2007 CELA Bulletins - California Employment Lawyers Association

Transcription

CALIFORNIA EMPLOYMENT LAWYERS ASSOCIATION
BULLETIN
Published
Monthly
EDITOR: CHRISTOPHER BELLO
RECENT EMPLOYMENT LAW DECISIONS
CALIFORNIA
SUPREME COURT
SUPREME COURT WILL
REVIEW SECOND DISTRICT
DECISION CONCERNING VIDEO
SURVEILLANCE OF
EMPLOYEES’ OFFICE
HERNANDEZ v HILLSIDES, INC.
On January 3, the Supreme Court
announced that it will review the Second District’s decision, filed on September 14, that reversed summary
judgment on invasion of privacy
claims brought by two employees
whose employer, without their knowledge, had placed a video surveillance camera in their office. The Second District held that the success of
the employees’ claims did not de-
pend on whether their pictures had
ever actually been observed or recorded by the camera which, according to the employer, had been placed
only for the purpose of determining
who was using the plaintiffs’ computer
at night to access pornographic
websites. The Second District’s opinion appeared at 142 CA4th 1377, 48
CR3d 780, and was summarized in
CELA Bulletin, Sep 06, p.4.
For plaintiffs: Arnold Kessler and Mark
S. Eisenberg.
For defendant: Seyfarth Shaw, Laura
Wilson Shelby, Holger G. Besch, and
Amy C. Chang.
Cal SC, 1/3/07; S147552.
(Cont'd on Page 2, DECISIONS)
January 2007
Vol. 21, No. 1
CELA FORMS IMMIGRANT
EMPLOYMENT RIGHTS
COMMITTEE—JOIN US!
by Kathryn Dickson
What if you learn during discovery
that your client is an undocumented
worker? What if defense counsel asks
about your client’s immigration status
during his or her deposition? Does
your client have to answer? Does defense counsel have any right to ask
the question? How will your client’s
damages be affected by his or her
status? What is an H1B visa? What
rights do H1B visa holders have in the
workplace? Whom do you contact
when immigration issues arise in your
cases, and do you need an expert for
trial? Who would be a good expert on
immigration procedures and law?
What in the blazes is the Hoffman
(Cont'd on Page 3, IMMIGRANT)
CELA’S INAUGURAL LOBBY DAY IS SET FOR MAY 23 IN SACRAMENTO
Plan to attend CELA’s inaugural Lobby
Day on May 23, 2007, when CELA
members will convene in Sacramento
to meet with key members of the
Legislature. The Legislative Committee is working hard to develop legislation to help California workers: Lobby
Day will be your opportunity to join the
campaign!
Send Jean Hyams an email,
([email protected]), if you
would like to participate. We need a
BIG turnout to make a difference.
(You don’t have to make a definite
commitment at this point, but we do
need a sense of how many folks we’ll
be able to turn out.)
By joining us you will help fulfill CELA’s
mission of furthering social justice for
California’s employees, by introducing CELA’s legislative agenda to our
elected officials. This is a great opportunity to meet with your local representative and to hang out with other
CELA members. No experience is
necessary! We will provide you with
the tools to make this day a success.
We will meet at a restaurant in the
morning, and travel in teams to designated legislators and staffers. After a
day of meeting, greeting, and advocating, we will return to be debriefed,
possibly to mix with some of our legislators, and to fete our esteemed col-
league and resident legislative guru
Steve Pingel, who will be celebrating
his 39th birthday for the 17th consecutive year.
When you contact Jean to indicate
your interest in participating, include
your residence zip code, and the
names of your legislators if you know
them. (To find out, you can log on to
www.info.ca.gov and click on “Your
Legislature.”)
See you in Sacramento!
Legislative Committee Co-Chairs
Jean Hyams, David Lowe, and
Steve Pingel
DECISIONS
(From Page 1)
SUPREME COURT DENIES
REVIEW OF SECOND DISTRICT
DECISION THAT AFFIRMED
$2.95 MILLION JUDGMENT FOR
GENDER DISCRIMINATION AND
RETALIATION
CONNEY v REGENTS OF UNIVERSITY OF CALIFORNIA. On January
3, the California Supreme Court announced that it will not review the
unpublished Second District decision,
(2006 WL 2730353; filed 9/26/06), that
affirmed an award of $2.95 million in
damages plus $415,450 in attorneys’
fees on gender discrimination and retaliation claims. (A multiplier of two
was used in calculating the fee award.)
For plaintiff: Pine & Pine, Norman
Pine and Beverly Tillet Pine; Michael
F. Baltaxe; Shannon M. Foley; James
K. Autrey.
For defendants: Reed Smith, Paul D.
Fogel and Raymond A. Cardoza; Lewis,
Brisbois, Bisgaard & Smith and Alan
R. Zuckerman.
Cal SC, 1/3/07.
CALIFORNIA COURTS
OF APPEAL
EVIDENCE DID NOT SUPPORT
PLAINTIFF’S VERDICT ON
DISABILITY HARASSMENT
CLAIM AND $15 MILLION IN
PUNITIVES WAS EXCESSIVE
ROBY v McKESSON HBOC. In an
opinion filed on December 26, 2006,
the Third District reduced the overall
jury award in a disability discrimination
and harassment case from $19 million
to $3.5 million. The court explained
the facts of the case as follows, as well
as its reasons for reducing both the
compensatory and punitive damage
awards:
“Plaintiff Charlene J. Roby was a stellar employee of defendant McKesson
HBOC, Inc. for 25 years [as a customer service support liaison] until she
developed panic disorder in 1998,
which caused her to start missing substantial time from work. Two years
later, McKesson fired Roby for abusing its attendance policy, although
many of her absences were attributable to her psychiatric disability.
“The jury ‘threw the book’ at McKesson.
It awarded Roby millions of dollars in
compensatory damages for wrongful
discharge in violation of public policy,
as well as harassment, disparate treatment, and discrimination/failure to
accommodate under [FEHA]. The jury
rendered a separate verdict finding
Roby’s supervisor, Karen Schoener,
liable for harassment. In a second
phase of the trial, the jury levied a $15
million punitive damage award against
McKesson and $3,000 against
Schoener.
“McKesson does not challenge the
verdict insofar as the jury found it
liable for wrongful termination, disability discrimination, and disparate treatment. McKesson and Schoener do
challenge the harassment verdict as
unsupported by substantial evidence.
Both defendants also claim that reductions in the compensatory damage
award are necessary and that the punitive damage award should be stricken
or reduced.
“We shall conclude that the judgment
awards duplicative noneconomic damages based on alternative theories of
liability for the same wrong, requiring a
downward adjustment. We shall also
strike the harassment awards against
McKesson and Schoener for insufficiency of the evidence. Finally, while
we find the evidence sufficient to support punitive damages, we conclude
that a substantial reduction in the size
of the award is necessary to comport
with constitutional constraints.
“We shall thus reduce both the compensatory and punitive damage awards
and affirm the judgment as modified.
“The trial court entered judgment for
$3,511,000 in compensatory damages
against McKesson and $500,000
-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:
Michelle Reinglass
23161 Mill Creek Drive
Suite 170
Laguna Hills, CA 92653
Tel: (949) 587-0460
FAX: (949) 587-1004
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
EXECUTIVE BOARD
J. Bernard Alexander III
(Sherman Oaks)
Dolores Leal
(Los Angeles)
Eve Chesbro
(Pasadena)
Steven Pingel
(Long Beach)
Kathy Dickson
(Oakland)
Mika Spencer
(San Diego)
David Duchrow
(Los Angeles)
James P. Stoneman
(Claremont)
Phil Horowitz
(San Francisco)
Christopher Whelan
(Gold River)
Jean K. Hyams
(Oakland)
Jeffrey Winikow
(Los Angeles)
Toni Jaramilla
(Los Angeles)
Brad Yamauchi
(San Francisco)
Virginia Keeny
(Pasadena)
Bulletin Editor
Christopher Bello
35116 Reith-Larson Lane
Astoria, OR 97103
Ph: (503) 338-3891
DECISIONS
(From Page 2)
against Schoener. Defendants’ motions for new trial and for [JNOV] were
denied. However, owing to Roby’s
concession that the jury’s award for
past economic damages included the
future value of the same loss, the
order denying defendants’ posttrial
motions included a $706,000 reduction in the verdict...
“Our analysis shows that, although
the trial court consolidated the multiple economic damage awards into
single figures, it did not treat any of
the noneconomic damage awards as
duplicative; itstead it ‘stacked’ these
three awards, such that Roby was
awarded a total of $1.6 million in
noneconomic damages for the three
termination-related torts. [Fn. 4: Because McKesson concedes that harassment in the workplace is a qualitatively different tort for which damages may be independently awarded,
the harassment verdict is not implicated in the present analysis.]
“McKesson argues that by adding the
three noneconomic damage awards
together, the trial court improperly
allowed Roby to recover treble damages based on a single legal wrong. It
contends the trial court should have
accepted the highest noneconomic
award (i.e., $800,000) and stricken
the two lower awards as duplicative.
We agree.
“Roby ... claims that multiple noneconomic damage awards were proper in
this case because splitting up the damages among the three alternative legal theories was expressly authorized
by the trial court’s instructions. According to Roby, the jury simply followed the court’s instructions to decide on a single sum for noneconomic
compensation and work backwards,
apportioning the damages among
three different theories of recovery.
We reject the argument [although the
instructions were not a model of consistency and clarity].
“In their briefs, the parties resume
their debate over whether the collateral source rule applies to Social Security disability benefits. Apparently,
the issue is still unsettled in California.
[cites omitted.] We need not delve
into this dispute, however, because, on
this record, the jury could reasonably
have concluded that defendants did
not carry their burden of proof [not
merely as to the fact of the offset but
also as to its amount].
“The jury found both defendants liable
for hostile work environment/harassment, awarding $600,000 against
McKesson and $500,000 against
Schoener. Defendants contend these
verdicts are not supported by substantial evidence. [W]e agree.
“Our review of the record yields the
following behavior by Schoener which
could conceivably support a claim of
disability harassment: (1) she sometimes placed apple pies and small gifts
on every subordinate’s desk except
Roby’s; (2) she made Roby document
all her phone calls and made her cover
the phones during the office Christmas
party; (3) Schoener would often snub
her at staff meetings and did not return
her ‘good morning’ greetings; (4) she
once made a ‘throat slash’ gesture
when Roby was on the phone with a
IMMIGRANT
(From Page 1)
Plastics decision that everyone seems
to despise, and what do I need to know
about it?
Representing foreign national employees—either undocumented workers
or those holding valid visas or green
cards—is both challenging and extremely rewarding. If you have cases
involving immigration issues or the
employment rights of foreign national
workers, please consider joining
CELA’s new Immigrant Employment
Rights Committee, which is now up
and running. We held our first two
teleconference meetings on November 16, 2006 and January 18, 2007.
We plan to present a breakout session at the Annual Conference in September, and to conduct a day-long
regional seminar later this year. We
have discussed a number of additional plans and possible projects,
including the following:
· Putting together a resources guide
· Compiling materials and guidance,
and considering legislative action
regarding Hoffman Plastics and
damages issues
· Collecting and developing pre-trial
and trial materials on immigration
issues that arise in our cases
· Developing a case evaluation
guide, and a checklist of issues to
address with clients in cases
involving immigration issues
· Collecting and disseminating information on the different types of
visas
· Collecting the names of good immigration lawyers who may be
able to serve as consultants and
experts, and proposing that they
attend our conferences—and we
theirs—to share information
· Developing information related to
-3-
causes of action such as fraud that
can be asserted by workers induced to come to the U.S. by promises of visa and green card applications, but who then are not paid
or whose visas are not processed
· Collecting and sharing information
on verdicts and settlements involving immigration issues
· Starting either a sub-list or a section
of the “Members Only” part of the
CELA website for immigration/
employment issues
This is a vibrant new committee working on “cutting edge” issues. If you
have an interest in joining, please contact me, Kathryn Dickson, at
[email protected]; (510)
268-1999; or Christina Krasomil,
CELA’s Administrative Director, at
[email protected]; (818) 9077895.
DECISIONS
(From Page 3)
client and then loudly reprimanded
Roby in front of her coworkers; (5) she
referred to Roby’s job as a ‘no-brainer’;
(6) she once told Roby her arm digging
and heavy sweating [symptomatic of
her disability] was ‘disgusting’; (7) even
though Roby advised her that the unpleasant body odor was related to the
medication she was taking for her condition, Schoener showed ‘no compassion,’ telling her instead that she
needed to bathe and shower more
frequently; and (8) Roby came to work
one morning to find soaps, shampoos
and deodorants had been placed on
her desk.
“Application of [the principles of Reno
v Baird (1998) 18 C4th 640] mandates
the conclusion that most of the alleged
harassment here was conduct that fell
within the scope of Schoener’s business and management duties... 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.
“When Reno-protected conduct is
sifted out, what we have left is evidence that Schoener treated Roby with
general scorn and contempt and failed
to show any sympathy for her disability. This is not sufficient to create
liability for harassment based on a
hostile work environment.
“While the evidence showed that
Schoener obviously disliked Roby,
shunned her, and showed no compassion for her condition, neither cold
indifference nor lack of sensitivity toward a disabled employee can be
alchemized into a claim of hostile work
environment. If such were the case,
virtually every case of disability discrimination could be parlayed into a
supplementary damage claim for harassment.
“Roby points to evidence that
Schoener’s behavior aggravated her
symptoms and left her emotionally
ravaged. But Roby, already emotionally frail..., was highly susceptible to
even the slightest display of antipathy... The ‘reasonable person’ test is
necessary to protect employers against
claims that are frivolous or brought by
hypersensitive employees...”
