Brown wanted to retaliate
against Scott for her accusations against
Brown, and thus unlawfully influenced
Fuller’s decision to fire Scott.
“Scott filed her retaliatory discharge
claim against the County and Brown in
federal district court. After a trial, a jury
found in Scott’s favor, awarding her
$650,000 in compensatory and punitive
damages against Brown... We conclude there was insufficient evidence to
support the verdict against Brown, given
the evidence that it was Fuller’s independent decision to terminate Scott.
We therefore reverse the district court’s
denial of Brown’s JMOL and remand for
entry of judgment in her favor.
“In Gilbrook [v City of Westminster (9th
Cir 1999)177 F3d 839] we established
that a ‘subordinate cannot use the nonretaliatory motive of a superior as a
shield against that liability if that superior never would have considered a dismissal but for the subordinate’s retaliatory conduct.’ 177 F.3d at 855. We
expressly declined, however, to decide
‘what the result should be, as a matter
of law, if the facts showed that the final
decision-maker made a wholly independent, legitimate decision to discharge
the plaintiff, uninfluenced by the retaliatory motives of a subordinate.’ Id.; see
also Ostad [v Oregon Health Sci. University (9th Cir 2003) 327 F3d 876] at
883.
“The facts before us here show a workplace in which the initial report of possible employee misconduct came from
a presumably biased supervisor, but
whose subsequent involvement in the
disciplinary process was so minimal as
to negate any inference that the investigation and final termination decision
were made other than independently
and without bias... [¶] [N]either Brown’s
role in the events leading up to the
investigation nor the evidence of her
participation in that inquiry rises to the
level of involvement in or influence on
Fuller’s termination decision that would
allow the jury reasonably to find that
Brown’s animus was a ‘substantial’ or
‘motivating factor’ in Fuller’s decision to
fire Scott... Instead, the record of Fuller’s
independent actions and judgments
-10-
compels the conclusion that she was
not influenced by any retaliatory motive
on Brown’s part.”
In a separate opinion concurring in the
result, Berzon wrote: “Because I would
hold that Scott presented sufficient evidence from which a jury could have
concluded that her protected conduct
was a ‘substantial or motivating factor’
in her termination, I would reach the
question whether Brown established
the affirmative defense ... that required
Brown to demonstrate ... that ‘the disciplinary action would have been taken
against [Scott] even in the absence of
the protected conduct.’ (cite omitted.)
[¶] Brown met that burden here...”
For plaintiff: George P. Fisher, Portland.
For defendant: Jenny M. Morf, Katie A.
Lane, Assistant County Attorneys,
Portland.
Fisher joined by Barzilay with
Berzon concurring in judgment; 2009
DAR 2161, 2009 WL 331460.
REHEARING EN BANC IS
ORDERED RE CERTIFICATION OF
CLASS ASSERTING SEX
DISCRIMINATION CLAIMS
AGAINST WAL-MART
DUKES v WAL-MART. On February
13, the Ninth Circuit announced rehearing en banc in the case in which a threejudge panel, in December of 2007, affirmed an order certifying a class of
current and former Wal-Mart employees who are asserting sex discrimination claims. (The panel opinion by
Pregerson, joined by Hawkins, with
Kleinfeld dissenting, appeared at 509
F3d 1168, and was summarized in CELA
Bulletin, Dec 07, p.2.)
For plaintiffs: The Impact Fund; Cohen,
Milstein, Sellers and Toll; Equal Rights
Advocates; Davis, Cowell and Bowe;
Tinkler & Firth; Bennett & Kosh; The
Public Justice Center.
Ninth Circuit, 2/13/09; 2009 WL 365818
(ordering rehearing en banc).
DECISIONS
(From Page 10)
UNPUBLISHED
CALIFORNIA COURT OF
APPEAL DECISIONS
SECOND DISTRICT AFFIRMS
JUDGMENT FOR FIREFIGHTER
ON RETALIATION CLAIMS
BRESSLER v CITY OF LOS ANGELES. In an opinion filed on January 29,
the Second District, Division Two, affirmed a judgment following a jury verdict and awards totaling $1,730,848 in
favor of an employee of the Los Angeles
Fire Department on claims for retaliation and failure to prevent retaliation.
The court wrote in part as follows:
“Bressler’s claims ... were based on
[his] allegations that the city and several of its employees retaliated against
[him] after he (1) reported a sexually
inappropriate comment made by Captain II Weley Elder; and (2) made verbal
and written reports about discrimination
and harassment directed at Firefighter
Brenda Lee, an African-American lesbian.
“The city contends that the trial court
erred in denying its motion for nonsuit
on Bressler’s retaliation claim because
(1) Bressler was not subjected to an
adverse employment action concerning
his reporting of Elder’s sexually inappropriate comment; and (2) no substantial evidence exists from which a reasonable jury could infer unlawful retaliatory motivation on the part of the relevant decisionmakers. The city further
contends that ... the city proffered a
legitimate, nonretaliatory reason for every employment action taken against
Bressler. Finally, the city contends that
because Bressler failed to present sufficient evidence on the underlying retaliation claim, the trial court erred in denying the city’s motion for nonsuit on the
failure to prevent retaliation claim.
“[Concerning adverse employment actions] [w]e begin by noting that we need
not analyze the actions taken against
Bressler separately. Instead, we follow
the Supreme Court’s mandate to ‘consider [the employee’s] allegations col-
lectively.’ (Yanowitz [v L’Oreal USA,
Inc.] 36 Cal.4th at p.1056.)
“The facts presented by Bressler show
that any number of the actions taken by
the city—giving unjustifiably low marks
on a performance evaluation; issuing
two notices to improve and a reprimand;
issuing a development prescription; restricting time off; requesting a transfer
on allegations of mental illness; and
ultimately giving an unsatisfactory performance evaluation—are acts which
are ‘reasonably likely to impair
[Bressler’s] job performance or prospects for advancement or promotion.’
(Yanowitz, supra, 36 Cal.4th at pp.
1054-1055.) [¶] [The] evidence ... sufficiently established this element of
Bressler’s prima facie case.
“[W]e [also] find that Bressler provided
sufficient evidence linking each protected activity to the adverse events
that followed.... [¶] While knowledge
and proximity in time is one way of
showing a causal link, nothing in [McRae
v Department of Corrections and Rehabilitation (2006) 142 CA4th 377] suggests that proximity in time is a requirement for proving a causal link. Here,
instead, Bressler showed the required
link with more direct evidence.
“[T]he city presents no authority that
the individual about whom the employee
complains must be the same individual
who takes the retaliatory action. Here,
the employment actions were taken by
individuals in a position of authority over
Bressler. The evidence showed that
they knew of Bressler’s protected activity and were influenced by Elder in
making their decisions... This evidence
was more than sufficient to show that
Elder’s retaliatory animus provoked
negative employment actions which were
part of the ‘course of conduct’ that
ultimately ended Bressler’s career.
“In discussing the adverse employment
actions allegedly linked to Bressler’s
reporting of discrimination against Lee,
the city argues that there is no causal
link because there was no evidence of
retaliatory motive on the part of the
relevant decisionmakers... [¶] We reiterate that established law directs that
-11-
‘we may not confine our consideration
to isolated bits of evidence, but must
view the whole record in a light most
favorable to the judgment...’ (McRae,
supra, 142 Cal.App.4th at p. 389.) ... [¶]
The individual decisonmakers’ knowledge of Bressler’s protected activities,
coupled with the proximity in time to the
adverse employment actions..., was
sufficient for Bressler to meet the ‘causal
link’ element of his prima facie case of
retaliation.
“The city next argues that the city proffered a legitimate, nonretaliatory reason for every employment action..., and
that Bressler failed to dispute these
reasons. In essence, the city argues
that the trial court’s decision to deny the
motion for nonsuit was based on nothing more than Bressler’s belief that he
was retaliated against.
“If an employer shows a legitimate,
nonretaliatory reason..., the burden
shifts back to the employee... However,
on a motion for nonsuit, the court must
disregard all conflicting evidence and
indulge every legitimate inference in
favor of the party against whom the
motion is directed... Thus, we may
justifiably give little weight to the city’s
evidence of the legitimate, nondiscriminatory reasons..., provided that Bressler
has presented conflicting evidence of
ponderable legal significance... [¶]
Bressler has provided such evidence...”
For plaintiff: Robert Kitson and Genie
Harrison; Norman Pine and Janet
Gusdorff.
For defendant: Paul L. Winnemore,
Deputy City Attorney.
Second Dist Div Two, 1/29/09; opinion by Chavez with Doi Todd and
Ashmann-Gerst concurring; 2009 WL
200242 (unpublished).
DECISIONS
(From Page 11)
REJECTING WORKERS’ COMP
EXCLUSIVITY ARGUMENT,
JUDGMENT FOR PLAINTIFF ON
NEGLIGENT RETENTION AND
ASSAULT CLAIMS
DUFFY v TECHNICOLOR ENTERTAINMENT SERVICES, INC. “Defendant ...
appeals from an order denying its motion for [JNOV] as to causes of action for
negligent retention and supervision and
for assault brought by plaintiff Eugene
Duffy and from the subsequently entered judgment for Duffy. We conclude
that Duffy’s injuries sustained as a result of Technicolor’s negligent retention
and supervision of Duffy’s coworker
assailant did not arise out of and occur
in the course of his employment. Therefore the exclusive remedy provision of
the Workers’ Compensation Act ... did
not bar plaintiff’s civil action... Regard-
ing Duffy’s second claim against
Technicolor for damages from injuries
from two verbal assaults by the coworker, we conclude that substantial
evidence supports the jury’s finding that
there were willful physical assaults on
Duffy and that those assaults fell within
the exception to Workers’ Compensation coverage in section 3602, subdivision (b)(1). We therefore affirm the judgment for Duffy on the claims for negligent retention and supervision and for
assault.
“[Because] Duffy’s injuries occurred after his work had ended, at his home,
and in circumstances in which he was
not working, performing any service for
his employer, or engaging in any activity in furtherance of his employer’s business, the ‘conditions of compensation’
in section 3600, subdivision (a)(2) did
not ‘concur’ and the Workers’ Compensation Act does not provide the exclu-
sive remedy for Duffy’s injuries. Consequently we find no error in the trial
court’s denial of motions for nonsuit,
directed verdict, and JNOV on this
ground.
“Technicolor also claims that Duffy failed
to establish that the ‘willful physical
assault’ exception of section 3602, subdivision (b)(1) applied... [¶] [There] was
sufficient evidence to satisfy the definition in Gunnell [v Metrocolor Laboratories, Inc. (2001) 92 CA4th 710] of physical assault as occurring when someone
engages in ‘physical conduct which a
reasonable person would perceive to be
a real, present and apparent threat of
bodily harm.’”
[Note: The trial attorneys were CELA
members Michael Baltaxe (Calabasas),
James Autrey (Hermosa Beach), and
Lauren Abrams (Beverly Hills.]
AGE DISCRIMINATION COMPLAINTS ARE FILED BY 100 LAID-EMPLOYEES OF
LAWRENCE LIVERMORE LABS
The following press release was issued
on February 4 by the firm of Gwilliam,
Ivary, Chiosso, Cavalli & Brewer, Oakland.
On February 4, 2009, the Law Firm of
Gwilliam, Ivary, Chiosso, Cavalli &
Brewer filed Complaints of Discrimination on behalf of 100 clients against
Lawrence Livermore National Security,
LLC, the private company that operates
the Lawrence Livermore National Lab,
for age discrimination in massive layoffs
that took place on May 22 and May 23,
2008.
At that time, LLNS laid off approximately 440 employees, the vast majority of whom were the Lab’s most senior
and experienced employees. These
former Lab employees include administrative assistants, maintenance workers, engineers, and senior scientists.
All of them were selected by the Lab to
lose their jobs because they were older
workers who were approaching retirement age. These former employees are
out of work at a stage in life when finding
new employment is particularly challenging. Most of them will suffer a severe financial hit in the amount of retirement income and benefits they will
eventually receive because of their forced
premature “retirement.”
The layoff selection process used by
the Lab was illegal. The Lab failed to
minimize the impact of the layoffs on
the workforce, as required by federal
law, by seeking voluntary separations
from the entire labor pool. (Section 3161
of the National Defense Authorization
Act for Fiscal Year 1993.) Instead, the
Lab excluded approximately forty percent of the workforce from its voluntary
separation program, ensuring that layoffs would be necessary for employees
who wished to remain on the job.
The Lab classified workers into small
“business units” which bore little or no
relation to their actual job categories, in
order to circumvent layoff seniority rules.
Those rules require employees to be
ranked according to their seniority at
the Lab, as well as by their skills,
-12-
knowledge, and abilities. By classifying
employees in small groups for purposes
of the layoff, the Lab was able to target
older workers who would not otherwise
have been subject to layoff. Approximately 94% of the employees who were
laid off are over the age of 40. This fact
alone demonstrates illegal discrimination.
Today, these targeted older workers are
fighting back by filing complaints with
the California Department of Fair Employment and Housing. At [the February 4] press conference..., representatives of the Society of Professionals,
Scientists & Engineers, Local 11 of the
University Professional and Technical
Employees (SPSE), the union representing many of the laid off workers,
[were] present to share their perspective.
PROFILES
(From Page 14)
45 minutes it became clear that the
harasser was lying, prompting his superior, who was present, to fire him on
the spot. The case settled for a significant sum.
Mark and his wife adopted their 16-yearold son from Russia when he was three.
Though Mark acknowledges that an
employment law practice is “a near allencompassing experience,” he and his
family manage to make time for snow
skiing, travel, opera, symphony, theater, and hiking.
Since 1977 they have bred and campaigned Rottweilers, and their dog
Cruiser is a star, having been the number one winning Rottweiler in the country in the 1990’s, and for several years
a “top ten working dog.” (By analogy,
it’s hard to resist describing Mark as a
“top ten working mediator.")
C O M I N G
E V E N T S
March 20-21, 2009
NELA SPRING SEMINAR:
TAKING AND DEFENDING DEPOSITIONS IN EMPLOYMENT LITIGATION
Sheraton Denver Hotel
Denver, Colorado
(See www.nela.org for information)
March 31, 2009
LACBA ANNUAL LABOR AND EMPLOYMENT LAW SYMPOSIUM
Millenium Biltmore Hotel, Los Angeles
(See www.lacba.org for information—several CELA planners and speakers)
April 29, 2009
Washington DC
(See www.nela.org for details)
May 1, 2009
CELA’s FIFTH ANNUAL ADVANCED WAGE & HOUR SEMINAR
Radisson Hotel at LAX
May 20, 2009
Sacramento
June 24-27, 2009
October 1, 2009
CELA’s PRE-CONFERENCE SEMINAR
Oakland Marriott
October 2-3, 2009
Oakland Marriott
-15-
DECISIONS
(From Page 12)
For plaintiff: John P. Dwyer and Julian
A. Biggs.
For defendant: Loeb & Loeb, Scott M.
Lidman; Dreier Stein & Kahan, Fred B.
Griffin; Greines, Martin, Stein & Richland,
Timothy T. Coates and Lillie Hsu.
Second Dist Div Three, 1/29/09; opinion by Kitching with Croskey and
Aldrich concurring; 2009 WL 204410
(unpublished).
ceive double backpay under the statute,
and the verdict will be increased to
$537,778. Mandatory attorneys’ fees
and substantial costs will also be added.
VERDICTS AND
SETTLEMENTS
The plaintiff, the Housing Authority’s
former Code and Enforcement Attorney,
proved that she had been fired in retaliation for conducting an investigation of
fraud allegedly committed by a HACLA
employee. The jury rejected defense
contentions based on the plaintiff’s probationary at-will status, and the assertion that the firing had been for legitimate
business reasons.
LOS ANGELES JURY AWARDS
$438,889 TO DISCHARGED
HOUSING AUTHORITY ATTORNEY
ON CLAIM UNDER FALSE
CLAIMS ACT’S WHISTLEBLOWER
PROVISION
CORDERO-SACKS v THE HOUSING
AUTH. OF THE CITY OF LOS ANGELES. On February 13, after a threeweek trial and 4.5 hours of deliberations, a Los Angeles County Superior
Court jury awarded a total of $438,889
to a Housing Authority attorney on a
claim under the False Claims Act’s
whistleblower retaliation provision, (Gov
Code § 12653(b)). The plaintiff will re-
HACLA did not engage in settlement
negotiations. While the summary judgment motion was pending, HACLA requested a demand, and the plaintiff
responded with a demand of $675,000,
which was never countered.
the case, having made multiple promises in opening statement that we could
no longer keep.”
For plaintiff: Craig T. Byrnes and Gina
Browne.
For defendant: Charles E. Slyngstad,
Rachel M. Pimentel, Morris Polich &
Purdy.
Los Angeles County Superior Court
(Central), No. BC386177; 2/13/09;
Judge John P. Shook; information
provided by counsel.
•
Attorney’s comments: “This was a tough
case, made tougher by misguided evidentiary rulings by the Court. Because
Ms. Cordero-Sacks was an attorney,
we fought repeated motions about the
admissibility of statements she made
and work that she did. After initially
ruling otherwise, and only after opening
statements, the Court ruled inadmissible the dramatic core of the plaintiff’s
case. We had to re-invent our theory of
NOTES TO MEMBERS
—CELA Lobby Day in Sacramento is
scheduled for May 20, 2009. Details will
appear in next month’s issue, on the
web site (www.cela.org), and on the
listservs. Please reserve this date. CELA
is sponsoring four bills this session and
we need as many volunteers as possible to meet with legislators. For more
information, contact Regina Banks, Legislative Director, ([email protected]).
—As the initial stage of an ongoing
project, a first batch of reports of CELA
member victories at trial, arbitration,
and mediation has been compiled and
posted, for the use of regular CELA
members, in the Members Only section of the CELA website,
(www.cela.org). The goal is to update
the searchable document every three
or four months, and to that end a survey
will be sent to CELA members asking
for additional reports. For further information, or to make suggestions for
improving this new member service,
contact Jennifer Kramer: (213) 9550200 ext. 113; [email protected].
-16-
•
•
Published
Monthly
BULLETIN
March 2009
Vol. 23, No. 3
CALIFORNIA
SUPREME COURT
REVIEW AND REQUEST FOR
DEPUBLICATION ARE DENIED IN
CASE GIVING PLAINTIFF PRECERTIFICATION ACCESS TO
NAMES AND CONTACT INFO
FOR CLASS MEMBERS
WITHOUT OPT-IN OR OPT-OUT
MECHANISM
CRAB ADDISON, INC. v SUPERIOR
COURT (MARTINEZ). On March 18,
the Supreme Court denied a petition
for review and a request for
depublication. The Second District’s
decision, filed on December 30, 2008,
upheld a discovery order requiring the
production of the names of and contact
information for class members, precertification, without either an opt-in or
opt-out procedure. The plaintiffs allege
that the employer misclassified them
for overtime purposes and failed to
provide meal and rest breaks. (The
Second District’s opinion appears at
169 CA4th 958, 87 CR3d 400, and was
summarized in CELA Bulletin, Jan 09,
p.3.)
For plaintiffs: Matthew Righetti, John
Glugoski, and Ellen Lake.
For employer: Epstein Becker & Green,
Michael S. Kun and Ted A. Gehring.
Cal SC, No. S170370; 3/18/08.
CALIFORNIA COURTS
OF APPEAL
ARBITRATION AGREEMENT WAS
“PERMEATED BY UNLAWFUL
PURPOSE” WHERE IT INCLUDED
CLASS WAIVER CONTRARY TO
PUBLIC POLICY AND
UNCONSCIONABLE ARBITRATOR
SELECTION PROVISION
SANCHEZ v WESTERN PIZZA EN-
TERPRISES, INC. In an opinion filed
on March 17, the Second District, Division Three, affirmed the denial of the
employer’s motion to compel arbitration of wage and hour claims by a class
of delivery drivers who allege that they
are paid less than the minimum wage
and are not adequately reimbursed for
expenses. The complaint also alleges
failure to itemize wage statements,
unfair business practices, and conversion. The Court of Appeal wrote in part:
“The trial court determined that a provision ... prohibiting class arbitration was
unenforceable, that other terms of the
agreement were unconscionable, and
that the agreement could not be enforced. Western Pizza contends (1)
the enforceability of the arbitration agreement is a question for the arbitrator to
decide; (2) the FAA preempts California law to the extent that California law
would prevent the enforcement of the
agreement; (3) the class arbitration
waiver does not impermissibly interfere
with the employees’ ability to vindicate
their statutory rights, and therefore is
CELA NEEDS YOUR HELP TO PROMOTE DIVERSITY IN
THE PLAINTIFFS’ EMPLOYMENT BAR
Last year, CELA pioneered a Diversity
Fellows Program to expand our outreach efforts into top law schools and
seek to diversify the membership of
our profession. Our first effort was a
success, raising close to $13,000 from
our generous members, with three Diversity Fellows hired for 2009.
As one CELA member who participated in the first year program, Sarah
Schlehr (Universal City), explained:
“The CELA Diversity Fellows Program
is a great way to meet future civil rights
leaders, help students gain experience,
and get some excellent work product.
One student decided to work with me
during the school year and is producing
outstanding work. I am also looking
forward to working with another student
in the summer. It was hard to know how
to choose, because I wanted to hire
them all! I never would have found them
without this program.”
the success of the program, to further
increase diversity among our membership, and to promote our role as workers’ advocates fighting for equal rights.
In 2009, we expect CELA’s Diversity
Fellows Program to provide tens of
thousands of dollars of scholarships to
law students from under-represented
communities, and further CELA’s outreach to leaders of multi-cultural organizations, students, and new lawyers.
CELA needs your help today to build on
(Cont'd on Page 3, DIVERSITY)
DECISIONS
(From Page 1)
enforceable; and (4) the terms of the
arbitration agreement are neither procedurally nor substantively unconscionable. We reject these contentions...
“The record does not indicate when the
parties signed the [arbitration] agreement. The agreement states that the
execution of the agreement ‘is not a
mandatory condition of employment.’ It
states that any dispute that the parties
are unable to resolve informally will be
submitted to binding arbitration before
an arbitrator ‘selected from the thencurrent Employment Arbitration panel
of the Dispute Eradication Services,’
and that the arbitrator must be approved
by both parties. It states that the parties
waive the right to a jury trial. It also
states that the arbitration fees will be
borne by Western Pizza and, ‘Except
as otherwise required by law, each
party shall bear its own attorney fees
and costs.'
“The arbitration agreement states that
the arbitrator ‘shall be responsible for
resolving any disputes over the interpretation or application of this Arbitration
Agreement.’ It also states, ‘[e]xcept as
expressly provided, the interpretation,
scope and enforcement of this ADR
agreement and all procedural issues
shall be governed by the procedural and
substantive provisions of the [FAA], the
federal decisional law construing the
FAA, and the Rules of the Arbitrator,
provided the Arbitrator’s rules do not
conflict with the FAA.
“The arbitration agreement also provides a procedure for small claims: ‘If
either Party asserts that a dispute involves an amount in controversy that is
too small to warrant resolution by standard arbitration procedures, the claim
may be resolved by a summary small
claims procedure... In no event ... shall
the Arbitrator utilize a Small Claims
Procedure for a dispute involving a claim
in excess of $50,000.
“The arbitration agreement includes a
waiver of class arbitration, stating: ‘the
Arbitrator shall not consolidate or combine the resolution of any claim or dispute ... with the resolution of any claim
by any other party or parties, including
but not limited to any employee of the
Company. Nor shall the Arbitrator have
the authority to certify a class under
Federal Rule of Civil Procedure Rule 23,
analogous state rules, or Arbitrator’s
rules pertaining to class arbitration, and
the Arbitrator shall not decide claims on
behalf of any other party or parties.
“Sanchez’s counsel stated that Sanchez
would submit to arbitration only if the
class arbitration waiver and the provisions for small claims and a referee
were stricken ... and [if] the arbitration
proceeded as a class arbitration before
JAMS or AAA.
“Western Pizza moved to compel arbitration and stay the action... It argued
that both the FAA and the California
Arbitration Act ... required the enforcement of the arbitration agreement.
Sanchez argued in opposition that the
class arbitration waiver was unenforceable under [Gentry] and that the arbitration agreement as a whole was unconscionable because (1) the small claims
procedure allows disputes to be decided without ‘strict application of law’
and using ‘relaxed rules of evidence’; (2)
the arbitration agreement does not require a written arbitration award; (3) the
arbitration panel designated ... has only
one arbitrator, Alan Saler, whose website
includes a testimonial from an attorney
at the former firm of Western Pizza’s
counsel; and (4) the arbitration agreement includes no provision for discovery.”
Responding to the parties’ respective
arguments, the Court of Appeal held:
(1) “[C]onsistent with the rules stated in
Discover Bank v Superior Court (2005)
36 C4th 148, the question whether the
arbitration agreement is enforceable
based on general contract law principles, including the question whether it
is unconscionable or contrary to public
policy, is a question for the court to
decide rather than an arbitrator, regardless of whether the FAA applies.”
(2) “An employee’s statutory right to
reimbursement of job expenses is
-2-
CALIFORNIA
EMPLOYMENT
LAWYERS ASSOCIATION
David J. Duchrow
Suite 305
Tel: (310) 479-5303
FAX: (310) 479-5306
E-mail:
[email protected]
Director:
Christina Krasomil
Encino, CA 91436-2412
Tel: (818) 907-7895
FAX: (818) 907-7474
EXECUTIVE BOARD
(Los Angeles)
Dolores Leal
(Los Angeles)
David DeRubertis
(Woodland Hills)
Steven Pingel
(Long Beach)
Kathy Dickson
(Oakland)
(Laguna Hills)
David Duchrow
(Los Angeles)
Cynthia Rice
(San Francisco)
Wilmer Harris
(Pasadena)
Mika Spencer
(San Diego)
Phil Horowitz
(San Francisco)
James P. Stoneman
(Claremont)
Jean K. Hyams
(Oakland)
Christopher Whelan
(Gold River)
Toni Jaramilla
(Los Angeles)
Jeffrey Winikow
(Los Angeles)
Virginia Keeny
(Pasadena)
Bulletin Editor
Christopher Bello
842 Irving Avenue
Astoria, OR 97103
Ph: (503) 338-3891
DECISIONS
(From Page 2)
unwaivable..., as is the statutory right
to receive minimum wage... Because
this action involves the enforcement of
unwaivable statutory rights, the rule
from Gentry applies... [¶] Our consideration of the factors from Gentry ...
supports the trial court’s decision. First,
any individual recovery ... is likely to be
modest... Second, the delivery drivers
are low wage earners, and the potential
for retaliation against members of the
class who litigate or arbitrate individually is significant... Third, Sanchez presented evidence that most of the drivers are immigrants with limited English
language skills who are likely to be
unaware of their legal rights...”
(3) “[T]he record indicates a degree of
procedural unconscionability in two
respects. First, as in Gentry..., the
inequality in bargaining power ... makes
it likely that the employees felt at least
some pressure to sign the agreement.
Second, the arbitration agreement suggests that there are multiple arbitrators
to choose from ... and fails to mention
that the designated arbitration provider
includes only one arbitrator. This renders the arbitrator selection process
illusory and creates a significant risk
that Western Pizza as a ‘repeat player’
before the same arbitrator will reap a
significant advantage.”
(4) “In light of our conclusion that the
trial court properly decided that the
class arbitration waiver is contrary to
public policy and therefore unenforceable, we need not decide whether that
provision is unconscionable...”
(5) “[As in Gentry] [w]e conclude that
the absence of express provisions requiring a written arbitration award and
allowing discovery does not render the
arbitration agreement unconscionable.
Rather, those terms are implied as a
matter of law.”
(6) “An arbitrator ordinarily has broad
discretion with respect to the procedures and law governing the arbitration... Arbitration procedures violate the
common law right to a fair hearing ‘only
in the clearest of cases...’ (Graham v.
Scissor-Tail, Inc. (1981) 28 Cal.3d 807,
826, fn.23)...[¶]We conclude that the
matters authorized under the small
claims provision are an ordinary inci-
dent of arbitration and that the small
claims provision is not substantively
unconscionable.”
(7) “In our view, the designation of a
‘panel’ of arbitrators consisting of a single
arbitrator selected by Western Pizza
creates a false appearance of mutuality
in the selection of an arbitrator. Moreover, the effective designation of a single
arbitrator ... gives rise to a significant
risk of financial interdependence... We
conclude that this provision is unfairly
one-sided and substantively unconscionable.”
(8) “The arbitration agreement here includes a class arbitration waiver that is
contrary to public policy and an unconscionable arbitrator selection clause...
These are important provisions that, if
they were not challenged in litigation,
could create substantial disadvantages
for an employee seeking to arbitrate a
modest claim. Although it may be true
that neither of these provisions alone
would justify the refusal to enforce the
entire arbitration agreement..., we be(Cont'd on Page 4, DECISIONS)
DIVERSITY
(From Page 1)
We hope we can count on you to
support this important program, which
will only succeed with your financial
contributions, and your commitment to
hire exceptionally qualified CELA Diversity Fellows.
Here is how the program works: CELA
will interview in Fall 2009 at five top law
schools statewide. During this interview process, we will provide information regarding CELA members statewide who are seeking summer law
clerks and who are willing to pay a
minimum of $20/hr. to such qualified
law clerks as they hire. Firms can also
work together to share the cost and
services of a Fellow.
CELA will distribute profiles of its members who are hiring, which will provide
a more personalized portrait of each
participating practitioner/firm than the
member’s website ordinarily provides,
(not unlike Match.com profiles). From
the initial interviews, Diversity Committee members will compile profiles of the
candidates, (also like dating profiles),
to provide more information about the
candidates than a simple resume and
transcript.
Those who interview and who meet
basic criteria, establishing their sincere
interest in pursuing a career in social
justice generally, or plaintiffs-side employment work specifically, will be eligible to receive a CELA Diversity Fellowship if they are chosen for a summer
associate position by one of the CELA
members seeking assistance. Through
this Fellowship, their $20/hr. minimum
salary can be supplemented by up to
$10/hr. of funds from the CELA Diversity Fellowship, up to $4,000 fellowship
funding for a summer.
CELA will not administer the program
-3-
with the CELA Diversity Fellows beyond
providing the member up to $4,000 in
funds to add to a Fellow’s summer
salary if that Fellow commits to working
full-time for at least ten weeks. The
CELA Diversity Fellowship program is
not intended to create a joint employer
relationship or to usurp any management discretion from the CELA member/employer.
You will be receiving an appeal in the
mail and may be contacted by a CELA
Diversity Committee member regarding
this program. Please be generous. This
effort aims to promote the same workplace diversity in our own Bar that so
many of us work towards every day in
the community at large. For more information, contact Bryan Schwartz:
[email protected].
DECISIONS
(From Page 3)
lieve that these provisions considered
together indicate an effort to impose on
an employee a forum with distinct advantages for the employer. As in
Armendariz..., we conclude that the
arbitration agreement is permeated by
an unlawful purpose. Accordingly, the
denial of the motion to compel arbitration was proper.”
For plaintiffs: James T. Grant.
For defendant: Brian F. Van Vleck and
Anthony J. Zaller.
Second Dist Div Three, 3/17/09; opinion by Croskey with Klein and Aldrich
683701.
GENTRY’S DISAPPROVAL OF
CLASS ARBITRATION WAIVERS
APPLIES TO MEAL AND REST
BREAK CLAIMS
FRANCO v ATHENS DISPOSAL COMPANY, INC. In an opinion filed on March
10, the Second District, Division One,
“Plaintiff, a trash truck driver, filed this
suit, denominated a class action,
against his former employer, a private
company. He alleged the employer had
violated the Labor Code by, among
other things, denying meal and rest
periods. The employer responded with
a petition to compel arbitration based
on a written agreement with plaintiff.
The agreement contained a provision
waiving class arbitrations. It also precluded an employee from acting in ‘a
private attorney general capacity,’ which
would bar plaintiff’s enforcement of the
Labor Code on behalf of other employees.
“Plaintiff argued that the petition should
be denied because the class arbitration
waiver and the private attorney general
prohibition were unconscionable. The
trial court disagreed and granted the
petition, effectively limiting the arbitration to plaintiff’s claims.
“We conclude that the class arbitration
waiver is unconscionable with respect
to the alleged violations of the meal and
rest period laws given ‘the modest size
of the potential individual recovery, the
potential for retaliation against members of the class, [and] the fact that
absent members of the class may be ill
informed about their rights.’ (Gentry v.
Superior Court (2007) 42 Cal.4th 443,
463.) In addition, because the arbitration agreement prevents the plaintiff from
acting as a private attorney general, it
conflicts with the Labor Code Private
Attorneys General Act of 2004 (PAGA)
(§§ 2698-2699.5)—an act that furthers
Gentry’s goal of comprehensively enforcing state labor laws through statutory sanctions (see Gentry, supra, 42
Cal.4th at pp. 462-463).
“Thus, the arbitration agreement is unconscionable in more than one respect
and is unenforceable in its entirety. We
conclude that the case should be tried
in a court of law.
“In its order, the trial court stated that
Franco had no overtime claim under the
Labor Code, and thus Gentry did not
apply. Assuming Gentry applied to the
nonovertime claims, [according to the
trial court], Franco failed to show that
class arbitration would be significantly
more effective than individual arbitrations. As shown by Athens’s evidence,
Franco’s claims concerning meal and
rest periods were not suitable for class
treatment because of the preponderance of individualized issues, the specific inquiries into the merits of each
individual’s claims, and the varying extent of liability. Last, Athens’s arbitration program would not disadvantage
any employee who pursued claims
through individual arbitration.
“It may well be that, as a matter of law,
Franco is exempt from state overtime
laws. And the exemption may be quite
easy to prove. Yet, the trial court did not
follow established procedures in finding
that Franco was an exempt employee...
The inquiry into class certification ...
does not include consideration of the
merits or sufficiency of a plaintiff’s cause
of action... [¶] The trial court granted a
de facto summary adjudication motion
on the overtime claim in determining the
enforceability of a class arbitration
-4-
waiver. That was error. Absent a demurrer or dispositive motion—Athens
brought none—Franco’s overtime claim
had to be considered as part of the case
in deciding the validity of the class
arbitration provision.
“[T]he primary issue on appeal is whether
Gentry applies to claims for meal and
rest periods... We conclude it does.
Discover Bank, a consumer case, laid
the foundation for Gentry, an overtime
case. And it is but a small step from the
overtime claims in Gentry to the meal
and rest period claims here. Although
overtime compensation is undoubtedly
important..., the state has a significant
interest in making sure that the drivers
of commercial vehicles receive sufficient food and rest while on the job.
“Athens contends that Discover Bank
and Gentry are not applicable here because meal and rest periods are
waivable statutory rights. Actually, in
Discover Bank, the court expressed a
lack of concern with waivability... [¶]
[But] to the extent Gentry may be limited to unwaivable statutory rights, it
applies here because, under [Labor
Code] section 219, the meal and rest
period laws cannot be waived.
“[Concerning the Gentry factors] the
complaint alleges that Athens systematically denied meal and rest periods to
a class of employees; all drivers were
subjected to identical violations; and
drivers were not paid an hour of additional compensation per workday for
the meal and rest periods they missed.
As in Gentry, the size of the potential
individual recovery is small, the possibility of retaliation against an employee
who files an individual suit exists, and
absent members of the class may be ill
informed about their rights.
“We [also] conclude the record does
not support the trial court’s determination that the employees’ claims would
be so individualized as to render class
arbitration treatment significantly less
effective than individual arbitrations. At
this early stage in the litigation, we
know that Athens uses a computer and
DECISIONS
(From Page 4)
an electronic timecard system to keep
track of its employees’ work hours. By
law, an employer must maintain time
records showing an employee’s (1) ‘total hours worked’ and (2) meal periods,
unless ‘operations cease’ during meals.
(Wage Order, § 7(A)(3).) Further, Athens allegedly engaged in a systematic
course of illegal payroll practices and
policies ... and subjected all of its hourly
employees to the same unlawful conduct. As a result, common questions of
law and fact predominate over individualized issues.
“If the sole problem with Athens’s arbitration agreement were the class arbitration waiver, we would direct the trial
court to strike the waiver and order the
case to arbitration... Shortly after appointment, the arbitrator, applying AAA
rules, would decide whether the dispute
should proceed as a class arbitration.
But the class arbitration waiver is not
the only significant problem...
“[T]he PAGA ... authorizes Franco to
collect civil penalties on behalf of other
current and former employees. The arbitration agreement expressly prohibits
this. Accordingly, if the class arbitration
waiver were stricken, the case were
sent to arbitration, and the arbitrator
certified the case as a class, the arbitration agreement would preclude an award
of civil penalties on behalf of employees
other than Franco.
“...Athens sought to nullify the PAGA
and preclude Franco ... from performing
the core function of a private attorney
general. Yet, by prohibiting enforcement of the PAGA, the arbitration agreement impedes Gentry’s goal of
‘comprehensive[ly] enforc[ing]’ a statutory scheme through the imposition of
‘statutory sanctions’ and ‘fines.’ (Gentry, supra, 42 Cal.4th at pp. 463, 462.)
Thus, the prohibition of private attorneys general is unconscionable.
“[T]he agreement as a whole is tainted
with illegality and is unenforceable...
Athens’s petition to compel arbitration
should therefore be denied, and this
case should proceed in a court of law.”
For plaintiff: Matthew J. Matern and
Thomas S. Campbell.
For defendant: Hill, Farrer & Burrill, Kyle
D. Brown, James A. Bowles, and E.
Sean McLoughlin.
Second Dist Div One, 3/10/09; opinion by Mallano with Rothschild and
Bauer concurring; 2009 DAR 3496,
2009 WL 695452; modif 3/18/09; 2009
DAR 4190.
LABOR CODE § 351 IMPOSES
NO “DIRECT TABLE SERVICE”
LIMITATION ON TIP POOLS AND
EMPLOYERS MAY REQUIRE
THAT BARTENDERS RECEIVE
SHARES
BUDROW v DAVE & BUSTER’S OF
CALIFORNIA, INC. “Appellant Aaron
Budrow brought a putative class action
... on the theory that distributions from
the ‘tip pool’ to persons who did not
provide direct table service violated Labor Code section 351,” the Second
District, Division Eight, wrote in an opinion filed on March 2. “After demurrers to
two of appellant’s three causes of action were sustained without leave to
amend, respondent moved for summary
judgment on the remaining cause of
action that alleged a violation of Business and Professions Code section
17200. The court granted the motion.
We affirm.
“Respondent’s tipping policy requires
that servers contribute one percent of
their gross sales to bartenders and
other employees... [¶] Appellant concedes that respondent does not permit
any member of management to participate in, or retain any of the proceeds, of
the tipping pool. (Section 351 would be
violated if management collected any
part of the tip pool.)
“There are two segments of section 351
that are relevant to the inquiry whether
section 351 distinguishes between ‘direct’ and ‘indirect’ table service. First,
section 351 provides that ‘No employer
or agent shall collect, take, or receive
any gratuity or a part thereof that is paid,
given to, or left for an employee by a
patron.’ Second, section 351 also provides that ‘[e]very gratuity is hereby
-5-
declared to be the sole property of the
employee or employees to whom it was
paid, given, or left for.’
“The first limitation has been the subject
of a recent opinion in the case of Lu v.
Hawaiian Gardens Casino, Inc. (2009)
170 Cal.App.4th 466 [summarized in
CELA Bulletin, Jan 09, p.6]. This limitation is not at issue in this case... It is
the second limitation that is the subject
of this opinion. We begin with the fact
that it is quite apparent that section 351
does not distinguish between the various functions that restaurant employees perform...
“It is apparent that the Legislature could
have added to section 351 the ‘direct
table service’ requirement, which appellant seeks to invoke... [¶] We conclude
that on its face section 351 does not
distinguish between the functions performed by employees nor does it contain, on its face, the requirement that tip
pools are limited to those performing
direct table service. Appellant indirectly
concedes this point by claiming that it
is only under the interpretation given to
section 351 by [Leighton v] Old Heidelberg [(1990) 219 CA3d 1062] that tip
pools are limited to those employees
providing direct table service.
“Although we address Old Heidelberg in
part 2 of the opinion in order to lay this
controversy to rest, we note that under
the ‘plain meaning’ rule of statutory
construction, we must look first to the
language of the statute; if the statute is
clear and unambiguous, we must give
effect to its plain meaning...
“Given that section 351 clearly does not
impose a ‘direct table service’ requirement on tip pools, we are not required to
delve into legislative intent and history,
nor are we required to further parse the
language of the statute to determine its
meaning. But, because appellant claims
that Old Heidelberg interpreted section
351 to impose a ‘direct table service’
requirement, we turn to this decision.
“There are four reasons why we reject
the suggestion that Old Heidelberg cre(Cont'd on Page 6, DECISIONS)
DECISIONS
(From Page 5)
ated a ‘direct table service’ limitation on
tip pools... [¶] First. The Old Heidelberg
court does not define, in the abstract,
what ‘direct’ as opposed to ‘indirect’
service is... [¶] Second. The references
to direct table service are made in Old
Heidelberg without any attempt to fashion a rule that limits tip pools to servers
and busboys. [¶] Third... The opinion
simply does not address who is to be
excluded from the tip pool... [¶] Fourth.
It may well be that the appellate court in
Old Heidelberg recognized, albeit indirectly, that there is some limitation on
the types of employees who can be
included in a tip pool. But the court did
not decide what those limitations are,
nor did it address the criteria or standards under which those limitations
should be set.
“The foregoing four factors combine to
persuade us that Old Heidelberg did not
hold that tip pools are to be limited only
to those employees who provide ‘direct
table service.’... [¶] Our holding is that
bartenders ... may participate in tip
pools established pursuant to section
351. This comports with the facts and
the actual holding of Old Heidelberg, as
well as with section 351.”
For plaintiff: Eric B. Kingsley and Brian
Levine.
For defendant: Seyfarth Shaw, Diana
Tabacopoulos; Gardere Wynne Sewell,
Celeste Y. Winford and Grant H.
Teegarden.
As amicus on behalf of defendant:
Stephen Drapkin; Paul, Hastings,
Janofsky & Walker and Stephen L.
Berry.
Second Dist Div Eight, 3/2/09; opinion by Flier with Rubin and O’Neill
503359.
COUNTY EMPLOYEE ASSERTING
DISCHARGE IN VIOLATION OF
WHISTLEBLOWER STATUTES
WAS NOT REQUIRED TO
EXHAUST ADMINISTRATIVE
REMEDY OF LABOR CODE
§ 98.7
LLOYD v COUNTY OF LOS ANGELES. In an opinion filed on March 19, the
Second District, Division Three, wrote
in part as follows:
“Plaintiff and appellant Lloyd appeals a
judgment following a grant of summary
judgment in favor of his former employer, defendant and respondent
County of Los Angeles.
“The essential issues presented are
whether Lloyd’s action is barred by a
failure to exhaust administrative remedies, and if not, whether a triable issue
of material fact exists so as to preclude
summary judgment. In the published
portion of this opinion, we hold:
“Lloyd’s claim he suffered a retaliatory
dismissal for whistleblower activity did
not constitute a claim of discrimination
on the basis of a ‘non-merit factor’ within
the meaning of rule 25.01 of the County’s
Civil Service Rules. Therefore, Lloyd
was not required to exhaust his administrative remedies under the County’s
internal rules.
“We also hold Lloyd’s causes of action
alleging statutory violations of the Labor
Code are not barred by his failure to
exhaust the administrative remedy afforded by Labor Code section 98.7.
There is no requirement that a plaintiff
pursue the Labor Code administrative
procedure prior to pursuing a statutory
cause of action. (Daly v. Exxon Corp.
(1997) 55 Cal.App.4th 39, 46, review
den.; Murray v. Oceanside Unified
School Dist. (2000) 79 Cal.App.4th 1338,
1359, review den.)
“We further hold Lloyd’s common law
tort claims against the County, alleging
retaliation and wrongful termination in
violation of public policy, are barred by
Government Code section 815’s elimination of common law tort liability for
-6-
public entities. (Miklosy v. Regents of
University of California (2008) 44 Cal.4th
876, 899.)
“In the unpublished portion, we address
Lloyd’s other causes of action and conclude the County established a legitimate justification and that Lloyd failed
to raise a triable issue as to pretext."
For plaintiff: Leo James Terrell.
For defendant: Michael Thomas;
Greines, Martin, Stein & Richland,
Martin Sten and Alison M. Turner.
Second Dist Div Three, 3/19/09; opinion by Klein with Kitching and
Aldrich concurring; 2009 DAR 4191,
2009 WL 710581.
FIRST DISTRICT ADDRESSES
“BUMPING” RIGHTS OF PARTTIME EMPLOYEES IN
CONNECTION WITH SCHOOL
DISTRICT’S REDUCTION IN
SERVICES PURSUANT TO
EDUCATION CODE § 44955
HILDEBRANDT v ST. HELENA UNIFIED SCHOOL DISTRICT. “When a
school district lays off certificated employees because of a reduction in services, pursuant to Education Code section 44955,” the First District, Division
Three, framed the issue in an opinion
filed on March 19, “are part-time employees with greater seniority entitled
to ‘bump’ a full-time employee with
lesser seniority? We agree with the trial
court that they are not and, therefore,
shall affirm its judgment denying the
writ of mandamus sought by part-time
certificated employees who were released while the school district retained
a similarly credentialed full-time employee with lesser seniority.”
For plaintiffs: David N. Weintraub and
Sara Sandford-Smith.
For school district: Lawrence M.
Schoenike, Miller Brown & Dannis.
First Dist Div Three, 3/19/09; opinion
by Pollak with Siggins and Jenkins
708800.
DECISIONS
(From Page 6)
NINTH CIRCUIT
PANEL ANSWERS QUESTIONS
CONCERNING EEOC’S
ADMINISTRATIVE SUBPOENA
AUTHORITY IN CASE ALLEGING
DISPARATE IMPACT FROM BASIC
SKILLS TEST
EEOC v FEDERAL EXPRESS CORPORATION. On March 3, the Ninth
Circuit withdrew the opinion filed on
September 10, 2008, (543 F3d 531),
and ordered that it be replaced by an
Amended Opinion. The litigation in question involves claims that FedEx’s Basic
Skills Test, required for promotion eligibility, has an adverse impact on African
American and Latino employees. The
amended opinion reads in part as follows:
“We consider three issues pertaining to
Federal Express Corporation’s refusal
to comply with an administrative subpoena issued by the Equal Employment Opportunity Commission. First,
we consider whether FedEx’s compliance with an administrative subpoena
in another case, which resulted in FedEx
providing the EEOC with the same information that the EEOC seeks to compel
in this case, moots this appeal. We
hold that it does not. Second, we consider, as a matter of first impression,
whether 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.
We hold that the EEOC does. Third and
finally, we consider whether the EEOC
subpoena in this case, 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 ‘relevant’ to a charge of systemic
discrimination. We hold that it does. In
light of these holdings, we affirm the
district court’s [D Arizona] decision to
enforce the administrative subpoena.”
For EEOC: Susan R. Oxford, Washington DC.
For defendant: Frederick L. Douglas,
Memphis.
Tashima with McKeown and Gould;
2009 DAR 3118, 2009 WL 514110.
EVEN AFTER USSC’s DECISION
IN HALL STREET ASSOCIATES,
“MANIFEST DISREGARD OF THE
LAW” REMAINS VALID GROUND
FOR VACATUR OF ARBITRATION
AWARDS
COMEDY CLUB, INC. v IMPROV
WEST ASSOCIATES. In an opinion
filed on January 29, 2009, relative to a
trademark dispute, the Ninth Circuit
confirmed that, even after the Supreme
Court’s decision in Hall Street Associates LLC v Mattel, Inc. (2008) 128 S Ct
1396, (summarized in CELA Bulletin,
Apr 08, p.1), the potential grounds for
vacatur of an arbitration award still include “manifest disregard of the law.” (In
Hall Street, the U.S. Supreme Court
held that the FAA’s statutory grounds
for prompt vacatur and modification may
not be supplement by contract.) The
Ninth Circuit wrote in part:
“The Supreme Court did not reach the
question of whether the manifest disregard of the law doctrine fits within §§ 10
or 11 of the FAA. Hall Street Associates, 128 S. Ct. at 1404. Instead, it
listed several possible readings of the
doctrine, including our own. Id. (‘Or, as
some courts have thought, ‘manifest
disregard’ may have been shorthand for
§ 10(a)(3) or § 10(a)(4), the subsections
authorizing vacatur when the arbitrators
were ‘guilty of misconduct’ or ‘exceeded
their powers.’)... We cannot say that
Hall Street Associates is ‘clearly irreconcilable’ with Kyocera [Corp. v Prudential-Bache T Servs. (9th Cir 2003)
341 F3d 987] and thus are bound by our
prior precedent... Therefore, we conclude that, after Hall Street Associates,
manifest disregard of the law remains a
valid ground for vacatur because it is
part of § 10(a)(4). We note that we join
the Second Circuit in this interpretation
of Hall Street Associates. Stolt-Nielsen
Transportation, 548 F.3d 85 (2d Cir.
2008). But see Ramos-Santiago v. UPS,
524 F.3d 120, 124 n.3 (1st Cir. 2008).
Gould; 553 F3d 1277.
FEDERAL OFFICE OF PERSONNEL MANAGEMENT RESISTS ORDERS BY
REINHARDT AND KOZINSKI CONCERNING PAYMENT OF HEALTH PLAN BENEFITS
TO SAME-SEX SPOUSES OF FEDERAL EMPLOYEES
In a February 2 order concerning an
internal workplace discrimination case
involving a Los Angeles federal public
defender, Judge Stephen Reinhardt held
that the federal Defense of Marriage Act
unconstitutionally denies benefits to gay
federal employees’ spouses. In the
Matter of Brad Levenson. In another
internal grievance decision filed on January 13, Chief Judge Alex Kozinski also
ordered the payment of benefits to a
same-sex spouse, though on the basis
of what he found to be ambiguous language in the Federal Employee Health
Benefits Act. In the Matter of Karen
Golinski. (Both orders are posted on
the Ninth Circuit’s website,
www.ce9.uscourts.gov, and at
www.lambdalegal.org.)
According to a page one article in the
March 13 edition of The New York
-7-
Times, however, the federal Office of
Personnel Management has instructed
insurers not to provide the benefits ordered by Reinhardt and Kozinski. The
NYT added the following information:
“In a letter on Feb. 20 to the Administrative Office of the United States Courts...,
Lorraine E. Dettman, assistant director
of the personnel office, said, ‘Plans in
(Cont'd on Page 9, REINHARDT)
WASHINGTON REPORT
The following legislative update information from NELA’s Legislative Director Donna Lenhoff was included in the
March issue of NELA’s electronic newsletter “On The Hill.”
—On March 10, Senator Edward
Kennedy, Chairman of the Senate
Health, Education, Labor & Pensions
Committee, introduced the Employee
Free Choice Act (EFCA), S.560. The
same day, Congressman George Miller
(D-CA) introduced an identical bill in the
House, H.R. 1409. Co-sponsors total
39 in the Senate and 222 in the House.
A week before the bill’s introduction in
both chambers, both President Obama
and Vice President Biden, in separate
speeches, voiced their strong support
for the measure.
In the 110th Congress, EFCA (then H.R.
800) was passed by the House by a vote
of 241-185, but the Senate version (S.
1041) failed on a cloture vote, 51-48.
Then as now, the U.S. Chamber of
Commerce and other business lobbyists are working hard to defeat the
legislation.
The Employee Free Choice Act would
restore workers’ freedom to choose a
union by strengthening penalties for
violations of employee rights when workers seek to form a union and during first
contract negotiations; by allowing employees to form unions by signing authorization cards; and by requiring first
contract mediation/arbitration to thwart
bad-faith bargaining.
—The Fairness in Nursing Home
Arbitration Act, H.R. 1237, S. 512,
was introduced in the House by Representative Linda Sanchez (D-CA) on
February 26, and in the Senate by
Senator Mel Martinez (D-FL) on March
4. Originally introduced in the 110th
Congress, the bill would bar the increasingly widespread practice by nursing home facilities of requiring incoming
residents to agree to arbitration as the
sole vehicle for dispute resolution, including disputes involving allegations of
resident abuse and neglect. The bill
was reported out of the Judiciary Committees of both the House and Senate
last year.
NELA supports both this bill and the
broader Arbitration Fairness Act
(AFA), H.R. 1020. The AFA would cover
nursing home arbitration agreements,
but it would also reach more broadly
and invalidate pre-dispute mandatory
arbitration agreements in the employment, civil rights, consumer, and franchise contexts, (with the exception of
arbitration covered by a collective bargaining agreement).
—Last month we reported on the introduction in the Senate of the
Servicemembers Access to Justice
Act (SAJA), S. 263. Representative
Arthur Davis has now introduced an
identical House counterpart, H.R. 1474,
which would, inter alia, ban pre-dispute
mandatory arbitration of employer-employee disputes under USERRA (with
exceptions for CBAs); provide increased
liquidated damages and authorize punitive damages against state or private
employer violations of USERRA; and
authorize jury trials in such cases. The
bill has been referred to the Committees
of Veterans’ Affairs, Armed Services,
and Oversight and Government Reform.
—NELA also supports the following
bills, which have been introduced in the
111th Congress:
• The Paycheck Fairness Act, (H.R.
12, S. 182), which would amend the
EPA to permit opt-out class actions
and compensatory and punitive damages. The bill passed the House on
January 9, and was introduced in the
Senate on January 8 by Senator Hillary
Clinton with 25 co-sponsors and was
placed directly on the Senate calendar.
• Whistleblower Protection Enhancement Act, (H.R. 985 in the 110th Congress), which would greatly improve
current law protecting federal government whistleblowers. H.R. 985 was
added as an amendment to this year’s
H.R. 1, the economic stimulus bill, but
was stripped in conference. Supporters
vow to introduce it as a free-standing bill
and move it quickly.
• Federal Employees Paid Parental
Leave Act of 2009, (H.R. 626), which
would provide four weeks of paid paren-8-
tal leave for federal employees.
—NELA also supports the following
bills, which are expected to reintroduced in the 111th Congress:
• Civil Rights Tax Relief Act, which
would promote the settlement of civil
rights cases by making non-economic
damages non-taxable and permitting
lump sum awards to be taxed as if
received in the year they would have
been earned.
• Civil Rights Act of 2009, an omnibus
bill to ensure accountability for violations of civil rights and fair labor laws by,
inter alia: banning predispute arbitration
agreements in the non-union employment context; removing the caps on
damage remedies for sex, disability,
and religious job discrimination; establishing Congressional authority to authorize damages for violations of ADEA,
the ADA, the FLSA, and USERRA by
state employers; and authorizing optout class actions and compensatory
and punitive damages under the EPA.
• Employment Non-Discrimination
Act (ENDA), which would ban employment discrimination on the bases of
sexual orientation and gender identity.
• Private Sector Whistleblower Protection Streamlining Act, which would
provide a uniform, streamlined enforcement system applicable to all federal
statutes protecting private sector
whistleblowers from retaliation, and fill
in gaps in the coverage of current
whistleblower laws.
• Healthy Families Act, which would
require employers with 15 or more employees to provide a minimum of seven
days per year of paid sick leave, to meet
their own medical needs or those of
specified family members.
• Early Warning and Health Care for
Workers Affected by Globalization
Act, and FOREWARN Act, which would
strengthen the WARN Act by requiring
three months advance notice instead of
two; by protecting more workers; by
(Cont'd on Page 9, REPORT)
REPORT
(From Page 8)
increasing penalties; by authorizing the
Labor Department to bring enforcement
suits; and by closing various loopholes.
—The National Whistleblower Assembly 2009 was held in Washington DC on
March 8-11. Sponsored by the Government Accountability Project, NELA, and
other members of the Make It Safe
Coalition, activities included workshops,
training sessions, and lobbying visits
on Capitol Hill. Among the highlights
were appearances by Senator Claire
McCaskill (D-MO) and Congressman
Chris Van Hollen (D-MD), who both
received awards celebrating their leadership in advancing the rights of
whistleblowers.
REINHARDT
(From Page 8)
the Federal Employees Health Benefits
Program may not provide coverage for
domestic partners, or legally married
partners of the same sex, even though
recognized by state law.
“Federal officials said they had to follow
the laws on the books. But Richard
Socarides, a New York lawyer who was
an adviser to President Bill Clinton on
gay issues, said he believed that Mr.
Obama ‘has broad discretionary authority to find ways to ameliorate some
of the more blatant examples of discrimination.'
“Ben LaBolt, a White House spokesman, said: ‘While the president opposes gay marriage, he supports legislative repeal of the Defense of Marriage
Act... [¶] Mr. Obama and his choice for
director of the personnel office, M. John
Berry, (who is gay), have endorsed the
idea of providing health benefits to samesex partners of federal employees. The
Office of Personnel Management estimates the cost at $670 million over 10
years.
C O M I N G
E V E N T S
March 31, 2009
LACBA ANNUAL LABOR AND EMPLOYMENT LAW SYMPOSIUM
Millenium Biltmore Hotel, Los Angeles
(See www.lacba.org for information—several CELA planners and speakers)
April 29, 2009
Washington DC
(See www.nela.org for details)
May 1, 2009
May 20, 2009
Sacramento
June 26, 2009
NELA’s GALA FUNDRAISER WORKING FOR CHANGE:
RECLAIMING JUSTICE IN THE WORKPLACE
(contact NELA by April 27 to be listed as sponsor)
June 24-27, 2009
October 1, 2009
CELA’s PRE-CONFERENCE MOCK TRIAL SEMINAR
Oakland Marriott
October 2-3, 2009
Oakland Marriott
“In addition, Congress may soon weigh
in. Senator Joseph I. Lieberman, independent of Connecticut, and Representative Tammy Baldwin, Democrat of
Wisconsin, plan to introduce bills that
would provide benefits to same-sex
partners of federal employees.”
-9-
PROFILES
(From Page 11)
in Wilcox County, Alabama. (A
Roosevelt administration pilot project
helped the Gee’s Bend sharecroppers
buy the land, and those same small
farmers are still there.) After the Vista
stint, Chris remained in Alabama for
several months, working in Selma with
an organization called the Southern
Rural Research Project headed by attorney Don Jelinek, (later Mayor of Berkeley). After returning north, and finding
his job prospects dubious, Chris “retreated” to the Harvard fold, and finally
got his undergraduate degree in 1971.
Then came another interlude typical of
that era—a year-long trip overland
through Turkey, Iran, Afghanistan, and
India, with the ultimate goal, memorably realized, of several weeks trekking
in Nepal. Though this route was the
renowned “Hippie Trail,” Chris was never
in that camp, belonging instead to the
political wing of his generation. Traveling overland across western and southern Asia, he read leftist literature, and
worried that his degree in English had
not put him in a position to do socially
useful work. He filled out his law school
applications in a hotel room in Delhi.
At Hastings, although he admits to
having been a “less-than-stellar” class
attender, Chris learned a lot outside of
class as a volunteer intern with two
remarkable organizations. In his first
year, he worked at the Prison Law
Collective, an organization that represented California prisoners challenging
oppressive conditions—especially politically outspoken prisoners in San
Quentin’s notorious “Adjustment Center.” (One of the Prison Law Collective’s
founders was CELA member Patti Roberts of Oakland.)
now a potter and ceramicist. They lived
in Berkeley, (Loren’s home town), until
four years ago, when they moved to
Oregon and settled in Astoria at the
mouth of the Columbia River. Their son,
Joseph, 31, is an art teacher and illustrator in Portland—only two hours away,
but maybe a little too far now that their
first grandchild, (Lina, 16 months), has
arrived on the scene.
Chris took a lot of art history courses in
college, and he shares his wife’s interest in the history and technique of Asian
ceramics. He also particularly loves—
inter alia, as he would make clear in the
Bulletin—Ukiyo-e woodblock prints and
Rembrandt’s drawings.
Music, also, is a very major interest. His
focus has evolved from rhythm and blues
in college, through blues and jazz, before settling passionately (about 30 years
ago) on Cuban music and salsa—he
was the salsa reviewer for the free weekly
East Bay Express for a couple of years
in the 1980s. (He also loves Mexican
music, and there are times when his CD
player is dominated by the likes of Jose
Alfredo Jimenez, Los Cadetes de
Linares, and Agustin Lara.)
He reads a lot of U.S. history, and his
longstanding interest in the westward
expansion has recently been refueled
by Astoria’s rich associations with the
Lewis and Clark expedition and the fur
trade. He’s an avid consumer of progressive journalism, currently trying to
sharpen his understanding of the economic crisis by the daily consulting of
such on-line sources as counterpunch
.com, commondreams.org, and
monthlyreview.org/mrzine.
Although Chris landed with CELA by
chance, it clearly has been an excellent
match. He hopes that the relationship
can last for another twenty years—“at
least,” he says.
EEOC REPORTS JOB BIAS CHARGES HIT RECORD
HIGH OF OVER 95,000 IN FISCAL YEAR 2008
The following is a press release issued
by the EEOC on March 11.
The U.S. Equal Employment Opportunity Commission today announced that
workplace discrimination charge filings
with the federal agency nationwide
soared to an unprecedented level of
95,402 during Fiscal Year 2008, which
ended September 30. This level is a 15
percent increase from the previous fiscal year. The FY 2008 enforcement and
litigation statistics, which include trend
data, are available online at
www.eeoc.gov/stats/enforcement.
Later on during his law school years,
Chris volunteered at the Bayview-Hunters Point Community Defender, a sort
of de-centralized neighborhood public
defender’s office in San Francisco,
headed by the late Richard Bancroft,
later an Alameda County Superior Court
Judge.
“The EEOC has not seen an increase of
this magnitude in charges filed for many
years. While we do not know if it signifies a trend, it is clear that employment
discrimination remains a persistent
problem,’ said the Commission’s Acting Chairman, Stuart J. Ishimaru.
Chris has been married for 35 years to
his wife Loren Cross, formerly a chef at
a number of Bay Area restaurants, and
According to the FY 2008 data, all
major categories of charge filings in the
private sector (which includes charges
-12-
filed against state and local governments) increased. Charges based on
age (up 28.7 percent) and retaliation (up
22.6 percent) saw the largest annual
increases, while allegations based on
race, sex and retaliation continued as
the most frequently filed charges. The
surge in charge filings may be due to
multiple factors, including economic
conditions, increased diversity and demographic shifts in the labor force,
employees’ greater awareness of the
law, EEOC’s focus on systemic litigation, and changes to EEOC’s intake
practices.
The FY 2008 data also show that the
EEOC filed 290 lawsuits, resolved 339
lawsuits, and resolved 81,081 private
sector charges. Through its combined
enforcement, mediation and litigation
programs, the EEOC recovered approximately $376 million in monetary relief
for thousands of discrimination victims
and obtained significant remedial relief
from employers to promote inclusive
and discrimination-free workplaces.
Published
Monthly
BULLETIN
April 2009
Vol. 23, No. 4
in Alexander v. Gardner-Denver Co.,
415 U.S. 36 (1974), forbids enforcement of such arbitration provisions. We
disagree and reverse...
UNITED STATES
SUPREME COURT
PURPORTING TO DISTINGUISH
GARDNER-DENVER, SUPREME
COURT HOLDS ENFORCEABLE
CBA PROVISIONS THAT
REQUIRE UNION MEMBERS TO
ARBITRATE ADEA CLAIMS
14 PENN PLAZA LLC v PYETT. In a 54 opinion filed on April 1, Thomas wrote
in part as follows for the majority:
“The question presented by this case
is whether a provision in a collectivebargaining agreement that clearly and
unmistakably requires union members
to arbitrate claims arising under
[ADEA] is enforceable. The ... Second
Circuit held that this Court’s decision
“Respondents ... contend that the arbitration clause here is outside the permissible scope of the collective-bargaining process because it affects the
‘employees’ individual, non-economic
statutory rights.’ We disagree. Parties
generally favor arbitration precisely because of the economics of dispute
resolution... As in any contractual negotiation, a union may agree to the
inclusion of an arbitration provision in
return for other concessions from the
employer. Courts generally may not
interfere in this bargained-for exchange...
“As a result, the CBA’s arbitration provision must be honored unless the ADEA
itself removes this particular class of
grievances from the NLRA’s broad
sweep... This court has squarely held
that the ADEA does not preclude arbitration of claims brought under the
statute. See Gilmer [v Interstate/
Johnson Lane Corp. (1991)] 500 U.S.
at 26-33.
“The holding of Gardner-Denver is not
as broad as respondents suggest... [¶]
This Court reversed the judgment [for
the employer] on the narrow ground
that the arbitration was not preclusive
because the collective-bargaining
agreement did not cover statutory
claims...
“We recognize that apart from their
narrow holdings, the Gardner-Denver
line of cases included broad dicta that
was highly critical of the use of arbitration for the vindication of statutory antidiscrimination rights. That skepticism,
WE NEED YOUR HELP!
by Regina Banks and the Legislative Committee
CELA’s Third Annual Lobby Day is
scheduled for Wednesday, May 20,
2009. You only have a short time to
make travel plans and reservations at Sacramento’s Sterling Hotel to join fellow CELA
members in promoting two
important bills CELA is sponsoring this session. We will
also share with legislators and
their staffs our feelings about
other employment bills now
working their way through the
Legislature. We need you to
take this day out of your practice because our “strength” in
Sacramento is on the line.
If you have never participated in a Lobby
Day, this is your chance to have some
fun while doing something vital for your
interests and those of your clients. You
will be well trained on what we do and
what to talk about on Lobby Day—
there will be a pre-Lobby Day
conference call, and an orientation session on Lobby Day
morning.
CELA BILL AB 335
(FUENTES)—CHOICE OF
FORUM/CHOICE OF LAW
Choice of forum/choice of law
clauses can inflict serious
damage to CELA members’
practices. Such clauses can
require California employees
to litigate their disputes under
Participants at CELA Lobby Day 2008
(Cont'd on Page 3, LOBBY DAY)
DECISIONS
(From Page 1)
however, rested on a misconceived view
of arbitration that this Court has since
abandoned.”
In a dissenting opinion joined by Stevens,
Ginsburg, and Breyer, Justice Souter
“The majority evades the precedent of
Gardner-Denver as long as it can simply by ignoring it... If this were a case of
first impression, it would at least be
possible to consider [the] conclusion
[that unions can bargain away individual
rights to a federal forum for antidiscrimination claims]. [B]ut the issue is settled
and the time is too late by 35 years to
make the bald assertion that ‘[n]othing
in the law suggests a distinction between the status of arbitration agreements signed by an individual employee
and those agreed to by a union representative.’ In fact, we recently and unanimously said that the principle that ‘federal forum rights cannot be waived in
union-negotiated CBAs even if they can
be waived in individually executed contracts ... assuredly finds support in’ our
case law, Wright [v Universal Maritime
Service Corp.] 525 U.S. at 77, and every
Court of Appeals save one has read our
decisions as holding to this position...
“When the majority does speak to
Gardner-Denver, it misreads the case
in claiming that it turned solely ‘on the
narrow ground that the arbitration was
not preclusive because the collectivebargaining agreement did not cover statutory claims.’ That, however, was merely
one of several reasons given in support
of the decision... One need only read
Gardner-Denver itself to know that it
was not at all so narrowly reasoned, and
we have noted already how later cases
have made this abundantly clear...
“On one level, the majority opinion may
have little effect, for it explicitly reserves
the question whether a CBA’s waiver of
a judicial forum is enforceable when the
union controls access to and presentation of employees’ claims in arbitration,
which ‘is usually the case,’ [cite omitted]. But as a treatment of precedent in
statutory interpretation, the majority’s
opinion cannot be reconciled with the
Gardner-Denver Court’s own view of its
holding, repeated over the years and
generally understood.”
[Editor’s note: The newest version of
the Arbitration Fairness Act, introduced
in the Senate the week of April 27, will
overturn Pyett as well as Gilmer and
Circuit City, and prohibit predispute
clauses in the employment and consumer contexts. See page 15 concerning NELA’s participation in the Fair
Arbitration Now coalition, and events
that took place on April 29 in Washington DC in connection with Arbitration
Fairness Day.]
For petitioners: Paul Salvatore, Edward
A. Brill, Charles S. Sims, Mark D.
Harris, Brian S. Rauch, Ian C. Schaefer,
Proskauer Rose, NYC
For respondents: David C. Frederick,
Jeffrey L. Kreisberg, Michael F. Sturley,
Lynn E. Blais, Derek T. Ho, Jennifer L.
Peresie.
For NELA as amicus: Stefano G.
Moscato, San Francisco, Kathleen Phair
Barnard, Seattle.
USSC, 4/1/09; opinion by Thomas
joined by Roberts, Scalia, Kennedy,
and Alito; dissenting opinion by
Stevens; dissenting opinion by
Souter joined by Stevens, Ginsburg,
and Breyer; 129 S Ct 1456.
SUPREME COURT GRANTS
REVIEW IN FIRST DISTRICT CASE
INVOLVING STATUTE OF
LIMITATIONS ON LABOR CODE
§ 203 CLAIM FOR LATE
PAYMENT OF WAGES
PINEDA v BANK OF AMERICA. On
April 22, the California Supreme Court
announced that it will review the January 21 decision that the First District,
Division Three, summarized as follows,
(170 CA4th 388, 87 CR3d 864):
“Plaintiff ... appeals an adverse judgment entered after the trial court granted
a motion for judgment on the pleadings... He contends that the court applied the wrong statute of limitations to
his claim under Labor Code section 203
for penalties incurred for the late pay(Cont'd on Page 3, DECISIONS)
-2-
CALIFORNIA
EMPLOYMENT
LAWYERS ASSOCIATION
David J. Duchrow
Suite 305
Tel: (310) 479-5303
FAX: (310) 479-5306
E-mail:
[email protected]
Director:
Christina Krasomil
Encino, CA 91436-2412
Tel: (818) 907-7895
FAX: (818) 907-7474
EXECUTIVE BOARD
(Los Angeles)
Dolores Leal
(Los Angeles)
David DeRubertis
(Woodland Hills)
Steven Pingel
(Long Beach)
Kathy Dickson
(Oakland)
(Laguna Hills)
David Duchrow
(Los Angeles)
Cynthia Rice
(San Francisco)
Wilmer Harris
(Pasadena)
Mika Spencer
(San Diego)
Phil Horowitz
(San Francisco)
James P. Stoneman
(Claremont)
Jean K. Hyams
(Oakland)
Christopher Whelan
(Gold River)
Toni Jaramilla
(Los Angeles)
Jeffrey Winikow
(Los Angeles)
Virginia Keeny
(Pasadena)
Bulletin Editor
Christopher Bello
842 Irving Avenue
Astoria, OR 97103
Ph: (503) 338-3891
DECISIONS
(From Page 2)
ment of wages; that the court erred in
concluding that section 203 penalties
are not restitution within the meaning of
Business and Professions Code section 17203; and that the court abused
its discretion in denying him leave to
amend. In the unpublished portion of
this opinion we adopt the conclusion
reached in McCoy v Superior Court
(2007) 157 Cal.App.4th 225, 233, that
the extended statute of limitations for
the recovery of section 203 penalties
found in that section only applies if the
penalties are sought in conjunction with
an action for recovery of the unpaid
wages. Since plaintiff here acknowledges all wages due were paid before
this action was filed, we reject his
contention that the court erred in applying the one-year statute of limitations
for an action upon a statute for a penalty
found in Code of Civil Procedure section
340, subdivision (a), and we also reject
the contention that the court abused its
discretion in denying plaintiff leave to
amend his complaint. In the published
portion of the opinion we affirm the trial
court’s conclusion that section 203 penalties may not be recovered as restitution under Business and Professions
Code section 17203.”
CELA BILL SB 705 (LOWENTHAL)—
EXHAUSTION OF REMEDIES REFORM
On April 28th, CELA members testifed
before the Senate Judiciary Committee
on SB 705, a bill that addresses the
confused state of exhaustion of remedies rules, (administrative and judicial), which have proven to be traps—
and not just for the unwary—in cases in
both the public and private sectors. As
stated in CELA’s Fact Sheet,
“(e)mployees who have been the victims of illegal employment practices
should not have to guess at what internal or administrative procedures they
need to exhaust to get to court. Nor
should they have to fear participation in
internal processes based on the risk
that by doing so they have waived their
right to seek redress in court.
Legislature determines to be based on a
fundamental public policy of the state
are admissible as evidence in a subsequent civil action involving substantially
the same rights and substantially the
same parties, unless otherwise expressly excluded by the Legislature or in
an applicable collective bargaining agreement.”
For plaintiff: Spiro Moss Barness, LLP,
Gregory N. Karasik.
For defendant: Paul, Hastings, Janofsky
& Walker, LLP, Maria A. Audero, Stephen
P. Sonnenberg, Los Angeles.
LOBBY DAY
(From Page 1)
the laws of other states (or countries).
Worse, some California employees
have to physically litigate their claims
in far-flung locales. We are all at risk of
having to litigate our cases in Mississippi, Alabama, or whatever “forum”
has been selected by the employer.
Such choice of forum/choice of law
clauses already exist and are on the
increase. Alarmed, CELA and
Assemblymember Felipe Fuentes are
tackling the issue head-on.
The bill’s basic premise is stated in
Section 1: “The Legislature finds and
declares the following: (a) It is the
public policy of the State of California to
ensure that California employees have
the full benefit of the provisions of the
California Labor Code and other provisions of California law that relate to
employment and that employees
should not be deprived of the protection
of California law by contract provisions
that require employees or job applicants, as a condition of employment,
to submit to the laws of other states for
claims that arise from employment, or
the securing of employment, in California.”
AB 335 would impose upon employers
more exacting standards to show the
fairness of using foreign laws in California courts, or of insisting that employees bring their employment-based
claims in a foreign forum. The bill as
introduced was heard in the Assembly
Labor Committee and will be heard
again on April 28, 2009, with CELA
presenting its views.
This bill will add section 1172 to the
Labor Code to read: “(a) Exhaustion of
an employer’s internal administrative
remedies, such as a grievance procedure, or judicial review of a decision of
a decision of an administrative agency,
is not a precondition for a civil action
alleging a violation of a right that the
Legislature determines to be based on
a fundamental public policy of the state,
unless the Legislature expressly requires the exhaustion of the employer’s
internal administrative remedies or judicial review of an administrative decision in the statute that establishes the
cause of action. (b) The results of an
administrative adjudication by an employer regarding an allegation of a violation of an employee right that the
-3-
Other bills that could have significant
effects on our clients’ cases are being
vetted by CELA’s Legislative Committee and will be covered in our Lobby Day
talking points.
A successful Lobby Day is important to
the future of employees’ rights in California, and it will help CELA raise its profile
and legitimacy in the eyes of legislators
and their staffs. Our bills this year are
good for California.
The Executive Board and Legislative
Committee believe that Lobby Day is
such an integral part of CELA’s mission
that money has been made available to
help cash-strapped members attend this
year. If finances are the final impediment
to your participation, please contact
Legislative Director Regina Banks at
[email protected], to inquire about board
stipends for Lobby Day expenses. Each
and every member is important for our
primary legislative activity of the year.
DECISIONS
(From Page 3)
Cal SC, 4/22/09, 2009 DAR 5767 (granting review).
CALIFORNIA COURTS
OF APPEAL
NAMED PLAINTIFF COULD NOT
APPEAL DENIAL OF CLASS
CERTIFICATION AFTER
VOLUNTARILY SETTLING HER
INDIVIDUAL CLAIMS
WATKINS v WACHOVIA CORPORATION. “Plaintiffs and appellants Felicia
M. Watkins and Patricia Brown are
former employees of defendant and
appellant Wachovia,” the Second District, Division Three, wrote in an April 16
opinion. “They brought a class action
against Wachovia, seeking damages
for unpaid overtime compensation, for
themselves and a purported class of
similarly situated workers. The trial court
granted summary judgment in favor of
Wachovia against Brown, on the basis
that Brown had signed a release of all
claims in exchange for enhanced benefits upon her termination from
Wachovia. Thereafter, the court denied
Watkins’s motion for class certification. Subsequently, Watkins settled
her own claims against Wachovia, but
attempted to retain the right to appeal
the denial of class certification in her
representative capacity. We conclude
summary judgment was appropriately
granted with respect to Brown, and that
Watkins no longer has standing to pursue this appeal.
“On February 24, 2003, Watkins, alone,
brought suit against Wachovia, alleging, among other things, causes of
action for wrongful termination and failure to pay overtime wages. She also
brought a cause of action under Business and Professions Code section
17200 on behalf of ‘similarly situated
members of the general public’ asserting Labor Code violations, but she did
not plead a class action at this time.
“Class action allegations first appeared
in Watkins’s second amended complaint, filed December 8, 2003. In the
interim, the U.S. Department of Labor
had completed an investigation of
Wachovia’s Century City office, covering the period from May 1, 2000 to May
1, 2002. The DOL had concluded that
Wachovia’s Century City branch had
incorrectly classified its sales assistants as exempt... Wachovia ultimately
paid all eleven of its Century City sales
assistants back wages...
“Given this determination, Watkins
amended her complaint to allege a class
action on behalf of all Wachovia employees not paid overtime within four years
of the date of her complaint... Watkins
alleged that ‘it was Wachovia’s policy
not to pay overtime compensation.’
“It is undisputed that Brown executed a
release of all claims against Wachovia
in exchange for enhanced severance
benefits, and that Brown received the
enhanced severance benefits. It is also
undisputed that Brown received all pay
that was concededly due her, and that
she would have received that pay, and
standard severance benefits, had she
not executed the release. The sole issue ... is whether the release is unenforceable as a matter of law.
“Recent authority has ... conclud[ed]
that Labor Code section 206.5 ... simply
prohibits employers from coercing settlements by withholding wages concededly due. [Chindarah v Pick Up Stix,
Inc. (2009) 171 CA4th 796, summarized in CELA Bulletin, Feb 09, p.6.]
Where a bona fide dispute exists, the
disputed amounts are not ‘due,’ and the
bona fide dispute can be voluntarily
settled with a release and a payment,
even if the payment is for an amount
less than the total wages claimed by the
employee. [¶] [Accordingly] we need
consider only whether a bona fide dispute existed when Brown signed the
release. The evidence indisputably establishes that one did... Under these
circumstances, the release is enforceable.
“After Watkins’s motion for class certification was denied, she entered into a
voluntary settlement of her individual
claims, purporting to retain the right to
pursue her appeal with respect to the
-4-
class claims. In light of this settlement,
Wachovia has moved to dismiss the
appeal as moot.
“This much is clear: Watkins settled her
wage claim ... and agreed that, if the
class was ultimately successful in obtaining relief, she would not be entitled
to participate in that relief. Watkins
assumes, however, that her ‘class claim’
for unpaid overtime wages has independent vitality and can continue after she
has settled her ‘individual claim’ for the
same wages. The argument reflects a
misunderstanding of the nature of a
class action. ‘[T]he right of a litigant to
employ [class action procedure] is a
procedural right only, ancillary to the
litigation of substantive claims. Should
these substantive claims become moot
... by settlement of all personal claims
for example, the court retains no jurisdiction over the controversy of the individual plaintiffs.’ [cite omitted] Thus, a
class representative’s voluntary settlement of her individual claim constitutes
a voluntary settlement of her only claim,
and moots her right to proceed on appeal.
“This area of the law, however, has
become muddied by cases presenting
the factual scenario of an involuntary
resolution of the representative plaintiff’s
claim... These cases are sometimes
referred to as ‘pick off’ cases, as the
defendant seeks to avoid exposure to
the class action by ‘picking off’ the
named plaintiff... We believe that it is
illogical to import the law governing
‘pick off’ cases into the context of a
voluntary settlement...
“A voluntarily settling plaintiff no longer
has any interest in the action... Whether
the settling plaintiff asserts a hypothetical interest in having the plaintiff’s already-incurred attorney’s fees paid out
of a future judgment or settlement fund
is irrelevant. We cannot conceive of a
situation in which a court would enter a
judgment or approve as reasonable a
settlement, in which a portion of the
class recovery is given to an individual
who has already settled and is not a
member of the class.
DECISIONS
(From Page 4)
“The judgment against Brown is affirmed. The appeal of Watkins is dismissed. Wachovia is to recover its costs
on appeal.”
For plaintiffs: Knapp, Peterson & Clarke
and Stephen M. Harris.
For defendants: Reed Smith, Margaret
M. Grignon, Michele J. Beilke and Zareh
A. Jaltorossian.
1019560.
LABOR CODE § 351 PERMITS
RESTAURANTS TO REQUIRE
SERVERS TO SHARE TIPS WITH
EMPLOYEES WHO DO NOT
PROVIDE DIRECT TABLE
SERVICE
ETHERIDGE v REINS INTERNATIONAL CALIFORNIA, INC. “In this
case,” the Second District, Division
Three, wrote in a March 27 opinion,
“restaurant servers challenge the legality of a mandatory tip-pooling arrangement, whereby, as a condition of their
employment, the servers must share
tips with certain other employees at the
restaurant. While the servers do not
contest the requirement that bussers
share in the tip pool, they challenge the
inclusion of employees who do not provide ‘direct service.’ The trial court sustained the demurrer of the restaurant
without leave to amend, on the basis
that employees who do not provide
direct table service may, nonetheless,
participate in mandatory tip pools. We
agree and, therefore, affirm...
“Specifically, it is alleged that servers
are required to pay a share of their tips
to the kitchen staff, bartender, and dishwashers... [¶] [Etheridge] alleges three
causes of action for unlawful and unfair
business practices (Bus. & Prof. Code
§ 17200)... The fourth cause of action
sought civil penalties under Labor Code
sections 2698 and 2699, for violations of
the Labor Code. Each cause of action
was based on Labor Code section 351,
governing gratuities...
“There are two issues presented by this
appeal: (1) whether Etheridge is barred
from proceeding on the second notice of
appeal by the dismissal of the first
appeal; and (2) whether a mandatory tip
pool, whereby restaurant tips are shared
with employees who do not provide
direct table service, is violative of Labor
Code section 351.