Concerning punitive damages, the
court held, first, that “a reasonable jury
could find that McKesson’s conduct
consisted of more than a careless failure to investigate absences, and was
rather a deliberate plan to rid itself of
the inconvenience of accommodating
a mentally disabled employee. The
imposition of punitive damages is supported by substantial evidence.” But
the court concluded that the punitive
damages award was constitutionally
excessive, applying as follows the three
United States Supreme Court “guideposts:”
“If we simply applied an automatic
proportionate reduction of the punitive
damage award to reflect [the] same
ratio after our modifications to the compensatory damages (now a total of
$1,405,000), it would yield a punitive
damage award of $6,002,160. However, we do not feel that a 4-to-1 ratio
falls within constitutional limits in this
case because (1) the original punitive
damage award was based on the jury’s
determination that McKesson was
guilty of harassment, a qualitatively
different tort, and one for which we
have failed to find evidentiary support
in the record; (2) more than half the
compensatory damage award—
$800,000—represents compensation
for emotional distress, humiliation and
mental suffering, ‘outrage’ components
that are, to a large extent, duplicated
by the punitive damage verdict...; and
finally (3) the magnitude of the punitive damage award dwarfs the maximum civil penalties for the same wrongful conduct.
“Considering the shifting, complex
mosaic of elements at play in this
case, we conclude that a punitive damage award of $2 million reaches the
constitutional frontier. Such a sum
yields a ratio ... of approximately 1.42
to 1 or about one-third of the original
ratio. Our figure comports with Supreme Court jurisprudence on the subject yet is large enough to have a
deterrent effect on future conduct.”
-4-
For plaintiff: Riegels, Campos &
Kenyon and Charity Kenyon; Christopher H. Whelan; David M. deRubertis.
For defendants: Howard, Rice,
Nemerovski, Canady, Falk & Rabkin,
Jerome B. Falk, Jr., Linda Q. Foy,
Jason M. Habermeyer; Fitzgerald,
Abbott & Beardsley and Sarah E.
Robertson.
Third Dist, 12/26/06; opinion by Butz
with Nicholson and Robie concurring; 2006 DAR 16848, 2006 WL
3775897.
[Note: The Respondent’s Petition for
Rehearing in Roby, included as an
attachment to a January 11 CELA
Listserv message from attorneys
Whelan, deRubertis, and Pine, argues,
inter alia: (1) there was no duplication
of non-economic damages; (2) the
opinion omits, misstates, and
downplays critical facts that support
the harassment verdict; (3) the opinion
misapplies Reno v Baird; (4) the
opinion’s constitutional analysis misapplies the Gore guideposts and misstates material facts; and (5) an absolute appellate reduction of the punitive
damages award is improper and the
Court should order a conditional remittitur.]
ANTI-SLAPP STATUTE MAY NOT
BE USED TO STRIKE CLAIM
THAT HAS BEEN FILED ONLY IN
PRIVATE ARBITRAL FORUM
SHEPPARD v LIGHTPOST MUSEUM
FUND. Reversing an order of the Santa
Clara County Superior Court, the Sixth
District held that “...Code of Civil Procedure section 425.16 does not authorize a superior court to grant a motion
to strike an arbitration claim filed only
in an agreed arbitral forum and not
asserted by the claimant in any complaint, cross-complaint or petition filed
in court.”
Section 425.16, the anti-SLAPP statute, specifies that “[a] cause of action
against a person arising from any act
of that person in furtherance of the
DECISIONS
(From Page 4)
person’s right of petition or free speech
... in connection with a public issue
shall be subject to a special motion to
strike, unless the court determines that
the plaintiff has established that there
is a probability that the plaintiff will
prevail on the claim.” The Sixth District reasoned that “[the] statute was
expressly intended to prevent abuse
of the ‘judicial process,’ and its terms
are not reconcilable with a legislative
intent to extend it to arbitration claims
filed only in private nonjudicial forums.”
The case involves an arbitration claim
filed by the employer pursuant to the
arbitration provision contained in the
plaintiff’s employment contract, alleging that the plaintiff had violated the
contract’s non-disclosure clause following his termination by giving testimony in certain legal proceedings and
by writing a book.
For employee: J. Joseph Wall, Jr.
For employer: Rhonda Cate Canby,
Philip T. Darke, Downey Brand.
Sixth Dist, 12/29/06; opinion by
Mihara with Duffy and McAdams
concurring; 2007 DAR 84, 2006 WL
3824896.
SUPERIOR COURT DID NOT
ERR IN DENYING EMPLOYER’S
MOTION TO DISQUALIFY
PLAINTIFF’S LAW FIRM
BECAUSE OF “FIRMSWITCHING” ATTORNEY
OCHOA v FORDEL. Relative to employment discrimination and wrongful
discharge litigation, the Fifth District
affirmed an order of the Fresno County
Superior Court denying the defendants’
motion to disqualify the law firm representing the plaintiffs because that firm
had hired an attorney who had previously worked at the law firm representing the defendants. Agreeing with the
superior court’s use, in applying rule 3310(E) of the California Rules of Professional Conduct, of the “modified
version of the substantial relationship
test,” (first referred to in Adams v
Aerojet-General Corp. (2001) 86
Cal.App.4th 1324, 1340), the Fifth Dis-
trict explained the facts, and its reasons for rejecting the defendants’ contentions on appeal, as follows:
“[Defendants] Ridgeback [Ranch] and
[Charles] Johnston filed a motion to
disqualify attorney Shelley G. Bryant
and the law firm of W. J. Smith &
Associates from representing plaintiffs in this case... Declarations in support of the motion set forth [that] Ridgeback and Johnston retained the law
firm of Jory, Peterson, Watkins, Ross
& Woolman to defend them in this
case soon after they were served with
the complaint in January 2004. Bryant
was an associate of the Jory Peterson
firm at that time.
“In April 2005, Bryant informed Jory
Peterson that he would resign his employment and shareholder status effective May 11, 2005, and would become associated with Smith... [¶] The
declarations of William J. Smith and
Bryant addressed how the Smith firm
kept Bryant insulated from plaintiffs’
cases since he was hired by the firm.
“Applying the modified substantial relationship test, the superior court found
that the targeted attorney had carried
his burden of proving that confidential
information material to the plaintiff’s
lawsuit was not imparted to him. Accordingly, the superior court denied
the motion...
“[T]he modified substantial relationship test applies because this case
involves (1) no proof that the firmswitching attorney actually obtained
confidential information...; (2) the successive representation of clients with
adverse interests; and (3) a firm-switching attorney whose prior attorney-client relationship with the moving party
was peripheral or attenuated...
“Under the modified substantial relationship test, a presumption that the
attorney knows confidential information applies only where the moving
party ... makes ‘an adequate showing
that the attorney was in a position visa-vis the client to likely have acquired
confidential information material to the
current representation.’ [cite omitted]
-5-
“Two defendants appeal, claiming (1)
the superior court’s findings of fact
were not supported by substantial evidence, (2) the superior court failed to
consider and analyze material facts,
(3) the superior court committed legal
error in analyzing the firm-switching
attorney’s opportunity for acquiring
confidential information while at his
former law firm, and (4) the superior
court erroneously denied their request
to depose the firm-switching attorney.
“We conclude (1) the superior court’s
findings are supported by substantial
evidence; (2) the superior court correctly ruled that the modified substantial relationship test, when met, shifts
the burden to the targeted attorney to
prove that he or she was not exposed
to material confidential information (not
[to] prove that he or she had no opportunity to acquire confidential information), and (3) the superior court did not
otherwise abuse its discretion. Therefore, the order denying the motion to
disqualify is affirmed.”
For employee: William J. Smith.
For employer: Caswell, Bell & Hillison
and Russell G. VanRozeboom.
Fifth Dist, 1/12/07; opinion by
Vartabedian with Levy and Gomes
80406.
IN UNPUBLISHED DECISION,
SECOND DISTRICT UPHOLDS
REDUCTION OF FEE REQUEST
BUT HOLDS THAT MULTIPLIER
WAS PROPER
GONZALEZ v MERCHANTS BUILDING MAINTENANCE. The Second
District, Division Eight, affirmed a
postjudgment order setting attorneys’
fees, using a multiplier of two, and
denying prejudgment interest. “Appellants are among 29 individuals who
opted out of a class action settlement,”
the court explained, “and filed individual actions asserting wage and hour,
discrimination and retaliation claims...
Appellants’ counsel, Robert J. Younger,
represented all 29 individual plaintiffs
DECISIONS
(From Page 5)
in substantially identical actions... Prior
to trial, appellants accepted offers by
Merchants for entry of judgments in
the amounts of $30,100 for Gonzalez,
$10,000 for Maximo and $10,000 for
Quintanilla, plus reasonable attorney
fees and costs to be determined by the
court... [A]pplying a multiplier of two,
Younger requested a total of $135,070
in attorney fees for Gonzalez, $97,085
for Maximo and $102,335 for
Quintanilla... [T]he court granted appellants’ motions for attorney fees in
part and denied the motions in part.
The court awarded each appellant attorney fees of $20,510, based on a
lodestar of $10,255 and multiplier of
two, and found all other claimed attorney fees to be unreasonable and unrecoverable.
“[T]he trial court based the award of
attorney fees on the number of hours it
determined counsel should have reasonably expended in representing appellants multiplied by $250, the rate
the court found to be a reasonable rate
..., obtaining a lodestar figure of
$10,255 and doubling that amount.
“We find no abuse of the court’s discretion in reducing the number of hours
claimed by appellants’ counsel. Merchants attached a copy of all written
discovery undertaken in the cases and
the court was able to gauge first-hand
the nature, extent, quality and, particularly, the duplicative nature of
counsel’s efforts... [Defense] expert
[John W.] Toothman performed a thorough analysis ... in an attempt to screen
out duplicative, unreasonable or otherwise unjustified time entries...
“Although the court adopted
Toothman’s ... lodestar figure, the court
obviously disagreed with Toothman’s
conclusion that the duplicative nature
of the issues justified the award of only
one attorney fee; consequently, the
court applied the lodestar figure to
each appellant, rather than collectively
to all three. We find no abuse of discretion in this approach since each appellant had a separate case and counsel
was obliged to separately litigate and
tailor discovery responses to each
action.
“We also find no abuse of discretion in
the trial court’s applying a multiplier of
two... The court particularly noted the
risks that appellants’ counsel had taken
in pursuing these three cases. Merchants had settled a class action involving 2,500 other employees, at an
average of no more than $29 [for] each
claim. The court noted these were not
easy cases and the 29 persons who
had opted out of the settlement were
‘brave souls’ and their counsel was
‘even braver’...
“The trial court properly enhanced appellants’ attorney fees by a multiplier
of two in light of the contingency nature of counsel’s representation, the
risk he could obtain no better results
than class participants and his skill in
achieving a result for appellants many
times the value of the class settlement
for each claim.
“[A] postjudgment cost bill is ‘not an
appropriate vehicle to request prejudgment interest under [Civil Code] section 3287.’ [cite omitted] Rather, a
plaintiff must timely request prejudgment interest by way of a motion prior
to entry of judgment or a motion for a
new trial...
“Appellants further argue that prejudgment interest is not considered an
element of damages under Civil Code
section 3291 and, once the court ruled
on the motions for attorney fees and
costs, the court should have determined whether appellants obtained
more than the demands they had purportedly made under section 998. We
disagree. Appellants sought recovery
for contractually based employment
claims for wages and wrongful termination. Contractually based claims and
claims for wages are not considered
claims for personal injury falling under
Civil Code section 3291... The trial
accordingly did not abuse its discretion in granting the motion to tax costs
denying appellants prejudgment interest.”
For plaintiffs: Robert J. Younger.
For defendant: Mark C. Teuton.
Second Dist Div Eight, 12/29/06;
opinion by Flier with Cooper and
-6-
Rubin concurring; 2006 WL 3824940
(unpublished).
DISCLOSURE REQUIREMENTS
OF H & S CODE § 1363.1
APPLY TO ARBITRATION
PROVISIONS IN EMPLOYERNEGOTIATED GROUP HEALTH
PLANS EVEN WHERE
EMPLOYEE ENROLLS BY
SIGNING EMPLOYER’S FORM,
NOT INSURER’S
MEDEIROS v SUPERIOR COURT
(HEALTH NET OF CALIFORNIA). “In
this writ proceeding,” the Second District, Division Seven wrote in an opinion filed on January 16, “petitioners ...
challenge the trial court’s order compelling them to arbitrate a dispute with
their health insurer, real party in interest Health Net. Medeiros contends the
arbitration provision at issue is unenforceable because it does not comply
with the disclosure requirements set
forth in Health and Safety Code section 1363.1. [Specifically, Medeiros
pointed to the fact that the arbitration
provision was not prominently displayed and was not located immediately before the signature line as required by the statute.]
"Health Net asserts, as a member of a
group health plan negotiated between
Health Net and Medeiros’s employer,
Medeiros is not entitled to the protection of those disclosures. Moreover,
Heath Net argues the requirements of
section 1363.1 do not apply to the
‘benefits election form’ Medeiros
signed and submitted to his employer
in order to enroll in the group health
plan. Health Net claims section
1363.1’s disclosure obligation would
only have been triggered if it had required Medeiros to sign an ‘enrollment
form’ in order to enroll in the health
plan. We reject Health Net’s contention [that] consumers who enroll in a
group health plan negotiated between
their employer and the insurance company, and consumers who sign their
DECISIONS
(From Page 6)
employer’s benefits election form instead of an enrollment form provided
by the insurance company, are entitled to some lesser form of disclosure
concerning arbitration than consumers who individually subscribe to a
health insurance plan. We conclude
the disclosure requirements of section
1363.1 are applicable to the arbitration
provision Health Net seeks to enforce
against Medeiros, and the arbitration
provision is unenforceable for failure
to comply with these requirements.
Accordingly, we direct the trial court to
vacate its order requiring Medeiros to
arbitrate this dispute with Health Net,
and to issue an order denying Health
Net’s motion to compel arbitration.
“The plain language of section 1363.1
is clear. If a health plan wants to require employee-subscribers to a group
plan to arbitrate disputes, the health
plan must make the mandatory disclosures. We can conceive of no reason
why employees who sign a document
called an ‘enrollment form’ provided
by the insurance company should receive more protection than employees
who sign a document called a ‘benefits
election agreement’ provided by their
employer. If an employer-prepared
form does not provide the health plan
with an appropriate ‘vehicle’ to make
the required disclosures then the health
plan must provide its own form for this
purpose.”
For employee: Shernoff, Bidart &
Darras, Michael J. Bidart, Ricardo
Echeverria; Jeffrey Isaac Ehrlich.
For real party in interest: Lewis,
Brisbois, Bisgaard & Smith, Raul L.
Martinez and Elise D. Klein.
Second Dist Div Seven, 1/16/07;
opinion by Johnson with Perluss
and Zelon concurring; 2007 DAR
745, 2007 WL 93170.
NINTH CIRCUIT
LMRA DOES NOT PREEMPT
TORT CLAIMS IN CONNECTION
WITH FORCE USED BY
SECURITY GUARDS IN
BREAKING-UP UNION MEETING
WARD v CIRCUS CIRCUS CASINOS,
INC. Reversing summary judgment,
the Ninth Circuit, in a January 10 opinion by Beezer, held that the district
court (D Nevada) erred in concluding
that the union-represented plaintiffs’
state law tort claims were preempted
by LMRA § 301. The Ninth Circuit
explained:
“During the relevant time period, the
Workers were employed by Circus and
were members of a labor union... The
CBA provided that the union representatives may communicate with employees regarding union business so
long as such activities do ‘not interfere
with the conduct of the Employer’s
business or with the performance of
work by employees...’
“On May 3, 2002, Circus employees
including the Workers met during a
scheduled work break in the Circus
employee dining room. The purpose
of the meeting was to distribute leaflets and inform union members of the
progress on contract negotiations. After participants began distributing leaflets, employee Al Williams stood on a
chair and spoke about union members
defending their employment rights. In
response, meeting participants began
chanting and shouting phrases such
as ‘union, yes’ and ‘we want a contract.’
“Soon after the chanting began, Circus
security guards interrupted the meeting and told the participants to leave.
The participants instead locked arms
in a circle around Williams to prevent
the guards from getting near him. The
guards pushed through the participants,
pulled Williams off the chair and handcuffed him. The Workers alleged that
in the process the security guards
grabbed, pushed and knocked them
down.
-7-
“In September 2003, the Workers
brought an action in Nevada state
court, alleging that Circus was liable
for (1) assault and battery, (2) false
imprisonment, (3) intentional infliction
of emotional distress, (4) negligent
infliction of emotional distress, (5) negligent entrustment and (6) negligent
hiring, training and supervision. Circus removed the action to the United
States District court for the District of
Nevada. The Workers moved to remand to state court, which the district
court denied... The district court granted
Circus’ motion for summary judgment...
“For each of the Workers’ claims, the
determinative question is ‘whether the
state law factual inquiry ... turn[s] on
the meaning of any provision of the
collective bargaining agreement.’ [cite
omitted] The Workers bring two types
of claims based on the alleged physical force used against them... The first
type directly challenges the force
used... The second type involves Circus’ alleged negligence...
“As to both types of claims, Circus
argues that the CBA must be interpreted to determine whether the Workers’ union activity interfered with company business and was in violation of
the CBA. The Workers contest the
restraint, physical force and threats
used against them by Circus security
guards. Their claims do not depend on
an interpretation of permissible union
communications. Even if the Workers’
activities ... were not permissible under the CBA, Circus may be liable
under state law if the facts ... alleged
by the Workers are proved.
“The CBA also does not set forth procedures for employee control or authorize the use of threats, physical
force or restraint. CBAs typically do
not govern such conduct, and state
claims involving physical threats or
force used against an employee usually are not preempted. [cites omitted].
“Circus contends that its right to direct
and control its employees pursuant to
the CBA requires interpretation and
DECISIONS
(From Page 7)
amounts to consent by the Workers to
the challenged conduct. To the contrary, Circus’ right to direct and control
its employees cannot reasonably sanction any level of threats, physical force
or restraint, even if the employees’
activities interfere with company business.
“As to the Workers’ negligence based
claims, Circus argues that the CBA
must be interpreted to determine the
particular duties of care owed to the
workers. State law negligence claims
are preempted if the duty relied on is
‘created by a collective bargaining
agreement and without existence independent of the agreement.’ [cite
omitted]... [But] Circus is ‘accused of
acting in a way that might violate the
duty of reasonable care owed to every
person in society.’ [cite omitted] The
Workers’ negligence claims do not
require interpretation of the CBA.”
For plaintiffs: Romeo R. Perez, Las
Vegas.
For defendant: Lionel, Sawyer &
Collins, Las Vegas.
Ninth Circuit, 1/10/07; opinion by
Beezer joined by O’Scannlain and
Trott; 2007 DAR 439, 2007 WL 60390.
FOR SECOND TIME, NINTH
CIRCUIT REVERSES JUDGMENT
ON DEFENSE VERDICT IN
TITLE VII RACE
DISCRIMINATION ACTION, AND
ORDERS REPLACEMENT OF
TRIAL JUDGE ON REMAND
OBREY v ENGLAND. In an unpublished sequel to its March 2005 opinion
in “Obrey I,” (400 F3d 691; summarized in CELA Bulletin, Mar 05, p.5),
the Ninth Circuit again reversed a judgment on a jury verdict for the defense
in a Title VII action by a civilian employee of the Pearl Harbor Naval Shipyard who alleged that the navy had
engaged in a pattern or practice of
discriminating against qualified candidates of Asian Pacific ancestry in favor of white applicants for senior
management positions. The court
wrote:
“[The plaintiff] contends that the district court [D Hawaii] made several
erroneous evidentiary rulings and used
an improper verdict form. We agree
that the district court committed a number of errors, mostly due to its failure
faithfully to apply our prior decision in
this case... Because we are unable to
conclude that these errors, taken together, were harmless, we reverse
and remand for a new trial.
“First, we hold that the district court
abused its discretion when it prevented
Obrey’s expert witness, James
Dannemiller, from testifying about nonselections (that is, instances in which a
selection process was initiated but no
candidate was chosen) and about noncompetitive selections (that is, instances in which only one candidate
applied for and received a job) at the
Shipyard. In Obrey I, we held that
‘Dannemiller’s study was relevant for
what it purported to analyze: the race
of managers selected at the Shipyard
compared to the race of those who
applied for managerial positions.’
Obrey I, 400 F.3d at 696-97. We did
not suggest that the district court on
remand could exclude a portion of
Dannemiller’s proposed testimony. In
any event, it is clear that the district
court’s reasons for excluding this testimony went to weight rather than admissibility.
“Second, we hold that the district court
abused its discretion when it precluded
Obrey from testifying about his reasons for bringing suit and about his
relative qualifications for promotion,
at least to the extent that Obrey’s
testimony would have been based upon
personal observation and experience.
This evidence was relevant under Federal Rule of Evidence 401 and was not
improper lay opinion under Federal
Rule of Evidence 701.
“Third, we hold that the district court
abused its discretion when it refused to
permit live testimony from three of
Obrey’s witnesses... Federal Rule of
Civil Procedure 43(a), which expresses
our strong preference for oral testimony in open court, forecloses the
district court’s unorthodox procedure.
-8-
“Fourth, we hold that the district court
abused its discretion when it prevented
Benjamin Toyama from testifying about
budgetary issues within his knowledge
and about his discussions with senior
Shipyard officials on the subject of
racial bias.
“Fifth, we hold that the district court
erred by failing to use a mixed-motive
jury verdict form. Here, a rational jury
could have concluded that race was a
motivating factor in, but not the sole
cause of, the challenged employment
decision. [cite omitted] The jury instructions imperfectly conveyed the
mixed-motive standard, and the verdict form did not convey the standard
at all.
“We hold that these errors, taken together, were prejudicial to Obrey. In
Obrey I, we clarified that we ‘begin with
a presumption of prejudice,’ which may
be rebutted ‘by a showing that it is
more probable than not that the jury
would have reached the same verdict
even if the evidence had been admitted.’ Obrey I, 400 F.3d at 701. Given
that the trial would have been quite
different had these significant errors
not been made, we are reluctant to
usurp the jury’s function by concluding
that the verdict would have remained
unchanged.
“Obrey also argues that the district
judge in this case is biased. The test
for proving judicial bias is a demanding one ... and it has not been met
here. However, we are troubled by the
district judge’s apparent unwillingness
to implement our decision in Obrey I.
In order to preserve the appearance of
justice, we ‘exercise [our] supervisory
power under 28 U.S.C. § 2106 to reassign this case to a different district
court judge on remand.’ [cite omitted].”
For plaintiff: Clayton C. Ikei, Jerry P.
S. Chang, Honolulu.
Ninth Circuit, 12/26/06; memorandum opinion by Trott, Wardlaw, and
W. Fletcher; 2006 WL 3825350 (unpublished).
DECISIONS
(From Page 8)
REVERSING DENIAL OF MOTION
TO COMPEL ARBITRATION,
NINTH CIRCUIT HOLDS THAT
UNCONSCIONABLE COSTS
PROVISION COULD BE
SEVERED
MARTIN v TELETECH HOLDINGS,
INC. In an unpublished decision filed
on December 19, the Ninth Circuit
reversed a Central District order denying the employer’s motion to compel
arbitration of a former employee’s
FLSA and pendent state law claims.
The court wrote:
“The arbitration agreement was procedurally unconscionable because it was
imposed as a condition of employment and there was no opportunity to
negotiate. See Armendariz... The feesharing provision renders the agreement substantively unconscionable
because it requires the arbitrator’s fees
to be paid equally by the parties and
requires each party to post its portion
of the anticipated fee prior to commencement of the arbitration. [cites
omitted] Nonetheless, the fee sharing
provision is easily severable from the
remainder of the arbitration agreement.
[cites omitted]
“Although it is true that the agreement
requires the employee to arbitrate all
of his or her claims but does not similarly require TeleTech to arbitrate its
claims against the employee, Martin’s
argument that the agreement is invalid
for lack of mutuality was not raised in
the district court. TeleTech accordingly has not had the opportunity to
present evidence regarding business
reasons for the provision.
“We accordingly reverse the order of
the district court denying TeleTech’s
motion to compel arbitration and remand for further proceedings. On remand, TeleTech may renew its motion
to compel arbitration and Martin may
raise any applicable defenses, including lack of mutuality. If any issue of
unconscionability is raised, TeleTech
shall be afforded the opportunity to
present evidence on the issue...”
For plaintiff: Guy Patrick Glazier, Los
Angeles; George A. Hanson, Kansas
City, Mo.
For defendant: John S. Battenfeld,
Morgan, Lewis & Bockius, Los Angeles; Rebecca Eisen, Morgan, Lewis &
Bockius, San Francisco; Richard G.
Rosenblatt, Morgan, Lewis & Bockius,
Princeton, NJ.
Ninth Circuit, 12/19/06; memorandum opinion by Siler, Tashima, and
Bea; 2006 WL 3794324 (unpublished).
UNITED STATES
DISTRICT COURTS
JUDGE PATEL GRANTS MOTION
FOR CLASS CERTIFICATION IN
GENDER DISCRIMINATION
ACTION AGAINST COSTCO
ELLIS v COSTCO WHOLESALE
CORP. On January 11, Judge Marilyn
Hall Patel of the Northern District
granted a motion for class certification
in a Title VII action by current and
former Costco employees alleging
gender discrimination in the company’s
promotion and management practices.
The class is alleging that Costco’s
promotion system has a disparate impact on female employees, that
Costco’s management discriminates
against women in promotions, and that
the company has retaliated against
persons seeking redress for discrimination. The plaintiffs, who are also
asserting pendent FEHA claims, successfully sought certification of a nationwide class consisting of more than
700 current and former Costco employees who, since January 3, 2002,
were denied promotion to General
Manager, Assistant General Manager,
or certain Senior Staff positions.
In an article in the January 12 New
York Times, lead counsel Brad
Seligman was quoted as stating that
“Costco has a blind spot in its employment policies, which has allowed a
glass ceiling to fester.” The plaintiffs
assert that women make up almost
half of Costco’s total workforce, but
-9-
only thirteen percent of its managers.
Unlike most of its competitors, the
lawsuit alleges, Costco neither posts
openings for managers nor accepts
applications, but instead relies on an
informal word of mouth system that
favors men over women. [Note: Judge
Patel’s order was included as an attachment to a January 11 CELA
Listserv message from Kathryn
Dickson.]
For plaintiffs: The Impact Fund; Lieff,
Cabraser, Heimann & Bernstein; Davis,
Cowell & Bowe.
For defendant: Seyfarth Shaw, Los
Angeles.
USDC ND Cal, 1/11/07; C O4-03341
MHP.
CALIFORNIA
SUPERIOR COURTS
PENA v J & M ASSOCIATES. On
January 12, the San Diego County
Superior Court, (Judge Richard E.
Strauss, Dept. 75), granted certification to a class of well over 1,000 workers hired by J & M Associates and
assigned to work at the National Ship
Building Company, (NASSCO), which
is being sued as a joint employer. The
class consists of all J & M workers who
were required to undergo a day of inhouse training without pay. The plaintiffs are seeking lost wages and statutory waiting time penalties equal to 30
days’ pay for each worker, and private
attorney general penalties. Total estimated wages and penalties are in excess of $6 million.
For plaintiffs: Stephen Danz and
Marcus Jackson, San Diego.
For defendant J & M Associates: James
F. Holtz, Gil Abed, Stutz, Artiano,
Shinoff & Holtz, San Diego.
For defendant NASSCO: Gordon E.
Krischer, Larry A. Walraven,
O’Melveny & Myers, Newport Beach.
San Diego County Superior Court,
No. GIC833973; Judge Richard E.
Strauss.
JUDITH VLADECK: 1923-2007
Judith Vladeck, an employment law
and women’s rights pioneer, died on
January 8 in Manhattan. She was a
NELA member, and a partner in
Vladeck, Waldman, Elias & Engelhard.