“Etheridge’s first notice of appeal, taken
from the ... dismissal order, was ...
properly taken from a judgment. His
belief that the appeal had been prematurely taken from a non-appealable order was mistaken; he should have pursued the appeal, rather than allow it to
be dismissed for failure to submit the
filing fee.
“Etheridge’s second notice of appeal
was filed ... after he had obtained a
document entitled ‘Judgment.’ There is
no question that if we construe this
notice of appeal as being taken from the
earlier-filed dismissal, the appeal is
timely. The only question is whether the
dismissal of the first appeal, for failure to
pay the filing fee, bars Etheridge from
pursuing a second appeal of the same
dismissal. It does not... [¶] He should
not be deprived of the right to appeal by
the harmless mistake he made in seeking to prosecute the second, instead of
the first, appeal...
“[B]oth the holding in Leighton [v Old
Heidelberg, Ltd. (1990) 219 CA3d 1062,
268 CR 647] and the Leighton rationale
mandate the conclusion that tip pooling
is not illegal when the participants in the
tip pool contribute to the patron’s service, even if not providing direct table
service. Recently, a federal court faced
with the same issue interpreted Leighton
in precisely the same manner. (Louis v
McCormick & Schmick, Restaurant
Corp. (C.D. Cal. 2006) 460 F.Supp.2d
1153, 1158-1160.) [Editor’s note: See
also, in accord, the Second District’s
March 2 opinion in Budrow v Dave &
Buster’s of California, Inc. (2009) 2009
WL 503359, summarized in CELA Bulletin, March 09, p.5.]
“In the reply brief on appeal, Etheridge
suggested that the tip pooling restrictions of the FLSA could be helpful in
-5-
interpreting the restrictions imposed by
Labor Code section 351. When seeking
amicus curiae briefing, we invited the
amici and the parties to ‘consider the
effect, if any’ of the FLSA. We now
conclude the FLSA provides no guidance in this case... [¶] Labor Code
section 351 permits tip pooling except
when the tip pooling operates as a tip
credit [allowing the employer to pay
less than the minimum wage], while the
FLSA permits tip pooling, but restricts
it when the employer is taking a tip
credit. The FLSA’s restrictions on tip
pooling have the purpose of rendering a
tip credit permissible. As the purpose
behind the tip pooling restriction is incompatible with California’s prohibition
on tip crediting, the FLSA can provide
no guidance in this case.”
Croskey filed a separate concurring
opinion to emphasize that “[w]hile
Etheridge has not alleged a factual
basis for a cause of action for an unfair
or inequitable tip pool, it is my view that
such a cause of action may be asserted
in a proper case... [¶] [A] mandatory tip
pool should only be sustained under
Labor Code, section 351 when it works
a fair and equitable distribution among
the employees who participate in the tip
pool... [¶] I share another view expressed
by my dissenting colleague, Presiding
Justice Klein. I believe this is an appropriate case for review by the Supreme
Court.”
Concurring only with Part 1 of the majority opinion, (allowing Etheridge to pursue the instant appeal), Klein otherwise
dissented in a lengthy opinion. “It is my
view,” Klein wrote, “that employees who
do not render direct table service may
not share in the proceeds of an employer-mandated tip pool... Leighton flies
in the face of section 351, which provides ‘[e]very gratuity is hereby declared to be the sole property of the
employee or employees to whom it was
paid, given, or left for.’” Klein continued:
“The majority opinion authorizes the
employer to confiscate a portion of the
gratuities left for servers and to redistribute those monies to other employees,
so as to subsidize the wages of non(Cont'd on Page 6, DECISIONS)
DECISIONS
(From Page 5)
tipped employees, in accordance with
the employer’s self-interest and priorities... [¶] Notwithstanding the
Legislature’s failure to address Leighton
at the time it amended section 351 in
2000, in view of the chaos Leighton has
now spawned, there is profound reason
for the Supreme Court to grant review in
this case in order to clarify the import of
section 351.”
For plaintiff: Eric B. Kingsley, Darren M.
Cohen, Encino, and Brian Levine, Palo
Alto.
For defendant: Russell J. Thomas, Jr.,
Beverly Hills.
For CELA as amicus: Spiro Moss
Barness and Dennis F. Moss, Los Angeles, Los Angeles.
Second Dist Div Three, 3/27/09; opinion by Croskey joined by Kitching;
concurring opinion by Croskey; concurring and dissenting opinion by
Klein; 2009 DAR 4693, 2009 WL
794521.
“I AGREE” LANGUAGE IN
ARBITRATION AGREEMENT
COVERING “ALL DISPUTES”
CREATED MUTUAL NOT ONESIDED OBLIGATION
ROMAN v SUPERIOR COURT (FLOKEM, INC.) In an opinion filed on April
13, denying an employee’s petition for
writ of mandate, the Second District,
Division Seven, wrote in part as follows:
“An application for employment contains an arbitration clause providing, ‘I
agree, in the event I am hired by the
company, that all disputes and claims
that might arise out of my employment
with the company will be submitted to
binding arbitration.’ Is the arbitration
agreement one-sided, obligating the
applicant-employee (if she is hired) to
arbitrate her claims without imposing a
reciprocal requirement on the employer
in connection with its claims against
the employee?
“In her petition for writ of mandate challenging the trial court’s order compelling arbitration of her discrimination and
wrongful termination claims against her
employer, Flo-Kem, Inc., under [FEHA],
Gabriela Roman contends this ‘I agree’
language manifests only a unilateral
obligation to arbitrate. When the adhesive nature of the contract is also taken
into account, Roman asserts the agreement to arbitrate is procedurally and
substantively unconscionable and, therefore, unenforceable.
“The trial court properly granted FloKem’s petition to compel arbitration.
Absent some indicia in the agreement
that arbitration is limited to the
employee’s claims against the employer, the use of the ‘I agree’ language
in an arbitration clause that expressly
covers ‘all disputes’ creates a mutual
agreement to arbitrate all claims arising
out of the applicant’s employment. Accordingly, whatever elements of unconscionability may be present in employment adhesion contracts, the agreement to arbitrate does not lack mutuality so as to make it substantively unconscionable. [The court distinguished
Higgins v Superior Court (2006) 140
CA4th 1238, O’Hare v Municipal Resource Consultants (2003) 107 CA4th
267, and Nyulassy v Lockheed Martin
Corp. (2004) 120 CA4th 1267.]
“Roman also contends the arbitration
agreement, incorporating the 1997 AAA
rules, unconscionably limits discovery...
[¶] [But] [t]here appears to be no meaningful difference between the scope of
discovery approved in Armendariz and
that authorized by the AAA employment dispute rules, certainly not the
role of the arbitrator in controlling the
extent of actual discovery permitted.
“The arbitration agreement itself does
not mention costs. However, in 1997 ...
the AAA rules ... provided the costs of
arbitration would be divided equally
among the parties. Roman contends
this cost-splitting provision ... unfairly
burdens the employee with costs unique
to the arbitration process... [¶] Flo-Kem
discounts this issue, emphasizing the
1997 AAA rules expressly provided the
AAA rules actually in effect at the time
of the demand for arbitration would govern the proceedings... Roman ...
counters [that] the 2007 rules are immaterial because the question of un-6-
conscionability is determined as of the
time an agreement is executed...
“Even if the 1997 AAA cost provisions
govern ... it would not provide a basis to
void the arbitration agreement... [¶] [W]e
have little difficulty concluding the interests of justice would be furthered by
severance of the cost provision, which,
if unconscionable ... is plainly ‘collateral to the main purpose of the contract.’ (Armendariz at p. 124).
“A petition to compel arbitration will be
denied when the right has been waived
by the proponent’s failure to properly
and timely assert it... [¶] Roman contends Flo-Kem engaged in conduct inconsistent with arbitration: Not only did
Flo-Kem, without mentioning arbitration, file a demurrer and serve objections to discovery requests, but also, a
few weeks after it filed its motion to
compel arbitration, Flo-Kem served and
filed a motion in superior court to compel Roman’s deposition, asserting in
that motion it intended to ‘file a motion
for summary judgment immediately
upon gathering the story underlying
Plaintiff’s claims.’ Roman insists FloKem’s conduct prejudiced her, forcing
her to both bring and oppose motions
that would not have been necessary
had Flo-Kem sought arbitration in a
timely fashion.
“Although Roman’s argument may be
superficially appealing, the facts she
presents are not sufficiently compelling
to demonstrate a waiver... Flo-Kem filed
its notice of petition to compel arbitration a little more than two months after
Roman filed her complaint. At the time,
no substantive discovery responses had
been served by either side, and no
formal hearings had taken place on the
discovery issues. Moreover, the discovery requests Flo-Kem served ... were
authorized under AAA rules; thus the
discovery sought (although not received)
did not seek to take advantage of discovery tools unavailable in arbitration...
“Although Roman incurred litigation
expenses in serving and filing objections to discovery requests and opposing the demurrer and motion to compel
DECISIONS
(From Page 6)
her deposition, those expenses are insufficient, by themselves, to support a
finding of waiver... The trial court did not
err in rejecting Roman’s waiver argument.”
For petitioner: Michael Nourmand.
For real party in interest: Loeb & Loeb,
Michelle M. La Mar, Jon Daryanani, and
Erin Smith.
Second Dist Div Seven, 4/13/09; opinion by Perluss with Woods and Zelon
975994.
LABOR CODE CLAIMS BY
EMPLOYEES OF SECURITY FIRM
THAT CONTRACTS WITH
FEDERAL IMMIGRATION AGENCY
TO RUN DETENTION FACILILTIES
WERE NOT PREEMPTED BY
FEDERAL SERVICE CONTRACT
ACT
NARANJO v SPECTRUM SECURITY
SERVICES, INC. In an opinion filed on
March 24, the Second District, Division
Four, reversed summary judgment on
class-wide Labor Code and unfair business practices claims brought by a
former detention officer employed by a
firm that provides security services in
holding facilities and detention centers
under a contract with Immigration and
Customs Enforcement, (ICE), a federal
agency. The terms of Spectrum’s contract with ICE rely on wage and fringe
benefit determinations by the Secretary
of the United States Department of
Labor pursuant to the McNamaraO’Hara Service Contract Act of 1965
(SCA), 41 USC § 351 et seq.
On behalf of himself and other employees who had resigned or been discharged from their employment, Naranjo
asserted meal and rest break claims;
claims under section 203(a), which imposes a penalty on employer’s who
willfully fail to pay discharged employees their full compensation in a timely
manner; and claims under section 226,
which obliges employers to provide
employees with records of their earnings and deductions.
“The key issue,” the Court of Appeal
wrote, “is whether the SCA preempts
Naranjo’s right to pursue additional compensation under the California Labor
Code in state court. Spectrum contends that the SCA preempts Naranjo’s
entitlement to seek redress for any
breaches of the pertinent Labor Code
provisions in state court. He argues that
Naranjo’s remedies are found within the
SCA administrative process, which constitutes the exclusive forum for his
claims. We disagree. [A]lthough the
SCA administrative process provides
the sole remedies for claims arising
under the SCA, the SCA does not
preempt Naranjo’s suit to recover the
additional compensation he seeks under the California Labor Code.”
For plaintiffs: Howard Z. Rosen and
Jason C. Marsili.
For defendant: Anderson & Anderson
and Steven A. Micheli.
Second Dist Div Four, 3/24/09; opinion by Manella with Epstein and
Willhite concurring; 172 CA4th 654,
91 CR3d 393.
NINTH CIRCUIT
NINTH CIRCUIT REVERSES
SUMMARY JUDGMENT ON
OVERTIME CLAIMS BY CLASS
OF FEDEX KINKO’S “CENTER
MANAGERS”
WHITEWAY v FEDEX KINKO’S OFFICE AND PRINT SERVICES. In a
short unpublished memorandum opinion filed on March 19, a Ninth Circuit
panel wrote in part as follows:
“Whiteway and similarly situated plaintiffs (‘Center Managers’) appeal a[n]
order [by Northern District Judge
Saundra Brown Armstrong] granting
summary judgment to [FedEx Kinko’s].
“We review de novo the district court’s
grant of summary judgment... [¶] Reviewing the evidence in the light most
favorable to the Center Managers ..., we
conclude the Center Managers’ tendered evidence was sufficient to establish a genuine issue of material fact
-7-
regarding whether the Center Managers
were realistically expected to spend at
least half their time on exempt tasks.
FedEx Kinko’s bore the burden of establishing that Center Managers were
‘primarily engaged in duties that meet
the test of the exemption.’ Sav-On Drug
Stores, Inc. v. Superior Court, 34 Cal.4th
319, 324 (2004). The evidence tendered
by the managers—including declarations of class members and expert
rebuttal of FedEx Kinko’s statistics—
was sufficient to create a genuine issue
of material fact.
“In remanding this case, we do not
preclude the district court from reconsidering its decision to certify the class
(or, if it elects to proceed with the case
as a class action, from creating subclasses). The presentation by the parties on appeal created some question
as to the commonality of the asserted
claims.”
For plaintiffs: Scott Edward Cole, Ellen
Lake.
For defendant: Jonathan M. Cohen,
Winston & Strawn; Annamary E.
Gannon, Keith A. Jacoby, Theodora R.
Lee, Littler Mendelson.
Ninth Circuit, 3/19/09; before Thomas, Bybee, and Benitez (unpublished memorandum opinion); 2009
WL 725152.
UNPUBLISHED
CALIFORNIA COURT OF
APPEAL DECISIONS
BECAUSE OF INSTRUCTIONAL
ERROR, SECOND DISTRICT
ORDERS NEW TRIAL AS TO
LIABILTY FOR DISABILITY
DISCRIMINATION, BUT HOLDS
THAT IF JURY AGAIN FINDS FOR
PLAINTIFF, FIRST JURY’S $1.5
MILLION DAMAGES AWARD WILL
BE REINSTATED
CUIELLETTE v CITY OF LOS ANGELES. In an unpublished opinion filed on
April 7, the Second District, Division
DECISIONS
(From Page 7)
Five, reversed a judgment of over $1.5
million on a disability discrimination
claim by a Los Angeles Police Department Officer. “We hold,” the court wrote,
“that the trial court erred in failing to
instruct the jury that plaintiff had the
burden of proving that he was able to
perform the job of a police officer with or
without reasonable accommodation.”
The Court of Appeal also held, however,
that “[b]ecause defendant’s challenge
on appeal concerns the issue of liability
and not damages, retrial will be limited
to the issue of liability... (Torres v.
Automobile Club of So. California (1997)
15 Cal.4th 771, 776 [‘It is a firmly established principle of law that ‘[t]he appellate courts have power to order retrial on
a limited issue, if that issue can be
separately tried without such confusion
or uncertainly as would amount to a
denial of a fair trial.’ [Citation.]’]; Baxter
v. Peterson (2007) 150 Cal.App.4th 673,
679.) If the jury finds liability against
defendant, then the trial court shall
reinstate the award of $1,571,500.” (The
total sum awarded by the jury included
$313,205 for past economic loss,
$46,988 for medical insurance coverage, $11,307 for moving expenses; $1
million for past non-economic loss, including mental suffering; and $200,000
for future non-economic loss, including
mental suffering.)
“Plaintiff brought an action alleging disability discrimination under section
12940, subdivision (a) of the FEHA and
for wrongful termination in violation of
public policy. Defendant moved for summary judgment on the grounds that
plaintiff was judicially estopped from
asserting a disability discrimination
claim as the result of the position he had
taken in a prior workers’ compensation
proceeding...
"On appeal, we reversed the trial court’s
grant of summary judgment. [2006 WL
1928526; summarized in CELA Bulletin, July 06, p.8.] We held that, upon the
facts presented in connection with the
summary judgment motion, the doctrine of judicial estoppel did not, as a
matter of law, bar plaintiff from pursuing
his FEHA claim. We also held that
plaintiff’s 100 percent total permanent
disability rating was not, as a matter of
law a legitimate, nondiscriminatory reason for defendant’s adverse employment action. Although we noted in our
opinion that plaintiff had sustained his
initial burden of establishing a prima
facie case of disability discrimination in
connection with the summary judgment
motion, we did not hold that plaintiff was
relieved of his burden of proving at trial ...
that he was able to perform the essential duties of a police officer...
“Defendant contends that the trial court
erred in instructing the jury that plaintiff
had the burden of proving he was able to
perform the essential functions of the
job... Defendant requested the [court]
to instruct with CACI 2541. Instead, the
trial court instructed the jury with a
‘Special instruction in lieu of CACI 2541’
that, defendant contends, omitted reference to plaintiff’s burden of proof, told
the jury that defendant admitted that
plaintiff was entitled to damages and,
thus, left the award of damages as the
only issue for the jury...
“Under Green [v State of California
(2007) 42 C4th 254], the trial court’s
failure to instruct the jury that plaintiff
had to prove that he was able to perform
the essential duties of a police officer
was prejudicial... [T]here was, in effect,
no trial on liability.”
For plaintiff: Robert E. Racine, Irving
Meyer.
For defendant: Paul L. Winnemore,
Second Dist Div Five, 4/7/09; opinion by Mosk with Armstrong and
Kriegler concurring; 2009 WL 921705
(unpublished).
REVERSING SUMMARY
JUDGMENT ON DISABILITY
DISCRIMINATION CLAIMS, SIXTH
DISTRICT HOLDS THAT FACT
ISSUES WERE RAISED
CONCERNING JOB’S ESSENTIAL
FUNCTIONS
SHIEJAK v COMMUNITY HOSPITAL
OF THE MONTEREY PENINSULA. In
-8-
an unpublished opinion filed on April 3,
the Sixth District reversed summary
judgment on claims for disability discrimination, failure to accommodate,
failure to engage in a good faith interactive process, and wtvpp brought by a
radiology clerk subject to a 10-pound
lifting restriction. Triable issues had
been raised, the Court of Appeal held,
as to whether the task of escorting
patients was an essential function of
the radiology clerk position. The court
wrote in part:
“[T]he evidence showed that the Hospital did not include the task of escorting
patients in the radiology clerk’s job
description at the time Shiejak was
hired in 2003... [¶] [S]ince the March
2005 amendments were added ... during her dispute with the Hospital regarding the accommodation of her physical
disability, the amended job description
and job activity summary do not constitute evidence that escorting patients
was an essential function...
“[In addition] when ... the assistant
director of cardiopulmonary service was
asked during her deposition..., [s]he did
not mention that the radiology clerk ...
had the task of escorting patients... [¶]
Moreover, the limited evidence presented
regarding the ‘actual functioning and
circumstances’ ... of the radiology department creates a triable issue of material fact ... [as does] evidence regarding the minimal amount of time Shiejak
spent on the job ‘performing [that] function’...
“[W]e need not decide whether an employer violates section 12940, subdivision (m) by failing to accommodate a
disabled employee only where the employee can perform the essential functions of the position held or desired with
reasonable accommodation. Under the
decisions of both the federal and California appellate courts, we find that triable
questions ... exist as to whether ... the
Hospital [was required] to accommodate Shiejak by keeping her in her
existing position.
“Although the evidence ... showed that
DECISIONS
(From Page 8)
the Hospital engaged in an extensive
interactive process..., the evidence also
indicates that there is a triable question
of fact as to whether the hospital acted
in good faith. [¶] Specifically, we note
the evidence that the Hospital amended
the job description...
“Because triable questions ... exist as
to whether the Hospital discriminated
against Shiejak on the basis of her
disability..., we find that triable questions of fact also exist as to whether the
Hospital wrongfully terminated Shiejak
in violation of public policy.
“[However] we agree with the Hospital
that ... Shiejak ... failed to present any
evidence to show that the Hospital acted
either extremely or outrageously with
the intention of causing, or in reckless
disregard of causing, emotional distress. Shiejak also did not show that
she suffered severe or extreme emotional distress.”
For plaintiff: Jeremy Pasternak, San
Francisco.
For defendant: Dennis G. McCarthy,
Monterey.
Sixth District, 4/3/09; opinion by
Bamattre-Manoukian with McAdams
and Duffy concurring; 2009 WL
FIFTH DISTRICT REVERSES
JNOV ON DISABILITY
DISCRIMINATION CLAIMS AND
DIRECTS TRIAL COURT TO
REINSTATE JUDGMENT FOR
PLAINTIFF AND JURY’S AWARD
OF $800,000 IN DAMAGES
CARR v WASHINGTON MUTUAL
BANK. In a lengthy unpublished opinion
filed on April 22, the Fifth District reversed JNOV and directed the trial court
to reinstate the original judgment in
which a jury had awarded the plaintiff
$800,000 in damages on disability discrimination claims. The court wrote in
part as follows:
that she suffered posttraumatic stress
disorder (PTSD) as the result of a takeover robbery of Bank’s branch where
she worked as a teller. Carr alleged that
Bank violated [FEHA] by (1) failing to
engage in the required interactive process...; (2) failing to reasonably accommodate her disability; and (3) retaliating
against her for complaining to Bank’s
human resources department and to
the [DFEH]. A jury found for Carr on the
three theories and awarded her $800,000
in damages. The trial court granted
Bank’s motion for [JNOV] and made no
express ruling on Bank’s motion for a
new trial.
“Carr appealed, requesting this court to
reinstate the jury’s verdict. Bank filed a
protective cross-appeal, contending that
if the [JNOV] is overturned, this court
should order a new trial to remedy the
willful misconduct of Carr’s attorney.
“We conclude that substantial evidence
supports the jury’s findings regarding
liability and damages, and the trial
court’s denial of Bank’s motion for a
new trial through the passage of time
did not constitute a prejudicial abuse of
discretion.
“The instances of misconduct relevant
to our analysis of prejudice are (1)
statements in closing argument that
were not supported by the evidence, (2)
improper commentary on two evidentiary rulings, and (3) use of cross-examination techniques to impart to the
jury information that was not in evidence... [¶] [W]e conclude that it is not
reasonably probably the jury would have
arrived at a verdict more favorable to the
moving party in the absence of the
foregoing instances of inappropriate
conduct by Carr’s attorney.”
For plaintiff: Jill P. Telfer.
For defendant: Lang, Richert & Patch,
Charles Trudung Taylor and Kirsten O.
Zumwalt.
Fifth Dist, 4/22/09; opinion by Dawson
with Wiseman and Gomes concurring; 2009 WL 1068354 (unpublished).
TRIAL COURT DID NOT ABUSE
DISCRETION IN DISMISSING
PREGNANCY DISCRIMINATION
CASE FOR DISCOVERY ABUSE
CREWS v FISHBURNE. In an unpublished opinion filed on April 9, the Second District, Division Five, wrote in part
as follows:
“In January 2006, appellant Kristel Crews
sued respondents ... for employment
discrimination based on pregnancy. The
case was dismissed in October 2007,
on a finding that appellant had failed to
comply with court orders concerning
discovery and had engaged in discovery
abuse, that, in the words of the trial
court, ‘so severely prejudiced the defendants in their defense that it would be an
abuse of discretion by this court not to
dismiss this case.’ Our review is abuse
of discretion. (cite omitted). Finding
none, we affirm.
“The causes of action were breach of
contract, sex discrimination, violation
of [FEHA], retaliation, failure to investigate and take prompt remedial action,
and [wtvpp]. The factual allegations were
that appellant ... was fired ... when she
was due to return from maternity leave.
“When served with perfectly proper discovery, appellant responded with delay.
When faced with a motion to compel,
she made a meaningless production
which did not comply with the Code of
Civil Procedure. She redacted documents without informing respondents
that she was doing so, and her method
of production meant that her redactions
were concealed from respondents. She
refused to produce unredacted documents even after the trial court warned
her that she could not unilaterally decide that a document was not relevant.
She never produced a privilege log,
despite repeated court orders. She
waited until the very eve of dismissal to
seek an in camera review, and the delay
speaks volumes about her litigation tactics.
“Laressia M. Carr sued Washington
Mutual Bank, her employer, claiming
-9-
DECISIONS
(From Page 9)
“In choosing a sanction, the trial court
should consider the totality of the circumstances, including the conduct of
the offending party to determine if the
actions were willful; detriment to the
propounding party; the number of formal
and informal attempts to obtain the
discovery; and time spent avoiding or
evading discovery. (cite omitted.) That
is what the trial court did here.”
rebut the statistical evidence and gather
additional evidence in support of her
claims. We affirm.
For plaintiff: Nikki Tolt, Gerald M. Serlin,
Douglas G. Benedon.
Second Dist Div Five, 4/9/09; opinion by Armstrong with Turner and
Mosk concurring; 2009 WL 946876.
“However, such a general comment
about unidentified employees, made to
a group of workers, is insufficient to
show a discriminatory intent in Cozzi’s
selection for layoff. [cites omitted.]
SUMMARY JUDGMENT ON AGE
DISCRIMINATION CLAIM
COZZI v McCAIN, INC. In an unpublished opinion filed on April 13, the
Fourth District, Division One, wrote in
part as follows:
“Plaintiff ... asserts she was discriminated against, harassed, and ultimately
terminated because of her age. Her
employer ... contends Cozzi was laid off
as part of a company restructuring.
“Cozzi sued McCain and a supervisor ...
stating causes of action for intentional
discrimination, disparate treatment discrimination, harassment, breach of express and implied contract not to terminate without cause, and [wtvpp]. [Defendants] filed motions for summary
judgment, which the court granted.
“Cozzi asserts she has direct evidence
... based upon [the supervisor’s] statements made at sales meetings that
some employees were ‘too old’ and ‘too
entrenched in their ways’ to remain at
McCain.
“Cozzi asserts the court erred in relying
upon the statistical evidence submitted
by Mills [the defendant’s vice president
of human resources] showing there was
no significant change in the age of
workers at McCain after the restructuring. Specifically, Cozzi asserts (1) the
statements ... lacked foundation; and
(2) [Mills] was not an expert witness
qualified to provide such statistics.
These contentions are unavailing... [¶]
The court did not abuse its discretion in
determining that Mills ... was competent to provide such evidence.”
For plaintiff: Carney Richard Shegerian,
Santa Monica.
For defendant: Janice P. Brown, San
Diego.
by Nares with McDonald and
O’Rourke concurring; 2009 WL
“On appeal Cozzi asserts the court
erred in granting summary judgment
because (1) triable issues of fact exist
on her discrimination, harassment, and
public policy claims; (2) the court erred
in considering statistical evidence concerning the age of McCain employees
set forth in the declaration of defendants’ lay witness; (3) the court erred in
excluding the declaration of her psychiatrist expert stating she suffered
emotional distress as a result of the
alleged discrimination and harassment;
and (4) the court should have granted
Cozzi’s request for a continuance to
-13-
UNITED STATES
SUPREME COURT
ARGUMENTS
—On March 24, the US Supreme Court
heard argument in Gross v FBL Financial Services, 08-441, a case in which
the Eighth Circuit, (526 F3d 356), adhered to the principle that, in an ADEA
case, a plaintiff must present “direct”
evidence of discrimination in order to
obtain a mixed motive instruction. The
“direct evidence” rule, confusingly derived from Justice O’Connor’s concurring opinion in Price Waterhouse v
Hopkins (1989) 490 US 228, was disapproved for Title VII purposes by Desert
Palace, Inc. v Costa (2003) 539 US 90,
but the Eighth Circuit in Gross said
“[w]e are not persuaded that Desert
Palace dictates a modification of our
precedents regarding the ADEA.” Counsel of record for the petitioner is Eric
Schapper of the University of Washington School of Law. And NELA’s amicus
brief was written by Paul Mollica (Chicago), Stefano Moscato (San Francisco), and Douglas B. Huron and
Stephen Z. Chertkof, (Washington DC).
—On April 22, the Supreme Court heard
argument in Ricci v DeStefano, 071428 and 08-328, a case in which a
United States District Court in Connecticut held that a city’s desire to avoid
making fire department promotions
based on a test with a racially disparate
impact did not amount to intentional
Title VII discrimination against white
candidates, nor did the city’s decision
not to certify the test results amount to
a Equal Protection or a First Amendment violation. The district court’s decision, (554 FS2d 142), was affirmed by
the Second Circuit, (264 Fed Appx
106).
KULLAR v FOOT LOCKER RETAIL, INC.
A NEW STANDARD FOR CLASS ACTION SETTLEMENT APPROVAL?
by Scott Edward Cole
So, you have made it to mediation
against a financially-strapped company,
curious to see if your wage and hour
class action can be resolved before the
tumultuous economy catches up with
the defendant and dashes any hope of
recovery. The catch, however, is that
the defendant wants none of its sensitive financial information in the public
record should you settle and be required to submit the deal for judicial
approval. Given the mediation privilege,
you know that you cannot unilaterally
open up such information to public scrutiny. And you also know that asking the
trial judge to simply trust that you saw
enough detail to support the reasonableness of the deal is not likely to
work, given the trial court’s duty to
independently assess the settlement.
For practitioners considering the issue
of how much evidence is enough to
support court approval of a class action
settlement, the First District’s decision
in Kullar v Foot Locker Retail, Inc.
(2008) 168 CA4th 116, [summarized in
CELA Bulletin, Nov 08, p.6], is a mustread.
The opportunity of an early mediation in
Kullar presented questions all too familiar to class action practitioners: Was
the evidentiary record sufficient to value
the class claims intelligently? If mediation were to be delayed, would the
company still be financially capable of
funding the settlement? Could the defendant be persuaded to reveal the sensitive information that might secure
settlement approval, but that would expose the defendant if approval were to
be denied? Despite these uncertainties, the reality is that most practitioners are open to early mediation because, in the end, getting the client
compensated is usually the paramount
goal.
The claims in Kullar were not unusual:
on behalf of a class of Foot Locker nonexempt workers, the plaintiff claimed
that the company violated state wage
and hour laws by failing to reimburse
them for the cost of uniforms, and by
denying them meal and rest breaks.
The case was filed in August 2005, and
the parties thereafter engaged in stan-
dard discovery and law and motion work.
When the parties agreed in August
2006 to attend mediation, formal discovery was stayed, but an informal
informational exchange continued, including an exchange of various data
points. It was these data points that the
defendant considered highly proprietary
and subject to the mediation privilege.
(Cal Evid Code § 1119).
After a full day mediation in October
2006, before a highly respected mediator, the parties reached an accord and
signed a document setting forth the
basic settlement terms. Three months
later, a formal settlement agreement
was finalized, executed, and submitted
to the court for preliminary approval. In
response to modifications to the agreement and related notices, as well as the
filing of objections by three class members, (all represented by one law firm),
the preliminary approval process continued for several more months. At the
end of the process, and following a
successful notice program, the objections were rejected by the trial judge
and the settlement was granted final
approval.
The Kullar appeal by the three objectors
followed, arguing that the mediation
privilege should not apply when a settlement is submitted for trial court approval, and that the evidentiary record
was insufficient for the trial judge to
adequately assess the reasonableness
of the agreement. In an opinion filed in
October 2008, the First District Court of
Appeal, Division Three, while expressly
stating that the settlement may ultimately be found entirely reasonable,
reversed the trial court’s order granting
final settlement approval. In its short
opinion, it remanded with instructions
that the trial judge make further inquiry
into the factual underpinnings so that a
more informed decision could be made.
Specifically, the appellate panel held:
(1) the public record must reflect information about the “nature and magnitude” of the claims; (2) the mediation
privilege did not trump the court’s duty
to receive sufficient information to make
an informed decision about the fairness
and reasonableness of the proposed
-14-
settlement; and (3) if the record is sufficient to explain the manner in which
the factual and legal issues have been
evaluated, very little in the way of additional discovery may be justified.
Equally important as these holdings is
what the Court of Appeal did not say.
The Kullar opinion does not say that
early settlements are disfavored. It also
does not limit the parties regarding
either the volume or kind of information
needed for class settlement approval.
Finally, in this writer’s opinion, Kullar
did not forge a new standard for judicial
approval: how to interpret the admonition that the trial court must obtain
information about the “nature and magnitude of the claims being settled” is still
up for vigorous debate. It’s an open
question whether the admonition means
that counsel must forecast specific
class claim values far in advance of trial,
(or even far in advance of a class certification ruling), or must merely provide
the kind of data points that were withheld in Kullar.
If any one piece of practical advice can
be gleaned from this decision, it is that
defendants should be as forthcoming
as possible with information supporting
the particular “discount” involved in a
settlement, (e.g., a bleak financial outlook), and make a place for that kind of
information in the settlement record.
Given increased judicial scrutiny of class
action settlements, getting as much of
this information before the trial judge as
possible increases the chances of resolving matters already ripe for settlement.
Scott Cole & Associates (Oakland)
represented plaintiff Jatinda Kullar and
the plaintiff class in the litigation that
was the subject of the First District’s
decision in Kullar v Foot Locker Retail,
Inc. The firm is dedicated to furthering
workers’ rights in employment class
action litigation, particularly cases involving claims for overtime pay, meal
and rest breaks, and expense reimbursement. Scott, a CELA member,
can be reached at: [email protected],
or (510) 891-9800.
NELA NEWS
—NELA’s 2009 Gala Fundraiser,
“Working for Change: Reclaiming Justice in the Workplace,” will be held on
Friday, June 26, 2009 at the Westin
Mission Hills Resort & Spa in Rancho
Mirage, California. The fundraiser will be
held during NELA’s Twentieth Annual
Convention, and will feature live music
and dancing, as we rededicate ourselves to advancing equality and justice
in the American workplace. We are
delighted that Antonia Hernandez, President and CEO of the California Community Foundation, will be our Special
Guest and Keynote Speaker. Previously, Ms. Hernandez was president
and general counsel of the Mexican
American Legal Defense and Educational Fund, the country’s leading civil
rights organization working on behalf of
Latinos.
—Also about our Twentieth Annual
Convention: • The Saturday, June 27,
Keynote Address will be delivered by
Erwin Chemerinsky, Founding Dean of
the University of California Irvine School
of Law. • NELA and its public interest
organization, The Employee Rights
Advocacy Institute for Law & Policy will
celebrate “Workplace Heroes and Heroines” who have made a difference in the
evolution of employee rights during the
past twenty years. • NELA members
and supporters are invited to place a
greeting or advertisement in the
Convention’s Program Guide, which
must be received by May 8. (A form can
be downloaded at www.nela.org/NELA/
docDownload/17447.)
—In mid-April, NELA joined with representatives of employees, consumers,
homeowners, and others to introduce
the Fair Arbitration Now Coalition.
The coalition held a press conference
and lobby day on Arbitration Fairness
Day, April 29, in Washington DC, with
more than 50 consumers, employees,
and their attorneys, who spoke about
their experiences when they were forced
into arbitration. NELA member Tim
Garrigan’s client Monica Williams of
Jasper, Texas, was among those visiting Capitol Hill to tell their personal
stories. Although Tim showed that each
of the purported non-discriminatory rea-
sons for Monica’s discharge was
pretextual, she lost her race discrimination case because the arbitrator credited an explanation that the reviewing
magistrate subsequently called “preposterous.” Because of the limited
scope of review, the magistrate felt
obliged to confirm the arbitrator’s award
despite finding it “astonishing, eye-popping, and, perhaps, soft-witted.” Take a
look at The Report and Recommendation of United States Magistrate Judge
Earl Hines in Williams v Mexican Restaurant, Inc., No. 1:05-CV-841 (ED Tex
February 27, 2009). It will confirm much
of what you know is wrong about forced
pre-dispute arbitration provisions. (The
Magistrate’s Report can be found online by Googling Williams v. Mexican
Restaurant.) NELA members and allies
are asked to show their support for the
Arbitration Fairness Act, H.R. 1020,
and its Senate counterpart, soon to be
introduced by Sen. Russ Feingold (DWI). The newest version of the Act will
overturn Gilmer, Circuit City, and Pyett
and prohibit predispute clauses in the
employment and consumer contexts.
Go to NELA’s Action Center,
(www.capwiz.com/nela), where you will
find a sample letter to email to your
Senators and Representatives. And
please sign the petition at
www.fairarbitrationnow.org, a terrific new
website hosted by Public Citizen with
lots of information about the anti-arbitration effort.
—Last month marked one year since
the National Employment Law
Project (NELP), one of NELA’s allied
partners, launched the National Wage
& Hour Clearinghouse (www.justpay.org). NELP’s goal was to create an
online community to support and promote wage and hour litigation, policy
and organizing campaigns, and public
agency enforcement activities. The webbased, password-protected Clearinghouse now contains over 750 documents consisting of model litigation and
wage campaign materials, state and
local legislative reforms, and industrybased research and data. With over 400
members from the constituencies NELP
hoped to bring together, (the NELA bar,
the labor bar, legal services and non-15-
profits, worker centers, and academics), 2,000 visits to the website and 400
document downloads each month, as
well as activity on the Clearinghouse
listserv and updates on important wage
and hour news and developments, the
Clearinghouse has much to celebrate in
its first year of operation. To join the
Clearinghouse, go to www.just-pay.org
and click on “Join the Clearinghouse,”
or go to www.just-pay.org/join. For more
information about NELP, see
www.nelp.org.
—If you missed the event March 20-21
in Denver, audio files and accompanying PDF presentations from NELA’s
Spring Seminar, “Taking and Defending
Depositions in Employment Litigation,”
can now be bought and downloaded by
going to www.nela.org and clicking on
“Online Learning.” Individual sessions
are available, as well as a “bundle” of
seven sessions that contains the following programs and supporting materials:
• The Ground Rules: Deposition Goals
and Strategies
• Cross-Examining the Adverse Deponent
• Evasive and Adverse Deposition Answers
• Working Your Depositions Into an
Effective Discovery Plan
• Responding to Objections and other
Actions of Opposing Counsel
• Strategies and Tactics for Preparing
Your Client
• Defending the Deposition
CELA’s DIVERSITY COMMITTEE RECEIVES GRANT AWARD FROM THE STATE BAR
by Toni Jaramilla
The California State Bar Labor & Employment Law Section has established
a grant program to promote education
and networking in the area of labor and
employment law. It considers organizations throughout California which seek
funding for worthy programs that have
the goal of educating or promoting diversity in the practice of employment or
labor law.
This year, CELA’s Diversity Committee
is only one of two recipients of the State
Bar grant, out of a pool of many candidates. The Committee will be receiving
$2,550.00 to help fund one of its diversity outreach projects, a networking
seminar entitled “Choosing Employment
Discrimination Law as a Legal Career.”
Through the seminar, (date and place to
be announced), the Committee will be
targeting law students as well as new
attorneys, to encourage them to consider the practice of employment law as
their chosen career. A diverse panel will
provide insight on the realities of practicing employment law and the rich and
fulfilling variety of sub-areas to choose
from, such as representing immigrants,
specializing in pregnancy or disability
cases, representing public employees
or employers, or becoming an employment law mediator, just to name a few.
The program will be educational and
helpful not just to students and new
attorneys, but also to seasoned attorneys who may want tips on law practice
management, including how to start and
survive a law practice in this economy
C O M I N G
as a solo practitioner or small firm. In
the tradition of the Diversity Committee’s
seminars, a cocktail hour and a full
dinner of ethnic cuisine will be provided
after the program, to promote networking and friendship among us and in our
legal community.
This program will be free of charge,
thanks to the generosity of the State
Bar Labor & Employment Section. More
details will be announced soon.
If you are interested in being a speaker
for this event or for future programs, or
if you wish to become more involved in
the Diversity Committee, please contact the Committee Chair, Toni Jaramilla,
at (310) 551-3020 or [email protected].
E V E N T S
April 29, 2009
Washington DC
(See page 15 and www.nela.org for details)
May 1, 2009
May 20, 2009
Sacramento
June 26, 2009
NELA’s GALA FUNDRAISER WORKING FOR CHANGE:
RECLAIMING JUSTICE IN THE WORKPLACE
June 24-27, 2009
October 1, 2009
Oakland Marriott
October 2-3, 2009
Oakland Marriott
-16-
Published
Monthly
BULLETIN
May 2009
Vol. 23, No. 5
on pregnancy is discrimination against
women...
UNITED STATES
SUPREME COURT
TITLE VII IS NOT VIOLATED BY
CALCULATION OF SERVICE
CREDIT THAT EXCLUDES TIME
SPENT ON PREGNANCY LEAVE
DURING YEARS PRECEDING
PASSAGE OF PREGNANCY
DISCRIMINATION ACT
AT&T CORP. v HULTEEN. In a 7-2
opinion by Souter filed on May 18,
(with Ginsburg and Breyer dissenting),
the Supreme Court reversed the Ninth
Circuit in holding that an employer
does not necessarily violate the Pregnancy Discrimination Act, (42 USC §
2000e(k)), when it pays pension benefits calculated in part under an accrual rule, applied only prior to the
PDA, that gave less retirement credit
for pregnancy leave than for medical
leave generally. (The Ninth Circuit’s en
banc decision appears at 498 F3d
1001, and was summarized in CELA
Bulletin, Aug 07, p.8.) “We hold that
there is no necessary violation,” the
Supreme Court wrote, “and the benefit
calculation rule in this case is part of a
bona fide seniority system under §
703(h) of Title VII..., which insulates it
from challenge.” Souter’s majority opinion continues in part as follows:
“The Ninth Circuit’s decision directly
conflicts with the holdings of the Sixth
and Seventh Circuits that reliance on a
pre-PDA differential accrual rule to
determine pension benefits does not
constitute a current violation of Title
VII. [cites omitted.]
“‘[S]eniority systems are afforded special treatment under Title VII,’ [cite
omited], reflecting Congress’s understanding that their stability is valuable
in its own right... Benefit differentials
produced by a bona fide seniority-based
pension plan are permitted unless they
are ‘the result of an intention to discriminate.’ 42 U.S.C. § 2000e-2(h)...
“Because AT & T’s differential accrual
rule was ... a permissible differentiation
given the law at the time, there was
nothing in the seniority system at odds
with the subsection (h) bona fide requirement...
“Bona fide seniority systems allow,
among other things, for predictable financial consequences, both for the
employer who pays the bill and the
employee who gets the benefit. [cite
omitted.] As § 703 demonstrates, Congress recognized the salience of these
reliance interests and, where not based
upon or resulting from an intention to
discriminate, gave them protection.
Because the seniority system run by
AT & T is bona fide, the judgment of the
Court of Appeals for the Ninth Circuit is
reversed.”
Ginburg’s dissenting opinion argues in
part as follows:
“In General Elec. Co. v. Gilbert, 429
U.S. 125..., this Court held that a classification harmful to women based on
pregnancy did not qualify as discrimination ‘because of ... sex’ prohibited by
Title VII... [¶] Congress swiftly reacted
to the Gilbert decision. Less than two
years after the Court’s ruling, Congress
passed the [PDA] to overturn Gilbert
and make plain the legislators’ clear
understanding that discrimination based
“The PDA does not require redress for
past discrimination. It does not oblige
employers to make women whole for
the compensation denied them when,
prior to the Act, they were placed on
pregnancy leave, often while still ready,
willing, and able to work, and with no
secure right to return to their jobs after
childbirth. But the PDA does protect
women, from and after April 1979, when
the Act became fully effective, against
repetition or continuation of pregnancybased disadvantageous treatment...
“Congress interred Gilbert more than
30 years ago, but the Court today
allows that wrong decision still to hold
sway... I would hold that AT & T committed a current violation of Title VII
when, post-PDA, it did not totally discontinue reliance upon a pension calculation premised on the notion that
pregnancy-based classifications display no gender bias... [¶] I would construe the Act to embrace plaintiffs’
complaint, and would explicitly overrule Gilbert so that the decision can
generate no more mischief.”
UPDATED SUMMARY OF
ARBITRATION DECISIONS
As noted by Christina Krasomil in an
April 29 CELA Listserv message, Ellen
Lake and Tali Shaddow have updated
their “Summary of Arbitration Decisions
To Support Opposition to Motions To
Compel Arbritration” with all the newest
cases. The updated Summary is available under the Arbitration Provisions
category in the Members Only Brief
Bank, at www.cela.org.
DECISIONS
(From Page 1)
For respondents: Amy Howe, Kevin K.
Russell, Bethesda, MD; Henry S. Hewitt,
Oakland; Blythe Mickelson, Kerianne
R. Steele, Weinberg, Roger & Rosenfeld,
Alameda; Judith Kurtz, San Francisco;
Mary K. O’Melveny, Washington DC;
Noreen Farrell, Debra Smith, Equal
Rights Advocates, San Francisco;
Pamela S. Karlan, Stanford Law School
Supreme Court Litigation Clinic.
For petitioner: Carter G. Phillips, Washington DC.
As amici for respondents: NELA and
Pick Up The Pace, (brief by Stefano G.
Moscato, Victoria W. Ni, and Charlotte
Fishman); National Women’s Law Center; Lawyers’ Committee for Civil Rights
Under Law; Asian American Justice
Center; The National Council of La Raza;
People for the American Way Foundation; Center for Reproductive Rights;
AARP.
USSC, 5/18/09; opinion by Souter
joined by Roberts, Stevens, Scalia,
Kennedy, Thomas, and Alito; concurring opinion by Stevens; dissenting opinion by Ginsburg joined by
Breyer; 2009 DAR 7019, 2009 WL
1361539.
CERTIORARI IS GRANTED TO
ADDRESS ENHANCEMENT OF
FEE AWARDS UNDER FEDERAL
FEE-SHIFTING STATUTES
BASED ON “QUALITY OF
PERFORMANCE” AND
“RESULTS OBTAINED”
PERDUE v KENNY A. ex rel. WINN.
On April 6, the United States Supreme
Court announced a grant of certiorari to
review an Eleventh Circuit decision, (532
F3d 1209), involving the calculation of
an attorneys’ fee award to the successful plaintiffs in an action under 42 USC
§ 1983 challenging the adequacy of
foster child services in two Georgia
counties. In its July 2008 opinion, the
Eleventh Circuit panel begrudgingly affirmed a fee award that included an
enhancement of 1.75, (amounting to
$4.5 million). Although the Eleventh
Circuit expressed the view that “most, if
not all” of the reasons given by the
district court “appeared to be foreclosed
by binding Supreme Court precedent,”
it felt constrained by circuit precedent
that has continued to recognize “quality
of representation” and “results obtained”
as valid bases for enhancements.
CALIFORNIA
EMPLOYMENT
LAWYERS ASSOCIATION
The Supreme Court granted certiorari
limited to Question 1 presented by the
petition: “Can a reasonable attorney’s
fee award under a federal fee-shifting
statute ever be enhanced based solely
on quality of performance and results
obtained when these factors already
are included in the lodestar calculation?”
USSC, 4/6/09, No. 08-970; 129 S Ct
1907, 2009 WL 229762 (granting certiorari).
[Editor’s note: The subject was addressed as follows by the Ninth Circuit
in its June 2000 opinion in Van Gerwen
v Guarantee Mutual Life Co. (9th Cir
2000) 214 F3d 1041:
“Quality of representation is generally
considered at the lodestar stage in
determining what is a reasonable hourly
rate. [cite omitted.] To factor quality of
representation also into the multiplier
risks double counting. In Blum [v
Stenson (1984) 465 US 886], the Court
rejected use of a multiplier to increase
the fee award where the district court
had already awarded fees at the upper
end of the range based on factors that
included the high quality of the attorneys’ representation... Blum recognized
that in rare cases the lodestar amount
might be unreasonable and considerations such as ‘the important factor of
the results obtained’ might lead a district court permissibly to adjust a fee
upward or downward... Nonetheless,
the Court made clear (as we have) that,
absent exceptional circumstances, it is
impermissible to use the multiplier to
adjust the lodestar fee for quality of
representation. In the context of an
upward adjustment, as in Blum, such
an adjustment is justified only in the
rare case where there is specific evidence that the quality of service was
superior in light of the hourly rates
charged and the success was exceptional.”]
-2-
David J. Duchrow
Suite 305
Tel: (310) 479-5303
FAX: (310) 479-5306
E-mail:
[email protected]
Director:
Christina Krasomil
Encino, CA 91436-2412
Tel: (818) 907-7895
FAX: (818) 907-7474
EXECUTIVE BOARD
(Los Angeles)
Dolores Leal
(Los Angeles)
David DeRubertis
(Woodland Hills)
Steven Pingel
(Long Beach)
Kathy Dickson
(Oakland)
(Laguna Hills)
David Duchrow
(Los Angeles)
Cynthia Rice
(San Francisco)
Wilmer Harris
(Pasadena)
Mika Spencer
(San Diego)
Phil Horowitz
(San Francisco)
James P. Stoneman
(Claremont)
Jean K. Hyams
(Oakland)
Christopher Whelan
(Gold River)
Toni Jaramilla
(Los Angeles)
Jeffrey Winikow
(Los Angeles)
Virginia Keeny
(Pasadena)
Bulletin Editor
Christopher Bello
842 Irving Avenue
Astoria, OR 97103
Ph: (503) 338-3891
DECISIONS
(From Page 2)
CALIFORNIA
SUPREME COURT
IN UCL CASE INVOLVING
ALLEGATIONS OF FRAUDULENT
ADVERTISING, SUPREME COURT
HOLDS THAT ONLY CLASS
REPRESENTATIVES ARE
REQUIRED TO HAVE PROP 64
STANDING, NOT ALL UNNAMED
CLASS MEMBERS
In re TOBACCO II CASES. “The complaint before us,” the Supreme Court
wrote in a 4-3 opinion by Moreno, (with
Baxter joined by Chin and Corrigan
concurring and dissenting), “alleges
that the tobacco industry defendants
violated the UCL by conducting a decades-long campaign of deceptive advertising and misleading statements
about the addictive nature of nicotine
and the relationship between tobacco
use and disease. Prior to the passage
of Proposition 64, the trial court had
certified the case as a class action...
After Proposition 64 was approved, the
trial court granted defendants’ motion
to decertify the class on the grounds
that each class member was now required to show an injury in fact, consisting of lost money or property, as a result
of the unfair competition. The court of
appeal affirmed.
“On review, we address two questions:
First, who in a UCL class action must
comply with Proposition 64’s standing
requirements, the class representatives
or all unnamed class members, in order
for the class action to proceed? We
conclude that standing requirements
are applicable only to the class representatives, and not all absent class
members. Second, what is the causa-
tion requirement for purposes of establishing standing under the UCL, and in
particular what is the meaning of the
phrase ‘as a result of’ in section 17204?
We conclude that a class representative
proceeding on a claim of misrepresentation as the basis of his or her UCL action
must demonstrate actual reliance on
the allegedly deceptive or misleading
statements, in accordance with wellsettled principles regarding the element
of reliance in ordinary fraud actions.
Those same principles, however, do not
require the class representative to plead
or prove an unrealistic degree of specificity that the plaintiff relied on particular
advertisements or statements when the
unfair practice is a fraudulent advertising
campaign. Accordingly, we reverse the
order of decertification to the extent it
was based upon the conclusion that all
class members were required to demon(Cont'd on Page 4, DECISIONS)
NINTH CIRCUIT PROVIDES MUCH-NEEDED GUIDANCE ON EVIDENTIARY
BURDENS IN OVERTIME MISCLASSIFICATION LITIGATION
by Matthew Bainer
With the expiration of the employer’s
deadline to seek review, one of the
more modest but significant recent
California wage and hour law decisions
has now become final. The Ninth
Circuit’s unpublished decision in
Whiteway v FedEx Kinko’s Office and
Print Services (9th Cir 2009) 2009 WL
725152, issued on March 19, 2009,
reversed a Northern District order, (2007
WL 2408872), and reinstated a class
action lawsuit seeking unpaid overtime
and related penalties on behalf of a
class of hundreds of the company’s
Center Managers. This short threepage memorandum opinion, (before
Thomas, Bybee, and Southern District
Judge Roger Benitez), carries monumental implications for all California
employees who are paid on a “salaried”
basis and denied compensation for
overtime work. (The opinion was summarized in CELA Bulletin, April 09,
p.7.)
The complaint, filed in May of 2005,
alleged that Center Managers at
FedEx’s California locations were im-
properly classified as “exempt” from the
overtime pay requirement on the basis
of what is commonly referred to as the
“managerial” exemption. Under California law, exemptions from overtime pay
are narrowly construed and the employer has the burden of proving that the
exemption applies. For the managerial
exemption to apply, the employer must
prove, inter alia, that the employees
spend more than one-half of their work
time on exempt duties and “customarily and regularly”exercise discretion and
independent judgment under Cal Labor
Code § 515.
The case was certified as a class action
in 2006. In May of 2007, FedEx moved
for summary judgment, asking the District Court to conclude that the entire
class was exempt from overtime under
the “executive” exemption of Wage Order 7-2001. The District Court agreed
and granted Defendant’s motion. The
Plaintiff appealed to the Ninth Circuit,
seeking to have summary judgment
overturned.
The decision is significant for what it
reveals about the Ninth Circuit’s views
concerning the burdens of proof in overtime misclassification cases, and what
evidence is sufficient—or, in this case,
insufficient—to satisfy the employer’s
burden. Because the Ninth Circuit omitted a recitation of the evidence presented, a brief summary will be helpful.
In support of its motion for summary
judgment, FedEx submitted deposition
testimony by seven current or former
Center Managers who described their
duties and asserted that they spent
more than one-half of their work time on
managerial tasks. The defense evidence
also included deposition excerpts and a
declaration from higher-level managers
concerning the job duties and responsibilities of Center Managers and why
they believed that the Center Managers
were properly classified as exempt executives.
(Cont'd on Page 19, WHITEWAY)
-3-
DECISIONS
(From Page 3)
strate Proposition 64 standing, and remand for further proceedings regarding
whether the class representatives in
this case have, or can demonstrate,
standing.”
Cal SC, 5/18/09; opinion by Moreno
joined by Kennard, Werdegar, and
Moore; concurring and dissenting
opinion by Baxter joined by Chin
and Corrigan; 2009 DAR 7059, 2009
WL 1362556.
SUPREME COURT GRANTS
REVIEW TO DECIDE WHETHER
LABOR CODE § 351 CREATES
PRIVATE RIGHT OF ACTION FOR
EMPLOYEES
LU v HAWAIIAN GARDENS CASINO.
On April 29, the state Supreme Court
announced that it will review the January 22, 2009, decision in which the
Fourth District reversed summary judgment, in part, in a tip pooling case. The
Court of Appeal held that although Labor Code § 351 creates no private right
of action, it may serve as a predicate for
suit under the Unfair Competition Law,
(Bus & Prof Code § 17200 et seq.). (The
Fourth District’s decision appeared at
170 CA4th 466, 88 CR3d 345, and was
summarized in CELA Bulletin, Jan 09,
p.6.) The decision involves a class action by casino dealers challenging the
legality of the casino’s policy of requiring dealers to share tips with employees who provide service to casino patrons.
In granting the petition for review, the
Supreme Court specified: “The issue to
be briefed and argued is limited to the
following: Does Labor Code section
351, which prohibits employers from
taking any gratuity or part thereof that is
paid, given to, or left for an employee by
a patron, create a private right of action
for employees?”
For plaintiffs: Dennis F. Moss.
For defendant: Sheppard, Mullin, Richter & Hampton and Tracey A. Kennedy;
Michael St. Denis.
Cal SC, 4/29/09; 2009 DAR 6220 (granting petition for review).
SUPREME COURT GRANTS NINTH
CIRCUIT’S REQUEST THAT IT
DECIDE WHETHER LABOR
CODE’S OVERTIME
REQUIREMENTS APPLY TO
WORK DONE IN CALIFORNIA BY
NON-RESIDENTS
For plaintiffs: Charles Scott Russell,
Robert Thompson, Callahan McCune &
Willis, Tustin.
For defendants: Stephen L. Berry, Paul
W. Cane, Jr., Paul, Hastings, Janofsky
& Walker, Costa Mesa.
Cal SC, 4/22/09; No. S170577.
SULLIVAN v ORACLE CORP. On April
22, the California Supreme Court granted
the Ninth Circuit’s request, (2009 WL
367626, submitted on February 17,
2009), that it decide questions of California law regarding the application of
the Labor Code and the UCL to work
performed in California by non-residents.
Specifically, the Ninth Circuit is seeking
answers to the following questions:
CALIFORNIA COURTS
OF APPEAL
“(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 Bus & Prof Code § 17200
apply to the overtime work described in
question one?
“(3) Does § 17200 apply to overtime
work performed outside California for a
California-based employer by out-ofstate plaintiffs in the circumstances of
this case if the employer failed to comply with the overtime provisions of the
FLSA?”
On February 17, the Ninth Circuit withdrew the November 6, 2008, panel decision by W. Fletcher, (547 F3d 1177,
summarized in CELA Bulletin, Nov 08,
p.7), that had concluded that the Labor
Code’s overtime provisions and
California’s Unfair Competition Law do
apply to work performed in California by
non-residents. The case involves overtime claims by three workers, residents
of Colorado and Arizona, employed to
train Oracle customers in the use of its
software, who had been misclassified
for a number of years as exempt teachers.
REVERSING SUMMARY
JUDGMENT ON PREGNANCY
DISCRIMINATION CLAIMS,
SECOND DISTRICT HOLDS, INTER
ALIA, THAT “ME TOO” EVIDENCE
WAS ADMISSIBLE AND
SUFFICIENT TO RAISE TRIABLE
ISSUE
JOHNSON v UNITED CEREBRAL
PALSY. In an opinion filed on April 30,
the Second District, Division Three, reversed summary judgment on pregnancy
discrimination and related claims brought
by a discharged counselor. Specifically,
the plaintiff alleged causes of action for
discrimination based on sex (pregnancy), and discrimination based on
disability (pregnancy) in violation of Gov
Code § 12940, and in violation of public
policy; violation of California’s law on
pregnancy disability leaves (§ 12945);
failure to take reasonable steps to prevent discrimination and retaliation (§
12940); and wrongful termination in violation of public policy. The court wrote in
part as follows:
“To support its summary judgment
motion, the employer presented evidence ... that it terminated plaintiff for a
valid reason—it had obtained information that plaintiff falsified her work time
records. Plaintiff opposed the motion by
presenting evidence that (1) she had not
falsified her time records, (2) she was
fired soon after she disclosed that she
was pregnant, and (3) defendant had
fired other women after they disclosed
they were pregnant. The latter assertion
was based on declarations from the
other women.
-4-
DECISIONS
(From Page 4)
“Defendant made evidentiary objections
to these declarations, and the declarations were addressed by both parties at
the hearing on the motion for summary
judgment. However, the reporter’s transcript shows that the trial court made no
evidentiary rulings at the hearing, and
the trial court’s minute order for the
summary judgment motion, dated January 16, 2007, does not contain explicit
evidentiary rulings. Instead, the minute
order shows that plaintiff’s evidence of
these other firings of pregnant women
was implicitly accepted by the trial
court, but found to be insufficient to
justify denying defendant’s motion for
summary judgment.
“Defendant served a notice of ruling that
does not contain any reference to its
evidentiary objections. Later, however,
defendant submitted an attorney order
on the summary judgment motion, which
the court signed and filed on March 5,
2007, nearly two months after the hearing [on] that motion. Despite the fact
that the minute order indicates otherwise, the attorney order states that the
court sustained defendant’s objections
to the declarations. The court signed
the attorney order despite plaintiff’s filed
objection in which, among other things,
she argued that the court had never
made an express ruling on defendant’s
evidentiary objections. The admissibility of these declarations..., along with
the question as to whether triable issues of material fact were disclosed by
the evidence submitted by the parties,
constitute the appellate issues before
us...
“We conclude that the contested declarations are admissible and they constitute substantial circumstantial evidence
which is sufficient to raise triable issues
of material fact as to the reason for
plaintiff’s termination. We further conclude that other evidence in the record
is also sufficient to raise triable issues
regarding plaintiff’s termination. Therefore, the summary judgment must be
reversed and the matter remanded for
“Plaintiff questions whether Jimenez
[plaintiff’s supervisor] did a thorough
(good faith) investigation [of the time
records issue] before firing plaintiff...
However, without more, that comes
under the rule that to defeat a summary
judgment motion, a plaintiff must do
more than raise an issue whether the
employer’s action was unsound, unfair,
wrong or mistaken...
“Nor does plaintiff necessarily meet her
summary judgment burden ... when she
argues that she was fired very shortly
after (1) she revealed ... that she was
pregnant, and (2) she was away from
work due to her pregnancy. In King [v
UPS (2007) 152 CA4th 426], the court
held that the timing of an adverse employment action is not, by itself, sufficient to raise an inference ... [of] ... an
unlawful purpose.
“Nor are we persuaded by plaintiff’s
argument that not telling her she was
being fired because of her time records
constitutes substantial evidence of pretext, a lack of good faith, or discriminatory animus... Indeed, our Supreme
Court has held that one cannot reasonably draw an inference of intentional
discrimination solely from evidence that
an employer lied about its reasons for
taking an adverse employment action...
“Although we have set out several matters which by themselves will not constitute substantial evidence ..., there
remains the question whether these
matters, when taken together, do constitute sufficient evidence to demonstrate a triable issue of fact... In our
view, they do.
“The challenged ‘me too’ declarations
... constitute substantial evidence requiring reversal of the judgment. Former
employees of defendant stated in their
declarations that (1) they too were fired
by defendant after they became pregnant, (2) they know of someone who
was fired by defendant because she
was pregnant, (3) they resigned because Jimenez made their work stressful after they notified her they were
trying to become pregnant, or (4) they
know of occasions when employees
who were dishonest or cited for dishonesty, were not fired by defendant. These
employees worked at the same facility
where plaintiff worked [and] they were
-5-
supervised by the same people that
supervised plaintiff... This is substantial
evidence sufficient to raise a triable
issue...
“As discussed below, couts have routinely sanctioned use of this ‘me too’
type of evidence. Nevertheless, relying
on Beyda v. City of Los Angeles (1998)
65 Cal.App.4th 511, and other cases,
defendant filed written objections to
those portions of the declarations that
deal with the topic of pregnancy...
“The Beyda court stated that rather than
lacking probative value, the evidence
was actually too relevant and had too
much probative value. However, Beyda
did not address whether the evidence
could be admitted under the provisions
of subdivision (b) of Evidence Code
section 1101. As discussed below, many
courts have held that evidence of [this]
type ... is admissible under rule 404(b)
of the Federal Rules of Evidence to
show intent or motive, for the purpose of
casting doubt on an employer’s stated
reason... and thereby creating a triable
issue [as to] pretext...
“Recently the United States Supreme
Court ... took up the question of the
admissibility of evidence from several
employees of the defendant who claimed
that they too were discriminated against
... because of their age. (Sprint/United
Management Co. v. Mendelsohn (2008)
128 S.Ct. 1140)... The Supreme Court’s
answer was that the relevance of the
evidence ‘is fact based and depends on
many factors...’ Thus ... there was no
wholesale rejection of such ‘me too’
evidence ..., and Sprint does not support defendant’s assertion that the ‘me
too’ evidence presented by plaintiff in
this case should be rejected.
“Further ..., here we can say as a matter
of law that the ‘me too’ evidence ... is per
se admissible under both relevance and
Evidence Code section 352 standards.
The evidence sets out factual scenarios
... that are sufficiently similar to the one
presented by plaintiff..., and the probative value of the evidence clearly outweighs any prejudice... Dissimilarities
DECISIONS
(From Page 5)
between the facts related in the other
employees’ declarations and the facts
asserted by plaintiff ... go to the weight
of the evidence, not its admissibility.”
For plaintiff: V. James DeSimone and
Twila S. White.
For defendants: Howard M. Knee and
Melanie C. Ross.
Second Dist Div Three, 4/30/09; opinion by Croskey with Kitching and
2009 WL 1154132.
[Editor’s note: In an April 30 CELA
Listserv posting, Twila White wrote:
“This is a defining moment for me.
When the summary judgment was
granted I really did consider leaving the
law practice entirely, or at least taking
a long break from it. Many thanks to Jim
[DeSimone] and his firm for spearheading and handling this appeal. They are
so awesome. Thanks to Paul Greenberg
and Iris Weinmann for helping me fine
tune the opposition to the msj... And
special thanks to Jeff Winikow, Norm
Pine, and Lee Feldman for bending their
ear to give us feedback/guidance/support in getting this opinion published. I
am so proud to be a member of CELA!”
And Jim DeSimone added in a May 2
Listserv posting: “This is a terrific result
owed in large part to the fabulous job
Twila White did in obtaining the necessary evidence to defeat summary judgment... Some of the language is troubling here when you only have one
indicia of discriminatory conduct, such
as the timing of the decision, so I would
suggest that folks read it and use this
case as guidance at the case intake
stage. The truly precedent setting value
of this decision is that the Judges ruled
that evidence of similarly situated employees who have been discriminated
against is admissible as a matter of law.
This should truly help all of us litigate
these cases... [In addition to those
Twila thanked], I want to acknowledge
the good work of Rebecca Hamburg,
(now NELA’s Program Director), who
drafted the reply brief, and Supreeta
Sampath, who helped prepare me for
oral argument and wrote the request for
publication. It takes a village to win an
appeal.”]
HIGH DEGREE OF PROCEDURAL
UNCONSCIONABILITY WAS
PRESENT AND CLASS
ARBITRATION WAIVER WAS
SUBSTANTIVELY
UNCONSCIONABLE BECAUSE IT
APPLIED TO LOW-WAGE
EARNERS AND WAS UNFAIRLY
ONE-SIDED
OLVERA v EL POLLO LOCO, INC. “El
Pollo Loco, Inc.,” the Second District,
Division Three, wrote in an April 27
opinion, “appeals the denial of its motion to compel arbitration of a complaint
filed by Carlos Olvera [alleging wage
and hour violations]. The trial court determined that the employment arbitration agreement was procedurally and
substantively unconscionable. El Pollo
Loco contends (1) the arbitration agreement is neither procedurally nor substantively unconscionable; (2) the class
arbitration waiver is not unenforceable
under the rule from Gentry v Superior
Court (2007) 42 Cal.4th 443, 64
Cal.Rptr.3d 773, 165 P.3d 556; and (3)
the overruling of its evidentiary objections was error. We conclude that El
Pollo Loco has shown no prejudicial
error and affirm the order.
“The first amended complaint [on behalf
of a class of general managers] alleges
counts for (1) failure to pay overtime; (2)
failure to provide meal breaks; (3) unlawful deductions from earnings; (4)
failure to provide accurate itemized wage
statements; (5) unfair business practices (Bus. & Prof. Code, § 17200 et
seq.); and (6) conversion.
“We conclude that the record here indicates a degree of procedural unconscionability in two respects. First, as in
Gentry..., the inequality in bargaining
power between the low-wage employees and their employer makes it likely
that the employees felt at least some
pressure to sign the acknowledgment
and agree to the new dispute resolution
policy, whatever they understood that
policy to be.
“Second, it appears that the employees’ agreement ... was not an informed
-6-
decision... The description of the new
policy [in the explanatory materials] ...
was totally inaccurate. The dispute resolution policy itself, on another page,
required binding arbitration of all employment-related disputes and stated
that the parties ‘may agree to mediate,’
not that mediation was required. The
description provided in the explanatory
materials was misleading in that it described the new policy as one of required mediation rather than required
arbitration. Moreover, the policy appeared in much smaller type than the
explanatory materials, and in English
only... [¶] [W]e conclude that the degree of procedural unconscionability is
high.
“The class arbitration waiver here ...
applies not only to restaurant general
managers, such as Olvera, but to all
employees who signed the acknowledgment, many of whom are low-wage
earners. A class action or class arbitration may be the most effective way, and
perhaps the only effective way, for those
employees to vindicate their statutory
rights... This is true particularly if many
of those employees are low-wage earners with limited English language skills
who are likely ill-informed of their statutory rights ... as appears to be the case
here. Moreover, the waiver is unfairly
one-sided because it benefits only El
Pollo Loco, which is unlikely to sue its
employees in a class action... We therefore conclude that the class arbitration
waiver is substantively unconscionable...
“We conclude that the high degree of
procedural unconscionability ... together
with the substantive unconscionability
of the class arbitration waiver render
that provision unconscionable. In light
of our conclusion, we need not decide
whether the class arbitration waiver is
unenforceable under the rule from Gentry...
“El Pollo Loco has not indicated that it
would continue to seek arbitration if
only the class arbitration waiver were
invalidated. In these circumstances, we
regard El Pollo Loco’s failure to argue
the issue on appeal as a waiver of any
DECISIONS
(From Page 6)
claim regarding severability.”
For plaintiffs: Arias Ozzello & Gignac,
Mike Arias and Mikael H. Stahle.
For defendant: Carlton DiSante &
Freudenberger,
Timothy
M.
Freudenberger and Leigh A. White.
Second Dist Div Three, 4/27/09; opinion by Croskey with Klein and
Kitching concurring; 2009 WL
1110828.
CLAIMS FOR VIOLATIONS OF
PREVAILING WAGE LAWS WERE
NOT COVERED BY ARBITRATION
CLAUSE OF AGREEMENT
BETWEEN UNIONS AND
L.A.U.S.D.
FLORES v AXXIS NETWORK & TELECOMMUNICATIONS, INC. On April 30,
the Second District, Division One, ordered the publication of its April 8 opinion affirming a trial court order that had
denied the employer’s petition to compel arbitration of employees' claims that
they had not been paid the prevailing
wage for work performed on projects for
the Los Angeles Unified School District
as required by Labor Code § 1770 et
seq. governing public works projects.
The Court of Appeal wrote in part as
follows:
“We agree with the trial court that the
arbitration provision of the agreement
between the LAUSD and trade unions
involved in the projects did not mandate
arbitration of these prevailing wage
claims... [¶] The trial court denied Axxis’s
petition finding that under the authority
of Vasquez v. Superior Court (2000) 80
Cal.App.4th 430 the agreement did not
contain the ‘clear and unmistakable
waiver of [employees’] right[s] to a judicial forum necessary to compel arbitration of [their] statutory claims.’
in this case, despite the existence of
certain of the Vasquez factors, shows it
contained certain provisions demonstrating that claims for prevailing wage law
violations were specifically not subject
to arbitration. Accordingly, Axxis’s reliance on Vasquez is unavailing...
“The agreement in this case carved out
an exception for complaints of statutory
and regulatory violations from the arbitration procedure. It distinguished between complaints of violations of law on
the one hand, and disputes or grievances arising from the interpretation or
application of the agreement on the
other, and provided different procedural
mechanisms for resolving each. [¶][One]
section described ‘complaints’ of prevailing wage law violations, as distinguished from ‘disputes’ or ‘grievances’
as used in the arbitration provision, and
said nothing about resolving such ‘complaints’ through the arbitration procedures...
“Alternatively, Axxis argues that Labor
Code section 229 requires that the
employees’ claims be arbitrated because they concern the interpretation
and application of the agreement. We
disagree... [¶] It is immaterial whether
the agreement may require interpretation because ... the agreement itself
carved out an exception from arbitration
for alleged violations of prevailing wage
laws. This being the case, Labor Code
sction 229 is inapplicable...”
For plaintiffs: Richard E. Donahoo and
Thomas J. Welch.
For defendants: Atkinson, Andelson,
Loya, Ruud & Romo.
Second Dist Div One, 4/30/09; opinion by Rothschild with Mallano and
Tucker concurring; 2009 DAR 6302,
2009 WL 931706.
“[F]or an agreement to require arbitration of a statutory claim the [United
States Supreme] Court [in Wright v
Universal Maritime Service Corp. (1998)
525 US 70] held it must be ‘clear and
unmistakable’ that the parties intended
to waive a judicial forum for statutory
claims... [¶] A review of the agreement
TO PREVAIL ON “INTERACTIVE
PROCESS” CLAIM, PLAINTIFF
MUST IDENTIFY AFTER
DISCOVERY SOME REASONABLE
ACCOMMODATION THAT WAS
AVAILABLE AT TIME THAT
PROCESS SHOULD HAVE
OCCURRED
SCOTCH v ART INSTITUTE OF CALIFORNIA-ORANGE COUNTY, INC. Affirming summary judgment on disability
discrimination claims, the Fourth District, Division Three, wrote in part as
follows in an opinion filed on May 6.
“Scotch alleged AIC violated the FEHA
by reducing his employment status to
part time because he was HIV-positive,
failing to make a reasonable accommodation, failing to engage in the required
interactive process, failing to maintain a
workplace free of discrimination, and
retaliating against him. Scotch also
alleged AIC constructively discharged
him in violation of public policy.
“We hold summary judgment was proper
on Scotch’s claim for disability discrimination ... because Scotch did not
meet his burden of presenting evidence
that (1) AIC’s stated reason ... was false
or pretextual, and (2) there was a causal
link...
“On Scotch’s claim of failure to make a
reasonable accommodation..., AIC offered Scotch a reasonable accommodation. Scotch’s proposed accommodation of priority in teaching assignments to ensure he maintained full-time
employment status amounted to a guarantee of full-time employment, which
AIC was not required to provide.
“On Scotch’s claim for failure to engage
in the interactive process..., [we] hold
... the employee must identify a reasonable accommodation that was available
at the time the interactive process
should have occurred. We recognize
that during the interactive process itself
the employee does not have the same
access to information about possible
accommodations as the employer does.
-7-
DECISIONS
(From Page 7)
But, we also hold, through the litigation
process, including discovery, the employee must be able to identify a reasonable accommodation that would
have been available during the interactive process...
“Finally, summary judgment was properly granted on Scotch’s claims for
retaliation, failing to maintain an environment free from discrimination, and
termination of employment in violation
of public policy.
“[Relative to the discrimination claim]
AIC met [its] initial burden [on summary
judgment]. It presented evidence that
Scotch received a [low performance
review score], did not have a master’s
degree, and never enrolled in a master’s
degree program... [¶] AIC also presented [evidence that] it experienced
declining enrollment in 2006 ... and ...
had to change 10 faculty members from
full-time to part-time status and asked
seven faculty members to leave based
on their failure to enroll in a master’s
degree program...
“Any factual issue of the timing of the
master’s degree requirement ... is not
material ... because Scotch failed to
show a causal link between his revelation he was HIV-positive and AIC’s decision to implement the master’s degree requirement. He presented no evidence that any of the decision makers
... knew he was HIV-positive...
“Scotch thus failed to demonstrate ‘such
weaknesses, implausibilities, inconsistencies, incoherencies, or contradictions’ in AIC’s reasons to assign him
fewer than five course sections that a
reasonable trier of fact could rationally
find those reasons not credible. [cite
omitted.] Scotch’s discrimination claim
depends on an inference, drawn solely
from the timing of events, that AIC
implemented the ACICS accreditation
standard of requiring a master’s degree
... in order to discriminate against him
for being HIV-positive—a fact known
only to [a single decision maker who
had in fact supported him]. A reasonable jury could not draw that inference,
and neither do we.
“The accommodation offered by AIC—
three years to complete a master’s
degree program and time spent working
on a master’s degree replacing professional development requirements—did
not guarantee Scotch immediate fulltime employment, but was ‘a modification or adjustment to the workplace’
that would have enabled Scotch ‘to
perform the essential functions of the
job held or desired.’ (cite omitted)... The
accommodation that Scotch requests—
priority in assignment of lower division
courses—is the same accommodation
any AIC faculty member without a
master’s degree would need in order to
be ensured ... full-time employment.
The trial court was correct to grant
summary judgment...
“In this case, the parties have conducted extensive and thorough discovery... Yet, after this extensive process,
the only accommodation Scotch identifies that should have been offered to him
was priority in assignment of lower division courses—an accommodation
which, we have concluded, is not reasonable and not directed to the limitations created by his disability.
“Scotch contends AIC did not engage in
the interactive process in good faith
because (1) it changed his employment
status to part time before scheduling a
second [promised] meeting... [¶] A reasonable jury could find AIC, rather than
Scotch, had the burden of initiating a
second meeting ... [but] [¶] [w]as AIC’s
failure to engage in the interactive process material? [W]as Scotch required
to identify a reasonable, available accommodation which the second meeting ... might have produced? If so, at
what stage was Scotch required to
identify a reasonable, available accommodation?
“In response to Scotch’s application for
unemployment benefits, [defendant’s
agent Marchman] informed the EDD:
‘He went from [full time] to [part time]
teaching... Changing to [part time]
means the employee has the option to
keep his benefits going.’ Scotch contends that statement is false and the
falsity demonstrates retaliatory motive...
Marchman’s statement ... was incomplete rather than false. A reasonable
trier of fact could not draw a reasonable
inference of retaliatory motive...
“We synthesize Wysinger [v Automobile Club of Southern California (2007)
157 CA4th 413], Nadof-Rahrov [v The
Neiman Marcus Group, Inc. (2008) 166
CA4th 952], and Claudio [v Regents of
University of California (2005) 134 CA4th
224] as follows: To prevail ... an employee must identify a reasonable accommodation that would have been
available at the time the interactive process should have occurred... [¶] This
reconciliation is consistent with federal
cases. For example, in Willis v.
Conopco, Inc. (11th Cir. 1997) 108 F.3d
282, 287, the Eleventh Circuit Court of
Appeals explained that ... in litigation,
the employee has discovery tools available to learn what accommodations
might have been discussed during the
interactive process...
“By establishing a prima facie case of
retaliation, Scotch shifted the burden to
AIC of showing a legitimate
nonretaliatory reason... For the reasons we have explained, AIC met its
burden... [Scotch then] failed to submit
evidence showing AIC’s reasons were a
pretext...
“Scotch concedes ‘the Failure to Maintain [an environment free from discrimination]’ claim can survive only if a ‘retaliation cause of action survives.’ Because we affirm summary judgment on
all of Scotch’s FEHA causes of action,
we also affirm summary judgment on
[that] claim.
“[Finally], [o]n the undisputed facts of
this case, Scotch was not constructively discharged as a matter of law. AIC
did not change Scotch’s working conditions or make it difficult for him to
perform his job functions. There is no
evidence he was shunned, treated badly,
or subjected to epithets or scorn.
Scotch’s appointment letter informed
him AIC might change his employment
status to part time in the case of enrollment decline. Under the Turner [v
Anheuser-Busch, Inc. (1994) 7 C4th
-8-
DECISIONS
(From Page 8)
1238] standard, a reasonable employer
would not have realized a reasonable
person in Scotch’s position would be
compelled to resign.”
For plaintiff: David F. Tibor.
For defendant: Curiale Dellaverson
Hirschfeld & Kraemer, Kirstin E. Muller,
Judy M. Iriye.
Fourth Dist Div Three, 5/6/09; opinion by Fybel with Rylaarsdam and
Bedsworth concurring; 2009 DAR
6593, 2009 WL 1219956.
IN UCL CASE CHALLENGING
HIDDEN FEES BY INSURERS,
DISCRETION IN PERMITTING
PRECERTIFICATION DISCOVERY
FOR PURPOSE OF FINDING NEW
CLASS REPRESENTATIVE WITH
PROP 64 STANDING
SAFECO INSURANCE CO. v SUPERIOR COURT (KARNAN). Relative to a
complaint filed as a representative action under the unfair competition law,
(Bus & Prof Code § 17200 et seq.),
alleging Insurance Code violations, the
Second District, Division Three, summarized the issue and its conclusion as
follows in an opinion filed on April 30.
“[Safeco] and [First National] challenge
an order granting a motion by the plaintiffs’ class representative, Lisa Karnan,
for precertification discovery for the purpose of finding a new class representative. Karnan is not a member of the
class she purports to represent. She
seeks to identify potential class members and substitute a new class representative in her place. We conclude the
trial court properly exercised its discretion by weighing the potential for abuse
of the class action procedure against
the rights of the parties in these circumstances and that the defendants have
shown no error in the granting of the
motion.
“In order to proceed with the unfair
competition claim, the Proposition 103
Enforcement Project had to address
the issue of its lack of standing, given
the passage of Proposition 64. It did so
by filing a motion in July 2006 for leave
to conduct discovery for purpose of
identifying a prospective plaintiff who
satisfied the new standing requirements
imposed by Proposition 64.
Fourth District, Division Three, wrote in
part as follows relative to wage and hour
claims asserted by two service representatives for a company that provides
respiratory services and medical equipment setup for patients in their homes:
“Karman proposed that a third party
administrator send a letter to affected
customers to be identified by Safeco
and First National notifying them of this
action and of ‘their right to opt-out of any
discovery which would disclose their
contact information to plaintiff’s counsel.’
“[P]laintiffs sought compensation for the
on-call time spent resolving customer
questions by phone, and for all the time
they were on call, even when not responding to customer calls. Plaintiffs
also claimed they were entitled to a
premium rate of compensation ... for all
hours worked in excess of eight hours
per day or 40 hours per week. Lincare
filed motions for summary judgment
and/or summary adjudication and demurrers. The trial court’s rulings on
those motions ultimately resolved every
cause of action against plaintiffs... [W]e
affirm in part, reverse in part, and remand.
“We conclude that the trial court did not
abuse its discretion [in granting the
motion]. The court reasonably concluded
that the rights of the class members in
these circumstances was substantial.
As was the case in CashCall [v Superior
Court (2008) 159 CA4th 273], and unlike First American [Title Ins. Co. v
Superior Court (2007) 146 CA4th 1564],
the circumstances here make it likely
that class members would be denied
relief if precertification discovery were
not allowed and the class action were
dismissed.... The trial court has considerable discretion in evaluating the evidence and making these determinations.”
For real parties in interest: Coughlin
Toia Geller Rudman & Robbins,
Theodore J. Pintar, Kevin K. Green,
Thomas R. Merrick; Consumer Watchdog, Harvey J. Rosenfield, Pamela M.
Pressley; Roger Brown and Associates
and Jay Angoff.
For petitioners: Barger & Wolen.
1153433.
FOURTH DISTRICT HOLDS THAT
TRIAL COURT ERRED IN
SUMMARILY ADJUDICATING
OVERTIME AND RELATED WAGE
AND HOUR CLAIMS
GOMEZ v LINCARE, INC. In an opinion
filed on April 3 and modified slightly and
certified for publication on April 28, the
-9-
“The trial court granted Lincare’s motions for summary adjudication of plaintiffs’ claim for overtime compensation
on the ground that plaintiffs, as drivers of
hazardous materials, were covered by
the motor carrier exemption and therefore exempt from California’s overtime
law. Lincare failed to carry its initial
burden of proof to show the motor carrier
exemption applied to all of plaintiffs’
workdays, and summary judgment was
improperly granted.
“The trial court also sustained Lincare’s
demurrer to plaintiffs’ claim for breach of
an express contract. [T]he complaint
contained sufficient facts to state a
cause of action for breach of an express
contract, and the order sustaining the
demurrer is reversed.