Her New York Times obituary, published on January 11, read in part as
follows:
“Judith P. Vladeck, a prominent labor
lawyer and ardent advocate of women’s
rights in the workplace, particularly on
college campuses, died on Monday in
Manhattan. She was 83.
“Proud of her courtroom contentiousness, Ms. Vladeck brought a combination of showmanship and detailed
analysis of salary histories and job
performance to her cases. She took on
potent opponents like major Wall Street
investment firms, the Union Carbide
Corporation and the City University of
New York—and usually won, or settled
for millions.
“As the women’s movement gained
footing, Ms. Vladeck turned her attention to workplace discrimination. In
1975, she represented Val Winsey, a
professor at Pace University who had
been denied tenure. When the
university’s lawyers argued that Professor Winsey was a troublemaker
who devoted too much of her time to
challenging the system, Ms. Vladeck
responded: ‘The only way women are
tolerated is if they are supine, silent
and submissive.’ Winsey was reinstated with back pay and received her
tenure.
“In the City University case, filed in
1973, Ms. Vladeck traced salary histories for more than 5,000 female faculty
members. The judge ruled that the
university had discriminated for 15
years. When The New York Times
asked Ms. Vladeck in 1983 whether
she thought the multimillion-dollar
settlement had been fair, she gave an
answer that appeared as the paper’s
quotation of the day: ‘If we were to
calculate the real back pay in this
case, they’d have to take Brooklyn
College and City College and auction
them off to pay the damages.’
“Ms. Vladeck did not represent only
women. In the Union Carbide case, in
1983, she argued successfully that
John Whittlesley, a labor lawyer, should
COMING
not have been forced to retire at 65.
“Asked if she had ever represented an
employer, Ms. Vladeck once told a
reporter: ‘Are you kidding? Never.’”
The results of an “Attorney Profile”
search on Westlaw include a list of the
staggering number of cases Judith
Vladeck litigated, as well as the citations of law review articles she published on issues such as the glass
ceiling and the concept of comparable
worth.
In a NELAnet message on January 11,
Janice Goodman wrote as follows:
“Every time we bring a discrimination
case, particularly a sex or age claim,
let’s remember that Judy was one of
the people who helped establish the
laws that make our practice possible.
She will be missed. In tribute, NELA
would like to honor her story by putting
together a book of reminiscences.
Many of you may have worked with
Judy, met her at conferences, heard
her speak, or received help or advice
from her. If you did, please share with
us (by posting here) your favorite Judy
story, to be incorporated in our album.”
E V E N TS
March 16-17, 2007
NELA SEMINAR
Representing Workers in Whistleblower & Retaliation Actions
(Co-sponsored by Government Accountability Project and National
Whistleblowers Center)
The Renaissance Chicago Hotel
Chicago, Illinois
May 11, 2007
CELA WAGE & HOUR CLASS ACTION TRIAL PLANNING SEMINAR
El Segundo
May 23, 2007
CELA LOBBY DAY
Sacramento
(See page 1 for details)
June 27-30, 2007
NELA's EIGHTEENTH ANNUAL CONVENTION
San Juan, Puerto Rico
-10-
Published
Monthly
BULLETIN
UNITED STATES
SUPREME COURT
reversed by the Seventh Circuit, (274
FS2d 1010), had ruled in the plaintiff’s
favor.
SUPREME COURT WILL NOT
REVIEW SEVENTH CIRCUIT
DECISION THAT REJECTED
AGE DISCRIMINATION
CHALLENGE TO IBM’S “CASH
BALANCE” PENSION PLAN
[Note: The accounting details of “cash
balance” plans, their history, the reasons for their adoption, and ongoing
legal challenges, was thoroughly discussed in an article by Mary Williams
Walsh of The New York Times, reprinted in the Daily Journal of January
18, 2007, at p.5: “Supreme Court’s
IBM Ruling Casts Doubt on Pensions,
Age-Bias Issue.”]
COOPER v IBM PERSONAL PENSION PLAN. On January 16, the
Supreme Court denied certiorari, letting stand a Seventh Circuit decision,
(457 F3d 636), that rejected the argument that IBM’s cash-balance defined benefit pension plan violates
ERISA’s age discrimination provisions. The district court, in a decision
REPORT FROM THE
DIVERSITY COMMITTEE
by Toni Jaramilla
Diversity outreach efforts are truly a
labor of love. We have accomplished
so much, but we still have much more
to do.
To give some background, the Diversity Committee was formed to help
accomplish CELA’s goal of encouraging persons of color, women, people
with disabilities, LGBTs, and others
from traditionally under-represented
communities to become employment
lawyers committed to advocating the
rights of workers.
For several years now, the Commit-
USSC, 1/16/07; 2007 WL 91579
(Mem).
February 2007
Vol. 21, No. 2
CELA-SPONSORED
BEREAVEMENT AND
MOURNING LEAVE BILL
WILL BE INTRODUCED IN
STATE LEGISLATURE
The following appeared as a CELA
Listserv message from CELA Legislative Committee Co-Chair Jean Hyams
(Oakland) on January 29. (As soon as
the proposed Bereavement and
Mourning Leave bill is out of the Legislative Counsel’s office, its text will be
posted on CELA’s website,
www.celaweb.org.)
CELA’s Legislative Committee is
proud to announce that Senator Ellen
Corbett (D-San Leandro), Chair of the
Senate’s Judiciary Committee, has
agreed to carry a CELA-sponsored bill
(Cont'd on Page 3, LEAVE BILL)
tee has awarded Diversity Scholarships for full or partial waiver of our
CELA Annual Conference fee. Recipients are usually law students or
new attorneys who have demonstrated
a passion for helping victims of employment discrimination and harassment, and who have shown a deep
commitment to giving back to their
communities. If you could only read
their applications—they are all so inspiring! Almost all of our scholarship
recipients have become CELA members or have worked for other CELA
members as practicing employment
attorneys, making our scholarship program a huge success.
how to accomplish the goals of increasing diversity among our membership, our Board, and the legal profession. We listened, took many of
your wonderful ideas to heart, and
have begun to implement many of
them.
In 2005, we had our first Diversity
Luncheon during the Annual Conference, and we brain-stormed with many
of you. You gave us great ideas about
(Cont'd on Page 5, DIVERSITY)
REMINDERS
—A nomination form for the 2007
Joe Posner Award is enclosed with
this issue of the CELA Bulletin.
—Remember to sign-up ASAP for
CELA Lobby Day in Sacramento,
May 23, 2007. Contact Legislative
Committee Co-Chair Jean Hyams,
[email protected]. (Include
residence zip code and names of
your legislators.)
DECISIONS
(From Page 1)
CALIFORNIA
SUPREME COURT
SUPREME COURT REJECTS
SECOND DISTRICT’S
RESTRICTIVE RULE
CONCERNING COUNSEL’S
ACCESS TO CONTACT
INFORMATION FOR MEMBERS
OF PUTATIVE CLASS
PIONEER ELECTRONICS (USA),
INC. v SUPERIOR COURT
(OLMSTEAD). In a consumer class
action, the California Supreme Court
reversed a Second District decision,
(128 CA4th 246, 27 CR3d 17), which
had vacated a trial court discovery
order relating to plaintiffs’ attorneys’
access to information about injured
consumers. The Supreme Court wrote
in part as follows, in a unanimous
January 25 opinion by Chin.
“Purchasers of possibly defective DVD
players communicated with the seller,
expressing their discontent and relating their identifying information
(names, addresses, etc.). We consider here the extent to which
California’s right to privacy protects
these purchasers from having their
identifying information disclosed to the
plaintiff during civil discovery proceedings in a consumers’ rights class action against the seller. The named
plaintiff in the action assertedly needs
this information from the seller to facilitate communication with potential
class members. We focus on the requisite notice and opportunity to assert
a privacy right which should accompany a precertification communication to members of the putative class
before such disclosure may occur.
“The Court of Appeal ruled that trial
courts in such cases must assure not
only that all prospective or potential
class members receive actual notice
of their right to grant or withhold consent to the release of their personal
identifying information, but also that
such consent must be exhibited by
each potential class member’s own
positive act of agreeing to disclosure,
rather than by their mere passive failure to object. Because this ruling is
overprotective of the purchasers’ privacy rights, inconsistent with established privacy principles, and likely to
cause adverse consequences in future cases, we will reverse.
“The record shows that the trial court,
reconsidering its earlier order requiring receipt of an affirmative authorization from Pioneer customers before
disclosure could occur, carefully balanced the competing interests and
expressly found ‘that there are minimal privacy interests involved here...
The proposed letter which the Court
now adopts does allow anyone who
does not wish to be bothered to say so,
and they will not be contacted.’ As we
explain, we find no abuse of discretion.
“From the standpoint of fairness to the
litigants..., Pioneer would possess a
significant advantage if it could retain
for its own exclusive use and benefit
the contact information of those customers who complained regarding its
product. Were plaintiff also able to
contact these customers and learn of
their experiences, he could improve
his chances of marshaling a successful class action against Pioneer, thus
perhaps ultimately benefitting some, if
not all, of those customers. It makes
little sense to make it more difficult for
plaintiff to contact them by insisting
they first affirmatively contact Pioneer
as a condition to releasing the same
contact information they already divulged long ago.
“Additionally, adoption of the Court of
Appeal’s constitutionally based rule ...
could have potentially adverse effects
in cases brought to redress a variety of
social ills...
“For all the foregoing reasons, we think
the trial court properly evaluated the
alternatives, balanced the competing
interests, and permitted disclosure of
contact information ... unless, following proper notice to them, they registered a written objection. These customers had no reasonable expectation
of any greater degree of privacy, and
-2-
CALIFORNIA
EMPLOYMENT
LAWYERS ASSOCIATION
Michelle Reinglass
Suite 170
Tel: (949) 587-0460
FAX: (949) 587-1004
Director:
Christina Krasomil
Encino, CA 91436-2412
Tel: (818) 907-7895
FAX: (818) 907-7474
EXECUTIVE BOARD
(Sherman Oaks)
Dolores Leal
(Los Angeles)
Eve Chesbro
(Pasadena)
Steven Pingel
(Long Beach)
Kathy Dickson
(Oakland)
Mika Spencer
(San Diego)
David Duchrow
(Los Angeles)
James P. Stoneman
(Claremont)
Phil Horowitz
(San Francisco)
Christopher Whelan
(Gold River)
Jean K. Hyams
(Oakland)
Jeffrey Winikow
(Los Angeles)
Toni Jaramilla
(Los Angeles)
Brad Yamauchi
(San Francisco)
Virginia Keeny
(Pasadena)
Bulletin Editor
Christopher Bello
Astoria, OR 97103
Ph: (503) 338-3891
DECISIONS
(From Page 2)
no serious invasion of their privacy
interests would be threatened by requiring them affirmatively to object to
disclosure.”
cia D. Mew, Los Angeles.
Cal SC, 1 /25/07; unanimous opinion by Chin; 150 P3d 198, 53 CR3d
513, 2007 WL 176215.
For plaintiffs: Lange & Koncius, El
Segundo; Milberg, Weiss, Bershad &
Schulman, Los Angeles; Robert I. Lax,
Los Angeles.
Amici for plaintiffs: Jocelyn D. Larkin,
Brad Seligman; CELA (Jeff Winikow
and Matt Kaufman); Asian Law Caucus; Disability Rights Advocates; Disability Rights Education and Defense
Fund; Equal Justice Society; Equal
Rights Advocates; The Impact Fund;
Legal Aid Society Employment Law
Center; Lawyers’ Committee for Civil
Rights of the San Francisco Bay Area;
Mexican American Legal Defense and
Education Fund; Public Counsel;
Western Center on Law and Poverty;
The Sturdevant Law Firm, San Francisco; Mark T. Johnson and Sylvia
Sokol, San Francisco, for Consumer
Attorneys of California.
For Pioneer: Hughes, Hubbard &
Reed, William T. Bisset, Charles
Avrith, David A. Lombardero and Ali-
[Note: In a January 25 CELA Listserv
message, Jeff Winikow wrote concerning the Pioneer Electronics decision: “We emphasized in our [amicus]
brief that the balancing of third party
privacy rights applies to single plaintiff
cases as well as class actions, and
that a ruling for the defense could curb
civil rights enforcement. The Impact
Fund made a similar pitch, emphasizing how the discovery rule could affect
civil rights class actions. We were
more worried about highlighting a slippery slope than in trying to actually
expand discovery rights, but the opinion can be used to short-circuit a lot of
the privacy mishegas we all face when
trying to identify witnesses.”]
SUPREME COURT WILL NOT
REVIEW OR DEPUBLISH
SECOND DISTRICT DECISION
THAT HELD THAT RETALIATION
PLAINTIFF ADEQUATELY
PLEADED “ADVERSE
EMPLOYMENT ACTION” UNDER
EITHER YANOWITZ OR
BURLINGTON STANDARD
TAYLOR v CITY OF LOS ANGELES
DEPT. OF WATER AND POWER. On
February 14, the Supreme Court announced that it will not review or
depublish the Second District’s November 20 decision that reversed the
dismissal of FEHA claims for retaliation and failure to prevent retaliation
brought by a city employee who had
opposed race discrimination against a
subordinate. Although the Second
District’s opinion leaves unclear the
relationship between the Yanowitz and
Burlington standards for identifying an
“adverse employment action,” the court
held that the plaintiff’s allegations were
LEAVE BILL
(From Page 1)
that will provide California employees
with up to four days of job-protected
leave for bereavement and mourning
upon the death of a loved one. The bill
prohibits discrimination or retaliation
against any employee who takes bereavement leave, and authorizes a
private right of action. The bill seeks
to amend the Labor Code to allow
employees to take up to four days off
work following the death of a spouse,
child, parent, sibling, grandparent,
grandchild, registered domestic partner, or child of a registered domestic
partner. (The bill specifies that the
leave will be unpaid, except that an
employee may utilize accrued vacation, personal leave, or compensatory time off for purposes of the authorized absence.)
Currently, California employees have
no right to bereavement leave under
federal or state law. While the FMLA
and the CFRA provide employees
with protected leave in order to care
for an ailing family member, the protected leave ends upon that family
member’s death. Without legislation
providing the right to bereavement
leave, an employer may legally discharge an employee for taking any
leave of absence to prepare or attend
the funeral of a loved one. This bill
corrects this injustice.
The Bereavement Leave bill is the
culmination of months of work by
members of CELA’s Legislative Committee, with the full support of CELA’s
Executive Board. Particular thanks go
to Peter Rukin and Zach Cincotta, who
took the laboring oar in drafting the
proposed bill and the white paper explaining its significance. And, of course,
Sacramento-savvy Steve Pingel connected us to key legislators who will
help to bring about the bill’s passage.
Although we have much work still to
-3-
do, the introduction of this bill already
shows the success CELA members
can achieve when we work together. In
the coming months, we will be looking
to all CELA members for help in getting
this and other CELA-sponsored legislation enacted. There are many ways
to participate: write an op-ed piece, or
a letter-to-the-editor; tape a public service announcement for your local radio
station; call and write your legislators;
help us locate people who have suffered from the absence of bereavement leave protection. And, of course,
join CELA in Sacramento on May 23
for our inaugural Lobby Day.
If you are interested in joining the Legislative Committee, please send an
email message to CELA’s Administrative Director, Christina Krasomil,
([email protected]), and she will
add you to the very-active Legislative
Committee Listserv.
DECISIONS
(From Page 3)
sufficient under either standard. The
court also held that a supervisor can
be held personally liable for retaliation
under § 12940(h), and that § 12940(k)
permits a claim for failure to prevent or
investigate discrimination even when
the only cause of action at issue is
retaliation. The Second District’s decision appears at 144 CA4th 1216, 51
CR3d 206, and was summarized in
CELA Bulletin, Nov 06, p.1.
For plaintiff: Jill B. Shigut.
Cal SC, 2/14/07; 2007 DAR 2139.
CALIFORNIA COURTS
OF APPEAL
REINSTATING JUDGMENT FOR
PLAINTIFF ON SEXUAL
ORIENTATION HARASSMENT
AND RETALIATION CLAIMS,
FOURTH DISTRICT HOLDS THAT
TRIAL COURT APPLIED
ERRONEOUS McRAE
STANDARD RE “ADVERSE
EMPLOYMENT ACTION”
JONES v THE LODGE AT TORREY
PINES PARTNERSHIP. In an opinion
filed on February 5, the Fourth District,
Division One, reversed JNOV that had
been granted by San Diego County
Superior Court Judge Richard E.
Strauss. The Court of Appeal reinstated a judgment on a jury verdict for
the plaintiff, a former restaurant manager, on FEHA sexual orientation harassment and retaliation claims, and
an award of $1,395,000.
The plaintiff appealed the JNOV and
the order granting a new trial on the
grounds: (1) that the trial court applied
an incorrect standard in assessing
whether an “adverse employment action” had been taken; (2) that the trial
court abused its discretion in granting
a new trial on the ground of excessive
damages; and (3) that the trial court
erred in granting JNOV in favor of the
defendant supervisor on the ground
that a supervisor cannot be held liable
for retaliation under FEHA. Concern-
ing the principal issues, the Fourth
District wrote in part as follows:
“McRae I’s [McRae v Department of
Corrections (2005) 127 CA4th 779, 25
CR3d 911] holding that a plaintiff may
seek redress through the courts only
for final employment actions that are
not subject to reversal or modification
through internal review processes is
inconsistent with Yanowitz’s totalityof-the-circumstances approach to determining whether a plaintiff has suffered adverse employment action,
which is presumably why the California Supreme Court granted review in
McRae I and transferred the case to
the Court of Appeal for reconsideration in light of Yanowitz. The trial court
here expressly based its finding of no
adverse employment action on McRae
I’s overly restrictive definition of that
term. Thus, the court applied an incorrect standard for determining whether
the evidence sufficiently supported the
jury’s finding of adverse employment
[action] for purposes of ruling on the
JNOV motions. [fn.15: We recognize
that ... the court did not have the
benefit of Yanowitz’s clarification of
the meaning of that term...]
“[W]e conclude the evidence was sufficient to support the jury’s finding that
Jones suffered adverse employment
action... There was evidence that when
Jones sent Weiss a memorandum asking him to refrain from making unprofessional [homophobic and sexist] remarks, Weiss responded with a tirade
and physically intimidated Jones by
crumpling his memorandum and throwing it at him. The day after Jones met
with [Human Relations Director] Fulks
to complain about sexual orientation
discrimination and harassment..., he
received the first of a series of employee warning notices from Weiss—
this one concerning his absence from
work the previous day (at Fulks’s direction) as a result of being too emotional to work after discussing the harassment he had endured... About a
week and a half later, Jones was summoned to meet with Weiss and Fulks
and was presented with Weiss’s extensive memorandum charging him with
deficient work performance in a num-4-
ber of areas. Jones viewed the memorandum as a ‘30-day notice for poor
work performance’ based on false
charges, and the jury could reasonably
have taken the same view. Weiss
stopped talking to Jones and began
excluding him from weekly LTP management meetings. Weiss and Steen
continued to use offensive language in
the workplace and Jones overheard
Steen threaten to ‘punch the faggot in
the mouth.’
“Although Jones made it clear during
his disability leave that he wanted to
return to his job at LTP and would not
take a demotion, when his leave expired, Fulks placed him on paid administrative leave until the issue of where
he would return to work was resolved.
Fulks and the general manager of LTP
told Jones he could return to LTP but
he was still on his 30-day probation
and his sudden disability leave had
‘burn[ed] a bridge’ with LTP’s management. When Jones told Fulks he had
met with a representative of DFEH,
Fulks accused him of ‘blackmailing’
the hotel.
“After Jones returned to work at LTP,
he continued to be excluded from
meetings and was warned by a coworker to watch his back. There was
evidence that during a meeting Weiss
said, ‘We’ve got to get Scott Jones out
of here.’ After Jones filed his complaint with DFEH, he was excluded
from an important ‘coordination meeting’... Jones received four employee
warning notices from Weiss for what
Jones characterized as ‘stupid stuff’ or
‘little mistakes’ that other employees
would not get ‘written up for.’
“Based on this evidence and the evidence that Jones was harassed by
Weiss and Steen based on his sexual
orientation, the jury could reasonably
conclude that Jones suffered adverse
treatment in the form of a series of
damaging injuries that would be reasonably likely to impair a reasonable
employee’s job performance or prospects for advancement or promotion—
i.e., actions that threatened to derail
his career. (Yanowitz, supra, 36 Cal.4th
DECISIONS
(From Page 4)
at pp. 1054-1055, 1060.) In accordance with the ... instruction it was
given, the jury reasonably could have
based its adverse employment action
finding on evidence that Jones experienced ‘significantly diminished material responsibilities’ (e.g., exclusion
from management ... meetings) and
‘unwarranted probation.’ Accordingly,
the court erred in granting defendants’
motions for JNOV on the ground there
was insufficient evidence of adverse
employment action.
“We [also] agree with Jones that the
court erred in granting JNOV in favor
of Weiss on the ground a supervisor
cannot be held liable for retaliation
under FEHA... [¶] We agree with
Walrath [v Sprinkel (2002) 99 CA4th
1237] and Taylor [v City of Los Ange-
les Dept. of Water & Power (2006) 144
CA4th 1216] that an individual supervisor can be held liable for retaliation
under section 12940, subdivision (h).
[Note: see p.3 concerning the Supreme
Court's February 14 denial of review in
Taylor.]
“Jones contends that the court erred in
granting a new trial on the ground of
excessive damages as to The Lodge.
The court’s order on that point states:
‘[T]he Court ... finds the verdict of $1.5
million is excessive as it bears no
relationship to the special damages or
facts in this case. The jury’s award
effectively amounts to an award of
punitive damages, which were not
available in this case.’ We asked the
parties to submit supplemental letter
briefs on the issue of whether the trial
court sufficiently complied with the
requirement under Code of Civil Procedure section 657 that it specify its
reasons for granting a new trial on the
ground of excessive damages, citing
the parties to Stevens v. Parke, Davis
& Co. (1973) 9 Cal.3d 51, 59-63. We
conclude the court did not sufficiently
comply with that requirement.
“[T]he statement ... that the verdict is
excessive and ‘bears no relationship
to the special damages or facts in this
case’ is essentially a statement of ultimate fact that does not go beyond
stating the ground of excessive damages. The court’s excessive damages
determination was more likely based
on its conclusion there was no adverse
employment action under McRae (an
DIVERSITY
(From Page 1)
For instance, in 2006 CELA presented
its first-ever joint program and mixer
with the John Langston Bar Association, one of the largest African American bar associations in California. Our
panel topic was You Can Do It—Becoming and Succeeding as a Plaintiff’s
Employment Lawyer. Dolores Leal,
Bernard Alexander, and I were speakers, and the session was moderated by
Langston Bar President Rupert
Byrdsong. Many of you showed your
support by attending, and it was a
great opportunity for us to catch up
with each other, and to welcome the
new CELA members who signed up
because of the program. This year we
hope to present more joint programs
with other multi-cultural bar organizations, with some perhaps in Northern
California.
Last year, CELA’s 19th Annual Conference focused on the theme Two Decades of Advancing Workplace Rights
and Diversity. We were all very proud
of this conference and the wonderful
speakers and topics that were presented, which included a look at crosscultural issues. We also had our first
keynote speaker at our Diversity Luncheon, Law Professor Marjorie M.
Shultz of Boalt Hall School of Law, the
co-author of Whitewashing Race: The
Myth of a Color-Blind Society. Professor Shultz spoke about a major empirical study that she and her colleagues
are conducting with the goal of designing a new kind of law school admission
test that will assess abilities relevant to
effective lawyering, rather.than focusing almost exclusively on academic
skills. She and her colleagues believe
that a new testing mechanism of this
kind would increase race diversity in
law school admissions.
The Diversity Committee has many
more ideas and projects to work on.
We continue to maintain a strong CELA
presence at multi-cultural bar dinners
with the idea of building strong liaisons
with the multi-cultural community. We
also want to strengthen liaisons with
law school employment law clinics and
professors. And we would love to create a job fair, to benefit law students
and CELA members who are looking
for employees who share their passion
for our area of law.
Also, throughout the year, Diversity
Committee members and Law School
Outreach Chair Noah Lebowitz attend
the State Bar Swearing-In ceremonies
to recruit the “wide-eyed” and “big
-5-
hearted” new lawyers who want to join
in our battle against workplace injustice. I am currently working on a “Recruitment Board” to display at these
events: it will depict what CELA is all
about, with powerful and moving images of Joe Posner and his fellow
CELA founders, of our many members
who have achieved incredible trial and
appellate victories for workers, of civil
rights and labor rights heroes like Cesar
Chavez and Thurgood Marshall, and
of others who embody CELA’s fighting
spirit and soul.
We have so many ideas and hopes,
but so little time, and we need to
expand the Diversity Committee’s
membership. (Currently, the Committee is comprised of Dolores Leal, Jean
Hyams, Virginia Keeny, Michelle
Reinglass, and myself.) If you are
interested in becoming a member of
the Diversity Committee, please contact me directly, either by phone (310)
551-3020 or e-mail: [email protected].
All are welcome to help, and we are
looking for both Northern and Southern California volunteers. I guarantee
that you, like me, will feel fulfilled and
proud to work on projects relating to
CELA’s crucial diversity goals.
DECISIONS
(From Page 5)
erroneous application of the law) than
on the sufficiency of Jones’s emotional distress evidence to support the
noneconomic component of the damages award.
“We find no basis to affirm the court’s
order granting a new trial or to reverse
the original judgment... [¶] The judgment entered notwithstanding the verdict and the order granting a new trial
are reversed. The judgment previously
entered on February 28, 2005, in favor
of Jones and against The Lodge and
Weiss is reinstated and affirmed. Jones
is awarded his costs on appeal.”
For plaintiff: Scott H. Toothacre and
Rod M. Toothacre.
For defendants: Horvitz & Levy LLP,
Barry R. Levy and Nina E. Scholtz;
Wilson, Petty, Kosmo & Turner LLP,
Regina A. Petty, Michael S. Kalt, and
Jessica A. Chasin.
Fourth Dist Div One, 2/8/07; opinion
by Benke with McConnell and
McDonald concurring; 2007 DAR
1611, 2007 WL 314804, as modif. 2/
8/07, 2007 WL 416692.
UCLA STUDENT HEALTH
SERVICE PHYSICIAN WAS
DISCHARGED FOR WASTING
RESOURCES NOT FOR
“ADVOCATING FOR MEDICALLY
APPROPRIATE HEALTH CARE”
SARKA v THE REGENTS OF THE
UNIVERSITY OF CALIFORNIA. “Petitioner George Sarka, M.D. was employed as a primary care physician at
the student health services ... at
[UCLA]. He filed a grievance challenging the University’s decision to discharge him for repeatedly refusing to
follow the directions of his superior to
modify his approach to patient care to
be more in accord with his SHS colleagues [by being ‘less wasteful of
resources and relying less on diagnostic testing and more on optimal clinical
judgment’]. The administrative hearing officer upheld the termination. Dr.
Sarka appeals from the trial court’s
judgment that denied his petition for
writ of administrative mandate ... seek-
ing to overturn the hearing officer’s
decision.
“At issue is whether the hearing officer
and the trial court committed legal
error by failing to apply Business and
Professions Code section 2056, which
declares it a violation of public policy
for employers to penalize physicians
‘principally for advocating for medically appropriate health care.’ The
record shows that both the hearing
officer and the trial court considered
and properly applied section 2056 and
that substantial evidence supports the
trial court’s conclusion that Dr. Sarka
was discharged for insubordination.
Accordingly, we affirm the judgment.