“The trial court determined Lincare had
established there were no triable issues
of material fact regarding plaintiffs’ claim
for on-call time following a regular shift
of less than eight hours. We affirm the
order granting summary adjudication ...
because undisputed evidence showed
plaintiffs were paid for all the time they
worked during regular shifts and were
never on call after working less than an
eight-hour shift.
DECISIONS
(From Page 9)
“[P]laintiffs’ claims for failure to provide
itemized wage statements, failure to
pay wages upon termination of employment, and unfair competition ... were
derivative of a valid claim for wages. As
noted, we conclude the trial court erred
by granting summary adjudication of
the overtime claim based on the motor
carrier exemption; therefore, we also
reverse the summary adjudication of
those causes of action.
“Finally, the trial court summarily adjudicated plaintiffs’ claims for breach of an
implied-in-fact contract and promissory
estoppel. Although the trial court correctly determined there was no triable
issue of material fact regarding the implied-in-fact contract claim, Lincare
failed to meet its initial burden with
respect to the promissory estoppel claim
by failing to address the allegation that
Lincare promised to pay plaintiffs for the
time spent telephonically resolving customer questions...”
For plaintiffs: David R. Greifinger; Howard
A. Goldstein; Mark A. Ozzello and Mike
Arias; Stephanie Lai.
For defendant: Drinker Biddle & Reath,
Alan J. Lazarus, Cheryl D. Orr, and
Susan B. Burr.
Fourth Dist Div Three, 4/3/09, modif
and cert’d for pub 4/28/09; opinion
by Fybel with Rylaarsdam and
Bedsworth concurring; 173 CA4th
508, 2009 WL 891836.
NINTH CIRCUIT
SUMMARY JUDGMENT WAS
ERRONEOUSLY GRANTED ON
ERISA AND LMRA CLAIMS BY
RETIREES WHOSE HEALTH
BENEFITS WERE TERMINATED
POORE v SIMPSON PAPER CO. “We
must decide a dispute about retirement
benefits,” O’Scannlain prefaced his May
21 opinion. (The court contemporaneously issued an order withdrawing its
September 22, 2008 opinion, 544 F3d
1062.) O’Scannlain’s opinion continues
in part as follows:
“Simpson Paper Company owned and
operated the Evergreen Mill in West
Linn, Oregon, from 1990 until 1996,
when it closed for economic reasons.
Plaintiffs are former workers in the mill,
who retired at ages over 55 but under 65,
and their dependent spouses...
“The Association of Western Pulp and
Paper Workers represented the hourly
employees at the mill, including the
early retirees, from the 1970s through
the time of the mill’s closure. Three
CBAs were in force during the time
Simpson owned the mill: 1990-1993,
1993-1995, and 1995-2001. Simpson
and the Union negotiated a closure
agreement in 1996, which terminated
the 1995-2001 CBA.
“The first CBA incorporated by reference a benefit booklet as follows: ‘Subject to all the provisions of the Benefit
Plan Booklet the Company will provide
each eligible employee and each eligible dependent the coverages agreed
to in its labor agreement dated November 27, 1990.’ The incorporated booklet
provided that early retirees could continue medical coverage that existed at
the time of retirement and that they
could ‘change coverage at the annual
open enrollment on the same basis as
active employees.’ The booklet further
provided that such coverage would continue until the retiree ‘bec[ame] eligible
for Medicare, attain[ed] age 65, or until
... death, whichever occurs first.’ A
similar extension period was provided
for continuation of medical coverage of
the retirees’ spouses. During the time
that such coverages continued, the cost
was ‘paid on the same basis as active
employees.’ Finally, the benefits booklet specifically reserved to Simpson the
‘right to alter, amend, delete, cancel or
otherwise change’ the welfare benefits
plan ‘at any time, subject to negotiation
with the Union.’ (Emphasis added.)
“The latter two CBAs likewise incorporated the benefits booklet. Such contracts stated that, ‘[u]nless otherwise
specified, all participants covered by
the health care plans will be subject to
the same level of contributions as active
employees and to the same health care
plan provision changes which take ef-10-
fect from time to time.’ Though there
were slight changes to the benefits
booklet over the years, the benefits
Simpson provided therein remained
substantially the same.
"Simpson’s closure agreement, negotiated with the Union, provided that ‘employees who are curtailed as a result of
the closure and begin receiving their
Simpson pension benefits as of the first
month immediately following curtailment, will be eligible for retiree medical
coverage in accordance with the provisions of the Benefits Plan Booklet.’
“Then-active employees received a ‘Termination Checklist’ at meetings just
before the closure. It contained essentially the same provision just quoted.
Neither the closure agreement nor the
information given to employees who
remained employed until closure referenced early retiree or dependent spouse
benefits for those who already had retired.
“In 2002, Simpson notified all retirees
that it intended to phase out, and eventually to eliminate, retirement health
benefits. On July 1, 2004, it carried out
such intention and stopped providing
retirement health benefits. The present
action followed.
“The early retirees assert that Simpson
breached its duties under [ERISA] by
terminating health benefits without having obtained the Union’s agreement or
having bargained to impasse. They also
assert breach of contract claims under
[the LMRA], arguing Simpson violated
its obligations under the CBAs. The
district court [D Oregon] granted summary judgment to Simpson, concluding
that the early retirees have no vested
right to the benefits they seek. This
timely appeal followed.
“To establish standing to sue under
ERISA, the early retirees must show
that they are plan ‘participants’... [¶]
We are satisfied that the early retirees
need not show that their benefits are
vested in the way that pension benefits
are vested. Under LaRue [v DeWolff,
DECISIONS
(From Page 10)
Boberg & Associates (2008) 128 S Ct
1020], they have shown enough.
“The retirees also assert breach of contract claims under the LMRA... [¶] The
retirees here have stated at least a
colorable claim that they have a right to
benefits which survived the expiration of
the remainder of the agreement... Accordingly, jurisdiction under the LMRA
exists.
“Retirees assert that they have nonforfeitable rights, while Simpson Paper
claims that it could terminate the benefits at any time. Neither is correct. The
plan document states that it may be
modified ‘subject to negotiation with the
Union.’ Retirees have argued, as an
alternative theory, that there was never
any negotiation with the Union. The
contractual term is ambiguous: it could
mean negotiation to impasse, see 29
U.S.C. § 158(a)(5) & (d), or something
less. Because resolving the ambiguity
requires consideration of disputed facts,
the grant of summary judgment was
inappropriate. And, of course, the retirees are entitled to try their claim under
section 301 of the LMRA to a jury.
“Retirees assert that Simpson Paper
violated its fiduciary responsibilities by
not advising them of the possibility of
plan termination during their exit interviews... [¶] [But h]ere, there is no evidence in the record to suggest that
Simpson Paper was considering
changes in retiree benefits at the time
that representations were made to the
early retirees....
“‘An ERISA beneficiary may recover
benefits under an equitable estoppel
theory upon establishing a material
misrepresentation, reasonable and detrimental reliance upon the representation and extraordinary circumstances.’
[cite omitted.] The retirees have offered
no argument to counter the district
court’s conclusion that no exceptional
circumstances were present. Their estoppel claim accordingly must fail as
well.
“Because it is unclear whether Simpson
Paper negotiated as required by the
CBA, we reverse in part the grant of
summary judgment in its favor and remand. We affirm the grant of summary
judgment as to the early retirees’ claims
of breach of fiduciary duty and estoppel.”
[Note: In its original September 2008
opinion, the Ninth Circuit panel had
dismissed the appeal over a dissent by
Judge Graber whose views have been
substantially accepted by the panel in
the new opinion.]
For plaintiffs: Thomas K. Doyle, Portland.
For defendant: Douglas S. Parker, Anchorage.
For CELA as amicus: Monique Olivier,
The Sturdevant Law Firm, San Francisco.
For AARP as amicus: Jay E. Sushelsky,
Barbara A. Jones, Melvin R. Radowitz.
O’Scannlain joined by Callahan and
Graber; 2009 DAR 7225, 2009 WL
1409257.
ON REHEARING EN BANC, NINTH
CIRCUIT DISAGREES WITH
PANEL AND HOLDS THAT
CONGRESS VALIDLY
ABROGATED STATES’ IMMUNITY
IN ENACTING GOVERNMENT
EMPLOYEE RIGHTS ACT
STATE OF ALASKA v EEOC. In an
opinion by Kozinski, on rehearing en
banc, filed on May 1, with Ikuta joined
by Tallman and Callahan dissenting
and O’Scannlain concurring and dissenting in parts, the Ninth Circuit held
that the Government Employee Rights
Act validly abrogated the states’ Eleventh Amendment immunity with respect
to claims for pay discrimination, sex
harassment, and retaliation. (The November, 2007, panel decision had held
otherwise: 508 F3d 476, summarized in
CELA Bulletin, Nov 07, p.5.) Kozinski
“Lydia Jones and Margaret Ward worked
in the office of then-Governor Walter
Hickel of Alaska. Both were fired under
disputed circumstances and filed complaints with the [EEOC]. Jones alleged
-11-
that she was paid less because she is
a black woman, sexually harassed and
then retaliated against for complaining
about the harassment. Ward alleged
she was paid less on account of her sex
and that she was terminated because of
statements she made supporting
Jones’s complaint.
“The EEOC assigned the cases to an
administrative law judge. Before the
ALJ, Alaska argued that Jones and
Ward’s claims were barred by sovereign immunity. The ALJ disagreed. On
interlocutory appeal, the EEOC denied
the sovereign immunity defense and
remanded for further proceedings. The
state petitions for review of the EEOC’s
decision.
“The Eleventh Amendment protects
states from being sued without their
consent... [T]he parties seem to agree
that EEOC proceedings are sufficiently
court-like to implicate the Eleventh
Amendment. We assume, without deciding, that this is true.
“Congress may abrogate this immunity
in certain circumstances. To determine
when it has validly done so, we must
‘resolve two predicate questions: ...
whether Congress unequivocally expressed its intent to abrogate’ and, if so,
‘whether Congress acted pursuant to a
valid grant of constitutional authority.’
Kimel v. Fla. Bd. Of Regents, 528 U.S.
62, 73 (2000).
“GERA’s provisions, entitling state
employees to ‘back pay ... payable by
the employer,’ 42 U.S.C. §§ 2000e5(g)(1), 2000e-16c, unmistakably express Congress’s intent to allow suits
against states for damages... The remaining question ... is whether Congress had the authority to do so.
“Section 5 of the Fourteenth Amendment empowers Congress to ‘enforce,
by appropriate legislation, the provisions of' that article, and sovereign immunity may be abrogated in service of
this goal. There are two ways in which
Congress can do this. First, Congress
may prohibit and provide a remedy for
DECISIONS
(From Page 11)
conduct that actually violates the
Amendment... Second, legislation
‘which deters or remedies constitutional
violations can fall within the sweep of
Congress’ enforcement power even if in
the process it prohibits conduct which
is not itself unconstitutional.’ [cite omitted.] We refer to the latter kind of legislation as prophylactic ... and we must
be convinced that it is congruent and
proportional to the harm that Congress
sought to prevent... But the congruence
and proportionality requirement applies
only to prophylactic legislation; it doesn’t
apply to a direct remedy for unconstitutional conduct.
“We therefore consider first whether
Jones and Ward allege actual violations
of the Fourteenth Amendment... If they
do, we needn’t decide whether GERA is
valid prophylactic legislation... [¶] Each
of Jones and Ward’s claims allege actual violations of the Fourteenth Amendment. GERA has validly abrogated
Alaska’s sovereign immunity with respect to these claims. The petition for
review is therefore denied and the case
is remanded to the EEOC for further
proceedings.”
O’Scannlain summarized as follows his
reasons for concurring only in part:
“Although I agree ... that the allegations
of sex discrimination, if true, would
establish that the State of Alaska ...
violated the Constitution’s Equal Protection Clause, I do not think that the
same can be said for the allegation of
retaliatory discharge in violation of the
First Amendment. In my view, that claim
does not state an actual constitutional
violation. We must therefore analyze
[GERA] to determine whether it is valid
prophylactic legislation... I believe
GERA fails such scrutiny.”
Dissenting, Ikuta, joined by Tallman
and Callahan, insisted that “GERA does
not explicitly abrogate state sovereign
immunity; it does not specify states as
potential defendants; and it does not
create a statutory scheme under which
states are the only possible defendants.”
Ninth Circuit, 5/1/09 (en banc); opinion by Kozinski with Ikuta, Tallman
and Callahan dissenting, and
O’Scannlain concurring and dissenting; 2009 DAR 6436, 2009 WL 1163863.
FLSA’S OVERTIME PROVISIONS
APPLY TO PURELY
COMMERCIAL RETAIL BUSINESS
NOTWITHSTANDING ITS LOCATION
ON INDIAN RESERVATION AND
OWNERSHIP BY TRIBAL
MEMBERS
SOLIS v MATHESON. “In this opinion,”
wrote District Judge Ezra sitting by
designation, “we resolve whether the
overtime provisions of the [FLSA] apply
to a retail business located on an Indian
reservation and owned by Indian tribal
members. We also resolve whether
appellee the Secretary of Labor ... has
the authority to enter the Indian reservation to inspect the books of that business. Finally, we resolve whether it was
an abuse of discretion for the district
court to appoint a receiver for this retail
business in the event the overtime payments were not made.
“We conclude that the overtime requirements of the FLSA apply to the retail
business at issue in this case. Because the FLSA applies..., we conclude that the Secretary had the authority to enter the Indian reservation to
audit the books... We therefore affirm
the decision of the district court on
these two issues.
“We conclude that the district court’s
decision with respect to the automatic
appointment of a receiver ... was premature. We therefore vacate that portion of
the judgment.
“Because the Puyallup Tribe has not
enacted wage and hour laws ... the
overtime provisions of the FLSA apply
... and the intramural affairs exception
does not. Baby Zack’s is a purely commercial enterprise engaged in interstate
commerce selling out-of-state goods to
non-Indians and employing non-Indians... Baby Zack’s is not a tribal business, although it is owned by tribal
members. Therefore, the district court’s
finding that the intramural exception
does not apply because there is nothing
-12-
profoundly intramural or involving selfgovernance about the employment of
Indians and non-Indians by a retail business engaged in interstate commerce
is affirmed.”
Ezra joined by B. Fletcher and
Rawlinson; 2009 DAR 5631, 2009 WL
1036083.
NINTH CIRCUIT CERTIFIES
QUESTIONS TO CAL SUPREME
COURT CONCERNING OVERTIME
EXEMPTION FOR
PHARMACEUTICAL SALES
REPRESENTATIVES
D’ESTE v BAYER CORPORATION.
On May 5, a Ninth Circuit panel requested that the California Supreme
Court decide two certified questions
relative to class claims by pharmaceutical sales representatives who claim
they were wrongly classified as exempt
from overtime pay requirements. The
Central District had granted the
employer’s motion for summary judgment, finding that the plaintiffs were
exempt under the outside sales exemption and declining to reach the question
whether they were exempt under the
administrative exemption. (No. CV-0703206-JFW-PLA.) The case was consolidated with two other cases pending
before the Ninth Circuit, and the court
noted that at least four other similar
class actions have been filed in the
Central District. Explaining that it believed that there is no controlling precedent or clear state court guidance on
the question, the Ninth Circuit framed
the certified questions as follows:
“1. The Industrial Welfare Commission’s
Wage Orders 1-2001 and 4-2001 define
‘outside salesperson’ to mean ‘any person, 18 years of age or over, who customarily and regularly works more than
half the working time away from the
employer’s place of business selling
tangible or intangible items or obtaining
orders or contracts for products, services or use of facilities.’ 8 Cal.Code
DECISIONS
(From Page 12)
Regs., tit. 8, §§ 11010, subd. 2(J);
11040, subd. 2(M). Does a pharmaceutical sales representative (PSR) qualify
as an ‘outside sales person’ under this
definition, 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, Wage Order 42001 defines a person employed in an
administrative capacity as a person
whose duties and responsibilities involve (among other things) ‘[t]he performance of office or non-manual work
directly related to management policies
or general business operations of his/
her employer or his employer’s customers’ and ‘[w]ho customarily and regularly exercises discretion and independent judgment.’ Cal.Code Regs., tit. 8 §
11040, subd. 1(A)(2)(a)(I), 1(A)(2)(b). Is
a PSR, as described above, involved in
duties and responsibilities that meet
these requirements?”
For plaintiffs: James Alton Jones, Dallas; Matthew D. Brinckerhoff, NYC.
For defendant: Benjamin Davidson, Jennifer Elizabeth White-Sperling, Morgan
Lewis & Bockius, Irvine; Shannon B.
Nakabayashi, Thomas M. Peterson,
Morgan Lewis & Bockius, San Francisco; Melinda S. Riechert, Morgan
Lewis & Bockius, Palo Alto.
Ninth Circuit, 5/5/09; before Freedman, Kleinfeld, and Ikuta; 2009 WL
1192514.
REJECTING POLICE
DEPARTMENT’S QUALIFIED
IMMUNITY ARGUMENT, NINTH
CIRCUIT AFFIRMS DENIAL OF
SUMMARY JUDGMENT ON
§ 1983 CLAIM BY NONPROMOTED WHISTLEBLOWER
ROBINSON v YORK. In an opinion filed
on April 27, a Ninth Circuit panel wrote
in part as follows, (superceding an unpublished January, 2009 opinion that
appeared at 308 Fed Appx 69):
“Plaintiff Richard Robinson, a sergeant
with the Los Angeles County Office of
Public Safety, filed a civil rights complaint under 42 U.S.C. § 1983 against
the County of Los Angeles and several
OPS officers alleging that he was denied promotion in violation of his First
and Fourteenth Amendment rights because he reported misconduct within
his department. Defendants appeal from
the denial of qualified immunity. For the
reasons that follow, we affirm.
“Robinson alleges that he was not promoted because he spoke out or filed
reports about misconduct in his department between 2002 and 2006. In addition to testifying in a class action lawsuit alleging discrimination by OPS,
Robinson also filed misconduct reports
pertaining to various problematic behavior, some of which he observed while off
duty. The reports described (1) a fellow
officer who allegedly worked for an outside employer while on the clock, (2)
officers who appeared to be drinking
alcohol during work hours, (3) OPS
officers who wore distinctive tattoos
possibly indicative of anti-Semitic attitudes, (4) cases of potential battery or
excessive force, and (5) a ‘Parking for
Irish Only’ sign allegedly placed by
OPS officers and directed at a fellow
officer. After failing to receive what he
considered an adequate response from
OPS, Robinson took several steps following-up on these reports, including
emailing internal affairs and discussing
the details of the complaints with superior officers.
“Defendants moved for summary judgment, arguing that Robinson’s reports
were not protected speech because
they were made as part of his professional duties or because he failed to
present the reports through the chain of
command as required by written department policy. The district court denied
the motion, finding genuine issues of
material fact on the scope of Robinson’s
job duties and holding that a violation of
a written chain of command policy was
not dispositive, but merely one of the
factors to be considered as part of
balancing test established in Pickering
v. Board of Education, 391 U.S. 563
(1968).
-13-
“As a matter of law, ‘the competency of
the police force is surely a matter of
great public concern.’ [cite omitted.]...
Robinson’s testimony in a class action
against the County is also of public
concern, regardless of whether it had an
impact on the result of that litigation...
“Defendants also argue that Robinson’s
reports were made in conjunction with
his official job duties and therefore were
not protected by the First Amendment
under Garcetti v. Ceballos, 547 U.S.
410 (2006). The scope of Robinson’s
job duties is a question of fact. [cite
omitted.] ... We lack jurisdiction to
review the district court’s finding of a
genuine issue of material fact regarding
whether the scope of Robinson’s duties
included reporting police misconduct.
[cite omitted.] Instead, we assume the
resolution of this dispute in the nonmoving party’s favor.
“Under the [Pickering] balancing test...,
the First Amendment interests of employees must be weighed against the
‘interest of the State, as an employer, in
promoting the efficiency of the public
services it performs...’ [¶] Although we
have sometimes found a police
department’s interests in discipline and
esprit de corps to outweigh First Amendment interests, genuine factual disputes
here—including, for example, the extent of potential workplace disruption
and whether the justifications Defendants assert for their actions were
pretextual—preclude such a determination at this stage of the litigation... [¶]
[A] fact-finder could conclude that Defendants’ application of the chain of
command policy was pretextual and
not based on Defendants’ interest in
avoiding workplace disruption...
“Although Defendants are free to argue
at trial that they would have taken the
same adverse employment actions
against Robinson regardless of his
speech..., [t]his factual dispute cannot
be resolved on summary judgment.
“[Finally,] at the time defendants acted
in 2005 and 2006, both the constitutional protection of employee speech
DECISIONS
(From Page 13)
and a First Amendment cause of action
for retaliation against protected speech
were clearly established and potentially
applicable to Defendants’ conduct.”
For plaintiff: Sanjay Bansal and Michael
A. McGill, Lackie & Dammeier, Upland.
For defendant: Jin Suk Choi, Franscell,
Strickland, Roberts & Lawrence, Glendale.
Hawkins joined by Cudahy and
Pregerson; 2009 DAR 5962, 2009 WL
1109534.
PATRONAGE DISMISSAL
DOCTRINE DOES NOT IMMUNIZE
PUBLIC EMPLOYERS WHO
TERMINATE EMPLOYEES FOR
LACK OF PERSONAL AS
OPPOSED TO POLITICAL
LOYALTY
NICHOLS v DANCER. “This appeal,” a
Ninth Circuit panel explained in a May
18 opinion, “presents the question of
whether the patronage dismissal doctrine immunizes public employers who
terminate employees on the basis of
perceived lack of personal loyalty. We
conclude that it does not and remand for
“Under certain circumstances, a public
employer is permitted to take adverse
employment action against an employee
for engaging in speech that is normally
protected by the First Amendment, and
the court need not conduct a Pickering
balancing test. For example, the patronage dismissal doctrine allows public employers to terminate certain public employees on the basis of their
political beliefs and loyalties... Here,
the district court found that Nichols was
a confidential employee and that her
termination was a patronage dismissal... However, because Nichols was
terminated for a perceived lack of personal loyalty, rather than political loyalty, we conclude that the patronage
dismissal doctrine does not apply to her
termination. We therefore must vacate
the summary judgment and remand the
case to the District Court [D Nev] so that
it may conduct a traditional First Amendment analysis.
“The patronage dismissal doctrine is
designed to ensure the integrity of the
political process. To force a public official to work toward his or her goals with
the assistance of employees who may
be working against those goals has the
potential to frustrate the will of the electorate. Personal disagreements do not
give rise to the same potential for electoral frustration. Some personal conflict
exists in nearly every workplace, and
severe personal conflicts may be resolved through performance evaluations
or by resorting to the balancing test set
out in Pickering. Extending the patronage dismissal doctrine to matters of
personal loyalty would give public employers unjustified power to abridge their
employees’ First Amendment rights.”
For plaintiff: Jeffrey S. Blanck, Reno.
For defendant: Cox & LeGoy, Reno.
Thomas joined by Wallace and
Graber; 2009 DAR 7135, 2009 WL
1362960.
QUI TAM PLAINTIFFS FAILED TO
ESTABLISH PUBLIC DISCLOSURE
OR ORIGINAL SOURCE STATUS
RE ALLEGATIONS OF MEDICARE
FRAUD
MEYER v HORIZON HEALTH CORPORATION. “In this appeal,” a Ninth Circuit panel explained in a May 14 opinion, “qui tam relators ... contend that the
[Northern District] erred by granting a
motion to dismiss for lack of subjectmatter jurisdiction... The principal issues on appeal relate to whether relators’ fraud allegations are based on a
public disclosure, and, if so, whether
the relators were the original source of
those allegations. Having jurisdiction
under 28 U.S.C. § 1291, we affirm.
“The gravamen of relators’ allegations
assert that appellees fraudulently billed
Medicare for patient services... [¶] In
March 2006, relator Weatherford withdrew from the suit. In August 2006,
appellees moved to dismiss the [Third
-14-
Amended Complaint]..., arguing that ...
the allegations of the remaining relators
... had been publicly disclosed by
Weatherford’s 1999 state-court wrongful-termination suit and they were not
original sources of the allegations. The
district court granted the motion...
“Even accepting relators’ assertion that
they disclosed the allegations of Medicare fraud to the government before
Weatherford filed her suit, we reject
relators’ argument because it fails the
first prong of the two-part test described
in A-1 Ambulance Serv. [v California (9th
Cir 2000) 202 F3d 1238].
“Relators’ apparent argument is that
they made the first public disclosure by
informing the government of the allegations during a meeting with [Medicare
fraud] Investigator [Steven M.] Lack.
But relators offer no argument (and cite
no authority) in support of their contention that such a private disclosure to a
government employee is a public disclosure, as the Act defines the term.
“Because the Weatherford suit publicly
disclosed the allegations in relators’
suit, we must next consider whether
relators are original sources under the
Act... [¶] We conclude that the district
court did not err by determining that
relators were not original sources... [¶]
[T]he TAC alleges fraud solely regarding the treatment and billing for the
patient referred to as ‘Patient A.’ Thus,
relators must have direct and independent knowledge of the treatment and
billing of Patient A. The district court
found that relators had ‘no such direct
and independent knowledge.’ We conclude that the record supports the district court.
“The TAC contains no allegation that
relators had direct and independent
knowledge of appellees’ alleged attempt
to defraud the government with respect
to Patient A... The TAC and declarations reveal, at most, that [relator]
Szerlip knew about the alleged fraud,
not that she had direct and independent
knowledge of the alleged fraud. This is
an important distinction....
DECISIONS
(From Page 14)
“We note additionally that relators have
not established another prerequisite to
be an original source: that they ‘had a
hand in the public disclosure of allegations that are a part of ... [the] suit.’
[cites omitted.] The district court determined that relators did not have a hand
in the Weatherford suit, which publicly
disclosed the allegations, because they
were not parties to the Weatherford
suit...”
Reinhardt wrote in dissent: “I agree with
the majority that the Weatherford suit
constituted a public disclosure, thereby
triggering the requirement that the relators be ‘original sources’ in order to
proceed with their qui tam suit. I disagree, however, with the majority’s assessment of the record, and conclude
that Szerlip has met her burden of
showing ‘original source’ status, thereby
establishing jurisdiction, by a preponderance of the evidence.”
For plaintiffs: Sarah S. Wright, San
Rafael; John A. McGuinn, San Francisco.
For defendant Horizon Health Corp.:
Kenneth P. White, George P. Schiavelli,
Teresa Cespedes Ellis, Amber Finch.
For defendant Summit Medical Center:
Gregory M. Luce, Washington DC;
Shawn Hanson and Tracy M. Strong,
San Francisco.
For defendant Sukhdeep Grewal, M.D.:
Robert R. Moore and Michael J. Betz,
San Francisco.
Bright joined by Tashima; dissenting opinion by Reinhardt; 2009 WL
1331874.
UNPUBLISHED
CALIFORNIA COURT OF
APPEAL DECISIONS
TRIAL COURT ERRED IN HOLDING
INVALID ARBITRATION
AGREEMENT’S PROVISION
CALLING FOR JUDICIAL REVIEW
OF FACTUAL AND LEGAL
ERRORS
FISHER & PHILLIPS v BEKKEN. In an
unpublished opinion filed on April 27,
the Fourth District, Division Three, reversed the trial court’s order denying
judicial review, a judgment confirming
an arbitration award, and an order awarding attorneys' fees. The court wrote in
part as follows:
“An arbitrator issued an award in favor of
the law firm Fisher & Phillips, LLP and
against its former partner, Robert J.
Bakken. The firm sought to confirm the
award in the Orange County Superior
Court, and Bekken opposed the petition
invoking the arbitration agreement’s
specially drafted provision calling for
judicial review of legal and factual errors. Bekken also separately filed a
petition to correct or vacate the award.
The trial court considered both petitions
at the same time. It deemed the special
judicial review provision was invalid, and
severed it from the contract. It granted
the petition to confirm the award. It
dismissed the petition to vacate, which
is the subject of a separate appeal. The
court later granted Fisher & Phillips’
request for attorney fees.
“Bekken’s appeal of the order confirming the award, and his appeal of the
order granting attorney fees were consolidated and will be decided in this
opinion. Concurrent with the filing of this
opinion, we have filed our unpublished
opinion in Bekken’s appeal from the
order dismissing his petition to vacate.
[See 2009 WL 1112796]. We reverse: In
making its rulings, the trial court did not
have the benefit of the recent California
Supreme Court decision Cable Connection, Inc. v. DIRECTV, Inc. (2008)
44 Cal.4th 1334 [summarized in CELA
Bulletin, Sep 08, p.1], holding an arbitration agreement may expressly provide for judicial review of the arbitration
award. In light of that well-reasoned and
binding decision, we must reverse the
trial court’s order denying judicial review
and the judgment confirming the arbitration award. Because our record is insufficient to review the claimed legal and
factual errors, we remand to the trial
court to review in the first instance the
arbitration award.
“Fisher & Phillips assert DIRECTV permits parties to expressly provide for
-15-
judicial review of the arbitrator’s award
when the contract is governed solely by
the CAA, but not when the arbitration
agreement states it is to be ‘enforced’
under the FAA (citing Hall Street [Associates, LLC v Mattel, Inc.(2008) 128 S
Ct 1396]). [T]his argument was rejected
by the California Supreme Court in
DIRECTV... [¶] [T]he FAA’s procedural
provisions for reviewing arbitration
awards do not preempt their CAA counterparts...”
For Bekken: Paul Rolf Jensen, Robert
J. Bekken.
For Fisher & Phillips: Paul, Hastings,
Janofsky & Walker, William S. Waldo,
Paul W. Cane, Jr., Christopher M.
Bissonnette, Stephen L. Berry.
Fourth Dist Div Three, 4/27/09; opinion by O’Leary with Rylaarsdam and
Ikola concurring; 2009 WL 1114036
(unpublished).
FINDING ARBITRATION
AGREEMENT UNCONSCIONABLE
WHERE EMPLOYEE FAILED TO
REBUT EVIDENCE THAT
AGREEMENT HAD BEEN
INDIVIDUALLY NEGOTIATED
BARFIELD v ECOLOGY CONTROL
INDUSTRIES, INC. “Defendant ... appeals from the trial court’s order denying its motion to compel arbitration [of a
claim for constructive termination in
violation of public policy]. Ecology Control contends the court erred in concluding the arbitration agreement in plaintiff’s
employment agreement is unconscionable. We agree and reverse the trial
court’s order.
“In May 2005, Ecology Energy hired
plaintiff ... to be the general manager of
its Richmond office. At the same time it
also hired Barfield’s wife ... to be the
billing manager... At the time they were
hired, both Barfield and his wife were
employed by a competitor of Ecology
Control...
“[In his complaint,] Barfield ... alleged
WHITEWAY
(From Page 3)
FedEx also submitted a declaration by
Dr. Christina Banks who had been hired
to conduct a questionnaire study of 150
FedEx Center Managers in Oregon,
Washington, Arizona, and Texas to
determine what tasks and activities
Center Managers perform on the job
and how much time they spend on
exempt work. (Because this litigation
covers only California Center Managers, the Banks study did not survey any
actual class members.) According to
Banks, 75 percent of the Center Managers surveyed reported spending more
than 50 percent of their time on exempt
work, while 25 percent of them reported
a figure below 50 percent.
In opposition to summary judgment, the
plaintiffs submitted 22 declarations from
class members—current or former California Center Managers—including plaintiff Stephen Whiteway. The declarants
had managed approximately 50 different stores throughout California, (out of
a total of 200), and had spent an average
of nearly five years in the Center Manager position. Each of the declarations
stated, on “personal knowledge,” that
Center Managers are required to spend,
and in fact do spend, the majority of
their time performing manual labor and
tasks requiring little or no independent
thought. The plaintiff submitted deposition testimony by class members that
was consistent with the declarations.
Plaintiff also submitted the declaration
of Dr. George Johanson, a tenured Professor of Educational Studies at Ohio
University, who regularly teaches
courses in statistics, research, and
questionnaire design, and classical test
and item response theory. Dr. Johanson
opined that the main results obtained
by the Banks survey “[were] unreliable
and invalid.” Additionally, three class
members submitted declarations explaining why they found the Banks questionnaire confusing and poorly drafted.
In reversing the Northern District’s grant
of summary judgment, the Ninth Circuit
wrote:
“Reviewing the evidence in the light
most favorable to the Center Managers,
as we must at this stage, [cite omitted],
we conclude that the Center Managers’
tendered evidence was sufficient to establish a genuine issue of material fact
regarding whether the Center Managers
were realistically expected to spend at
least half their time on exempt tasks.
FedEx Kinko’s bore the burden of establishing that Center Managers were
‘primarily engaged in duties that meet
the test of the exemption.’ Sav-On Drug
Stores, Inc. v. Superior Court, 34 Cal.4th
319, 324 (2004). The evidence tendered
by the Center Managers—including
declarations of class members and
expert rebuttal of FedEx Kinko’s statistics—was sufficient to create a genuine
issue of material fact as to whether the
Center Managers were ‘primarily engaged’ in exempt tasks. For this reason, we must reverse the grant of summary judgment.” 2009 WL 725152 at *1.
The decision is important for its statements regarding both the legal and
evidentiary
standards
in
misclassification cases. The Court reinforced previous decisions in squarely
placing the heavy burden of proof on the
employer, and elucidated the type of
evidence that may be used to make or
defeat that required showing.
Significantly, the plaintiff’s expert here
did not state an opinion in contradiction
to that of the defense expert. Rather, he
only called into question the validity of
the defense expert’s findings. And because the plaintiff bore no burden of
proof, this was sufficient, the court held,
for purposes of raising a fact issue and
supporting a denial of summary judgment. Similarly, the plaintiff’s declarations and deposition testimony were
found sufficient for purposes of defeating summary judgment, not because
they were more credible than the
defendant’s, but simply because they
called into question the validity of the
assertions made by the defense witnesses.
The lesson to be taken from this decision is that the heavy burden of proof
placed on the employer in these cases
is to be taken seriously. While it might
initially seem counter-intuitive that a
defendant should be required to prove
its “innocence,” it is nonetheless the
clear law in California that employees
-19-
are presumptively entitled to overtime
until it is proven otherwise. Litigants on
both sides of these cases, as well as
those counseling employers on the propriety of their overtime classification
practices, would be well advised to look
carefully at Whiteway v FedEx Kinko’s
in anticipating how courts are likely to
analyze misclassification cases in the
future.
Matthew Bainer is the Senior Associate Attorney at Scott Cole & Associates (Oakland), which represents plaintiff Stephen Whiteway and the plaintiff
class in Whiteway v FedEx Kinko’s,
joined by the Law Offices of Ellen Lake
in litigating the appeal. The Cole firm is
dedicated to furthering workers’ rights
through class action litigation. Matthew,
a CELA member, can be reached at
[email protected], or (510) 8919800.
•
•
•
Published
Monthly
BULLETIN
UNITED STATES
SUPREME COURT
IN 5-4 OPINION BY THOMAS,
COURT HOLDS THAT MIXEDMOTIVES INSTRUCTION IS
NEVER PROPER IN ADEA
CASE
GROSS v FBL FINANCIAL SERVICES. In a 5 vote majority opinion
filed on June 18, Thomas wrote in part
as follows:
“The question presented by the petitioner in this case is whether a plaintiff
must present direct evidence of age
discrimination in order to obtain a
mixed-motives jury instruction in a suit
brought under [ADEA]... Because we
hold that such a jury instruction is
never proper in an ADEA case, we
vacate the [Eighth Circuit’s] decision
below [526 F3d 356].
CALL FOR ARTICLES
FOR SPECIAL JUDGES’
ISSUE OF CELA
BULLETIN
Once again, CELA will be publishing a
special issue of the CELA Bulletin to
be distributed to Judges and Justices
throughout California as well as to
CELA members. As in the case of our
special issues for May and June of
2008, it will feature two or three articles
by members on topics of importance
to labor and employment law practitioners. Please submit proposed article
topics
to
Wilmer
Harris,
([email protected]), by July 15,
2009.
“At the close of trial, and over FBL’s
objections, the District Court instructed
the jury that it must return a verdict for
Gross if he proved, by a preponderance
of the evidence, that FBL ‘demoted him
...’ and that his ‘age was a motivating
factor’ in FBL’s decision to demote
him... The jury was further instructed
that Gross’s age would qualify as a
‘motivating factor if [it] played a part or
role in [FBL’s] decision to demote him.’
The jury was also instructed regarding
FBL’s burden of proof. According to the
District Court, the ‘verdict must be for
[FBL] if it has been proved ... that [FBL]
would have demoted [Gross] regardless of his age.’ The jury returned a
verdict for Gross, awarding him $46,945
in lost compensation.
“The ... Eighth Circuit reversed and
remanded for a new trial, holding that
the jury had been improperly instructed
under the standard established in Price
Waterhouse v. Hopkins, 490 U.S. 228
(1989)... [¶] In accordance with Circuit
precedent, the Court of Appeals identified Justice O’Connor’s opinion as controlling... Applying that standard, the
Court of Appeals found that Gross
needed to present ‘direct evidence’ ...
in order to [shift the burden] to the
employer to convince the trier of fact
that it is more likely than not that the
decision would have been the same
absent consideration of the illegitimate
factor...
June 2009
Vol. 23, No. 6
THE JOE POSNER
AWARD COMMITTEE
IS SOLICITING
NOMINATIONS
The upcoming fall CELA Conference
promises once again to be a great
event. Sadly, it will also mark the ninth
anniversary of Joseph Posner’s last
presentation to our group. Joe passed
away about six weeks after the 2000
conference. Since then, CELA has
taken the occasion of the conference to
present our annual Joe Posner Award.
The award committee, (Nancy Bornn,
Dolores Leal, Cliff Palefsky, and Jim
Stoneman), is now soliciting nominations for the 2009 honoree.
Because CELA’s membership has
grown tremendously in the years since
Joe’s passing, and many of the current
members didn’t have the privilege of
knowing Joe or working with him, it may
be helpful to describe the qualities that
Joe exemplified, and that we try to
honor each year with the award in his
name.
Joe co-founded this organization at the
dawn of the development of the rights of
non-unionized employees in California.
He and others did so in the belief that,
collectively, plaintiff’s employment attorneys could match and defeat their
better financed opponents. The success of CELA and its members has
definitely proven the correctness of this
vision.
“The parties have asked us to decide
whether a plaintiff must ‘present direct
evidence of discrimination in order to
obtain a mixed-motive instruction in a
non-Title VII discrimination case.’ Before reaching this question, however,
we must first determine whether the
Joe was a zealous advocate, not only
for his own clients but, ultimately, for all
employees in the state, whose rights
were advanced by Joe’s many accomplishments as plaintiff’s counsel, and
by his wonderful amicus briefs in impor-
(Cont'd on Page 15, POSNER AWARD)
DECISIONS
(From Page 1)
burden of persuasion ever shifts to the
party defending an alleged mixed-motives discrimination claim brought under the ADEA. We hold that it does not.
“This Court has never held that [the
Price Waterhouse] burden-shifting
framework applies to ADEA claims.
And we decline to do so now... Unlike
Title VII, the ADEA’s text does not
provide that a plaintiff may establish
discrimination by showing that age was
simply a motivating factor. Moreover,
Congress neglected to add such a provision to the ADEA when it amended
Title VII to add §§2000e-2(m) and 2000e5(g)(2)(B)... [¶] We cannot ignore Congress’ decision to amend Title VII’s
relevant provisions but not make similar
changes to the ADEA...
“The ADEA provides ... that ‘it shall be
unlawful for an employer [to discriminate] ... because of [an] individual’s
age.’ 29 U.S.C. §623(a)(1)... [¶] Thus,
the ordinary meaning of the ADEA’s
requirement ... is that age was ‘the
reason’ that the employer decided to
act... To establish a disparate treatment claim under the plain language of
the ADEA, therefore, a plaintiff must
prove that age was the ‘but-for’ cause of
the employer’s adverse decision... [¶]
Hence, the burden or persuasion necessary to establish employer liability is
the same in alleged mixed-motives cases
as in any other ADEA disparate-treatment action. A plaintiff must prove by a
preponderance of the evidence, (which
may be direct or circumstantial), that
age was the ‘but-for’ cause of the challenged employer decision.”
Stevens wrote in part as follows in a
dissenting opinion joined by Souter,
Ginsburg, and Breyer:
“The [ADEA] makes it unlawful for an
employer to discriminate against any
employee ‘because of’ that individual’s
age, §623(a). The most natural reading
of this statutory text prohibits adverse
employment actions motivated in whole
or in part by the age of the employee...
Not only did the Court reject the but-for
standard in [Price Waterhouse v
Hopkins] in a case construing identical
language, so too did Congress when it
amended Title VII in 1991. Given this
unambiguous history, it is particularly
inappropriate for the Court, on its own
initiative, to adopt an interpretation of
the causation requirement in the ADEA
that differs from the established reading
of Title VII. I disagree not only with the
Court’s interpretation of the statute, but
also with its decision to engage in
unnecessary lawmaking. I would simply answer the question presented by
the certiorari petition and hold that a
plaintiff need not present direct evidence of age discrimination to obtain a
mixed-motives instruction.”
In a second dissenting opinion, Breyer,
joined by Souter and Ginsburg, disagreed with the majority’s conclusion
that the words “because of” require a
plaintiff to prove that age was the “butfor” cause. “[T]he majority does not
explain why this is so,” Breyer pointed
out. “The words ‘because of’ do not
inherently require a showing of ‘but-for’
causation, and I see no reason to read
them to require such a showing.”
For employee: Eric Schnapper, Seattle; Beth A. Townsend, West Des
Moines; Michael J. Carroll, Des Moines.
For employer: Carter G. Phillips, Sidley
Austin; Frank Harty, Debra L. Hulett,
Jordan B. Hansell, Des Moines.
For NELA as amicus: Paul Mollica,
Chicago; Stefano Moscato, San Francisco; Douglas B. Huron, Stephen Z.
Chertkof, Washington DC.
For United States as amicus for employee: Lisa S. Blatt, Washington DC.
USSC, 6/18/09; opinion by Thomas
joined by Roberts, Scalia, Kennedy,
and Alito; dissenting opinion by
Stevens joined by Souter, Ginsburg,
and Breyer; dissenting opinion by
Breyer joined by Souter and
Ginsburg; 2009 DAR 8888, 2009 WL
1685684.
CALIFORNIA
EMPLOYMENT
LAWYERS ASSOCIATION
David J. Duchrow
Suite 305
Tel: (310) 479-5303
FAX: (310) 479-5306
E-mail:
[email protected]
Director:
Christina Krasomil
Encino, CA 91436-2412
Tel: (818) 907-7895
FAX: (818) 907-7474
EXECUTIVE BOARD
(Los Angeles)
Dolores Leal
(Los Angeles)
David DeRubertis
(Woodland Hills)
Steven Pingel
(Long Beach)
Kathy Dickson
(Oakland)
(Laguna Hills)
David Duchrow
(Los Angeles)
Cynthia Rice
(San Francisco)
Wilmer Harris
(Pasadena)
Mika Spencer
(San Diego)
Phil Horowitz
(San Francisco)
James P. Stoneman
(Claremont)
Jean K. Hyams
(Oakland)
Christopher Whelan
(Gold River)
Toni Jaramilla
(Los Angeles)
Jeffrey Winikow
(Los Angeles)
Virginia Keeny
(Pasadena)
Bulletin Editor
-2-
Christopher Bello
842 Irving Avenue
Astoria, OR 97103
Ph: (503) 338-3891
DECISIONS
(From Page 2)
CALIFORNIA
SUPREME COURT
SUPREME COURT WON’T
REVIEW FOURTH DISTRICT
DECISION ENFORCING
RELEASES SIGNED BY “PICKED
OFF” CLASS MEMBERS
CHINDARAH v PICK UP STIX, INC.
On June 10, the Supreme Court announced that it will not review the Fourth
District’s decision that rejected the
argument that a settlement agreement,
including a general release, was null
and void to the extent that it released
claims for any wages actually due and
unpaid, and to the extent it constituted
an agreement to work for less than the
overtime compensation actually due
and unpaid. (The Fourth District’s February 26 opinion appears at 171 CA4th
796, 90 CR3d 175, and was summarized in CELA Bulletin, Feb 09, p.6.)
The case involves misclassification
claims by a class of the defendant’s
current and former general managers,
assistant managers, and lead cooks.
When an attempt to settle the suit
through mediation failed, the defendant
attempted settlement with as many of
the class members as possible for a
figure previously offered in mediation,
and over 200 class members accepted
the offer. The Fourth District wrote:
“[Labor Code] section 1194 embodies
a public policy ... to protect workers
from employer coercion to forego overtime... This public policy is not violated
by a settlement of a bona fide dispute
over wages already earned. The releases here settled a dispute over
whether Stix had violated wage and
hour laws in the past; they did not
purport to exonerate it from future violations. Neither did the releases condition the payment of wages concededly
due on their executions. The trial court
correctly found the releases barred the
Chindarah plaintiffs from proceeding
with the lawsuit...”
For plaintiffs: Joseph J. Gigliotti; Rudolfo
Ginez and John F. Grotz.
For defendant: Shea Stokes, Maria C.
Roberts, Shirley A. Gauvin, Stacey M.
Cooper, and Arch Y. Stokes.
For CELA as amicus: Employment
Rights Attorneys and Richard D.
Schramm.
Cal SC, 6/10/09 (denying review).
[Editor’s note: The following CELA
Listserv messages were posted on June
11, concerning responses to the denial
of review in Chindarah:
From Ellen Lake: “We can move to
invalidate the releases as soon as we
learn of them presenting evidence of
fraud, etc., by the employer in soliciting
the releases. We can cite some very
good research by those who wrote
amicus letters on behalf of Chindarah,
pointing for example to rule 3.769 requiring approval of class settlements.
Some judges have set aside such releases... Rule 3.769 requires court approval of a settlement of ‘an entire class
action, or of a cause of action in a class
action, or as to a party.’ When the
employer picks off class members,
isn’t that settlement ‘as to a party’? Or
if substantially all the class members
sign the releases, isn’t that settlement
of ‘an entire class action,’ especially if
there are not enough putative class
members left to form a class? What
about petitioning the Judicial Counsel
to amend Rule 3.769 to explicitly cover
the uncertified class?”
From Michael Singer: “Since these
points were made in the amicus letters
and in the Petition, I read the denial as
stating that the practice of settling with
absent class members without court
supervision is condoned by the court.
Rule 3.769 does not apply because an
absent class member is not a party
until the class is certified. Technically,
they are ‘putative’ absent class members. The Supreme Court may be sending a message to certify cases and to
expect putative class members to be
picked off if we don’t. We would also, I
imagine, want to consider protective
responses such as following the requirements of pre-filing settlement demands, etc., to warrant applications for
catalyst attorneys’ fees.”]
CALIFORNIA COURTS
OF APPEAL
SECOND DISTRICT ENFORCES
“BERMAN WAIVER” CONTAINED IN
SONIC-CALABASAS A, INC. v
MORENO. “In this case,” the Second
District wrote in a May 29 opinion by
Suzukawa, “we consider whether an
admittedly valid employment arbitration
agreement that is governed by the [FAA]
may be enforced to dismiss a former
employee’s administrative wage claim
against his former employer for unpaid
vacation pay. The former employee ...
filed an administrative wage claim with
the Labor Commissioner according to
the ‘Berman’ process provided in Labor
Code section 98 et seq. Moreno’s former
employer ... petitioned the superior court
to dismiss the Berman proceeding and
compel arbitration... The superior court
denied the petition as premature. We
reverse the order denying Sonic’s motion to compel arbitration.
“Sonic contends that the Labor
Commissioner’s jurisdiction over this
statutory wage claim was divested by
the FAA. Sonic cites as controlling authority ... Preston v. Ferrer (2008)
___U.S.___ 128 S.Ct. 978, [summarized in CELA Bulletin, Feb 08, p.1], in
which the Labor Commissioner’s original and exclusive jurisdiction was held
to be divested by the FAA with regard to
a contract dispute arising under the
Talent Agencies Act... Alternatively,
Sonic argues that even if the minimum
requirements for arbitration set forth in
Armendariz ... apply to this statutory
wage claim, a Berman hearing is not a
prerequisite to arbitration, either under
Armendariz or Gentry v. Superior Court
(2007) 42 Cal.4th 443.
“We conclude that Moreno waived his
right to a Berman proceeding and enforcement of that waiver is not barred by
Armendariz or Gentry.
“The Labor Commissioner argued against
bypassing the Berman process, claim(Cont'd on Page 4, DECISIONS)
-3-
DECISIONS
(From Page 3)
ing that, under Armendariz, it is a necessary prerequisite to arbitration. The
rationale for this conclusion was that, in
the event the employee prevailed in the
Berman process and the employer then
moved to compel arbitration, the arbitrator would be required to provide the
employee with all of the protections that
would otherwise be available if the employer had sought a de novo appeal in
superior court under section 98.2. However, the Labor Commissioner failed to
identify any statutory authority to support this conclusion.
“The superior court denied the petition
to compel arbitration as premature. Citing Armendariz, the superior court stated
that, as a matter of ‘basic public policy
... until there has been the preliminary
non-binding hearing and decision by the
Labor Commissioner, the arbitration
provisions of the employment contract
are unenforceable, and any petition to
compel arbitration is premature and
must be denied.’
“Sonic appealed from the order of denial... During the briefing period, the
United States Supreme Court decided
Preston...
“[W]e are faced with the following issues: (1) whether Preston compels the
conclusion
that
the
Labor
Commissioner’s jurisdiction over
Moreno’s statutory wage claim was
divested by the FAA, and, if not, (2)
whether Moreno contractually waived
the statutory right to pursue his wage
claim in an administrative forum (Berman
waiver), and, if so, (3) whether the Berman
waiver is unenforceable for public policy
reasons under Armendariz or Gentry.
“As the Supreme Court in Preston explained: (1) the artist was seeking to
invalidate the entire contract based on
the personal manager’s alleged violations of the TAA...; (2) the validity and
substantive rights of the arbitration
clause were not in dispute; and (3) the
only issue was whether the fee dispute
should be resolved in an arbitral or
administrative forum. The parties did
not litigate in Preston whether there
were any generally applicable contract
defenses, such as fraud, duress, or
unconscionability, which would invalidate or restrict the arbitration agreement...
“In this case, the parties disagree as to
whether it would be unconscionable ...
to restrict the arbitration clause by invalidating the Berman waiver. Accordingly, the issues in this case are distinguishable from those that were addressed in Preston. We therefore disagree with Sonic’s position that Preston
is dispositive of this case.
“According to the arbitration agreement,
Moreno was precluded from pursuing
any judicial ‘or other governmental dispute resolution forum,’ with ‘the sole
exception’ of ‘claims arising under the
[NLRA]..., claims for medical and disability benefits under the [WCA] and
Employment Development claims.’ In
addition, the agreement stated that
Moreno was allowed to file ‘administrative proceedings only before the [DFEH]
or the [EEOC].’
“Given that neither the [DLSE] nor the
Labor Commissioner was listed among
the stated exceptions, we conclude, as
a matter of law, that Moreno was barred
from pursuing an administrative wage
claim under section 98 et seq... [W]e
turn to the issue whether the waiver is
unenforceable for public policy reasons
under Armendariz or Gentry.
“Sonic contends that the superior court
erroneously applied the Armendariz requirements to this case because the
right to vacation pay is not an unwaivable
right. We disagree.
“Sonic contends that the record fails to
show that the Berman waiver is unenforceable for public policy reasons under Armendariz or Gentry. We agree.
“Moreno contends that unless the
Berman waiver is invalidated, he will
forgo ... statutory protections afforded
by sections 98.2 and 98.4 that will apply
in a de novo appeal by Sonic of an
adverse administrative ruling... [¶] We
must decide whether the absence of
these statutory protections will significantly impair Moreno’s ability to vindicate his wage rights in arbitration... [¶]
-4-
Significantly, all of these statutory protections are only available if and when
an employer appeals from an adverse
administrative ruling... We are not persuaded that the loss of what are merely
contingent benefits can be equated with
the significant obstacle to the vindication of statutory rights that Armendariz
sought to address.
“[Moreover] [t]he record in this case is
devoid of any evidence that the Berman
process will save employees time or
money...
“Moreno contends that Berman waivers
should be invalidated as a matter of
public policy because forcing employees to undergo a case-by-case determination of each waiver’s validity ‘would
completely subvert’ the goal in Gentry of
providing a substantially more effective
way of vindicating statutory rights.
“As we previously stated, however,
Moreno has failed to persuade us that
enforcing the Berman waiver in this
case would deprive him of rights that are
necessary to the vindication of a statutory wage claim. Moreover, the record
contains no evidence that Moreno or
any other wage claimant lacks the knowledge, skills, abilities, or resources to
vindicate his or her statutory wage rights
in an arbitral forum. Even assuming the
arbitral process is more difficult to navigate than the Berman process, there is
nothing in the record to indicate that
enforcing a Berman waiver will significantly impair the claimant’s ability to
vindicate his or her statutory rights. In
short, Moreno has failed to demonstrate either the inadequacy of the arbitral forum ... or the existence of a factual
basis to invalidate all Berman waivers
as against public policy.”
For employee: Rachel Folberg and Miles
E. Locker.
For employer: Fine, Boggs & Perkins,
David J. Reese and John P. Boggs.
Second Dist Div Four, 5/29/09; opinion by Suzukawa with Willhite and
Manella concurring; 2009 DAR 7773,
2009 WL 1492917.
DECISIONS
(From Page 4)
DENYING MOTION TO VACATE
DEFAULT JUDGMENT AGAINST
“DOE” DEFENDANT WHERE
PROOF OF SERVICE OF
SUMMONS FAILED TO STATE
FICTITIOUS NAME UNDER WHICH
DEFENDANT WAS SERVED
PELAYO v J. J. LEE MANAGEMENT
CO. “In this case,” the Second District
wrote in a May 28 opinion, “we deal with
the ‘do’s’ and ‘don’t’s of Does. Code of
Civil Procedure section 474 authorizes
a plaintiff, who is ignorant of the true
name of certain defendants, to name
them as fictitious, or ‘Doe,’ defendants.
Upon discovering a Doe defendant’s
true identity, the plaintiff must amend
the complaint to allege the defendant’s
true name, ‘provided, that no default or
default judgment shall be entered
against a defendant so designated’ unless two requirements are met. First,
the summons must bear ‘on the face
thereof a notice stating in substance’
that the served person is being sued
‘under the fictitious name of’ a specific,
designated Doe defendant. Second, the
proof of service filed with the court ‘must
state the fictitious name under which
such defendant was served and the fact
that notice of identity was given by
endorsement upon the document served
as required by this section.’
“Here, plaintiff ... Pelayo amended his
complaint [for disability discrimination
and wrongful discharge] to designate J.
J. Lee Management Co. as fictitious
‘Doe 4.’ After JJLM failed to file a responsive pleading, plaintiff obtained a
clerk’s entry of default against JJLM
and a default judgment of $3.1 million.
JJLM moved to vacate the default and
default judgment, arguing that plaintiff
had failed to comply with the requirements of section 474 regarding service
of summons and proof of service. The
trial court denied the motion. JJLM appeals, and we reverse.
“We conclude that substantial evidence
supports the trial court’s finding that the
summons was properly endorsed—that
is, that the summons ‘bore on the face
thereof a notice stating in substance’
that JJLM was being sued ‘under the
fictitious name of’ Doe 4. (§ 474.) The
evidence is undisputed, however, that
the proof of service of the summons did
not contain the recitals required by
section 474—that is, it did not ‘state the
fictitious name under which such defendant was served’ (Doe 4), and did not
recite ‘the fact that notice of identity
was given by endorsement upon the
document [the summons] served as
required by this section.’ Because section 474 makes compliance with the
requirements for both the summons
and proof of service mandatory to obtain
a default or default judgment, the trial
court erred in denying the motion to
vacate.”
For plaintiff: Mancini & Associates,
Marcus A. Mancini and Adam J. Reisner;
Benedon & Serlin, Shona L. Armstrong
and Douglas G. Benedon.
For defendant: Steven L. Sugars.
Second Dist Div Four, 5/28/09; opinion by Willhite with Epstein and
2009 WL 1479408.
LABOR CODE § 351 IS NOT
VIOLATED BY POLICY ALLOWING
SUPERVISORS TO SHARE IN
TIPS COLLECTIVELY LEFT FOR
SERVICE TEAM
CHAU v STARBUCKS CORP. Reversing a judgment for the plaintiff class
following a bench trial on tip pooling
claims before Judge Patricia A. Y.
Cowett, the Fourth District, Division
One, wrote in part as follows in an
opinion filed on June 2.
“Jou Chau, a former Starbucks ‘barista,’
brought a class action ... challenging
Starbucks’s policy of permitting certain
service employees, known as shift supervisors, to share in tips that customers placed in a collective tip box. Chau
alleged the policy violates the Unfair
Competition Law ... based on a violation
of Labor Code section 351. After certifying a class of current and former baristas
and conducting a bench trial, the trial
court found Chau proved the UCL claim,
-5-
and awarded the class $86 million in
restitution.
“Starbucks appeals. We conclude the
trial court erred in ruling that Starbucks’s
tip-allocation policy violated California
law. The applicable statutes do not
prohibit Starbucks from permitting shift
supervisors to share in the proceeds
placed in collective tip boxes. The court’s
ruling was improperly based on a line of
decisions that concerns an employer’s
authority to mandate that a tip given to
an individual service employee must be
shared with other employees. The policy
challenged here presents the flip side of
this mandatory tip-pooling practice. It
concerns an employer’s authority to
require equitable distribution of tips
placed in a collective tip box for those
employees providing service to the customer. There is no decisional or statutory authority prohibiting an employer
from allowing a service employee to
keep a portion of the collective tip, in
proportion to the amount of hours
worked, merely because the employee
also has limited supervisory duties.
Accordingly, we reverse the judgment
and order the trial court to enter judgment in Starbucks’s favor.
[Fn 2: Based on our conclusion, we
assume, but do not decide, that Chau
had standing under the UCL to enforce
section 351. We likewise do not reach
Starbucks’s arguments that the court
erred by: (1) certifying the class because of the existence of conflicts
among class members and individualized issues; (2) permitting plaintiffs to
recover restitution of tips that Starbucks
did not retain; (3) failing to set off damages for certain class members; and (4)
awarding prejudgment interest.]
“Before trial, Chau moved to dismiss the
section 351 claim and to proceed only
under the UCL. Chau stated there was
no need to proceed under both statutes
because section 351 was the sole legal
basis for the UCL claim. Chau further
asserted that although there would be
no right to a jury trial under the UCL...,
a bench trial would be a superior method
of resolving the case because ‘the par(Cont'd on Page 6, DECISIONS)
DECISIONS
(From Page 5)
ties’ dispute is largely a dispute over
statutory interpretation’ and the UCL
claim provides greater relief under a
restitution theory. The trial court granted
the motion, and then granted Chau’s
motion to bifurcate the trial into liability
and remedy phases.
him or her for his or her customer
services, there is no logical basis for
concluding that section 351 prohibits
an employer from allowing the shift
supervisor to retain his or her portion of
a collective tip that was intended for the
entire team of service employees...”
“In their trial briefs in the liability phase,
plaintiffs argued that as a matter of law
section 351 prohibits supervisors from
receiving any proceeds from the collective tip box because a shift supervisor
comes within the statutory definition of
an ‘agent.’ (See § 350, subd. (d).) ...
Plaintiffs argued this rule applied even if
the shift supervisor helps serve the customer and customers intend the shift
supervisor to share in the tip. Starbucks
countered that a shift supervisor is not
an ‘agent’ under the statutory definition,
and even if [they] are ‘agents,’ section
351 does not prohibit Starbucks from
permitting shift supervisors, who perform mainly behind-the-counter service
tasks, to share in the collective tips in
proportion to the amount of hours they
worked.
For plaintiffs: A. Eric Aguilera, Terry J.
Chapko, David Borgen, Laura L. Ho,
Steven G. Zieff, David A. Lowe, and
Kenneth J. Sugarman.
For defendant: Akin Gump Strauss
Hauer & Feld, Rex S. Heinke, Catherine
A. Conway, Gregory W. Knopp, Jessica M. Weisel, Johanna R. Shargel,
and Daniel L. Nash.
by Haller with McDonald and Irion
1522708.
“Plaintiffs thereafter moved in limine to
exclude evidence that shift supervisors
serve customers. The court granted the
motion, stating that it is ‘irrelevant’ that
shift supervisors serve customers and
‘how much time they spend doing that...’
“After the liability phase, the court ruled
in plaintiffs’ favor. The court found that
Starbucks’s shift supervisors qualify as
‘agents’ ... because they ‘supervise’
and ‘direct’ the acts of other employees...
“The parties devote substantial portions
of their appellate briefs to the issue
whether the trial court’s ‘agent’ finding
was supported by the evidence. We do
not decide this issue because we agree
with Starbucks’s alternate argument
that the trial court’s legal conclusion
was erroneous. Even if shift supervisors
can be considered ‘agents’ ... Starbucks
did not violate section 351 by permitting
[them] to share in the tip proceeds...
“Because—as plaintiffs concede—section 351 does not prohibit a shift supervisor from keeping gratuities given to
[Editor’s note: The following June 3
CELA Listserv messages were among
those posted commenting on the decision in Chau v Starbucks:
From Terry Chapko: “The problem with
the opinion ... is that there was never
any evidence introduced during trial
about the intent of a single patron.
Furthermore, the Leighton [v Old Heidelberg] decision [219 CA3d 1062] makes
clear it is impossible to correctly determine what every customer’s intent was
in leaving a tip. Moreover, how does a
‘tip receptacle’ differ from the typical
scenario in which a diner tips by signing
his or her credit card receipt, next to the
column for tips, and then the employer
divides the tips among employees. Is
that a tip pool or a tip allocation? Prior
to today, California law has been clear
that under any type of tip pooling or tip
allocation system, agents were not to
be included with non-agents.”
From Lee Feldman: “It’s not a question
of fairness. It’s a question of what the
statute says. It says the employer and
its agents are prohibited from sharing in
tips. Then Labor Code § 350(d) defines
an ‘Agent’ as ‘every person ... having
the authority to hire or discharge any
employee or supervise, direct, or control the acts of employees.’ Unlike
misclassification cases, where how you
spend your time is the issue, LC 350
-6-
makes the authority you’ve been given
the test... So it’s not about how much
time is spent doing these things, but
rather whether you have the authority to
do them. The General Manager of a
restaurant could be seating customers
and taking orders and running credit
cards all day long, but his authority
makes him an agent.”]
PUBLIC EMPLOYERS ARE NOT
COVERED BY LABOR CODE
PROVISIONS OR IWC WAGE
ORDERS REQUIRING OVERTIME
AND MEAL BREAKS
JOHNSON v ARVIN-EDISON WATER
STORAGE DISTRICT. In an opinion
filed on June 3, holding that the Kern
County Superior Court correctly sustained the defendant’s demurrer to overtime and meal break claims, the Fifth
District wrote in part as follows:
“Appellant, Randell Johnson, filed a class
action complaint ... alleging that he,
and a putative class of current and
former District employees, had not been
paid overtime and provided with meal
breaks in accordance with the California Labor Code and [IWC] wage orders.
The District demurred to the complaint
on the ground that, as a public entity, it
is exempt from the subject wage and
hour statutes. The trial court agreed
with the District and sustained the demurrer.
“Appellant argues that, contrary to the
trial court’s ruling, public employers are
subject to the California wage and hour
provisions at issue unless they are
expressly made exempt. According to
appellant, under statutory construction
rules, it is evident that the Legislature
intended that water storage districts
provide their employees with overtime
and meal periods as required by Labor
Code sections 510 and 512, and IWC
Wage Order No. 17. Appellant further
asserts that these Labor Code requirements will not infringe on the execution
of the District’s sovereign powers.
DECISIONS
(From Page 6)
“Additionally, appellant argues the District is required to immediately pay
wages due upon an employee’s termination or resignation under sections
201 and 202 and is subject to penalties
for failure to do so under section 203.
Although ‘other municipal corporations’
are exempt from these requirements
under section 220, subdivision (b), appellant contends the District does not
qualify as such.
“[U]nless Labor Code provisions are
specifically made applicable to public
employers, they only apply to employers in the private sector. Since sections
510 and 512 do not expressly apply to
public entities, they are not applicable
here. Further, applying sections 510
and 512 to the District would infringe on
its sovereign power to regulate its
workforce. Also, Wage Oder No. 17 is
inapplicable to this case. Finally, the
District is a ‘municipal corporation’ and,
therefore, is exempt from sections 201,
202, and 203.”
For plaintiffs: Daniel J. Palay and Jenna
H. Strauss.
For defendant: Atkinson, Andelson,
Loya, Ruud & Romo; Young Wooldridge.
Fifth Dist, 6/3/09; opinion by Levy
with Vartabedian and Cornell concurring; 2009 DAR 8076, 2009 WL
1545555.
WAGE COMPLAINT GROUNDED
ONLY ON FLSA COULD NOT BE
MAINTAINED AS CLASS ACTION
UNDER CODE CIV PROC 382,
BUT ONLY AS FLSA
“COLLECTIVE ACTION” WITH OPTIN PROCEDURE
HARO v ROSEMEAD. In an opinion
filed on June 9 relating to a “collective”
FLSA action for unpaid wages brought
by current and former city employees,
the Second District, Division Eight, dismissed appeals from orders denying
class action certification and denying
leave to amend the complaint to add
class action allegations to FLSA claims.
“We find that appellant’s FLSA action
cannot be maintained as a class action
under [Code Civ Proc] section 382...
[T]he trial court’s order [denying class
certification] was not appealable. Appellants also appeal an order denying
leave to amend the complaint, which is
not an appealable order. We dismiss
both appeals.
“The fact that the [FLSA’s] opt-in feature is irreconcilable with a class action
has not only been reaffirmed as a matter
of federal civil procedure [cite omitted],
at least one California court has held
that the opt-in feature cannot be adopted
in California class actions. (Hypertouch,
Inc. v. Superior Court (2005) 128
Cal.App.4th 1527, 1550...) [¶] FLSA
actions are not class actions, whether
the class action is governed by the
federal rules of civil procedure or, in
California, by section 382 and rule 3.760
of the California Rules of Court.
“The trial court found that even though
this was an FLSA collective action,
appellants had not moved to ‘certify an
opt-in collective action pursuant to the
FLSA.’ Strictly speaking, an opt-in collective action is not ‘certified’ as such...
In any event, the trial court was correct
in noting that appellants never crossed
the threshold of an FLSA action... That
threshold is the preparation, under the
trial court’s supervision, of a timely,
accurate and informative notice to persons similarly situated to the plaintiff(s)
in the FLSA action...
“Theoretically, there is no reason why
appellants cannot pursue an action
against respondent for wages that they
should have been but were not paid on
a theory or theories that are not grounded
on the FLSA. Assuming that there are
such other theories under which they
can recover, they may be entitled to
pursue such an action as a class action
under section 382... [¶] But appellants
chose to bring their action under the
FLSA. Having done that, they cannot
discard the opt-in feature...
“The denial of a request for class certification is appealable. [cite omitted.]
The reason for this is the ‘death knell’
doctrine which we recent addressed in
Farwell v. Sunset Mesa Property Own-7-
ers Assn., Inc. (2008) 163 Cal.App.4th
1545. ‘[T]he gist of the death knell
doctrine is that the denial of class action certification is the death knell of the
action itself, i.e., that without a class,
there will not be an action or actions.’
(Id. At p. 1552.)
“Our analysis of this FLSA action and of
appellants’ motion to certify a class
action yields three reasons why this is
not a proper case for the death knell
doctrine.
“First. Appellants cannot maintain their
FLSA action with the opt-in feature as a
class action under section 382... In
other words, as a matter of California
law appellants are not entitled to a class
action certification.
“Second. Ordinarily, under the death
knell doctrine the appellate court will
review the merits of the decision denying certification. That is not true of this
case; neither the trial court nor this
court addressed the substantive merits
of class action certification in this case.
“Third. The order denying class certification is not the death knell of appellants’ action. The order does not produce a terminal result, i.e., there is no
reason why the action cannot go forward with appellants as plaintiffs. Specifically, there is nothing to prevent this
action going forward as an opt-in, collective FLSA action. While there may or
may not be issues about the statute of
limitations, there is no question that
this FLSA action as it is presently
constituted can go forward to trial.
“In the context of this case and this
purported appeal, the order denying
class action certification is not an appealable order. The appeal from this
order must therefore be dismissed.
“After the trial court denied appellants’
motion for class certification, appellants moved to amend their complaint
with class action allegations... The order denying leave to amend the complaint did not dispose of any issues in
this case, save the question whether
DECISIONS
(From Page 7)
the complaint could be amended. Accordingly, the purported appeal from the
order denying leave to amend complaint
with class action allegations must be
dismissed.”
For plaintiffs: Law Offices of Thomas W.
Falvey and Jon D. Henderson.
For defendant: Garcia Calderon Ruiz,
Bonifacio B. Garcia, Albert A. Erkel, Jr.,
Chaka C. Okadigbo; Burke, Williams &
Sorenson and Daphne M. Anneet.
Second Dist Div Eight, 6/9/09; opinion by Flier with Rubin and Bauer
1591697.
NINTH CIRCUIT
IN TITLE VII RACE
DISCRIMINATION AND
RETALIATION CASE, DISTRICT
COURT DID NOT ABUSE
DISCRETION IN REFUSING TO
GIVE PERMISSIVE INSTRUCTION
EXPLICITLY ADDRESSING
PRETEXT
BROWNING v UNITED STATES OF
AMERICA. In an opinion filed on May
22, affirming a judgment for the employer on Title VII race discrimination
and retaliation claims brought by an
demoted employee at an IRS call center in Portland, the Ninth Circuit wrote in
part as follows:
“We address the issue of whether a
district court’s refusal to give a permissive jury instruction regarding pretext in
an employment discrimination case is
reversible error. We reaffirm that so long
as the jury instructions set forth the
essential elements that the plaintiff must
prove, a district court does not abuse its
discretion in declining to give an instruction explicitly addressing pretext.
“In November 2003, [following a demotion ostensibly due to performance deficiencies,] Browning filed a complaint
with the Equal Opportunity Office alleging racial discrimination and retaliation
for a prior EEO complaint that Browning
had brought against another supervisor.
After the EEO investigation found no
discrimination had occurred, Browning
filed this lawsuit in federal district court
alleging racial discrimination and retaliation. At the close of trial, Browning
requested that the following instruction
be given to the jury:
‘Consistent with the general principle of
law that a party’s dishonesty about a
material fact may be considered as
affirmative evidence of guilt, if you find
that the defendants’ explanation about
why they took adverse action against a
plaintiff is not worthy of belief, you may
infer a discriminatory motive from that
fact.’
“She based her proposed instruction on
a passage in Reeves v. Sanderson
Plumbing Products, Inc., 530 U.S. 133,
147 (2000), which held:
‘In appropriate circumstances, the trier
of fact can reasonably infer from the
falsity of the explanation that the employer is dissembling to cover up a
discriminatory purpose. Such an inference is consistent with the general
principle of evidence law that the
factfinder is entitled to consider a party’s
dishonesty about a material fact as
‘affirmative evidence of guilt.’
“The district court refused to give the
requested instruction... [¶] In Cassino
v. Reichhold Chemicals, Inc., 817 F.2d
1338 (9th Cir. 1987), we held that refusal
to give a permissive pretext jury instruction was not reversible error...
“In the years since Cassino, a circuit
split has emerged on the question of
permissible pretext instructions. [cites
omitted.] Analysis of discrimination
claims has also evolved since Cassino
was decided in 1987. We see no reason, however, to depart from Cassino’s
basic holding that if the jury instructions
set forth the essential elements the
plaintiff needs to prove, the district court’s
refusal to give an instruction explicitly
addressing pretext is not reversible error.
“Here, the district court gave the following instructions regarding the reasons
the IRS demoted Browning:
-8-
‘In the plaintiff’s first claim, she contends that race was a motivating factor... In her second claim, she contends
the fact that she complained about
discrimination in the workplace was a
motivating factor...
‘Now, in order to prevail on her first claim
for race discrimination, the plaintiff must
prove the defendants took certain actions against her and that the plaintiff’s
race was a motivating factor...
‘In order to prevail on her second claim
for retaliation, the plaintiff must prove
the defendants took certain actions
against her because she complained
about race discrimination...’
“The district court defined ‘motivating
factor’ as ‘a factor that played a role in
the decisions...’ The court also instructed the jury that it should ‘weigh
and evaluate the testimony and the
credibility of each witness’ and that it
should consider both direct and circumstantial evidence (after explaining both
concepts). The court told Browning that,
although it would not give her requested
pretext instruction, she was free to
explain to the jurors that they could find
the IRS’s reasons for [demoting] her to
be pretextual and infer an unlawful motive. Specifically, the court said:
‘I’m mindful of Ninth Circuit authority
that cautions trial judges against giving
any kind of inference instruction, and
I’m mindful of the risk that an inference
instruction can be seen as potentially a
comment on the evidence; and so I’m
not inclined to give any permissive inference instruction and instead to permit
counsel full latitude to argue inferences,
based on a circumstantial evidence instruction.’
“Apparently in response to the court’s
offer, Browning subsequently argued to
the jury that ‘if you don’t believe the IRS
witnesses, then you have the right to
find for Ms. Browning.’ Although cursory, Browning’s argument advised the
jury that if it did not believe the IRS’s
justifications for Browning’s demotion,
it could find in her favor.
DECISIONS
(From Page 8)
“In sum, the district court’s jury instructions ‘set forth the essential elements
that [Browning] had to prove in order to
prevail,’ and Browning was free to explain those elements to the jury in order
to make clear that finding the IRS’s
proffered reasons for Browning’s demotion pretextual could justify the jury
finding the IRS had discriminated against
Browning. [cites omitted.] ... The district court did not abuse its discretion in
rejecting Browning’s more explicit pretext instruction.”
For plaintiff: Beth Creighton, Zan
Tewksbury, Portland.
For defendants: Karin J. Immergut,
United States Attorney, Kelly A.
Zusman, Assistant United States Attorney, Portland.
Fisher joined by Graber and Smith;
2009 DAR 7294, 2009 WL 1425153.
POLICE OFFICER WHO CHOSE
TO RESIGN RATHER THAN RISK
TERMINATION FOR MISCONDUCT
WAS NOT CONSTRUCTIVELY
DISCHARGED AND THEREFORE
COULD NOT ESTABLISH
DEPRIVATION OF PROPERTY
INTEREST WITHOUT DUE
PROCESS
KNAPPENBERGER v CITY OF PHOENIX. “Bruce Knappenberger appeals
from the district court’s decision granting the City of Phoenix’s motion for
judgment on the pleadings and dismissing his § 1983 action against the
Phoenix Police Department,” the Ninth
Circuit wrote in a May 26 opinion by
Ikuta. “Knappenberger alleges his early
retirement from his job as a commander
... amounted to a constructive discharge,
and he was therefore deprived of both
property and liberty without due process of law. Because [he] has failed to
allege facts which, if true, would establish that his retirement was involuntary,
we affirm.
“In July 2004, the Professional Standards Bureau of the Phoenix Police
Department notified Knappenberger that
it would begin investigating allegations
that Knappenberger had made sexually
suggestive comments to a female officer and had also made unwelcome
physical contact...
“Knappenberger learned from Phoenix’s
employee benefits department that ‘he
had to retire 19 months early in order to
continue to receive his lifetime health
insurance coverage.’ Although the import of this statement is not clear from
the complaint, [he] explained in his
opening brief that he would lose his
lifetime health insurance coverage if the
police department terminated him, but
would retain his benefits if he retired
early. Because Knappenberger’s wife
had a history of breast cancer, [he]
‘could not afford to lose the insurance
coverage.’ Rather than running the risk
of being terminated and losing his health
coverage, he retired on December 17,
2004.
“From the complaint, it is clear that he
could and did choose the date of his
retirement. Indeed, Kanppenberger does
not even allege that a termination would
have been inevitable; he could have
opted to continue his opposition to the
department’s investigation. Although
[he] perceived he had a choice between
two unpleasant alternatives, such a
choice ‘does not of itself establish that
a resignation was induced by duress or
coercion...’ [cite omitted.] In short, the
allegations in [his] complaint do not
support a claim that Phoenix’s conduct
deprived [him] of free will in choosing to
retire. Therefore, we conclude that [his]
complaint does not allege an involuntary retirement.
“In the absence of an involuntary retirement, the complaint fails to allege that
Phoenix deprived him of either a property interest or a liberty interest in his
employment.”
For plaintiff: Kathi Man Sandweiss, Kraig
J. Marton, Phoenix.
For defendant: Georgia A. Staton, Gordon Lewis, Eileen Dennis GilBride,
Phoenix.
Ikuta joined by Goodwin and
Kleinfeld; 2009 DAR 7375, 2009 WL
1444557.
-9-
PLAINTIFFS WHO SETTLED
INDIVIDUAL CLAIMS BEFORE
OTHER PLAINTIFFS HAD OPTEDIN TO FLSA COLLECTIVE ACTION
COULD NOT APPEAL
CERTIFICATION DENIAL
SMITH v T-MOBILE USA, INC. In an
opinion filed on June 15, the Ninth Circuit, citing decisions from the Fifth and
Eleventh Circuits, concluded that it would
“...join our sister circuits in holding that
a FLSA plaintiff who voluntarily settles
his individual claims prior to being joined
by opt in plaintiffs and after the district
court’s certification denial does not retain a personal stake in the appeal so as
to preserve our jurisdiction.”
Two former hourly employees who had
worked as sales representatives brought
an action under the FLSA, Lab Code §
200 et seq., and Bus & Prof Code §
17200 et seq, alleging that T-Mobile
willfully failed to pay its hourly employees for all the hours they worked, forcing them to work ‘off the clock’ and
denying pay hours worked during
breaks. The plaintiffs sought to represent a class of about 25,000 former and
current employees in a FLSA collective
action. Following the denial of a motion
for conditional certification, the two plaintiffs accepted an offer of judgment and
settled their claims. The Ninth Circuit’s
opinion continues in part as follows:
“Before reaching settlement, the parties represented to the district court
that they discussed whether there existed a mechanism by which plaintiffs’
individual claims could be settled while
still preserving their ability to appeal the
ruling denying FLSA certification. They
eventually signed a stipulated judgment
that stated: [¶] ‘Plaintiffs’ acceptance of
this offer shall be expressly subject to
Plaintiffs’ ... reservation of rights (a) to
take an appeal ... of the Court’s earlier
Order denying their motion for conditional certification of this action as a
collective action under the [FLSA], and
(b) in the event such an appeal is pursued, is successful ... to continue to
prosecute the case in accordance with
DECISIONS
(From Page 9)
the order of remand, with the understanding, however, that their individual
claims have been fully and finally compromised ... and ... may not be reinstated or reopened... In accepting this
Offer, Plaintiffs and their counsel acknowledge that they have relied solely
on their own legal analysis ... regarding
the legal effect of this Offer and/or their
standing to appeal.’
“We need not decide whether a Rule 23
class action plaintiff who settles his
individual claims can preclude mootness
by affirmatively preserving his claim to
appeal in the settlement agreement and
then asserting a procedural right to
represent a class... We do not decide
this issue because here, structural distinctions between a FLSA collective
action and a Rule 23 class action foreclose appellants’ claim of a continuing
personal stake...
“A plaintiff seeking FLSA collective action certification does not have a procedural right to represent a class in the
absence of any opt in plaintiffs... A
FLSA plaintiff therefore has no independent right to represent a class that
would preserve a personal stake in the
outcome for jurisdictional purposes; his
right to represent a class depends entirely on whether other plaintiffs have
opted in.
“Because plaintiffs did not have a right
to represent a class, they were not
acting in the capacity of class representatives at the time of settlement as they
now claim.... Thus, [their] acceptance
of T-Mobile’s offer of judgment when no
other plaintiffs had opted in disposed of
the only claims they could assert at the
time...
“For the same reasons, Smith and
Gossett’s argument that they continue
to retain a personal stake in the recovery of attorneys’ fees and costs relative
to the class claims, the ‘class share’ of
any liquidated or punitive damages, and
the enhancement to which a class representative is entitled if the claims ultimately prevail also fails. Plaintiffs agreed
to accept $10,000 as full satisfaction of
any claim they had to attorneys’ fees
and costs of litigation... Any enhance-
ment a district court may order ... also
does not create a personal interest in
the case, as any enhancement awarded
would relate only to costs of litigation
brought about by the class litigation
itself. They similarly had no right to
liquidated and punitive damages that a
district court might award if other plaintiffs opted in.”
For plaintiffs: Gwen Freeman, Knapp,
Petersen & Clark, Glendale.
For defendants: James Severson,
Bingham McCutchen, San Francisco.
Silverman joined by Hall and
Kleinfeld; 2009 DAR 8568, 2009 WL
1651531.
UNITED STATES
DISTRICT COURTS
“Alternatively,” the court continued, “Defendants argue that Section 2 of the
FAA preempts Plaintiffs’ state-law unconscionability arguments. Defendants
suggest that the FAA preempts general
principles of contract law such as unconscionability if those doctrines are
employed in ways that subject arbitration clauses to special scrutiny. Given
the unique and ‘pro-consumer’ nature of
the arbitration agreements at-issue,
Defendants contend that the Court
should overlook any state-law standard
that is at odds with the FAA’s liberal
policy in favor of arbitration.
“The first issue for the Court to determine is whether the choice-of-law provisions contained in the WSAs are valid...
Plaintiffs maintain ... that applying the
choice-of-law clauses would violate
Washington’s fundamental public policy
against class-action waivers in arbitration agreements.