“The record contains substantial evidence to support the trial court’s conclusion, after exercising its independent judgment, that the weight of the
evidence before the IPR [Independent
Party Reviewer] supported its finding
that Dr. Sarka was not terminated ‘principally for advocating for medically
appropriate health care’ but for refusing to modify his practice in response
to SHS requests, to perform as a primary care physician and to be less
wasteful of health service resources
and of student time.”
For petitioner: Sherry Bahrambeygui;
Karen G. Sarames.
For respondents: James E. Holst and
Michael R. Goldstein.
On behalf of California Medical Ass’n
as amicus for petitioner: Catherine I.
Hanson and Gregory M. Abrams.
Second Dist Div Three, 12/28/06;
opinion by Aldrich with Croskey
and Kitching concurring; 146 CA3d
261, 52 CR3d 810.
FIRST DISTRICT AFFIRMS
SUMMARY JUDGMENT ON
TAMENY TORT AND FEHA AGE
AND DISABILITY CLAIMS
ROSS v SAN FRANCISCO BAY
AREA RAPID TRANSIT DISTRICT.
In an opinion filed on January 24, the
First District, Division One, affirmed
summary judgment on Tameny tort
-6-
and FEHA age and disability discrimination claims by a BART supervisor
who alleged that he had been suspended in connection with a false accusation that he had caused a work
stoppage. (An initial decision to discharge him had been rescinded.) In
the published portion of its decision,
concerning BART’s immunity in connection with the Tameny tort allegations, the First District wrote in part as
follows:
“Ross contends that [Gov Code] section 815.2, subdivision (b) provides
immunity to a public entity only for its
vicarious liability for the wrongs of its
employees, but not for its own direct
liability. According to Ross, the common law torts of discrimination or
wrongful termination in violation of
public policy create direct employer
liability that, in the case of a public
entity employer, is unaffected by sections 815.2 or 821.6...
“In our view, Ross’s analysis fails to
recognize a fundamental distinction
between common law tort claims such
as those pleaded in his first and fourth
causes of action, and the statutory
FEHA violation claims alleged in his
second and third causes of action.
BART can have no direct liability except as provided by statute...
“Since a public entity has no direct
liability for its acts or omissions except
as provided by statute (§ 815.2, subd.
(a)), it follows that in the case of a
Tameny claim against a public entity,
the entity is liable, if at all, only vicariously, and that it is immune from liability to the extent that its employees are
immune.
“In our view, Ross’s tort claims ... fall
‘under the general rubric of malicious
prosecution’ [cite omitted] as discussed
in Hardy [v Vial (1957) 48 C2d 577],
Kemmerer [v County of Fresno (1988)
200 CA3d 1426], and Shoemaker [v
Myers (1992) 2 CA4th 1407]. The gravamen of his claims is that, acting out
of discriminatory and retaliatory motives, BART employees initiated and
prosecuted administrative proceedings
DECISIONS
(From Page 6)
to discipline or discharge Ross based
on accusations they knew to be false.
Such acts by employees are immune
from liability under sections 821.6, and
therefore BART is immune from liability under section 815.2.
In unpublished portions of the opinion,
the First District held, inter alia: (1) with
respect to his age discrimination claim,
the plaintiff failed to show that an
adverse employment action had been
taken against him; and (2) the plaintiff
had failed to exhaust his administrative remedies as to BART’s alleged
failure to accommodate his disability.
The plaintiff’s age discrimination claim
was based on allegations that he had
been punished for acts that were not
punished when committed by younger
workers; that his position had been
filled by younger, less qualified individuals; and that the defendant had
tried to force him to retire by spreading
rumors that he had retired or intended
to retire.
And the plaintiff alleged that BART
had failed to reasonably accommodate his stress-related disability by
conditioning his return to work on proof
that he could perform his old job and
refusing to negotiate accommodations;
by convening a hearing during his disability leave; and by refusing to stay
his 45-day suspension.
Concerning the age discrimination
claim, the court wrote in part as follows: “The facts here simply do not rise
to the level of a constructive discharge... Ross resigned rather than
have to serve a 45-day suspension
without pay, even though he was entitled to arbitrate the suspension and
would have received a full back-pay
award if he prevailed in it. As BART
correctly points out, if a demotion with
a cut in pay does not satisfy the Turner
[v Anheuser-Busch, Inc. (1994) 7 C4th
1238] standard, neither does a 45-day
suspension with potentially no loss in
pay.
“Assuming no constructive discharge,
Ross argues in the alternative that he
can sustain an age discrimination claim
under FEHA limited to the emotional
distress damages he alleges he incurred as a result of BART’s shortlived decision to discharge him... [¶]
Ross correctly points out that ‘adverse
treatment that is reasonably likely to
impair a reasonable employee’s job
performance or prospects for advancement or promotion’ can support a FEHA
claim. (Yanowitz v. L’Oreal USA, Inc.
(2005) 36 Cal.4th 1028, 1054-1055...)
On the other hand, FEHA has no application to ‘[m]inor or relatively trivial
adverse actions...’ [cite omitted]. [¶] In
our view, BART’s quickly-abandoned
decision to discharge Ross falls into
the latter category.”
With respect to the alleged failure to
accommodate, the court reasoned as
follows: “Ross contends that his notation on the FEHA complaint that he
was ‘36.5% disabled’ created a triable
issue of material fact over whether he
exhausted his administrative remedies... We disagree. [¶] Simply inserting a notation that he was ‘36.5%
disabled,’ without checking the spaces
provided to state a failure to accommodate claim, did not as a matter of
law provide adequate notice of such
claim to the DFEH.”
For plaintiff: Joan Wolff; Michael
Couzens.
For defendant: Office of the General
Counsel, San Francisco BART, Thomas C. Lee.
First Dist Div One, 1 /24/07; opinion
by Margulies with Stein and Swager
concurring; 53 CR3d 715, 2007 WL
171988.
[Note: In a February 14 CELA Listserv
message, Paul Glusman responded
as follows to the question: “Does Ross
really say no more WTVPP against
public entities?”
“Not quite. But it does prohibit WTVPP
claims based on the acts of employees
which are privileged under 815.2. Apparently, you still can sue for WTVPP
if the employee whose actions are at
issue could have been sued personally. But that would only include such
things as harassment and retaliation. I
don’t think the court weighed at all the
-7-
public policies which support WTVPP
and are embodied in laws which would
outweigh the immunity granted under
815.2. Suppose a teacher is fired for
political speech outside of employment. Section 815.2 would seem to
grant immunity. The public policy
embodied in LC 1102 would counterbalance that, as would the public policy
in the State Constitution in Article I
section 2, and the First Amendment to
the U.S. Constitution.”]
HARASSMENT CLAIM AGAINST
UC DAVIS’S HEARING OFFICER
WHO DENIED EMPLOYEE’S
SEXUAL HARASSMENT
GRIEVANCE SHOULD HAVE
BEEN STRICKEN UNDER ANTISLAPP STATUTE
VERGOS v McNEAL. “Plaintiff Randy
Vargas, who alleges he was sexually
harassed in his employment at the
University of California at Davis (UCD),
filed a civil rights claim against the
manager who denied his administrative grievances—defendant Julie
McNeal (acting director of UCD’s Facilities Services Department). McNeal
appeals from the trial court’s order
denying her motion to strike plaintiff’s
third cause of action (alleging violation
of civil rights) as a ‘strategic lawsuit
against public participation’ (SLAPP)
under Code of Civil Procedure section
425.16. McNeal contends her statements and conduct as a hearing officer
denying plaintiff’s grievances are protected by the anti-SLAPP statute. We
agree and shall reverse the order and
remand to the trial court to determine
an award of attorney’s fees for McNeal.”
In a footnote, the Third District wrote:
“In Olaes v Nationwide Mutual Insurance Company [(2006) 135 CA4th
1501, 38 CR3d 467], we recently held
a private company’s sexual harassment grievance protocol did not constitute an official proceeding authorized by law. Olaes is obviously distinguishable since, as we have explained,
the Regents’ protocol is equivalent to
a state statue.”
DECISIONS
(From Page 7)
For plaintiff: Geraldine Armendariz;
James A. Michel.
For defendant: Porter, Scott, Weiberg
& Delehant and Brendan J. Begley,
Michael W. Pott, and George A. Acero,
Sacramento.
Third Dist, 1 /23/07; opinion by Sims
with Hull and Cantil-Sakauye concurring; 146 CA4th 1387, 53 CR3d
647.
DISMISSAL ON TIMELINESS
GROUNDS WAS ERRONEOUS
WHERE ILL PLAINTIFF HAD
SATISFIED TWO ELEMENTS OF
“IMPRACTICABILITY TOLLING”
AND SHOULD BE GIVEN
OPPORTUNITY TO SATISFY
THIRD “DUE DILIGENCE”
ELEMENT ON REMAND
TAMBURINA v COMBINED INSURANCE COMPANY OF AMERICA. The
Third District reversed the dismissal of
claims for age discrimination and tortious interference with stock option
contracts in a case in which the parties
had entered into five stipulations, with
accompanying orders, to continue the
trial date because of illnesses suffered
first by the plaintiff and then by the
plaintiff’s attorney. The trial court had
granted the defendant’s motion to dismiss the action for failure to bring it to
trial within the five-year statutory period. The Third District explained that
“[w]e disagree with the trial court and
conclude that Tamburina has cleared
two of the three hurdles required to
apply the impracticability (tolling) exception to the five-year [statutory period of Code Civ Proc §§ 583.310,
583.360]: (1) he has shown a circumstance of impracticability (lengthy illness) that (2) has a ‘causal connection’
to his failure to move the case to trial.
(§ 583.340, subd. (c); [cites omitted].
“The trial court has yet to determine
whether Tamburina cleared the third
and final hurdle: was he reasonably
diligent in prosecuting the case at all
stages of the proceedings? Consequently, we reverse and remand for
the trial court to consider the issue of
diligence, and this will determine
whether the impracticability exception
applies here.”
For plaintiff: Wilcoxen, Callahan, Montgomery & Deacon; Haley & Bilheimer;
Montague & Viglione.
For defendant: DLA Piper, Rudnick,
Gray, Cary.
Third Dist, 1/31/07; opinion by Davis
with Nicholson and Morrison concurring; 2007 DAR 1475, 2007 WL
259825.
TRIAL COURT ABUSED
DISCRETION IN ARBITRARILY
LIMITING FEE AWARD TO
AMOUNT OF DAMAGES AND
FAILING TO USE LODESTAR
ADJUSTMENT METHOD
SCOTT v COUNTY OF LOS ANGELES. In an unpublished opinion filed
on January 17, the Second District,
Division Four, wrote in part as follows:
“A jury found that plaintiff and appellant Keisha Scott had been subjected
to a hostile work environment due to
sexual harassment by defendant Craig
Austin, and awarded her damages of
$100,000 against Austin and defendants County of Los Angeles and the
Los Angeles County Sheriff’s Department. Scott moved for $456,425 in
attorney fees—a lodestar of
$228,212.50, with a multiplier of two...
Finding ‘compelling justification for limiting fees to no greater than the monetary [damages] award given by the
jury,’ the trial court awarded Scott attorney fees in the amount of $100,000.
“Scott appeals from the order ... on the
ground that the trial court abused its
discretion by limiting the attorney fee
award to the amount of the damages
award. [T]he California Supreme Court
has mandated that the exercise of [the
trial court’s discretion] be based on the
lodestar adjustment method... The trial
court in this case did not follow that
method, and therefore abused its discretion. Accordingly, we reverse the
order awarding attorney fees and remand the matter for a determination of
-8-
the reasonable attorney fees under the
lodestar adjustment method.
“In the present case, the trial court
arrived at the amount of the attorney
fee award by ... consider[ing] the following: (1) the relationship between
the amount of fees sought and the
amount of damages recovered; (2)
Lavi’s ‘difficulty [in] framing the pleadings;’ (3) only one of the four causes of
action alleged was submitted to the
jury; (4) the case was ‘a garden variety
hostile environment case’ with no novel
issues; (5) the only issue was the compensation owed to Scott for her pain
and suffering; and (6) ‘[t]he only obstacle to proceeding to trial was the
difficulty surrounding the production of
Deputy Austin’s personnel records.’
Although some of those factors are
appropriate to consider..., the court’s
conclusion ... is contrary to the Supreme Court’s mandate that the trial
court apply the lodestar adjustment
method to ensure that the attorneys
are compensated ‘for all the hours
reasonably spent’ litigating the case.
[cite omitted.]”
For plaintiff: Lavi & Ebrahimian, Joseph Lavi and N. Nick Ebrahimian,
Beverly Hills.
For defendants: Raymond G. Fortner,
Jr., County Counsel; Lester J. Tolnai,
Assistant County Counsel; Donna
Bruce Koch, Deputy County Counsel.
Second Dist Div Four, 1/17/07; No.
B192591; opinion by Willhite with
Epstein and Manella concurring;
2007 WL 102856 (unpublished).
NINTH CIRCUIT
NINTH CIRCUIT AFFIRMS
ORDER CERTIFYING CLASS OF
OVER TWO MILLION CURRENT
AND FORMER WAL-MART
EMPLOYEES ON SEX
DISCRIMINATION CLAIMS
DUKES v WAL-MART INC. On February 6, the Ninth Circuit decided, in an
opinion by Pregerson joined by
DECISIONS
(From Page 8)
Hawkins with Kleinfeld dissenting, that
several current and former Wal-Mart
employees may represent all female
employees who worked at Wal-Mart
any time since December 26, 1998 in
a nationwide sex discrimination lawsuit. The plaintiffs assert that WalMart discriminates against women in
pay and promotions.
The Ninth Circuit’s opinion described
the case as involving “the largest certified class in history.” (It is estimated
that the class includes in excess of two
million women.) In upholding Northern
District Judge Martin Jenkins’s certification ruling, (see CELA Bulletin, June
04, p.9), the Ninth Circuit held that the
plaintiffs’ “expert opinions, factual evidence, statistical evidence and anecdotal evidence present significant proof
of a corporate policy of discrimination,
and support plaintiff’s contention that
female employees nationwide were
subjected to a common pattern and
practice of discrimination.”