DISTRICT COURT IN
WASHINGTON REFUSES TO
APPLY CHOICE-OF-LAW
PROVISION IN CONSUMER
CONTRACT AND HOLDS CLASSACTION WAIVER
UNCONSCIONABLE
CONEFF v AT & T CORP. In connection with a class action by cell phone
customers asserting overcharging
claims under the consumer protection
acts of fourteen states, the Federal
Communications Act, and several common law doctrines, District Judge
Ricardo S. Martinez (W.D. Washington) denied the company’s motion to
compel arbitration under an arbitration
agreement that contained a class waiver
and choice-of-law clause selecting the
law of the Plaintiff’s home state as the
governing law. “Defendants argue,” the
court explained, “that under the law of
each applicable state, the class-waiver
provisions in the WSAs [Wireless Service Agreements] are neither procedurally nor substantively unconscionable.
The applicable state laws include: Alabama, Arizona, California, Florida, Illinois, Missouri, New Jersey, Virginia
and Washington.”
“[I]t is clear that a substantial portion of
the allegedly fraudulent activity occurred
in Washington. The application of Washington law in this case ‘would encourage Washington residents involved in
business transactions to behave responsibly.’ [cite omitted.] Coupled with
the fact that the Restatement analysis
weighs slightly in favor of applying Washington law, the Court finds that Washington law has the most significant
relationship to this case, and that Washington law would apply absent a choiceof-law provision in the WSAs.
“Both parties are fully aware that the
Washington Supreme Court has recently held that a class-action waiver
provision in an arbitration agreement is
substantively unconscionable. See Scott
[v Cingular Wireless (2008) 160 Wash
2d 843] at 859... [¶] Despite this recent
case law, Defendants contend that there
is no categorical rule that all classaction waivers ... are substantively unconscionable.... The Court agrees that
there is no per se ban... As a result, the
heart of this dispute is whether the
specific terms of the class-action waivers are substantively unconscionable.
-10-
DECISIONS
(From Page 10)
“Notwithstanding ... the allegedly unique
and ‘pro-consumer’ nature of the agreements..., the Court finds that the classwaiver provisions are substantively unconscionable for the following five reasons.
“First, the class-action waiver serves to
protect Defendants ‘from legal liability
for any wrong where the cost of pursuit
outweighs the potential amount of recovery.’ Scott, 160 Wash.2d at 855...
“The second reason in support of a
finding of substantive unconscionability
is that Defendants significantly overstate the [pro-consumer] ‘premiums’
contained in the WSAs.
“Third, and perhaps most compelling, is
that the Court has tangible evidence
which reveals that Defendants’ ‘proconsumer’ provisions are not having
their intended effect...
“The fourth reason ... is that class action lawsuits are necessary and effective avenues for consumers whose economic positions vis-a-vis their corporate
opponents would not allow them to
proceed on a case-by-case basis.
“Lastly, the Court recognizes that recent jurisprudence views class-action
waivers unfavorably. Dating back to the
beginning of 2008, there have been at
least seven different courts in five different jurisdictions that have refused to
enforce class-action waivers. [cites
omitted.]
“As a result, the Court finds that class
waiver provisions in the instant case are
unconscionable . Defendants are effectively exculpated from any liability as a
result of the provisions contained in
their WSAs. This conduct contravenes
Washington’s fundamental public policy
favoring the availability of class actions
as a mechanism for enforcing a
consumer’s rights.
“Defendants indicate that if the classaction waiver provision is unenforceable, the entire arbitration agreement
should be unenforceable. Accordingly,
this Court finds that all language in the
applicable WSAs touching upon arbitration is unenforceable under Washington law.
“Defendants nevertheless argue that the
FAA preempts the substantive unconscionability laws of Washington State...
Defendants argue that [§ 2] preempts
general principles of contract law where
those doctrines are employed in a way
to subject arbitration clauses to special
scrutiny. [¶] However, the arguments
raised by Defendants have been squarely
rejected by the Ninth Circuit... [I]n
Shroyer v. New Cingular Wireless
Servs., Inc., the court recognized that
Congress never intended to place arbitration agreements on a different footing
than other contracts. 498 F3d 976, 989
(9th Cir. 2007)... The court concluded
‘that applying California’s generally applicable contract law to refuse enforcement of the unconscionable class action waiver in this case does not stand
as an obstacle to the purposes or objectives of the FAA.’ Id. at 993 (emphasis added).”
For plaintiffs: Harvey Rosenfield, Consumer Watchdog, Santa Monica; Leslie
Bailey and Paul Bland, Public Justice;
Kevin Coluccio, Seattle.
USDC, WD Washington, 5/22/09;
opinion by Martinez; 2009 WL
1459111.
VERDICTS AND
SETTLEMENTS
THREE AFRICAN AMERICAN LOS
ANGELES PUBLIC SAFETY
OFFICERS ARE AWARDED $1.2
MILLION ON NON-PROMOTION
CLAIMS
PATRICK v CITY OF LOS ANGELES.
On May 28, following a bench trial that
began on April 28 before Judge Stephen
J. Czuleger in Los Angeles County
Superior Court, (Central District), three
African American Public Safety Officers prevailed on claims for discriminatory non-promotion and were awarded a
total of $1.2 million for wage loss and
emotional distress. (Discrimination and
retaliation claims by five other officers
were dismissed). The final defense offer
had been a global $80,000.
The case began in 2004, when Mario
-11-
Patrick filed an EEOC charge alleging
that he had been passed over for a
promotion to lieutenant because of his
race. In mediation, the city refused the
EEOC’s urging that Patrick be paid
$36,000 in compensation, and Patrick
and several co-workers filed suit on
June 4, 2007, also complaining that
Chief Gary Newton had sent a racist email in response to the EEOC’s position.
For plaintiffs: Michael F. Baltaxe and
Ronald Rosengarten.
For defendants: James Axtell and Casey
Shim, City Attorney’s Office.
No. BC 372183, 5/28/09; Judge
Stephen J. Czuleger; information
provided by counsel and as reported
in Los Angeles Daily News.
FIRST OF 56 INDIVIDUAL WAGE
AND HOUR ACTIONS AGAINST
UPS FOLLOWING CLASS
DECERTIFICATION RESULTS IN
VERDICT FOR PLAINTIFF
MARLO v UNITED PARCEL SERVICE,
INC. On May 20, after a two-week trial
and four days of deliberation, a nineperson federal court jury (Central District) returned a unanimous verdict in
favor of a former UPS supervisor on
claims for unpaid overtime and premium
wages for missed meal and rest breaks.
The plaintiff was a UPS employee for
over 21 years, including 17 years as a
full time supervisor. (He was terminated
by UPS in November of 2008, and a
wrongful discharge claim is scheduled
to go to trial on November 2, 2009, in
Los Angeles County Superior Court.)
The total award came to approximately
$163,000, but the Court is expected to
increase the judgment under the UCL to
about $235,000. The motion for attorneys’ fees will be heard on August 10.
The case was filed on May 6, 2003, and
was certified as a class action in June
of 2004. But after extensive discovery,
(and multiple sanction hearings against
UPS and its attorneys), summary judgment was entered in favor of UPS in
August of 2005. Summary judgment
DECISIONS
(From Page 11)
was then reversed by the Ninth Circuit in
October of 2007, and the case was
remanded for trial. (In a brief unpublished opinion, 254 Fed Appx 568, the
Ninth Circuit held that fact issues had
been raised as to whether supervisors
customarily and regularly exercised discretion and independent judgment.)
In April of 2008, about three weeks
before the scheduled trial date, the
District Court decertified the class.
The case is significant because, in
addition to being one of only a few wage
and hour cases actually tried to a jury,
it represents the first of 55 cases that
have been filed against UPS as a result
of the decertification of the class. Those
cases are venued throughout California,
in both state and federal courts. UPS is
making no settlement offers and is fighting each case with one of four different
teams of lawyers from Paul Hastings.
The next case is scheduled for trial in
San Bernardino County Superior Court,
beginning on July 20, 2009.
For plaintiff: Mark C. Peters and John A.
Furutani.
For defendant: Paul Hastings Janofsky
& Walker, Kirby Wilcox, George Abele,
Jennifer Baldocchi, and Maria Audero.
USDC (Central District), No. 03-4336;
5/20/09; Judge Dean D. Pregerson;
information provided by counsel.
L.A. SUPERIOR COURT AFFIRMS
ARBITRATION AWARD OF $4.1
BILLION ON DISCHARGED
EXECUTIVE’S CLAIMS FOR
FRAUD AND BREACH OF
CONTRACT
CHESTER v FREEDOM COMMUNICATIONS, INC. On May 28, Judge
Teresa Sanchez-Gordon of the Los
Angeles County Superior Court issued
a $4.1 billion judgment confirming a
JAMS arbitration award. The defendants,
including iFreedom Communications
International Holdings, Ltd., and its
founder, Timothy Ringgenberg, were
found liable for compensatory and punitive damages in connection with an
employment dispute with Paul Thomas
Chester, their former Chief Marketing
Officer. It is believed to be the largestever arbitration award in an employment
case. A press release issued by the
plaintiff’s attorneys on June 2 explained
the case as follows:
“Mr. Chester became the defendants’
Chief Marketing Officer in June 2004.
The defendants’ promises to pay him
certain commissions and overrides on
gross revenues, his right to receive
company stock, and other elements of
his compensation package reflected
his experience in building marketing
organizations. When the promised compensation was not forthcoming, Mr.
Chester raised the issue with his employers. By then, they had obtained the
benefits of the plaintiff’s knowledge and
expertise, and they quickly terminated
him without cause.
“The arbitrator, retired judge William F.
McDonald, determined that the defendants had obtained the plaintiff’s services by means of false representations
and fraud, and found the defendants
liable for breach of contract, breach of
the implied covenant, conversion, failure to pay wages, and failure to compensate for all hours worked, failure to
pay wages upon discharge, failure to
pay overtime and minimum wage compensation under federal law, and violation of Bus & Prof Code § 17200. In
addition to all unpaid salary, commissions, travel expense reimbursements,
and compensation for unissued company stock and unreturned intellectual
property, the arbitrator awarded statutory penalties, interest, attorneys’ fees
(with a multiplier of three based on
contingent risk and results obtained),
and punitive damages equal to three
times the compensatory damages.
C O M I N G
“‘Significantly,’ said plaintiff’s attorney
Steve Buchwalter, ‘the arbitrator held all
defendants jointly and severally liable.
Mr. Ringgenberg won’t be able to hide
behind corporate entities that were his
alter egos.’
“Added plaintiff’s attorney Scot
Bernstein: ‘It was the combination of
the defendants’ representations to their
investors regarding sales revenue and
their admissions regarding revenue
growth rates that gave rise to the override commission figure that drove this
large award.”
Ringgenberg concealed data on gross
revenue during discovery, the arbitrator
found, and the award was therefore
based on information Ringgenberg presented to the company’s shareholders,
including monthly revenue of $535,000
and monthly growth rates of from ten to
twenty percent.
Under the commissions structure in his
contract, the plaintiff was entitled to five
percent of gross sales, a payment that
was to continue on an ongoing basis if
he was terminated without cause. The
arbitrator found the termination to have
been without cause, but cut off the
commission payments at seven years
following the termination.
For plaintiffs: Scot Bernstein, Mather
Field; Steve A. Buchwalter, Encino.
For defendants: Timothy Ringgenberg.
No. BC353567; 5/28/09; Judge Teresa
Sanchez-Gordon; information provided by counsel and as reported in
Daily Journal and Law 360.
E V E N T S
October 1, 2009
Oakland Marriott
October 2-3, 2009
Oakland Marriott
October 23-24, 2009
NELA SEMINAR: SURVIVING SUMMARY JUDGMENT
IN EMPLOYMENT LITIGATION
Hyatt Regency Boston
Boston, Massachusetts
(see www.nela.org for details)
-12-
POSNER AWARD
A LOBBY DAY REPORT
(From Page 1)
tant cases such as Rojo v Kliger (1990)
52 C3d 65; Pugh v See’s Candies
(1988)203 CA3d 743; City of Moorpark
v Superior Court (1988) 18 C4th 1143;
Commodore Home Sys., Inc. v Superior Court (1982) 32 C3d 211; Tameny v
Atlantic Richfield Co. (1980) 27 C3d
167; and Davaris v Cubaleski (1993) 12
CA4th 1583.
His zealousness as an advocate was
equaled by his desire to educate and
develop other plaintiff’s attorneys. Joe
was a prolific lecturer and was generous
to a fault with his time—always available to pick up the phone and give
advice. He was humble even in success, always eager to learn from others. He had great wit and charm, and
appreciated music, wine, colorful jackets, fast cars, the Hollywood Bowl, and
the company of CELA Members. Joe
loved and appreciated life to an extent
that few do.
Because of his great work, Joe will
never be forgotten. Because we can
draw inspiration from his life, we continue to honor others who remind us of
him in their values and dedication.
If you know of a person you believe to
have some of the qualities that made
Joe such a special person and lawyer,
he or she should be considered for this
award. (Please note that, as in the past,
we try to give the award to persons other
than CELA Board members.) Please
send your nomination form to Dolores
Leal directly at: [email protected], or
fax it to her at (323) 653-1660, on or
before July 15, 2009.
by Pam Pitt and the Legislative Committee
CELA held its Third Annual Lobby Day
on May 20, 2009, in Sacramento, where
sixty-two of us from all over the state
made the rounds at the Capitol Building.
(Our numbers represented a big jump
from the approximately 35 members
who attended in each of the previous two
years.) Some of us arrived the night
before, but more of us than you would
believe got up at hours like 5:30 am to
make flights or to meet up with car
pools. Now that’s dedication!
Our mission was to educate lawmakers
about CELA and its issues, particularly
about our own bills: AB 335, the Choice
of Law and Choice of Forum Bill, and SB
705, the Exhaustion of Administrative
Remedies Bill. Our contingent attended
37 official and pre-scheduled meetings
with legislators, including meetings in
the offices of Assembly Speaker Karen
Bass and Majority Whip Fiona Ma, and
with representatives from the offices of
both Governor Schwarzenegger and Lt.
Governor Garamendi.
It was clear that the lawmakers know
who we are. They know that we’ll be
coming back en masse next year, and
that we’ll stay in contact throughout the
session. We urged each lawmaker to
call on CELA with questions about employment-related legislation, and we
made some good new connections with
several of them. As part of our follow-up
effort, members of the Legislative Committee will keep in touch with their own
representatives throughout the coming
year. And the Committee is currently
taking suggestions for bills to present
next year.
Because many new CELA members
participated, this year’s contingent included a lot of ”rookies.” But they learned
quickly, and qualified as “seasoned”
after their first legislator meeting. We
tried to put “old hands” together with
rookies, but the first-timers were outstanding and even carried the ball in
some of the meetings. One new member in particular really knew her stuff and
ably presented our positions despite
having passed the bar only very recently.
-16-
We accomplished a lot this year. Our
bills are still going through the process,
(although SB 705 is a two-year bill that
will be acted on next year). Keep watching! Thanks to all who came and all who
helped!
[Editor’s note: The day after Lobby Day,
Carla Minnard (Walnut Creek) sent the
following message to the CELA list: “I
know that everyone who attended Lobby
Day is as busy as I am after having been
out of the office all day yesterday, but I
wanted to take a quick second and say
a huge thank you to Regina Banks and
Christina Krasomil for all their hard work
putting yesterday together... This was
my first Lobby Day—I had not gone in
the past because I felt that legislators
would meet with us just as a formality.
I am happy to say that I could not have
been more wrong. The groups I was in
were well and seriously received. The
legislators and staffers asked good,
probing questions for the most part, and
seemed genuinely interested in learning about our bills. I do feel like we made
a difference, and I am more convinced
than ever that we absolutely must have
a presence in Sacramento if we want to
prevent further erosion of our clients’
rights. I will definitely be at our next
Lobby Day, (but in much more comfortable shoes).]
PROFILES
(From Page 15)
Vienna, and at Carnegie Hall. Danielle
is preparing to start college on the East
Coast, and has shown some inclination
to follow in her father’s footsteps—she
has an interest in international relations, (she has visited 22 countries
before turning 18), and she served as a
volunteer mediator in middle school.
The family dog, Casper, remains a puppy
at heart, at age 14, and enjoys full family
membership privileges in the Moscovitch
household.
Published
Monthly
BULLETIN
July 2009
Vol. 23, No. 7
UNITED STATES
SUPREME COURT
WHITE FIREFIGHTERS WERE
ENTITLED TO SUMMARY
JUDGMENT ON DISPARATE
TREATMENT CLAIMS ARISING
FROM CITY’S NONCERTIFICATION OF
PROMOTIONAL EXAM RESULTS
held that it was the white firefighters
who were entitled to summary judgment on their Title VII disparate treatment claims, despite the fact that the
city’s non-certification of the exam results had been based on the belief that
use of the results would have had an
unlawful disparate impact on minority
firefighters. The decision’s syllabus
summarizes the majority opinion in
part as follows:
“Under Title VII, before an employer can
engage in intentional discrimination for
the asserted purpose of avoiding or
remedying an unintentional disparate
impact, the employer must have a
strong basis in evidence to believe it will
be subject to disparate-impact liability
if it fails to take the race-conscious,
discriminatory action... All the evidence
demonstrates that the City rejected the
test results because the higher scoring
candidates were white. Without some
William Gordon Lewis died suddenly
on July 3, 2009, at his home in Half
Moon Bay, at age 59. Bill was a loving
father, an accomplished San Francisco
trial lawyer, and a tireless advocate for
(Cont'd on Page 16, LEWIS)
sions devoted to enforcing workers’
rights under the ADA, ADEA, Title VII,
FMLA, ERISA, and more.
by Karen Maoki
NELA Project Manager
& Affiliate Liaison
three states, the District of Columbia,
and Puerto Rico were represented, with
California leading the charge with165
participants. (By comparison, attendance at last year’s Convention in Atlanta was 475.) The collective
brainpower alone kept the wind turbines spinning.
With temperatures reaching 111 degrees in Rancho Mirage, the desert
was scorching—and the weather was
only part of it. NELA’s 20th Annual
Convention, held on June 24-27 at The
Westin Mission Hills Resort & Spa,
drew 516 employee rights advocates
from across the nation to connect,
learn, and celebrate. In a remarkable
turn-out for a recession year, forty-
After the Convention was kicked-off by
CELA’s lively Welcome Reception on
Wednesday, June 24, the next twoand-a-half days featured cutting-edge
CLE tracks devoted to California Employment Law, Trial Advocacy, Strategic Thinking In The Practice Of Employment Law, Employment Law 101, and
Class & Collective Actions, along with
seventeen plenary and concurrent ses-
RICCI v DeSTEFANO. In a 5-4 decision filed on June 29, with a majority
opinion by Kennedy and a dissenting
opinion by Ginsburg joined by Stevens,
Souter, and Breyer, the Supreme Court
reversed the Second Circuit’s affirmance, (530 F3d 87), of summary
judgment in favor of the city of New
Haven and city officials in an action by
white firefighters challenging the city’s
non-certification of the results of a
promotional exam. The Supreme Court
CELEBRATING
NELA’s 20th ANNUAL
CONVENTION
WILLIAM GORDON LEWIS
1949-2009
by Eliz. C. A. Johnson
NELA Founder Paul Tobias’s traditional
raucous and rousing convention-opening “Roll Call of the States” was followed by NELA Executive Director Teri
Chaw’s remarks about the many ways
in which NELA and its members are
“working for change,” and by NELA
President Bruce Fredrickson’s inspirational “call to action.”
There were many Convention highlights,
including “NELA & The Institute Celebrate Workplace Heroes and Hero(Cont'd on Page 3, NELA CONVENTION)
DECISIONS
(From Page 1)
other justification, this express, racebased decision-making is prohibited.
The question, therefore, is whether the
purpose to avoid disparate-impact liability excuses what otherwise would
be prohibited disparate-treatment discrimination. The Court has considered
cases similar to the present litigation,
but in the context of the Fourteenth
Amendment’s Equal Protection Clause.
Such cases can provide helpful guidance in this statutory context. [cite
omitted.] In those cases, the Court held
that certain government actions to remedy past racial discrimination—actions
that are themselves based on race—
are constitutional only where is a ‘strong
basis in evidence’ that the remedial
actions were necessary. [cites omitted] ... [T]he Court adopts the strongbasis-in-evidence standard as a matter
of statutory construction in order to
resolve any conflict between Title VII’s
disparate-treatment and disparate-impact provisions.
“The racial adverse impact in this litigation was significant, and petitioners do
not dispute that the City was faced with
a prima facie case of disparate-impact
liability. The problem for respondents is
that such a prima facie case—essentially, a threshold showing of a significant statistical disparity, [cite omitted]
and nothing more—is far from a strong
basis in evidence that the City would
have been liable under Title VII had it
certified the test results. That is because the City could be liable for disparate-impact discrimination only if the
exams at issue were not job related and
consistent with business necessity, or
if there existed an equally valid, less
discriminatory alternative that served
the City’s needs but that the City refused to adopt... Based on the record
the parties developed through discovery, there is no substantial basis in
evidence that the test was deficient in
either respect.
“Fear of litigation alone cannot justify
the City’s reliance on race to the detriment of individuals who passed the
examination and qualified for promotions. Discarding the test results was
impermissible under Title VII, and summary judgment is appropriate for peti-
tioners on their disparate-treatment
claim. If, after it certifies the test results,
the City faces a disparate-impact suit,
then in light of today’s holding the City
can avoid disparate-impact liability based
on the strong basis in evidence that, had
it not certified the results, it would have
been subject to disparate-treatment liability.”
Scalia filed a concurring opinion to suggest that the Court will ultimately have
to address whether Title VII’s disparate
impact provisions are consistent with
the Constitution’s guarantee of equal
protection. “Title VII’s disparate-impact
provisions,” Scalia wrote, “place a racial
thumb on the scales, often requiring
employers to evaluate the racial outcomes of their policies, and to make
decisions based on (because of) those
racial outcomes. That type of racial
discrimination is ... discriminatory.”
Alito filed a concurring opinion to argue
that there was a genuine issue of material fact as to whether the city’s claimed
purpose to comply with Title VII was in
reality a pretext for intentional racial
discrimination. “A reasonable jury,”
Alito wrote, “could easily find that the
City’s real reason for scrapping the test
results was not a concern about violating the disparate-impact provision of
Title VII but a simple desire to please a
politically important racial constituency.”
Ginsburg’s lengthy dissenting opinion
makes, inter alia, the following points:
“In 1972, Congress extended Title VII ...
to cover public employment. At that
time, municipal fire departments across
the country, including New Haven’s,
pervasively discriminated against minorities. The extension of Title VII to
cover jobs in firefighting effected no
overnight change. It took decades of
persistent effort, advanced by Title VII
litigation, to open firefighting posts to
members of racial minorities.
“The white firefighters who scored high
on New Haven’s promotional exams
understandably attract this Court’s sympathy. But they had no vested right to
-2-
CALIFORNIA
EMPLOYMENT
LAWYERS ASSOCIATION
David J. Duchrow
Suite 305
Tel: (310) 479-5303
FAX: (310) 479-5306
E-mail:
[email protected]
Director:
Christina Krasomil
Encino, CA 91436-2412
Tel: (818) 907-7895
FAX: (818) 907-7474
EXECUTIVE BOARD
(Los Angeles)
Dolores Leal
(Los Angeles)
David DeRubertis
(Woodland Hills)
Steven Pingel
(Long Beach)
Kathy Dickson
(Oakland)
(Laguna Hills)
David Duchrow
(Los Angeles)
Cynthia Rice
(San Francisco)
Wilmer Harris
(Pasadena)
Mika Spencer
(San Diego)
Phil Horowitz
(San Francisco)
James P. Stoneman
(Claremont)
Jean K. Hyams
(Oakland)
Christopher Whelan
(Gold River)
Toni Jaramilla
(Los Angeles)
Jeffrey Winikow
(Los Angeles)
Virginia Keeny
(Pasadena)
Bulletin Editor
Christopher Bello
842 Irving Avenue
Astoria, OR 97103
Ph: (503) 338-3891
DECISIONS
(From Page 2)
promotion. Nor have other persons received promotions in preference to
them. New Haven maintains that it
refused to certify the test results because it believed, for good cause, that
it would be vulnerable to a Title VII
disparate-impact suit if it relied on those
results. The Court today holds that
New Haven has not demonstrated ‘a
strong basis in evidence’ for its plea...
In so holding, the Court pretends that
‘[t]he City rejected the test results
solely because the higher scoring candidates were white.’ That pretension,
essential to the Court’s disposition,
ignores substantial evidence of multiple flaws in the tests New Haven
used. The Court similarly fails to acknowledge the better tests used in
other cities, which have yielded less
racially skewed results.
“Neither Congress’ enactments nor this
Court’s Title VII precedents ... offer
even a hint of ‘conflict’ between an
employer’s obligations under the
statute’s disparate-treatment and disparate-impact provisions...
“Yet the Court today sets at odds the
statute’s core directives. When an
employer changes an employment
practice in an effort to comply with Title
VII’s disparate-impact provision, the
Court reasons, it acts ‘because of
race’—something Title VII’s disparatetreatment provision generally forbids.
This characterization of an employer’s
compliance-directed action shows little
attention to Congress’ design or to the
Griggs line of cases Congress recognized as path-marking.
“In codifying the Griggs and Albemarle
instructions, Congress declared unambiguously that selection criteria operating to the disadvantage of minority group
members can be retained only if justified by business necessity. In keeping
with Congress’ design, employers who
reject such criteria due to reasonable
doubts about their reliability can hardly
be held to have engaged in discrimination ‘because of’ race. A reasonable
endeavor to comply with the law and to
ensure that qualified candidates of all
races have a fair opportunity to compete is simply not what Congress meant
to interdict. I would therefore hold that
an employer who jettisons a selection
device when its disproportionate racial
impact becomes apparent does not
violate Title VII’s disparate-treatment
bar automatically or at all, subject to
this key condition: The employer must
have good cause to believe the device
would not withstand scrutiny for business necessity...
“To ‘reconcile’ the supposed ‘conflict’
between disparate treatment and disparate impact, the Court offers an enigmatic standard... The Court’s [strong
basis in evidence] standard, drawn from
inapposite equal protection precedents,
is not elaborated. One is left to wonder
what cases would meet the standard
and why the Court is so sure this case
does not... [¶] The strong-basis-in-evidence standard..., as barely described
in general, and cavalierly applied in this
case, makes voluntary compliance a
hazardous venture.
“Applying what I view as the proper
standard to the record thus far made, I
would hold that New Haven had ample
cause to believe its selection process
was flawed and not justified by business
necessity... [¶] Like the chess player
who tries to win by sweeping the
opponent’s pieces off the table, the Court
simply shuts from its sight the formidable obstacles New Haven would have
faced in defending against a disparateimpact suit... [¶] In sum, the record
solidly establishes that the City had
good cause to fear disparate-impact
liability. Moreover, the Court supplies no
tenable explanation why the evidence of
the tests’ multiple deficiencies does not
create at least a triable issue under a
strong-basis-in-evidence standard.”
For petitioners: Gregory S. Coleman et
al.
For respondents: Christopher J. Meade
et al.
For United States as amicus supporting
vacatur and remand: Edwin S. Kneedler.
USSC, 6/29/09; opinion by Kennedy
joined by Roberts, Scalia, Thomas,
and Alito; concurring opinions by
NELA CONVENTION
(From Page 1)
ines,” featuring Gary Branham, Lilly
Ledbetter and Armando Robles (for the
workers of Republic Windows & Doors).
Dean Erwin Chemerinsky (UC Irvine
School of Law) received a standing
ovation for a Keynote Address discussing the most significant decisions
by the U.S. Supreme Court this past
term, and the ideological composition
of the Court following Judge Sonia
Sotomayor’s confirmation as the
Court’s next Associate Justice.
The Convention closed with Professor
Eric Schnapper and Rick Seymour
presenting their always popular “Sig-
nificant Developments In Employment
Law: The Year In Review,” which many
Convention attendees stated was worth
the price of admission alone.
Antonia Hernández, President and CEO
of the California Community Foundation, delivered the Keynote Address for
NELA’s 2009 Gala Fundraiser, “Working for Change: Reclaiming Justice In
The Workplace.” As a President’s
Cabinet Sponsor ($2,500), CELA had a
strong presence at this event in support
of NELA’s efforts to build its capacity
and leverage its resources, and to more
effectively advance the interests of work-3-
ing people in and out of the courtroom.
Many thanks to CELA for its support and
partnership in making this a fantastic
Convention! We look forward to seeing
many of you on October 2-3 at CELA’s
Annual Conference in Oakland, and again
in 2010 as NELA celebrates its 25th
Anniversary in Washington DC!
The written materials and audio recordings for the Convention’s plenary and
concurrent sessions will be available for
on-line purchase in August. For more
information, visit www.nela.org.
DECISIONS
(From Page 3)
Scalia and Alito; dissenting opinion
by Ginsburg joined by Stevens,
Souter, and Breyer; 129 S Ct 2658.
[Editor’s note: On June 30, NELA issued a statement on Ricci v DeStefano
that read in part as follows:
“While there are troubling aspects of the
Court’s opinion, let there be no doubt
that the Court recognizes that employment discrimination remains a serious
problem in our society, and that public
and private employers have an ongoing
responsibility to take proactive voluntary measures to address it. The Court
reaffirms its position and ‘Congress’s
intent that voluntary compliance be the
preferred means of achieving the objectives of Title VII.’
“In doing so, however, the Court suggests for the first time that the disparate
treatment and disparate impact provisions of Title VII conflict with rather than
complement each other, and attempts
to reconcile those provisions with the
new ‘strong-basis-in-evidence’ standard.
Unfortunately, this new threshold only
serves to place additional obstacles in
the path toward equal employment opportunity and voluntary efforts by employers to comply with the nation’s antidiscrimination laws.As Justice Ginsburg
notes in her dissent, this new higher
burden ‘makes voluntary compliance a
hazardous venture.’
“Of equal concern is the unnecessary
overreaching by the Court in applying
the new strong-basis-in-evidence standard to the facts of the case and determining that the City of New Haven had
failed to meet it, rather than allowing the
District Court to make that determination on remand. As Justice Ginsburg
states, ‘[t]he court stacks the deck
further by denying respondents any
chance to satisfy the newly announced
standard. When this Court formulates a
new legal rule, the ordinary course is to
remand and allow the lower courts to
apply the rule in the first instance.’
“NELA calls upon President Obama
and the appropriate executive branch
agencies, (such as the EEOC), to provide swift guidance to employers on
how to deal with the new standard in
accordance with their obligations under
the law. Regardless of which party one
supports in this matter, it remains clear
that genuine issues of material fact are
in dispute. Indeed, references to what a
reasonable jury could have concluded
appear in the majority opinion, in Justice Alito’s concurrence, and in Justice
Ginsburg’s dissent. Given that a reasonable jury could arrive at differing
outcomes, we believe that the issue of
whether the City of New Haven violated
Title VII by discarding the test results
should properly have been decided by a
jury.”]
CALIFORNIA
SUPREME COURT
REPRESENTATIVE ACTION
UNDER UCL MUST COMPLY
WITH CLASS ACTION
REQUIREMENTS, BUT EMPLOYEE
NEED NOT SATISFY THOSE
REQUIREMENTS TO BRING
UNDER PAGA
ARIAS v SUPERIOR COURT
(ANGELO DAIRY). “We hold,” the California Supreme Court wrote in a June 29
opinion by Kennard, “that an employee
who, on behalf of himself and other
employees, sues an employer under
the unfair competition law (Bus. & Prof.
Code, § 17200 et seq.) for Labor Code
violations must satisfy class action requirements, but that those requirements
need not be met when an employee’s
representative action against an employer is seeking civil penalties under
the Labor Code Private Attorneys General Act of 2004 (Lab. Code, § 2698 et
seq.).
“Jose A. Arias sued his former employer, Angelo Dairy, and others. In the
first through sixth causes of action...,
plaintiff on behalf of himself alleged
violations of the Labor Code, labor regulations, and an Industrial Welfare Commission wage order.
“In the seventh through eleventh causes
-4-
of action..., plaintiff asserted claims on
behalf of himself as well as other current and former employees of defendants...
“The trial court granted defendants’
motion to strike the seventh through
eleventh causes of action ... on the
ground that plaintiff failed to comply with
the pleading requirements for class
actions. Plaintiff petitioned the Court of
Appeal for a writ of mandate. That court
held that the causes of action brought in
a representative capacity alleging violations of the unfair competition law, but
not the representative claims under the
Labor Code Private Attorneys General
Act of 2004, were subject to class
action requirements. We granted the
plaintiff’s petition for review. [The Third
District’s opinion, filed on July 24, 2007,
appeared at 63 CR3d 272, and was
summarized in CELA Bulletin, July 07,
p.2.]
“Plaintiff contends the Court of Appeal
erred in holding that to bring representative claims ... under the unfair competition law, he must comply with class
action requirements. We disagree... [¶]
Plaintiff contends that because Proposition 64’s amendment of the [UCL]
requires compliance only with ‘[s]ection
382 of the Code of Civil Procedure’ ...
and because that statute makes no
mention of the words ‘class action,’ his
representative lawsuit brought under the
[UCL] need not comply with the requirements governing a class action... [¶]
[But a] thorough review of the Voter
Information Guide ... leaves no doubt
that ... one purpose of Proposition 64
was to impose class action requirements on private plaintiffs’ representative actions brought under the [UCL].
“We turn now to the next issue—whether
class action requirements must also be
satisfied when an aggrieved employee
seeks civil penalties for himself and
other employees under the [PAGA] for
an employer’s alleged Labor Code violations.
“Not to [construe the PAGA as requiring
that all actions be brought as class
actions], defendants argue, would ren(Cont'd on Page 5, DECISIONS)
DECISIONS
(From Page 4)
der the act unconstitutional as violating
the due process rights not only of defendant employers but also of nonparty
aggrieved employees... [¶] Underlying
defendants’ arguments are concerns
pertaining to the application of collateral
estoppel... [¶] Unfairness may result
from application of collateral estoppel
when, for example, various plaintiffs in
separate lawsuits against the same
defendant assert claims presenting
common issues. Because collateral
estoppel may be invoked only against a
party to the prior lawsuit in which the
issue was determined, and because in
our example the defendant would be a
party to every lawsuit while each of the
various plaintiffs would be a party in only
one lawsuit, the defendant would in later
lawsuits be bound by any adverse determination of the common issues, while
none of the plaintiffs would be similarly
bound by prior determinations in the
defendant’s favor. This process ... is
commonly known as ‘one-way intervention’...
“Defendants here assert that unless the
[PAGA] is construed as requiring representative actions under the act to be
brought as class actions, defendants in
those actions will be subjected to the
unfairness flowing from one-way intervention.
“[A] representative action brought by an
aggrieved employee under the [PAGA]
does not give rise to the due process
concerns that defendants have expressed, because the judgment in such
an action is binding not only on the
named employee plaintiff but also on
government agencies and any aggrieved
employee not a party to the proceeding... [¶] Because an aggrieved
employee’s action under the [PAGA]
functions as a substitute for an action
brought by the government itself, a judgment in that action binds all those,
including nonparty aggrieved employees, who would be bound by a judgment
in an action by the government.”
In a separate opinion concurring in the
judgment, Werdegar wrote: “I write separately because I disagree with the
majority’s nonliteral interpretation of
Proposition 64, which forecloses a vari-
ety of representative actions the measure clearly permits. Unlike the majority, I do not believe we would frustrate
the voters’ intent by enforcing the measure according to its plain language...
“The [UCL], as amended by Proposition
64, requires persons who wish to pursue claims on others’ behalf to ‘compl[y]
with Section 382 of the Code of Civil
Procedure...’ The majority construes
the italicized language ‘to mean that
such an action must meet the requirements for a class action.’ The problem
with this conclusion is that the UCL,
even as amended by Proposition 64,
does not refer to class actions. Instead,
it refers to ... section 382 ... which also
does not refer to class actions...
“Today, its history largely forgotten,
section 382 is commonly but inaccurately described as setting out the requirements for class certification. The
majority adopts this shorthand description, as did the Attorney General and
Legislative Analyst in the ballot pamphlet...
“The propriety of any given representative action obviously depends on whether
the nonparties assumed to be represented will in fact be bound by the
judgment. Of the six categories of exceptions to the rule against nonparty
preclusion..., three might well, but for
today’s decision, support non-class
representative actions under the UCL...
“The majority, by simplistically construing Proposition 64’s reference to ‘Section 382’ as requiring class certification
in every instance, forecloses these other
possibilities. I acknowledge that the
practical difference between the
majority’s construction of Proposition
[64] and my literal one is small... [T]he
vast majority of representative plaintiffs
in UCL actions cannot hope to comply
with section 382 except through class
certification. Thus, my disagreement
with the majority affects very few cases...
[¶] [And] I agree with the majority that
the Court of Appeal correctly struck
plaintiff’s representative claims under
the circumstances of this case...”
For Petitioner: California Rural Legal
-5-
Assistance, Inc., Blanca A. Banuelos,
Stockton, and Michael L. Meuter, Salinas.
As amici on behalf of Petitioner:
Worksafe Law Center, M. Suzanne
Murphy; The Impact Fund, Brad
Seligman, Jocelyn Larkin; Asian Pacific American Legal Center, Julie A.
Su, Yung-Suhn Park; Legal Aid Foundation of Los Angeles, Anel Flores;
Legal Aid Society—Employment Law
Center, Matthew Goldberg; Neighborhood Legal Services of Los Angeles
County, David Pallack, Jose Tello; The
Watsonville Law Center, Dori Rose Inda;
National Employment Law Project, Laura
Moskowitz.
For Real Parties in Interest: Stephen
Drapkin; O’Melveny & Myers, Scott H.
Dunham, Ryan W. Rutledge.
by Kennard; opinion concurring in
judgment by Werdegar; 209 P3d 923,
95 CR3d 588.
UNION MAY NOT BRING
UNDER UCL OR PAGA EITHER
AS ASSIGNEE OF EMPLOYEES
WHO SUFFERED ACTUAL INJURY
OR AS ASSOCIATION WHOSE
MEMBERS SUFFERED ACTUAL
INJURY
AMALGAMATED TRANSIT UNION v
SUPERIOR COURT (FIRST TRANSIT,
INC.). In a companion case to Arias v
Superior Court, (summarized supra),
the California Supreme Court held as
follows in another unanimous opinion
by Kennard:
“This case presents two issues. First,
may a plaintiff labor union that has not
suffered actual injury under the unfair
competition law, and that is not an
‘aggrieved employee’ under the [PAGA],
nevertheless bring a representative action under those laws (1) as the assignee of employees who have suffered
an actual injury and who are aggrieved
employees, or (2) as an association
whose members have suffered actual
injury and are aggrieved employees?
DECISIONS
(From Page 5)
The answer is ‘no.’ Second, must a
representative action under the unfair
competition law be brought as a class
action? The answer is ‘yes,’ for the
reasons stated in the companion case
of Arias v. Superior Court (2009)
___Cal.4th___, 95 Cal.Rptr.3d 588, 209
P.3d 928.”
For union as Petitioner: Neyhart, Anderson, Flynn & Grosboll, San Francisco.
For Real Parties in Interest: McMahon
Berger, James N. Foster, Jr., Michelle
M. Cain, St. Louis; K. W. Kampe, III.
by Kennard; opinion concurring in
judgment by Werdegar; 95 CR3d
605, 209 P3d 937.
AFFIRMING SUMMARY
JUDGMENT ON CLAIM UNDER
CIVIL CODE § 51.9, SUPREME
COURT HOLDS THAT
ALLEGATIONS FAILED TO
ESTABLISH SEVERE OR
PERVASIVE CONDUCT OR QUID
PRO QUO HARASSMENT
HUGHES v PAIR. “At issue here,” the
California Supreme Court wrote in a
unanimous July 2 opinion by Kennard,
“is California’s Civil Code section 51.9,
which prohibits sexual harassment in
certain business relationships outside
the workplace. This statute, enacted
after the federal law’s Title VII and
California’s FEHA, expressly limits liability to harassing conduct that is ‘pervasive or severe,’ the same words used
to define liability under Title VII and the
FEHA. Considering the presence of
those words in section 51.9 to be significant, the trial court in this case granted
defendant’s motion for summary judgment, which the Court of Appeal affirmed in a two-to-one decision. [The
Second District’s September 2007 opinion appeared at 154 CA4th 1469, 65
CR3d 619, and was summarized in
CELA Bulletin, Sept 07, p.3.] Both
courts concluded that by its use of the
words ‘pervasive or severe,’ California’s
Legislature intended to incorporate into
section 51.9 the liability limitations governing workplace sexual harassment
suits brought under Title VII and the
FEHA. We agree, and we affirm the
Court of Appeal’s judgment.
“[The] history of the amendments to
Civil Code section 51.9 leaves no doubt
of the Legislature’s intent to conform
the requirements governing sexual harassment in professional relationships
outside the workplace to hose of the
federal law’s Title VII and California’s
FEHA...
“Here, defendant’s sexually harassing
conduct ... was not ‘pervasive’ within
the meaning of Civil Code section 51.9—
that is, not so egregious as to alter the
conditions of the underlying professional
relationship... To be pervasive, the sexually harassing conduct must consist of
‘more than a few isolated incidents.’
[cite omitted.]
“Nor was defendant’s alleged conduct
‘severe’... [E]mployment law acknowledges that an isolated incident of harassing conduct may qualify as ‘severe’
when it consists of ‘a physical assault
or the threat thereof.’ [cite omitted.] ...
Most reasonably construed, defendant’s
comment was a threat, not of physical
violence, but of financial retaliation...
But such a threat will not support a
claim under section 51.9 for the hostile
environment form of sexual harassment,
because it does not constitute ‘severe’
harassing conduct...
“In this case, plaintiff’s factual allegations provide two potential bases for a
claim of quid pro quo sexual harassment: First, plaintiff alleges that defendant [a trustee of her deceased
husband’s estate] made comments to
her ... that if she would be ‘nice’ to him,
he could ... be persuaded to vote to
approve [an expenditure she had requested.] Second, she has alleged that
defendant told her he would ‘fuck [her]
one way or another.’ [T]his crude statement ... is most reasonably construed
as a threat that, unless plaintiff granted
him sexual favors, he would use his
authority ... to deny plaintiff’s requests
for funds.
“These allegations are insufficient to
establish quid pro quo sexual harassment, however, because they amount
-6-
at most to unfulfilled threats... Because
plaintiff has identified no tangible retaliatory conduct by defendant in the context of their professional relationship,
plaintiff’s claim is properly treated as a
claim for hostile environment sexual
harassment. As we have already concluded, plaintiff’s factual allegations fail
to establish the [necessary] ‘severe’ or
‘pervasive’ conduct...
“The Court of Appeal here [also] concluded that plaintiff failed to establish
two of the three elements of a cause of
action for intentional infliction of emotional distress: either extreme or outrageous conduct by the defendant, or that
plaintiff suffered severe or extreme emotional distress. We agree... [¶] The
judgment of the Court of Appeal is
affirmed.”
For plaintiff: Hillel Chodos and Deborah
Chodos.
For defendant: Melanie C. Ross.
by Kennard; 2009 DAR 9903, 2009
WL 1886877.
CALIFORNIA COURTS
OF APPEAL
THIRD DISTRICT AFFIRMS
JUDGMENT FOR PLAINTIFF ON
WTVPP CLAIM BUT REVERSES
AWARD OF PUNITIVE DAMAGES
SCOTT v PHOENIX SCHOOLS, INC.
In an opinion filed on June 30, the Third
District affirmed a judgment in favor of a
discharged preschool director on a wtvpp
claim, letting stand an award of
$1,108,247 in compensatory damages,
but reversing a $750,000 punitive damages award on grounds of insufficient
evidence of malice or oppression. The
court wrote in part as follows:
“Plaintiff Jennifer Scott was employed
by defendant ... as the director of its
Rocklin, California preschool. She had
the responsibility of assigning personnel to comply with the state regulations
that set the minimum teacher/student
DECISIONS
(From Page 6)
ratios for child care centers. (Cal. Code
Regs., tit. 22, §§ 101216.3, 101416.5,
and 101516.5.)
“Phoenix terminated Scott in August
2006, shortly after she informed the
parents of a prospective student that
the school had no room for their child.
Scott sued Phoenix, alleging her termination violated the public policy embodied in the state regulations. She alleged
she was terminated for refusing to violate the staffing ratio regulations, the
implication being that the admission of
the extra child would have resulted in a
regulatory violation...
“Phoenix argues the verdict must be
overturned because: (1) no substantial
evidence exists that enrolling the
McMaster child would have violated the
regulation, (2) no substantial evidence
exists that Scott notified Phoenix that
enrolling the McMaster child would have
violated the regulation, and (3) the regulation does not reflect a fundamental or
important public policy.
“Taken together [the] evidence indicates
the school, and in particular the Ladybugs classroom [which the McMaster
child would have joined] had a shortage
of teachers... Because of the fluid nature of staffing at the school, it is difficult
to determine whether the addition of one
more student would have made it impossible to adequately staff the class,
but given the fact the class was already
operating at times in violation of the
staffing ratios, and that the school was
shortstaffed, the jury’s conclusion that
the addition of one more child would
have caused the classroom to operate
out of compliance was a reasonable
inference. That is sufficient to sustain
the verdict.
“Phoenix argues that it was necessary
for Scott to present evidence she disclosed to Phoenix that enrolling the
McMaster child would result in a regulatory violation. Scott replies that only in
a whistleblower case is it necessary for
the employee to disclose to the employer the employer’s violation of the
law. We decline to resolve this issue
because we conclude there was substantial evidence from which the jury
could reasonably infer that Scott did
disclose the violation to Phoenix... [¶]
The jury could have reasonably inferred
that when Scott told her superiors the
school was shortstaffed, and that she
did not enroll the McMaster child for that
reason, she was in fact indicating there
were not enough teachers and/or aides
to maintain regulatory staffing ratios.
“‘[T]he primary rationale for requiring
that a public policy be substantial and
fundamental is ‘to ensure that employers have adequate notice of the conduct
that will subject them to tort liability to
the employees they discharge.’ [Citations.] A corollary of the substantial and
fundamental requirement, then, is that
a ‘constitutional or statutory provision
must sufficiently describe the type of
prohibited conduct to enable an employer to know the fundamental public
policies that are expressed in that law.’
[Citations.]’ (Sullivan v. Delta Air Lines,
Inc. (1997) 58 Cal.App.4th 938, 943.)
“The regulations governing teacher/student ratios are statutorily authorized by
the California Child Day Care Act. (Health
& Saf. Code, § 1596.81.)... Manifestly,
the purpose of the teacher/student ratios is to protect the safety and ensure
the educational development of the children by ensuring they are adequately
supervised... [¶] The public policy embodied by the regulation at issue here is
no less substantial and fundamental
than other public policies the courts
have found sufficient to subject an employer to tort liability...
“Phoenix argues there was insufficient
evidence of malice, fraud or oppression
to support the award of punitive damages. We agree.
“The only evidence of wrongful conduct
directed toward Scott was her termination for an improper reason. This evidence was insufficient to support a
finding of despicable conduct, because
such action is not vile, base or contemptible. Nor do we find this evidence
shows a conscious and deliberate disregard of plaintiff’s interests.
“In this case, Scott was not subject to
any personal liability by violating the
-7-
regulation. Violation of the regulation
would result in a monetary penalty imposed against the child care center, not
against Scott... Thus, Scott’s rights
were not endangered by the school’s
noncompliance with the regulation... [¶]
[W]e conclude that wrongful termination, without more, will not support a
finding of malice or oppression. There
was no evidence Phoenix attempted to
hide the reason it terminated Scott...
Likewise, there was no evidence Phoenix engaged in a program of unwarranted criticism to justify her termination...
“Phoenix argues the trial court should
have granted its motion for new trial
because of two prejudicial evidentiary
rulings... These were: the introduction
of evidence of the inadequacy of
Phoenix’s investigation into the
McMaster incident, and the exclusion
of evidence of McMaster’s complaint of
discrimination...
“Phoenix argues the trial court allowed
Scott to question witnesses about
whether an adequate investigation of
her job performance was conducted
prior to the decision to discharge her. It
argues this raised irrelevant issues relating to the reasonableness and fairness of Phoenix’s decision, when this
was not an issue in the termination of an
at-will employee. We conclude the issue was relevant, and therefore admissible...
“If the motivating reason had been merely
Scott’s ill treatment of the McMasters,
it would have been reasonable for Phoenix to talk to McMaster... Likewise, if
the motivating factor had been Scott’s
perceived lack of enthusiasm and drive,
it would have been reasonable to look at
her past performance. By showing that
no such investigation was done, Scott
offered evidence from which the jury
could infer that the motivating factor ...
[was] the fact that she refused to enroll
[the McMaster] child...
“Phoenix argues the trial court incorrectly granted Scott’s in limine motion
to exclude evidence that Mr. McMaster
DECISIONS
(From Page 7)
accused Scott of discriminating against
his [Hispanic] wife... [¶] [This] evidence
was not at all relevant... Phoenix never
claimed to have terminated Scott because she had discriminated against
the McMasters, or because it believed
she had discriminated against the
McMasters...
TRIAL COURT LACKED
SUFFICIENT INFORMATION TO
MAKE INFORMED EVALUATION
OF FAIRNESS OF SETTLEMENT
OF WAGE AND HOUR CLASS
ACTION
“Phoenix claims that portions of the
damage award were unsupported by
the evidence and were excessive. It
makes this claim with regard to the jury
award of $500,000 for noneconomic
damages and the portion of the economic damage award representing future economic damages...
CLARK v AMERICAN RESIDENTIAL
SERVICES LLC. In an opinion filed on
July 6, the Second District, Division
Eight, vacated an order approving the
settlement of a wage and hour class
action, holding that the trial court had
lacked sufficient information to make an
informed evaluation of the settlement’s
fairness. The Court of Appeal wrote in
part as follows:
“Scott’s husband presented evidence
... that Scott had been depressed every
day from the day she was suspended
until the trial, a period of some 16
months... The jury was in the best
position to determine whether being
wrongfully terminated from her job would
have resulted in a substantial, as opposed to a trivial injury... The evidence
presented was sufficient...
“Phoenix argues the award of future
earnings from age 37 to retirement was
speculative and unsupported by the
evidence because Scott was an at-will
employee... [¶] Assuming Phoenix is
correct in claiming that the evidence
was merely speculative that Scott would
have worked for Phoenix until retirement age, and that because she was
credited with lost tuition benefits, she
had a duty to mitigate her lost fulltime
wages by securing other fulltime employment, the jury verdict must still be
upheld... [¶] We must uphold a jury’s
award of damages if it is within the range
of possibilities supported by any of the
testimony...”
For plaintiff: MaryAlice Coleman and
James C. Ashworth.
For defendant: Kronick, Moskovitz,
Tiedemann & Girard, Bruce A. Scheidt,
Kristianne T. Sergeant, and Meredith
Packer.
Third Dist, 6/30/09; opinion by Blease
with Sims and Nicholson concurring; 2009 DAR 9800, 2009 WL
1877532.
“Derain Clark and Maxine Gaines filed a
class action ... seeking damages and
penalties for allegedly unpaid minimum
and overtime wages, failure to provide
meal and rest periods, and other Labor
Code violations and unfair business practices. Eighteen months later, after a
one-day mediation before a respected
mediator, the parties agreed to settle
the matter for $2 million, [inclusive of
attorneys’ fees and costs,] out of which
Clark and Gaines would receive $25,000
each, and the other 2,360 class members would receive an average payment
of $561.44. Notice of the proposed settlement elicited objections from 20 putative class members, who alleged that
they worked at least two hours of unpaid
overtime every workday, that they would
be compensated for only about one
percent of the total value of their claims,
and that no evidence was presented to
the court to justify the settlement. After
a hearing, the trial court gave final approval to the settlement. The objectors
appealed.
“We conclude the order approving the
settlement must be vacated because
the trial court lacked sufficient information to make an informed evaluation of
the fairness of the settlement. This was
due to the court’s apparent reliance on
counsel’s evaluation of the class’s overtime claim as having ‘absolutely no’
value, without regard to the objectors’
claim that counsel’s evaluation was
based on an allegedly ‘staggering mistake of law.’ While the court need not
-8-
determine the ultimate legal merit of a
claim, it is obliged to determine, at a
minimum, whether a legitimate controversy exists on a legal point, so that it
has some basis for assessing whether
the parties’ evaluation of the case is
within the ‘ballpark’ of reasonableness.
We further conclude that the court
abused its discretion in finding that the
$25,000 enhancements for Clark and
Gaines were fair and reasonable, and
that it erred in awarding costs greater
than the maximum amount specified in
the notice given to the class.
“Clark’s motion [for preliminary approval]
stated the settlement would provide a
payment of approximately $6.43 per
workweek for each class member submitting a claim, attorney fees of
$600,000, costs of up to $40,000, and
class representative enhancements of
$50,000 ($25,000 each).
“On May 8, 2007, the court gave preliminary approval to the class action settlement agreement, and on May 22, 2007,
notice of pendency of the settlement
was mailed to 2,821 potential class
members.
“A month later, Clark moved for final
approval of the settlement, arguing [it]
was entitled to a presumption of fairness where the agreement is reached
through arm’s length bargaining; investigation and discovery are sufficient to
allow counsel and the court to act intelligently; counsel is experienced in similar litigation; and the percentage of objectors is small... Only 23 of the 2,821
class members opted out.
“On July 5, 2007, twenty class members, represented by the Law Office of
Randall Crane, filed objections... Their
declarations stated they had approached
the Crane office in mid-May, unaware of
the Clark action... They argued that the
proposed settlement was ‘a near-total
loss for class members,’ compensating
them for approximately one percent of
the total value of their claims...
“[T]wo weeks before the fairness hearing, class counsel Barnes submitted
DECISIONS
(From Page 8)
another declaration, evaluating the entire case at ‘approximately
$2,351,605.61.’ Barnes stated: ‘As to
overtime: while initially believing their
strongest cause of action was for overtime compensation..., plaintiffs ‘have
determined that there are no damages
whatsoever for the overtime cause of
action,’ as ARS ‘had a legally compliant
overtime policy and they actually paid
overtime premium pay pursuant to their
compensation policy.’
“At the August 29 fairness hearing,
counsel for the objectors responded to
class counsel’s claim that ‘there absolutely no damages on the overtime cause
of action,’ asserting this reflected a
‘staggering mistake of law...’ He asserted that ... overtime for commission
workers cannot be calculated on a minimum wage, disregarding the commission for purposes of overtime. Rather, to
find the overtime rate, the amount of a
commission check is divided by the
number of hours worked to obtain the
regular rate, and that rate is multiplied
by .5 for the overtime hours.
“On review of the trial court’s approval of
a class action settlement ... [w]e make
no independent determination whether
the settlement terms are ‘fair, adequate
and reasonable,’ but only determine
whether the trial court acted within its
discretion. (Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116,
127-128.) Here, it did not, because the
court did not receive and consider sufficient information on a core legal issue
affecting the strength of the case for
plaintiffs on the merits... We also conclude the enhancement or incentive
awards were excessive, and that the
award of costs in excess of the maximum amount stated in the notice to the
class was improper.
“[T]he trial court is obliged, at a minimum, to determine whether a legitimate
controversy exists on a legal point, if
that legal point significantly affects the
valuation of the case for settlement
purposes. Here, the trial court simply
accepted class counsel’s conclusion
the overtime claim had ‘absolutely no’
value, without a ‘substantiated explanation’ of the manner in which a core legal
issue was evaluated... The court thus
lacked a sufficient basis to ‘satisfy itself
that the class settlement is within the
‘ballpark’ of reasonableness.’ (Kullar,
supra, at p. 133.)
“An enhancement that gives the named
plaintiffs at least 44 times the average
payout to a class member simply cannot be justified on the record in this
case. (While Clark and Gaines say they
spent ‘countless hours’ on this case, a
$25,000 enhancement would compensate them, if they were paid, say, $50
an hour—a rate we do not suggest
would be justified—for 500 hours, or
more than 12 weeks of full-time work.)
Moreover, the trial court is not bound to
and should not accept conclusory statements about ‘potential stigma’ and ‘potential risk,’ in the absence of supporting evidence or reasoned argument...
“The trial court approved an award of
costs totaling $44,574.27... However,
the notice to class members ... stated
that plaintiffs’ counsel requested reimbursement ‘of costs of up to $40,000.'
Likewise, the stipulated class settlement ... stated that class counsel would
submit an application for an award of
actual litigation costs ‘not to exceed
Forty Thousand Dollars...’ Consequently, the trial court was not at liberty
to award an amount exceeding $40,000
in costs without further notice to the
class.”
For plaintiffs: Kevin T. Barnes and Gregg
Lander; Joseph Antonelli and Janelle C.
Carney.
For objectors: Randall C. Crane and
Leonard Emma.
For defendants: Winston & Strong, Lee
T. Paterson, Amanda C. Sommerfeld,
and Emilie C. Woodheard.
Second Dist Div Eight, 7/6/09; opinion by Bauer with Rubin and Flier
1912713.
NO MALPRACTICE CLAIM COULD
BE ASSERTED AGAINST CLASS
COUNSEL FOR FAILING TO
MAKE SURE THAT CLASS
MEMBER FILED TIMELY CLAIM
FORM
MARTORANA v MARLIN &
SALTZMAN. In an opinion by Zelon filed
on July 1, the Second District, Division
Seven, wrote in part as follows:
“Appellant Ron Martorana was a class
member in a prior wage and hour class
action... A settlement of the class action was approved ... but Martorana did
not recover any portion of the settlement because he failed to timely submit
a claim form. Martorana then filed the
instant action against Allstate and Class
Counsel alleging that Respondents were
negligent in failing to take action to
contact Martorana before the claim filing deadline to determine why he had
not filed a claim form and to make sure
that he was aware of the need to timely
do so. Respondents filed demurrers to
Martorana’s complaint, which the trial
court sustained... [¶] For the reasons
set forth below, we hold that the trial
court did not err in sustaining Class
Counsel’s demurrers without leave to
amend, but did err in awarding sanctions to Allstate.
“Martorana does not allege that he failed
to receive the settlement notice, or the
accompanying claim form, within the
claim filing period. Rather, he alleges
that he did not submit a claim form ...
because he had been diagnosed with
prostate cancer and was experiencing
the physical effects of his diagnosis and
treatment...
“Martorana contends that he has
pleaded an actionable malpractice claim
under two possible theories. First, he
asserts that Class Counsel can be
liable for failing to negotiate a settlement notice procedure whereby counsel would be notified before the claim
filing deadline as to which class members had not yet responded... Second,
Martoran claims that Class Counsel
-9-
DECISIONS
(From Page 9)
can be liable for failing to contact him
specifically once counsel knew or should
have known that he had not submitted a
timely claim form. [W]e conclude that
Martorana has failed to state a cause of
action under either theory.
“Martorana’s first theory of liability fails
because he is collaterally estopped...
[¶] In asserting that Class Counsel
should have negotiated a different settlement notice procedure, Martorana is
attempting to challenge the judiciallyapproved notice procedure in the [underlying] Sekly action, and thus to
relitigate an issue that was actually
decided... Before the trial court in the
Sekly action could grant final approval
of the settlement, it was required to
review the settlement notice to class
members for compliance with due process...
“Martorana’s alternative theory of liability likewise lacks merit... [T]here were
no allegations ... to support a theory
that Class Counsel had any knowledge
that Martorana was ill or otherwise incapable of submitting a timely response.
Instead, Martorana suggests that Class
Counsel should have followed up with
him simply because his allocated share
of the settlement was fairly sizable at
$65,000. But Martorana does not cite
any case law to support this theory of
liability, nor are we aware of any authority imposing such an obligation on counsel in a class action suit.
“Martorana also appeals the trial court’s
award of sanctions under [Code of Civil
Procedure] section 128.7. Among other
arguments, Martorana asserts that the
trial court erred in ordering sanctions
against him and his attorney because
Allstate did not comply with the ‘safe
harbor’ provisions of section 128.7, subdivision (c)(1) by serving a separate
motion for sanctions 21 days before
filing it with the court... During the safe
harbor period, the offending party may
withdraw the improper pleading and
thereby avoid sanctions... [¶] [I]t is
clear that Allstate did not satisfy the
safe harbor requirements ... [and] the
trial court’s order awarding sanctions to
Allstate must be reversed.”
For plaintiff: Bennett Rolfe.
For defendants: Marlin & Saltzman;
Nemecek & Cole; Seyfarth Shaw.
Second Dist Div Seven, 7/1/09; opinion by Zelon with Perluss and Woods
1875681, modif. 7/16/09, 2009 WL
2060117.
FOURTH DISTRICT MODIFIES TIPSHARING OPINION ON DENIAL
OF REHEARING
CHAU v STARBUCKS CORPORATION. On July 2, the Fourth District
issued orders denying petitions for rehearing and modifying its June 2 opinion, (174 CA4th 688, 94 CR3d 593;
summarized in CELA Bulletin, June
09, p.5), without changing the judgment. The court added, inter alia, the
following paragraphs to immediately
precede Section III:
“In a petition for rehearing, plaintiffs
challenge statements in our opinion
that it was ‘undisputed’ that customers
who leave money in a collective tip box
intend the tip for employees who provide
customer service. They assert that customer intent was not an issue at trial,
and note that neither party presented
any testimony from a customer...
“The argument is unsupported on factual and legal grounds. Plaintiffs had the
burden of proving their claim, and they
presented no evidence or argument that
customers placed tips in a collective tip
box with the understanding or intent to
benefit only the barista class of employees. To the contrary, the testimony by
baristas and shift supervisors was undisputed that customers leave tips in
the collective tip boxes for the service
team...
“Moreover, it was not necessary for
either party to present direct evidence
from customers to establish the fact
that persons who place tips in a collective tip box understand that tips will be
divided by the service personnel. Clearly,
the tips were left for someone. Whether
one presents specific evidence on the
issue, considers a dictionary definition,
-10-
references case law authority, or applies established social mores, it is well
established that tips are given in return
for service. Our statements about undisputed customer intent ... reflect this
simple proposition. There is nothing
remarkable in concluding, and it follows
logically, that the tips were intended for
those who provided service. To suggest
otherwise ignores reality, something
the law does not require.”
Fourth Dist Div One, 7/2/09; 2009
DAR 9943, 2009 WL 1887761.
NINTH CIRCUIT
IN GRANTING CLASS
CERTIFICATION ON OVERTIME
CLAIMS, DISTRICT COURT
ABUSED DISCRETION IN RELYING
ON EMPLOYER’S UNIFORM
EXEMPTION POLICY ALMOST TO
EXCLUSION OF OTHER FACTORS
RELEVANT TO PREDOMINANCE
INQUIRY
In re WELLS FARGO HOME MORTGAGE OVERTIME PAY LITIGATION.
“This interlocutory appeal,” the Ninth
Circuit wrote in a July 7 opinion, “challenges a [Northern District] order certifying a group of California employees as
a class.
“The dispute is whether the court abused
its discretion in finding that the predominance requirement of Federal Rule of
Civil Procedure 23(b)(3) was satisfied,
based—in large part—on a employer’s
internal policy of treating its employees
as exempt from overtime laws.
“While such uniform exemption policies
are relevant to the Rule 23(b)(3) analysis, we hold that it is an abuse of
discretion to rely on such policies to the
near exclusion of other relevant factors
touching on predominance.
“The plaintiffs ... are current and former
home mortgage consultants (‘HMCs’)
who were employed by Wells Fargo
DECISIONS
(From Page 10)
Home Mortgage in California. Since
2001, there have been some 5000 such
HMCs.
“During the class period, Wells Fargo
neither paid overtime nor tracked the
hours of the HMCs. Rather, it treated
nearly all of its HMCs as exempt...
These cases, as well as those filed by
non-California plaintiffs, were consolidated in the Northern District of California by the Judicial Panel on Multidistrict
Litigation.
“The California plaintiffs sought class
certification. In opposition, Wells Fargo
argued that individual issues predominated... In particular, Wells Fargo pointed
to a number of exemptions under the
FLSA (applicable through the UCL) and
California labor law that would require
individualized inquiries.
“In an order dated October 17, 2007, the
district court carefully reviewed each
exemption identified by Wells Fargo
and found that individual inquiries would
be necessary with respect to five exemptions... These inquiries, the court
found, would require an analysis of the
job experiences of the individual employees, including the amount of time
worked by each HMC, how they spent
their time, where they primarily work,
and their levels of compensation.
“In contrast, the court found that common issues arose only with respect to
two exemptions... [¶] Despite the conclusion that numerous individualized
inquiries would be necessary, the district court ultimately granted certification by relying on Wells Fargo’s uniform
exemption policies:
“‘As numerous courts have recognized,
[the district court wrote], it is manifestly
unfair disingenuous for a company to
treat a class of employees as a homogenous group for the purposes of internal
policies and compensation, and then
assert that the same group is too diverse for class treatment in overtime
litigation. This is particularly true in a
situation such as this, where the difficulty of proving hours worked and compensation received is exacerbated by
defendants’ complete failure to main-
tain pertinent records. Accordingly,
plaintiffs have satisfied their burden and
demonstrated that common issues predominate.’
“The [defendant’s] first line of attack,
[the Ninth Circuit continued,] that Wells
Fargo’s exemption policy was an impermissible factor, is a nonstarter. An
internal policy that treats all employees
alike for exemption purposes suggests
that the employer believes some degree of homogeneity exists among the
employees. This undercuts later arguments that the employees are too diverse for uniform treatment. Therefore,
an exemption policy is a permissible
factor for consideration under Rule
23(b)(3).
“Wells Fargo’s arguments are better
construed as a challenge to the weight
accorded to the internal exemption policies under the third abuse of discretion
prong: mulling the proper factors but
committing clear error in weighing them.
To analyze this question, we first ask
how much weight the district court gave
to the exemption policy. Plaintiffs suggest the weight was minimal; Wells
Fargo claims that the district court’s
reliance was tantamount to estoppel.
“A review of the California certification
order lends substantial credence to
Wells Fargo’s position... [W]e conclude
that the district court’s reliance on Wells
Fargo’s internal exemption policy was
substantial.
“District courts within this circuit have
split on the relevance of exemption
policies. The district court relied primarily on Wang v. Chinese Daily News,
Inc., 231 F.R.D. 602, 612-13 (C.D. Cal.
2005), which found predominance of
common issues based on an employer’s
policy of treating all employees in a
certain position as uniformly exempt
from overtime compensation requirements. In contrast, another district court
has expressed doubt about Wang, and
found that uniform exemption policies
are merely a minor factor in the predominance analysis. See Campbell v.
PricewaterhouseCoopers, LLP, 253
F.R.D. 586, 603-04 (E.D. Cal 2008)
(rejecting ‘estoppel’ position of Wang.)
-11-
“Viewed in light of [the applicable] principles, the rule espoused in Wang has
little justification... Such an approach
... disregards the existence of other
potential individual issues that may
make class treatment difficult if not
impossible. Indeed, this case is a prime
example, as the district court identified
‘serious issues regarding individual variations’ that were not susceptible to common proof, but nevertheless felt compelled to certify the class.
“Of course, uniform corporate policies
will often bear heavily on questions of
preponderance and superiority. Indeed,
courts have long found that comprehensive uniform policies detailing the job
duties and responsibilities of employees carry great weight for certification
purposes... Such centralized rules, to
the extent they reflect the realities of the
workplace, suggest a uniformity among
employees that is susceptible to common proof.
“But Wells Fargo’s blanket application
of exemption status, whether right or
wrong, is not such a rule. In contrast to
centralized work policies, the blanket
exemption policy does nothing to facilitate common proof on the otherwise
individualized issues...
“In short, Wells Fargo’s uniform exemption policy says little about the main
concern in the predominance inquiry,
the balance between individual and common issues. As such, we hold that the
district court abused its discretion in
relying on that policy to the near exclusion of other factors relevant to the
predominance inquiry.”
For plaintiffs: Arthur W. Lazear, Oakland; Kevin J. McInerney, Reno.
For defendant: Lindbergh Porter, Jr.,
Littler Mendelson, San Francisco.
Amici for plaintiffs: Stefano G. Moscato
(for NELA et al); Titi Liu and Shirin
Sinnar (Asian Law Caucus); Cynthia
Rice (CRLA); Donna Ryu (Hastings Civil
Justice Clinic); Jule Su (Asian Pacific
American Legal Center); Fabian Gatti
(Centro Legal de La Raza); Brad
Seligman (Impact Fund); Gladys Limon
DECISIONS
(From Page 11)
(Mexican-American Legal Defense and
Educational Fund); Robert Rubin (Lawyers Committee for Civil Rights of Bay
Area); Matthew Goldberg (Legal Aid
Society—Employment Law Center);
Cathy Ruckelshaus, Laura Moskowitz
(National Employment Law Project);
Marci Seville (Women’s Employment
Rights Clinic, Golden Gate University
School of Law); Sara Ainsworth, Janet
S. Chung (Northwest Women’s Law
Center, Seattle).
Ninth Circuit, 7/7/09; opinion by Mills
joined by Silverman and Callahan;
2009 DAR 10025, 2009 WL 1927711.
RULE 23 DOES NOT PREVENT
DEFENDANT FROM BRINGING
“PREEMPTIVE” MOTION TO DENY
CLASS CERTIFICATION BEFORE
PLAINTIFFS HAVE FILED MOTION
TO CERTIFY
VINOLE v COUNTRYWIDE HOME
LOANS, INC. In an opinion by Callahan
filed on July 7, the Ninth Circuit affirmed
the Southern District’s grant of a defense motion to deny the certification of
a class of outside salespersons who
alleged that they had been misclassified
as exempt employees and wrongfully
denied overtime and related wages. The
Ninth Circuit wrote in part as follows:
“On appeal, we consider whether the
district court abused its discretion by
(1) considering Countrywide’s motion
to deny class certification before Plaintiffs had filed a motion to certify and prior
to the pretrial and discovery cutoffs, and
(2) denying class certification based on
its reasoning that individual issues predominate over common issues... We
affirm. First, no rule or decisional authority prohibited Countrywide from filing its motion to deny certification before Plaintiffs filed their motion to certify,
and Plaintiffs had ample time to prepare
and present their certification argument.
Second, the district court did not abuse
its discretion by denying certification
under Rule 23(b)(3) because the record
supports its conclusion that individual
issues predominate over common issues.
“We first address Plaintiffs’ argument
that a defense motion to deny class
certification ‘brought outside the context of a plaintiff’s motion actually seeking certification is procedurally improper
per se.’ Although we have not previously
addressed this argument directly, we
conclude that Rule 23 does not preclude a defendant from bringing a ‘preemptive’ motion to deny certification.
court conduct an individualized analysis of each employee’s actual work
activity... This is essentially the approach adopted by the district court in
In re Wells Fargo Home Mortgage Overtime Pay Litigation, 527 F. Supp.2d
1053, 1068 (N.D. Cal. 2007), which is
also before us on appeal.
“Nothing in the plain languate of Rule
23(c)(1)(A) either vests plaintiffs with
the exclusive right to put the class
certification issue before the district
court or prohibits a defendant from seeking early resolution of the class certification question. The only requirement
is that the certification question be resolved ‘[a]t an early practicable time.’
The plain language of Rule 23(c)(1)(A)
alone defeats Plaintiffs’ argument that
there is some sort of ‘per se rule’ that
precludes defense motions to deny
certification, and Plaintiffs have produced no authority to the contrary.
“We decline to adopt such an approach
because—as set forth in greater length
in our opinion in In re Wells Fargo—we
hold that a district court abuses its
discretion in relying on an internal uniform exemption policy to the near exclusion of other factors relevant to the
predominance inquiry. [Editor’s note:
the Ninth Circuit’s July 7 opinion in In re
Wells Fargo is summarized supra, at
p.10.] As we stated there, focusing on
a uniform exemption policy alone does
little to further the purpose of Rule
23(b)(3)’s predominance inquiry, which
requires an assessment of the relationship between individual and common
issues. Instead of adopting what would
essentially be a bright-line presumption
in favor of class certification, we favor an
approach that takes into consideration
all factors that militate in favor of, or
against, class certification. The
overarching focus remains whether trial
by class representation would further
the goals of efficiency and judicial
economy.
“We also conclude that Plaintiffs were
provided with adequate time in which to
conduct discovery related to the question of class certification such that the
district court did not abuse its discretion by considering Countrywide’s motion... [¶] Although the district court
considered Countrywide’s motion
roughly three weeks before the November 2007 discovery cutoff, Plaintiffs had
nearly ten months to conduct informal
and formal discovery between the time
Plaintiffs filed their original class action
complaint and their opposition to
Countrywide’s motion... [P]laintiffs had
conducted significant discovery and did
not intend to propound any additional
discovery seeking information from
Countrywide regarding the propriety of
class certification... [T]he district court’s
consideration of the motion would only
be improper if Plaintiffs could show
some procedural prejudice from the timing of the consideration. Plaintiffs have
failed to do so on the record presented,
and, thus, the district court did not
abuse its discretion.
“Plaintiffs ask us to follow the Wang [v.
Chinese Daily News, Inc., 231 F.R.D.
602 (C.D. Cal. 2005)] decision and adopt
a rule that class certification is warranted under Rule 23(b)(3) whenever an
employer uniformly classifies a group of
employees as exempt, notwithstanding the requirement that the district
-12-
“Here, the district court weighed the
relevant considerations and properly
focused on whether class certification
would enhance efficiency and further
judicial economy. It stated that ‘in cases
where exempt status depends upon an
individualized determination of an
employee’s work, and where plaintiffs
allege no standard policy governing how
employees spend their time, common
issues of law and fact may not predominate.’ ... It did not suggest that the lack
of a common policy necessarily defeats
certification as a matter of law, but that
the lack of that type of evidence in this
case reduced the number of issues
susceptible to common proof... Plaintiffs’ claims will require inquires into how
much time each individual HLC spent in
or out of the office and how the HLC
performed his or her job; all of this where
the HLC was granted almost unfettered
autonomy to do his or her job. This must
DECISIONS
(From Page 12)
be considered along with the lack of
issues subject to common proof that
would actually ameliorate the need to
hold several hundred mini-trials with
respect to each HLC’s work performance...
“Here, the district court correctly selected and applied Rule 23’s criteria,
and there is no persuasive evidence in
the record that it relied on an improper
factor, failed to consider a factor entitled
to substantial weight, or mulled the
correct mix of factors but made a ‘clear
error of judgment in assaying them.’
[cite omitted.] Accordingly, the district
court did not abuse its discretion.”
For plaintiffs: Michael D. Singer.
For defendants: Thomas R. Kaufman,
Seyfarth Shaw LLP.
Callahan joined by Silverman and
Mills; 2009 DAR 10031, 2009 WL
1926444.
EMPLOYEES OF WAL-MART’S
FOREIGN SUPPLIERS COULD
STATE NO CLAIM AGAINST WALMART FOR FAILING TO ENFORCE
CONTRACTUALLY MANDATED
LABOR STANDARDS
DOE v WAL-MART STORES, INC. In
an opinion by Gould filed on July 10, a
Ninth Circuit panel wrote in part as
follows:
“The appellants were among the plaintiffs in the district court [Central District]
and are employees of foreign companies that sell goods to Wal-Mart Stores,
Inc. They brought claims against WalMart based on the working conditions in
each of their employers’ factories. These
claims relied primarily on a code of
conduct included in Wal-Mart’s supply
contracts, specifying basic labor standards that suppliers must meet. The
district court dismissed the complaint
for failure to state a claim under Federal
Rule of Civil Procedure 12(b)(6). We
have jurisdiction under 28 U.S.C. §
1291, and we affirm.
“Plaintiffs are employees of Wal-Mart’s
foreign suppliers in countries including
China, Bangladesh, Indonesia,
Swaziland, and Nicaragua. Plaintiffs
allege the following relevant facts...
“In 1992, Wal-Mart developed a code of
conduct for its suppliers, entitled ‘Standards for Suppliers.’ These Standards
were incorporated into its supply contracts with foreign suppliers. The Standards require foreign suppliers to adhere to local laws and local industry
standards regarding working conditions
like pay, hours, forced labor, child labor,
and discrimination. The Standards also
include a paragraph entitled ‘RIGHT OF
INSPECTION’:
“‘To further assure proper implementation..., Wal-Mart or a third party ... will
undertake affirmative measures ... to
implement and monitor such standards.
Any supplier which fails or refuses to
comply ... is subject to immediate cancellation of any and all outstanding
orders...’
“Wal-Mart represents to the public that
it improves the lives of its suppliers’
employees and it does not condone any
violation of the Standards. However,
Plaintiffs allege that Wal-Mart does not
adequately monitor its suppliers and
that Wal-Mart knows its suppliers often
violate the Standards. Specifically,
Plaintiffs claim that in 2004, only eight
percent of audits were unannounced,
and that workers are often coached on
how to respond to auditors. Additionally, Plaintiffs allege that Wal-Mart’s
inspectors were pressured to produce
positive reports of factories that were
not in compliance with the Standards.
Finally, Plaintiffs allege that the short
deadlines and low prices in Wal-Mart’s
supply contracts force suppliers to violate the Standards in order to satisfy the
terms of the contracts.
“Plaintiffs present four distinct legal theories, all of which aim to establish that
the Standards and California common
law provide substantive obligations that
can be enforced by the foreign workers
against Wal-Mart: (1) Plaintiffs are thirdparty beneficiaries of the Standards...;
(2) Wal-Mart is Plaintiffs’ joint employer;
(3) Wal-Mart negligently breached a
duty to monitor the suppliers...; (4) WalMart was unjustly enriched by Plaintiffs’
mistreatment. Applying California law,
we address each claim in turn.
“We agree with the district court that
[the Right of Inspection] language does
not create a duty on the part of Wal-Mart
to monitor the suppliers, and does not
provide Plaintiffs a right of action against
Wal-Mart as third-party beneficiaries.
[¶] The language and structure of the
agreement show that Wal-Mart reserved
the right to inspect the suppliers, but did
not adopt a duty to inspect them...
Because ... Wal-Mart made no promise
to monitor the suppliers, no such promise flows to Plaintiffs as third-party beneficiaries.
“We conclude ... that Wal-Mart cannot
be considered Plaintiffs’ employer on
the facts alleged. [¶] Plaintiffs’ general
statement that Wal-Mart exercised control over their day-to-day employment is
a conclusion, not a factual allegation
stated with any specificity... Plaintiffs
allege specifically that Wal-Mart contracted with suppliers regarding deadlines, quality of products, materials
used, price, and other common buyerseller contract terms. Such supply contract terms do not constitute an ‘immediate level of day-to-day control over a
supplier’s employees so as to create an
employment relationship between a
purchaser and a supplier’s employees.’
[cite omitted.]
“Plaintiffs’ ‘common law negligence’
claim provides no additional grounds for
finding a duty on the part of Wal-Mart.
Wal-Mart had no duty to monitor the
suppliers or to protect Plaintiffs from the
intentional acts the suppliers allegedly
committed. Thus, Plaintiffs’ theories
sounding in negligence do not state a
claim.
“The lack of any prior relationship between Plaintiffs and Wal-Mart precludes
the application of an unjust enrichment
theory here... Plaintiffs essentially seek
to disgorge profits allegedly earned by
Wal-Mart at Plaintiffs’ expense; however, we have already determined that
Wal-Mart is not Plaintiffs’ employer,
and we see no other plausible basis
upon which the employee of a manufacturer, without more, may obtain restitution from one who purchases goods
from that manufacturer. That is, the
connection between Plaintiffs and WalMart here is simply too attenuated to
-13-
DECISIONS
(From Page 13)
support an unjust enrichment claim.”
For plaintiffs: Hadsell & Stormer, Pasadena, Dan Stormer, Anne Richardson,
Lisa Holder; Conrad & Scherer, Washington DC, Terence P. Collingsworth,
Natacha Thys.
For defendant: Morgan, Lewis &
Bockius, San Francisco, James N.
Penrod, Thomas M. Peterson, Amy M.
Spicer.
For Pacific Legal Foundation, Sacramento, as amicus: Deborah J. La Fetra,
Damien M. Schiff.
For Washington Legal Foundation and
Allied Educational Foundation as amici:
Daniel J. Popeo, Richard A. Samp,
Michael A. Carvin, Daniel R. Volkmuth,
Jones Day.
Gould joined by B. Fletcher and
Fisher; 2009 DAR 10206, 2009 WL
1978730.
FEDERAL EMPLOYEE SATISFIES
EXHAUSTION REQUIREMENT
THAT HE OR SHE MUST
CONTACT EEO “COUNSELOR”
WITHIN 45 DAYS BY
CONTACTING ANY OFFICER
CONNECTED WITH EEO
PROCESS
KRAUS v PRESIDIO TRUST FACILITIES DIVISION. Reversing summary
judgment that had been granted by the
Northern District, the Ninth Circuit wrote
in part as follows in a July 23 opinion by
Berzon:
“Vicky Kraus, a federal employee,
brought suit against her employer ...
under Title VII ... and the Rehabilitation
Act of 1973... [¶] [W]e review the district
court’s holding that Kraus failed to satisfy the administrative exhaustion requirement as to several of her claims...
For the reasons explained below, we
conclude that the district court failed to
apply the correct legal standard in its
exhaustion analysis...
“With respect to [several] claims, the
district court held that Kraus had failed
to contact an EEO counselor within 45
days of the alleged discrimination as
required by 29 C.F.R. § 1614.105(a)(1)...
The district court’s exhaustion holding
turns on a question of law previously
undecided in this circuit, namely,
whether a federal employee seeking to
proceed under Title VII must contact a
person with the job title ‘Counselor’ to
exhaust her claims of employment discrimination, or whether contacting certain other government employees can
suffice.
“The EEOC has long and consistently
adhered to an interpretation of 29 C.F.R.
§ 1614.105(a)(1) that ‘a complainant
may satisfy the criterion of EEO Counselor contact by initiating contact with
any agency official logically connected
with the EEO process, even if that
official is not an EEO Counselor, and by
exhibiting an intent to begin the EEO
process.’ EEO Management Directive
110, at ch. 2, § 1.A n.1, 1999 WL
33318588 (Nov. 9, 1999)...
“Like the Eighth Circuit [in Culpepper v
Schafer (8th Cir 2008) 548 F3d 1119], we
conclude that the EEOC’s interpretation merits deference... [¶] Indeed, it
makes good sense to interpret ‘contact
with a Counselor’ pragmatically, to include contact with agency officials with
EEO counseling responsibilities or a
connection to the counseling process,
without attributing dispositive significance to the officials’ job titles...
“Deferring to the EEOC’s interpretation,
and taking as true Kraus’s asserted
C O M I N G
that she contacted Officer Zipp [the
Presidio Trust’s designated EEO Officer] about each instance of discrimination within one day of its occurrence,
we reverse the district court’s grant of
summary judgment. Despite the fact
that her job title is not ‘Counselor,’ the
record shows that Officer Zipp facilitates contact between the Presidio
Trust’s employees and EEO Counselors and advises employees about the
EEO complaint process. She is thus
clearly connected to the EEO process,
and, indeed, is a ‘counselor’ within any
ordinary meaning of the term, whatever
the job title.
“We need not decide whether, in contacting Zipp, Kraus ‘exhibited an intent
to begin the EEO process.’ ... On remand, the district court should decide
this question in the first instance. If
Kraus did exhibit such an intent ... she
will have satisfied 29 C.F.R. § 1614.105’s
requirement that she ‘initiate contact
with a Counselor within 45 days.’”
For plaintiff: John L. Taylor, San Francisco.
For defendant: Katherine Burke Dowling,
Joseph Russoniello, and Joann M.
Swanson, Office of the U.S. Attorney,
San Francisco.
Berzon joined by Nelson and Clifton;
2009 DAR 10901, 2009 WL 2199041
(not selected for publication in Federal Reporter).
E V E N T S
September 3-6, 2009
CONSUMER ATTORNEYS ASSOCIATION OF LOS ANGELES
27TH ANNUAL LAS VEGAS CONVENTION
(see www.caala.org to register and for list of CELA presenters)
October 1, 2009
Oakland Marriott
October 2-3, 2009
Oakland Marriott
October 23-24, 2009
-14-
NELA NEWS
—On July 13, NELA released a comprehensive 33-page report: “Judge Sonia
Sotomayor’s Employment Decisions on
the U.S. Court of Appeals for the Second Circuit.” To read the full report, go
to: www.nela.org/NELA/docDownload/
25420.
—In an email notice sent on July 9,
NELA noted that on June 25, in a
bicameral bipartisan effort, the Civil
Rights Tax Relief Act of 2009 (CRTRA)
was introduced in both the House and
Senate. The House bill, H.R. 3035, was
introduced by Representatives John
Lewis
(D-GA)
and
James
Sensenbrenner (R-WI), while the Senate bill, S. 1360, was introduced by
Senators Jeff Bingaman (D-NM) and
Susan Collins (R-ME).
—This fall, NELA will be revising its
Amicus Policies to make implementation of the Amicus Program as effective
as possible. One critical aspect of the
proposed Policies is a commitment to
cooperation and information sharing with
NELA affiliates. Your input into the relationship between national’s and your
affiliate’s amicus programs is welcomed
and encouraged. Send your comments
and questions to NELA Program Director (and CELA member) Rebecca Hamburg at [email protected], or (415)
296-7629. As we work to coordinate
National-Affiliate amicus activities
across the country, Rebecca will be
your primary contact for any and requests for NELA’s amicus assistance,
questions about National’s work, or if
your affiliate is considering filing a brief
in federal appellate court, (at the District, Circuit, or Supreme Court levels).
Working together, we can combine resources and brainpower, develop stronger and more consistent arguments,
and avoid reinventing the wheel.
—On June 2, NELA released its 2008
Annual Report, which is available at
www.nela.org.
—On July 14, NELA announced that it
has joined the National Employment
Law Project and the AFL-CIO in asking
the Department of Labor’s Wage and
Hour Administrator to withdraw one of
several opinion letters issued in the last
days of the Bush administration. In
opinion letter FLSA2009-3, the DOL
approved the retroactive use of the fluctuating workweek (FWW) calculation
method to determine the amount of
backpay owed to employees who had
been misclassified as exempt from the
FLSA. The FWW calculation method
results in employees receiving “halftime” for their overtime hours. While the
FWW is permitted, under specific conditions, for non-exempt employees who
prospectively understand the arrangement, a number of courts have not
allowed it to be applied to misclassified
employees.
—NELA is inviting proposals for presentations at its 2010 Annual Convention,
which will be held on June 23-26, 2010,
at the Omni Shoreham Hotel in Washington DC. The deadline for proposals is
September 11, 2009. For further information, contact [email protected], or
(415) 296-7629.
—At its June 2009 meeting following
the NELA Convention in Rancho Mirage, the Executive Board appointed
incumbent Board members Mark
Hammons (OK), Aaron B. Maduff (IL),
and Victoria W. Ni (NM) to the NELA
Board. They join the other Board members of the class of 2009: David R.
Cashdan (DC), Kathryn Burkett Dickson
(CA), Diane S. King (CO), and Robert A.
Richardson (CT). The Board also elected
the following officers: Bruce A.
Fredrickson (DC), President; Patricia
A. Barasch (NJ), First Vice President;
Diane S. King (CO), Vice President;
David R. Cashdan (DC), Vice President
of Public Policy; Rebecca L. Salawdeh
(WI), Secretary; Marguerite M. Longoria
(FL), Treasurer. The other members of
the NELA Board are: Patricia C. Benassi
(IL), Brian East (TX), Dennis E. Egan
(MO), Herbert Eisenbergt (NY), Alicia
K. Haynes (AL), Janet E. Hill (GA),
Immediate Past President James H.
Kaster (MN), David L. Kern (TX), Daniel
B. Kohrman (DC), David L. Lee (IL),
Richard R. Renner (DC), Glen D. Savits
(NJ), and Paul H. Tobias (OH), Founder.
NELA wishes to acknowledge the contributions of retiring Executive Board
member William R. Amlong (FL), who
served for twelve years. Those who
attended NELA’s 1998 Annual Convention in Monterey will remember with
great pride and joy the June 26 date on
which the Convention celebrated Bill’s
landmark U.S. Supreme Court victory in
Faragher v City of Boca Raton.
—In mid-June, NELA joined with over a
dozen civil rights and worker advocacy
organizations to alert the EEOC that
two of the country’s largest employers
and a state employment office may be
illegally blocking otherwise qualified
African American and Latino applicants
from job opportunities by preventing
employment consideration of persons
with felony or misdemeanor records.
Bank of America, the Manpower staffing agency, and the Alameda, California, One-Stop Career Center recently
posted over 600 job announcements
containing that purported disqualification. In a letter to EEOC Chairman
Stuart Ishimaru, NELA and its allies
asserted that the absolute bar violates
Title VII and longstanding EEOC hiring
guidelines. The letter called on Chairman Ishimaru to issue a Commissioner’s
Charge to trigger an investigation into
the job announcements.
•
•
•
"CELA Member Profiles” reporter Michelle Reinglass has been deeply involved
in trial preparation and is sorry to have to skip this issue. The series will continue
next month.
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LEWIS
(From Page 1)
the victims of employment discrimination.
Bill graduated from U.C. Berkeley in
1976 with a B.A. in Political Science,
and received his J.D. from New College
of Law in 1980. Soon after being admitted to the Bar, he undertook the representation of Louis Fisher, who had been
discharged from his job following a cancer diagnosis. Bill’s appeal from an
adverse trial court ruling resulted in a
holding by the First District, in Fisher v
Superior Court (1986) 177 CA3d 779,
that established for the first time that an
employer has a duty of reasonable accommodation to an employee who has
a cancer-related medical condition within
the meaning of Gov Code §§ 12940 and
12926.
Bill’s own father had died of cancer
when Bill was only 16, and that experience, along with the Fisher case, set
him on a career-long mission of advocacy for the victims of disability discrimination, with a particular emphasis
on cancer discrimination, which, Bill
believed, was often based on stereotypes and phobias. Bill devoted countless hours educating judges, juries, and
professional colleagues about the realities of a cancer diagnosis and the responsibility of employers to work with,
not against, employees who have been
so diagnosed. His empathy and passion for the cause was palpable to
clients, juries, judges, and opposing
counsel.
In 1992, Bill teamed up with Eliz. C. A.
Johnson to form Lewis & Johnson. (One
of the first cases they handled together,
Spear v CSAA (1992) 2 C4th 1035, was
argued by Bill and resulted in a unanimous favorable decision by the state
Supreme Court.) This began a 17-year
partnership championing the cause of
cancer survivors and others facing disability or age discrimination in the workplace. Bill and Elizabeth traveled
throughout California lecturing to disability rights and other groups, including
The American Cancer Society, the
Rhonda Fleming Mann Resource Center, the San Francisco Bar Association,
and the California Association of
Laryngectomees, to name just a few.
Lewis & Johnson had a statewide litigation practice, with cases all over California, and Bill accumulated 29 years experience litigating in both state and
federal court, at both the trial and appellate levels.
Bill’s combined interests in employment and healthcare notably intersected
in the case Ulrich v City and County of
San Francisco, in the courtroom of the
Hon. Thelton Henderson—a highlight of
Bill’s career. Dr John Ulrich, a physician
at San Francisco’s Laguna Honda Hospital, had been discriminated against in
1998 after speaking out against physician layoffs and in favor of patient care.
The hospital administration had tried to
use the physician peer review process
to punish Dr. Ulrich, and had denied him
an opportunity for a hearing on false
charges of substandard medical care.
Bill was brought in as lead counsel, and
a federal court jury returned a quick
verdict in Dr. Ulrich’s favor, awarding him
a total of $4.3 million.
Bill shamelessly enjoyed political drama,
and a good “throw down” when politics
heated up, particularly at election time.
Bill loved to laugh, and part of his charm
with juries—and with people generally—
was his wonderful and inventive gift for
story-telling, and an ability to make
whatever he said interesting and compelling. Bill’s professional accomplishments were many, but the man that will
be most missed was the father, partner,
and friend. He will be sorely missed by
his family, friends, colleagues, and clients.
His daughter Kimberlee was dearer to
him than anything on earth. He was very
proud of her decision to go to law school,
joking that he had “tried to talk her out of
it,” while beaming with pride at her academic achievements.
Bill belonged to many professional organizations over the years, but remained
most connected to CELA, regarding all
CELA members as colleagues and
friends. He enjoyed being a mentor and
resource for anyone who contacted him,
and regularly spent hours of free time
helping and advising his fellow employment lawyers.
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Bill’s partner, Elizabeth, is handling his
estate and wrapping up the practice. If
you have any stories to share that she
can pass along to Bill’s daughter, it will
be greatly appreciated. Elizabeth can
be reached at (925) 362-1010, or
[email protected],
or
[email protected]. In lieu of
flowers, and in keeping with Bill’s lifelong work, the family requests that
donations be made in his name to The
American Cancer Society, local chapters of which can be located at
www.cancer.org.
Published
Monthly
BULLETIN
CALIFORNIA
SUPREME COURT
NO PRIVACY CLAIM WAS
STATED RE VIDEO
SURVEILLANCE OF PLAINTIFFS’
OFFICE WHERE PLAINTIFFS
WERE NOT TARGETED AND
EMPLOYER WAS MOTIVATED
BY STRONG COUNTERVAILING
CONCERNS
HERNANDEZ v HILLSIDES, INC. In a
unanimous opinion by Baxter filed on
August 3, the California Supreme Court
reversed a Second District decision
that had reversed summary judgment
on an invasion of privacy claim brought
by two employees of a residential facility for abused children. The plaintiffs’
shared office was one of the locations
in which the employer had placed video
surveillance equipment, not to observe
the plaintiffs, but in an effort to determine who, after hours, was accessing
pornographic websites on the plaintiffs’
office computer. (The Second District’s
September, 2006 opinion appeared at
142 CA4th 1377, 48 CR3d 780, and
was summarized in CELA Bulletin,
Sep 06, p.4.) The Supreme Court wrote
in part as follows:
“Defendants argue here, as below, that,
absent evidence they targeted and either viewed or recorded plaintiffs as part
of the surveillance scheme, there could
be, as a matter of law, no actionable
invasion of privacy on an intrusion theory.
“We agree with defendants that the trial
court properly granted their motion for
summary judgment. However, we reach
this conclusion for reasons more varied
and nuanced than those offered by
defendants.
“On the one hand, the Court of Appeal
did not err in determining that a jury
could find the requisite intrusion. While
plaintiffs’ privacy interests in a shared
office at work were far from absolute,
August 2009
Vol. 23, No. 8
they had a reasonable expectation under widely held social norms that their
employer would not install video equipment capable of monitoring and recording their activities—personal and work
related—behind closed doors without
their knowledge or consent.
“On the other hand, the Court of Appeal
erroneously found a triable issue as to
whether such intrusion was highly offensive and sufficiently serious to constitute a privacy violation. Any actual
surveillance was drastically limited in
nature and scope, exempting plaintiffs
from its reach. Defendants were also
motivated by strong countervailing concerns [involving possible legal liability
and the employer’s goal of providing a
wholesome environment for the abused
children in its care]. We therefore will
reverse the Court of Appeal's judgment
insofar as it allowed the privacy claim to
proceed to trial.”
For plaintiffs: Arnold Kessler and Mark
S. Eisenberg.
For defendant: Seyfarth Shaw, Laura
REGISTER NOW FOR CELA ANNUAL CONFERENCE, OCTOBER 2-3
The 2009 Annual Conference schedule and on-line registration are now
available on the CELA website,
www.cela.org.
Also included on the website is information on the one-day skills seminar,
“CELA Trial Intensive: A Full-Day Mock
Trial," which will be held at the Conference site, the Oakland Marriott City
Center, on Thursday, October 1, from
9:00am to 6:00pm. The mock trial,
based on a sexual harassment and
retaliation fact pattern, will involve, as
the plaintiff’s team, Kathryn BurkettDickson, J. Bernard Alexander, Carol
Gillam, Genie Harrison, Nathan
Goldberg, William J. Smith, and Samuel
Wells. The defense team will include
David deRubertis, Arash Homampour,
Jean Hyams, Anthony Luti, Jill Telfer,
Christopher Whelan, and Wendy York.
The judges will be Magistrate Judge
Elizabeth Laporte from the USDC, and
John True from the Alameda County
Superior Court. And acting as jury consultants will be Sonia Chopra, Ph.D.,
and A. Marisea Rivera from the National
Jury Project.
Highlights of the Conference itself will
include a Keynote Speech by Mary Lou
Breslin, co-founder of the Disability
Rights Education and Defense Fund,
and presentation of the 2009 Joe Posner
Award to Lisa Maki.
Breakout sessions at the Conference
will include: Depositions: The Good,
The Bad, and The Ugly; Winning Wage
and Hour Claims for Union Workers;
ERISA 101; Surviving and Thriving in
Solo Practice; Understanding the Mediation Dynamics of the Defense Camp;
Staying Alive: Practical Advice for Surviving Summary Judgment; 21 Cases
That Can Help You Achieve Victory;
and more.
DECISIONS
(From Page 1)
Wilson Shelby, Holger G. Besch,
Candice Zee, and Amy C. Chang.
by Baxter; 47 C4th 272, 97 CR3d 274.
CALIFORNIA COURTS
OF APPEAL
SUMMARY JUDGMENT ON LAB
CODE § 1102.5 AND OTHER
CLAIMS BY FIREFIGHTER WHO
ALLEGED THAT DEPARTMENT
NEGLIGENTLY INVESTIGATED HIS
HARASSMENT AND RETALIATION
COMPLAINTS
MUELLER v COUNTY OF LOS ANGELES. “Plaintiff Steve Mueller,” the Second District, Division Three wrote in an
August 13 opinion by Croskey, “a
firefighter with the County of Los Angeles Fire Department, appeals from a
judgment entered in favor of [the county]...
The complaint charges the county and
its department personnel with conducting a negligent investigation into his
complaints of harassment and retaliation, and with breach of the firefighters’
union contract with the county,
whistleblower retaliation..., and intentional infliction of emotional distress."
According to the complaint, in 2002 the
plaintiff publicly stated his disapproval
of the LAFD’s decision to transfer two
firefighters away from his station, and
he was thereafter harassed and unfairly
disciplined by their two replacements.
He further alleged that the LAFD had
taken no action in response to his
request for an investigation, but had
instead transferred him to another station in what he was misled into believing
was only a temporary reassignment.
The court continued:
“The county removed the case to the
federal district court, where the cause of
action on plaintiff’s federal claim (violation of plaintiff’s federal rights under 42
U.S.C. § 1983) was adjudicated against
him in a summary judgment, and the
case was then remanded back to state
court for adjudication of plaintiff’s re-
maining causes of action. Those claims
were decided in the county’s favor in the
trial court’s order granting the county’s
motion for summary judgment... We
find no cause to reverse and therefore
the judgment will be affirmed.
“Plaintiff’s second cause of action alleges he sustained damages resulting
from negligent and tardy investigation
by the department, [and] from the negative actions taken against him... [¶]
Referencing Government Code § 815.6,
the [trial] court reasoned that ... the
department’s behavior policy does not
create mandatory duties ... but rather
gives the department discretion in enforcing its behavior policy and allows
the department to make judgment calls.
[Gov Code § 815.6 states: ‘Where a
public entity is under a mandatory duty
imposed by an enactment that is designed to protect against the risk of a
particular kind of injury, the public entity
is liable for an injury of that kind proximately caused by its failure to discharge the duty...’] We find the trial
court’s analysis of this cause of action
persuasive...
“[Similarly], plaintiff is precluded from
pursuing a cause of action under section 5.02.060 [the County Code’s
whistleblower provision] by the fact that
section 815.6 requires that the prospective defendant public entity ... be
under a mandatory duty...
“Nor does plaintiff’s retaliation claim
fare better under Labor Code section
1102.5... [T]his case is not about perceived violations of federal or state statutes, rules or regulations, but rather
about perceived violations of the
department’s own policies, which are
local policies... [¶] Last, but certainly
not least, the activities of the department personnel of which plaintiff complains ... do not rise to the level of
whistle blowing retaliation. Matters such
as transferring employees, writing up
employees, and counseling employees
are personnel matters. ‘To exalt these
exclusively internal personnel disclosures with whistleblower status would
create all sorts of mischief. Most damagingly, it would thrust the judiciary into
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CALIFORNIA
EMPLOYMENT
LAWYERS ASSOCIATION
David J. Duchrow
Suite 305
Tel: (310) 479-5303
FAX: (310) 479-5306
E-mail:
[email protected]
Director:
Christina Krasomil
Encino, CA 91436-2412
Tel: (818) 907-7895
FAX: (818) 907-7474
EXECUTIVE BOARD
(Los Angeles)
Dolores Leal
(Los Angeles)
David DeRubertis
(Woodland Hills)
Steven Pingel
(Long Beach)
Kathy Dickson
(Oakland)
(Laguna Hills)
David Duchrow
(Los Angeles)
Cynthia Rice
(San Francisco)
Wilmer Harris
(Pasadena)
Mika Spencer
(San Diego)
Phil Horowitz
(San Francisco)
James P. Stoneman
(Claremont)
Jean K. Hyams
(Oakland)
Christopher Whelan
(Gold River)
Toni Jaramilla
(Los Angeles)
Jeffrey Winikow
(Los Angeles)
Virginia Keeny
(Pasadena)
Bulletin Editor
Christopher Bello
842 Irving Avenue
Astoria, OR 97103
Ph: (503) 338-3891
DECISIONS
(From Page 2)
micromanaging employment practices
and create a legion of undeserving
protected ‘whistleblowers’ arising from
the routine workings and communications of the job site. [citation.]’ (Patten
v. Grant Joint Union High School Dist.
(2005) 134 Cal.App.4th 1378,1385.)
“The fifth cause of action seeks damages for intentional infliction of emotional distress... [¶] The analysis in
Cole [v Fair Oaks Fire Protection District (1987) 43 C3d 148] and Shoemaker [v Myers (1990) 52 C3d 1] preclude plaintiff’s cause of action... The
incidents in plaintiff’s employment with
the county of which he complains in
this case are specifically what the Cole
court described as a normal part of
employment relationships.”
For plaintiff: Steven H. Haney and
Michelle S. Tamkin; George G. Romaine.
For defendants: Manning & Marder.
Second Dist Div Three, 8/13/09; opinion by Croskey with Klein and
Kitching concurring; 2009 DAR
12069, 2009 WL 2462886.
SUPPORTED FEHC’S FINDINGS
OF PREGNANCY
DISCRIMINATION AND MALICE
OR OPPRESSION
SASCO ELECTRIC v FEHC. In an
opinion by McConnell filed on July 15
and certified for publication on August
7, the Fourth District, Division One,
affirmed a judgment denying the
employer’s petition for administrative
mandate challenging a FEHC decision
that found that the employer had engaged in pregnancy discrimination in
violation of FEHA when it laid off the
plaintiff from her position as a deckhand
on the corporate yacht. The Fourth
District rejected the employer’s contentions that the FEHC had failed to
proceed in the manner required by law
and that its findings were not supported
by substantial evidence. The court wrote
in part as follows:
“Following a four-day evidentiary hear-
ing, an administrative law judge issued
a proposed decision, finding against
SASCO and awarding Scherl backpay
and $85,000 in emotional distress damages. The proposed decision also found
there was clear and convincing evidence of oppression or malice by
SASCO and imposed an administrative
fine of $25,000. The Commission
adopted the proposed decision.
“SASCO appeals, arguing the
Commission’s liability finding is not
supported by substantial evidence because the Commission never considered Scherl’s inability to dock the yacht
in determining whether SASCO had a
justifiable basis for laying off Scherl. In
addition, SASCO argues the
Commission’s award of backpay for the
period between May 10 and September
17, 2004 is contrary to law ... because
there is undisputed medical evidence
Scherl was disabled by pregnancy during this period...
“[T]here is substantial evidence to support the Commission’s finding that there
was a causal connection between
Scherl’s pregnancy and SASCO’s decision to end her employment. McIntyre
[the yacht’s captain] specifically told
Scherl she would not have lost her job
if she had not been pregnant...
“While SASCO insists the reason
McIntyre laid off Scherl ... is that she
could not dock the yacht, there is
substantial evidence in the record to
support the Commission’s finding this
reason was pretextual...
“To remedy SASCO’s discrimination,
the Commission ordered SASCO to
pay Scherl backpay for, among other
periods, the date of her discharge ... to
the date of her child’s birth. SASCO
contends the Commission should not
have awarded Scherl backpay for the
period between May 10 to September
17, 2004 because ... she was disabled
by pregnancy during this period.
“Assuming without deciding that Scherl
became disabled on May 10, 2004, the
disability did not preclude the Commission from awarding backpay for the
period between May 10 and September
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17, 2004. Had SASCO not unlawfully
terminated Scherl’s employment, it
would have been required to reasonably
accommodate her disability, including
temporarily transferring her to a less
strenuous or hazardous position...
SASCO offered no evidence to show it
could not have accommodated Scherl’s
work restrictions. Instead, SASCO
speculates she would have been unwilling to accept any work off the yacht
because she considered boating her
career. Such speculation is not sufficient to meet SASCO’s burden...
“SASCO contends the [emotional distress] award is not supported by substantial evidence because the evidence
relied upon by the Commission is subjective and speculative. We disagree.
[¶] The testimony of Scherl, her husband, and her father-in-law establishes
SASCO’s actions profoundly affected
her... [¶] The evidence amply supports
the Commission’s award.
“Finally, SASCO contends the
Commission’s decision to impose an
administrative fine is not supported by
substantial evidence... [¶] [T]he evidence
... establishes SASCO intentionally discriminated against Scherl... The evidence also establishes SASCO contrived a reduction in force to hide its
discrimination... [¶] [And] Scherl suffered significant emotional distress and
financial hardship because of SASCO’s
conduct. Accordingly, we conclude there
is substantial evidence to support the
Commission’s finding...”
For plaintiff: Benjamin A. Johnson, San
Mateo, and S. Edward Slabach.
For respondent: Angela Sierra and
Antonette Benita Cordero, Deputy Attorneys General.
Fourth Dist Div One, 7/15/09; cert’d
for pub, 8/7/09; opinion by McConnell
with Nares and McIntyre concurring;
97 CR3d 482.
DECISIONS
(From Page 3)
EDUCATION CODE RENDERED
NULL AND VOID “LAST CHANCE
AGREEMENT” SIGNED BY
TENURED COMMUNITY COLLEGE
FACULTY MEMBER
FARAHANI v SAN DIEGO COMMUNITY COLLEGE DISTRICT. In an opinion filed on July 28, the Fourth District,
Division One, wrote in part as follows:
“In this case we hold that Education
Code section 87485 ... renders ‘null and
void’ the ‘last chance agreement’ under
which community college faculty member Sam H. Farahani waived his statutory due process rights relating to faculty discipline. The San Diego Community College District terminated Farahani
after he allegedly violated his Agreement with the District. The trial court
granted Farahani’s petition for writ of
mandate (Code Civ. Proc., § 1085),
ruling that the Agreement violated the
Education Code and Farahani’s due
process rights. The court issued a peremptory writ of mandate under Code of
Civil Procedure section 1085 directing
the District to: (1) reinstate Farahani
with full back pay, interest and benefits
and (2) require its governing board to
determine whether Farahani should be
terminated, ‘all in compliance with the
requirements of the Education Code,
including appropriate notice and opportunity to be heard.’ The District appeals.
“In addition to concluding that Farahani’s
purported waiver of the right to a hearing
in the Agreement and attached General
and Special Release and Settlement
Agreement (Release) were unenforceable under section 87485, we also reject the District’s claim that Farahani’s
petition was barred by laches, unclean
hands, and the failure to exhaust administrative remedies. Accordingly, we
affirm the judgment.
him for a year without pay unless he
signed it... The Agreement stated that if
Farahani failed to comply with its provisions, he could be ‘terminated at the
Chancellor’s discretion, without the issuance of charges under the Education
Code or District Policies and without
right of appeal...’
“When encouraging Farahani to sign
the Agreement, the Union attorney told
Farahani that although the Agreement
was ‘probably ... not legal,’ it would be
best to ‘[g]ive your 18 months and get it
over with.’ Although Farahani believed
that the charges were baseless, he
stated he was ‘compelled’ to sign ‘by
two bad options.’
“While the Agreement was in effect, the
District received new complaints about
Farahani from female employees... [The
Chancellor] terminated Farahani effective June 9, 2006, pursuant to the Agreement.
“The first paragraph of [Educ Code]
section 87485 expressly provides: ‘Except as provided in Section 87744, any
contract or agreement, express or implied made by any employee to waive
the benefits of this chapter or any part
thereof is null and void.’ The District
contends that section 87485 is inapplicable to the Agreement and Release
signed by Farahani, which it describes
as a waiver in response to discipline.
We conclude that the District interprets
section 87485 too narrowly and there
was no error in the trial court’s ruling.”
For plaintiff: Grady and Associates,
Dennis M. Grady, Kenneth W. Baisch,
and Bradley K. Moores.
For defendant: Ray J. Artiano and Richard E. Romero.
by McIntyre with Benke and Huffman
concurring; 96 CR3d 900.
“Beginning in 1994, the District received
complaints from female students and
staff about what they described as unwanted sexual and social advances...
[¶] In November 2004, the attorney for
[Farahani’s union] presented Farahani
with the [Last Chance] Agreement, and
told him that the District would suspend
DISCRETION IN DENYING
CERTIFICATION OF CLASS OF
CAB DRIVERS WHO ALLEGED
MISCLASSIFICATION AS
INDEPENDENT CONTRACTORS
ALI v U.S.A. CAB, LTD. In an opinion
filed on July24 and certified for publication on August 24, the Fourth District,
Division One, affirmed the denial of class
certification in an action by drivers of
leased taxicabs who alleged that they
were improperly classified as independent contractors. The court wrote in part
as follows, in an opinion by McConnell:
“[Plaintiffs] assert the court impermissibly weighed the merits of the lawsuit,
applied improper legal criteria and made
erroneous legal assumptions, and made
unsupported findings about the lack of
predominance of common questions of
law and the superiority of class treatment... We find no abuse of discretion
and affirm the order.
“According to the complaint, the class
members were USA Cab’s employees,
but as a condition of employment the
company required them to sign lease
agreements that designated them as
independent contractors. USA Cab allegedly exercised ‘pervasive and significant’ control over putative class members’ conduct, indicative of an employment relationship.
“In its opposition to the [class certification] motion, USA Cab argued the purported class would be unmanageable,
and common questions do not predominate over individual issues, given differences among lessees’ situations...
“USA Cab presented declarations by 20
putative class members ... show[ing]
variations in declarants’ actual conduct,
and that their conduct tended to undercut complaint allegations of USA Cab’s
pervasive control. For instance, all declarations stated the declarants set their
own work schedules... The declarations uniformly stated the declarants
believed they were independent con(Cont'd on Page 5, DECISIONS)
-4-
DECISIONS
(From Page 4)
tractors rather than employees of USA
Cab, and they preferred the freedom,
flexibility and greater earning potential
of that arrangement.
“The declarations also tended to show a
lack of class-wide damage. For instance,
most declarations state the declarants
incurred no work-related injuries; customarily took meal and rest breaks; and
earned net income equaling or exceeding minimum wages.
“Plaintiffs contend ... [that] the trial
court, relying on the numerous declarations of putative class members, erroneously ruled on the ultimate question
in the case and determined they were
independent contractors... [¶] [T]he
court did not exceed its authority... The
court did not require plaintiffs to prove
their case as a prerequisite to class
certification. Rather ..., ‘the court simply considered evidence bearing on the
factual elements necessary to determine whether to certify the class.’ (Caro
v. Proctor & Gamble Co. (1993) 18
Cal.App.4th 644 at p. 656.) At the hearing, the court expressly stated it understood ‘we’re not trying the case today,’
but the declarations ... went to issues
relevant to class certification such as
‘manageability, commonality, do individual issues predominate.’
“[Concerning the finding of lack of commonality,] [w]e find no abuse of discretion because the declarations of 36
putative class members as to their actual conduct support the finding.
“Additionally, plaintiffs complain that
the court relied on improper criteria—
statements in the lessees’ declarations
that they believed they were independent contractors... [I]t is well established that a worker’s belief is one of
several indicia of his or her status...
There is no suggestion that the court
relied solely on the declarants’ beliefs
or unduly focused on that factor...
“Plaintiffs also submit that the court
relied on improper criteria, the numerous declarations of purported class
members, in determining class treatment is not superior to separate lawsuits... [¶] We find no abuse of discre-
tion, because when individual issues of
fact predominate over common issues,
as here, ‘a class action would be extremely difficult to manage.’ [cite omitted.]”
For plaintiffs: Marks, Golia & Finch,
LLP, Stephen J. Schultz, Bernard F.
King, III; Initiative Legal Group and H.
Scott Leviant.
For defendants: Borton Petrini, LLP,
Paul Kissel and Jonathan P. Green.
Fourth Dist Div One, 7/24/09; cert for
pub, 8/24/09; opinion by McConnell
with Benke and McIntyre concurring; 2009 DAR 12622, 2009 WL
2197069.
IN NON-EMPLOYMENT CASE,
ORDER VACATING ARBITRATION
AWARD BECAUSE ARBITRATOR’S
LEGAL RULING RESULTED IN
PREJUDICIAL EXCLUSION OF
MATERIAL EVIDENCE
BURLAGE v SUPERIOR COURT
(SPENCER). In an opinion in a nonemployment case, the Second District,
Division Six analyzed the scope of judicial review of an arbitration award, holding that the trial court had correctly
vacated an award because the arbitrator had excluded material evidence.
That error, the court held, had prejudiced the losing party, the seller of a
house who had allegedly fraudulently
failed to disclose that the property encroached on land owned by an adjacent
country club. According to a strong
dissenting opinion by Judge Perren,
“[A]ffirming the order of the trial court
cuts the heart out of Moncharsh [v Heily
& Blase (1992) 3 Cal4th 1]." The majority opinion by Gilbert explains the facts
and the majority’s reasoning in part as
follows:
“In 1991, we wrote what we thought was
a routine arbitration opinion. (Moncharsh
v. Heily & Blase (Apr. 2, 1991, B048936)
[nonpub. opn.].) We relied on decades
of precedent ... to affirm the arbitration
award because no error appeared on
the face of the award. In dicta, we noted
that had the error appeared on the face
-5-
of the award and created substantial
prejudice, we would have reversed.
“To our surprise, our Supreme Court
granted review. Our holding was affirmed, but our dicta ‘reversed.’
(Moncharsh v. Heily & Blase (1992) 3
Cal.4th 1.) Moncharsh held that ... even
though an error of law appears on the
face of an arbitration award and causes
substantial injustice, it is not subject to
judicial review in the absence of a limiting clause or as provided by statute. (Id.
at p. 25.)
“For the next decade, courts have
wrestled with the question of when and
under what circumstances judicial review ... is proper. Cable Connection,
Inc. v. DIRECTV, Inc. (2008) 44 Cal.4th
1334 gives us some answers, but unfortunately not the answer to the question
here. Our conclusion that arbitrators
have a great deal of power, but not
absolute power, provides the key to our
answer.
“Petitioners Roger and Cheryl Burlage
... purchased a house from real party
Martha Martinez Spencer. The parties
arbitrated a dispute over the sale of the
house. The arbitrator awarded the
Burlages approximately $1.5 million in
damages and costs. On motion from
Spencer, the trial court vacated the
award. The Burlages filed a petition for
writ of mandate, challenging the trial
court’s order.
“Two years after the purchase, but before the arbitration was held, the title
company paid the country club $10,950
in exchange for a lot-line adjustment
that gave the Burlages title to the encroaching land. Nevertheless, the
Burlages sought damages for the diminution in value of their property and for
the cost of moving the pool and the
fence that were on the encroaching land
they now owned.
“The Burlages moved in limine to exclude evidence of the lot-line adjustment. They argued that damages must
be measured from the date escrow
closed. Under this theory, Spencer could
not introduce evidence of the lot-line
DECISIONS
(From Page 5)
adjustment to show the Burlages were
not damaged. Spencer argued that later
circumstances can and should be considered in measuring damages.
“The arbitrator granted the motion and
excluded evidence concerning the financial effect the lot-line adjustment
had on the Burlages’ damages.
“Spencer moved to vacate the award.
Her motion rested upon [Code of Civil
Procedure] section 1286.2, subdivision
(a)(5), which requires vacation of an
arbitration award when a party’s rights
are ‘substantially prejudiced’ by the
arbitrator’s refusal to hear ‘evidence
material to the controversy.’
“The Burlages contend that a private
arbitration award may not be reviewed
for errors of law... [¶] But tolerance for
fallibility has its limits... [¶] The question whether the arbitrator was right or
wrong about the proper date from which
to measure damages arguably is not
subject to judicial review. But it is selfevident that his ruling disallowing evidence that the title company solved the
problem through a modest payment to
the country club was more than a mere
erroneous evidentiary ruling. The ruling
substantially prejudiced Spencer and
undermined the fundamental principle
embodied in section 1286.2, subdivision (a)(5) that an arbitrator must consider material evidence.”
In dissent, Judge Perren argued in part
as follows: “The arbitrator’s ruling unquestionably precluded evidence of mitigation of damage. The exclusion, however, was the product of the arbitrator’s
determination that the law does not
permit consideration of evidence of mitigation in a land fraud case following the
close of escrow. Right or wrong, it was
a legal ruling which, under both
Moncharsh and Cable Connection, precludes judicial review. This is not a
surprise. Virtually every ruling on a ‘legal issue’ at trial results in limiting the
admissibility of evidence.
“I suggest that great mischief can and
will result from the majority’s holding. In
effect, every ruling resulting in witness
preclusion attributable to a legal or evi-
dentiary ruling will be rendered suspect
and subject to challenge... The ‘strong
public policy in favor of arbitration as a
speedy and relatively inexpensive means
of dispute resolution’ achieved ‘...without necessity for any contact with the
courts,’ will be rendered illusory and
chimerical.”
For petitioners: Richard M. Hoefflin,
Jason M. Burrows, Wendy Cole Lascher.
For real party: Horvitz & Levy, Lisa
Perrochet, John A. Taylor, Jr.; John D.
Lang; Craig R. Smith.
Second Dist Div Six, 8/31/09; opinion by Gilbert with Yegan concurring and Perren dissenting; 2009
DAR 12987, 2009 WL 2712382,
NINTH CIRCUIT
DESPITE EMPLOYER’S
BANKRUPTCY, MANAGERS
REMAINED INDIVIDUALLY LIABLE
FOR UNPAID WAGES AS
‘EMPLOYERS’ UNDER FLSA
BOUCHER v SHAW. After receiving
answers to questions of state law that
had been certified to the Nevada Supreme Court, the Ninth Circuit addressed one remaining federal law question relative to wage claims brought by
former employees of a bankrupt casino
who had not received final paychecks
and pay for accrued vacation and holiday pay. The court wrote in part:
that Defendant Villamor was responsible for handling labor and employment
matters at the Castaways; Defendant
Shaw was chairman and chief executive officer of the Castaways; and Defendant Van Woerkom was the Castaways’
chief financial officer... The plaintiff also
alleges that Shaw held a 70 percent
ownership interest in the Castaways,
Villemor held a 30 percent ownership
interest and all three defendants had
‘control and custody of the plaintiff class,
their employment, and their place of
employment.’ Accepting these allegations of material fact as true, Ballard’s
claim withstands a motion to dismiss.
“We have never addressed the question
whether a company’s bankruptcy affects the liability of its individual managers under the FLSA. But our case law
regarding guarantors, sureties and other
non-debtor parties who are liable for the
debts of the debtor leaves no doubt
about the answer: the Castaways bankruptcy has no effect on the claims
against the individual managers at issue here.”
For plaintiffs: Richard McCracken, Las
Vegas; Kristin L. Martin, San Francisco.
For defendants: Constance L. Akridge
and Matthew T. Milone, Las Vegas.
Cudahy joined by Wallace and
McKeown; 2009 DAR 11827, 2009 WL
2217517.
“Ballard [the only plaintiff suing under
the FLSA] alleges that the Castaways
managers are individually liable for unpaid wages as ‘employers’ under the
FLSA. The FLSA defines ‘employer’ as
‘any person acting directly or indirectly
in the interest of an employer in relation
to an employee...’ 29 U.S.C. § 203(d).
IN UNPUBLISHED DECISION,
NINTH CIRCUIT HOLDS THAT
DISTRICT COURT IN ARIZONA
ERRED IN GRANTING SUMMARY
JUDGMENT ON TITLE VII SEX
DISCRIMINATION AND
RETALIATION CLAIMS
“We have held that the definition of
‘employer’ under the FLSA is not limited by the common law concept of
‘employer,’ but ‘is to be given an expansive interpretation in order to effectuate
the FLSA’s broad remedial purposes.’
[cites omitted.]
EEOC v THE BOEING COMPANY. “The
[EEOC] appeals,” the Ninth Circuit wrote
in an August 18 opinion, “on behalf of
charging parties Antonia Castron and
Renee Wrede, the grant of summary
judgment to Boeing in this action under
Title VII... Boeing terminated Castron
and Wrede after they received low scores
“In the case at bar, Ballard has alleged
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DECISIONS
(From Page 6)
on reduction-in-force assessments...
We hold that the EEOC introduced
adequate evidence from which a reasonable jury could conclude that the
reasons Boeing advanced ... were
pretextual. Accordingly, we reverse and
remand for a trial on both charging
parties’ discrimination claims and
Castron’s retaliation claim.
“After complaining of a hostile work
environment, Castron was transferred
to a new work group and was terminated
in a RIF two months later... [¶] We
conclude the EEOC has established a
prima facie case on Castron’s behalf
because of direct evidence of discriminatory animus...
“Foster [a co-worker] testified that
Charlton, Castron’s supervisor, frequently made demeaning and derogatory comments about women. These
comments, considered along with
Charlton’s interactions with Castron...,
are sufficient to create an inference of
discriminatory motive even though the
comments were not directed specifically at Castron or made in regard to
decisions about her employment...
These comments are more severe than
‘ambivalent’ ‘stray remarks’...
“Because Boeing has articulated legitimate, nondiscriminatory reasons ...,
the EEOC was required to respond with
evidence [of pretext]. The discriminatory animus exhibited by Castron’s supervisor constitutes direct evidence of
pretext... There is also ‘specific and
substantial’ circumstantial evidence ...
on which a jury could rely ... [to] conclude that Charlton deliberately set
Castron up to fail because of her sex or
because of her invocation of Title VII
rights.
“There is also sufficient evidence ... that
Castron’s later poor RIF evaluation
scores, which led to her termination,
were pretextual... [¶] [including the testimony of] [s]everal employees that
Hobby [Castron’s new supervisor] unfairly ignored Castron’s past performance evaluations... [¶] Boeing urges
us to consider this testimony of other
employees irrelevant... [Instead] we ...
adopt the Tenth Circuit’s view that ‘co-
workers’ assessment[s]’ of a plaintiff’s
work should be considered because
they can be ‘clearly probative of pretext.’ Abuan v. Level 3 Communications, Inc., 353 F.3d 1158, 1174 (10th
Cir. 2003).
“A jury could find in favor of the EEOC on
all of Castron’s discrimination and retaliation claims regarding both her transfer and termination.
“In October 2002, one year after Boeing
substantiated a sexual harassment
claim Wrede had filed, she received
lower RIF scores than most engineers
in her skill code and was subsequently
terminated.... [¶] Both parties agree
that the EEOC established a prima
facie case of gender discrimination regarding Wrede under McDonnell Douglas, 411 U.S. 792, that Boeing has
articulated a legitimate reason..., and
that the EEOC has introduced circumstantial, but not direct, evidence [of
pretext]. The parties dispute only
whether the EEOC presented sufficiently ‘specific and substantial’ circumstantial evidence that Wrede’s RIF
scores were not credible to allow a jury
to find pretext.
“As it concedes, the EEOC must also
overcome an inference arising from the
fact that the same actors who made an
adverse employment decision against
Wrede in the October RIF had twice
given her scores that were high enough
to avoid vulnerability to discharge. While
positive employment decisions made
by the same actors who later make an
adverse employment decision against
an employee may give rise to ‘an inference that no discrimination took place,’
Coleman v. Quaker Oats Co., 232 F.3d
1271, 1288 (9th Cir. 2000), the inference
in this case is weaker than the ‘strong
inference’ against bias that arises when
an employer who hires or promotes a
plaintiff later takes an adverse employment action against her...
“Although a termination is rarely motivated by bias when it is initiated by the
same actors who recently selected the
same employee for the job or promotion
in the first place, the logic differs when
applied to less overtly ‘positive’ employment decisions, such as refraining from
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firing an employee at the earliest opportunity or giving an employee a lukewarm
evaluation, rather than a poor one...
[W]here a supervisor discharges an
employee he did not affirmatively hire or
promote by lowering her scores over
time, rather than by firing her precipitously, there is no ... strong circumstantial evidence of lack of bias.
“Other specific and substantial circumstantial evidence also suggests
[Wrede’s supervisor] lacked legitimate
justification for his scoring. Several of
Wrede’s coworkers and managers offered detailed testimony why RIF assessments of Wrede’s skill were not
credible...
“Finally, Wrede, the only woman in her
skill code, was laid off while every male
employee identified for termination in all
three RIFs ultimately remained at
Boeing... All this could lead a jury to
conclude that Boeing’s asserted rationales were pretextual.”
For plaintiffs: Anne Noel Occhialino,
EEOC, Washington DC.
For defendant: Tibor Nagy, Jr. and Erica
K. Rocush, Tucson.
Hawkins joined by Berzon and
Clifton; 2009 DAR 12233, 2009 WL
NINTH CIRCUIT EXAMINES
REQUIREMENTS NECESSARY TO
ESTABLISH CLAIM UNDER
WHISTLEBLOWER PROVISIONS
OF SARBANES-OXLEY ACT
VAN ASDALE v INTERNATIONAL
GAME TECHNOLOGY. In an opinion
filed on August 13, the Ninth Circuit
reversed summary judgment that had
been granted by the district court, (D
Nev), on the plaintiffs’ claim under the
Sarbanes-Oxley Act, which bars employers of publicly-traded companies
from discriminating against employees
for providing information relating to fraud
against shareholders. “This case,” the
panel wrote in an opinion by Bybee,
“presents our first opportunity to exam(Cont'd on Page 8, DECISIONS)
DECISIONS
(From Page 7)
ine the substantive requirements necessary to establish a claim under the
whistleblower-protection provisions of
the Sarbanes-Oxley Act, 18 U.S.C. §
1514A.”
The court held, inter alia, that to prevail
on such a claim, a plaintiff must prove
that his or her communication specifically related to protected activity; that
he or she had a reasonable belief that
the reported conduct was illegal; and
that the protected activity contributed to
the adverse employment action.
The plaintiffs, who both held positions
as Associate General Counsel, had
reported to the defendent’s General
Counsel their questions about the validity of a patent held by a company with
which I.G.T. was negotiating a merger.
It was reasonable, the Ninth Circuit
held, for the plaintiffs to have believed
that non-disclosure of the patent’s invalidity would have amounted to a violation
of securities law and have resulted in
the merger’s overvaluation. And, the
court added, their termination occurred
in such close temporal proximity to the
protected activity as to raise issues of
material fact as to causation.
For plaintiffs: Margo Piscevich, Mark J.
Lenz, Reno.
For defendant: Armstrong Teasdale LLP,
Reno; O’Melveny & Meyers, LLP, Los
Angeles.
Bybee joined by Wallace and Thomas; 2009 DAR 12023, 2009 WL
2461906.
NINTH CIRCUIT REVERSES
SUMMARY JUDGMENT ON
CLASS CLAIMS FOR
COMPENSATION FOR REQUIRED
“POSTLIMINARY” ACTIVITIES, BUT
HOLDS THAT COMMUTE TIME
WAS NOT COMPENSABLE
DESPITE REQUIRED USE OF
COMPANY TRUCK AND
RESTRICTIONS ON PERSONAL
USE OF VEHICLE
RUTTI v LOJACK CORPORATION.
An opinion by Callahan filed on August
21 reads in part as follows:
“Mike Rutti sought to bring a class
action on behalf of all technicians employed by Lojack, Inc. to install alarms
in customers’ cars. He sought compensation for the time they spent commuting to worksites in Locjack’s vehicles
and for time spent on preliminary and
postliminary activities performed at their
homes. The [Central District] granted
Lojack summary judgment, holding that
Rutt’s commute was not compensable
as a matter of law and that preliminary
and postliminary activities were not
compensable because they either were
not integral to Rutti’s principal activities
or consumed a de minimis amount of
time. We affirm the district court’s denial of compensation for Rutti’s commute and for his preliminary activities.
However, we vacate the district court’s
grant of summary judgment on Rutti’s
postliminary activity of required daily
portable data transmissions, and remand the matter to the district court for
further proceedings...
“On April 5, 2006, Rutti filed this putative
class action ... asserting that under the
[FLSA] and under California law, Lojack
had unlawfully failed to compensate for
commuting and ‘off-the-clock’ work. After
the parties had engaged in considerable discovery, Lojack moved for partial
summary judgment and Rutti sought
class certification. The district court
decided to rule on the motion for partial
summary judgment before addressing
class certification, citing Wright v.
Schock, 742 F.2d 541, 544 (9th Cir.
1984)... On August 16, 2007, the district court issued its order granting in
part and denying in part Lojack’s motion
for partial summary judgment. The order disposed on all federal claims and
denied [Rutti's] state law claim for compensation for commuting. The district
court subsequently issued an order dismissing the remaining state law claims
for lack of subject matter jurisdiction.
Rutti filed a timely notice of appeal.
“Rutti’s appeal raises three major issues: (1) whether Rutti’s commute in a
Lojack vehicle was compensable under
state or federal law; (2) whether Rutti’s
off-the-clock activities were either not
-8-
part of his principal activities for Lojack
or were de minimis...; and (3) whether
under the ‘continuous workday’ doctrine Rutti’s workday started at his home
in the morning before he commuted to
the first assignment and extended to
his return home...
“Rutti’s first argument is that because
he is required to commute in the vehicle
provided by Lojack, he did not voluntarily agree to the arrangement and is
entitled to compensation... [¶] [H]is
claim to compensation does not survive
the passage of the Employee Commuting Flexibility Act, 29 U.S.C. § 254(a)(2).
The language of the EFCA and its legislative history compel the conclusion
that the requisite ‘agreement’ concerning the use of an employer’s vehicle to
commute may be part of the employee’s
employment...
“Rutti’s second argument is that restrictions placed on his use of the vehicle
render the commute compensable...
Rutti’s perspective finds no support in
the language of the EFCA, is counter to
its legislative history, and has been
rejected by those courts that have considered the issue. [cites and discussion omitted.]
“Rutti contends that even if his commute is not compensable under the
ECFA, it is compensable under California law pursuant to Morillion v. Royal
Packing Co., 22 Cal.4th 575 (2000). He
asserts that in Morillion, the California
Supreme Court adopted a standard more
favorable to employees ‘by merely requiring that the worker be subject to the
‘control of the employer’ in order to be
entitled to compensation.’
“The ‘control of the employer’ standard
set forth in Morillion may be more favorable to employees than federal law, but
it does not cover Rutti’s commute. In
Morillion, the employer required the
employees ‘to meet at the departure
points at a certain time to ride its buses
to work, and it prohibited them from
using their own cars.’ Id. at 587. The
court held that ... the employees’ ‘compulsory travel time, which includes the
DECISIONS
(From Page 8)
time they spent waiting for [the
employer’s buses] ... was compensable,’ but ‘the time [the employees]
spent commuting from home to the
departure points and back again, is
not.’ Id. at 587-88. Here, Rutti’s use of
Lojack’s automobile to commute to and
from his jobs sites is more analogous to
the ‘home to departure points’ transportation in Morillion than to the employees’ transportation on the employer’s
buses. [fn.7: Although this is a close
issue, our reading of Morillion is informed by the court’s statement ‘we
emphasize that employers do not risk
paying employees for their travel time
merely by providing them transportation.’ 22 Cal.4th at 588. Although Rutti
was required to drive the company vehicle, he was free to determine when he
left, his route, and which assignment he
drove to first.]
“Rutti also seeks compensation for activities ... before he travels to his first job
site and after he returns home from his
last job site of the day. The ECFA,
however, ... provides that an employer
need not compensate an employee for
‘activities which are preliminary or
postliminary to said principal activity or
activities.’ 29 U.S.C. § 254(a)(2)...
“Rutti’s morning activities do not appear
to be integral to his principal activities.
Most of his activities—‘receiving, mapping, and prioritizing jobs and routes for
assignment’—are related to his commute... [And] to the extent that they are
both distinct from his commute ... and
related to his principal activities, [they]
appear to be de minimis...
“Lojack requires that Rutti, after he
completes his last job for the day and
goes ‘off-the-clock,’ return home and
send a PDT transmission to Lojack
using a modem provided by Lojack. The
transmissions have to made every day
as they provide Lojack with information
concerning all the jobs its technicians
perform during the day. The transmissions appear to be ‘part of the regular
work of the employees in the ordinary
course of business...’ [cite omitted.]
Accordingly, at least on summary judgment, the district court could not determine that this activity was not integral to
Rutti’s principal activities... [¶] Our review of the record suggests that the
PDT transmissions are an integral part
of Rutti’s principal activities and that
there are material issues of fact as to
whether [they] are de minimis.
“Finally, Rutti argues that under the
continuous workday doctrine, because
his work begins and ends at home, he
is entitled to compensation for his travel
time, citing Dooley v. Liberty Mutual
Ins. Co., 307 F. Supp.2d 234 (D. Mass.
2004)... Even if we were to adopt the
continuous workday doctrine set forth
in Dooley, Rutti would not be entitled to
compensation... We have already determined that Rutti’s preliminary activities ... are either not principal activities
or are de minimis. Accordingly, his
situation is not analogous to the situation in Dooley... Our determination [concerning] Rutti’s postliminary activity,
the PDT transmissions... might support
the extension of his work day through
his travel back to his residence were it
not for 29 C.F.R. § 785.16. This regulation provides that ‘[p]eriods during which
an employee is completely relieved from
duty and which are long enough to
enable him to use the time effectively for
his own purposes are not hours worked.’
Lojack allows a technician to make the
transmissions at any time between 7:00
p.m and 7:00 a.m... Because he has
hours, not minutes, in which to complete this task, the intervening time is
‘long enough to enable him to use the
time effectively for his own purpose.’”
There were two separate opinions, concurring and dissenting in parts. Judge
Hall wrote: “I join in the opinion except
as to Rutti’s claim for compensation for
the required postliminary PDT transmission, which I would also affirm. I
believe [that] time was de minimis.”
Judge Silverman wrote to insist that the
majority’s attempt to distinguish Morillion
was unconvincing, and that “...the majority ... utterly ignores the relevant
question under California law, which is
whether Rutti was ‘subject to the control of an employer’ during his mandatory travel time... Rutti was required to
use the company truck and was permit-
ted no personal stops or any other
personal use. Thus, under Morillion,
Rutti had a valid state law claim for
compensation.”
For plaintiff: Matthew Righetti and John
Glugoski, San Francisco.
For defendant: McDermott, Will & Emery LLP, Peter D. Holbrook, Dan
Chammas, and Jennifer Fercovich.
Callahan with Hall and Silverman
concurring and dissenting in parts;
2009 DAR 12563, 2009 WL 2568661.
UNPUBLISHED
CALIFORNIA COURT OF
APPEAL DECISIONS
FAILURE-TO-PREVENT CAUSE
OF ACTION DOES NOT REQUIRE
PLEADING OF SEPARATE CAUSE
OF ACTION FOR
DISCRIMINATION, HARASSMENT,
OR RETALIATION; IT IS ENOUGH
THAT COMPLAINT PLEADS
FACTS SHOWING ONE OF
THOSE VIOLATIONS
HILL v SAN FRANCISCO BAY AREA
RAPID TRANSIT DISTRICT. In a complex and difficult-to-summarize opinion
filed on August 8, the First District,
Division One, wrote in part as follows
concerning its central holdings:
“A jury found [BART] liable to plaintiff
Oliver Hill under [FEHA] in the aggregate amount of $1,271,500 for (1) retaliation (§ 12940, subd. (h)); and (2) failing
to take reasonable steps to prevent
racial harassment, discrimination, or
retaliation (§ 12940, subd. (k)). BART
challenges the award on multiple
grounds including instructional error,
insufficient evidence, and excessive
damages. We reverse the portion of the
judgment based on the jury’s retaliation
award, finding that the jury was improperly allowed to consider [time-barred]
matters outside the pleadings... We
affirm the portion of the judgment based
on BART’s failure to prevent conduct
-9-
DECISIONS
(From Page 9)
violating FEHA. We remand the matter
for a limited retrial on the retaliation
claim and for a redetermination of the
amount of the statutory attorney fees...
“By a vote of 12 to 0, the jury found that
BART had subjected Hill to retaliation
and awarded him $6,500 in past economic damages, $65,000 in future economic damages, $350,000 in past noneconomic damages, and $250,000 in
future noneconomic damages. On a
vote of 11 to 1, the jury also found that
BART had failed to prevent harassment,
discrimination, or retaliation and awarded
Hill $300,000 in past noneconomic damages, and $300,000 in future noneconomic loss.
“The trial court awarded the Boxer &
Gerson law firm $370,148 in attorney
fees under section 12965, subdivision
(b), and awarded [Daniel] Bartley [who
did pretrial work] and his co-counsel
FEHA fees totaling $118,680.
“BART claims that the trial court erroneously allowed the jury to consider
whether BART had engaged in improper
conduct in 2003 and earlier even though,
according to BART, [trial court rulings]
should have foreclosed the jury from
considering that conduct... [¶] [W]e
agree with BART that the retaliation
claim was limited to Hill’s failure to
obtain a promotion after the filing of his
lawsuit and the trial court erred by failing
to so instruct the jury.
“BART’s argument with regard to the
scope of the failure-to-prevent cause of
action is more complicated and less
persuasive. BART maintains that its
liability exposure at trial should have
been limited to liability for failing to
prevent only those specific actions of
[non-time-barred] retaliation alleged and
proven in connection with the retaliation
cause of action. BART relies in part on
Trujillo v. North County Transit Dist.
(1998) 63 Cal.App.4th 280, 73
Cal.Rptr.2d 596, which held that a defendant should not be liable for failure to
prevent under section 12940, subdivision (k), unless there is proof of underlying conduct violating FEHA...
“Trujillo merely holds that failure to prevent cannot be found unless there is
proof of an underlying FEHA violation
such as discrimination, harassment, or
retaliation... Nothing in the Trujillo case
suggests that a viable failure-to-prevent
cause of action does not exist unless
the complaint pleads a separate cause
of action for discrimination, harassment,
or retaliation. It is irrelevant under Trujillo
whether a separate FEHA cause of
action for discrimination, harassment,
or retaliation is pleaded, as long as the
complaint pleads facts showing that the
defendants committed one or more of
those violations.
“Based on our analysis of the case
law..., the operative pleadings did limit
the scope of BART’s potential liability to
Hill for retaliation to the consequences
of its failure to promote him after August
2004. At the same time, however, those
pleadings fairly placed in issue whether
BART’s conduct from January 2003
forward made it liable for failing to prevent discrimination, harassment, or retaliation.”
For plaintiff: Darci Elaine Burrell, Oakland, and Gail S. Hodes, Sebastopol.
For defendant: Victoria Rose Nuetzel,
Oakland.
First Dist Div One, 8/7/09; opinion by
Margulies with Marchiano and Graham concurring; 2009 WL 2415479
(unpublished).
VERDICTS AND
SETTLEMENTS
SAN FRANCISCO COUNTY
SUPERIOR COURT APPROVES
SETTLEMENT OF OVER $17
MILLION IN OVERTIME CLASS
ACTION BY PG&E EMPLOYEES
CONLEY, et al. v PACIFIC GAS &
ELECTRIC COMPANY. On July 30,
San Francisco County Superior Court
Judge John K. Stewart granted final
approval to a settlement in a class
action brought on behalf of roughly 700
current and former PG&E employees in
California, for unpaid overtime wages.
-10-
The settlement will result in the payment of $17,250,000 to compensate
the employees for back pay and attorneys’ fees, and will require that PG&E
pay most of the covered employees
overtime compensation in the future.
The case was filed in March of 2000 by
John Conley, Coy Wiggins, Hall Hackney, and Jeff Brewer, seeking compensation for unpaid overtime hours worked.
The plaintiffs alleged that they were
improperly classified as exempt from
overtime under the Labor Code, and
asserted violations of B & P Code §
17200. The trial court initially denied
class certification, but the plaintiffs appealed and, on remand, three subclasses of employees were certified
pursuant to the job duties test.
The settlement will compensate current
and former employees in the job categories of Senior New Business Representative, Industrial Power Engineer,
Electric Distribution Engineer, and Gas
Distribution Engineer for unpaid overtime going back to 1996. It also requires
PG&E to pay overtime compensation
under state law to Senior New Business
Representatives and Industrial Power
Engineers, (a majority of the plaintiffs),
in the future. While many employers in
overtime cases reduce employees’ base
pay when converting them from salaried
to hourly, the settlement prohibits PG&E
from doing so.
For plaintiffs: Jonathan Siegel, Daria
Dimitroff, Sarah Beard, and Heather
Conger, Siegel & LeWitter, Oakland.
San Francisco County Superior
Court, No. 310938; 7/30/09; information provided by counsel.
RIVERSIDE JURY AWARDS
FORMER KMART MANAGER $26
MILLION ON AGE
DISCRIMINATION CLAIM
HAWKINS v KMART. On July 29, a
Riverside County Superior Court jury,
after deliberating for just 76 minutes,
added $25 million in punitive damages
to the nearly $1 million in compensatory
DECISIONS
(From Page 10)
damages they had awarded the previous day to a former Kmart manager with
20 years of highly productive tenure who
proved that he had been terminated
because of his age (64). The jury also
found that the company had breached
an implied “good cause” contract provision.
The plaintiff alleged that the defendants’
unlawful conduct was part of an ongoing
pattern and practice of age discrimination, and that in the months before his
termination, he was unlawfully demoted
and disciplined in an effort to “work on
him” to “get him to retire.” Settlement
talks went on at various points during
the trial, with the defense offering a
maximum of $150,000 and the plaintiff
demanding $750,000.
For plaintiff: Greg Lutz and Jennifer
Lutz, Del Mar.
For defendant: Ogeltree, Deakins, Nash,
Smoak & Stewart.
Riverside County Superior Court, 7/
29/09; Judge Gary Tranbarger; information provided by counsel and
as reported in Daily Journal, 8/27/
09.
PLAINTIFFS EMPLOYMENT LAWYERS RECEIVE
AWARDS AND RECOGNITION
—LISA MAKI (Los Angeles) has been
named our 2009 Joe Posner Award
recipient, it was announced by Dolores
Leal of the Award Committee on August
6. The Award will be presented to Lisa
at the CELA Annual Conference, October 2 and 3, in Oakland. One of the
nomination forms the Committee received read as follows:
"Lisa is the only plaintiffs’ lawyer I know
who says ‘I don’t care how little a case
is worth,’ and she is dead serious. She
will devote countless hours through and
including trial to right the wrongs of
employees who could never otherwise
obtain her extraordinary caliber of service. She has dropped everything to
help me when I was in a jam during trial,
on a moment’s notice. Her speaking
and bar activities are endless. If there’s
a cause to synergize with her work,
from the Venice Free Clinic to Clothes
the Deal, she’ll spearhead that cause. I
truly believe that Joe would be right
there in his support for Lisa’s contributions to the cause, and her selfless
service to our caring community.”
—CLAUDIA CENTER, Senior Staff Attorney at the Legal Aid Society—Employment Law Center in San Francisco,
and director of that organization’s disability rights program, has been awarded
the ABA’s Paul G. Hearne Award for
Disability Rights. Claudia was the lead
private attorney working on the 2000
amendments to FEHA’s disability provisions, and in 2001 she argued before
the United States Supreme Court in
U.S. Airways, Inc. v Barnett, a case that
clarified the standards for reasonable
accommodation under the ADA. She
was the appellate lawyer in Nunes v
Wal-Mart Stores, a 1999 case that established for the first time in the Ninth
Circuit that a leave of absence may be
a reasonable accommodation.
"CELA Member Profiles” author
Michelle Reinglass regrets having to
skip another issue because of a trial.
She hopes to continue the series next
month.
—PATRICIA SHIU has been selected
by the Obama Administration, it was
announced on August 6, to head the
Department of Labor’s Office of Federal
Contract Compliance Programs,
(OFCCP), a sub-agency charged with
administering and enforcing laws that
-11-
prohibit discrimination and that require
federal contractors to implement affirmative action plans. Pat is currently the
Vice President for Programs at the
Legal Aid Society—Employment Law
Center, which she joined in 1983. She
has also served as the director of the
Society’s Work and Family Project,
and lobbied for the passage of the California Family Rights Act. In 1993, former
U.S. Secretary of Education Richard
Riley appointed Pat to that Department’s
Civil Rights Reviewing Authority. She is
a former NELA Board Member and Vice
President, and is currently a member of
the Board of The Employee Rights Advocacy Institute, NELA’s public interest
organization.
—ARCELIA HURTADO has been appointed Executive Director of Equal
Rights Advocates. Raised in the Lower
Rio Grande Valley of South Texas,
Arcelia has worked with numerous community-based organizations, such as
La Raza Centro Legal, to secure immigrants’ rights in the areas of employment, housing, and immigration. As a
trial lawyer, she has handled over a
dozen criminal jury trials, and has represented death row prisoners on appeal, arguing cases before numerous
courts, including the California Supreme
Court. She has devoted substantial time
to community service, serving on the
boards of professional and non-profit
organizations such as Women Defenders, San Francisco La Raza Lawyers
Association, Our Family Coalition, and
Bay Area Lawyers for Individual Freedom. Arcelia is the founder of the
Women Defenders Fellowship, which
supports law students pursuing careers
in indigent criminal defense, and she
has also taught Constitutional Law,
Criminal Law, and Criminal Procedure
at several Bay Area law schools.
C O M I N G
E V E N T S
September 21, 2009
CELA DIVERSITY COMMITTEE AND STATE BAR JOINT PROGRAM:
“THE TRIUMPHS AND STRUGGLES OF AN EMPLOYMENT LAWYER”
UCLA Law School Building at 5:00pm
(for details, contact Toni Jaramilla: [email protected])
September 26, 2009
ANNUAL TARDEADA FOR CRLA
(for details, contact Dolores Leal: [email protected])
October 1, 2009
Oakland Marriott City Center
October 2-3, 2009
October 23-24, 2009
-12-
Published
Monthly
BULLETIN
CALIFORNIA
SUPREME COURT
SUPREME COURT WILL NOT
REVIEW FOURTH DISTRICT
DECISION ALLOWING
SUPERVISORS TO SHARE IN
COLLECTIVE TIP POOL
CHAU v STARBUCKS CORP. On
September 9, the California Supreme
Court denied review, letting stand the
Fourth District’s decision that held
that Labor Code § 351 was not violated
by a policy that allowed supervisors to
share in tips left in a collective tip box
for the “service team.” Following a
bench trial, San Diego County Superior Court Judge Patricia A. Y. Cowett
had awarded the plaintiff class of over
100,000 current and former baristas
$86 million in restitution and $20 million
in interest on their UCL claims. But the
Fourth District reasoned that “[t]here is
no decisional or statutory authority prohibiting an employer from allowing a
service employee to keep a portion of
the collective tip ... merely because the
employee also has limited supervisory
duties.” The Fourth District’s June 2
decision, as modified on denial of rehearing on July 2, appears at 174 CA4th
688, 94 CR3d 593, and was summarized in CELA Bulletin, June 09, p.5,
and July 09, p.10.
For plaintiffs: A. Eric Aguilera, Terry J.
Chapko, David Borgen, Laura L. Ho,
Steven G. Zieff, David A. Lowe, Kenneth J. Sugarman.
Hauer & Feld, Rex S. Heinke, Catherine
A. Conway, Gregory W. Knopp, Jessica M. Weisel, Johanna R. Shargel,
September 2009
Vol. 23, No. 9
Daniel L. Nash.
Cal SC, 9/9/09, (denying review).
SUPREME COURT WILL REVIEW
SECOND DISTRICT DECISION
THAT ENFORCED “BERMAN
WAIVER” IN ARBITRATION
AGREEMENT
SONIC-CALABASAS A, INC. v
MORENO. On September 9, the California Supreme Court granted review to
decide whether the Second District
correctly enforced a “Berman waiver”
contained in an employment arbitration
agreement. “In this case,” the Second
District wrote in its May 29, 2009 opinion, “we consider whether an admittedly valid employment arbitration
agreement that is governed by the [FAA]
may be enforced to dismiss a former
employee’s administrative wage claim...
OUR 2009 SUMMER DIVERSITY FELLOWS REPORT AND REFLECT
MARISSA DAGDAGAN. “I’d like to
thank CELA, the CELA Diversity Committee, and the dedicated attorneys at
the Law Offices of Toni Jaramilla for a
summer that made me want to be a
lawyer again. My first two years in law
school at UCLA had made me think
that I might have chosen the wrong
profession—that learning to “think, talk,
and act like a lawyer” meant that I
would have to sacrifice parts of myself
or my dreams. I’m glad to report that I
was wrong.
“Various mentors and professors along
the way had assured me otherwise,
but regardless of what they told me,
they all seemed to fit some variation of
the same attorney mold.
“But this summer, I had the chance to
meet and work with several CELA attorneys who obliterated all notions of what
I had assumed a lawyer had to be. One
particularly instructive moment occurred
during a mediation between a client and
his employer. As defense counsel presented her case in a joint session, she
argued that our client’s minimum wage
dictated a small recovery. Toni was
visibly irritated by the implications of
that assumption and said as much. I
was stunned that not only had she
spoken “truth to power,” but that she
used that truth in order to ultimately win
a fair settlement for her client.
“Toni taught me that I can and should
fiercely cling to the beliefs that inspired
me to become a lawyer in the first place
and that passion should inform and be
reflected in my advocacy. I learned this
not only from watching Toni interact
with her clients, but also from the
thoughtful feedback she and May
Mallari, (the firm’s Managing Associate), gave me. Whether it was a section
of a motion that I drafted or an attempt
(Cont'd on Page 15, DIVERSITY FELLOWS)
This issue of the CELA Bulletin is
being distributed to Judges and Justices throughout California, as well
as to our membership, and it includes three substantive articles specially written for this issue by CELA
members. (See pages 3 to 10.)
DECISIONS
(From Page 1)
The former employee filed an administrative wage claim with the Labor Commissioner according to the ‘Berman’
process provided in Labor Code section
98 et seq. Moreno’s former employer ...
petitioned the Superior Court to dismiss
the Berman proceeding and proceed to
arbitration... The Superior Court denied
the petition as premature. We reverse
the order denying Sonic’s motion to
compel arbitration... [¶] We conclude
that Moreno waived his right to a Berman
proceeding and enforcement of that
waiver is not barred by Armendariz or
Gentry.” The Second District’s opinion
appeared at 174 CA4th 546, 94 CR3d
544, and was summarized in CELA
Bulletin, June 09, p.3.
For employee: Rachel Folberg and Miles
Locker.
For employer: Fine, Boggs & Perkins,
David J. Reese and John P. Boggs.
Cal SC, 9/9/09; 2009 DAR 13495,
(granting review).
NINTH CIRCUIT
QUESTION OF ARBITRATION
PROVISION'S
UNCONSCIONABILITY WAS FOR
COURT, NOT ARBITRATOR
JACKSON v RENT-A-CENTER WEST,
INC. In an opinion by Thomas filed on
September 9, affirming and reversing in
parts an order of the district court, (D
Nev), that had dismissed the plaintiff’s
statutory race discrimination claim and
compelled arbitration, the Ninth Circuit
“Under the circumstances presented
here, we conclude that the district court
was required to determine whether the
arbitration agreement was unconscionable, and we remand for further proceedings.
“On February 1, 2007, Jackson filed a
complaint ... alleging race discrimination and retaliation ... under 42 U.S.C. §
1981. The Employer moved to dismiss
the proceedings and compel arbitration, relying on a Mutual Agreement to
Arbitrate Claims [that] Jackson signed
as a condition of his employment ...
when he was initially hired. The Agreement specifically includes claims for
discrimination in the list of claims that
must be resolved by aribtration.
“Of particular relevance to this appeal is
a section of the Agreement entitled
‘Arbitration Procedures,’ which includes
the following provision:
The arbitrator, and not any federal,
state, or local court or agency, shall
have exclusive authority to resolve
any dispute relating to the interpretation, applicability, enforceability or
formation of this Agreement including, but not limited to any claim that
all or any part of this Agreement is
void or voidable.
“The Employer argued ... that ... the
threshold question of whether the arbitration agreement was valid and enforceable was for an arbitrator, not the
court. Jackson argued in response that
the Agreement was unconscionable. In
particular, he contended that the Agreement was substantively unconscionable
because it contained one-sided coverage and discovery provisions and a
provision specifying that the arbitrator’s
fee was to be equally shared by the
parties. Jackson also argued that the
Agreement was procedurally unconscionable because the form contract was
presented to him as a nonnegotiable
condition of his employment... [¶] We
review de novo a district court’s decision to compel arbitration...
“The Supreme Court has held that, as a
matter of federal substantive arbitration
law, when a party challenges the validity of a contract ... but ‘not specifically
its arbitration provisions,’ the challenge
... should be considered by an arbitrator, not a court. Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 446
(2006). The flip side of this rule, however, is that when a party specifically
challenges the validity of arbitration provisions within a larger contract ..., a
court decides the threshold question of
the enforceability of the arbitration provisions. We applied this rule in Nagrampa
v. MailCoups, Inc., 469 F.3d 1257, 1264
-2-
CALIFORNIA
EMPLOYMENT
LAWYERS ASSOCIATION
David J. Duchrow
Suite 305
Tel: (310) 479-5303
FAX: (310) 479-5306
E-mail:
[email protected]
Director:
Christina Krasomil
Encino, CA 91436-2412
Tel: (818) 907-7895
FAX: (818) 907-7474
EXECUTIVE BOARD
(Los Angeles)
Dolores Leal
(Los Angeles)
David DeRubertis
(Woodland Hills)
Steven Pingel
(Long Beach)
Kathy Dickson
(Oakland)
(Laguna Hills)
David Duchrow
(Los Angeles)
Cynthia Rice
(San Francisco)
Wilmer Harris
(Pasadena)
Mika Spencer
(San Diego)
Phil Horowitz
(San Francisco)
James P. Stoneman
(Claremont)
Jean K. Hyams
(Oakland)
Christopher Whelan
(Gold River)
Toni Jaramilla
(Los Angeles)
Jeffrey Winikow
(Los Angeles)
Virginia Keeny
(Pasadena)
Bulletin Editor
Christopher Bello
842 Irving Avenue
Astoria, OR 97103
Ph: (503) 338-3891
DEFAMATION IN EMPLOYMENT
Introduction. This article concerns
the law of defamation, which has been
described as “a forest of complexities,
overgrown with anomalies, inconsistencies, and perverse rigidities.” (McNair
v Worldwide Church of God (1987) 197
CA3d 363, 375.) Despite the complexities, defamation in the employment
context is of great importance because
it provides a terminated employee access to general, emotional distress,
and punitive damages.
Statutory Basis. Defamation includes
libel, “a false and unprivileged publication by writing, printing, picture, effigy,
or other fixed representation to the eye
... which has a tendency to injure [any
person] in his occupation” (Cal Civil
Code § 45); and slander, “a false and
unprivileged publication, orally uttered
... which tends directly to injure [any
person] in respect to his office, profession, trade or business ...by imputing
to him general disqualification in those
respects which the office or other occupation peculiarly requires...” (Cal Civil
Code § 46).
Internal Publication Is Sufficient.
Defamation in employment usually
occurs when an employee is subjected
to the publication of false criticism
alleging poor performance, incompetence, or dishonesty as a means to
justify a termination. “[P]ublication occurs when a statement is communicated to any person other than the
party defamed.” Kelly v General Telephone Co. (1982) 136 CA3d 278, 284.
Publication can be completely internal
and still be actionable: that is, it may
be published and received solely by
other employees of the defendant employer. See Agarwal v Johnson (1979)
25 C3d 932, 944; Kelly v General Telephone Co. (1982) 136 CA3d 278, 284;
Biggins v Hanson (1967) 252 CA2d 16,
19; Cruey v Gannett Co. (1998) 64
CA4th 356, 367. This is an area of
major confusion for employers. Many
defense counsel believe that publication has to be made to outside third
persons, and will therefore dispute that
publication occurred even when the
employer admits, and documentation
confirms, internal publication.
by Christopher H. Whelan
Proof of Publication. Publication can
be proved by the defamed employee’s
testimony based on his or her own
knowledge. “We can find no precedent
for defendant’s contention that a slandered individual’s testimony of publication is insufficient, as a matter of law,
without corroboration.” Cunningham v
Simpson (1969) 1 C3d 301, 307. “Publication” does not require dissemination
to any substantial number of individuals: it suffices that the defamatory matter “is communicated to a single individual other than the one defamed.”
Lundquist v Reusser (1994) 7 C4th
1193, 1203.
“Operative Fact”of Publication Can
Be Proven With Apparent Hearsay.
A well-established exception to the
hearsay rule applies to defamation
cases in which the fact in controversy is
whether certain things were published,
not whether they were true or false. In
those situations, the published words
are admissible, not as hearsay, but as
original evidence. Witkin, Calif. Evid., §
590, at 563 (3d ed. 1986). See also
People v Henry (1948) 86 CA2d 785,
789; People v Rossen (1962) 202 CA2d
480, 486-487. “In these situations the
words themselves, written or oral, are
‘operative facts,’ and an issue in the
case is whether they were uttered or
written.” Russell v Geis (1967) 251
CA2d 560, 571-572.
Abuse of Conditional Privilege.
Employers typically attempt to rely on
a conditional privilege to publish criticism of an employee’s performance,
competency, or honesty within the corporation or to interested outsiders. But
they often misinterpret a conditional
privilege as some kind of an absolute
one. The conditional privilege created
by Civ Code section 47, subdivision (3),
is lost if abused, or if the publication
was motivated by malice. Deaile v General Telephone Co. of California (1974)
40 CA3d 841, 847.
In order to overcome the affirmative
defense of a conditional privilege, an
employee needs only to show some
circumstantial evidence of either malice or an abuse of privilege, the exist-3-
ence of which is a factual issue. McMann
v Wadler (1961) 189 CA2d 124, 129.
This type of “malice”only requires a showing, (by a preponderance of the evidence), of a state of mind arising from
hatred or ill will evidencing a willingness
“to vex, annoy or injure.” Agarwal v
Johnson (1979) 25 C3d 932, 944-945;
Mamou v Trendwest Resorts, Inc. (2008)
165 CA 4th 686, 729.
Defamation in the employment context
typically involves a private person, a
private matter, and a non-media defendant, and therefore the more difficult-toprove New York Times Co. v Sullivan
type of malice is not an element of the
cause of action. (When a defamation
case involves a public person, or a matter of public concern, or a media defendant, the plaintiff has to present clear
and convincing evidence that the publication was made “with knowledge that it
was false, or with reckless disregard of
whether it was false or not.” New York
Times Co. v Sullivan (1964) 376 US 254;
Khawar v Globe Internat., Inc. (1998) 19
C4th 254, 275).
Great confusion has resulted from three
very different concepts, all having the
same label: (1) the type of “malice”
necessary to defeat a conditional privilege; (2) “malice” as defined in New York
Times v Sullivan; and (3) the type of
“malice” necessary to support an award
of punitive damages (Cal Civ Code
§3294). In particular, plaintiff’s counsel
should be alert to any attempt by the
defense to rely on a New York Times Co.
v Sullivan type case as authority for the
definition, or standard of proof, of “malice” in the employment defamation context.
Establishing Malice. The type of malice necessary to overcome a conditional
privilege in an employment defamation
case can be established in many different ways, e.g., by showing that the
publication was motivated: (1) by a “willingness to vex, annoy or injure,” (Agarwal
v Johnson (1979) 25 C3d 932, 944-945);
(2) by “hatred or ill will towards plaintiff,”
(Mamou v Trendwest Resorts, Inc. 165
(Cont'd on Page 4, DEFAMATION)
DEFAMATION
(From Page 3)
CA4th 686, 729); or (3) by anger and
hostility toward the plaintiff, (Widener v
P.G.& E. (1977) 75 CA3d 415, 436.
Malice can also be established by showing, inter alia: (4) that the publication
was a result of an inadequate or reckless investigation, (Widener v PG&E
(1977) 75 CA3d 415, 434), as where
there was a failure to “interview obvious
witnesses” or to “consult relevant documentary sources,”(Khawar v. Globe
Internat., Inc.,(1998) 19 C4th 254), or a
failure to investigate thoroughly to verify
the facts, (Rollenhagen v City of Orange
(1981) 116 CA3d 414, 423); (5) that the
publication was a result of “a longstanding grudge, ... former disputes, ...
or any previous quarrel, rivalry, or ill
feeling,”(Larrick v Gilloon (1959) 176
CA2d 408, 416); (6) that the publisher
lacked reasonable grounds for belief in
the publication’s truth, (MacLeod v Tribune Publishing Co. (1959) 52 C2d
536, 552); (7) that the statements were
published with doubts about their truthfulness, (Field Research Corp. v Patrick
(1973) 30 CA3d 603, 610); (8) that there
was “no reasonable ground for believing
the statement to be true,”(MacLeod v
Tribune Pub. Co. (1959) 52 C2d 536);
(9) that reliance was placed upon a
source “known to be biased against the
plaintiff,”(Reader’s Digest Assn. v Superior Court (1984) 37 C3d 244, 258);
(10) that publication was “motivated by
any cause other than the desire to
protect the interest for which the privilege is given,”(Mamou v Trendwest Resorts, Inc. 165 CA4th 686, 729); or (11)
that there was “excessive” publication
“beyond the group interest,” (Emde v
San Joaquin County Council (1943) 23
C2d 146,155; Brewer v Second Baptist
Church (1948) 32 C2d 791, 797).
Loss of the Affirmative Defense of
Privilege. If a defendant denies publication, denies belief in the truth of the
publication, or denies knowledge of the
truth of the publication, those denials
result in the loss of the affirmative defense of conditional privilege. Russell v
Geis (1967) 251 CA2d 560, 566-567.
Defamatory Performance Reviews.
Civil Code section 46(3) specifically
concerns defamation per se affecting a
person’s professional reputation. (See
Washer v Bank of America (1943) 21
C2d 822, 827.) Numerous cases hold
that commonly-occurring criticism of an
employee’s performance can be defamatory per se. Even a performance
review can be defamatory, it has been
held, if it accuses an employee of “criminal conduct, lack of integrity, dishonesty, incompetence, or reprehensible
personal characteristics or behavior.”
Jensen v Hewlett-Packard Co. (1993)
14 CA4th 958, 965.
False criticism is frequently used in the
employment setting to justify terminating a long term employee or a person in
a protected class, in an attempt to
create justification for the termination
and in hope of avoiding a potential law
suit. This ill-advised maneuver frequently
turns a weak discrimination case into a
strong defamation case. It can also turn
a wrongful termination case, in which
only wage loss would be available, into
a defamation case with a possible recovery of emotional distress and punitive damages.
Although a bad performance review can
be defamatory regardless of its consequences, as a practical matter I suggest pursuing a defamation case only
when the defamatory review has resulted in the loss of employment. The
concrete damages flowing from the loss
of a job are easier for a jury to understand, and those damages are a good
foundation for emotional distress damages.
Workers’ Compensation Non-Exclusivity. In the past, claims of workers’
compensation exclusivity tended to
cause some confusion. But it is now
generally recognized in California that
freedom from liability for defamation was
not part of the “bargained-for exchange,”
and that defamation claims, including
emotional distress damages, do not
come within the workers’ compensation
exclusivity rule. The seminal California
case on this issue is Howland v Balma
(1983) 143 CA3d 899, 904, which was
cited with approval by the Supreme
Court in Shoemaker v Myers (1990) 52
C3d 1. See also Livitsanos v Superior
Court (1992) 2 C4th 744, and Davaris v
-4-
Cubaleski (1993) 12 CA4th 1582, 1591.