For plaintiffs: Brad Seligman and
Jocelyn D. Larkin, The Impact Fund;
Christine E. Webber, Cohen, Milstein,
Hausfefld & Toll, Washington DC.
Amici: Marissa M. Tirona, NELA; Terri
L. Ross, McDermott, Will & Emery,
NYC; Ann Elizabeth Reesman,
McGuiness, Norris & Williams, Washington DC; Michael Foreman, Lawyers Committee for Civil Rights Under
Law; Daniel B. Kohrman, AARP; Jeffrey A. Berman, Sidley, Austin, Brown
& Wood, Los Angeles; Bill Lan Lee,
Lieff, Cabraser, Heimann & Bernstein,
San Francisco; Richard A. Stamp,
Washington Legal Foundation; Evelyn
L. Becker, O’Melveny & Meyers, Washington DC.
For defendant: Theodore J. Boutrous,
Gibson, Dunn & Crutcher, Los Angeles.
Pregerson joined by Hawkins with
Kleinfeld dissenting; 2007 DAR
1665, 2007 WL 329022.
“CLASS-OF-ONE” THEORY OF
EQUAL PROTECTION DOES NOT
APPLY IN CONTEXT OF PUBLIC
EMPLOYMENT
ENGQUIST v OREGON DEPARTMENT OF AGRICULTURE. “Plaintiff
Anup Engquist brought suit alleging
violations of federal antidiscrimination
law, constitutional law, and state tort
law against her former employer, the
Oregon Department of Agriculture and
John Szczepanski and Joseph Hyatt.
A jury found the individual defendants
liable for constitutional violations of
equal protection and substantive due
process, and for intentional interference with contract... We hold that
Engquist’s constitutional claims are
invalid as a matter of law, and remand
the case to the district court to adjust
Engquist’s damages and attorneys’
fees awards in light of that holding...
“In her complaint, Engquist alleged
claims under Title VII..., 42 U.S.C. §
1981, equal protection, procedural and
substantive due process, and intentional interference with contract... Defendants moved for summary judgment on all the claims. The district
court granted the motion as to the
sexual harassment and procedural due
process claims, and denied it with respect to the remaining claims. Defendants made a second motion for summary judgment, specifically challenging Engquist’s use of the ‘class-of-one’
theory of equal protection. The court
denied the motion, concluding that the
claim was viable.
“This case presents several issues of
first impression in this circuit, the first
of which is whether the class-of-one
theory of equal protection is applicable
to public employees. The jury concluded that Defendants were liable on
the equal protection claim because
Defendants ‘intentionally treat[ed] the
plaintiff differently than others similarly situated with respect to the denial
of her promotion, termination of her
employment, or denial of bumping
rights without any rational basis and
solely for arbitrary, vindictive, or malicious reasons.’ Defendants contend
-9-
that Engquist’s claim fails as a matter
of law, because the class-of-one theory
is not applicable to the claims of public
employees. [¶] [W]e hold that the classof-one theory of equal protection is not
applicable to decision made by public
employers.
“Based on [Village of Willowbrook v]
Olech [(2000) 528 US 562] we have
applied the class-of-one theory in the
regulatory land-use context to forbid
government actions that are arbitrary,
irrational, or malicious. [cites omitted].
“Other courts of appeals have chosen
to apply Olech’s class-of-one theory to
public employment decisions. [cites
omitted] Courts, however, have
‘struggled to define the contours of the
class-of-one cases’ because, unless
constrained, the class-of-one theory
of equal protection claim could provide a federal cause of action for review of almost every executive or administrative government decision. [cite
omitted].
“[W]hen a public employee is subjected to unequal treatment at work for
arbitrary reasons, the need for federal
judicial review under equal protection
‘is especially thin’ given the number of
other legal protections that public employees enjoy.
“A judicially-imposed constitutional
proscription of arbitrary public employer
actions would also upset longstanding
personnel practices... The power of
employers to discharge employees for
reasons that may appear arbitrary,
unless constrained by contract or statute, is well-established under the common law of at-will employment...
“In addition to significantly altering traditional personnel practices, applying
the class-of-one theory to public employment would also generate a flood
of new cases... The theory would apply
not only to discharges, but also to
other employment actions, such as
promotions, disciplinary actions, and
decisions about pay, benefits and transfers.
DECISIONS
(From Page 9)
“This case also presents a novel due
process issue for this circuit: what showing is required in a substantive due
process claim based on the right to
pursue a particular profession. The
jury concluded that Defendants were
liable on the substantive due process
claim because they ‘subject[ed] plaintiff to arbitrary and unreasonable government actions causing plaintiff to be
unable to pursue her profession.’ [¶]
We hold that Engquist has stated a
valid claim... We conclude, however,
that Engquist’s claim fails as a matter
of law because she did not present
sufficient evidence that Defendants’
actions were responsible for her inability to pursue her profession.
people in the industry. In addition,
Engquist presented evidence that she
was having much difficulty finding a
job in the same field in Oregon, and
that such difficulty would likely continue. Engquist, however, did not demonstrate that Defendants’ actions
caused her job search difficulties...
Instead, it appears that Engquist works
in a highly specialized field, and there
simply are not many jobs available in
that field in Oregon.”
Northern District of California. Akal is
a private contractor that provides CSOs
at federal courthouses within the Ninth
Circuit by contract with the USMS. The
contract requires that Akal employees
for CSO positions meet certain USMS
physical requirements. Based on the
USMS’s determination that Walton did
not meet the USMS’s audiological standards, the USMS medically disqualified her from employment as a CSO
and Akal terminated her employment.
Reinhardt filed a dissenting opinion,
arguing that the class-of-one equal
protection theory should be recognized
as in the context of public employment.
“As we have already recognized the
right to pursue a chosen profession is
protected by substantive due process
in the legislative context, we believe
that the right should also be protected
in the public employment context.
Therefore, we hold that there is substantive due process protection against
government employer actions that foreclose access to a particular profession
to the same degree as government
regulation.
For plaintiff: Stephen L. Brischetto,
Portland.
Tashima with Graber concurring
and Reinhardt dissenting; 2007 DAR
1836, 2007 WL 415249.
“Walton does not allege that she is
actually disabled; rather she alleges
that she ... was ‘regarded as’ disabled...
[¶] [I]n order to state a ‘regarded as’
claim a plaintiff must establish that the
employer believes that the plaintiff
has some impairment, and provide
evidence that the employer subjectively believes that the plaintiff is substantially limited in a major life activity.
If the plaintiff does not have direct
evidence of the employer’s subjective
belief that the plaintiff is substantially
limited in a major life activity, the
plaintiff must further provide evidence
that the impairment imputed to the
plaintiff is, objectively, a substantially
limiting impairment. [cite omitted].
“We have not previously articulated
how much interference with someone’s
job prospects constitutes a denial of
the right to pursue a profession. On
this question, we find useful the Seventh Circuit’s standard that ... a plaintiff must show that the ‘character and
circumstances of a public employer’s
stigmatizing conduct or statements are
such as to have destroyed an
employee’s freedom to take advantage of other employment opportunities.’ Bordelon v. Chi. Sch. Reform Bd.
Of Trs., 233 F.3d 524, 531 (7th Cir.
2000). ‘It is not enough that the
employer’s stigmatizing conduct has
some adverse effect on the employee’s
job prospects; instead, the employee
must show that the stigmatizing actions make it virtually impossible for
the employee to find new employment
in his chosen field.’ Id.
“In this case, Engquist presented evidence that Defendants made defamatory statements to two or three other
US DISTRICT COURT SECURITY
OFFICER DISCHARGED FOR
HEARING DEFICIENCY FAILED
TO RAISE FACT ISSUES ON
REHAB ACT CLAIM
WALTON v U.S. MARSHALS SERVICE. Affirming the Northern District’s
grant of summary judgment, the Ninth
Circuit wrote as follows in an opinion
filed on February 9:
“Naomi Walton sued the U.S. Marshals Service under the Rehabilitation
Act of 1973 alleging that the USMS
unlawfully discharged her because of
her hearing impairment. She appeals
from the district court’s grant of summary judgment in favor of the USMS,
arguing that the district court erred in
ruling that she failed to demonstrate a
genuine issue of material fact concerning whether she was disabled
within the meaning of the [Rehab Act
and the ADA]. We have jurisdiction
under 28 U.S.C. § 1291, and we affirm.
“Walton was employed by Akal Security, Inc. as a Court Security Officer at
the United States District Court for the
-10-
“Walton alleges that she was regarded
as substantially limited in the major life
activities of (1) hearing, (2) working,
and (3) localizing sound. Walton fails
to raise a genuine issue of material
fact that the USMS regarded her as
disabled with respect to any of these
activities.
“Walton argues that the following paragraph in [her expert’s] report raises a
genuine issue of material fact that the
inability to localize sound is an impairment that substantially limits the major
life activity of hearing:
“‘[The employer’s examining physician]
states that the plaintiff is ‘unable to
localize the direction of sound.’ The
ability to localize sound is ‘...essential
to the condition or manner under which
an individual can...’ use the sense of
hearing. Thus being able to localize
sound severely/significantly restricts
one’s hearing as compared to how
DECISIONS
(From Page 10)
unimpaired people normally hear in
everyday life.’
“This paragraph is insufficient to raise
a genuine issue of material fact. Dr.
Sweetow does not state a factual basis
for his opinion: the conclusion appears
to be drawn from the second sentence,
but the second sentence references
no facts and instead contains an
unattributed quote.
“Walton’s only other evidence ... is a
draft report prepared by Dr. Lynn Cook
for the United States Immigration and
Naturalization Service... Cook states
that auditory localization is necessary
for the performance of certain activities... [¶] However, Dr. Cook’s report
also discusses compensatory measures, which ‘must be taken into account in judging whether an individual
possesses a disability.’ Albertson’s,
Inc. V. Kirkingburg, 527 U.S. 555, 565
(1999)...
“[Concerning the major life activity of
working], Walton ... relies solely on Dr.
Chelton’s letter, Dr. Sweetow’s expert
report and Dr. Cook’s report on auditory localization, none of which expresses any opinion about relevant
labor markets or Walton’s particular
training, knowledge, skills or abilities.
“Walton further alleges that the USMS
regarded her as disabled in the major
life activity of localizing sound. We
decline to consider whether localizing
sound could be an additional major life
activity because Walton failed to raise
this argument before the district court.”
For plaintiff: Edith J. Benay, San Francisco.
For defendant: Eric Fleisig-Greene,
United States Department of Justice,
Washington DC.
Smith with Goodwin and Fisher
concurring; 2007 DAR 1905, 2007
WL 430426.
FOLLOWING PLAINTIFF’S
VERDICT ON GENDER
DISCRIMINATION AND
HARASSMENT CLAIMS BY AIR
FORCE SURGEON, DISTRICT
COURT ABUSED DISCRETION IN
REDUCING LODESTAR AMOUNT
FOR LIMITED SUCCESS
abeyance and reviews leading up to it
were discriminatory, yet Velez lost her
disparate treatment claim. In making
this finding, however, the district court
did not discuss whether winning the
hostile work environment claim and
receiving the maximum statutory
amount allowed justified the expenditure of over 2,000 hours of attorney
time.
VELEZ v WYNNE. In an unpublished
memorandum filed on January 29, the
Ninth Circuit held that Magistrate Judge
Edward M. Chen (Northern District)
abused his discretion in reducing the
lodestar amount in the plaintiff’s attorneys’ fee request by twenty-five percent for limited success. The appeal
related to gender discrimination and
harassment claims asserted against
the Secretary of the Air Force by a
Veterans Administration surgeon employed at Travis Air Force Base. Following an eight-day trial in January
and February of 2004, a unanimous
jury awarded the plaintiff $505,623 in
non-economic damages, later reduced
to $300,000, Title VII’s statutory maximum. The district court then awarded
the plaintiff $613,192.79 in fees and
costs. The Ninth Circuit wrote in part
as follows:
“Specifically, the district court failed to
identify any fees that had been factored into the lodestar that were unnecessary to the pursuit of Velez’s
successful hostile work environment
claim. The district court could have
discussed all the evidence introduced
(not just the abeyance and reviews
leading up to it) and determined which
evidence possibly could have contributed to the verdict. The district court
could have then attempted to approximate the percentage of time spent on
developing and introducing the evidence that possibly supported a hostile work environment claim and separated those events from the events
that could have only supported the
losing claims. Instead, the district court
reduced the total number of hours as
being excessive before calculating the
lodestar, and then reduced the lodestar amount without discussing the
relationship between the relief obtained
and the hours spent and without an
explanation of the exceptional circumstances requiring such a reduction. In
other words, the district court did not
analyze whether any of the hours used
to calculate the lodestar amount were
unnecessary to win the hostile work
environment claim.
“Velez argues that the district court
abused its discretion by reducing the
lodestar amount by 25% based upon
its finding that she did not obtain a total
victory or complete vindication, and
by not treating the lodestar amount as
presumptively reasonable. We agree.
“Although the district court cited to
Hensley v. Eckerhart, 461 U.S. 424,
433 (1983), it failed to properly apply
the process required to determine attorneys’ fees. Where the prevailing
party was only partially successful,
and the unsuccessful and successful
claims are related, the district court
must focus on whether the hours spent
in litigation were reasonably necessary to obtain the relief that was ultimately obtained. Dang v. Cross, 422
F.3d 800, 813 (9th Cir. 2005). The
district court found that Velez had limited success because the main focus
of the trial was Velez’s claim that the
-11-
“Velez also argues that the district
court abused its discretion by not affording sufficient weight to the declarations she submitted, and by requiring the declarations to contain information regarding discounted rates. We
agree.
“We find that the district court has
placed an unrealistic standard of precision that is not required. The declarations submitted provided much more
information than the identity of the
DECISIONS
(From Page 11)
practice area, as stated by the district
court. For example, Barry Goldstein,
Steven Zieff, Kathryn Dickson, and
Mary Dryovage outlined their education and professional experience; highlighted their area of specialty, set forth
special recognition and achievements,
and discussed cases they handled and/
or the percentage of time spent litigating employment cases.