At-Will Employment Is No Defense
to Recovery for Wage Loss. In
Rodriguez v North American Aviation,
Inc. (1967) 252 CA2d 889, 894-895, the
defendant argued that the plaintiff could
not recover for lost earnings because,
as an at-will employee, he could have
been fired at any time. The court rejected that argument, explaining that
the damages for defamation resulted
not from the loss of employment, per
se, but from the loss of employability as
the result of the defamation.
An additional theory that allows a defamed employee to recover damages
for wage loss was identified in O’Hara v
Storer Communications, Inc. (1991) 231
CA3d 1101, 1114-1115: “One’s loss of
employment due to emotional instability [caused by defamation] certainly
results in loss of ‘property, business,
trade, profession or occupation’ as set
out in the statute...”
Finally, the California Supreme Court
has recognized that “loss of employment” is a proper element of a claim for
special damages caused by defamation per se tending to damage the plaintiff in his or her occupation. Washer v
Bank of America (1943) 21 C2d 822,
829; Pridonoff v Balokovich (1951) 36
C2d 788, 792.
Employer Liability for Defamation
by Employees or Agents. As stated
by the court in Di Giorgio Fruit Corp. v
AFL-CIO (1963) 215 CA2d 560, 576,
“[a] master is subject to liability for
defamatory statements made by an
agent acting within the scope of his
authority.” It is also well established
that “a principal can be liable for the
malicious torts of his employee committed within the scope of his employment, despite any contention that the
employee may not have had the authority to engage in tortious conduct.”
Mercado v Hoefler (1961) 190 CA2d 12,
17. And this is true regardless of the
agent’s motive. Rosenberg v J. C.
Penney Co. (1939) 30 CA2d 609, 623.
The court in McLachlan v Bell (9th Cir
(Cont'd on Page 5, DEFAMATION)
DEFAMATION
(From Page 4)
2001) 261 F3d 908, 912, confirmed an
employer’s responsibility for defamation published by its employees, noting
that “...all three acted foreseeably...
There is unfortunately nothing ‘unusual
or shocking’ about personal hostility,
backbiting, resentment or another’s
success, false rumors, and malicious
gossip in the workplace.”
Conclusion. Defamation in employment
is a complex area. But redress for
damage to this fundamental but fragile
right should be vigorously pursued.
Defamation in employment destroys
careers, the potential for re-employment, and the financial and emotional
well-being of employees and their families. Full redress for these harms is not
some new theory, but has been recognized throughout the history of our law
and society as “a concept at the root of
any decent system of ordered liberty.”
McNair v Worldwide Church of God
(1987) 197 CA3d 363, 374-375.
Christopher H. Whelan, a CELA Executive Board Member, has law offices
in Gold River. His practice focuses on
disability discrimination, defamation,
sexual harassment, wrongful termination, and other employment and labor
issues. This article originally appeared
in the March/April 2009 issue of CAOC’s
journal “Forum,” and is reprinted here in
abridged form with CAOC’s permission.
(The longer version of the article, which
includes two pages of cites and summaries of cases representing “Examples
of Defamatory Criticism of Work Performance,” can be ordered from CAOC
through their website, www.caoc.com.)
CONTEXT MATTERS: EXAMINING THE ADMISSIBILITY OF OTHER EMPLOYEE/OTHER
SUPERVISOR, OR "ME TOO," EVIDENCE IN FEHA DISCRIMINATION CASES
by V. James DeSimone and Supreeta Sampath
Employment discrimination cases are
rarely straightforward or simple—they
tend to be subtle, complicated, and
highly contextualized. Employees seldom have direct evidence of discrimination, and they often have to depend
upon circumstantial evidence. Frequently, evidentiary disputes focus on
whether evidence of similar acts of discrimination directed at non-parties constitutes admissible circumstantial evidence, or whether this type of evidence
is simply inadmissible and/or unduly
prejudicial.
This article will discuss federal and
state judicial approaches to evaluating
the admissibility of evidence of acts of
discrimination against other employees or by “other” supervisors, (often
called “me too” evidence). A recent
California decision, Johnson v United
Cerebral Palsy/Spastic Children’s Foundation of Los Angeles (2009) 173 CA4th
740, provides analytical guideposts for
practitioners and judges and will be
discussed at length below. The Second
District Court of Appeal directed trial
courts to admit such evidence where
the “factual scenarios related by former
[or presumably current] employees of
the defendant ... are sufficiently similar
to the one presented by the plaintiff
concerning her own discharge by defendant.”
The Johnson decision clarifies the trial
judge’s role in admitting such evidence
at both the summary judgment stage
and during trial. In its precedent-setting
directive, the Johnson court provides a
comprehensive framework of analysis
which should help avoid inconsistent
trial court rulings on these critical issues of admissibility. In order to understand how the Johnson court reached
its conclusions, it is helpful to revisit the
evidentiary burdens in a discrimination
case.
Proving Discrimination Under FEHA.
In the first two stages of the familiar
McDonnell Douglas burden-shifting
analysis, the plaintiff is commonly able
to establish a prima facie case, and the
defendant is often able to counter by
presenting evidence of a legitimate nondiscriminatory explanation for the challenged employment action. In order to
prevail on summary judgment, the
plaintiff’s task is then to offer evidence
that the justification presented by the
employer is a pretext for discrimination.
If there is reason to disbelieve the
defendant’s justification, a triable issue
of material fact has been raised sufficient to show that the plaintiff’s protected status was a “motivating reason”
for the adverse employment action.1
Although the ultimate burden of persua-5-
sion on the issue of discrimination remains with the plaintiff, the weight of
evidence necessary to prevail at the
summary judgment stage and at trial
are significantly different.2 In order to
prevail on summary judgment, “[t]he
defendant must show that under no
possible hypothesis within the reasonable purview of the allegations of the
complaint is there a material question of
fact which requires examination by trial.”3
On the other hand, to avoid summary
judgment, a plaintiff needs to only raise
a triable issue of fact.4 Thus, if the
plaintiff can show one single material
fact in dispute, the motion must be
denied.5
At trial, the employee must prove by a
preponderance of the evidence that there
is a causal connection between her
protected status and the adverse employment decision.6 The question put to
the jury however, is not whether the
illegal motivation was the sole reason
for the adverse employment action, but
whether the plaintiff’s protected class
status was a “motivating reason.” 7
Since the crux of a discrimination case
involves the employer’s state of mind,
and because employers of even minimal sophistication will neither admit
discriminatory animus nor leave a paper
(Cont'd on Page 6, "ME TOO" EVIDENCE)
"ME TOO" EVIDENCE
(From Page 5)
trial demonstrating it, an employee rarely
has “smoking gun” direct evidence.
Accordingly, whether at summary judgment or at trial, justice requires an
employee the opportunity to attack an
employer’s proffered reasons as pretext, or to offer any other evidence of
discriminatory intent or motive.
Federal Cases. Federal courts have
understood for some time that employment discrimination cases present difficult problems of proof because courts
and juries cannot peer into the minds of
decision makers to determine their true
motivations.8 For this reason, federal
courts have consistently agreed that
“me too” evidence is admissible depending on its context. 9
In Obrey v Johnson,10 the plaintiff alleged that his employer had engaged in
a pattern and practice of racial discrimination in promotions to senior management positions. The Ninth Circuit reversed a judgment following a jury verdict for the employer, holding that the
trial court had erred in excluding relevant evidence in the form of a statistical report showing a correlation between race and promotion, and the
anecdotal testimony of three naval shipyard employees who believed that they
too had suffered racial discrimination
when they were passed over for supervisory positions. The Court also found
relevant and admissible the testimony
of a co-worker who recalled the defendant making discriminatory statements
against people of the plaintiff’s race.11
In Estes v Dick Smith Ford Inc.,12 the
Eighth Circuit reversed a judgment
against the employee, holding that the
trial court had erred in excluding the
plaintiff’s evidence that “tended to show
a climate of race and age bias [...].”13
The Court explained that “[e]vidence of
prior acts of discrimination is relevant to
an employer’s motive in discharging a
plaintiff, even where this evidence is not
extensive enough to establish discriminatory animus by itself.”14 The court
stated that while the plaintiff had to
prove the unlawfulness of his termination, “ . . . it is hard to see how evidence
which suggests that [the employer] discriminated against blacks in hiring would
be irrelevant to the question of whether
it fired a black employee because of his
race.”15
The United States Supreme Court has
increasingly made clear that the determination of admissibility must not be
made in a vacuum, but only after a
thorough review of the facts and context. This principle was reinforced by
the Court in its recent decision in Sprint/
United Management Co. v Mendelsohn.16
The Supreme Court rejected any per se
rule of inadmissibility in connection with
testimony by other employees alleging
discrimination at the hands of company
supervisors who played no role in the
adverse employment action taken
against the plaintiff. Instead, courts must
analyze the context in which the evidence is sought to be admitted,17 and
where the discrimination involved similarly situated employees, the evidence
is presumptively admissible.18
Because there is no single general
theory of relevance that applies to all
“other employee” or “other supervisor”
evidence in all cases, in arguing for
admissibility under the reasoning of
Sprint it is important to focus upon and
articulate a specific theory of relevance
that fits the particular case. For example: (1) the “other” supervisor may
have engaged in overt, rather than disguised, discrimination against another
employee, suggesting his or her belief
that the employer would tolerate or even
condone such behavior; (2) the “other”
supervisor may have used a pretextual
explanation similar to the one used by
the plaintiff’s supervisor, or may have
engineered an adverse action against
another employee in the same or similar way; (3) the “other” supervisor may
have applied a standard in justification
of an employment action against another employee that was inconsistent
with the standard purportedly applied
by the plaintiff’s supervisor; (4) the defense may itself have used “other supervisor” evidence, for example by offering
evidence of non-discriminatory hiring
statistics; and (5) discrimination by the
“other supervisor” may be of evidentiary
significance because of such factors as
the number of incidents, their proximity
in time, or the fact that they were all part
-6-
of some coordinated process.
California Cases. California courts
have been less ready to issue decisions
explicitly holding that “me too” evidence
is admissible to show an employer’s
motive or state of mind. In Clark v
Claremont University Center and Graduate School (1992) 6 CA4th 639, 8 CR3d
151, the Second District held that the
jury’s verdict in favor of the race discrimination plaintiff was supported by
substantial statistical evidence showing that the University had never granted
tenure to a minority professor. The decision does not deal directly with standard evidence of co-worker discrimination involving other similarly situated
employees. Rather, it holds that the
statistical evidence was properly admitted because it showed a discriminatory
mind-set: by inference, this could be
considered evidence of other employee
discrimination.
In another California state court case,
Bihun v AT&T Info Systems,19 the Court
of Appeal provided a more detailed analysis of “other employee” evidence in the
standard sense, in the context of sexual
harassment allegations. The Court held
that evidence of the harassing
supervisor’s sexual misconduct with
female employees other than the plaintiff was not inadmissible hearsay, unduly prejudicial, or irrelevant. It was
relevant, the court held, to the employer’s
knowledge of the harassment and failure to act.20
Johnson v United Cerebral Palsy/
Spastic Children’s Foundation.
Johnson, filed on April 30, 2009, [see
CELA Bulletin, May 09, p.4], was the
first published California state court
decision to explicitly make clear that
“me too” evidence is admissible in an
employment discrimination case. The
Second District, reversing summary
judgment, held that the trial court had
improperly disregarded circumstantial
evidence in the form of declarations by
five of the plaintiff’s co-workers.
The plaintiff, who worked as an in-home
care giver for cerebral palsy patients
(Cont'd on Page 7, "ME TOO" EVIDENCE)
"ME TOO" EVIDENCE
(From Page 6)
through UCP, informed her supervisor
that she was pregnant and that her
doctor had prescribed eight days of bed
rest requiring her to miss work. She was
terminated the day that she returned to
work following her leave, being told that
UCP did not feel she was capable of
handling the job. Although UCP later
claimed that the plaintiff had been terminated for falsifying her time records, the
plaintiff presented evidence that UCP
had failed to conduct a good faith investigation of the alleged timecard violation. And there was also evidence that
the plaintiff’s supervisor had admitted
having concerns about the ability of
pregnant employees to care for clients.21
Concerning “me too” evidence, the Court
of Appeal held that the trial judge had
improperly disregarded evidence regarding five other employees who variously
declared: (1) they too had been fired
shortly after informing UCP of their pregnancies; (2) they knew of people who
were fired after UCP learned they were
pregnant; (3) they had resigned because the same supervisor who had
fired the plaintiff made their work stressful after learning that they were trying to
become pregnant; or (4) they knew of
occasions when employees cited for
dishonesty were not fired by UCP. These
five employees all worked at the same
facility as the plaintiff; three of the five
had the same direct supervisor as the
plaintiff; and all five worked under the
higher level supervisor who had approved the plaintiff’s discharge.22
Taken together, and in the context of
the plaintiff’s case, the Johnson court
held that the co-workers’ declarations
constituted circumstantial evidence
sufficient to raise a triable issue of
material fact as to the reason for the
plaintiff’s termination.23 “[W]e can say
as a matter of law,” the court wrote, “that
the ‘me too’ evidence ... is per se
admissible under both relevance and
Evidence Code section 352 standards.”
Similarly, the court held, evidence of
comments by the plaintiff’s supervisor
criticizing an employee for wanting to
become pregnant were not mere “stray
remarks” because, in context, the trier
of fact could conclude that the remarks
were relevant on the question of motive.24 The court distinguished the oftcited case of Beyda v City of Los Angeles (1998) 65 CA4th 511, emphasizing
that Beyda did not address whether “me
too” evidence could be admitted under
Evidence Code Section 1101 “to show
intent or motive, for the purpose of
casting doubt on an employer’s stated
reason for an adverse employment action, and thereby creating a triable issue of material fact ...”25
The Implications of Johnson for Both
Employees and Employers. In reversing summary judgment, the
Johnson decision gave great weight to
the fact that plaintiff did not seek to rely
solely on the circumstantial evidence
provided by the co-workers’ declarations, emphasizing that such circumstantial evidence was presented as part
of a larger context.
There are lessons to be learned from
Johnson for both sides. Frequentlyused arguments that “me-too” evidence
is simply inadmissible as hearsay, irrelevant, or unduly prejudicial, should no
longer hold water: it should be clear that
an employee may rely on such circumstantial evidence to raise a triable issue
as to pretext or discriminatory motive
and to defeat summary judgment.
Nonetheless, employers will have an
opportunity to attack the relevancy of
the context within which the employee
seeks to introduce that evidence. And
the trial judge should make explicit
findings on the record explaining his or
her reasoning for admitting or excluding
any such evidence, keeping in mind the
full context of the case.
Plaintiffs attorneys should spend the
necessary time to investigate other
possible “me too” witnesses early on,
and to obtain comprehensive declarations detailing how the third-party witnesses’ testimony is relevant in the
context of their client’s case. The sooner
this occurs, the more thoroughly the
employee can pursue relevant evidence
through discovery. For example, pleading a theory of “pattern and practice”
discrimination early on in the case will
increase the likelihood that the em-7-
ployer will be required to produce statistical evidence addressing this issue
during the discovery process. These
initial steps are vital to having the requisite “me too” evidence available at the
summary judgment stage. In fact, failure to do this leg work could result in
devastating consequences for the employee.
Conclusion. Trial judges may be
tempted to use expediency as a rationale for curtailing the use of “me too”
evidence of discrimination. However, to
do so would be to improperly remove an
essential ingredient from the body of
evidence a plaintiff is entitled to submit
in order to prove pretext. When circumstantial evidence is presented as part of
a larger context, courts have determined that it matters. The Johnson
case provides valuable guidance to trial
judges and parties litigating FEHA discrimination cases and should make the
admissibility of such evidence more
predictable in the future.
(Endnotes)
1. Reeves v Sanders (2000) 120 S Ct
1096, 2108: A “motivating reason” is a
reason that contributed to the decision
to take a certain action, even though
other reasons also may have contributed to the decision. CACI 2507.
2. Guz v Bechtel National, Inc. (2000)
24 C4th 317 at 354-356.
3. Murillo v Rite Stuff Foods, Inc. (1998)
65 CA4th 833, 840 (1998).
4. Mamou v Trendwest Resorts, Inc.
(2008) 165 CA4th 686, 722 (2008).
5. Weil & Brown, Civil Procedure Before
Trial, §10:253 (TRG 2007).
6. Clark v Claremont University Center
and Graduate School (1992) 6 CA4th
639; Mixon v Fair Employment & Housing Com. (1987) 192 CA3d 1306, 1319.
7. CACI 2507.
8. Coghlan v Am. Seafoods Co. LLC (9th
Cir 2005) 413 F.3d 1090, 1100.
9. See e.g. Estes v Dick Smith Ford,
Inc. (8th Cir 1998) 856 F2d 1097 (implicitly overruled on other grounds by Price
Waterhouse v Hopkins (1989) 490 US
228, 237, 242, 244, 259; Riordan v.
Kempiners (7th Cir 1987) 831 F2d 690;
Shattuck v Kinetic Concepts, Inc. (5th
(Cont'd on Page 8, "ME TOO EVIDENCE)
"ME TOO" EVIDENCE
(From Page 7)
Cir 1995) 49 F3d 1106, 1109-1110;
Heyne v Caruso (9th Cir 1995) 69 F3d
1475, 1480 (evidence of other workers
who had been sexually harassed was
not admissible to prove conduct on
particular occasion or as character evidence, but was admissible to prove
employer’s motive or intent in discharging plaintiff).
10. Obrey v Johnson (9th Cir 2005) 400
F3d 691.
11. Id at 697.
12. Estes, supra, 856 F2d 1097.
13. Id. at 1102.
14. Id. at 1104.
15. Id. at 1103.
16. Sprint/United Management Co. v.
Mendelsohn (2008) 128 S Ct 1140. In
Sprint, the U.S. Supreme Court framed
the issue on appeal as follows:
“[W]hether, in an employment discrimination action, the Federal Rules of Evidence require admission of testimony
by nonparties alleging discrimination at
the hands of persons who played no role
in the adverse employment decision
challenged by the plaintiff.” Id. at 1144.
The Court responded that admissibility
“is fact based and depends on many
factors, including how closely related
the evidence is to the plaintiff’s circum-
stances and theory of the case.” Id. at
1147.
17. Id. at 1146-1147.
18. See id.
19. Bihun v AT&T Info Systems Inc.
(1993)13 CA4th 976 (1993).
20. Id. at 987-991.
21. See Johnson, supra,, 173 CA4th
748-753.
22. Id. at 759
23. Id. at 758-59.
24. Id. at 759, fn. 12
25. Id. at 760.
V. James DeSimone is a trial lawyer
and founding partner of Schonbrun
DeSimone Seplow Harris & Hoffman,
LLP, (SDSHH), a civil rights firm with
offices in Venice and Pasadena,
(www.losangelesemploymentlawyer.com).
Mr. DeSimone specializes in both individual and class action employment
cases. He was lead counsel in
Mogilefsky v Silver Pictures, the first
published California decision to recognize that same sex harassment violates FEHA, and he was the lead appellate lawyer in Johnson v UCP, et al,
(discussed above). In 2008 he was a
finalist for CAALA’s Trial Lawyer of the
Year, and in 2009 he was named by the
Daily Journal as one of the Top Ten
Plaintiff Employment Lawyers in California.
Supreeta Sampath is an Associate at
SDSHH whose practice focuses on
employment law, including wrongful termination and wage and hour. Ms.
Sampath was instrumental in preparing
for oral argument in the Johnson v UCP
appeal, and authored the successful
Request for Publication. Prior to practicing law, Ms. Sampath served as the
Director of the Legal Aid Association of
California, in San Francisco. She can
be reached at [email protected],
or (310) 396-0731.
The authors wish to acknowledge Twila
White for tenaciously litigating the underlying case on behalf of Dewandra
Johnson, and for co-counseling the
appeal in Johnson v UCP et al; Michael
Morrison of SDSHH for his advice and
guidance throughout the appeal; and
Rebecca Hamburg, currently NELA’s
Program Director, for taking the lead on
the Appellant’s Reply Brief.
BOOK REVIEW: SCALIA AND GARNER ON MAKING YOUR CASE:
THE ART OF PERSUADING JUDGES
by Daniel U. Smith and Valerie T. McGinty
United States Supreme Court Justice
Antonin Scalia and legal writing guru
Bryan A. Garner have written a compelling guide: Making Your Case: The Art
of Persuading Judges (Thompson/West
2008).
This pithy volume offers a wealth of tips
on argumentation, legal reasoning, briefing, and oral argument. The book is not
only instructive but lively, as the authors
debate their own disagreements on issues such as the purpose of footnotes,
the placement of citations, and the
desirability of the use of contractions.
Principles of Argumentation. Scalia
and Garner give a fresh and memorable
perspective on argumentation, emphasizing the following principles:
Where the standard of decision is in
your favor, “emphasize that point at the
outset ... and keep it before the court
throughout.” Where the standard of decision is against you, “cite a case in
which an appellant met that standard
and compare it to your own.” (The phrase
“standard of decision” refers to the test
that a party must meet to prevail in the
trial court, e.g., “preponderance of the
evidence;” “triable issue” (re summary
judgment); or “clear and convincing evidence (re punitive damages).)
Avoid overstating your case: “Proceed
methodically to show the merits of your
case and the defects of your
opponent’s—and let the abject weakness of the latter speak for itself.”
Be accurate. It goes without saying that
you should “never make a statement
you know to be incorrect.” But more
than that, “never make a statement you
are not certain is correct.”
Lead with your strongest argument.
Take the most easily defensible position—don’t argue that unfavorable cases
should be overruled, but rather that they
should be distinguished.
Directly address any obvious points of
fact or law that are not in your favor and
explain why they are not dispositive.
Failure to do so will result in a weak
argument that “speaks poorly of your
(Cont'd on Page 9, PERSUADING JUDGES)
-8-
PERSUADING JUDGES
(From Page 8)
judgment and thus reduces confidence
in your other points. Fessing up at the
outset ... avoids the impression that
you have tried to sweep these unfavorable factors under the rug” and “demonstrates that, reasonable person that
you are, you have carefully considered
these matters but don’t regard them as
significant.”
“Evoke rather than display indignation”
by “describing the shoddy treatment
your client has received,” and by “dissecting ... calmly and dispassionately”
your opponent’s “feeble and misleading
arguments.”
Invoke not only authority, but also justice and common sense. Help the judge
achieve a result that works for all cases,
(not just yours), and that promotes
sound judicial administration.
Scalia and Garner urge that every brief
state the issue or issues before fully
stating the facts. An issue statement is
required in federal appellate briefs, and
it is good practice in state court because the reader will better understand
the facts if he or she first knows the
issue to which each fact relates.
Legal Reasoning. Scalia and Garner
urge lawyers to analyze cases “syllogistically,” i.e., (1) major premise, (often the rule of law); (2) minor premise,
(often a factual claim); and (3) conclusion. They give this example:
possibly to two or to all three).
Briefing. Scalia and Garner’s premise
is that “the overarching objective of a
brief is to make the court’s job easier.”
To facilitate the “court’s job,” lawyers
need to clearly present (1) the issues,
and (2) the information that will resolve
those issues. To this end, Scalia and
Garner offer several useful tips.
They urge creating outlines for every
brief, warning that eliminating this step
is a “false economy.” They recommend
sign-posting arguments with topic sentences and captioned section headings. “Headings are most effective,” they
emphasize, “if they’re full sentences
announcing not just the topic but your
position on the topic.” They give the
following examples:
Ineffective: “I. Statute of Limitations”
Effective: “I. The Statute of Limitations
Was Tolled While the Plaintiff
Suffered from Amnesia.”
Clarity should be valued above all. This
means that “the same word should be
used to refer to a particular key concept, even if elegance of style would
avoid such repetition in favor of various
synonyms.” It also means “shunning
puffed-up, legalistic language,” and writing instead in a “blunt, straightforward
manner.”
Conclusion: Plaintiff is entitled to
recover.
Refute in advance the argument you
anticipate from your adversary, Scalia
and Garner urge. Anticipatory refutation
dispels immediately the obvious objections to your argument that would occur
to an attentive reader. Omitting anticipatory refutation allows obvious objections to linger and implies that you fear
those objections. Moreover, anticipatory refutation puts your adversary on
the defensive because you have framed
the opposing argument in your own
terms. Finally, by discussing the case
from your adversary’s point of view, you
appear “even-handed and trustworthy.”
According to Scalia and Garner, such
syllogistic analysis reveals whether the
dispute is over the rule of law, the facts,
or how the law applies to the facts, (or
For an opening brief, Scalia and Garner
recommend putting anticipatory refutation in the middle, to keep the central
focus on your affirmative points. But in
•
Major premise: Prisoners may recover for harm caused by the state’s
deliberate indifference to their serious
medical needs.
•
Minor premise: Prison guards ignored the plaintiff prisoner’s complaints
of acute abdominal pain for 48 hours,
resulting in a burst appendix.
•
-9-
a responding brief, if your opponent has
said something that seems compelling
and dispositive, “you must quickly demolish that position to make space for
your own argument.”
On the question of how a responding
brief should sequence the arguments,
Scalia and Garner suggest generally
“placing your stronger points first and
stamping your own order upon the case,”
especially where the opposing brief is “a
mess.” All things being equal, however,
they recommend addressing the issues in the same order followed by your
opponent, for the reader's benefit.
Reply briefs should not merely refute
your adversary’s claims, but should
also put your points in the context of
your affirmative arguments, thus relieving the reader of the need to consult
prior briefs. Supplying the context also
allows the judge to read the Reply Brief
first, (as often occurs).
Italics should be used for emphasis
“sparingly,” and bold face type should
be used only for headings and not in the
text. Scalia and Garner discourage underlining as a “crude throwback.”
They urge brevity. “Judges often associate the brevity of the brief with the
quality of the lawyer.” Brevity “requires
ruthlessness in wringing out of your
argument everything that doesn’t substantially further your case: entire points
that prove to be weak; paragraphs or
sentences that are unnecessary elaboration; words and phrases that add
nothing but length.”
Points of Disagreement Between the
Authors. Scalia and Garner present a
few lively disagreements:
Substantive Footnotes: Garner abhors
substantive footnotes because they
detract from the train of thought in the
text, and because some judges don’t
read them. “If the point is not important
enough to be in the text,” Garner believes, “it’s not important enough to be
in the brief.”
(Cont'd on Page 10, PERSUADING JUDGES)
PERSUADING JUDGES
(From Page 9)
Although Scalia agrees that “nothing
really important to the decision should
be in a footnote,” he values them for
secondary information, for refuting an
opponent’s weak argument, and for refuting an argument your opponent did
not think of but the court might.
Citations in Text or Footnotes? Garner
advocates putting everything but the
case name in a footnote, arguing that
this helps the writer create a clear train
of thought and helps the reader by
eliminating the need to skip over citations. Scalia, on the other hand, thinks
that putting cites in footnotes “forces
the eye to bounce repeatedly from text
to footnote.” This difficulty has led California appellate judges and court staff to
uniformly reject Garner’s suggestion,
which Scalia also rejects because it is
novel. “Judges are uncomfortable with
change,” he says. He does endorse one
technique for reducing “citation clutter,”
however—removing citations from the
middle of a sentence. “That is easy to
achieve,” he says, “and is certain not to
offend.”
Contractions. Garner advocates the
occasional use of contractions to improve readability, to reflect modern writing style, and to close the distance
between writer and reader by a suggestion of informality. Scalia disagrees,
arguing that contractions provide no
substantive benefit and might “affront
the dignity of the court... There is something to be lost and nothing whatever to
be gained.”
No volume on legal writing and argument of which we are aware compares
to Making Your Case with respect to the
value of the authors’ opinions and suggestions, nor from the point of view of
the authors’ experience and credibility.
If you want just one such treatise to be
guided by, this is certainly it.
Daniel U. Smith is a Certified Appellate Specialist, (State Bar Board of
Legal Specialization). His office in
Kentfield represents plaintiffs on appeal. He belongs to CAOC’s Amicus
Curiae Committee, representing that
organization before the California Supreme Court. Mr. Smith teaches a seminar, “Persuasive Legal Writing,” for the
Continuing Education of the Bar and for
law firms throughout California. In 2003,
the Consumer Attorneys Association of
Los Angeles selected him Appellate
Lawyer of the Year.
Valerie T. McGinty is an Associate in
the Law Offices of Daniel U. Smith. She
was previously an Associate at Lawless
& Lawless, and externed for the Hon.
John Munter of the San Francisco
County Superior Court, and for the Hon.
J. Anthony Kline, Presiding Justice of
Court of Appeal, First Appellate District, Division Two.
DECISIONS
(From Page 2)
(9th Cir. 2006) (en banc)...
“Pursuant to Buckeye, Nagrampa,
Ticknor [v Choice Hotels Int’l, Inc., 265
F.3d 931 (9th Cir. 2001)], and Davis [v
O’Melveny & Myers, 485 F.3d 1066 (9th
Cir. 2007)], we conclude that the question whether the Agreement was unconscionable was for the court to decide.
The district court erred in concluding
that unconscionability was an issue to
be decided by the arbitrator...
“[W]here, as here, a party challenges
an arbitration agreement as unconscionable, and thus asserts that he could
not meaningfully assent to the agreement, the threshold question of unconscionability is for the court... [¶] We
hold that where ... an arbitration agreement delegates the question of the
arbitration agreement’s validity to the
arbitrator, a dispute as to whether the
agreement to arbitrate arbitrability is
itself enforceable is nonetheless for the
court to decide as a threshold matter.
“We next address the district court’s
alternate holding that the Agreement to
Arbitrate was not unconscionable... The
agreement in this case was formed in
Nevada... Although ... three [unconscionability] issues were argued to the
district court below, that court only
addressed one of them, determining
that the provision regarding costs was
not substantively unconscionable.
“The district court did not err in determining that the cost provision was not
substantively unconscionable... [¶]
Jackson presented no evidence suggesting prohibitive costs would actually
be incurred and so did not meet his
burden of establishing the fee-sharing
provision and silence regarding potentially significant arbitration costs render
the arbitration agreement unconscionable... [¶] Furthermore..., the agreement itself effectively states that the
fee-sharing provision is inapplicable if it
is unconscionable under Nevada law...
“However, the district court did not address Jackson’s remaining arguments
about substantive unconscionability,
namely, that the Agreement’s coverage
and discovery provisions were one-sided
-10-
and unfairly favored the Employer. Therefore, we must vacate the judgment and
remand for the district court to complete
its analysis of substantive unconscionability.”
In dissent, Judge Hall cited First Options of Chicago, Inc. v Kaplan (1995)
514 US 938 for the proposition that
“[a]bsent some ambiguity in the agreement, it is the language of the contract
that defines the scope of disputes subject to arbitration.” “In light of this,” Hall
wrote, “I believe the question of the
arbitration agreement’s validity should
have gone to the arbitrator, as the parties ‘clearly and unmistakably provide[d]’
in their agreement.”
For plaintiff: Ian E. Silverberg, Reno.
For defendant: Michael T. Garone, Portland.
Ninth Circuit, 9/9/09; opinion by Thomas joined by Nelson; dissenting
opinion by Hall; 2009 DAR 13514,
2009 WL 2871247.
DECISIONS
(From Page 10)
JURY VERDICT FOR PLAINTIFF
ON RETALIATION CLAIM WAS
ADEQUATELY SUPPORTED BY
PLAINTIFF’S OWN
CONTRADICTED TESTIMONY THAT
HE HAD COMPLAINED OF
HOSTILE QUESTIONING
CONCERNING HIS MUSLIM
RELIGION
EEOC v GO DADDY SOFTWARE, INC.
In connection with a verdict for the
plaintiff returned by a federal district
court jury in Arizona on a Title VII
retaliation claim, a Ninth Circuit panel,
in a September 10 opinion by W.
Fletcher, affirmed the denial of defense
motions for judgment as a matter of law
and, in the alternative, for a new trial.
The jury’s conclusion that the plaintiff
had engaged in protected activity, the
Ninth Circuit held, was adequately supported by his testimony that he had
complained to a manager about supervisors’ apparently hostile questions concerning his national origin (Moroccan)
and religion (Muslim). Although the
manager denied that such complaints
were ever made, the court held that
“Bouamama’s testimony was adequate
to support the jury’s conclusion that
Bouamama was more credible on this
point, even though it might have been
‘possible to draw a contrary conclusion.’ (Cite omitted.)”
The Ninth Circuit also rejected the
defendant’s argument that the conduct
to which Bouamama had been subjected was limited to “offhand comments” which he could not reasonably
have believed were sufficiently serious
to constitute Title VII violations. “‘Looking at all the circumstances,’” the court
emphasized, “requires us to take note
not only of all the comments of which
Bouamama complained but also of the
context in which they were made...
Bouamama also testified that [one supervisor] ... made a comment near his
cubicle, ‘The Muslims need to die. The
bastard Muslims need to die.’ However,
he testified that he did not complain on
that occasion because ‘[t]here’s a culture in Go Daddy. You complain you get
fired.’”
Concerning causation, the court held
that “...a reasonable jury ... could have
concluded that Slezak [the manager to
whom the plaintiff made his complaint]
had ample opportunities to inform
Franklin [who made the discharge decision] of Bouamama’s complaint and
had, in fact, done so.”
In dissent, Judge Noonan insisted that
no reasonable person in Bouamama’s
position could have believed that he was
reporting and opposing a pattern of
discrimination as opposed to merely
“offhand comments” and “isolated incidents.”
For EEOC: James M. Tucker, Washington DC.
For defendant: Fred W. Alvarez, Michael
J. Nader, Wilson Sonsini, Palo Alto;
Lawrence Kasten, Lewis & Roca, Phoenix.
Ninth Circuit, 9/10/09; opinion by W.
Fletcher joined by Tashima; dissenting opinion by Noonan; 2009 DAR
13590, 2009 WL 2882839.
TITLE VII SEX DISCRIMINATION
PLAINTIFF INTRODUCED “MINIMAL”
EVIDENCE NECESSARY TO
SURVIVE SUMMARY JUDGMENT
UNDER McDONNELL DOUGLAS
FRAMEWORK
NICHOLSON v HYANNIS AIR SERVICE, INC. In a September 8 opinion by
Reinhardt, the Ninth Circuit reversed
summary judgment entered by the district court, (D Guam), on a Title VII sex
discrimination claim brought by a female airline pilot who alleged that she
had been unfairly disciplined. The Ninth
Circuit wrote in part as follows:
“Tiffany Anne Nicholson alleges that her
former employer Cape Air discriminated
against her on account of her sex when
it suspended her from flying the twopilot ATR 42 airplane on Cape Air’s
Guam and Micronesia routes. The district court granted Cape Air’s motion for
summary judgment, finding that
Nicholson could not establish a prima
facie case of discrimination, nor that
Cape Air’s explanation for its disciplin-11-
ary action was a pretext for discrimination... We reverse.
“Nicholson alleges that ... complaints
about her CRM [crew resource management] skills leading to her discipline
and the decision to remove her from the
ATR 42 [two-pilot airplane] program resulted from her being the only woman in
the program, rather than from her alleged CRM deficiencies [involving lack
of communication and cooperation
skills]. According to Nicholson, she
was removed from the ATR 42 program
because she “was the only female in an
all male situation and ... the guys didn’t
think that they would be able to do what
they wanted with a girl hanging around.”
She claims that Cape Air’s actual purpose in disciplining her was to remove
an object of sexual competition from its
Guam service.
“Cape Air alleges, and the district court
held, that Nicholson cannot establish a
prima facie case under McDonnell Douglas because her CRM deficiencies
rendered her unqualified to fly ATR 42s.
Nicholson claims that her CRM skills
were sufficient, and that, regardless,
CRM skills are a subjective job qualification that should not be considered at
the first phase of the McDonnell Douglas analysis. Because Nicholson is
correct that CRM skills are a subjective
qualification that cannot be considered
in evaluating a plaintiff’s qualifications
at the first step of McDonnell Douglas,
the district court erred in finding that
Nicholson was not qualified... [¶] Considering only the objective criteria required to perform as an ATR 42 pilot,
Nicholson was clearly qualified.
“To establish the fourth element of her
prima facie case..., Nicholson points to
two male pilots who failed portions of
their training at Flight Safety and were
then given additional training and a second opportunity to pass... Cape Air
responds that, because the deficiencies these two pilots exhibited were
technical rather than CRM-related, neither was similarly situated to Nicholson...
DECISIONS
(From Page 11)
“Although CRM skills are different from
other skills required of pilots, any distinction ... is not material for purposes of
determining whether the male pilots
were ‘similarly situated’ to Nicholson.
The CRM skills allegedly lacking in
Nicholson and the technical piloting
skills lacking in the male pilots each
were skills required of pilots and necessary for safe flying, and Cape Air treated
both sets of skills as ones that could be
acquired and improved upon through
training....
“Construing the evidence in Nicholson’s
favor, the male pilots received comprehensive remedial training..., while
Nicholson received no instruction and
little, if any, constructive criticism prior
to being suspended... This qualitative
difference in treatment provides sufficient evidence that Nicholson was
treated less favorably than similarly situated male pilots...
“Cape Air alleges that Nicholson was
suspended from the ATR program due
to her CRM deficiencies. Cape Air’s
allegation [of this legitimate, nondiscriminatory reason] is supported by
substantial evidence... Cape Air has
thus met its burden of production at
step two.
“To avoid summary judgment at this
step..., the plaintiff must only demonstrate that there is a genuine issue of
material fact regarding pretext. The
amount of evidence required to do so is
minimal... Where the evidence, direct
or circumstantial, consists of more than
the McDonnell Douglas presumption, a
factual question will almost always exist with respect to any claim of a nondiscriminatory reason. McGinest v. GTE
Serv. Corp., 360 F.3d 1103, 1124 (9th
Cir. 2004)...
“Nicholson has met her minimal burden
at step three. First, irregularities in
Nicholson’s disciplinary proceedings
provide some evidence that Cape Air
had a discriminatory motive...
“Cape Air’s knowledge ... of the rumors
about [Nicholson’s prior relationships
with two male pilots] provides additional
evidence that her employer, in
Nicholson’s words, ‘wanted to remove
an object of sexual competition, and
therefore, discord, from the pilot group
on Guam...
“Finally, the evidence introduced by
Nicholson to establish her prima facie
case also provides evidence of pretext... Cape Air’s failure to treat
Nicholson in the same manner that it
treated similarly deficient male pilots
provides some evidence that Cape Air
disciplined her because of her sex and
not because of her alleged CRM deficiencies...
“In employment discrimination cases
brought under the McDonnell Douglas
framework, ‘[w]e require very little evidence to survive summary judgment
precisely because the ultimate question is one that can only be resolved
through a searching inquiry—one that
is most appropriately conducted by the
fact-finder, upon a full record.’ SischoNownejad v. Merced Com’ty College
Dist., 934 F.2d 1104, 1111 (9th Cir.
1991). Because Nicholson introduced
the minimal evidence necessary..., the
district court’s grant of summary judgment to Cape Air was improper.
“Nicholson’s arguments on appeal rely
in part upon evidence that was not filed
with the district court—deposition excerpts that were attached to Nicholson’s
proposed surreply. Nicholson did not
appeal the district court’s rejection of
the surreply. However, she nonetheless
included five pages from these deposition excerpts in her Excerpts of Record
... [thus] violat[ing] Fed. R. App. P.
10(a)(1)...
“As required by Rule 10(a)(1), we disregard all arguments that depend upon
her improperly included material... However, monetary sanctions are not warranted. Nicholson included only five
improper pages, and the arguments
based on those pages are peripheral to
the primary issues on appeal. The consequences of Nicholson’s violation are
too minimal to justify monetary sanctions.”
For plaintiff: Phillip Torres, Hagatna,
Guam.
-12-
For defendant: David Ledger, Elyze J.
McDonald, Hagatna, Guam.
Reinhardt joined by Brunetti and
Thomas; 2009 DAR 13340, 2009 WL
2857198.
OBAMA ANNOUNCES
NOMINATION OF
GEORGETOWN
PROFESSOR CHAI
FELDBLUM AS EEOC
COMMISSIONER
On September 14, President Obama
announced his intent to nominate for
the position of EEOC Commissioner
Georgetown University Law Professor
Chai R. Feldblum, who would become
the Commission’s first openly lesbian
or gay member.
After receiving her B.A. from Barnard
and her J.D. from Harvard, Feldblum
served as a law clerk for First Circuit
Court of Appeals Judge Frank M. Coffin,
and for Supreme Court Justice Harry A.
Blackmun. She has been a leading
advocate and scholar in the areas of
disability rights, health and welfare
rights, LGBT rights, and workplace issues. She previously served as Legislative Counsel to the ACLU’s AIDS Project,
and played a leading role in the drafting
and negotiating of both the ADA and the
ADA Amendments Act of 2008. She
has also helped draft and negotiate the
Employment Nondiscrimination Act and
various medical privacy bills and regulations. As Co-Director of Workplace Flexibility 2010, Professor Feldblum has
worked to advance flexible workplaces
in ways that work for both employees
and employers. She is the author of
numerous articles and book chapters
on sexuality, morality and the law, disability law, and legislative lawyering.
(For further information and a bibliography
of
her
writings,
see
www.georgetown.edu.)
DECISIONS
(From Page 12)
ERISA PLAN ADMINISTRATOR
WAS IMPROPERLY MOTIVATED
BY CONFLICT OF INTEREST IN
TERMINATING DISABILITY
BENEFITS
MONTOUR v HARTFORD LIFE & ACCIDENT INSURANCE CO. “This case,”
a Ninth Circuit panel wrote in a September 14 opinion by Clifton, “presents the
question of how a district court should
apply the abuse of discretion standard
when reviewing a decision by the administrator of an employee benefits plan
governed by [ERISA], when that administrator has a conflict of interest. We
conclude that a reviewing court must
take into account the conflict and that
this necessarily entails a more complex application of the abuse of discretion standard. Specifically, a modicum
of evidence in the record supporting the
administrator’s decision will not alone
suffice in the face of such a conflict,
since this more traditional application of
the abuse of discretion standard allows
no room for weighing the extent to which
the administrator’s decision may have
been motivated by improper considerations.
“Robert Montour appeals the [Central
District’s] order granting summary judgment in favor of Hartford Life and Accident Insurance Company in his action
challenging Hartford’s decision to terminate his long-term disability benefits
as an abuse of discretion. We reverse
and, applying the proper standard of
review to the facts of this case, conclude that Hartford abused its discretion because its conflict of interest too
heavily influenced its termination decision. Accordingly, we remand to the
district court for an order reinstating
Montour’s long-term disability benefits.
“In the absence of a conflict, judicial
review ... involves a straightforward application of the abuse of discretion standard... [¶] Commonly, however, the
same entity that funds an ERISA benefits plan also evaluates claims, as is
the case here... Under these circumstances, the plan administrator faces a
structural conflict of interest: since it is
also the insurer, benefits are paid out of
the administrator’s own pocket, so by
denying benefits, the administrator retains money for itself...
“[T]he court must consider numerous
case-specific factors... See MetLife [Ins.
Co. v Glenn (2008) 128 S Ct 2343]
(describing the garden variety ‘combination-of-factors method of review’).
Under this rubric, the extent to which a
conflict of interest appears to have motivated an administrator’s decision is
one among potentially many relevant
factors that must be considered. Other
factors that frequently arise in the ERISA
context include the quality and quantity
of the medical evidence, whether the
plan administrator subjected the claimant to an in-person medical evaluation
or relied instead on a paper review...,
whether the administrator provided its
independent experts ‘with all the relevant evidence[,]’ and whether the administrator considered a contrary SSA
disability determination, if any.
“Weighing all of the foregoing factors
together, we conclude that Hartford’s
conflict of interest improperly motivated
its decision to terminate Montour’s benefits. This constituted an abuse of its
administrative discretion. [¶] We ... remand to the district court to enter summary judgment in favor of Montour and
to order the reinstatement of long-term
disability benefits...”
For plaintiff: Bradley P. Knypstra, Irvine.
For defendant: Bruce D. Celebrezze,
Dennis G. Rolstad, Erin A. Cornell,
Sedgwick, Detert, Moran & Arnold LLP,
San Francisco.
Clifton joined by Smith and W.
Fletcher; 2009 DAR 13673, 2009 WL
2914516.
ERISA PLAN’S SUMMARY PLAN
DESCRIPTION CONTAINED
CLEAR-ENOUGH STATEMENT OF
ONE-YEAR LIMITATIONS PERIOD
FOR FILING ERISA CLAIM IN
FEDERAL COURT
SCHARFF v RAYTHEON CO. SHORT
TERM DISABILITY PLAN. “Plaintiff
-13-
Donna Scharff worked for the Raytheon
Company,” the Ninth Circuit wrote in a
September 9 opinion by Graber. “The
Raytheon Company employees’ contributions ... and the Company jointly fund
[Raytheon’s] Short Term Disability
Plan...
“The Plan[] contained a contractual oneyear statute of limitations. After MetLife
denied her claim for Short Term Plan
benefits, Plaintiff brought suit in federal
court seeking benefits..., but she filed
the action twenty days after the oneyear contractual statute of limitations
had lapsed. The district court dismissed
“EMPLOYMENT
DISCRIMINATION
PLAINTIFFS IN FEDERAL
COURT: FROM BAD TO
WORSE?”
A recent article by Cornell University
Professors of Law Kevin M. Clermont
and Stewart J. Schwab in the Harvard
Law and Policy Review, (vol. 3, no. 1),
updates the authors’ 2004 survey “How
Employment Discrimination Plaintiffs
Fare in Federal Court,” (1 J. Empirical
Legal Stud. 429 (2004). The introduction to the 2009 article, (which is available at www.hlpronline.com), includes
the following summary:
“[W]e should disclose at the outset our
concluding view that results in the federal courts disfavor employment discrimination plaintiffs, who are now forswearing use of those courts. Our study
of the federal district courts shows
employment discrimination plaintiffs
bring many fewer cases now. Jobs
cases proceed and terminate less favorably for plaintiffs than other kinds of
cases. Plaintiffs who appeal their losses
or face appeal of their victories again
fare remarkably poorly in the circuit
courts. The fear of judicial bias at both
the lower and the appellate court levels
may be discouraging potential employment discrimination plaintiffs from seeking relief in the federal courts.”
DECISIONS
(From Page 13)
the action as untimely. We hold that
even if the doctrine of ‘reasonable expectations’ applied here, the one-year
statute of limitations met its requirements and also met the statutory and
regulatory standards for disclosure. We
decline to import into federal common
law a California regulation requiring insurers to inform claimants expressly of
statutes of limitations that may bar their
claims. Accordingly, we affirm the judgment dismissing the action.”
In dissent, Judge Pregerson wrote in
part as follows: “I do not think that an
average plan participant could successfully navigate through Raytheon’s labyrinthine Summary Plan Description. In
my view, the Summary Plan Description bounces a reader between important provisions ... in a way that makes
it all too easy to miss the one-year
deadline for filing a claim under ERISA
in federal court. First, I believe the Summary Plan Description at issue does
not meet the statutory and regulatory
requirements governing employee benefit plan disclosures. Those disclosures
are required to be ‘written in a manner
calculated to be understood by the
average plan participant.’ 29 U.S.C. §
1022(a) (emphasis added). Second,
even if those statutory and regulatory
requirements were met, we have already applied the doctrine of reasonable expectations to self-funded ERISA
plans [in Winters v Costco Wholesale
Corp., 49 F3d 550 (9th Cir 1995)], so I
would hold that the one-year deadline
here is unenforceable because it was
not set forth in a clear, plain and conspicuous statement in the plan.”
For plaintiff: Peter S. Sessions and Lisa
S. Kantor, Northridge.
For defendant: Ariadne Staples, MetLife,
Long Island City, NY; Robert K. Renner,
Barger & Wolen LLP, Irvine.
Graber joined by Wardlaw; dissenting opinion by Pregerson; 2009 DAR
13533, 2009 WL 2871229.
UNPUBLISHED
CALIFORNIA COURT OF
APPEAL DECISIONS
FIRST DISTRICT AFFIRMS
JUDGMENT ON JURY VERDICT
FOR PLAINTIFF ON FAILURE-TOACCOMMODATE CLAIM
A. M. v ALBERTSONS, LLC. In an
unpublished opinion filed on September18, the First District, Division Four,
affirmed a judgment on a jury verdict for
the plaintiff on a FEHA claim for failure
to accommodate, and awards totaling
$200,000, ($12,000 for past lost wages,
$40,000 in future medical expenses,
and $148,000 for past emotional distress).
The plaintiff, an immigrant from El Salvador, needed frequent restroom breaks
from her work as a supermarket checker
as a result of cancer treatment that had
affected her salivary glands and required her to drink water constantly.
When she returned to work following the
cancer treatment, she explained to
managers what she needed and was
told that the frequent breaks would not
be a problem, and for approximately a
year after her return to work she was
regularly permitted to ask co-workers to
take her place when necessary.
On February 11, 2005, however, a new
manager, unaware of the accommodation the plaintiff had negotiated, refused
to permit her to take a needed restroom
break, with the result that the plaintiff
urinated while standing at her
checkstand, wetting herself with urine
and menstrual blood. She left work
sobbing and with suicidal thoughts, and
continued thereafter to be listless, withdrawn, and sleepless. Soon after the
incident, she left her employment with
Albertsons. She tried to return to work
in May of 2005, but the store was unable
to offer her a schedule that allowed her
to continue to attend therapy meetings.
(The jury rejected the plaintiff’s claim
that Albertsons failed to engage in an
interactive process at this point.) Eventually, the plaintiff did return to work at
an Albertsons store, and at the time of
-14-
trial she was regularly receiving restroom
breaks whenever she asked for them.
The jury heard evidence of the plaintiff’s
susceptibility to emotional distress. Her
father was abusive, and she grew up
during a period of war in El Salvador. Her
cancer treatment had been difficult and
stressful, and she had once been robbed
at gunpoint and physically assaulted.
She had a prior history of depression,
and the incident at work led to depression, sleeplessness, an obsession with
cleanliness, and thoughts of suicide.
Her brother had died unexpectedly soon
after the incident at work. An expert in
psychological injury and treatment told
the jury that the plaintiff suffered from
posttraumatic stress disorder.
The Court of Appeal summarized in part
as follows the defendant’s unsuccessful arguments on appeal and its conclusions:
“First, Albertsons contends that because there was no actionable failure to
accommodate A. M., the trial court
improperly denied its motion for nonsuit... It asserts that the February 2005
incident must be viewed in the context
of many months during which
Albertsons did accommodate A. M.’s
disability. At trial, Albertsons’s primary
theory of defense was that ... the February 2005 incident occurred because
A. M. did not simply leave her
checkstand to use the restroom or at
least mention to Sampson [the new
manager] that she had been granted an
accommodation...
“Albertsons takes a broad view of the
failure to accommodate, arguing that A.
M. failed to continue the interactive
process by notifying Sampson of her
disability and of management’s granting of the agreed-upon accommodation. Acceptance of this argument would
require us to blur the distinctions between these two different violations...
[¶] None of the legal authorities that
Albertsons cites persuade us that the
legislature intended that after a reasonable accommodation is granted, the
interactive process continued to apply
in a failure to accommodate context...
DIVERSITY FELLOWS
(From Page 1)
at a client demand letter, they encouraged me to submit work that was not
only legally water-tight, but also in a
voice that was uniquely my own. I didn’t
have to think, talk, and act like some
kind of caricatured lawyer that law
schools seem to prize. I just have to
think, talk, and act like myself.
ing confidence and some grasp of the
substantive law and the policies behind
it. On the other hand, there were many
areas of employment law with which I
had no prior experience, such as pregnancy discrimination and military leave,
and I was continually challenged this
past summer.
summer at Minami Tamaki than I could
dream of learning in any law school
classroom. Minami Tamaki is a minority-owned law firm with a diverse staff of
extremely bright, charismatic, and
skilled attorneys who work with great
integrity for justice, equality, and community.
“That lesson has re-inspired me, and I’ll
go into my last year with a much clearer
vision of how I want to serve my community.”
“I found the summer especially rewarding because I was able to work with
clients directly— accompanying Sarah
when she conducted intake interviews,
and speaking with clients and potential
witnesses on my own to gather information and assist the attorneys in trial
preparation. I was able to see the work
come alive, because I saw the very real
impact we have on our clients as individuals. Getting to know our clients’
personalities and struggles did an immense amount to enrich the experience, and motivated me to produce the
best work of which I was capable.
“As a summer law clerk with the employment law group, I worked closely
with Partners Jack Lee and Brad
Yamauchi; Senior Attorney John Ota;
and Associates Lisa Charbonneau,
Bethany Caracuzzo, Alex Cleghorn,
and Sean Tamura-Sato. Lisa
Charbonneau and Seth Rosenberg, who
run the summer clerk program, made
sure that the law clerks received a
broad range of meaningful assignments
and experiences. I was able to draft
sections of motions, discovery outlines,
and deposition outlines; to attend depositions, oral arguments, and client consultations; and to learn directly from
Jack Lee and Brad Yamauchi, who
have decades of experience doing plaintiffs-side employment work.
· · ·
CITADELLE PRIAGULA. “I am very
appreciative of my CELA Diversity Fellowship and the opportunity it provided
to do civil rights work this summer at the
Schlehr Law Firm. The experience has
strongly reinforced my interest in continuing to work in the area of employment discrimination and civil rights generally.
“That the summer’s twelve weeks
seemed to fly by is a testament, I think,
to how much I enjoyed my work, and to
how necessary employee advocates
are at this moment in time. It is particularly exciting to be part of this field in a
time of intense national debate spurred
by such controversial developments as
the Supreme Court’s deplorable holding
in Ricci v New Haven.
“I particularly enjoyed the opportunity I
was given this summer to engage in
some very substantive civil rights work.
The attorneys I worked with fostered a
culture in which I and the other law clerk
were able to take ownership of the work
we did on cases—collecting information, drafting complaints and motions,
propounding and responding to discovery requests. At the same time, we
were able to ask questions when we
were unsure of what we were doing, and
to improve our legal analysis, research,
and writing skills through the feedback
we received.
“My experience may have differed slightly
from that of other CELA Diversity Fellows because I had worked at the EEOC
the summer following my 1L year, gain-
“I came to law school (UCLA) with the
desire to become a civil rights attorney,
and discovered this summer that I find
employment discrimination cases particularly compelling, involving as they
do the everyday lives and struggles of
peoples whose lives and circumstances
have been changed, sometimes irreparably, by the actions of their employers.
The diligence and dedication of the attorneys I got to know this summer has
been a singular inspiration.”
· · ·
LAURA WEITZMAN. “This past summer, with CELA’s support, I landed a
dream job. Now, as a third-year student
at Boalt Hall, I remain dedicated to
promoting, defending, and expanding
workers’ rights.
“Before law school, at a worker center in
New Jersey, I prepared a Spanish translation of a health and safety curriculum
that was used by members and staff to
organize and train 150 day laborers.
Witnessing how dramatically this legal
training empowered the workers was
my inspiration to pursue my own legal
education.
“I learned more as a law clerk this
-15-
“In addition to my experience with the
employment law group, I had the opportunity to learn from Dale Minami, who
practices plaintiffs-side personal injury
and entertainment law, and from Don
Tamaki, who does commercial and business litigation. Dale met with us after
work to share valuable advice, captivate
us with war stories, and teach us about
the business of law. Don presented us
with lunch seminars on the fundamentals of negotiation, business law, and
dealing with the news media in high
profile cases. Both Don and Dale have
a gift for organizing years of experience
into priceless words of wisdom.
“As a law clerk at Minami Tamaki, I was
privileged to receive litigation training,
education, and mentorship that will help
greatly in preparing me for a career in
plaintiffs-side employment work. Thank
you Minami Tamaki and CELA for a
fantastic summer!”
DECISIONS
(From Page 14)
“Albertsons also argues that its February 2005 failure to accommodate was
trivial... In essence, Albertsons reasons that the FEHA allows for at least
one failure to accommodate, if a pattern
of successful accommodation also is
shown... [¶] In our view, to adopt this
interpretation ... would be inconsistent
with the FEHA...
burden of proof of the issue, we are
satisfied that any reasonable jury would
have found that A. M. was an unusually
susceptible plaintiff entitled to greater
damages than a normally healthy person. Thus, we conclude that the trial
court properly denied Albertsons’s motion for new trial. [¶] The judgment is
affirmed.
“On appeal, Albertsons asserts that, for
the same reason that the trial court
erred in its interpretation of the FEHA
resulting in the denial of its motion for
nonsuit, the trial court erroneously rejected its proposed jury instructions
[involving a continued “interactive process” obligation on the part of the plaintiff]... As we have concluded that the
trial court correctly interpreted FEHA
when it properly denied Albertsons’s
motion for nonsuit, we necessarily find
that it properly refused to give proposed
instructions that were consistent with
the employer’s flawed interpretation of
the underlying law.
For plaintiff: Leslie Levy and Jean Hyams,
Boxer & Gerson; Ellen Lake.
For defendant: Steven R. Blackburn,
Leslie J. Mann, Epstein, Becker &
Green.
First Dist Div Four, 9/18/09; opinion
by Reardon with Ruvolo and
Sepulveda concurring; 2009 WL
“Lastly, Albertsons urges us to find that
the trial court improperly instructed the
jury that A. M. did not bear the burden
of proving whether she was unusually
susceptible to emotional distress injuries... The jury was instructed that it
was required to ‘decide the full amount
of money that will reasonably and fairly
compensate [A. M.] for all damages
caused by the wrongful conduct of
Albertsons even if [A. M.] was more
susceptible to injury than a normally
healthy person...’ (See CACI No. 3928.)
“On appeal, Albertsons again argues
that the trial court’s comment during
argument that A. M. did not bear the
burden of proving that she was an unusually susceptible plaintiff was incorrect as a matter of law... It reasons that
unless she proved by a preponderance
of evidence that she was an unusually
susceptible plaintiff, she was not entitled to emotional distress damages
beyond those that could be awarded to
a normally healthy person.
“Assuming arguendo that the trial court
misstated the law, we find that
Albertsons cannot establish any prejudice... [R]egardless of who had the
CALIFORNIA
SUPERIOR COURTS
SAME-SEX PARTNER OF
DECEASED LAPD OFFICER
WAS ENTITLED TO PENSION
BENEFITS EVEN THOUGH
COUPLE HAD NOT COMPLIED
WITH CONFUSING AND
DISCRIMINATORY
DOCUMENTATION
REQUIREMENTS
GERRITSEN v CITY OF LOS ANGELES. On September 15, Los Angeles
County Superior Court Judge Judith C.
Chirlin ruled that Laura Gerritsen, the
same-sex partner of Spree DeSha, the
LAPD officer killed in last year’s
Metrolink crash, is entitled to collect
pension benefits even though the couple
did not submit documentation proving
their union prior to DeSha’s death. The
case is the first in which the Los Angeles Fire and Police Pensions has had to
address the question whether a samesex partner is entitled to a deceased
partner’s pension even though their relationship had not been formally registered.
Gerritsen, also a LAPD officer, filed suit
last December after she received notice
from the city that she could not collect
-16-
survivorship benefits because she and
DeSha had not submitted an affidavit of
domestic partnership to the city before
DeSha died. Of the four classes of
people entitled to survivorship benefits
under the city’s administrative code,
only same-sex partners are required to
file an affidavit during the lifetime of the
person whose benefits are at issue.
Members of other classes—married
couples, children, and dependent parents—can submit documents proving
the relationship after the death of the
relative.
Gerritsen and DeSha had never registered as domestic partners with the
state for fear that registration could lead
to discrimination within the police department. During the two-day bench
trial, Gerritsen’s attorneys introduced
other documents to substantiate the
civil union, including joint bank accounts
and a grant deed for a house they
bought together.
Judge Chirlin rejected the city’s argument that Gerritsen should have known
of the affidavit requirement, and that it
was not responsible for Gerritsen’s failure to understand materials provided to
LAPD officers regarding their benefits.
Judge Chirlin’s minute order characterized the requirements for the paperwork
as confusing, and emphasized that
neither Gerritsen nor DeSha had received training from the city concerning
their pension benefits.
For plaintiff: Lisa L. Maki and Christina
Coleman.
For city: Brian Cheng, Deputy City Attorney.
9/15/09; Judge Judith C. Chirlin; information as reported in Daily Journal, 9/18/09.
NELA NEWS
—On August 10, NELA, along with the
National Employment Law Project
(NELP) and AFL-CIO filed an amicus
brief in Russell v Wells Fargo & Co.,
(No. 4:07-cv-03993 CW), a case pending in the Northern District. The August
18 issue of the organization’s electronic
newsletter @NELA explained the issue
as follows:
“Russell involves one of two potential
classes of technical support workers
who seek backpay and penalties under
the FLSA and state law for Wells Fargo’s
misclassification of them as exempt.
The court is preparing to rule on the
bank’s motion for summary judgment,
and that ruling may have a major impact
on workers nationwide, as well as on
the litigation of FLSA overtime cases
generally. Building off of NELA’s recent
amicus brief in the Seventh Circuit case
Urkinis-Negro v AFPS, and the joint
letter submitted to the DOL requesting
the repeal of an Opinion Letter concerning these issues, NELA’s brief focuses
on the question whether the fluctuating
workweek method of calculating overtime wages can be retroactively applied
in the exemption misclassification context. The brief provides a comprehensive discussion of the application of the
fluctuating workweek in the
misclassification context and explores
the various public policy considerations
involved. We thank all the NELA members who participated in preparing this
brief, including Derek Braziel (TX), Kelly
M. Dermody (CA), Steven G. Zieff (CA),
John T. Mullan (CA), Jahan C. Sagafi
(CA), and Michael Sweeney (NY). In
addition, we thank Catherine Ruckelhaus
and Laura Moskowitz from NELP, and
William Lurye from the AFL-CIO for their
input.” (A September 3, 2008, Northern
District opinion granting plaintiff’s motion for conditional collective action certification appears at 2008 WL 4104212.)
—On September 15, Cliff Palefsky, CoChair of NELA’s Mandatory Arbitration
Task Force, testified before the House
Judiciary Committee’s Subcommittee
on Commercial and Administrative Law.
The subject of the hearing was “Mandatory Binding Arbitration—Is It Fair and
Voluntary?” Also testifying were Rep.
Hank Johnson (D-FL), sponsor of the
House version of the Arbitration Fairness Act (H.R. 1020), Alison Hirschel,
National Consumer Voice for Quality
Long-Term Care; Stuart T. Rossman,
National Consumer Law Center; and
Stephen J. Ware, University of Kansas
School of Law. Cliff’s prepared testimony can be accessed at:
www.judiciary.house.gov/hearings/pdf/
palefsky090915.pdf.
—NELA’s Working for Change agenda
includes advocating for independent and
fair-minded federal judges who are committed to equal justice under law for all
Americans, and who do not place the
interests of employers over the rights of
employees. NELA takes an active role
in assessing candidates nominated to
federal court judgeships, as well as
individuals interested in becoming candidates for district and circuit court
vacancies. The Judicial Nominations
Committee screens candidates, ensuring that nominees have a record of
commitment to the progress made on
civil rights and individual liberties, as
well as a documented commitment to
justice and equality in the workplace. If
you would like more information about
NELA’s Judicial Nominations Program
or are interested in becoming a federal
C O M I N G
judicial candidate; or if you are a candidate for a federal judicial vacancy and
would like to be endorsed by NELA; or
if you know someone whom NELA
should consider endorsing, please contact Rebecca M. Hamburg, NELA Program Director, at [email protected];
or Donna R. Lenhoff, NELA Legislative
and Public Policy Director, at
[email protected].
—NELA announced on September 22
that it has cancelled its contract with
the Hyatt Regency Boston because of
a labor dispute involving the termination
of the hotel’s housekeeping staff. The
hotel was the planned venue for NELA’s
upcoming seminar, “Surviving Summary
Judgment in Employment Litigation,”
on October 23-24, 2009. NELA does
not anticipate cancelling the seminar,
and is working with INMEX, the nonprofit arm of UNITE HERE, which provides socially responsible meeting planning services, to find another Boston
area hotel for the same dates. The new
location will be announced as soon as
arrangements have been made, and
updates will be posted on www.nela.org.
•
E V E N T S
October 1, 2009
October 2-3, 2009
October 8, 2009
NELA FALL LOBBY DAY
Washington DC
October 23-24, 2009
-20-
•
•
Published
Monthly
BULLETIN
UNITED STATES
SUPREME COURT
USSC, 9/30/09, No. 08-974; 2009 WL
247742 (granting certiorari).
USSC WILL REVIEW EIGHTH
CIRCUIT DECISION RE
TIMELINESS OF DISPARATE
IMPACT CLAIM
USSC WILL REVIEW HOLDING
THAT FEE AWARDS UNDER
EAJA BECOME PROPERTY OF
PREVAILING PARTY’S ATTORNEY
WHEN ASSESSED
LEWIS v CITY OF CHICAGO. On
September 30, the USSC announced
a grant of certiorari to review an Eighth
Circuit decision, (528 F3d 488), addressing the timeliness of a Title VII
action by African-American applicants
for city firefighter jobs who asserted a
disparate impact challenge to the city’s
written test. Reversing a judgment in
favor of the applicants, the Eighth Circuit held: (1) the period for filing an
EEOC charge commenced on the date
the tests were scored; (2) the continuing violation doctrine did not apply; and
(3) equitable tolling did not apply.
RATLIFF v ASTRUE. Also on September 30, certiorari was granted in a Fourth
Circuit case in which the Court of Appeals held that fee awards under the
Equal Access to Justice Act, (EAJA),
become the property of the prevailing
party’s attorney when assessed and, in
the present case, could not be used to
offset debts owed to the government by
prevailing claimants for Social Security
Administration benefits. 540 F3d 800.
USSC, 9/30/09, No. 08-1322; 2009 WL
1146426 (granting certiorari).
CELA EXECUTIVE BOARD
ELECTS NEW CHAIRPERSON
Long-time CELA Executive Board
Member Virginia Keeny, of Hadsell,
Stormer, Keeny, Richardson & Renick
(Pasadena), has been selected by the
Board to replace out-going Chair David
Duchrow. At our Annual Conference in
Oakland, the Board and the membership recognized David’s outstanding
service, his dedication to building the
organization, and his calm and reassuring presence through CELA’s rapid
growth over the past two years.
Virginia has been an active member of
CELA for the past twelve years, and
has served on the Education and Diversity Committees for much of that time.
October 2009
Vol. 23, No. 10
OUR 2009 ANNUAL
CONFERENCE: KUDOS
AND REFLECTIONS
FROM MICHELLE REINGLASS (for
the Education Committee): Thanks to
the 305 CELA members, (yep, a record!)
who attended this year’s Conference
and made it such a major success.
(Attendance at the “day before” mock
trial seminar was also a remarkable
188.)
This was just awesome! I am so sorry
for those who were unable to attend due
to such things as illness, (Irv’s “pain in
the neck,”) Final Status Conferences,
and trials, (Yosef Peretz sent his case
to the jury on Friday—keep us posted
on your verdict!), personal emergencies, and just plain old work. I would
like to make a request—this is something that I do: put next year’s Conference on your calendar NOW, and every
time a judge tries to set a trial near that
date, tell him or her that you have an
important conference to attend and ask
to move the date a week or two. (In fact,
I have actually been in trial and told my
judge that I needed Thursday and Friday off for the CELA Conference—
request granted every time!) We can’t
control all scheduling conflicts, but we
can control some of them.
Her law firm is one of the leading employment discrimination firms in Southern California, and Virginia has handled
such precedent-setting cases as
Wysinger v Automobile Club of Southern California (2007) 157 CA4th 413
(reaffirming the requirement that employers engage in an interactive process concerning the accommodation
of employees’ disabilities); Nelson v
I want to give special recognition to
Christina Krasomil, our Administrative
Director, and her staff, including Diane
Sell, (from whom you received conference registration confirmations), and
the many many others who dedicated
their time to helping out with the Conference. You may not fully understand the
amount of “behind the scenes” work
that went into making the Conference
flow pretty much seamlessly: Christina
(Cont'd on Page 5, NEW CHAIR)
(Cont'd on Page 3, ANNUAL CONFERENCE)
DECISIONS
(From Page 1)
CALIFORNIA COURTS
OF APPEAL
FIRST DISTRICT CASTIGATES
DEFENSE TEAM AND TRIAL
COURT IN REVERSING SUMMARY
JUDGMENT ON CLAIMS FOR
NATIONAL ORIGIN HARASSMENT
AND RELATED CAUSES OF
ACTION
NAZIR v UNITED AIRLINES, INC. “Our
Supreme Court has said,” the First
District wrote in an October 9 opinion by
Richman, addressing an appeal from
summary judgment entered by trial judge
Marie S. Wiener of the San Mateo
County Superior Court, “that the purpose of the 1992 and 1994 amendments to the California summary judgment statute was ‘to liberalize the granting of motions for summary judgment.’
(Aguilar v. Atlantic Richfield Co. (2001)
25 Cal.4th 826, 854.) It is no longer a
disfavored remedy...
“At the same time, the summary judgment procedure has become the target
of criticism on a number of fronts. Some
particular criticism is directed to the
procedure in employment litigation, including that it is being abused, especially by deep pocket defendants to
overwhelm less well-funded litigants.
More significantly, it has been said that
courts are sometimes making determinations properly reserved for the
factfinder, sometimes drawing inferences in the employer’s favor, sometimes requiring the employees to essentially prove their case at the summary judgment stage. Here we confront
the poster child for such criticism, in a
case involving what may well be the
most oppressive motion ever presented
to a superior court.
“Plaintiff Iftikhar Nazir ... sued United
Airlines and [supervisor] Peterson ... in
a complaint that ... asserted rather
typical claims grounded on harassment,
discrimination, and retaliation. What
ensued was hardly typical.
“Defendants filed a motion for summary
judgment/summary adjudication, seek-
ing adjudication of 44 issues, most of
which were not proper subjects of adjudication. Defendants’ separate statement was 196 pages long, setting forth
hundreds of facts, many of them not
material—as defendants’ own papers
conceded. And the moving papers concluded with a request for judicial notice
of 174 pages. All told, defendants’ moving papers were 1056 pages.
“Plaintiff’s opposition was almost three
times as long, including an 1894-page
separate statement, papers the trial
court would later disparage as ‘mostly
verbiage,’ a description with which, as
will be seen, we disagree. Curiously, no
such criticism was leveled at defendants’ papers, not even those in reply,
papers that defy description.
“Defendants’ reply included, and properly, their response to plaintiff’s additional disputed facts. Defendants’ reply
also included, not so properly, a 297page ‘Reply Separate Statement’ and
153 pages of ‘Exhibits and Evidence in
Support of Defendants’ Reply.’ And the
reply culminated with 324 pages of
evidentiary objections, consisting of 764
specific objections, 325 of which were
directed to portions of plaintiff’s declaration, many of which objections were
frivolous. In all, defendants filed 1150
pages of reply.
“Five thousand, four hundred, fifteen
pages of material were before the trial
court which, following argument, issued
its order granting summary judgment,
the substance of which order began as
follows:
Upon due consideration ... and having taken the matter under submission, [¶] The Court finds as follows:
[¶] Despite its girth, Plaintiff’s opposition to the separate statement
of material facts is mostly verbiage,
and utterly lacking in the identification and presentation of evidence
demonstrating a disputed issue of
fact.
“There followed several pages of discussion which did not consider the evidence favorably to plaintiff, as the law
-2-
CALIFORNIA
EMPLOYMENT
LAWYERS ASSOCIATION
Virginia Keeny
128 North Fair Oaks Avenue
Pasadena, CA 91103
Tel: (626) 585-9600
Director:
Christina Krasomil
Encino, CA 91436-2412
Tel: (818) 907-7895
FAX: (818) 907-7474
EXECUTIVE BOARD
(Los Angeles)
Dolores Leal
(Los Angeles)
David DeRubertis
(Woodland Hills)
Steven Pingel
(Long Beach)
Kathy Dickson
(Oakland)
(Laguna Hills)
David Duchrow
(Los Angeles)
Cynthia Rice
(San Francisco)
Wilmer Harris
(Pasadena)
Mika Spencer
(San Diego)
Phil Horowitz
(San Francisco)
James P. Stoneman
(Claremont)
Jean K. Hyams
(Oakland)
Christopher Whelan
(Gold River)
Toni Jaramilla
(Los Angeles)
Jeffrey Winikow
(Los Angeles)
Virginia Keeny
(Pasadena)
Bulletin Editor
Christopher Bello
842 Irving Avenue
Astoria, OR 97103
Ph: (503) 338-3891
ANNUAL CONFERENCE
(From Page 1)
went up to Oakland early for meetings
with hotel staff, going over every detail
and anticipating glitches.
Kudos also to outgoing Executive Board
Chair David Duchrow who did a tremendous job during his two-year term,
leaving CELA in even better shape than
it was before. And congratulations to
incoming Chair Virginia Keeny!
Thanks to the “trial teams” who put on
the Mock Trial program on Thursday.
This was the brainchild of several people
including Jean Hyams, who has pushed
for years to have this type of seminar.
Jean, Kathy Dickson, and so many
people worked their tails off for many
months. They treated this as if it was
their own real trial, and put in every bit
as much time, dedication, and commitment as they would have for their
own case. (I heard that Chris Whelan
was sending emails through the nights
with never-ending ideas and strategies
from his razor-sharp never-sleeping
mind.) Anyway, this was far more than
just putting on a seminar—they interrupted their practices, they gave up
work and sleep to put on this program.
So thanks and kudos to everyone:
Jean Hyams, Kathy Dickson, David
DeRubertis, Chris Whelan, Bernard
Alexander, Jill Telfer, Willie Smith, Nate
Goldberg, Genie Harrison, Arash
Hamampour, Carol Gillam, Sam Wells,
Wendy York, Toni Luti ... I know there
are others whom I’m missing. Plus all
the participants and good sports who
played witnesses, (e.g., Nancy Bornn,
who only got her script two days beforehand and was so convincing that
it’s tempting to mix her up with the
character she played—really, she
knows better).
Thanks also to every speaker and participant at the Conference. I personally
thought that the programs were uniformly excellent and informative.
A reminder to all: Please send in your
evaluations. Believe it or not, we do
read them, and use them for ideas to
improve future Conferences!
Finally, many of you have asked for a
copy of the Member Success power
point. This is technically proprietary
and generally not distributed, but we
have worked out a way to send it. While
I am not able to email it to you, (several
people sent me photos, etc., with the
express promise that they would not be
disseminated), Christina will be preparing and sending out a printout of the
slides in handout format, with the express proviso that it goes only to CELA
members, and that no recipient may
send it to anyone else or use it for any
other purpose.
And Congratulations and Kudos to everyone for your successes, for sharing
your losses, for your friendship, and for
being there that weekend. Keep up the
good work for September 2010, and in
the words of the panelists on the “Member Success” panel, (Twila, Craig,
Parnell, Sharon, and Paul), “never give
up,” “perserverance,” “passion,” and “totally believing in your client will get you
through!”
• • •
FROM VIRGINIA KEENY. CELA was
fortunate to have two incredibly inspiring and knowledgeable speakers at our
Annual Conference in Oakland: Mary
Lou Breslin, who gave the Keynote
Address, and Holly J. Fujie, who spoke
at our Diversity Luncheon.
For over thirty-five years, Mary Lou
Breslin, a co-founder of the Disability
Rights Education and Defense Fund
(DREDF), has been a passionate, respected, and effective advocate on behalf of people with disabilities in the
United States and around the world. A
pioneer in the area of disability rights,
she presently serves as Senior Policy
Advisor for DREDF, a leading disability
rights law and policy center.
Her Keynote Address reviewed the history of the treatment of individuals with
disabilities in this country, from the
notorious “Ugly Laws” enacted by some
cities outlawing the public exposure of
any disability or “deformity,” through
the long battle for true recognition of the
rights and abilities of the disabled, to
the passage of the ADA and comparable state statutes. Her speech was at
-3-
once scholarly and deeply personal,
challenging CELA members to remain
attuned to disability issues, and to take
on difficult and sometimes novel discrimination cases in this area.
Holly J. Fujie is the President of the
State Bar of California, the third woman
and the second Asian American to head
that organization. Throughout her career, she has been involved in organizations devoted to multi-cultural issues,
and she spoke at our Diversity Luncheon to emphasize our responsibility—as individuals, as attorneys, and as
CELA members—to promote diversity
in the legal profession and on the bench.
Ms. Fujie delivered a rousing call to
action.
• • •
FROM MICHAEL D. BURSTEIN. A
quick scan of the 2009 Conference program led me to expect an educational if
somewhat mundane experience. As we
all know, deposition strategy and overcoming adversity during trial, though
woefully under-covered in the law school
curriculum, are not necessarily the most
exciting of topics for a weekend’s entertainment. Although I was prepared to
absorb practical tips and valuable tactics, I was caught off guard not only by
the detail and specificity of the presentations, but also by their direct relevance
to the experience of practicing plaintiffs’side employment law. These three days,
I believe, were an excellent immersion
into the context and perspective of workers’ rights advocacy, and an immense
boon to this neophyte lawyer. The Conference left me with a few simple conclusions: (1) law schools need more
classes on these topics; (2) CELA needs
to have a greater presence at law
schools; and (3) our organization has
some pretty interesting and excellent
characters. Thanks for the diversity
scholarship that helped me attend!
• • •
FROM SCOT BERNSTEIN. CELA’s Fun
Run has proven again that it has it all
over Business and Professions Code
ANNUAL CONFERENCE
(From Page 3)
sections 17200 et seq. and 17500:
nothing in its name is false or misleading.
Seriously, I have run in the Fun Run at
each of our last five Annual Conferences. Not only have I had a great time
every year, but, to all appearances, so
did everyone else who has taken part.
Nine of us were in the Marriott lobby at
7:00am on Saturday morning. We were
Gina Browne, Shelley Bryant, Cathe
Caraway, Roxanne Davis, Rob Hennig,
Amanda Newell, Erin Parks, Michelle
Reinglass, and me.
Whether the 7:00am start sounds reasonable or brutal probably depends on
how late you stayed at the Hootenanny
that Lisa Maki hosted in her suite on
Friday night. Getting more than four or
five hours of sleep before the Fun Run
sounds like a good idea, but I can’t
really speak from experience. “Night
Guy” spends time talking with great and
interesting people, most of whom he
gets to see only once a year. “Morning
Guy” is thus sleep deprived for the Fun
Run. Every year.
The nine of us took off towards Lake
Merritt, running along downtown
Oakland’s quiet and nearly deserted
streets. Soon our varying speeds broke
us into pairs and one group of three. The
three—Gina, Shelley, and Amanda—
were flying over the ground and soon
developed a commanding lead. After
just under a mile, we all arrived at the
lake and turned left along the shore. At
the fifteen- or sixteen-minute mark, we
turned around and headed back. Well,
some of us did—more about that later.
When Rob and I finished our run out in
front of the Marriott, Gina, Shelley, and
Amanda were standing around waiting
for us, looking calm and rested. They
seemed to have been waiting for a while.
Michelle and Roxanne joined us soon
afterward.
And then we waited. And waited. And
waited. Some of us went upstairs to
shower and change. Gene Ramos
showed up, having missed the start and
taken off running in some other direc-
tion, and nonetheless having had a good
run. And still we waited. When Shelley,
Rob and I were starting to get worried,
Cathe and Erin finally appeared. Unlike
the rest of us, they had completely
circled Lake Merritt, (they claimed), and
had then felt impelled to take a coffee
break at Peet’s.
We all somehow made it to CELA’s
Annual Employment Law Update, which
started promptly at 9:00am. (Well, I’m
not sure of the time, actually, the run
was over so I had stopped keeping
track.) Although it’s always hard to
imagine doing anything at 6:30 on a
Saturday morning, the Fun Run is a
consistent high point of our Annual Conference. I hope all ten who ran this year
will show up next year—along with many
more!
• • •
FROM MARY DRYOVAGE. As employee rights attorneys, we are under
incredible stress. Like Cesar Chavez,
(who practiced Yoga and was guided by
his commitment to Ahisma, see www.
Phoenixyogo.net/Ahimsa), we stand up
to very powerful interests, and must
stay committed to our client’s cause in
the face of many strong pressures and
distractions. For the past six years,
CELA has hosted a Yoga Class as part
of its Annual Conference. Why? Because we need to connect our minds
with the rest of our bodies to rejuvenate
and remain balanced, creative, and committed.
How do we nurture the mind-body connection that Cesar Chavez knew was
important to his work? Through our
breath—in yoga, we focus on inhaling
and exhaling. Choosing awareness this
way strengthens both body and mind.
At our Conference, our yoga teacher
Arch deLeon, (www.hanumancenter
.com), gave us an invitation: “come
prepared to open your body, calm your
mind, and rejuvenate your spirit,” and he
led us through a series of stretches and
meditative poses. By the end of the
class, the more than two dozen CELA
members and exhibitors who took part
felt relaxed, confident, and better able to
-4-
absorb new information. CELA member
Moira McQuaid commented on the appropriateness of our teacher’s approach:
“Believe me, I couldn’t have handled
‘power yoga’ at 7:00am. Plus, since we
tend to be competitive and ‘mental’ in
our work, I was pleased not to have an
exercise routine that gave me more
competition and mental aspects to deal
with. I liked zoning out and just paying
attention to where my breath was going
in my body.”
For me, the experience is akin to pushing the reset button on my computer—
a way to clear out the mind, prune away
distractions, and return to my challenges with full energy and awareness.
You don’t have to able to bend like a
pretzel to get the benefits of yoga. Just
stretch your routine a little bit—you
won’t regret it.
• • •
FROM ANN HENDRIX. As a newly
admitted attorney representing workers, I found this year’s CELA Conference invaluable. I was lucky enough to
have attended the Conference two years
ago in San Jose, when I was a student
and was given a Diversity Committee
Scholarship. Since then, I have graduated and begun practicing—with many
thanks to the CELA members who
helped me reach this goal.
As a new attorney, my second Conference was an even better experience.
This time, I was able to really benefit
from the practical advice offered in the
sessions, and will be able to incorporate what I learned into my practice. The
“21 Cases You Must Know” seminar
was especially useful, as were the sessions on Depositions, and Practicing in
Federal Court.
But even more than that, it was a great
feeling to be in a place where everyone
is working toward the same goal. The
sense of camaraderie was inspiring,
and really made me feel part of a bigger
movement dedicated to helping workers.
Finally, on Thursday, it was great to see
DECISIONS
(From Page 2)
requires. Then, after granting summary
judgment, the order ends with these two
one-sentence rulings:
2. Plaintiff’s 47 evidentiary objections
are OVERRULED.
3. Defendants’ evidentiary objection
No. 27 is OVERRULED, and the
remainder of the Defendants’ evidentiary objections are SUSTAINED.
“This, then, is what is before us for de
novo review: an order granting summary
judgment that purports to sustain without explanation 763 out of 764 objections to evidence, in a record the likes of
which we have never seen—not here,
not in the combined 11 years of law and
motion experience of the members of
this panel.
“Nevertheless, we deal with what is
before us, and first hold that the trial
court’s ‘ruling’ on defendants’ objections was manifestly wrong. We then
review the matter considering all the
evidence properly in the record. And we
reverse the summary judgment, concluding that eight causes of action must
be decided by a jury...
“We have referred to the misleading
picture painted by the mass of paper
before the trial court, and to the error
that resulted. And the two are undoubtedly related, as what apparently happened is that the trial court did not read
all the papers...
“The incredible volume of material here
simply has no place in a system where
overburdened trial courts labor long and
hard. Thus, we conclude with some
guidance in the event a trial court is ever
again confronted with anything remotely
close to that here.
“The deficiencies in summary judgment
papers can appear in a variety of places,
and the approaches taken by the courts
to address the deficiencies can vary as
well, limited only by the inspiration or
creativity of the particular law and motion judge—and, of course, due process. There is no universal solution, no
panacea, and we do not even attempt to
offer suggestions. We write here only to
confirm the existence of the inherent
power [to exercise reasonable control
over all proceedings], and to remind trial
courts of it, and to encourage them to
use it when appropriate...
“We ... observe that many employment
cases present issues of intent, and
motive, and hostile working environment, issues not determinable on paper. Such cases, we caution, are rarely
appropriate for disposition on summary
judgment, however liberalized it be.”
[Editor’s note: The First District’s opinion, addressing fourteen causes of action, is too lengthy and fact-intensive to
be meaningfully summarized here. In
addition to the discussion of summary
judgment procedure and standards,
particularly noteworthy are pro-plaintiff
discussions of the continuing violation
doctrine and the “same actor inference.”
Readers are of course referred to the
opinion itself, but also to a number of
plaintiff’s briefs and other documents
that have been added to the Brief Bank
portion of CELA’s website,
www.cela.org.]
For plaintiff: Phil Horowitz and Moira
McQuaid, San Francisco.
For defendants: Littler Mendelson, Philip
L. Ross, Nancy E. Pritikin, Kurt R.
Bockes.
First Dist Div Two, 10/9/09; opinion
by Richman with Haerle and
Lambden concurring; 2009 DAR
14717, 2009 WL 3235159.
AFTER REHEARING, SECOND
DISTRICT AGAIN AFFIRMS
ORDER VACATING ARBITRATION
AWARD BECAUSE ARBITRATOR’S
LEGAL RULING RESULTED IN
PREJUDICIAL EXCLUSION OF
MATERIAL EVIDENCE
BURLAGE v SUPERIOR COURT. On
October 20, the Second District, Division Six, filed a new opinion after rehearing, vacating the August 31 opinion
that appeared at 99 CR3d 142 and that
was summarized in CELA Bulletin,
August 09, p.5. The new opinion is
-5-
substantially identical to the earlier one,
and once again affirms an order that
vacated an arbitration award because
the arbitrator’s legal ruling resulted in
the prejudicial exclusion of material evidence. The new opinion adds two paragraphs of analysis that read in part as
follows:
“We disagree with the dissent’s suggestion that the arbitrator considered
the lot-line adjustment evidence in the
in limine motion... ‘One cannot ‘consider’ what one has refused to ‘hear’...
[cite omitted].
“It may be argued that to avoid the
imposition of [Code Civ Proc] section
1286.2, arbitrators will simply admit
evidence to insulate their decisions from
review. We do not subscribe to this
cynical view. It is through judicial review
that the law is shaped and developed.
Arbitrators do not subvert this process
because a court might vacate an award...
NEW CHAIR
(From Page 1)
NASA (9th Cir 2009) 568 F3d 1028
(protecting the informational privacy
rights of federal contractors at the Jet
Propulsion Lab in Pasadena from intrusive background investigations); and
Wang v Chinese Daily News, (class
action on behalf of approximately 120
employees against the largest Chinese
lanaguage newspaper in the United
States, resulting in federal jury award of
over $5.2 million).
Virginia is looking forward to further
expanding CELA’s membership, increasing the number of CELA-sponsored seminars, and making CELA a
“household name” with judges, defense
firms, and the legislature, as part of our
efforts to expand and protect workers’
rights.
She encourages CELA members to
contact her directly to propose new
areas in which CELA can expand its
efforts, and to suggest ways in which
CELA can better serve its membership.
Her
email
address
is
[email protected], and her office
phone number is (626) 585-9600.
DECISIONS
(From Page 5)
They, like the arbitrator here, are professionals who conduct themselves according to the canons of ethics and the
high degree of integrity their profession
demands.”
For petitioners: Hoefflin & Associates;
Lascher & Lascher.
For real party: Horvitz & Levy; Lang,
Hanigan & Carvalho; Craig R. Smith.
Second Dist Div Six, 10/20/09; opinion by Gilbert with Yegan concurring and Perren dissenting; 2009 WL
3358169.
AFTER REVERSAL OF SUMMARY
JUDGEMENT AND REMAND,
THIRD DISTRICT AFFIRMS
JUDGMENT ON JURY'S DEFENSE
VERDICT ON SEX HARASSMENT
CLAIMS
MYERS v TRENDWEST RESORTS,
INC. “This is the second appeal by
plaintiff Alissia Myers in an action against
Trendwest Resorts, Inc. for sexual harassment under [FEHA],” the Third District wrote in a partially-published opinion by Sims filed on October 26. “In the
prior appeal, we reversed the summary
judgment in favor of Trendwest on
Myers’s FEHA causes of action as well
as her claim for punitive damages. We
affirmed the dismissal of Myers’s common law causes of action... (Myers v.
Trendwest Resorts, Inc. (2007) 148
Cal.App.4th 1403, 1439, [summarized
in CELA Bulletin, March 07, p.6] (Myers
I).)
“After remand, the case proceeded to
jury trial on the FEHA claims for sexual
harassment ... and failure to take all
reasonable steps to prevent harassment... The jury [poll: 10-2] found that
Myers had not been subjected to unwanted harassment.
“On appeal, Myers contends the trial
court erred by (1) failing to grant [JNOV]
because Trendwest’s statement of undisputed facts—made for purposes of
summary judgment—admitted she had
‘suffered severe sex harassment,’ (2)
failing to grant JNOV based on insufficiency of the evidence in support of the
verdict, (3) disallowing her expert witnesses from testifying after she filed a
tardy expert witness disclosure list, (4)
excluding testimony from her treating
physician about the cause of her mental
distress, (5) excluding the testimony of
her human resources expert to bolster
Myers’s credibility, (6) excluding testimony from Myers’s mother and friend
about her mental state shortly after her
first hospitalization, (7) excluding evidence of other sexual harassment lawsuits against Trendwest, (8) denying
Myers’s mid-trial motion to amend the
complaint to state a claim for disability
discrimination..., and (9) denying her
motion for new trial based on jury misconduct.
at trial... [¶] By failing to recount much
defense evidence, plaintiff Myers has
waived her claim of lack of substantial
evidence to support the verdict.
“In the published portion of the opinion,
we explain why a statement in
Trendwest’s statement of undisputed
facts ... cannot be used against
Trendwest at trial as an admission. We
also explain why Myers has waived her
claim that no substantial evidence supports the defense verdict. We also commend the trial judge, the Honorable
Brian R. Van Camp.
“Myers contends the trial court committed reversible error by excluding testimony by her treating psychiatrist, Dr.
Wright, and her retained human resources expert, Rhoma Young... [S]he
complains that the trial court improperly
prevented [Dr. Wright] from testifying
that sexual harassment at Trendwest
caused her distress. Myers also assigns error to the trial court’s exclusion
of Young’s testimony concerning
Trendwest’s lack of compliance with
anti-harassment laws. We reject her
contentions.
“In the unpublished portion of the opinion, we reject Myers’s remaining contentions of prejudicial error. [¶] We shall
therefore affirm the judgment.
“Any impartial reader who approaches
Myers’s [appellate] briefs unfamiliar with
the testimony at trial must come away
with a sense of bafflement as to why the
jury and trial court did not decide in her
favor—especially given the seemingly
uncontradicted testimony regarding the
sexual assaults leading to her mental
distress.
“Only upon perusing the record does it
become clear that the trial court found
Myers’s credibility to be problematic...
Myers offers no discussion of ... facts
unfavorable to her arguments... [¶] Professional ethics and considerations of
credibility in advocacy require that appellants support their arguments with
fair and accurate representations of trial
court proceedings... Myers’s opening
and reply briefs fall far short of complying with the rules regarding statements
and discussions of evidence adduced
-6-
“Myers argues that the trial court erroneously denied JNOV on the issue of
liability because Trendwest was estopped from denying [supervisor]
Damlakhi sexually harassed her. Myers
relies on Trendwest’s statement of undisputed facts ... as a judicial admission... The argument is without merit...
[¶] Trendwest’s summary judgment
motion gave every indication that the
factual admissions ... were made solely
for the purpose of seeking dismissal as
a matter of law.
“Myers sought to introduce testimony
from Dr. Wright regarding ‘the causation for plaintiff’s emotional breakdown...’
Trendwest counters that Dr. Wright’s
testimony was not admissible to establish that Damlakhi engaged in the conduct alleged by Myers. We agree that
Myers impermissibly sought to establish the historical fact of harassment via
the opinion testimony of Dr. Wright...
“Myers next contends the trial court
should have allowed Young to ‘offer
opinions on the policies, practices and
procedures of Trendwest to deal with
and prevent and respond to issues of
harassment and discrimination’... As
with the testimony of Dr. Wright, Myers
sought to introduce [Young’s] evidence
to prove that Myers was harassed by
Damlakhi...
DECISIONS
(From Page 6)
“Myers alternately asserts that the expert testimony would have impeached
[the] credibility of other Trendwest employees by refuting their assertions of
adequate company practices... [¶] [But]
Young’s testimony would not have provided probative evidence on the issue of
whether Myers was subjected to unwanted sexual harassment by
Damlakhi... [¶] The jury’s finding that
Myers did not sustain unwanted sexual
harassment precluded her from establishing her cause of action under Government Code section 12940—even if
she had been able to prove that
Trendwest’s personnel practices and
procedures failed to comply with FEHA
requirements.
to conduct discovery to defend against
the disability discrimination claim...
Myers’s tactical decision ... would have
prejudiced Trendwest’s ability to investigate the facts and formulate a defense...
“Myers contends the trial court abused
its discretion in excluding hearsay testimony by Myers’s mother and friend
regarding statements made by Myers
after her first hospitalization... Recognizing that the testimony constituted
hearsay, Myers argues that the testimony should have been admitted as a
statement of mental state and as a
spontaneous statement. We find no
error in the trial court’s evidentiary ruling.
For plaintiff: Stephan C. Williams and
Daniel R. Bartley.
For defendant: Curiale Hirschfeld
Kraemer, John F. Baum, and Felicia R.
Reid.
Third Dist, 10/26/09; opinion by Sims
with Robie and Cantil-Sakauye concurring; 2009 DAR 15225, 2009 WL
3418560.
“Myers argues the trial court erroneously excluded a consent decree in a
class action against Trendwest by other
female employees who claimed gender
discrimination. Myers also contends
evidence of additional lawsuits against
Trendwest should have been admitted
to show Trendwest’s personnel policies
do not comply with FEHA requirements.
We shall deem the argument forfeited
for failure to provide adequate citation to
the lengthy record in this case... [¶] [In
any event] [a]ny wrongful exclusion of
evidence regarding whether the environment was hostile would have been harmless because Myers was unable to
convince the jury that she was sexually
harassed.
“Myers contends the trial court erred by
denying her mid-trial motion to ... add a
claim for disability discrimination ‘to
conform to proof.’ Myers admits she
deliberately delayed in moving to amend
the complaint in order to secure an
earlier trial... [¶] Trendwest was entitled
“Myers contends the trial court erred in
denying her motion for a new trial based
on misconduct by a juror, Matthew
Molina. She claims Molina wrongfully
called for a vote at the outset of deliberations and refused thereafter to deliberate... We shall reject the argument,
again finding that her factual recount
differs significantly from the evidence in
the record when viewed in the light most
favorable to the trial court’s ruling...”
NINTH CIRCUIT
DISTRICT COURT ERRED IN
CONCLUDING THAT “PHYSICAL
CAPACITY EVALUATION”
CONDUCTED AFTER PLAINTIFF’S
RETURN FROM MEDICAL LEAVE
WAS NOT PROHIBITED “MEDICAL
EXAMINATION” WITHIN MEANING
OF ADA
INDERGARD v GEORGIA-PACIFIC
CORP. In an opinion by Goodwin filed
on September 28, a Ninth Circuit panel
reversed summary judgment on causes
of action under the ADA and Oregon
disability law, writing in part as follows:
“Indergard ... took medical leave to undergo surgery for work-related and nonwork-related injuries to her knees. She
remained on medical leave until March
21, 2005, when her orthopedic surgeon
... authorized her return to work, but
with permanent restrictions. GP policy
required employees to participate in a
-7-
physical capacity evaluation (PCE) before returning to work from medical leave
and so informed Indegard...
“[Following the PCE] GP ... informed
Indergard that she could not return [to
her previous position or the next position for which she was entitled to bid
under the CBA] and that no other positions were available for which she was
qualified. On February 8, 2006, GP
terminated her employment pursuant to
a provision in the [CBA] that allowed GP
to terminate employees who had been
on leave for more than two years.
Indergard filed a union grievance, which
was denied, and filed a joint complaint
with the EEOC and [Oregon’s Bureau of
Labor and Industries]. The administrative investigation found no substantial
evidence to support her claims. She
received right to sue letters and filed this
action.
“Indergard alleged various claims of disability discrimination... Relevant to this
appeal, she alleged that GP misrepresented the essential job functions of the
position in which she had worked prior
to going on medical leave, forced her to
participate in the PCE without ‘an objectively reasonable basis for doing so,’
and refused to allow her to return to
employment after the PCE. In her first
claim for relief, Indergard alleged that
the PCE was improper and discriminatory, and that GP relied on the PCE to
‘remove and/or deny’ her return to employment. She also raised other claims
under the ADA, including that GP treated
her ‘in a disparate, discriminating and
harassing manner’ because she was
disabled, had a record of disability or
was perceived as disabled, and that GP
failed to engage in the interactive process. She sought relief in the form of
loss of income, and $250,000 in noneconomic damages.
“GP moved for summary judgment, and
Indergard’s response abandoned all
claims except those alleging that the
PCE was an improper medical examination and that GP discriminated against
her because of a perceived disability or
record of disability. GP’s reply argued
DECISIONS
(From Page 7)
that the PCE was not a medical examination, and that it therefore did not
violate the ADA. It further argued that
even if the PCE was a medical examination, it was job-related and consistent
with business necessity, and therefore
expressly allowed by the ADA. See 42
U.S.C. § 12112(d)(4)(A).
“The Magistrate Judge agreed with GP
that the PCE was not a medical examination... In the interest of providing a
thorough analysis, however, the magistrate judge analyzed GP’s business
necessity defense... [and found that
PCE] ‘would not be entitled to summary
judgment on the basis of the business
necessity defense because [GP] failed
to show that the PCE was limited to the
essential functions’ of Indergard’s prior
positions...’ [¶] This appeal followed.
“Under the ADA, an employer may not
require a current employee to undergo a
medical examination unless the examination ‘is shown to be job-related and
consistent with business necessity.’
42 U.S.C. § 12112(d)(4)(A)... The implementing regulations impose the same
restriction, but state that an employer
‘may make inquiries into the ability of an
employee to perform job-related functions.’ 29 C.F.R. § 1630.14(c). Thus, we
must determine whether the PCE was a
medical examination ... or simply an
inquiry into whether Indergard was capable of performing the job-related functions of the positions she was qualified
to return to after her medical leave.
“Neither the ADA nor the implementing
regulations define the term ‘medical
examination,’ and case law interpreting
this provision is limited. Agency guidance on the issue, however, is more
detailed...[cites and quotations omitted.] [¶] In light of the agency guidance,
Indergard’s argument that the PCE was
a medical examination is convincing...
[T]he PCE included range of motion and
muscle strength tests, and ... measured Indergard’s heart rate and recorded an observation about her breathing after the treadmill test. Each of
these tests is within the EEOC’s description of tests that are considered
medical examinations...
“The EEOC Enforcement Guidance identifies seven factors as relevant to determining whether a test is a medical
examination, and at least four weigh in
Indergard’s favor... [¶] Thus, viewed in
the light most favorable to Indergard,
applying the balancing factors establishes that the PCE was a medical
examination.
“We hold that the PCE was a medical
examination within the meaning of 42
U.S.C. § 12112(d)(4)(A). Because the
magistrate judge correctly found that a
triable issue of fact remained on the
question of whether the PCE was jobrelated and consistent with business
necessity, the summary judgment was
inappropriate. We vacate the judgment
and remand the case to the district
court to determine whether the PCE
was job-related and consistent with
business necessity, and to determine
whether Indergard exhausted administrative remedies.”
For plaintiff: Kerry M. L. Smith, Gresham,
Oregon.
For defendant: Scott G. Seidman, Portland.
Goodwin joined by Fisher with
O’Scannlain dissenting; 2009 DAR
14192, 2009 WL 3068162.
sors constructively discharged her in
retaliation for her expression of concerns that the Riverside County Office
of Education was not complying with
requirements of federal and state law in
connection with providing educational
services to disabled students. The court
“Barker contends that ... section 504 of
the Rehabilitation Act grants standing
to individuals who are retaliated against
for attempting to protect the rights of
disabled people, even if they themselves are not disabled... Contrary to
the Riverside County of Education’s
arguments, we find that the anti-retaliation provision of section 504 grants
standing to non-disabled people who
are retaliated against for attempting to
protect the rights of the disabled.
“Section 504 and its anti-retaliation provision use the all-inclusive phrases ‘any
person aggrieved’ and ‘any individual,’
and no language further limits who ‘any
person aggrieved’ or ‘any individual’ may
be. In particular, the statutes do not
include language requiring such individuals to have disabilities in order to
have standing. Nor do they require the
protected individual to have any ‘close
ANNUAL CONFERENCE
TEACHER ALLEGING SHE WAS
CONSTRUCTIVELY DISCHARGED
AFTER ADVOCATING FOR
RIGHTS OF DISABLED STUDENTS
HAD STANDING UNDER ANTIRETALIATION PROVISIONS OF
BOTH REHAB ACT AND TITLE II
OF ADA
BARKER v RIVERSIDE COUNTY OFFICE OF EDUCATION. In an opinion by
Pregerson filed on October 23, a Ninth
Circuit panel disagreed with the Central
District that a public school teacher
lacked standing to assert retaliation
claims under the section 504 of the
Rehabilitation Act and Title II of the
ADA. The Ninth Circuit therefore reversed the dismissal of claims based on
the allegation that the plaintiff’s supervi-8-
(From Page 4)
a trial from start to finish. Beyond the
practical tips, there is a huge benefit
from seeing the different styles of experienced lawyers. I’m still developing my
own style, and this was a great opportunity to see how many different ways
there are to accomplish the same goal.
• • •
FROM AMANDA INOCENCIO. The
Conference was incredibly inspiring.
Each subject matter seminar was filled
with a wealth of information provided by
enthusiastic and skilled presenters. The
attendees were friendly and motivated.
And the high spirit of the organization
was conveyed over fabulous food and
drink. I so much appreciate having been
able to attend, learn, and meet some
wonderful new colleagues. Thank you!
PROFILES
DECISIONS
may be thwarted, and the resulting
stress can exacerbate or bring about
devastating health consequences.
connection to a disabled person’...
(From Page 10)
(From Page 8)
Although it is hard to believe with all that
she does professionally, Peggy also
has a life outside of law, including her
marriage to husband Michael, a love of
modern art, (at times she assists her
aunt who owns an art gallery in
Scottsdale), and an occasional professional expression of her musical skills.
Improbably, she plays violin on a heavy
metal album released in 2004 by—and
I’m quoting— “a Rob Zombie spin-off
group” called “Scum of the Earth.” If you
want, you can listen to samples on
Amazon, and read many enthusiastic
customer reviews—the album is called
“Blah...Blah...Blah Love Songs.” (And
just possibly, you’ll be able to make out
some violin-type sounds. Let me know.)
•
•
•
“‘Congress [apparently recognized] the
fact that disabled individuals may need
assistance in vindicating their rights...’
[cite omitted]. Indeed, empathetic people
who teach and interact frequently with
the disabled are those most likely to
recognize their mistreatment and to
advocate on their behalf.
“We find that Barker [has] standing to
sue under Title II [of the ADA] for the
same reasons that she has standing
under section 504 of the Rehabilitation
Act... [¶] The district court’s reliance on
Zimmerman v. Oregon Department of
Justice, 170 F.3d 1169 (9th Cir. 1999) ...
was misguided... Relying on
Zimmerman, the district court incorrectly found that because Barker ...
claimed that she was discriminated
against by her employer, Barker would
... only have standing under Title I of the
ADA.
“Unlike Zimmerman, Barker does not
allege that she lost her job because her
employer discriminated against her
C O M I N G
E V E N T S
November 19, 2009
DISABILITY RIGHTS LEGAL CENTER ANNUAL GALA
Omni Hotel, Los Angeles
(see www.disabilityrightslegalcenter.org for details)
because of a disability she had. Instead, Barker alleges that she was
retaliated against and subsequently lost
her job because she advocated for disabled students who were receiving inadequate public services—educational
services provided by a public school—
which are covered under Title II of the
ADA... Thus, Barker’s claim was appropriately brought under Title II.
“Having concluded that Barker has
standing to pursue her retaliation claims
under both section 504 of the Rehabilitation Act and Title II of the ADA, we
reverse and remand to the district court.”
For plaintiff: Janice S. Cleveland, Riverside; Gary S. Bennett, Laguna Hills.
For defendant: Atkinson, Andelson,
Loya, Ruud & Romo, Riverside.
Pregerson joined by Nelson and
Singleton; 2009 DAR 15159, 2009 WL
3401986.
EMPLOYER DID NOT VIOLATE
FLSA’S OVERTIME PAY
REQUIREMENTS BY ADOPTING
“WEIGHTED AVERAGE METHOD”
FOR DETERMINING “REGULAR
PAY” IN CONNECTION WITH
ALTERNATIVE WORK WEEK
SCHEDULE
PARTH v POMONA VALLEY HOSPITAL MEDICAL CENTER. Affirming summary judgment in an opinion by N. R.
Smith filed on October 22, a Ninth
Circuit panel held that when an employer changes its shift schedule to
accommodate its employees’ scheduling desires, the fact that the employer
makes changes in rates in an attempt
to keep overall pay revenue-neutral does
not establish a violation of the FLSA’s
overtime pay requirements. The court
explained:
June 23, 2010
NELA’S 2010 LOBBY DAY
Washington DC
June 23 to June 26, 2010
NELA’s TWENTY-FIRST ANNUAL CONVENTION
The Omni Shoreham Hotel, Washington DC
July 10 to July 14, 2010
AAJ’s ANNUAL CONVENTION
Vancouver, British Columbia
September 30 to October 2, 2010
CELA’s ANNUAL CONFERENCE
Marriott Los Angeles (Downtown)
“Prior to 1989 or 1990, PVHMC scheduled its nurses to work almost exclusively in 8-hour shifts. However, many
PVHMC nurses preferred working 12hour shifts in order to have more days
October 15 to October 16, 2010
NELA FALL SEMINAR
"ADA and FMLA in Employment Litigation"
-11-
DECISIONS
(From Page 11)
away from the hospital... In response...,
PVHMC developed and implemented
an optional 12-hour shift schedule and
pay plan... The pay plan provided nurses
the option of working a 12-hour shift
schedule in exchange for receiving a
lower base hourly salary ... and timeand-a-half pay for hours worked in excess of eight hours per day. The result:
nurses who volunteered for the 12-hour
shift schedule would make approximately the same amount of money as
they made on the 8-hour shift schedule...
“In 2003, the PVHMC nurses voted to
unionize... [¶] In 2004, all Local 121
members employed at PVHMC voted
on the proposed CBA [employing the
‘weighted average method’ of determining the ‘regular rate.’ Gorman v. Consol.
Edison Corp., 488 F.3d 586, 596 (2d
Cir. 2007).]
“Just two years later, Parth filed a putative class action ... [alleging] that
PVHMC’s use of different base hourly
rates violates the FLSA in that it denies
unionized employees overtime pay...
The district court found that Parth met
the requirements for conditional class
certification to bring the FLSA claim.
PVHMC then filed a motion for summary judgment, asserting that its pay
practices comply with the FLSA. The
district court ... granted summary judgment. We affirm.
“Parth asserts that PVHMC’s pay plan
violates the FLSA, because it was designed to ‘make overtime payments
cost-neutral,’ and that such a scheme
is lawful only when implemented ‘before
the employer was subject to the FLSA.’
We disagree. The 12-hour shift scheduling practice was first initiated at the
nurses’ request. The 12-hour shift scheduling practice was then memorialized in
a collective bargaining agreement... The
parties do not dispute that the wages
paid under the pay plan are more than
the minimum wages under federal law.
We find no reason to invalidate the
agreement between the parties. There
is no justification in the law and no
public policy for doing so. Parth also
failed to cite ... any authority to suggest
that a voluntary base rate wage reduc-
tion in exchange for a 12-hour shift
schedule was unlawful.
“We conclude, as did the district court,
that Parth failed to adduce any evidence
or authority to support her claim that
PVHMC’s plan violates the FLSA. We
conclude that PVHMC was justified in
responding to its employees’ requests
for an alternative work schedule... There
is no evidence to suggest that PVHMC
is attempting to avoid paying its employees overtime wages, nor can we
find any authority that prohibits PVHMC
from paying employees different hourly
rates when they are assigned different
shifts.”
For plaintiffs: Frank J. Coughlin, Santa
Ana.
For defendant: Douglas R. Hart and
Beth Anne Scheel, Los Angeles.
Smith joined by Canby and
Rawlinson; 2009 DAR 15079, 2009
WL 3381116.
FORMER EMPLOYEE DID NOT
ACCESS COMPUTER “WITHOUT
AUTHORIZATION” NOR “EXCEED
AUTHORIZED ACCESS” IN
VIOLATION OF COMPUTER
FRAUD AND ABUSE ACT WHEN
HE E-MAILED COMPANY
DOCUMENTS TO HIMSELF WHILE
HE WAS STILL EMPLOYED
LVRC HOLDINGS, LLC v BREKKA. In
an opinion filed on September 15, the
Ninth Circuit wrote in part as follows:
LVRC Holdings ... filed this lawsuit in
federal district court against its former
employee, Christopher Brekka, his wife
..., and the couple’s two consulting
businesses... LVRC alleged that Brekka
violated the Computer Fraud and Abuse
Act (CFAA), 18 U.S.C. § 1030, by
accessing LVRC’s computer ‘without
authorization,’ both while Brekka was
employed at LVRC and after he left the
company... The district court granted
summary judgment in favor of the defendants. We affirm. Because Brekka was
authorized to use LVRC’s computers
-12-
while he was employed at LVRC, he did
not access a computer ‘without authorization’ ... when he emailed documents
to himself and to his wife prior to leaving
LVRC. Nor did emailing the documents
‘exceed authorized access,’ because
Brekka was entitled to obtain the documents. Further, LVRC failed to establish the existence of a genuine issue of
material fact as to whether Brekka accessed the LVRC website without authorization after he left the company.”
For employee: Norman H. Kirshman,
Las Vegas.
For employer: Thomas G. Grace, Las
Vegas.
Ikuta joined by McKeown and Selna;
581 F3d 1127.
•
•
•
SCHWARZENEGGER
VETOS CELA’S “CHOICE
OF LAW/CHOICE OF
FORUM” BILL
On October 11, the Governor vetoed AB
335, CELA’s Choice of Law and Choice
of Forum bill. The bill’s premise was
stated in its Section 1: “[E]mployees
should not be deprived of the protection
of California law by contract provisions
that require employees or job applicants, as a condition of employment, to
submit to the laws of other states for
claims that arise from employment, or
the securing of employment, in California.”
The Governor’s veto message read:
“[T]his bill would discourage out-of-sate
and multinational employers from hiring
California-based workers and potentially
contribute toward the growing problem
of unemployment. Additionally, the bill
is unnecessary because courts are already well equipped to determine when
a choice of law or choice of forum
provision in a private contract should be
enforced in consideration of all applicable circumstances.”
Published
Monthly
BULLETIN
UNITED STATES
SUPREME COURT
CALIFORNIA
SUPREME COURT
SUPREME COURT WILL NOT
REVIEW NINTH CIRCUIT
DECISION HOLDING THAT
EEOC RETAINS JURISDICTION
TO CONTINUE INVESTIGATION
AFTER CHARGING PARTY HAS
LITIGATED MATTER IN COURT
THIRD DISTRICT ERRED IN
EXCLUDING PERSONNEL
MANAGEMENT ACTIONS AS
EVIDENCE IN SUPPORT OF
HARASSMENT CLAIM
EEOC v FEDERAL EXPRESS CORP.
On November 9, the U.S. Supreme
Court denied certiorari, letting stand
the Ninth Circuit decision that held as
a matter of first impression that the
EEOC retained authority to issue an
administrative subpoena against the
employer after the charging party had
been issued a right-to-sue notice and
instituted a private action. In 2004, an
African-American FedEx employee
filed a charge with the EEOC alleging
race discrimination in promotion and
discipline, and the EEOC announced
its intent to continue its investigation
even after the charging party had joined
a class action on the same issue. The
class action eventually settled, with
FedEx paying out almost $38.5 million
in compensation. In an amended opinion filed on March 3, 2009, (558 F3d
March 09, p.7), the Ninth Circuit held
that Title VII gives the EEOC jurisdiction to continue an investigation even if
the charging party litigates the matter
in court. (The Fifth Circuit reached the
opposite conclusion in EEOC v Hearst
Corp., 103 F3d 462 (5th Cir 1997).)
USSC, 11/9/09; 2009 WL 3712027
(denying certiorari).
ROBY v McKESSON CORP. On November 30, the California Supreme
Court, reversing the Third District’s
December, 2006 decision, (53 CR3d
558), held that the Court of Appeal
should not have excluded personnel
management actions as evidence in
support of a harassment claim. “[S]ome
official employment actions done in
furtherance of a supervisor’s managerial role can also have a secondary
effect of communicating a hostile message,” Kennard’s majority opinion emphasized. “Moreover, acts of discrimination can provide evidentiary support
for a harassment claim by establishing
discriminatory animus on the part of the
manager... Nothing prevents a plaintiff
from proving these two violations with
the same (or overlapping) evidentiary
presentations.”
[Editor's note: The Supreme Court's
opinion was filed just as this issue was
going to press. Roby v McKesson will
be treated at greater length in the December issue.]
For employee: Christopher H. Whelan,
David M. DeRubertis, David A. Lesser,
Norman Pine, and Charity Kenyon.
For CELA as amicus: Jeffrey K.
Winikow.
For LAS-ELC, inter alia, as amicus:
Claudia Center.
November 2009
Vol. 23, No. 11
For CAOC as amicus: Sharon J. Arkin.
For McKesson Corp.: Howard Rice
Nemerovski; Paul Hastings; Wilson
Sonsini.
Cal SC, 11/30/09; opinion by
Kennard with George, Baxter, Chin
and Corrigan concurring; concurring and dissenting opinion by
Werdegar with Moreno concurring;
2009 DAR 16712, 2009 WL 4132480.
LABOR CODE WAS NOT
VIOLATED BY FORFEITURE
PROVISION OF VOLUNTARY
INCENTIVE COMPENSATION
PLAN
SCHACTER v CITIGROUP, INC. Upholding the Second District’s affirmance
of summary judgment, (70 CR3d 776),
the California Supreme Court wrote in
part as follows in a unanimous opinion
by Moreno filed on November 2:
“Citigroup offered a voluntary employee
incentive compensation plan that provides employees with shares of restricted company stock at a reduced
price in lieu of a portion of that employee’s
annual cash compensation. Employees agree that, should they resign or be
terminated for cause before their restricted shares of stock vest, they would
forfeit the stock and the portion of cash
compensation they directed be paid in
the form of restricted stock. We consider here whether the incentive plan’s
forfeiture provision violates Labor Code
sections 201, 202, and 219, which
provide that employees be paid all
earned, unpaid wages upon termination or resignation and prohibit agreements that purport to circumvent that
requirement. We conclude the forfeiture provision does not run afoul of the
DECISIONS
(From Page 1)
Labor Code because no earned, unpaid
wages remain outstanding upon termination according to the terms of the
incentive plan. Accordingly, we affirm
the judgment of the Court of Appeal.”
For plaintiff: Ashley D. Posner and Barbara Brudno.
For defendant: Skadden, Arps, Slate,
Meagher & Flom, Raoul D. Kennedy,
Joren S. Bass, Joan Shreffler, Douglas
B. Adler, Seth M. Schwartz, Jeffrey W.
McKenna, William P. Frank, Preeta D.
Bansal, and Sarah E. McCallum.
As amici for defendant: National Chamber Litigation Center, Inc.; Chamber of
Commerce of the United States; Securities Industry and Financial Markets
Association.
by Moreno; 47 C4th 610.
CALIFORNIA COURTS
OF APPEAL
IN OPINION VACATED ON
NOVEMBER 30, SECOND
DISTRICT HELD THAT TRIAL
COURT ERRED IN REFUSING
DEFENDANT’S REQUEST TO
GIVE BAJI No.12.26 ON MIXEDMOTIVE DEFENSE
HARRIS v CITY OF SANTA MONICA.
In an opinion filed on October 29, and
vacated when a petition for rehearing
was granted on November 30, the Second District, Division Eight, reversed a
judgment on a jury verdict for the plaintiff
on a FEHA sex discrimination claim
involving allegations by a probationary
bus driver that she had been discharged
because she was pregnant. Agreeing
with the city that the trial court had erred
in failing to give a requested “mixed
motives” instruction, the court wrote in
part as follows:
“The city asserts ... that it had sufficient
nondiscriminatory reasons to fire Harris, and her pregnancy played no part in
its decision to terminate her. The circumstances to which the city points as
giving it adequate cause to fire Harris
were undisputed and emerged before
the city knew Harris was pregnant: two
preventable accidents, two miss-outs,
and a performance evaluation warning
‘further development needed.’
“The city asked the court to instruct the
jury with BAJI No. 12.26. As offered by
the city, that instruction states in part:
If you find that the employer’s action
... was actually motivated by both
discriminatory and non-discriminatory reasons, the employer is not
liable if it can establish ... that its
legitimate reason, standing alone,
would have induced it to make the
same decision.
“The instruction was well tailored to the
city’s defense, which rested on substantial evidence of Harris’s deficient
performance... [¶] Instead of BAJI 12.26,
the court instructed the jury with the
Judicial Council’s California Civil Jury
Instruction (CACI) No. 2500. That instruction stated the city was liable if
Harris’s pregnancy ‘was a motivating
reason/factor for the discharge.’ A ‘motivating factor,’ the court told the jury, ‘is
something that moves the will and induces action even though other matters
may have contributed to the taking of
the action.’
“[T]he instructions [given] overlapped
BAJI No. 12.26... But the overlap was
incomplete, to the city’s detriment, because the instructions given did not
provide the city with a complete defense
if the jury found the city would have
terminated Harris anyway for performance reasons even if she had not been
pregnant. The court’s refusal to instruct
the jury with BAJI No.12.26 therefore
prejudiced the city.
“CACI’s omission of a form instruction
for mixed motive does not undermine
the viability of the defense... We take
from CACI’s omission ... a likely recognition ... that the law involving the mixedmotive defense is not stable and clear,
but instead arguably in flux. Indeed, as
recently as a few months ago, the
United States Supreme Court stated in
Gross v. FBL Financial Services, Inc.
(2009) 557 U.S. ___ [129 S.Ct. 2343]
that the defense was subject to criti(Cont'd on Page 3, DECISIONS)
-2-
CALIFORNIA
EMPLOYMENT
LAWYERS ASSOCIATION
Virginia Keeny
Pasadena, CA 91103
Tel: (626) 585-9600
Director:
Christina Krasomil
Encino, CA 91436-2412
Tel: (818) 907-7895
FAX: (818) 907-7474
EXECUTIVE BOARD
(Santa Monica)
Steven Pingel
(Long Beach)
David DeRubertis
(Woodland Hills)
(Laguna Hills)
David Duchrow
(Los Angeles)
Cynthia Rice
(San Francisco)
Wilmer Harris
(Pasadena)
Mika Spencer
(San Diego)
Phil Horowitz
(San Francisco)
James P. Stoneman
(Claremont)
Jean K. Hyams
(Oakland)
Christopher Whelan
(Gold River)
Toni Jaramilla
(Los Angeles)
Jeffrey Winikow
(Los Angeles)
Dolores Leal
(Los Angeles)
Bulletin Editor
Christopher Bello
842 Irving Avenue
Astoria, OR 97103
Ph: (503) 338-3891
DECISIONS
(From Page 2)
cism for its workability while continuing
to be available in employment discrimination cases other than those based
on age discrimination...
“Harris suggests the mixed-motive rule
stated in BAJI 12.26 is no longer good
law. In support she cites only our Supreme Court’s grant of review in Harvey
v. Sybase, Inc. (2008) 161 Cal.App.4th
1547 ..., a review that was later dismissed by stipulation of the parties... A
decision in which the Supreme Court
grants review may not be cited as
authority, and the Supreme Court’s
decision to grant review is itself of no
precedential value.
“Harris also contends the court did not
err ... because the city’s answer to
Harris’s complaint did not plead mixed
motive as an affirmative defense... Harris cites no authority, however, that the
mixed motive instruction constitutes
an affirmative defense that a defendant
waives if not alleged in its answer...
“Although we hold that the court erred
in not instructing the jury with the
mixed-motive defense of BAJI No.
12.26, we hold the error does not entitle
the city to judgment notwithstanding
the verdict because there was substantial evidence to support the jury’s
verdict for Harris... [¶] Harris offered
sufficient evidence that, if believed by a
trier of fact, suggested the city fired her
because she was pregnant. On the
other hand, the city’s competing evidence focusing on Harris’s purportedly
poor performance, even if believed, did
not obligate the city to fire her... Accordingly, the city was not entitled to
judgment notwithstanding the verdict...
[¶] The judgment and attorney’s fee
award are reversed, and the matter is
remanded for retrial.”
For plaintiff: Michael Nourmand.
For defendant: Marsha Jones Moutrie,
City Attorney; Joseph Lawrence, Assistant City Attorney; Carol Ann Rohr
and Barbara Greenstein, Deputy City
Attorneys.
Second Dist Div Eight, 10/29/09;
opinion by Rubin with Flier and
Bigelow concurring; 101 CR3d 61;
rehearing granted and opinion vacated, 11/30/09.
DISCRETION IN EXCLUDING
EVIDENCE OF OFFER TO
COMPROMISE CONTAINED IN
SEPARATION AGREEMENT
MANGANO v VERITY, INC. Affirming a
judgment on a jury verdict for the defense on a FEHA disability discrimination claim, the Sixth District rejected
the plaintiff’s argument that the trial
court had erred in granting two of the
defendant’s in limine motions. The court
wrote in part:
“In September 2005, Mangano filed an
action against Verity alleging disability
discrimination. On November 17, 2006,
the superior court entered judgment for
Verity in that action after granting
Verity’s summary judgment motion.
[fn.1: Mangano appealed from that judgment. His appeal remained pending at
the time of the current action. We
affirmed that judgment in Mangano v.
Verity (2008) 167 Cal.App.4th 944.]
[Editor’s note: The Sixth District’s
October 2008 opinion, addressing
claims for discriminatory non-promotion and harassment based on the
employer’s perception that Mangano
was mentally disabled by what was
later diagnosed as Asperger’s Syndrome, was summarized in CELA Bulletin, Oct 08, p.3.] On December 11,
2006, Verity terminated Mangano’s
employment.
“At the time it terminated Mangano’s
employment, Verity presented Mangano
with a letter proposing ‘terms of the
separation agreement ... which Verity
... is offering to you to aid in your
employment transition.’ In the proposed
separation agreement, Verity offered to
pay Mangano a lump sum equivalent to
17 weeks of salary in exchange for
Mangano’s agreement to a
‘Nonsolicitation’
clause,
a
‘Nondisparagement’ clause, a ‘Release’
clause, an ‘ADEA Waiver’ clause, a
‘Section 1542 Waiver’ clause, and a ‘No
Voluntary Adverse Action’ clause.
“The proposed ‘Release’ clause read:
‘Except as otherwise set forth in this
Agreement, in exchange for the consid-3-
eration under this Agreement to which
you would not otherwise be entitled,
including the Severance Payment, you
hereby generally and completely release
the Company ... from any and all claims,
liabilities and obligations, both known
and unknown, that arise out of or are in
any way related to events, acts, conduct, or omissions occurring at any time
prior to and including the date you sign
this Agreement. This general release
includes, but is not limited to: (1) all
claims arising out of or in any way
related to your employment with the
Company or the termination of that employment... (4) all tort claims, including
claims for fraud, defamation, emotional
distress, and discharge in violation of
public policy; (5) all claims made in the
lawsuit filed by you against Verity, Inc.
... (‘Prior Lawsuit’); and (6) all federal,
state, and local statutory claims...’
“Mangano declined the proposed separation agreement. In February 2007,
Mangano filed this action against Verity
for retaliatory termination in violation of
FEHA. [fn.2: His complaint alleged additional causes of action, but only the
retaliation cause of action was submitted to the jury.] In May 2008, Verity filed
a group of in limine motions. In Limine
Motion No.1 sought an order excluding
evidence of Mangano’s ‘purported disability’ and evidence of Verity’s ‘allegedly discriminatory statements or acts
regarding Mangano’s actual or perceived
disability.’ Verity claimed that this evidence was irrelevant and that it should
be excluded under Evidence Code section 352. In Limine Motion No.3 [Verity]
sought exclusion of the proposed separation agreement under Evidence Code
section 1152. The trial court granted
both motions.
“At trial, Mangano contended that he
had been fired in retaliation for filing and
prosecuting his 2005 lawsuit against
Verity. [fn.3: In his opening statement,
Mangano described his 2005 lawsuit as
having been based on ‘his belief that [he]
had been treated at Verity in 2004 and
2005 in a manner which was not permitted by law.’] Verity contended that
Mangano’s employment had been ter(Cont'd on Page 4, DECISIONS)
DECISIONS
(From Page 3)
minated because his job responsibilities had gradually been eliminated for
legitimate business reasons... Mangano
claimed that Verity’s asserted justification ... was a pretext for retaliation.
“The jury’s verdict resolved a single
question: ‘Was Thomas Mangano’s opposition to what he reasonably believed
to be improper treatment in the work
place by filing a lawsuit against Verity
the motivating reason for Verity’s decision to terminate his employment?’ The
jury answered ‘No.’
“Mangano moved for a new trial on the
ground that the trial court had erred in
granting Motion 1 and Motion 3. The
court denied the motion and entered
judgment on the jury’s verdict...
“The record plainly reflects that
Mangano’s attorney explicitly agreed
on the record to the exclusion of evidence of the ‘specific allegations of the
‘05 case...’ Consequently, he forfeited
any claim that the trial court erred in
excluding evidence of those specific
allegations. The only other evidence
excluded by the court’s ruling on Motion
1 was evidence of Mangano’s ‘alleged
disability.’ Mangano’s ‘conditional nonopposition’ to Motion 1 did not assert
that evidence of his ‘alleged disability’
was relevant to anything other than
mitigation of damages, an issue that
the jury never addressed... It follows
that the trial court’s exclusion of this
evidence cannot, under Evidence Code
section 354, provide a basis for reversal.
“Motion 3 sought and obtained exclusion of the proposed separation agreement under Evidence Code section 1152
‘for purposes of establishing liability.’
Mangano’s contention on appeal is that
the proposed separation agreement did
not fall within Evidence Code section
1152 because that section applies only
to ‘offers to compromise disputes existing at the time the offer is made’ and
does not apply where the offer to compromise also extends to ‘potential
claims arising out of the termination in
progress which had never been asserted by the plaintiff.’ He essentially
claims that any dispute about Mangano’s
termination, which was the basis of the
current lawsuit, had not yet arisen at the
time of the proposed separation agreement.
“We discern nothing in the language of
Evidence Code section 1152 which limits it to offers to compromise preexisting
disputes. ‘Evidence that a person has
... offered ... money to another who has
sustained or will sustain ... loss or
damage ... is inadmissible to prove his
or her liability...’ (Evid. Code, § 1152,
subd. (a), italics added.)
“Cassino [v Reichhold Chemicals, Inc.
(9th Cir 1987) 817 F2d 1338] is readily
distinguishable. Federal Rules of Evidence, rule 408, unlike Evidence Code
section 1152, expressly applies only
where a ‘claim’ was ‘disputed’ at the
time of the offer. Evidence Code section
1152, on the other hand, says nothing
about any claim, does not require the
preexistence of a dispute, and expressly
applies to a prospective loss. The trial
court did not abuse its discretion in
concluding that the proposed separation agreement fell within Evidence Code
section 1152’s broad scope.
“Mangano also contends that the trial
court abused its discretion in excluding
the proposed separation agreement
because it was potentially admissible
for uses other than proving Verity’s liability... [But] the challenged ruling did
not preclude Mangano from utilizing this
evidence for some other purpose... [¶]
The judgment is affirmed.”
For plaintiff: Stephen R. Jaffe.
For defendant: Gregory L. Doll, Hunter
R. Eley.
Sixth Dist, 11/16/09; opinion by
Mihara with McAdams concurring
and Duffy concurring in the judgment only; 2009 DAR 16143, 2009 WL
3807485.
FOURTH DISTRICT HOLDS THAT
GARCETTI APPLIES TO FREE
SPEECH CLAIMS UNDER
CALIFORNIA CONSTITUTION
KAYE v BOARD OF TRUSTEES OF
SAN DIEGO CO. PUBLIC LAW LI-4-
BRARY. “A former law librarian whose
employer discharged him after he sent
a scathing e-mail criticizing his superiors appeals the trial court’s decision to
grant summary adjudication as to the
state law causes of action in his wrongful termination action,” the Fourth District, Division One, wrote in a November
10 opinion. “We conclude the granting
of summary adjudication was proper
under the circumstances and affirm the
judgment.”
In addition to rejecting the viability of a
Brown Act claim, and a claim under a
Bus & Prof Code section defining the
authority of the Law Library’s Board of
Trustees, the court explained the facts
and its reasoning in part as follows in
connection with the plaintiff’s free speech
and False Claims Act causes of action.
“The day after Kaye sent the e-mail...,
he was ... placed on administrative
leave pending an investigation... Approximately two weeks later, [a supervisor] sent him a letter notifying him she
was proposing he be discharged for
‘insubordination and serious misconduct.’ ... [¶] Cyndy Day-Wilson, an
attorney and former member of the
Library’s Board of Trustees, conducted
a pre-termination administrative hearing ... [and] concluded Kaye’s ‘conduct
constituted serious misconduct and
justifies termination.’ [Library Director]
Riger subsequently terminated Kaye...
“Kaye submitted a grievance and argued his position before the Board [of
Trustees] ... [which] voted to discharge
Kaye... The Board’s decision ... indicated the Board was not concerned
about the substance of Kaye’s complaints, but the manner in which he
chose to raise them. In the Board’s
view, the e-mail appeared ‘intentionally
calculated to disrupt the office, undermine the authority of the Director, and
impinge upon working relationships with
the Library.’ The Board further concluded ‘the email exhibited an inappropriate lack of judgment, professionalism and respect for the chain of command necessary for the functioning of
the Law Library.’
DECISIONS
(From Page 4)
“Kaye filed a combined complaint for
wrongful termination and petition for writ
of mandate against the Board, the Library, Riger, and [supervisor] Allen-Hart.
The complaint contained six causes of
action. The first and second causes of
action have been removed to federal
court. [Note: The federal claims were
dismissed by the district court and
Kaye’s Ninth Circuit appeal is pending.]
The third cause of action alleges his
discharge violated Business and Professions Code section 6345. The fourth
cause of action alleges the Board violated [the Brown Act]. The fifth cause of
action alleges his discharge violated
the free speech clause in article I, section 2, subdivision (a) of the California
Constitution. The sixth cause of action
alleges his discharge violated the
whistleblower protections in the [California False Claims Act].... [¶] We conclude Kaye cannot establish any of
these causes of action and affirm the
judgment.
“Kaye concedes his [fifth] cause of
action fails if Garcetti [v Ceballos (2006)
547 US 410] applies to it; however, he
contends Garcetti does not apply to
violations of the state Constitution’s
free speech clause. We conclude there
is no merit to this contention...
“Generally, when we interpret a provision of the California Constitution that is
similar to a provision of the federal
Constitution, we will not depart from the
United States Supreme Court’s construction of the similar federal provision
unless we are given cogent reasons to
do so... [¶] Kaye does not identify
anything in the language or history of
the state Constitution’s free speech
clause suggesting Garcetti should not
apply... [T]he existence of dissenting
opinions and academic commentary is
not a sufficient basis by itself for departing from the Supreme Court’s construction...
“In his sixth cause of action, Kaye
contends his discharge violated the
CFCA because his discharge was based
in part on his suggestion that Riger may
not have wanted him to attend the conference to prevent him from discovering
Riger might be intending to submit a
false claim for reimbursement of conference-related expenses... [¶] [But] [i]t is
readily apparent from their context that
the remarks in Kaye’s e-mail about
Riger’s conference attendance were not
in furtherance of a false claims action.
The undisguised purpose of the e-mail
was to complain about the inquiry into
Kaye’s speaking invitation, not to report
or initiate an investigation into a false
claim. A disgruntled employee’s expression of dissatisfaction with his treatment on the job is not protected activity
under the CFCA...”
For plaintiff: Michael Kaye, in pro per.
For defendants and real parties in interest: Andrews, Lagasse, Branch & Bell,
Margaret C. Bell and Shauna L. Durrant.
Fourth Dist Div One, 11/10/09; opinion by McConnell with Huffman and
McDonald concurring; 2009 DAR
15935, 2009 WL 3738795.
WCAB ERRED IN UPHOLDING
LABOR CODE 132a CLAIM BY
WORKER WHOSE EMPLOYER
HAD REFUSED TO ACCEPT
PHYSICIAN’S RELEASE TO
RETURN TO WORK
GELSON’S MARKETS, INC. v WORKERS’ COMPENSATION APPEALS
BOARD. In an opinion filed on November 13, the Second District, Division
Three, wrote in part as follows:
“Labor Code section 132a penalizes an
employer who discriminates ‘in any
manner’ against an employee who has
filed a workers’ compensation claim or
received a rating, award, or settlement.
An employer, Gelson’s Supermarkets,
petitions this court pursuant to section
5950 seeking annulment of a [WCAB]
decision and award which found Gelson’s
liable for discrimination against an industrially injured employee, Paul Fowler,
because Gelson’s did not accept a
physician’s release to allow Fowler to
return to work. In making this determination, the WCAB did not apply the
standard established by the California
Supreme Court in Department of Rehabilitation v. Workers’ Comp. Appeal Bd.
(2003) 30 Cal.4th 1281 (Lauher). To
-5-
establish a prima facie case of discrimination prohibited by section 132a, an
employee must show that he suffered
an industrial injury and that the employer caused him to suffer some detrimental consequence as a result. The
employee must also show that the
employer singled out the industrially
injured worker for disadvantageous treatment because of the industrial nature of
his injury, and treated the industrially
injured employee differently by making
him suffer disadvantages not visited on
other employees because the employee
was industrially injured or had made a
workers’ compensation claim. Fowler
failed to make a prima facie case of
discrimination against Gelson’s under
this standard. The WCAB award ...
must therefore be annulled.
“Fowler made no showing that Gelson’s
treated him differently from
nonindustrially injured employees. That
is, Fowler made no showing that
Gelson’s would have returned to work a
non-industrially injured employee whose
physician provided the same releases,
but discriminated against Fowler by not
returning him to work.”
For employee: Lawrence Silver.
For Gelson’s: Paul, Hastings, Janofsky
& Walker, Paul W. Crane, Jr., Molly A.
Harcos; Daniel P. Goggins.
For California Applicants’ Attorneys
Ass’n as amicus: William H. Herreras.
Second Dist Div Three, 11/1/09; opinion by Kitching with Croskey and
2009 WL 3790739.
FOLLOWING DEFAULT
JUDGMENT AGAINST BANKRUPT
DEFENDANT, COUNSEL
REPRESENTING CLASS OF
WAGE AND HOUR PLAINTIFFS
HAD OBLIGATION TO CONTINUE
REPRESENTATION IN ATTEMPT
TO ENFORCE JUDGMENT
BARBOZA v WEST COAST DIGITAL
GSM, INC. “What are the obligations of
class counsel,” the Second District,
DECISIONS
(From Page 5)
Division Four asked, “when he learns
that the defendant in the class action he
is prosecuting had ceased operations,
sold its assets to a third party, and
intends to file for bankruptcy? In the
case before us, counsel obtained a
stipulated default and a default judgment that included more than $4 million
in aggregate damages for the class,
plus more than $1 million in prejudgment interest. So far, so good. But
counsel then asserted that his job would
be completed once his motion for attorney fees was heard, i.e., that he had no
obligation to enforce the judgment on
behalf of the class. The trial court disagreed. It ruled that ‘by assuming the
responsibility of pursuing claims on
behalf of the class, class counsel assumed the obligation to pursue it until
the end (i.e., enforcement of the judgment) and not just until judgment.’ Based
upon the principles guiding class actions, we agree that class counsel’s
obligations to the class do not end with
the entry of judgment, and hold that
class counsel’s obligations continue
until all class issues are resolved, which
may include enforcement of the judgment.
“In this case, the trial court properly
performed its duty by finding that class
counsel’s job did not end with entry of
judgment. The court was faced with a
judgment (and eventually an attorney
fee award), and a defendant who may
not have any assets, let alone sufficient
assets to satisfy both... [T]here remains an important class issue—i.e.,
how the recoverable assets (if any) are
to be distributed. In short, class
counsel’s job—to represent the class in
resolving class issues—is not yet done.
“If may be that, given the specialized
knowledge needed to enforce judgments, class counsel is not competent
to provide enforcement services without
assistance. But nothing prevents class
counsel from associating in counsel
with that expertise, and the cost of that
association can be paid by the class
from any recovery achieved. And if, after
diligent inquiry, class counsel determines there are no recoverable assets,
counsel may present such findings to
the trial court, and the trial court, as
guardian of the rights of the absent class
members, may determine whether counsel should be relieved of any further
obligations to the class.”
For plaintiffs: Douglas A. Barritt and
Perry G. Smith.
Second Dist Div Four, 11/19/09; opinion by Willhite with Epstein and
2009 WL 3859613.
SIXTH DISTRICT CONSTRUES
COMPULSORY CROSSCOMPLAINT STATUTE RE
COMPETING CLAIMS FOR
WRONGFUL TERMINATION AND
MISAPPROPRIATION OF PATENTS
ALIGN TECHNOLOGY, INC. v TRAN.
In an opinion filed on November 25, the
Sixth District wrote in part as follows:
“California’s compulsory cross-complaint
statute prohibits a party from asserting
a claim if, at the time the party answered
a complaint in prior litigation, it failed to
allege in a cross-complaint any thenexisting, related cause of action against
the plaintiff. (Code Civ. Proc., § 426.30,
subd. (a).) Few cases have construed
the relatedness requirement of the ...
statute. Accordingly, whether an
unasserted claim is a ‘related’ cause of
action that is barred by section 426.30
can be a difficult question to answer.
“In January 2008, appellant Align Technology, Inc., sued its former employee,
Bao Tran, for (among other things) breach
of contract and conversion of patents
belonging to the company. Tran demurred, claiming that the action was
barred under the compulsory cross-complaint statute. He asserted that Align, in
a prior state court action in San Francisco (the prior suit), had sued Tran, he
had cross-complained for wrongful termination, and Align had failed to assert
the current claims at the time it answered the cross-complaint. The court
agreed that Align’s claims were barred
under section 426.30 because they
should have been raised in the prior suit,
and it sustained Tran’s demurrer without
leave to amend.
-6-
“Align contends the claims asserted in
the present action were not matters
that it was required to assert as a
compulsory cross-complaint in the prior
suit. It argues that some of the claims
were unknown at the time it answered
Tran’s cross-complaint and that the
other claims were not ‘related’ to Tran’s
cross-complaint... Align argues further
that the court abused its discretion by
failing to grant Align leave to amend
after sustaining Tran’s demurrer.
“We conclude that the allegations of
the complaint included claims that were
barred on their face by the compulsory
cross-complaint statute because they
were claims logically related to Tran’s
cross-complaint that should have been
asserted in the prior suit. We hold
further that, based upon certain allegations in the complaint and representations made by counsel both at the
hearing on the demurrer and on appeal,
Align may be able to assert claims
against Tran that did not exist when it
answered Tran’s cross-complaint in the
prior suit and would thus not be barred
under section 426.30. Accordingly, Align
should have been granted leave to
amend. We will therefore reverse the
judgment and remand the case with
instructions that the court enter an
order sustaining the demurrer with leave
to amend.
“Align contends that the two lawsuits
are not logically related. It argues that
the prior suit—which it describes as
‘corporate raid’ litigation involving a
startup competitor and various former
key Align employees—was ‘separate
and distinct from’ the current litigation
involving Tran’s operation of ‘a side
business law firm’ and the misappropriation of Align’s patents...
“We conclude that Align’s position involves an improperly narrow application
of the logical relatedness standard...
[¶] Align’s side law business and patent
misappropriation claims here, along with
Tran’s claims in the cross-complaint,
arose out of the employment relationship between the parties... The fact that
the substantive breaches of duty and
DECISIONS
(From Page 6)
contract alleged by Align here differ
from those asserted against Tran in the
prior suit does not negate a finding of
logical relatedness... [¶] Moreover, the
matters Align asserted here are those
that one would anticipate an employer
might raise—either as defenses, by
cross-complaint, or both—in responding to an employee’s claim for wrongful
termination...
“Based upon our conclusions that (1)
Align’s claims are logically related to
the Tran cross-complaint and (2) the
allegations of the complaint do not clearly
show that any of the claims arose after
Align answered the cross-complaint,
we agree that the court properly sustained the demurrer.
“Align argues that it ‘could have amended
its complaint to further clarify that the
claims at issue arose after Align filed its
answer to [the Tran cross-complaint.]’
... [¶] We conclude that Align ... met its
burden of showing that there was a
reasonable possibility it could have
cured the complaint’s defects through
an amendment... Accordingly, we find
that the court abused its discretion here
in denying Align leave to amend.”
For Align: Thomas A. Counts, T. Lee
Kissman, Paul, Hastings, Janofsky &
Walker.
For Tran: Hugh F. Lennon, Ann A.
Nguyen, Robinson & Wood.
Sixth Dist, 11/25/09; opinion by Duffy
with Bamattre-Manoukian and
McAdams concurring; 2009 DAR
16641, 2009 WL 4068600.
NINTH CIRCUIT
ARE COVERED BY REHAB ACT
SECTION 504, WHICH GIVES
CAUSE OF ACTION TO
INDIVIDUALS “SUBJECT TO
DISCRIMINATION UNDER ANY
PROGRAM RECEIVING FEDERAL
FINANCIAL ASSISTANCE”
FLEMING v YUMA REGIONAL MEDICAL CENTER. “This case presents a
question of first impression in our court,”
began Ninth Circuit Judge Bybee in a
November 19 opinion. “Does § 504 of
the Rehabilitation Act, 29 U.S.C. § 794,
extend to a claim of discrimination
brought by an independent contractor?
In order to answer that question, we
must decide whether § 504(d), which
refers to ‘the standards applied under
title I of the Americans with Disabilities
Act ... as such sections relate to employment,’ incorporates Title I literally
or selectively. If Title I is incorporated
literally, then the Rehabilitation Act is
limited by the ADA and only covers
employer-employee relationships in the
workplace; if selectively, then the Rehabilitation Act covers all individuals ‘subject to discrimination under any program or activity receiving Federal financial assistance,’ who may bring an
employment discrimination claim based
on the standards found in the ADA. 29
U.S.C. § 504(a). The Sixth and Eighth
Circuits have concluded that Title I is
incorporated literally, [cites omitted],
while the Tenth Circuit has concluded
that Title I is incorporated selectively.
[cite omitted]. We agree with the Tenth
Circuit, and conclude that § 504 incorporates the ‘standards’ of Title I of the
ADA for proving when discrimination in
the workplace is actionable, but not
Title I in toto, and therefore the Rehabilitation Act covers discrimination claims
by an independent contractor. Accordingly, we reverse the judgment of the
district court.”
For plaintiff: Stanley Lubin, Phoenix;
Stephanie M. Marnin, Outten & Golden,
Stamford Conn.
For defendants: Sandra J. Creta,
Quarles & Brady, Phoenix.
Bybee joined by Gould and
Tymkovich; 2009 DAR 16248, 2009
WL 3856926.
EMPLOYEE WITH SPEECH
IMPAIRMENT FAILED TO RAISE
FACT ISSUE AS TO EITHER
SUBSTANTIAL LIMITATION OR
PRETEXT
BECERRIL
v
PIMA
-7-
COUNTY
ASSESSOR’S OFFICE. Affirming summary judgment on ADA claims for discriminatory reassignment and failure to
reasonably accommodate, the Ninth
Circuit held that the plaintiff, who suffers
from a temporomandibular disorder
(TMD) that affects her speaking ability,
failed to raise a triable issue of pretext.
The court wrote:
“We assume without deciding that
Becerril has stated a prima facie case of
discriminatory reassignment under the
ADA. The Office, however, has articulated several legitimate, nondiscriminatory reasons for the reassignment...
“There is no evidence that [County Assessor] Lyons reassigned Becerril because her coworkers ... complained
about accommodations she received
for her TMD; the complaints Lyons received were about Becerril’s alleged
misconduct. The fact that Lyons never
publicly articulated his concerns about
the alleged misconduct also fails to
raise a genuine issue, for
‘[c]ircumstantial evidence of pretext
must be specific and substantial.’
Bergene v. Salt River Project Agric.
Improvement and Power Dist., 272 F.3d
1136, 1142 (9th Cir 2001). His failure to
investigate the allegations does not
show pretext, since Lyons was concerned with the ‘morale problem’ the
allegations created and not the allegations themselves. Finally, Becerril’s disbelief of Lyons’s explanations for the
reassignment cannot create a genuine
issue of fact on pretext, because there
is no evidence to substantiate her disbelief.
“We [also] conclude that Becerril has
not raised a triable issue on whether her
TMD substantially limits her in speaking, eating, seeing, sleeping, and thinking and concentrating... [¶] As an initial
matter, we do not agree with Becerril
that the ADA Amendments Act of
2008..., which alters the ADA’s definition of ‘disability,’ applies retroactively...
“Becerril is not substantially limited in
speaking because she is limited only in
talking constantly, for a long time, and
DECISIONS
(From Page 7)
under stress... She is not substantially
limited in eating because eating hard
foods is not ‘of central importance to
daily life,’ Toyota Motor Mfg., Ky., Inc. v.
Williams, 534 U.S. 184, 197 (2002),
and an inability to eat hard foods is not
substantially limiting. See Frank v.
United Airlines, Inc., 216 F.3d 845, 848,
856-57 (9th Cir. 2000). She has produced no evidence besides conclusory
assertions on how her impairment substantially limits her seeing or sleeping.
And though her pain and grogginess
limited her thinking and concentrating
at times when she was working, Becerril
has not raised a genuine issue of material fact on whether her intermittent
symptoms substantially limited her
ability to think and concentrate not just
at work but outside of work as well. See
Toyota Motor, 534 U.S. at 200-01.”
and thus we affirm the district court’s
denial of American’s motion for judgment as a matter of law.
For plaintiff: Richard M. Martinez, Tucson.
For defendant: Stacey Roseberry, Pima
County Attorney’s Office, Tucson.
Ninth Circuit, 11/25/09; before B.
Fletcher, Canby, and Graber, (per
curiam opinion); 2009 DAR 16651,
2009 WL 4067450.
“[T]he district court did not abuse its
discretion in any of its evidentiary rulings. The decision to admit the disputed
evidence fell within the district court’s
discretion under Federal Rules of Evidence 402 and 403.”
NINTH CIRCUIT AFFIRMS $1.2
MILLION JUDGMENT ON FEHA
DISABILITY DISCRIMINATION
CLAIM BY DISCHARGED FLIGHT
ATTENDANT
ANDERSON v AMERICAN AIRLINES.
“Greta Anderson [a former flight attendant] sued American Airlines for employment discrimination under [FEHA],’
a Ninth Circuit panel began in a short
unpublished memorandum opinion filed
on November 6. “The jury found that
Anderson’s perceived mental disability
was a motivating reason for her termination by American, awarding her $1 million in emotional distress damages and
$238,333 in economic damages. The
district court denied American’s motion
for judgment as a matter of law and
motion for a new trial (or in the alternative, remittur).
“[W]e conclude that the jury’s verdict
was supported by substantial evidence,
“American requested a new trial on the
grounds that jury passion and prejudice
infused all issues and resulted in excessive damages. However, ‘[w]e will
not disturb an award of damages on
appeal unless it is clearly unsupported
by the evidence,’ and it ‘must be affirmed unless it is ‘grossly excessive’ or
‘monstrous’ or ‘shocking to the conscience.’ [cites omitted.] Here, ... the
district court properly upheld the award.
“American also appeals several trial
issues... Taken as a whole, the jury
instructions were proper. The district
court did not err in refusing American’s
proposed jury instructions.
[Editor’s note: As revealed by the appellate briefs, (see 2009 WL 2444263,
and 2009 2444264), the specific issues
on appeal, (not enumerated by the Ninth
Circuit), included American Airlines rejected contentions that: (1) the evidence established that Anderson was
not able to perform essential job functions; (2) the evidence established that
the sole decision-maker had no knowledge of Anderson’s disability; (3) the
jury was motivated by passion and prejudice; (4) the trial court failed to instruct
the jury fully as to: (a) the plaintiff’s
burden of proof; (b) American’s entitlement to rely on the medical opinion of
doctors; [c) business judgment; (d) the
proper calculation of damages and pension offset; and (e) insubordination and
violation of company rules; (5) the trial
court erred in admitting, as background,
evidence of events that occurred more
than one year before the plaintiff’s discrimination charge; and (6) the trial
court erred in admitting evidence of
events occurring outside California. (The
same arguments had been addressed
by trial Judge Susan Illston of the Northern District in a thoroughly reasoned
-8-
decision rejecting American Airlines’
post-trial motions.)]
For plaintiff: Ellen Lake, Oakland (appeal); Greg Redmond, Pittsburg (trial).
For defendant: Kenneth R. O’Brien,
Littler Mendelson PC, Sacramento;
Natalie A. Pierce, Littler Mendelson
PC, San Francisco.
Ninth Circuit, 11/6/09; before Rymer,
McKeown, and N. R. Smith (unpublished memorandum opinion); 2009
WL 3698566.
UNPUBLISHED
CALIFORNIA COURT OF
APPEAL DECISIONS
THIRD DISTRICT REVERSES
JUDGMENT FOR EMPLOYER
BECAUSE McDONNELL
DOUGLAS ANALYSIS WAS
INJECTED INTO JURY
INSTRUCTIONS, AND HOLDS THAT
PROOF THAT EMPLOYER
APPLIED “100 PERCENT
HEALED” POLICY REQUIRED
ENTRY OF DIRECTED VERDICT
FOR PLAINTIFF
TABAIE v STOCKTON UNIFIED
SCHOOL DISTRICT. In an unpublished
opinion filed on November 17, the Third
District wrote in part as follows:
“Plaintiff Bijan Tabaie’s employer ...
refused to allow him to continue working
after he was unable to obtain a complete medical release from a work-related injury and he had not requested
reasonable accommodations, even
though he was able to perform his normal job duties without the aid of accommodations. Plaintiff sued, claiming
employment discrimination based on
his disability. The jury found for the
District.
“Plaintiff claims the trial court erred
when it (1) specially instructed the jury
at the District’s request to make a legal
decision, namely, that the District had
DECISIONS
(From Page 8)
rebutted a presumption of discrimination if the jury determined the District
acted pursuant to a legitimate, nondiscriminatory business purpose, and the
court provided a special verdict question directing the jury to find for the
District if it found the existence of such
a business purpose; and (2) denied
plaintiff’s motion for a directed verdict.
“We agree with plaintiff that the court
committed prejudicial error by giving the
special instruction and special verdict
question, and it erred by not granting a
directed verdict in plaintiff’s favor. We
reverse the judgment and remand with
directions to grant plaintiff’s motion for a
directed verdict.
“Although [the jury] determined plaintiff’s
physical condition was a motivating
factor for the adverse employment action, it also found the District had a
legitimate, nondiscriminatory business
reason for taking its action.
“The [business purpose] instruction was
requested by the District at trial as an
affirmative defense, but plaintiff argues
no such affirmative defense exists
against FEHA discrimination when the
case is given to a jury. He also claims
the instruction is based on a burdenshifting test commonly used in discrimination actions that does not apply
if the action goes to a jury trial.
“In response to plaintiff’s argument, the
District now claims the existence of a
nondiscriminatory business purpose is
not an affirmative defense but rather is
relevant on the issue of liability. It claims
the existence of a nondiscriminatory
business purpose can be used at trial
‘for testing whether plaintiff has proved
discrimination.’
“We agree with plaintiff. The special
instruction wrongly required the jury to
decide issues of law and to engage in a
burden-shifting analysis that is not to be
performed by a jury at trial. Moreover,
while evidence of a nondiscriminatory
business purpose for taking adverse
employment action is relevant at trial, it
is not by itself dispositive, as it was
treated here by the special verdict question.
“Under these holdings [cites omitted], it
is obvious the trial court erred when ...
it injected the McDonnell Douglas balancing test into the jurors’ deliberations... The special instruction wrongly
... required the jury to determine if a
prima facie presumption of discrimination had been rebutted by the District’s
showing. This was an issue of law
relevant at a pretrial proceeding such as
a summary judgment motion. It was not
relevant by the time this case went to
the jury.
Third Dist, 11/20/09; opinion by
Nicholson with Scotland and CantilSakauye concurring; 2009 WL
“[T]here is a reasonable probability the
jury, when instructed correctly, would
find for the plaintiff. We conclude the
instructional error was prejudicial, and
the judgment must therefore be reversed.
VU v SUPERIOR COURT (RALPHS
GROCERY CO.) The employer’s arbitration agreement contained multiple
defects and was unenforceable, the
Second District, Division Seven, held in
an unpublished opinion filed on November 17 in connection with class claims
by Ralphs’ pharmacists for the denial of
meal and rest breaks. Granting a petition for writ of mandate and ordering the
matter to proceed in a court of law, the
Court of Appeal wrote in part as follows:
“The District [also] makes much of
plaintiff’s inconsistent statements in his
workers’ compensation and California
STRS proceedings regarding the effect
of his injury on his ability to perform his
job. We agree with the trial court ... that
plaintiff’s subsequent claims of total
disability occurring after the District
refused to let him work were not relevant
to his ability to perform his job before the
District took its action.
“Plaintiff claims the trial court erred in
denying his motion for a directed verdict. He asserts the District’s policy
was a 100 percent healed policy that is
an invalid discriminatory employment
action per se. He also claims the jury
determined all of the liability issues in
his favor, and that no substantial evidence supports the verdict against him.
We agree that ... the District’s policy ...
operated as a 100 percent healed policy,
and thus a directed verdict should have
been granted.
“The judgment is reversed and the matter is remanded to the trial court with
instructions to grant plaintiff’s motion
for directed verdict. Costs on appeal are
awarded to the plaintiff.”
For plaintiff: Adam Blair Corren, Stockton.
For defendant: Louis A. Leone, Walnut
Creek.
SECOND DISTRICT HOLDS
UNCONSCIONABLE AND
UNENFORCEABLE BECAUSE OF
MULTIPLE DEFECTS, INCLUDING
CLASS WAIVER
“Ralphs concedes the procedural element of the unconscionability analysis
is met in this case... ‘An arbitration
agreement that is an essential part of a
‘take it or leave it’ employment condition, without more, is procedurally unconscionable.’ Martinez v. Master Protection Corp. (2004) 118 Cal.App.4th
107, 114...
“The arbitration agreement is also substantively unconscionable on multiple
grounds. For the reasons addressed in
Olvera v. El Pollo Loco, Inc. (2009) 172
Cal.App.4th 447, 457..., the class arbitration waiver is substantively unconscionable because it purports to insulate Ralphs from all employee class
actions and class arbitrations as it applies not only to pharmacists like Vu but
to all employees of Ralphs and is also
unfairly one-sided...
“Further, as explained in Franco v. Athens Disposal Company, Inc. (2009) 171
Cal.App.4th 1277, another case involving meal and rest breaks, where the
arbitration agreement not only contains
a class arbitration waiver but also pro(Cont'd on Page 10, DECISIONS)
-9-
DECISIONS
(From Page 9)
hibits an employee from acting as a
private attorney general, ‘the agreement
as a whole is tainted with illegality and
is unenforceable.’ (Id. at p. 1302; see
also Armendariz, supra, 24 Cal.4th at p.
124...)
“Here, not only does Ralphs purport to
prohibit all employee class, private attorney general and representative actions, but in the same agreement it ...
mandates confidentiality as to the ‘existence, content and outcome’ of any
proceeding...; prohibits arbitration before providers maintaining their own procedural safeguards in conflict with the
limitations Ralphs seeks to impose...;
attempts to shorten the limitations period (and thus limit available damages)
and impose arbitration costs and fees
on employees...; and provides Ralphs
may modify the agreement so long as it
does so in writing..., among other onesided provisions.
“Let a peremptory writ of mandate issue
directing the trial court to vacate its
order granting Ralphs’s petition to compel arbitration and to issue a new and
different order denying the petition. Vu
shall recover his costs in this original
proceeding.”
For plaintiff: Matthew A. Kaufman,
Sherman Oaks.
For real party in interest: Reed Smith,
Linda S. Husar and Steven B. Katz.
opinion by Woods with Perluss and
Jackson concurring; 2009 WL
NO PERCEIVED DISABILITY
DISCRIMINATION CLAIM COULD
BE ASSERTED BY REJECTED
APPLICANT WHOSE OBESITY
HAD NO PHYSIOLOGICAL CAUSE
HINES v LOS ANGELES COUNTY
METROPOLITAN TRANSP. AUTH. “In
this disability discrimination action under [FEHA},” the Second District, Division Five, wrote in an unpublished November 6 opinion, “plaintiff and appellant Laverne Hines appeals from a summary judgment in favor of defendant and
respondent Los Angeles [MTA]. Hines
contends: (1) triable issues of fact exist
that MTA refused to hire her based on
her perceived disability; and (2) MTA’s
use of the Bus Operator Candidate
Assessment Test (BOCAT) violated
equal protection. Because Hines failed
to show her obesity was caused by a
physiological condition, no triable issue
of fact of perceived disability discrimination exists and summary judgment was
properly granted. As Hines failed to
raise the Equal Protection issue in the
trial court, the issue is forfeited. Accordingly, we affirm the judgment.
“In her opposition to the summary judgment motion, Hines contended a showing that MTA regarded her obesity as a
physical disability sufficed to maintain
an action based on perceived disability
discrimination pursuant to the FEHA,
even though her obesity had no medical
cause. Hines argued that, in enacting
section 12926.1, subdivision (d), in 2000,
the Legislature superseded the holding
of Cassista [v Community Foods, Inc.
(1993) 5 C4th 1050] by allowing plaintiffs to pursue a perceived disability
cause of action when the physical condition has no medical cause. We disagree with the contention.
“In response to portions of the opinion in
Cassista which are not pertinent to this
appeal, the Legislature amended the
statute in 2000, inter alia, to clarify that
the disabling condition only needed to
‘limit,’ not ‘substantially limit’ life’s major activities... [¶] The 2000 amendment
eliminated the requirement that the condition must affect a bodily system and
changed the requirement that the ‘condition limit ‘major life activities’ to the
singular ‘major life activity,’ but did not
alter the requirement that the condition
have a physiological cause. (See §
12926, subd. (k)(4).)
“Section 12926.1, which was added by
AB 2222 when section 12926, subdivision (k), was amended in 2000, does
not indicate the Legislature intended to
overrule Cassista’s holding that, in perceived disability discrimination cases,
the perceived condition must have a
physiological cause...
“[And] nothing in section 12926.1, subdivision (d), indicates that the Legislature intended to radically alter the definition of covered conditions for perceived disability discrimination lawsuits
by including conditions which have no
physiological basis...
“The sole authority Hines cites to support her contention ... is Jensen [v
Wells Fargo Bank (2000) 85 CA4th
245] at pages 259-260. Jensen is inapposite... The decision in Jensen did not
address whether plaintiff had to show
that a regarded-as-disabling condition
had a physiological cause.”
For plaintiff: Marcus A. Mancini, Timothy Gonzales; Gerald M. Serlin and
Kelly R. Horwitz.
For defendant: Office of the County
Counsel Transportation Division, Mary
E. Reyna; Greines, Martin, Stein &
Richland, Martin Stein and Barbara S.
Perry.
Second Dist Div Five, 11/6/09; opinion by Kriegler with Turner and
Armstrong concurring; 2009 WL
FACT ISSUES WERE RAISED ON
CLAIMS FOR FAILURE TO
ACCOMMODATE AND FAILURE
TO ENGAGE IN INTERACTIVE
PROCESS
AZER v COUNTY OF LOS ANGELES.
In an unpublished opinion filed on November 5, the Second District, Division
One, reversed summary judgment on
FEHA claims for failure-to-accommodate and failure to engage in an interactive process brought by an employee
suffering from carpal tunnel syndrome
and a back condition. “There is no
merit,” the court wrote, “to the County’s
argument that it was entitled to summary adjudication because it was up to
Azer to show that a vacant position
existed within his physical capabilities.
As the moving party, the County bore
the initial burden of producing evidence
that the two position it offered Azer were
the only possible alternative positions
-10-
DECISIONS
(From Page 10)
available. (Jensen v. Wells Fargo Bank,
85 Cal.App.4th at pp. 261-262.) [¶] The
conflicts in the evidence precluded summary adjudication of Azer’s cause of
action for failure to provide a reasonable
accommodation.
“The County’s own evidence establishes
that [supervisor] Goldberg failed to engage Azer in a ‘good faith exploration of
possible accommodations.’ At no time
prior to assigning Azer to the records
processing job did Goldberg confer with
Azer about the job’s physical requirements and whether they were within
Azer’s capacity. Goldberg simply made
the assignment in an e-mail.
“Even if the [subsequent] grievance procedure could be considered an ‘interactive process,’ a triable issue of fact
exists as to whether the job offer that
resulted from the grievance constituted
a reasonable accommodation. Azer
testified that the proposed assignment
to the Renditions Unit was only a temporary position. If the jury found the
assignment was only temporary it could
reasonably find that the County did not
act in good faith in proposing it as a
reasonable accommodation. (Jensen
v. Wells Fargo Bank, supra, 85
Cal.App.4th at p. 264.)”
For plaintiff: Gordon, Edelstein, Krepack,
Grant, Felton & Goldstein, Joshua
Merliss; Barry M. Wolf.
For defendants: Kessel & Associates,
Elizabeth M. Kessel and Gabriella E.
Smillie.
Second Dist Div One, 11/5/09; opinion by Rothschild with Mallano and
Johnson concurring; 2009 WL
DISMISSAL UNDER ANTI-SLAPP
STATUTE OF EXTORTION CLAIMS
BY EMPLOYER IN CONNECTION
WITH PRELITIGATION
SETTLEMENT OFFERS
STARK v WITHROW. “Plaintiffs ... Richard and Laurie Lynn Stark sued a
former employee [of their company
Chrome Hearts, LLC] and his attorney
for extortion following a series of communications between the attorney and
the Starks regarding a dispute about
the employee’s summary dismissal.
The employee and attorney filed special
motions to strike the complaint, arguing
the communications were prelitigation
settlement offers and that the complaint
arose from defendants’ exercise of constitutionally protected rights or speech
or petition. The trial court agreed, and
granted the motion.
nicate about the possibility of litigation
and/or its resolution.’ The second letter
was markedly more strident. Nevertheless, Thomas’s stated purpose in setting forth the details of the Starks’ alleged tax and business fraud, infidelity
and drug abuse, among other things,
was to illustrate the bases underlying
Withrow’s claim that he had been a key,
long-term and trusted employee, who
understood that his job was secure by
virtue of an implied-in-fact contract.
“The Starks contend ... the communications at issue constitute unlawful
extortion which is not entitled to constitutional protection. The Starks also insist the court erred in finding they failed
to make a sufficient showing they were
likely to prevail on the merits of their
claims, and that defendants’ communications were protected by the litigation
privilege... None of the Starks’ contentions has merit. Accordingly, we affirm.
“Thomas did not threaten to ‘ruin’ the
Starks with widespread media exposure of their activities. On the contrary,
the letter explicitly referred to Withrow’s
intention to sue (not merely to disclose
scurrilous accusations to the media) if
the matter could not be resolved, and
noted [that] the fallout from such a
lawsuit could be public disclosure of
sensitive information.
“Withrow’s employment was summarily
terminated on May 5, 2008, ostensibly
for insubordination and poor output of
work. [Withrow, who is gay, alleges that
he was persistently harassed by the
Starks based on his sexual orientation.] At the time of his termination,
[managers] presented him with a proposed ‘Separation Agreement.’ In that
agreement, the company offered to pay
Withrow $50,000 in exchange for his
agreement to release all claims...
“Withrow did not sign the proposed
agreement. Instead, he retained an
employment law practitioner, defendant
and respondent Jeffrey Thomas, to represent him in connection with a potential lawsuit... This dispute arose out of
three communications between Thomas and Chrome Hearts...
“[I]t is well-established that a prelitigation
settlement demand falls within the parameters of a writing ‘made in connection with an issue under consideration
or review by a ... judicial body.’ [cite
omitted.] ... [¶] We agree with the trial
court that Thomas’s first letter was a
‘routine settlement discussion arising
out of Withrow’s termination,’ and contained ‘the kinds of things that are
routinely presented as lawyers commu-11-
“Accordingly, because the record contains evidence to support defendants’
claim that they were acting in furtherance of their rights of speech and petition by placing non-extortionate pressures on a potential litigation adversary,
we find they met their initial burden on
the threshold issue of the SLAPP analysis...
“The Starks [also] failed to meet their
burden to demonstrate a probability of
prevailing at trial... [¶] [That] conclusion
... is also independently supported by
our conclusion that the communications at issue are absolutely protected
by the litigation privilege. [¶] The judgment is affirmed. Withrow and Thomas
are entitled to their costs on appeal.”
For Withrow: Hadsell, Stormer, Keeny,
Richardson & Renick, Randy Renick
and Natalie Nardecchia.
For Thomas: Carol L. Newman.
For the Starks: Brent H. Blakely.
Second Dist Div One, 11/20/09; opinion by Johnson; 2009 WL 3957538
(unpublished).
DECISIONS
(From Page 11)
VERDICTS AND
SETTLEMENTS
LOS ANGELES JURY AWARDS
PLAINTIFF $768,000 UNDER
CALIFORNIA TRAFFICKING
VICTIMS PROTECTION ACT
YUSUF v TJIA. The following press
release was issued by the poverty law
firm Bet Tzedek Legal Services (Los
Angeles) on November 2:
“A jury in Los Angeles County Superior
Court awarded $768,000, including
$500,000 in punitive damages, to a
domestic worker who brought suit
against her former employers under
California’s human trafficking statute, it
was announced today by Bet Tzedek,
which prosecuted the case alongside
pro bono counsel from O’Melveny &
Myers LLP. The verdict is believed to be
the first case adjudicated under Civil
Code § 52.5, the California Trafficking
Victims Protection Act.
“In early 2006, an Indonesian businessman brought plaintiff Suminarti Sayuti
Yusuf to Los Angeles, where his son
and daughter-in-law, defendants Andrew
Tija and his wife Sycamore Choi, put
Yusuf to work. According to Yusuf and
the evidence presented at trial, Tjia and
Choi confiscated Yusuf’s passport, withheld all pay, required her to work 16hour days, seven days a week, and
never permitted her to leave the house
to pray at a mosque or to visit the
Indonesian consulate. They subjected
Yusuf to verbal abuse, psychological
coercion, and instructed her to lie and
say she was a family member if law
enforcement ever visited the Tjia residence.
“Ultimately, Yusuf was able to notify an
acquaintance in another state of her
circumstances, and that acquaintance
notified authorities who initiated a criminal prosecution. Tjia and Choi subsequently plead guilty to criminal human
trafficking and false imprisonment
charges, preparing the way for the civil
action in which Yusuf prevailed at trial
on all nine causes of action in her
complaint, including a claim under the
anti-trafficking statute. (The civil jury
was not informed of the criminal convictions.)
“Jurors rejected out-of-hand the
defense’s claims that Yusuf came to
the United States voluntarily, was a
guest in the Tjia residence, and fabricated the enslavement story in order to
obtain a T-Visa, (which is reserved for
victims of trafficking and is among the
hardest immigration categories in which
to qualify). Following her emancipation
from the household by law enforcement, Yusuf was granted a T-Visa with
the assistance of the Coalition to Abolish Slavery and Trafficking (CAST), which
then referred the matter to Bet Tzedek
for the civil action.”
For plaintiff: Kevin Kish, (Director of Bet
Tzedek’s Employment Rights Project);
Paul McNamara, Bob Nicksin,
O’Melveny & Myers.
10/30/09; information provided by
counsel.
LA RAZA CENTRO AND LASELC ANNOUNCE SETTLEMENT
OF WAGE AND HOUR CLAIMS
BY EXPLOITED DOMESTIC
WORKER IN SILICON VALLEY
SERRALTA v KHAN. The Legal Aid
Society-Employment Law Center sent
CELA the following press release on
October 14:
“For four years Vilma Serralta, a 71year-old immigrant from El Salvador,
worked more than 80 hours a week as
a live-in housekeeper and nanny in the
nearly 10,000 square foot Atherton home
of Silicon Valley entrepreneur Sakhawat
Khan and his wife Roomy, a private
investor. Yet they paid Ms. Serralta a
monthly salary equivalent to between
$3 and $4 per hour—far below the $6.75
minimum wage at that time. Ms.
Serralta, who was regularly required to
work 14 hours a day, six days a week,
received no overtime pay.
“When the Khans abruptly fired Ms.
-15-
Serralta in 2006, she sought legal assistance from La Raza Centro, Inc., and
the Legal Aid Society-Employment Law
Center (LAS-ELC). The two San Francisco based workers’ rights organizations filed suit in United States District
Court on Ms. Serralta’s behalf, asserting that the Khans had violated a host of
state and federal worker protection laws.
“On the eve of trial, after Ms. Serralta’s
lawyers presented the court with evidence that the Khans had forged key
evidence in an attempt to mount a
defense, United States District Court
Judge Claudia Wilken ordered that the
jury would be instructed to take those
acts of fabrication as an indication that
the Khans had committed the violations
alleged. The Khans settled. (The amount
of the settlement is confidential.)
“The lawsuit sought unpaid minimum
and overtime wages, penalties, and
double damages, and the complaint
cited numerous wage and hour violations, including the Khans’ failure to
provide Ms. Serralta with meal and rest
breaks, and failure to keep accurate
records of her working hours. The Khans
admitted their failure to keep records,
and yet fought the lawsuit at every turn,
refusing to produce relevant documents
that the court ultimately ordered them
to disclose. As the litigation went on,
key defense witnesses would suddenly
become unavailable, and two law firms
consecutively hired by the Khans sought
permission to withdraw from the case.
“‘I worked very hard for the family and
cared for their daughter like she was my
own,’ said Ms. Serralta, adding that she
was delighted that a settlement had
been reached. ‘I didn’t do this for revenge, I simply wanted justice. I do not
want anyone else to go through what I
did.’
“There are an estimated 1.5 million
domestic workers in the United States,
many with limited English skills and
unaware of the laws designed to protect
them. According to a 2007 survey of
domestic workers, ninety percent of
Bay Area respondents reported work(Cont'd on Page 16, DECISIONS)
DECISIONS
(From Page 15)
ing overtime without receiving overtime
pay. (See Behind Closed Doors: Working Conditions of California Household
Workers, published by the Mujeres
Unidas y Activas, Day Labor Program of
La Raza Centro Legal.) In order to combat the widespread violation of their
rights, domestic workers around the
country have formed a national alliance
to organize and develop creative strategies to improve working condtions. Ms.
Serralta was a featured speaker at the
West Coast National Domestic Worker
Alliance Conference in Oakland the
weekend of November 13.
“Co-counsel Christopher Ho, Senior Staff
Attorney at the LAS-ELC, explained
what domestic workers are up against
in mounting challenges such as Ms.
Serralta’s: ‘We were very pleased about
the outcome, because typically these
cases aren’t brought at all, and because Vilma was brave enough to come
forward. She could well have been black-
listed by being in the press and having
her name associated with a movement
like the domestic worker movement...
And it’s obviously much harder to bring
cases such as this on behalf of people
whose immigration status is tenuous.
(Ms. Serralta is a U.S. citizen.) Although the workplace laws both at the
federal and state level are, almost without exception, exactly the same for
documented and undocumented workers, the fact is that undocumented workers are much more vulnerable to deportation, and to threats against themselves and their families. Employers
often initiate deportation proceedings in
retaliation, and since ICE runs independently of the court system, workers’
may not be able to remain in the United
States to press their cases.”
For plaintiff: Christopher Ho, Legal Aid
Society-Employment Law Center; Hillary
Ronen, La Raza Centro Legal.
•
C O M I N G
•
•
E V E N T S
June 23, 2010
Washington DC
NELA FALL SEMINAR
-16-
Published
Monthly
BULLETIN
UNITED STATES
SUPREME COURT
CERTIORARI IS GRANTED TO
REVIEW NINTH CIRCUIT’S
HOLDING THAT CITY VIOLATED
POLICE OFFICER’S PRIVACY
RIGHTS BY REVIEWING HIS
TEXT MESSAGES
ONTARIO, CALIFORNIA v QUON.
On December 14, the U.S. Supreme
Court granted certiorari to review the
aspect of the Ninth Circuit’s June 18,
2008 opinion that held that the Ontario
Police Department violated an officer’s
federal and state constitutional privacy
rights when it reviewed text messages
that he had sent and received. (The
Ninth Circuit’s opinion appears at 529
F3d 892, and was summarized in CELA
Bulletin, July 08, p.3; rehearing en
banc was denied on January 1, 2009.)
The City’s petition for writ of certiorari
states the Questions Presented as
follows:
“1. Whether a SWAT team member
has a reasonable expectation of privacy in text messages transmitted on
his SWAT pager, where the police
department has an official no-privacy
policy but a non-policymaking lieutenant announced an informal policy of
allowing some personal use of the
pagers.
“2. Whether the Ninth Circuit contravened this Court’s Fourth Amendment
precedents and created a circuit court
conflict by analyzing whether the police department could have used ‘less
intrusive methods’ of reviewing text
messages transmitted by a SWAT
team member on his SWAT pager.
“3. Whether individuals who send text
messages to a SWAT team member’s
SWAT pager have a reasonable expectation that their messages will be free
from review by the recipient’s government employer.”
At the same time that it granted the
City’s petition for certiorari, the Supreme Court denied a petition for certiorari filed by the city’s co-defendant,
USA Mobility Wireless, which had
sought to have the Supreme Court address the question “[w]hether the Ninth
Circuit erred by holding that a service
provider is liable as a matter of law
under the Stored Communications Act,
18 U.S.C. §§ 2701-2712, for disclosing
to a subscriber of the service the contents of communications stored in longterm archives on the provider’s computers, without the consent of the sender
or recipient of the message.”
USSC, 12/14/09; 2009 DAR 17486,
2009 WL 1146443 (granting City of
Ontario’s petition for certiorari); 2009
WL 1513112 (denying USA Mobility
Wireless’s petition for certiorari).
DISCLOSURE ORDERS
ASSERTEDLY ADVERSE TO
ATTORNEY-CLIENT PRIVILEGE
DO NOT QUALIFY FOR
IMMEDIATE APPEAL UNDER
COLLATERAL ORDER DOCTRINE
MOHAWK INDUSTRIES v CARPENTER. In a nearly-unanimous opinion by
Sotomayor, with Thomas concurring in
part and concurring in the judgment,
the U.S.S.C. affirmed an Eleventh Cir-
December 2009
Vol. 23, No. 12
cuit decision, (541 F3d 1048), concerning a discovery dispute in a wrongful
termination action brought under 42
U.S.C. § 1985 and various Georgia
laws. (Justice Sotomayor’s opinion includes the Court’s first-ever use of the
term “undocumented immigrants” rather
than “illegal immigrants.”)
“The question before us,” Sotomayor
wrote, “is whether disclosure orders
adverse to the attorney-client privilege
qualify for immediate appeal under the
collateral order doctrine. Agreeing with
the Court of Appeals, we hold that they
do not. Postjudgment appeals, together
with other review mechanisms, suffice
to protect the rights of litigants and
preserve the vitality of the attorneyclient privilege.” The Court thus resolved a circuit split, and rejected the
position that had been taken by three
Circuits, including the Ninth Circuit in
In re Napster, Inc. Copyright Litigation
(9th Cir 2007) 479 F3d 1078. The opinion’s
syllabus explains the facts and procedural context as follows:
“When respondent Norman Carpenter
informed the human resources department of his employer ... that the company employed undocumented immigrants, he was unaware that Mohawk
stood accused in a pending class action, [Williams v Mohawk Indus., Inc.,
No. 4:04-cv-00003-HLM (ND Ga., Jan.
6, 2004)], of conspiring to drive down its
legal employees’ wages by knowingly
hiring undocumented workers. Mohawk
directed Carpenter to meet with the
company’s retained counsel in Williams, who allegedly pressured Carpenter to recant his statements. When he
refused, Carpenter maintains in this
unlawful termination suit, Mohawk fired
him under false pretenses. In granting
Carpenter’s motion to compel Mohawk
DECISIONS
(From Page 1)
to produce information concerning his
meeting with retained counsel and the
company’s termination decision, the
District Court agreed with Mohawk that
the requested information was protected
by the attorney-client privilege, but concluded that Mohawk had implicitly waived
the privilege through its disclosures in
the Williams case. The court declined
to certify its order for interlocutory appeal, and the Eleventh Circuit dismissed
Mohawk’s appeal for lack of jurisdiction, holding, inter alia, that the District
Court’s ruling did not qualify as an
immediately appealable collateral order
under Cohen v. Beneficial Industrial
Loan Corp., 337 U.S. 541, because a
discovery order implicating the attorney-client privilege can be adequately
reviewed on appeal from final judgment.”
Thomas wrote separately, concurring in
part and concurring in the judgment, to
express his disagreement with the
Court’s practice of engaging in “Cohen
analysis.” “I would affirm the Eleventh
Circuit’s judgment,” Thomas wrote, “on
the ground that any ‘avenue for immediate appeal’ ... must be left to the
‘rulemaking process.’ [¶] I would leave
the value judgments the Court makes in
its opinion to the rulemaking process,
and in so doing take this opportunity to
limit ...the doctrine that, with a sweep of
the Court’s pen, subordinated what the
appellate jurisdiction statute says to
what the Court thinks is a good idea.”
USSC, 12/8/09; opinion by
Sotomayor with all Justices concurring except Thomas who concurred
in part and concurred in the judgment; 2009 DAR 17115, 2009 WL
4573276.
CALIFORNIA
SUPREME COURT
SUPREME COURT HOLDS THAT
THIRD DISTRICT ERRED IN
EXCLUDING PERSONNEL
MANAGEMENT ACTIONS AS
EVIDENCE IN SUPPORT OF
HARASSMENT CLAIM, BUT
FURTHER REDUCES AWARD OF
PUNITIVE DAMAGES
ROBY v McKESSON CORP. On November 30, the California Supreme Court,
reversing the Third District’s December,
2006 decision, (53 CR3d 558), held that
the Court of Appeal should not have
excluded personnel management actions as evidence in support of a harassment claim. “[S]ome official employment actions done in furtherance of a
supervisor’s managerial role can also
have a secondary effect of communicating a hostile message,” Kennard’s majority opinion emphasized. “Moreover,
acts of discrimination can provide evidentiary support for a harassment claim
by establishing discriminatory animus
on the part of the manager... Nothing
prevents a plaintiff from proving these
two violations with the same (or overlapping) evidentiary presentations.” The
court explained the facts and its conclusions in part as follows:
“A jury found that plaintiff employee,
Charlene J. Roby, was wrongfully discharged based on her medical condition and related disability. The jury found
both harassment and discrimination,
and it awarded $3,511,000 in compensatory damages and $15 million in punitive damages against the employer,
as well as $500,000 in compensatory
damages and $3,000 in punitive damages against the supervisor who was
responsible for the harassment. Defendants appealed.
“The Court of Appeal concluded that
some of the noneconomic damages
overlapped one another, and that the
evidence was insufficient to establish
harassment. It ordered the trial court to
-2-
CALIFORNIA
EMPLOYMENT
LAWYERS ASSOCIATION
Virginia Keeny
Pasadena, CA 91103
Tel: (626) 585-9600
Director:
Christina Krasomil
Encino, CA 91436-2412
Tel: (818) 907-7895
FAX: (818) 907-7474
EXECUTIVE BOARD
(Santa Monica)
Toni Jaramilla
(Los Angeles)
David DeRubertis
(Woodland Hills)
Cynthia Rice
(San Francisco)
David Duchrow
(Los Angeles)
Mika Spencer
(San Diego)
Wilmer Harris
(Pasadena)
James P. Stoneman
(Claremont)
Phil Horowitz
(San Francisco)
Christopher Whelan
(Gold River)
Jean K. Hyams
(Oakland)
Jeffrey Winikow
(Los Angeles)
Bulletin Editor
Christopher Bello
842 Irving Avenue
Astoria, OR 97103
Ph: (503) 338-3891
DECISIONS
(From Page 2)
enter judgment in favor of the supervisor, and it ordered the trial court to
modify the judgment against the employer to reflect a reduction of compensatory damages to $1,405,000. The
court further concluded that the award
of punitive damages against the employer exceeded the federal constitutional limit, and it ordered a reduction of
punitive damages to $2 million. The
Court of Appeal then affirmed the judgment as modified.
“We granted plaintiff’s petition for review, which raised three issues. First,
did the Court of Appeal err in concluding that some of plaintiff’s noneconomic damages awards overlapped one
another? Second, did the Court of Appeal err in allocating plaintiff’s evidence
between her harassment claim and her
discrimination claim, and, based on
that allocation, in finding insufficient
evidence to support the harassment
verdict? Third, did the Court of Appeal
err in concluding that the punitive damages against the employer exceeded
the federal constitutional limit?
“With respect to the first issue, we
conclude that the jury’s noneconomic
damages awards are hopelessly ambiguous. In a letter to this court and
again at oral argument, plaintiff’s counsel stated that plaintiff preferred to
concede this issue rather than face a
new trial, and defendants accepted
this concession. Therefore, the validity
of the Court of Appeal’s conclusion ...
is no longer in dispute. With respect to
the second issue, we conclude that the
Court of Appeal erred in allocating the
evidence..., and we reject its determination that the record included insufficient evidence to support the harassment verdict. With respect to the third
issue, we agree with the Court of Appeal that the punitive damages exceeded the federal constitutional limit,
but we disagree with the Court of Appeal on the amount of this limit. We
hold that in the circumstances of this
case the amount of compensatory damages sets the ceiling for the punitive
damages.
“[T]he Court of Appeal ... said: ‘[M]ost
of the alleged harassment ... was con-
duct that fell within the scope of [supervisor] Schoener’s business and management duties. Acts such as selecting Roby’s job assignments, ignoring
her at staff meetings, portraying her job
responsibilities in a negative light, or
reprimanding her in connection with her
performance, cannot be used to support a claim of hostile work environment. While these acts might, if motivated by bias, be the basis for a finding
of employer discrimination, they cannot
be deemed ‘harassment’ within the
meaning of the FEHA.’
“The Court of Appeal concluded that,
after this ‘business and management’
evidence was ‘sifted out,’ there was
little evidence that Schoener’s hostility
toward Roby was based on Roby’s
disability rather than mere rudeness.
The remaining evidence was limited to
Schoener’s demeaning comments and
gestures, Schoener’s refusal to respond
to Roby’s greetings, and Schoener’s
failure to give Roby gifts...
“In allocating the evidence between
Roby’s discrimination and harassment
claims and then ignoring the discrimination evidence when analyzing the
harassment verdict, the Court of Appeal
erred... [N]othing in the FEHA requires
that the evidence in a case be dedicated to one or the other claim but never
to both. Here, the evidence is ample to
support the jury’s harassment verdict.
The evidence included not only
Schoener’s rude comments and behavior, which occurred on a daily basis, but
also Schoener’s shunning of Roby during weekly staff meetings, Schoener’s
belittling of Roby’s job, and Schoener’s
reprimands of Roby in front of Roby’s
coworkers. This evidence was sufficient to allow the jury to conclude that
the hostility was pervasive and effectively changed the conditions of Roby’s
employment.
“Moreover, the jury could infer, based
on the discrimination evidence, that
supervisor Schoener’s hostility was ‘because of ... [Roby’s] medical condition.’ (§ 12940, subd. (j)(1), italics
added.) Specifically, the jury could draw
this inference from the evidence that
Schoener—who knew about Roby’s
-3-
medical condition—applied employer
McKesson’s attendance policy without
making any accommodation or even
inquiring if an accommodation was possible. The jury could also draw this
inference from the degrading manner in
which Schoener would announce to the
office that Roby was ‘absent again,’ and
from the demeaning comments, gestures, and facial expressions Schoener
made...
“McKesson concedes that the same
evidence can be used in support of both
a discrimination claim and a harassment claim. But, citing our decision in
Reno [v Baird] 18 Cal.4th at pages 645647, McKesson asserts that ‘nonabusive
actions by a supervisor acting in the
course of his or her managerial duties’
may not support a harassment claim.
Whether or not McKesson accurately
describes the law, discrimination is by
its nature an abusive action, not a
‘nonabusive action.’ Therefore, from the
evidence that Schoener discriminated
against Roby based on Roby’s medical
condition, the jury could reasonably infer that Schoener’s constant hostility
toward Roby was also based on her
medical condition, thus constituting
harassment...
“It is appropriate, therefore, to reinstate
the jury’s harassment verdict against
employer McKesson and supervisor
Schoener, and it is also appropriate to
reinstate the jury’s $3,000 punitive damages award against supervisor Schoener.
This conclusion, however, raises two
issues that the Court of Appeal did not
reach. First, is the $600,000 harassment award against McKesson based in
large part on McKesson’s vicarious liability for the harassing acts of its supervisor ... and does it therefore duplicate
the $500,000 harassment award against
Schoener? Second, assuming that the
$600,000 award against McKesson includes as its major component
McKesson’s vicarious liability..., what
evidence if any justifies the additional
$100,000 in harassment damages that
the jury awarded against McKesson? At
oral argument, Roby’s counsel said that,
to avoid a remand to the Court of Appeal,
Roby would stipulate to a lower award of
DECISIONS
(From Page 3)
$500,000 against McKesson, and
McKesson’s counsel accepted this proposed solution... Accordingly, we will
direct the Court of Appeal to modify the
trial court’s judgment to provide for a
single harassment award of $500,000
against both McKesson and Schoener.
certainly indignant at McKesson’s conduct, as shown by their award of $15
million in punitive damages, but they
also could have believed that only a
sizeable compensatory award could
make Roby whole from the noneconomic injuries she suffered.
“[Concerning the size of the punitive
damages award,] [a]fter applying the
test that the high court articulated in
State Farm [Mut. Auto. Ins. Co. v
Campbell (2003) 538 US 408], we conclude that a one-to-one ratio between
compensatory and punitive damages is
the federal constitutional limit here. We
base this conclusion on the specific
facts of this case. We note in particular
the relatively low level of reprehensibility
on the part of employer McKesson and
the substantial compensatory damages
verdict, which included a substantial
award of noneconomic damages.”
“Second, the majority fails to adequately
consider McKesson’s financial condition in determining the constitutional
maximum. As we explained in Simon [v
San Pablo U.S. Holding Co., Inc. (2005)
35 C4th 1159], California law has long
recognized the importance of the
defendant’s wealth in the use of exemplary damages for deterrence... In 2000,
the year it fired Roby, McKesson ranked
number 38 on Fortune Magazine’s list of
the 500 largest American corporations,
reportedly having a market value of more
than $5 billion, more than $30 billion in
revenues, and almost $85 million in
profits... While McKesson’s wealth
alone cannot justify a high award, a
somewhat larger award may be warranted in order to effectively deter such
a large and profitable corporation from
repeating its (at the least) conscious
disregard of employees’ rights.”
In a concurring and dissenting opinion
joined by Moreno, Werdegar wrote in
part as follows:
“While I agree with much of the majority’s
analysis of [the punitive damages] issue and with its conclusion the jury’s
$15 million punitive award was constitutionally excessive, I believe the evidence strongly suggests a significantly
higher degree of reprehensibility on the
corporate defendant’s part than the
majority acknowledges... I would locate
the constitutional limit at a two-to-one
ratio..., yielding a maximum punitive
damages award of $3.8 million.
“Beyond this difference over appraisal of
reprehensibility, two other points lead
me to diverge from the majority’s determination...
“First, while I agree with the majority
that a large noneconomic damages
award may reflect the jury’s indignation
at the defendant’s conduct and thus
contain a punitive component, I would
not assume this was true in the present
case. As the majority acknowledges,
Roby presented evidence she was ‘devastated emotionally and financially’ by
her termination, becoming agoraphobic
and suicidal as well as completely disabled from employment. The jury was
For employee: Christopher H. Whelan,
David M. DeRubertis, David A. Lesser,
Norman Pine, and Charity Kenyon.
For CELA as amicus: Jeffrey K. Winikow.
For LAS-ELC, inter alia, as amicus:
Claudia Center.
For CAOC as amicus: Sharon J. Arkin.
For McKesson Corp.: Howard Rice
Nemerovski; Paul Hastings; Wilson
Sonsini.
Cal SC, 11/30/09; opinion by Kennard
with George, Baxter, Chin and
Corrigan concurring; concurring and
dissenting opinion by Werdegar with
Moreno concurring; 2009 DAR 16712,
2009 WL 4132480; plaintiff’s petition
for rehearing filed 12/14/09.
DESPITE ITS INCLUSION OF
FACTUAL MATTER, OPINION
LETTER TO CORPORATE CLIENT
FROM ATTORNEY HIRED TO
ADVISE ON WAGE AND HOUR
MATTERS WAS PRIVILEGED IN
ITS ENTIRETY
-4-
COSTCO WHOLESALE CORP. v SUPERIOR COURT (RANDALL). “In this
case,” Werdegar wrote in a unanimous
November 30 opinion reversing the Second District, (74 CR3d 345), “we consider whether the trial court [L.A. County
Superior Court Judge Emilie H. Elias]
erred by directing a referee to conduct
an in camera review of an opinion letter
sent by outside counsel to a corporate
client, allowing the referee to redact the
letter to conceal that portion the referee
believed to be privileged, and ordering
the client to disclose the remainder to
the opposing party. We conclude the
court’s directions and order violated the
attorney-client privilege, and violated as
well the statutory prohibition against
requiring disclosure of information
claimed to be subject to the attorneyclient privilege in order to rule on a claim
of privilege. (Evid. Code, § 915, subd.
(a).)
“In June 2000, Costco Wholesale Corporation ... retained the law firm of
Sheppard, Mullin, Richter & Hampton
to provide legal advice regarding whether
certain Costco warehouse managers in
California were exempt from California’s
wage and overtime laws. Attorney Kelly
Hensley, an expert in wage and hour
law, undertook the assignment, ultimately producing for Costco the 22page opinion letter at issue here. The
letter followed conversations held by
Hensley with two warehouse managers
Costco had made available to her.
Costco, the managers, and Hensley
understood the communications between the managers and Hensley were,
and would remain, confidential. Similarly, Costco and Hensley understood
that Hensley’s opinion letter was, and
would remain, confidential.
“Several years later, real parties in interest, Costco employees..., filed this class
action against Costco, claiming that
from 1999 through 2001 Costco had
misclassified some of its managers as
‘exempt’ employees... In the course of
the litigation, plaintiffs sought to compel
discovery of Hensley’s opinion letter.
Costco objected on the grounds the
letter was subject to the attorney-client
privilege and the attorney work product
DECISIONS
(From Page 4)
doctrine. Plaintiffs disagreed, arguing
both that the letter contained unprivileged matter and that Costco had placed
the contents of the letter in issue, thereby
waiving the privilege.
“The referee produced a heavily redacted
version of the letter, stating her conclusion that although much of it ‘constitutes attorney client communications
and/or ... work product,’ those portions
of text involving ‘factual information about
various employees’ job responsibilities’
are protected by neither the privilege nor
the doctrine. The referee explained that
statements obtained in attorney interviews of corporate employee witnesses
generally are not protected ... and do
not become cloaked with the privilege
by reason of having been incorporated
into a later communication between the
attorney and the client. She also found
that while interviewing the two Costco
managers, Hensley had acted not as an
attorney but as a fact finder...
“The Court of Appeal denied [Costco’s]
petition [for a writ of mandate]. Without
ruling on the merits of the trial court’s
discovery order or its decision to refer
the opinion letter to the referee for in
camera review, the court concluded
Costco had not demonstrated that disclosure of the unredacted portions of
the letter would cause it irreparable
harm...
“We hold the attorney-client privilege
attaches to Hensley’s opinion letter in
its entirety, irrespective of the letter’s
content. Further, Evidence Code section 915 prohibits disclosure of the information claimed to be privileged as a
confidential communication between
attorney and client ‘in order to rule on
the claim of privilege.’ (Id., subd. (a).)
Finally, contrary to the Court of Appeal’s
holding, a party seeking extraordinary
relief from a discovery order that wrongfully invades the attorney-client relationship need not also establish that its
case will be harmed by disclosure of the
evidence.
“[P]laintiffs point out that the statements of a corporate employee to the
corporation’s attorney are not privileged
if the employee speaks as an indepen-
dent witness... [But D. I.] Chadbourne
[Inc. v Superior Court (1964) 60 C2d
723] and its progeny ... would [only] be
relevant if we were considering whether
the statements of the warehouse managers interviewed by Hensley were themselves subject to the attorney-client
privilege. But these authorities are not
relevant to the question before us:
whether the communication between
Costco’s attorney and Costco was privileged.
“Plaintiffs make a second, related point
also directed at a concern not present
here, asserting that a client cannot
protect unprivileged information from
discovery by transmitting it to an attorney... But again, we are not here concerned with whether the privilege covers
the statements of the warehouse managers to Hensley.
“Plaintiffs next point out that the attorney-client privilege does not attach to
an attorney’s communications when
the client’s dominant purpose in retaining the attorney was something other
than to provide the client with a legal
opinion or legal advice... But while plaintiffs insist Hensley’s interviews of
Costco’s managers was simple fact
gathering..., they have never disputed
that Costco retained Hensley ... to provide it with legal advice regarding the
exempt status of some of its employees... Hensley was presented with a
question requiring legal analysis and
was asked to investigate the facts she
needed to render a legal opinion... If, as
plaintiffs contend, the factual material
referred to or summarized in Hensley’s
opinion letter is itself unprivileged it may
be discoverable by some other means,
but plaintiffs may not obtain it by compelling disclosure of the letter.
“Because we [also] hold that a court
may not order disclosure of a communication claimed to be privileged to allow
a ruling on the claim of privilege, we
disapprove two cases plaintiff has cited
in support of the trial court’s orders.
[Martin v Workers’ Comp. Appeals Bd.
(1997) 59 CA4th 333, and 2,022 Ranch
v Superior Court (2003) 113 CA4th
1377].”
George wrote a separate concurring
opinion to emphasize that “...communications between persons who stand in
an attorney-client relationship are not
privileged in every instance, because it
sometimes occurs that an attorneyclient relationship exists, but that the
attorney also acts in another capacity
for the client, as, for example, the client’s
agent in a business transaction. In view
of the requirements of [Evid. Code] section 952..., the question of the purpose
of the communication arises regardless
of what element predominates in the
relationship of the attorney and the
client.”
For real parties: Hagens Berman Sobol
Shapiro, Reed R. Kathrein, Lee M.
Gordon, Elaine T. Byszewski, and Steve
W. Berman; Lawrence Glasner, William Rehwald, and Daniel Chaleff.
For Costco: Seyfarth Shaw, Kenwood
C. Youmans, David D. Kadue, Aaron R.
Lubeley, and Ann H. Qushair.
Cal SC, 11/30/09; unanimous opinion by Werdegar; concurring opinion by George; 2009 DAR 16727,
2009 WL 4133800.
NINTH CIRCUIT
ONLY EQUITABLE REMEDIES
ARE AVAILABLE FOR
VIOLATIONS OF ADA’S ANTIRETALIATION PROVISIONS
ALVARADO v CAJUN OPERATING
CO. Affirming the granting by the district court (D Ariz) of a defense motion
in limine, a Ninth Circuit panel wrote in
part as follows in a December 11 opinion by Rawlinson:
“Appellant Tannislado Alvarado filed a
retaliation claim pursuant to the [ADA]
alleging that Appellee Cajun Operating
Co. retaliated against him for complaining that his manager had discriminated
against him based on his disability.
“Alvarado challenges the district court’s
grant of Cajun’s motion in limine barring
Alvarado from seeking punitive and compensatory damages for his ADA retali(Cont'd on Page 6, DECISIONS)
-5-
DECISIONS
(From Page 5)
ation claim. Alvarado also contends
that the district court erred in holding
that because ADA retaliation claims
are limited to equitable relief, Alvarado
was not entitled to a jury trial on his
retaliation claim. We agree with the
district court’s resolution of these issues, and affirm the judgment.
“The district court granted Cajun’s motion in limine, concluding that the plain
language of 42 U.S.C. § 1981a(a)(2)
precluded compensatory damages,
punitive damages, and trial by jury.
“The district court certified an interlocutory appeal on these issues, and we
granted permission to appeal the district court’s interlocutory order.
“Alvarado maintains that the district
court erred in interpreting the ADA to
limit his remedies to those available in
equity. Alvarado posits that remedies
provided under the ADA are coextensive with remedies available under the
Civil Rights Acts of 1964 and 1991.
More specifically, Alvarado contends
that because compensatory and punitive damages are available under the
Civil Rights Acts, compensatory and
punitive damages are available for ADA
retaliation claims.
“Instead of delineating specific remedies available for retaliation claims,
section 12203[c] references the remedies and procedures available pursuant to 42 U.S.C. §§ 12117, 12133, and
12188... In turn, 42 U.S.C. § 12117
references remedies provided by 42
U.S.C. §§ 2000e-4 through 2000e-9.
“Section 2000e-5(g)(1) provides:
If the court finds that the respondent
has intentionally engaged in or is
intentionally engaging in an unlawful
employment practice charged in the
complaint, the court may enjoin the
respondent from engaging in such
unlawful employment practice, and
order such affirmative relief as may
be appropriate, which may include ...
reinstatement or hiring of employees, with or without backpay..., or
any other equitable relief as the court
deems appropriate...
“42 U.S.C. § 1981a expanded the remedies available pursuant to 42 U.S.C. §
2000e-5 by providing for punitive and
compensatory damages for specified
disability claims... Noticeably absent is
any reference to 42 U.S.C. § 12203, the
ADA retaliation provision.
“Although we have not resolved whether
compensatory and punitive damages
are available for ADA retaliation claims,
[fn. 2: In Gribben v. United Postal Serv.,
Inc., 528 F.3d 1166 (9th Cir. 2008), we
addressed the district court’s refusal to
provide a punitive damages instruction...
However, we did not squarely confront
the issue presented by this case, as we
held that there was insufficient evidence
of retaliation to warrant a punitive damages instruction.] other courts have applied divergent approaches to interpret
the ADA’s remedial provisions. In Kramer
v. Banc. of Am. Sec., 355 F.3d 961 (7th
Cir.), cert. denied 542 U.S. 932 (2004),
the Seventh Circuit held that punitive
and compensatory damages were not
available for ADA retaliation claims...
“The Seventh Circuit ... held that
‘[b]ecause the plain language of §
1981a(a)(2) limits its application to specific claims, it is inappropriate to expand
the scope of the statute in reliance on
legislative history to include claims for
retaliation...” Id. at 966. [Four district
court cites in accord omitted.]
“Several district courts have ... held to
the contrary. In Ostrach v. Regents of
the Univ. of Cal., 957 F. Supp. 196, 201
(E.D. Cal. 1997), the district court emphasized section 1981a’s use of the
term ‘complaining party.’ ... Based on
this broad application of section 1981a’s
terms, the district court held that it ‘must
presume the availability of all appropriate remedies unless Congress has expressly indicated otherwise.’ ... Thus,
the district court held that the plaintiff
could pursue general damages pursuant to the ADA’s retaliation provision.
“The lack of uniformity among the courts
underscores the complexity of this issue. Nevertheless, we are persuaded
that the Seventh Circuit’s reliance on the
plain language of 42 U.S.C. § 1981a(2)
adheres more closely to the precepts of
-6-
statutory construction.
“We acknowledge that legislative history ostensibly supports the notion that
Congress intended a broad remedial
purpose for the Civil Rights Act of 1991...
However, the legislative history is not
dispositive, because the text of section
1981a is unambiguous...
“Being persuaded by the Seventh
Circuit’s reasoning, we hold ... that the
plain and unambiguous provisions of 42
U.S.C. § 1981a limit the availability of
compensatory and punitive damages
to those specific ADA claims listed.
ADA retaliation is not on the list. [fn. 7:
Alvarado relies on the EEOC Compliance Manual... We acknowledge that
the EEOC Manual is generally entitled
to deference. However, the EEOC
Manual does not resolve the statutory
interpretation issue we confront... Because the EEOC Manual did not contain a reasoned analysis of the issue
we address, there is no EEOC position
to which we defer.] Because we conclude that ADA retaliation claims are
redressable only by equitable relief, no
jury trial is available...
“We adopt the Seventh Circuit’s reasoning in Kramer, and hold that punitive
and compensatory damages are not
available for ADA retaliation claims.
Because such claims are limited to the
equitable relief specified in 42 U.S.C. §
2000e-5(g)(1), the district court correctly concluded that Alvarado was not
entitled to a jury trial on his ADA retaliation claims.”
For plaintiff: Richard M. Martinez, Tucson.
For defendant: Lori L. Voepel and Rachel
Love, Phoenix.
Rawlinson joined by Bybee and
Burns; 2009 DAR 17324, 2009 WL
4724267.
DECISIONS
(From Page 6)
CALIFORNIA COURTS
OF APPEAL
ORDER REJECTING EMPLOYER’S
ATTEMPT TO ADD 140
OVERLOOKED CLASS MEMBERS
FOLLOWING SETTLEMENT OF
WAGE AND HOUR CLAIMS
BATES v RUBIO’S RESTAURANTS,
INC. “The parties in this wage and hour
class action litigation entered into a
$7.5 million settlement agreement, providing for three payments of $2.5 million
to approved class members,” the Fourth
District, Division Three, wrote in a November 30 opinion by Moore. “After the
initial $2.5 million payment was distributed among 529 approved class members, defendant and appellant Rubio’s
Restaurants, Inc. realized it had not
provided the names of all potential class
members to the settlement administrator. One hundred forty potential class
members had not received notification
of the settlement.
“After postjudgment briefing and status
conferences, the court ruled that the
140 late-identified class members should
receive notice and be folded into the
settlement agreement [and the 529
current participants should be given an
opportunity to opt out (considering that
the addition of the 140 persons would
diminish the amount of [their] recovery...)]. Later, the judge [Thierry Patrick
Colow] reconsidered his ruling sua
sponte and vacated it. In the same
minute order, the judge, citing Code of
Civil Procedure secdtion 170.1, subdivision (a)(6)(A)(I), then recused himself
from any further proceedings in the
matter, in the interests of justice.
“Named plaintiffs ... contend the appeal
must be dismissed as taken from a
nonappealable order. We reject this
contention. The order in question is a
postjudgment order from which an appeal may be taken. (Code Civ. Proc., §
904.1. subd. (a)(2).)
“Where the merits of the appeal are
concerned, Rubio’s contends that inas-
much as the judge was disqualified from
hearing the matter, he did not have the
authority to reconsider and vacate his
ruling... However, the judge did not ...
simultaneously disqualify himself and
vacate his prior ruling. Rather, the judge
undertook a sequential process... He
had the authority to do so and his
actions were not improper just because
both rulings were contained within the
body of a single minute order.
“We also reject the secondary argument of Rubio’s that the order vacating
the prior ruling ... must be reversed
because the judge erred in his reasoning. Rubio’s has failed to address the
judge’s power to reconsider is own orders sua sponte and has failed to address the standard of review on appeal.
The two-part order appealed from is
affirmed in its entirety.”
[Editor’s note: A December 3 Daily
Journal article about the Fourth District’s
decision read in part as follows: “Plaintiffs’ lawyer Matthew Righetti said the
case illustrates one of the big pitfalls
he’s seen in nearly 20 years of handling
wage-and-hour cases. Invariably after a
settlement, the defendant finds a handful of people who should have been
included in the class or a few hours of
overtime that are due. ‘You are completely at the mercy of the defendant in
giving you accurate information. You
rely on that information when you go
into settlement,’ he said. But Righetti
said he’s never seen a defendant mistakenly overlook 140 people... Righetti
says he intends to either litigate the
case to trial or reach a separate settlement for the 140, dismissing the notion
that more people should share the same
pot of money. ‘It just seemed incredibly
presumptuous and overreaching to suggest that people should just be folded in
on the backs of the people [in the
existing class] and reduce the value,’
he said.”]
For plaintiffs: Matthew Righetti and John
Glugoski; Kevin J. McInerney, Kelly
McInerney, and Charles A. Jones.
For defendant: Gregory R. Smith, Andra
Barmash Greene, and Julie M. Davis.
Fourth Dist Div Three, 11/30/09; opinion by Moore with Sills and O’Leary
-7-
concurring; 2009 DAR 16800, 2009
WL 4228090.
SUPPORTED ORDER
DECERTIFYING CLASS OF
RETAIL STORE MANAGERS
ASSERTING OVERTIME CLAIMS
KELLER v TUESDAY MORNING, INC.
“Appellants are managers employed by
respondent Tuesday Morning, Inc.,” the
Second District, Division Six began in a
decision filed on November 4 and certified for publication on December 4. “The
managers filed a class action against
TM, alleging that TM failed to pay overtime wages. The trial court [Judge
Frances Rothschild] denied certification. The Supreme Court subsequently
issued an opinion [Sav-On Drug Stores,
Inc. v Superior Court (2004) 34 C4th
319] addressing the standards for granting class certification. In light of the
decision, the trial court reversed its
position and granted the managers’
motion to certify the class. Two years
later, TM filed a motion to decertify the
class. A different trial judge [Aurelio
Munoz] granted the motion on the ground
that individual issues predominated over
common issues... We affirm.
“[T]he record contained the declarations of four managers, TM’s expert, its
Vice-President of Store Operations, and
five of TM’s attorneys. All asserted in
detail the wide disparity in store location, size, configuration, management
duties and styles. They also established that managers routinely exercise
their independent judgment. In his written ruling, Judge Munoz noted the varying characteristics of the stores and
identified matters he believed were susceptible to class-wide proof (mandated
management policies) and those that
were individual inquiries (time spent
performing exempt duties and exercising discretion). The court observed that
the managers, who filed declarations for
the class, were impeached by their
deposition testimony. This was a comment on the nature of the evidence, and
DECISIONS
(From Page 7)
did not constitute a consideration of the
case on the merits, or a determination
of witness credibility.
“Substantial evidence supports the trial
court’s conclusion that individualized
issues of liability and damages will
predominate over issues common to
the class if the overtime claims are tried
as a class action.”
For plaintiffs: Mower, Carreon & Desai,
Aashish Y. Desai.
For defendant: Fulbright & Jaworski,
Robert M. Dawson, Andrea M. Valdez.
Second Dist Div Six, 11/4/09, certified for publication 12/4/09; opinion
by Coffee with Yegan and Perren
WL 3633763.
NONSUIT WAS INCORRECTLY
GRANTED ON WTVPP CAUSE
OF ACTION WHERE PLAINTIFF
PRESENTED SUFFICIENT
EVIDENCE THAT HE HAD BEEN
FIRED FOR MISTAKEN BUT
GOOD FAITH CLAIM FOR UNPAID
OVERTIME
BARBOSA v IMPCO TECHNOLOGIES, INC. Reversing the granting of a
motion for nonsuit, the Fourth District,
Division Three, held that “the public
policy in favor of the employer’s duty to
pay overtime wages protects an employee from termination for making a
good faith but mistaken claim to overtime. The case must be reversed and
remanded for a jury determination of the
questions of Barbosa’s good faith and
IMPCO’s reason for his termination.”
The Court of Appeal continued in part as
follows in a November 30 opinion by
Sills:
“Barbosa concedes he was mistaken
about his claim to unpaid overtime but
contends the claim was based on a
reasonable good faith belief that he was
entitled to it. He argues he presented
sufficient evidence to support his claim
and the jury should be able to decide
whether his claim was made in good
faith and whether IMPCO terminated
him for making that claim or for falsifying
time cards. We agree.
“After the plaintiff has completed the
presentation of his case, the defendant
may move for nonsuit. (Code Civ. Proc.,
§ 581c, subd. (a).) The motion shall be
granted if the court determines that the
plaintiff’s evidence is insufficient to support a jury verdict in his favor. [cite
omitted.] But a trial court must proceed
with caution when making that determination... When we review the granting of
a motion for nonsuit, we must view the
evidence in the light most favorable to
the plaintiff, resolving all presumptions,
inferences and doubts in his favor. [cite
omitted.] After having done so, we will
not sustain the judgment for the defendant unless it is required as a matter of
law.
“We cannot say that IMPCO was entitled to judgment as a matter of law at
the end of Barbosa’s case. As we explain, public policy protects Barbosa
from being terminated for making a
good faith claim to overtime. And he
presented evidence sufficient to support a jury finding that the claim was
made in good faith.
“The duty to pay overtime wages is a
well-established fundamental public
policy affecting the broad public interest... If an employer discharges an
employee for exercising his right to
overtime wages, the employee will have
a viable cause of action for wrongful
termination. [Gould v Maryland Sound
Industries, Inc. (1995) 31 CA4th 1137,
1148-1149.]
“An employee’s good faith but mistaken
belief is protected from employer retaliation in the whistleblowing context...
[cites omitted.] [¶] It follows that the
same result should obtain when an
employee exercises his statutory right
to overtime wages out of a reasonable
good faith belief he is entitled to it,
notwithstanding the later discovery that
he is wrong. Any other conclusion would
open the door to employee intimidation
and chill the exercise of statutory rights.
“Barbosa presented evidence that he
had a reasonable good faith belief he
-8-
was entitled to overtime. Under the
previous time clock system, mistakes
in timekeeping had been made; the new
system had been in place less than a
month. Barbosa’s co-workers convinced
him the overtime was unpaid, and he in
turn convinced [a supervisor]. He testified he was confused. In fact, the trial
court acknowledged Barbosa had presented sufficient evidence to support a
good faith belief when it granted the
nonsuit.
“IMPCO contends that it is not a violation of public policy to fire an employee
for lying and cheating his employer.
IMPCO misses the point.”
For plaintiff: Aarin A. Zeif and Michael A.
Gould.
For defendant: Brian G. Saylin and
Marvin D. Mayer.
Fourth Dist Div Three, 11/30/09; opinion by Sills with Rylaarsdam and
Moore concurring; 2009 DAR 16804,
2009 WL 4227462.
RES JUDICATA DOES NOT
PRECLUDE STATE EMPLOYEE
FROM PURSUING BOTH
INTERNAL ADMINISTRATIVE CIVIL
SERVICE REMEDIES AND THOSE
AVAILABLE UNDER FEHA
GEORGE v CALIFORNIA UNEMPLOYMENT INSURANCE APPEALS
BOARD. “The [Agency] appeals from a
judgment entered against it after a jury
found that it had unlawfully retaliated
against its employee, Cynthia Francene
George,” the Fifth District began in a
December 9 opinion by Wiseman. “The
Agency suspended George, who was
employed as an administrative law judge,
on three occasions subsequent to her
filing a charge with the [DFEH] alleging
that travel assignments were made
discriminatorily in the Fresno office.
“We hold that the doctrine of res judicata does not preclude a state employee from pursuing both internal administrative civil service remedies and
those available under the Fair Employ(Cont'd on Page 9, DECISIONS)
DECISIONS
(From Page 8)
ment and Housing Act. The doctrine of
collateral estoppel may act to preclude
a retaliation claim if issues decided in
the administrative action eliminate a
necessary element of the employee’s
case. In this case, however, the administrative agency’s findings do not eliminate a necessary element of George’s
retaliation action. We also conclude
there was sufficient evidence to support
the jury’s verdict. The judgment is affirmed.
“In the unpublished portion of this opinion, we also reject on procedural grounds
the Agency’s challenge to the economic damages awarded by the jury.
“Despite the Agency’s contention that
the civil service proceeding and the
FEHA action seek to redress the same
primary right, both challenging the impropriety of suspensions, case law recognizes two distinct rights or interests
at stake when a civil service employee
challenges discipline or termination on
discriminatory or retaliatory grounds.
The primary right protected by the state
civil service system is the right to continued employment, while the primary
right protected by FEHA is the right to
be free from invidious discrimination
and from retaliation for opposing discrimination. We have held that ‘state
employees may pursue their claims of
employment discrimination with either
the Board or the DFEH or both.’ (Ruiz v.
Department of Corrections (2000) 77
Cal.App.4th 891, 900.) This is because
FEHA ‘clearly manifests an intent to
include both public and private employees within its scope.’ (State Personnel
Bd. v. Fair Employment & Housing
Com. (1985) 39 Cal.3d 422 at p.429.)
“[Concerning collateral estoppel] [t]he
Board’s decisions established that
some of the reasons given for the suspensions were legitimate... While these
findings are binding on George in her
FEHA action ... we do not believe the
findings preclude the entire retaliation
cause of action. George is not simply
challenging an adverse action on the
ground that it was discriminatory. Instead, she has alleged that the Agency
accumulated a number of minor incidents and used them collectively to
support the suspensions with retaliatory animus...
“Given the relatively minor incidents
used as justification for discipline and
the deteriorating relationship between
George and [co-worker] Temple, a finding that some of the collected incidents
were sufficient under the civil service
rules to sustain a lesser discipline than
imposed is not the equivalent of a finding that the discipline imposed was
just, proper, and nonretaliatory.”
For plaintiff: Joseph Clapp and J. Wayne
Herron.
For Agency: Vincent J. Scally, Jr. And
Noreen P. Skelly, Deputy Attorneys
General.
Fifth Dist, 12/9/09; opinion by
Wiseman with Cornell and Gomes
WL 4641704.
SUMMARY JUDGMENT ON
CLAIMS FOR SEX HARASSMENT,
RETALIATION, AND IIED
HABERMAN v CENGAGE LEARNING,
INC. On December 18, the Fourth District, Division Three, ordered the publication of its December 10 opinion affirming summary judgment on hostile
environment and related claims. (The
court noted that publication had been
requested by the Association of Southern California Defense Counsel.) The
opinion by Fybel reads in part as follows:
“Plaintiff ... appeals from a summary
judgment entered in favor of her former
employer..., her former supervisor, Rick
Reed, and Cengage’s national sales
manager, Eric Bredenberg ... as to her
claims for sexual harassment, retaliation, breach of contract, and intentional
infliction of emotional distress. The trial
court [Judge Andrew P. Banks] granted
defendants’ motions for summary judgment on grounds including (1) defendants’ alleged wrongful conduct was
neither severe nor pervasive and did not
create a hostile work environment as a
matter of law; (2) no evidence showed a
-9-
causal link between any alleged adverse employment action ... and any
complaint by Haberman of sexual harassment; and (3) no evidence showed
Haberman was subjected to extreme or
outrageous conduct.
“We affirm. ...[T]he acts of alleged harassment did not rise to the level of
establishing a hostile work environment
as a matter of law. (See Hughes v. Pair
(2009) 46 Cal.4th 1035, 1048-1049). No
evidence showed Haberman suffered
any adverse employment action because she complained about sexual
harassment. Although Cengage placed
Haberman on a performance improvement plan (PIP) in October 2007, the
undisputed evidence showed that decision was based on her failure to meet
her annual sales goals for three years;
no evidence in the record showed the
decision makers in this regard were
aware of any complaints of sexual harassment by Haberman at the time.
Summary judgment was also properly
granted because the record does not
contain any evidence showing
Haberman was subjected to ‘extreme
or outrageous conduct’ by defendants
as a matter of law. (Hughes, supra, 46
Cal.4th at p. 1051.)
“Haberman’s sexual harassment claim
against Reed was based on the following six incidents: (1) at a conference...,
Reed told her he want to bring his ‘guys’
in[to the company], that ‘we all want to
bring our guys in’; [fn.1: Haberman ...
testified ‘when someone says he wants
to bring his own guys in, I feel I’m being
discriminated against because I’m a
female.] (2) Reed and Bredenberg
planned [a] role-playing training evaluation session at Bredenberg’s house...
[during which Bredenberg commented
that ‘we don’t get pretty girls like you
coming around here very often’ and
Haberman was required to “approach”
Bredenberg in a room containing bedroom furniture]; (3) while Reed,
Haberman, Bredenberg, and [co-worker]
Avery were having lunch on July 26,
Reed told them that, at his wife’s 50th
birthday party, his wife’s friend was
following Bredenberg and wanted to
DECISIONS
(From Page 9)
date him; (4) Reed asked Haberman if
she planned on bringing her boyfriend to
the company dinner and stated that she
was going to disappoint a few men in the
company; (5) Reed rejected one of
Haberman’s travel and expense reimbursement requests; and (6) Reed
placed her on a PIP...
“Most of the alleged incidents involving
Reed are not sexual in nature... [¶]
Reed’s conduct in [the] planning and
execution of the role-playing training
session at Bredenberg’s house was
also not sexual in nature. It is undisputed that the training session was
legitimate. Although Haberman was
required as part of the role-playing exercise to approach Reed in Bredenberg’s
home office [allegedly containing bedroom furniture], which she claimed
caused her significant distress,
Haberman never alleged that Reed
complimented her, asked her out, or
expressed any interest in her. Reed
mentioned that a woman ... expressed
interest in Bredenberg. Reed also told
Haberman that a few male Cengage
employees would be disappointed if
she brought her boyfriend to the company dinner. Such comments, as a
matter of law, do not even come close to
[actionable] ‘harassing conduct’...
“Haberman’s sexual harassment claim
against Bredenberg is based on ... 13
instances of alleged harassment ... that
occurred over a time period of two to
three years...
“Two of the 13 alleged instances ... were
not based on sex. First, Bredenberg’s
comment to a customer that Haberman
was amazing and had five children with
no father in the picture was not sexual
in nature.
“Haberman does not contend that anything remotely sexual occurred during
the
role-playing
training
session...Whether Bredenberg’s home
office contained bedroom furniture and
whether the role-playing session could
have taken place in a different room do
not alone transform this training exercise into a sexual incident.
“The undisputed evidence shows the
remaining 11 instances ... constituted
instances where Bredenberg made brief
and isolated comments to Haberman
over a two- or three-year period. No
instance ... involved any physical contact. Haberman did not allege
Bredenberg ever propositioned her or
even asked her out on a date. The
record is devoid of any evidence that
Bredenberg ever threatened her or used
explicit language in her presence. Once,
Bredenberg made a joke ... that his
father was called ‘Big Dick.’ But ... the
FEHA is ‘not a civility code’... [cite
omitted].
“Bredenberg twice briefly complimented
Haberman’s general appearance...[¶]
Twice, Bredenberg informed Haberman
that someone else had expressed interest in her... [¶] Once ... Bredenberg
commented that a particular school
administrator was ‘hot’ for being an
older woman. In 2007, he made a mild
innuendo ... that he was coming up right
behind her and that it felt pretty good.
Once ... he asked Haberman if she was
getting married... [T]o be actionable,
alleged sexual harassment cannot be
occasional, sporadic, or trivial... Here,
the undisputed material facts show these
alleged incidents ... were indeed isolated, sporadic, and often trivial.
“Finally, Haberman’s ... claim also rests
on comments Bredenberg made to
Haberman about his wife’s terminal illness and his counselor’s advice regarding Bredenberg’s sex life following his
wife’s death. Sometime in 2005,
Bredenberg told Haberman ... the next
time around he would go for the younger
ones who would not get sick. Months
after his wife had died..., Bredenberg
told Haberman that his grief counselor
had told him not to make any changes
for one year, that he was not ready for a
relationship, and that he just wanted to
have sex. He asked Haberman what
she thought about [this] and whether
she had any friends who just wanted to
have sex and how she knew whether
someone was good in bed. After the
role-playing training session,
Bredenberg again asked Haberman if
she had any friends who just wanted to
have sex.
-10-
“Although those two comments were
too personal and inappropriate for the
workplace, Bredenberg’s comments,
without more, did not constitute actionable conduct...
“Haberman contends a triable issue of
material fact exists as to whether she
suffered unlawful retaliation ... because
the evidence shows (1) she was placed
on a PIP; (2) her travel and expense
reimbursement request was delayed;
(3) she experienced unwarranted delays in the transition between regular
payroll and disability benefits; and (4)
there were delays in communication
between Cengage and its workers’ compensation insurance carrier.
“Although Haberman contends she complained to Pineda Kinsky in 2005 and
2006..., it is undisputed that Pineda
Kinsky did not report any such complaint, and thus the individuals responsible for the decision to place Haberman
on a PIP were unaware of any such
complaint before that decision was
made. Two days after she was placed
on a PIP, Haberman contacted ... human resources ... and vaguely complained that she was being harassed,
but did not provide any details. Five
days after she was placed on a PIP, she
complained to Reed that Bredenberg
had engaged in inappropriate conduct
toward her. Thus, no evidence in the
record supports any causal link...
“Second, the undisputed facts show
Reed rejected a travel and expense
reimbursement request ... in which
$3,000 of the total amount ... was for
personal charges for which Haberman
was not entitled to reimbursement....
“Finally..., Haberman produced no evidence regarding the circumstances of
[the alleged delays in the transition
between regular payroll and disability
benefits; and in communication between
Cengage and its workers’ compensation insurance carrier], who was responsible for such delays, or the length
of any such delays. Haberman’s general and conclusory statement is insufficient to create a triable issue...
DECISIONS
(From Page 10)
“Haberman’s claim for [IIED] is entirely
based on the allegations supporting her
claims for sexual harassment. As discussed ante, those allegations fell far
short... The trial court did not err by
concluding these allegations also fell
‘far short of [outrageous] conduct...’”
Hauer & Feld, Gregory W. Knopp.
USDC CD Cal, 12/3/09; No. CV 087919; Judge Gary Allen Feess; information reported in Daily Journal,
12/7/09; (unpublished ruling not currently appearing on Westlaw).
For plaintiff: Elva P. Kopacz.
For defendant: Epstein Becker & Green,
James A. Goodman and Tae Kim.
Fourth Dist Div Three, 12/10/09; ordered published 12/18/09; opinion
by Fybel with Rylaarsdam and Ikola
WL 4693065.
UNPUBLISHED
CALIFORNIA COURT OF
APPEAL DECISIONS
UNITED STATES
DISTRICT COURTS
CENTRAL DISTRICT DENIES
SUMMARY JUDGMENT ON
CLAIMS FOR UNPAID OVERTIME
AND TERMINATION WAGES
YORK v STARBUCKS CORP. In an 18page ruling issued on December 3, U.S.
District Judge Gary Allen Feess of the
Central District denied Starbucks’ motions for summary judgment on claims
that it failed to pay the plaintiff overtime
and termination wages.
In December 2008, York, a former
barista and supervisor at various
Starbucks locations in Los Angeles
County between January 2003 and August 2008, filed a complaint alleging
unpaid overtime, unpaid meal and rest
periods, unpaid minimum wages, and
untimely payment of wages during employment and upon termination. She
alleges that she was frequently asked
to perform off-the-clock work, while
Starbucks argues that York failed to
properly document her hours.
The meal and rest break claims, pending the granting or denial of class certification, were not litigated in the summary judgment motion.
For plaintiff: Initiative Legal Group, Marc
Primo, Matthew T. Theriault.
DENYING MOTION FOR JNOV
ON WORKERS’ COMP
EXCLUSIVITY GROUNDS AFTER
JURY VERDICT FOR PLAINTIFF
ON I.I.E.D. CLAIM
GREGORY v CITY OF LOS ANGELES. In an unpublished opinion filed on
December 8, the Second District, Division Seven, reversed a judgment for the
plaintiff following a jury trial, holding that
the trial erred in denying a motion for
judgment notwithstanding the verdict.
“Sean Gregory is employed by the City
of Los Angeles in the police department. His grievances are against the
City, Richard Parks, and certain other
individuals and co-employees...
“Appellants summarize the factual allegations of Gregory’s complaint as follows: discrimination and retaliation for
exercising the right to use family medical leave, family bonding leave, and sick
leave; comments by a supervisor that
Gregory is lazy and unproductive; a
misconduct complaint regarding an alteration to Gregory’s service weapon,
which was adjudicated in his favor; a
performance rating that did not meet
Gregory’s satisfaction...; retaliation for
filing a complaint with the [DFEH] and a
claim for damages with the City; a
negative comment card and counseling
regarding Gregory’s work-product; and
denial of annual training in detective
school.
“Pertaining to Gregory’s fourth cause of
action for intentional infliction of emo-
tional distress, appellants note that the
allegations are against all defendants
except the City and claim damages for
pain and suffering, extreme and severe
mental anguish, and emotional distress
arising out of and in the course of
Gregory’s employment, and the need
for medical treatment, but also contain
allegations incorporating the first three
causes of action and the factual allegations of the complaint.
“During the course of the trial..., defendants filed a motion for nonsuit contending that the [IIED] claim was barred by
the exclusivity of the Workers’ Compensation Act. Gregory’s opposition
consisted of again asserting that the
conduct complained of was an exception to exclusivity... The motion was
denied.
“The jury returned verdicts in favor of
defendants on the statutory employment discrimination and retaliation
causes of action ... but [initially] deadlocked on the jury instruction regarding
[IIED]. Defendants then moved for a
directed verdict on the grounds that the
verdicts on the statutory employment
discrimination and retaliation causes of
action rendered the claim on the fourth
cause of action barred by Workers’
Compensation Act exclusivity. The trial
concluded on May 13, 2008, which
resulted in a verdict in favor of Gregory
on the [IIED] claim ... [and an award of]
$85,000 in emotional distress damages.
“Appellants claim that Gregory’s [IIED]
cause of action is barred even though
Gregory has incorporated allegations of
employment discrimination and retaliation in violation of statute and fundamental public policy, citing Shoemaker
v. Myers (1990) 52 Cal.3d 1 as authority. The plaintiff in Shoemaker alleged a
Tameny claim ... and an [IIED] claim
that incorporated allegations of the
Tameny claim, which asserted a wrongful discharge in retaliation for activity
protected by a whistleblower statute ...
and exercise of rights under the Public
Safety Officers Procedural Bill of Rights
Act... Those claims were dismissed by
the trial court ... on the grounds that
(Cont'd on Page12, DECISIONS)
-11-
DECISIONS
(From Page 11)
they were barred by WCA exclusivity.
The Tameny claim was remanded to the
Court of Appeal for a determination of
whether plaintiff stated such a claim,
but the court upheld dismissal of the
emotional distress claim. The court
concluded that plaintiff’s [IIED] claim,
incorporating allegations of employment
retaliation in violation of a whistleblower
statute and in violation of fundamental
public policy, was barred by the WCA
exclusivity provisions. In Miklosy v.
Regents of University of California (2008)
44 Cal.4th 876, the California Supreme
Court once again restated the principle
set forth in Shoemaker by declaring
that the alleged Tameny claims for
wrongful discharge in retaliation for activity protected by the California
Whistleblower Protection Act ... and
intentional infliction of emotional distress claims were barred by the exclusive remedy provision of the WCA.
“No further analysis is required by this
court on the issue. Our Supreme Court
has indelibly held that the exclusivity
principle set forth in the WCA bars
respondent’s claims in this instance
and the trial court committed reversible
error in failing to grant appellants’ motion for JNOV.”
For plaintiff: Cheryl Ruggiero.
For defendants: Paul L. Winnemore,
Second Dist Div Seven, opinion by
Woods with Perluss and Jackson
concurring; 2009 WL 4609251 (unpublished).
DENIAL OF CLASS
CERTIFICATION DESPITE FACT
THAT MEAL PERIOD WAIVER
CONTAINED IMPROPER
RESTRICTION ON REVOCATION
McELROY v INSTITUTE FOR APPLIED BEHAVIOR ANALYSIS. In an
unpublished opinion filed on December
11, the Second District, Division Five,
wrote in part as follows in affirming the
denial of a motion for class certification.
“Plaintiffs and appellants ... on behalf of
themselves and all others similarly situated, filed suit ... for violations of ... meal
and rest period requirements...
“The right to a meal period may be
waived by mutual consent ..., and IABA
required each Employment Specialist
to sign a meal period waiver... [¶] Plaintiffs’ theory of this case was that the
waiver was invalid because it included
an unauthorized restriction on revocation...
“The trial court [Judge John P. Shook]
found insufficient evidence of common
questions of law or fact, and that plaintiffs had failed to identify persons sufficient to constitute the class. We find
substantial evidence for the trial court
ruling, and no trace of improper criteria
or erroneous legal assumptions, and
thus affirm.
“Plaintiff’s evidence was, at best, that a
few ... employees had been unable to
take rest periods. This is clearly not
enough to justify class certification...
[¶] The evidence on meal periods is
different.
“Plaintiffs’ legal theory on the waiver is
that the limit on revocation (two weeks
notice) violates California Code of Regulations, title 8, section 11040, subdivision 11(A). That regulation provides,
inter alia, that ... ‘[t]he written agreement shall state that the employee
may, in writing, revoke the agreement at
any time.’
“Despite the apparent contradiction
between the IABA waiver and the regulation, we cannot see that the trial court
abused its discretion in denying class
certification on this issue. Even if the
waiver is improper under the law, plaintiffs did not present evidence that a
class of employees was damaged by
the waiver. That is, there was no evidence that any employee had sought to
be relieved of the waiver ... and was
prevented from doing so..., or even that
the inclusion of the notice requirement
deterred any employee from seeking to
revoke the waiver.
“We thus see no evidence that maintenance of a class action ... would be
-12-
advantageous to the judicial process
and to the litigants.”
For plaintiffs: R. Duane Westrup,
Lawrence R. Cagney, Jennifer L. Connor.
For defendant: Silver & Freedman, Andrew B. Kaplan, Jeffrey W. Mayes.
Second Dist Div Five, 12/11/09; opinion by Armstrong with Turner and
Mosk concurring; 2009 WL 4725852
(unpublished).
VERDICTS AND
SETTLEMENTS
UPS AGREES TO $12.8 MILLION
SETTLEMENT IN ACTION BY
CLASS OF PACKAGE DELIVERY
DRIVERS MISCLASSIFIED AS
LaBRIE v UPS SUPPLY CHAIN SOLUTIONS. On December 4, U.S. District Judge Phyllis J. Hamilton of the
Northern District tentatively approved a
$12.8 million settlement of claims by
about 660 package delivery drivers
misclassified as independent contractors. The settlement involves two
classes: a California opt-out class of
about 280 drivers, and a FLSA collective action class of about 380 drivers
nationwide. The case settled during the
discovery process, just prior to a motion
for class certification, when retired judge
and JAMS mediator Ronald M. Sabraw
suggested the $12.8 million figure. Judge
Hamilton has scheduled a fainess hearing on March 15 for a final determination.
For plaintiffs: Lynn Rossman Faris,
Leonard Carder, Oakland.
USDC ND Cal, 12/4/09; No. cv-03182PJH; Judge Phyllis J. Hamilton; information reported in Daily Journal,
12/9/09.
NELA NEWS
IN CONGRESS: The December issue
of NELA’s electronic newsletter On The
Hill included an update on the Franken
Amendment, which will prohibit the
award of DoD funds to any large federal
contractor - in the bill's revised version,
only those with contracts of $1 million or
more - that forces its employees or
independent contractors to sign
predispute arbitration agreements covering Title VII and sexual assault tort
claims. On December 16, the House
passed a conferenced bill that included
the Franken Amendment, and it has
now also been included in the DoD
appropriations bill that passed the Senate—so it is going to become law!
—NELA’s Legislative and Public Policy
Director Donna Lenhoff , wants to remind everyone that Congress needs to
hear more from constituents about several pending bills, (whose progress and
status can be tracked on the Library of
Congress website, www.thomas.
loc.gov). Those bills include:
• ENDA, the bipartisan Employment
Non-Discrimination Act, (H.R. 3017,
S.1584), to extend fair employment practices protection under federal law to the
gay, lesbian, bisexual, and transgender
communities;
• CRTRA, the Civil Rights Tax Relief
Act, (H.R. 3035, S. 1360), to eliminate
non-economic damages from gross income and permit income averaging of
back pay received in a lump sum.
• The Arbitration Fairness Act, (H.R.
1020, S.931), to prohibit predispute arbitration provisions in employment and
consumer contracts.
• The Protecting Older Workers
Against Discrimination Act, (H.R.
3721, S. 1756), to overturn Gross v FBL
Financial Services (2009) 129 S Ct
2343.
• The Open Access to Courts Act,
(H.R. 4115), and Notice Pleading
Restoration Act, (S. 1504), to overturn
Ashcroft v Iqbal (2009) 129 S Ct 1937,
and Bell Atlantic v Twombly (2007) 550
US 544, and to restore the Conley v
Gibson notice pleading standard.
It should be noted that the provisions of
GINA, The Genetic Information NonDiscrimination Act of 2008, (Pub Law
110-233) took effect on November 21,
2009. The Act prohibits discrimination
in workforce and insurance decisions
on the basis of genetic information, and
Title II imposes significant restrictions
on the ability of employers to obtain and
use such information.
NELA’s COMMENTS ON IRS’s NOTICE OF PROPOSED RULEMAKING.
[From On The Hill, December 2009] On
September 15, the IRS published a
Notice of Proposed Rulemaking on
“Damages Received on Account of Personal Physical Injuries or Physical Sickness,” (74 Fed Reg 47152). The proposed regulations would do two things:
(1) conform the IRS rules to the 1996 tax
code amendments that limited the exclusion from gross income for damages
or settlements to amounts awarded for
physical harm; and (2) eliminate the
requirement that, to qualify for the exclusion, damages or settlements be
based on “tort or tort-type rights.”
NELA filed comments on this NPRM on
December 14. Our comments commended the Service for (finally) conforming its regulations to a law passed
in 1996 and for removing the “tort or torttype rights” requirement. We also urged
the IRS to take this opportunity to address hostile working environment cases
involving such conduct as unwelcome
sexual advances, degrading or humiliating comments, racial epithets and
taunts, and physical or verbal intimidation. Such conduct often causes real
physical illness or injury even though it
may not be manifested in a readily
observable manner. We urged the IRS
to clarify that non-economic damages
for such conduct are “damages on account of physical injuries or physical
sickness” within the meaning of §
104(a)(2) of the Internal Revenue Code,
and should therefore be excluded from
gross income. NELA’s comments will
be posted on www.regulations.gov.
—NOMINATIONS AND APPOINTMENTS. [From On The Hill, December
2009] After a very brief and low-key
Committee hearing on November 18,
the Senate Judiciary Committee, on
December 10, approved by a unanimous voice vote the nomination of former
NELA member Judge Denny Chin’s
nomination to the Second Circuit Court
of Appeals.
Also advanced at that Judiciary Committee hearing was another former
plaintiff’s employment attorney,
Rosanna Malouf Peterson, nominee to
the United States District Court for the
Eastern District of Washington.
Earlier, on December 3, by a party-line
vote of 12-7, the Committee approved
former Wisconsin Supreme Court Judge
Louis Butler for a seat on the USDC for
the Western District of Wisconsin. NELA
supported the nomination of Judge Butler, who was opposed by a prominent
right-wing group.
On December 10, the Senate HELP
Committee approved President Obama’s
four EEOC nominees: for Chair,
Jacqueline Berrien; for Members, Chai
Feldblum and Victoria Lipnic; and for
General Counsel, David Lopez.
[Editor’s note: Two additional appointment confirmations should definitely be
noted: both Los Angeles County Superior Court Judge Jacqueline H. Nguyen,
and Los Angeles employment and labor
law Attorney Dolly M. Gee have been
confirmed for seats on the United States
District Court for the Central District of
California. Concerning Dolly Gee’s
Christmas Eve confirmation, see Los
Angeles Times, December 25. Her bio
and other information can be found on
the website of the organization Asian
Pacific Americans for Progress,
www.apaforprogress.org.]
AMICUS ACTIVITY. [From @NELA,
December 15] NELA joined with the
National Women’s Law Center and the
National Partnership for Women & Families, along with a number of other civil
(Cont'd on Page 14, NELA NEWS)
-13-
NELA NEWS
(From Page 13)
rights groups, to file a brief in support of
the petitioners in the Supreme Court
case Lewis v. City of Chicago. The
Supreme Court accepted certiorari to
address the question whether a Title VII
plaintiff must file an EEOC charge within
300 days of the date the discriminatory
practice was adopted or announced, or
if a plaintiff may also file within 300 days
of the date the practice was used by the
employer. The case has shades of both
the recent Ledbetter and Ricci cases.
The City of Chicago administered a
written test to firefighter job applicants
in 1995, and notified applicants of the
results in January 1996. The plaintiffs
filed an EEOC charge on March 21,
1997, more than 400 days after they
were notified of the results, but within
300 days of the City’s first use of the list
to hire applicants. The complaint alleged that the test had a disparate
impact on African American applicants
and was not a valid test of firefighting
aptitude. The trial court ruled that each
hiring was a fresh violation of Title VII,
and that the plaintiffs’ suit was therefore
timely. But the Seventh Circuit reversed,
(528 F3d 488), holding that “discrimination was complete when the tests were
scored,” and “was discovered when the
applicants learned the results.” Our
amicus brief appears at 2009 WL
4378919.
EMPLOYEE RIGHTS ADVOCACY INSTITUTE FOR LAW & POLICY. On
November 27, NELA’s related nonprofit
interest organization issued a year-end
summary of its activities, signed by
President Bruce A. Fredrickson, and
Executive Director Terisa E. Chaw, which
reads in part as follows:
“With the generous support of individuals, law firms and foundations, The
Institute’s 2009 accomplishments include:
• Initiating a “Project to Assess Public
Support for Stronger Enforcement of
Workplace Protections,” which gathered and analyzed public opinion research on critical issues affecting
America’s workers—banning forced arbitration of employment claims, the need
for government regulations in the work-
place, and expanding affirmative rights
for workers. The project’s findings have
been used by The Institute and its allied
partners to promote national legislative
and public policy reforms.
arships through The Employee Rights
Advocacy Scholarship Program to public interest, legal services and private
lawyers who otherwise could not afford
to attend NELA’s renowned continuing
legal education programs.
• Developing a National Litigation Strategy Project to ensure that individuals
whose workplace rights are violated
have their day in court by ending summary judgment abuse by defendants
and unwarranted summary judgment
dismissals by judges.
We invite you to visit The Institute’s
website to learn more about our activities and to download our 2008 Annual
Report, (www.employeerightsadvocacy.org).
• Establishing The Paul H. Tobias Attorney Fellowship Program, a two-year
placement for a new attorney committed to employee rights who will work on
cutting-edge projects with The Institute.
The Institute welcomes your support for
its programs... Your gift to The Institute
is tax-deductible as a charitable contribution... If you are interested in designating The Institute as a cy pres award
recipient, please contact us at 415-2967629.
• Awarding more than $20,000 in schol-
C O M I N G
E V E N T S
January 23, 2010
CAALA’s ANNUAL INSTALLATION AND AWARDS DINNER
Beverly Wilshire Hotel
(Arash Homampour to be honored as Trial Lawyer of Year;
Lisa Maki to be installed as Second Vice-President)
(see www.caala.org for details and to register by 1/15/10)
January 29, 2010
CELA TECHNOLOGY COMMITTEE HALF-DAY SEMINAR
“Videotaping Your Own Depositions”
New Horizons Computer Learning Center, Burbank
Quick Start Intelligence, San Francisco
(see www.cela.org for details and to register)
June 23, 2010
Washington DC
NELA FALL SEMINAR
-14-
DECISIONS
(From Page 12)
BANKRUPT TITLE COMPANIES
WILL PAY $4.29 MILLION TO
SETTLE LABOR
COMMISSIONER’S SUIT FOR
UNPAID WAGES
MERCURY COMPANIES, INC. BANKRUPTCY CASE. On December 10,
California Labor Commissioner Angela
Bradstreet announced that $4.29 will be
paid to 633 California employees following the settlement of a suit filed against
title companies operating in the state
who failed to fully pay employees laid off
in 2008. The settlement was approved
by U.S. Bankruptcy Court Judge
Michael E. Romero in Colorado, and
applies to employees of entities operating under Denver-based Mercury Companies. By virtue of the settlement,
those employees will recover more than
92 percent of their losses.
“In this case,” Bradstreet explained, “a
company closed without providing the
proper notification and without paying
final wages as required by law, and was
found to owe over $4 million in back
wages.” Former employees working at
Financial Title Company, Lenders
Choice Title Company, and Lenders
First Choice Agency, Inc., will receive in
excess of $3.6 million (before taxes) by
year’s end. At a later date, those employees will be paid additional sums in
excess of $125,000 as restitution of
401(k) contributions that were deducted
from their pay but not transferred to their
accounts.
Labor Commissioner Bradstreet filed
suit in Alameda County Superior Court
against Mercury in February of 2008,
after Alliance Title, another Mercury
affiliate, closed without notice and failed
to pay employees vested vacation benefits, commissions, expenses, and
notary fees. In September of 2008 the
cases was expanded to include claims
by Financial and Lenders employees.
Alliance Title filed for bankruptcy in
June of 2008, followed by Mercury and
its other affiliates in October of that
year. The claims were pursued in both
the state court action and in the Colorado Bankruptcy Court.
Former Lenders employees at the companies’ Rocklin and Simi locations were
not provided with 60 days notice before
the businesses were closed, and more
than $700,000 of the settlement represents damages for California WARN
Act violations.
The December 10 settlement resolves
the cases for the Financial and Lenders
employees, but not those of 594 Alliance Title employees, whose claims
will continue to be pressed in the Alliance bankruptcy case, being litigated
in California.
For Labor Commission: David Balter,
Department of Industrial Relations.
For Mercury: Brownstein, Hyatt, Farber,
& Shreck, Denver.
IR 2009-36, 12/10/09; information from
press release appearing at
www.dir.ca.gov/DIRNews/2009/
IR2009-36.
UNIVERSITY OF PHOENIX
AGREES TO SETTLE FALSE
CLAIMS ACT SUIT FOR $78.5
MILLION
U.S. ex rel HENDOW AND
ALBERTSON v UNIVERSITY OF
PHOENIX. On December 14, two
whistleblowers formerly employed by
the University of Phoenix agreed to
settle their False Claims Act claims for
$78.5 million. Their complaint alleged
that the on-line college made improper
incentive-based payments to recruiters. The settlement is believed to be
among the largest-ever in an FCA case
in which the government declined to
intervene.
The plaintiffs alleged that the university
defrauded the Department of Education
by obtaining federal student loan and
Pell Grant funds by means of false
statements of compliance with the Higher
Education Act, which bars universities
from paying recruiters based on the
number of students they sign up, a
practice that encourages the recruitment of unqualified students.
The whistleblowers will receive $19 million and the Department of Education
-15-
$48.5 million. Attorneys will receive an
additional $11 million in statutory fees
and costs.
The University of Phoenix has more
than 200 campuses worldwide and confers degrees in over 100 programs. It
has about 420,700 undergraduates and
78,000 graduate students, most of whom
do their course work online.
For plaintiffs: McGuinn, Hillsman &
Palefsky; Lieff, Cabraser, Heimann &
Bernstein; Altshuler Berzon.
USDC ED Cal, 12/14/09; No. 2:03-cv00457-GEB-DAD; information reported in Daily Journal, 12/15/09.
EEOC UPHOLDS DISABILITY
DISCRIMINATION CHARGES
AGAINST BERKELEY
McDONALD’S FRANCHISE
The October 29 issue of the Berkeley
Daily Planet contained the following
report:
“The disability community won a victory
Tuesday [October 27] when the [EEOC]
ruled that the McDonald’s in Berkeley,
on University and Shattuck Avenues,
discriminated against three of its disabled employees when it fired them last
year.
“The Legal Aid Society—Employment
Law Center filed charges last year with
the Commission, alleging that
McDonald’s in downtown Berkeley unlawfully discriminated against Lisa Craib
and her two co-workers, Susan Hanks
and Ruth Woo, because of their disabilities. Craib’s sister, Anne Craib, said
that the EEOC will be stepping in to
negotiate a settlement, failing which her
sister could sue.
“The LAS-ELC’s investigations revealed
that the three employees were fired
without notice or explanation when the
franchise was sold in March of 2008.
“Craib, 43, who has Asperger’s Syndrome—similar to autism—has been
unemployed since she was fired 15
DECISIONS
(From Page 15)
months ago. She had worked at
McDonald’s for 21 years, bussing and
cleaning tables and making salads. The
news of her termination led to day-long
vehement protests at the restaurant by
the disability community and disabled
advocates.”
“Ms. Craib ... used a job coach provided
by a local agency for people with disabilities to master her duties at
McDonald’s. ‘I was extremely upset,’
said Ms. Craib about losing her job. ‘It
felt as though my home was being taken
away from me. It hit me really hard.’
A LAS-ELC press release issued on
July 22, 2008, contained the following
additional information:
“At McDonald’s, Ms. Craib was a familiar face on the morning shift for two
NEXT MONTH’S ISSUE
Our ongoing series of “CELA Member
Profiles” will resume in the January
issue, and that mailing will also include the 2009 Index of Decisions
Summarized.
-16-
decades... Two of the regular customers referred to Ms. Craib as ‘Miss
McDonald’s.’
“Prior to working at the McDonald’s,
Ms. Craib attended Berkeley High and
community college. An award-winning
horseback rider, she also was an assistant coach in the Special Olympics and
helped other disabled athletes.”

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