“Moreover, the declarations which set
forth a current hourly rate confirmed
that that hourly rate was the rate that
the attorney actually charged and billed
to clients, and the rate that clients
paid... [¶] Accordingly, the district court
abused its discretion in requiring the
declarations submitted by Velez to
contain more information to compare
attorneys, and information concerning
discounted rates. In addition, to the
extent the court considered write-offs
in determining an hourly rate, the court
abused its discretion, as write-offs reflect certain hours not billed, and do
not reflect a discounted hourly rate or
otherwise shed light on a reasonable
hourly rate.
“As the district court found that the
survey evidence submitted by the opposing party did not establish that the
requested hourly rate of $475 was
unreasonable, Velez’s evidence was
not rebutted, and therefore, the district
court erred by not finding Velez’s evidence sufficient to carry her burden of
demonstrating the prevailing market
rate. Since Velez’s evidence established the prevailing market rate, it
was unnecessary for the district court
to engage in its own review of recent
fee awards and accord substantial
weight to such awards.”
For plaintiff: John Ota, Minami, Lew &
Tamaki, San Francisco; Richard M.
Pearl, Berkeley.
For defendant: Claire T. Cormier, Office of United States Attorney, San
Jose.
Ninth Circuit, No. 04-17425; 1 /29/
07; unpublished memorandum before Wallace, Thomas, and Ezra,
with Wallace concurring and dissenting in part; 2007 WL 295502.
[Note: Plaintiff’s attorney Jack W. Lee
wrote as follows concerning the Velez
decision in a January 29 CELA Listserv
message: “This is a good Ninth Circuit
decision for the fortunate plaintiffs’
lawyers who prevail at trial but are not
completely successful. Among the significant holdings: (1) ‘Complete vindication’ or ‘total victory’ are not the
correct standards for awarding a fully
compensatory fee to a prevailing plaintiff; (2) Once the lodestar is determined, it is presumptively reasonable
and adjustments should be made only
in rare and exceptional circumstances;
(3) Rare and exceptional circumstances justifying adjustments must
be explained by the court; (4) The
court needs to focus on the successful
issues, not the issues lost, to determine whether the plaintiff obtained
significant relief; (5) The plaintiff need
not receive all the relief requested, (in
this case, economic damages and injunctive relief), to show excellent results and receive a fully compensatory
fee; (6) Failure to receive all relief
requested should not be considered a
significant factor in the lodestar, absent a determination of whether substantial relief was obtained; (7) The
court may not engage in an independent review of fee awards and hourly
rates if the plaintiff’s declarations on
prevailing market hourly rates are
unrebutted; (8) The court may not consider write-offs or discounted hourly
rates in determining prevailing hourly
rates; and (9) In the present case, the
court mischaracterized the fees declarations submitted by the plaintiff and
required an idealized degree of precision which is unnecessary for such
declarations.”]
UNITED STATES
DISTRICT COURTS
AGE DISCRIMINATION CLAIMS
SURVIVED SUMMARY
JUDGMENT ON BASIS OF
EVIDENCE OF UNMANAGEABLE
WORK LOAD AND
SUPERVISOR’S AGE-BIASED
REMARKS
-12-
JUELL v FOREST PHARMACEUTICALS, INC. In a Memorandum and
Order filed on September 26, 2006,
Eastern District Judge Frank C.
Damrell, Jr., denied motions for summary judgment directed at FEHA
claims for age discrimination and harassment, failure to prevent harassment, and Tameny tort.
The plaintiff, a former “Manager of
Specialty Markets” involved in the sale
of prescription pharmaceuticals, alleged “...that defendant discriminated
against him based upon his age as
evidenced by derogatory age-related
comments [by his supervisor], a
heavier workload than younger employees, a corporate ageist culture,
and eventual replacement by a younger
employee. Plaintiff contents that
defendant’s conduct made it psychologically impossible for him to continue working in his position, and that
he was forced to demote himself and
then eventually to take a disability
leave... Plaintiff spoke to Forest’s Senior Director of Human Resources ...
approximately five times ... and told
[him] that he felt like he was the target
of age discrimination. Plaintiff was
never contacted ... concerning any
investigation into his complaints.”
The court held, inter alia: (1) a triable
issue as to constructive discharge was
raised despite the fact that the plaintiff
had not resigned but rather had demoted himself; (2) there were triable
issues as to whether the plaintiff’s
workload had or had not been commensurate with those of other MSMs;
(3) the fact that the plaintiff had been
able to competently perform his job
and meet expectations did not prevent
him from asserting that his working
conditions were intolerable; (4) an issue of fact was raised as to the objectively intolerable nature of the plaintiff’s
working conditions by evidence concerning an unmanageable workload,
in combination with evidence that his
supervisor regularly made degrading
comments about his age—in person,
during sales calls, in peer group situations, and in social settings; (5) the
DECISIONS
(From Page 12)
harassing supervisor’s participation in
recommending the plaintiff for a promotion did not warrant invocation of a
version of the “same actor inference;”
(6) even if the “same actor inference”
were applicable, the plaintiff presented
sufficient evidence to overcome it; (7)
a rational trier of fact could find that the
employer’s proffered legitimate explanations were pretextual and that its
actions had been taken for discriminatory reasons, and this conclusion was
supported by evidence of a corporate
culture hostile to older workers; (8) a
single instance in which the plaintiff
had made a comment about his
supervisor’s age did not demonstrate
“mutual bantering;” and (9) because
the plaintiff raised triable issues of fact
regarding his FEHA claims, his Tameny
tort claim similarly survived summary
judgment.
For plaintiff: Bushnell, Caplan, Fielding & Maier.
USDC ED Cal, No. CIV S-05-0378
FCD/GGH; 9/12/06; Judge Frank C.
Damrell, Jr.; 456 FS2d 1141.
IBM OVERTIME CLASS ACTION
SETTLES FOR $65 MILLION
ROSENBURG v IBM. On January 3,
Northern District Judge Phyllis J.
Hamilton gave preliminary approval to
a $65 million settlement of overtime
class action claims by certain current
and former IBM employees within
IBM’s Technical Services Professional
and Information Technology Specialist job categories. The settlement had
been announced by the parties on
November 22.
For plaintiffs: James A. Finberg
USDC ND Cal, 1/3/07; No. C-06-0430;
Judge Phyllis J. Hamilton.
•
•
•
PETITION FOR REVIEW IS FILED
IN ROBY v McKESSON HBOC
On February 5, attorneys for the plaintiff filed a petition asking the California
Supreme Court to review the Third
District’s December 26, 2006, decision that reduced the overall jury award
in a disability discrimination and harassment case from $19 million to $3.5
million, drastically reducing both compensatory and punitive damages. (The
Third District’s opinion appears at 146
CA4th 63, and was summarized in
CELA Bulletin, Jan 07, p.2. The Petition for Review is posted at
celaweb.org, under “Disability Discrimination” in the public Brief Bank.) Representing the plaintiff are Christopher
Whelan, Norman Pine, David
deRubertis, and Charity Kenyon. In a
February 13 CELA Listserv message,
David deRubertis explained the issues
and the significance of the Roby decision as follows:
“The Third District used language in
Reno v Baird (1998) 18 C4th 460,
(which discussed individual supervisor liability for discrimination), to hold
that any conduct that has an arguable
connection to necessary management
duties cannot support a harassment
claim. Worse yet, the Court of Appeal
decision makes the question of what
constitutes necessary management
action in this context a question of law
for a reviewing court, not one of fact for
a jury, (despite the fact that the jury
was instructed on this point).
“I believe that this decision will devastate disability harassment cases if it
remains the law. Disability harassment
often manifests itself in supervisor
antagonism toward the plaintiff’s disability or accommodation needs. According to this decision, any time a
supervisor berates an employee about
an accommodation need or constantly
questions restrictions, those acts cannot be used to support a harassment
claim because they are arguably part
of necessary management. And while
this is probably worst for disability harassment, it will greatly affect other
types of harassment claims. For example, in the sexual favoritism case
Miller v Department of Corrections
-13-
(2005) 36 C4th 446, many of the acts
that support the harassment claim—
denial of job opportunities, undue
management scrutiny, etc.—bore an
arguable connection to management.
Under the Roby decision, none of this
can support a harassment claim.
“Also troubling is the way that the court
dealt with punitive damages in the
unpublished portion of the decision.
“First, it speculated that the jury must
have punished the defendant in connection with the reversed harassment
claim, despite the fact that three other
claims supported punitive damages.
From that speculation, it assumed that
a drastic reduction was warranted. It
then struck down as unconstitutional
the ratio of a little more than 4:1 between punitives and compensatories.
It then amazingly said that the constitutional maximum was a 1.4:1 ratio.
“Second, despite its speculation that
the jury punished in connection with
the reversed harassment claim, it denied us the right to a conditional new
trial with a remittitur. Instead, it reduced the punitives outright at the
appellate level and gave us no choice
to retry the amount of punitives. This
creates a new level of appellate intellectual dishonesty, allowing courts to
substitute their view for the jury’s, even
in situations like this where the amount
that the appellate court selects is not
necessarily the true constitutional
maximum.
“We’re asking anyone who is willing, to
send Amicus letters supporting review,
either individually or in the name of
any organization that has an interest in
this. The Petition for Review was filed
February 5, 2007, and the Supreme
Court has 60 days, (unless it extends
that to 90 days), to decide whether or
not to grant review.”
•
•
•
COMING
E V E N TS
March 16-17, 2007
NELA SEMINAR
Representing Workers in Whistleblower & Retaliation Actions
(Co-sponsored by Government Accountability Project and National
Whistleblowers Center)
The Renaissance Chicago Hotel
Chicago, Illinois
May 11, 2007
Hacienda Hotel
El Segundo
May 23, 2007
CELA LOBBY DAY
Sacramento
June 27-30, 2007
NELA's ANNUAL CONVENTION
September 27-29, 2007
CELA's 20th ANNUAL CONFERENCE
The Fairmont Hotel
San Jose
NOMINATION
for the
2007 JOE POSNER AWARD
On November 14, 2000, we lost our beloved founder and icon,
Joe Posner. Today, Joe is with us in spirit! Joe will forever remain
in our hearts and minds.
In Joe’s honor and memory, CELA established the JOE POSNER
AWARD. This award is given each year to that individual who has
best demonstrated one or more of Joe’s inspiring qualities.
The qualities we believe best represent Joe include:
•
•
•
•
Tireless commitment to the betterment of the plight of workers
and the expansion of the their rights
Selfless services to the employee rights’ community
Promotion of collegiality amongst the employment bar
Unwavering efforts to further the education of his/her
colleagues, opposing counsel and the judiciary
The first Joe Posner Award in 2001 was bestowed upon Bill
Quackenbush. Thereafter, our honorees have been Cliff Palefsky,
Janet Koehn, Brad Seligman, Dan Stormer and Nancy Bornn. This
year we encourage and invite you to nominate the next recipient,
someone whom you believe is deserving of the 2007 Joe Posner
Award. You may do so by completing this form:
I,
, hereby nominate:
to receive the
2007 Joe Posner Award. I believe this nominee exemplifies the
qualities deserving of the Joe Posner award because:
(Use back side or additional sheets)
PLEASE RETURN BY APRIL 30, 2007 TO:
Dolores Y. Leal
Allred, Maroko & Goldberg
6300 Wilshire Blvd. Ste 1500
Los Angeles, CA 90048
Fax (323) 653-1660
or via e-mail to: [email protected]
BULLETIN
Published
Monthly
CALIFORNIA
SUPREME COURT
CALIFORNIA COURTS
OF APPEAL
SUPREME COURT WILL REVIEW
SECOND DISTRICT DECISION
THAT ENFORCED ARBITRATION
AGREEMENT’S CLASS ACTION
PRECLUSION
STATE EMPLOYEE WAS
COLLATERALLY ESTOPPED
FROM BRINGING CIVIL TORT
ACTION WHERE SHE HAD NOT
REQUESTED HEARING AFTER
RECEIVING ADVERSE “NOTICE
OF FINDINGS” FROM SPB
KONIG v U-HAUL COMPANY OF
CALIFORNIA. On February 28, the
California Supreme Court announced
that it will review the Second District
decision that enforced an arbitration
agreement’s class action preclusion
on the ground that the plaintiffs, alleging wage and hour violations, had failed
to carry their Discover Bank burden of
establishing that the action involved
predictably small amounts of damages. (The Second District’s decision
appeared at 52 CR3d 244, and was
summarized in CELA Bulletin, Dec
06, p.2.) The Supreme Court announced
that further action in the matter would
be deferred pending consideration of a
related issue in Gentry v Superior Court
(Circuit City Stores), S141502. In Gentry, also a wage and hour class action,
the Second District distinguished Discover Bank on several grounds, including the presence of an opt-out
provision and the availability of “substantial damages” on individual claims.
(Gentry appeared at 37 CR3d 790, and
was summarized in CELA Bulletin,
Jan 06, p.5; review in Gentry was
granted on April 26, 2006.)
For plaintiffs: Joseph Antonelli and
Janelle Carney.
Cal SC, No. S149883; 2/28/07; 2007
DAR 2926.
STATE BOARD OF CHIROPRACTIC
EXAMINERS v SUPERIOR COURT
(ARBUCKLE). “Carole M. Arbuckle
sued her employer ... and its executive
director ... alleging adverse employment actions were taken against her in
retaliation for her whistleblower reports,
specifically her allegation that a member of the Board allowed the member’s
own chiropractic license to expire but
improperly continued to act as a Board
member. Arbuckle first filed a complaint with the State Personnel Board
(SPB) but did not request a hearing
after receiving an adverse ‘Notice of
Findings’... She then filed this civil tort
suit. The Board unsuccessfully moved
for summary judgment, arguing this
suit was barred for her failure to exhaust
administrative and judicial remedies.
After the Board petitioned this court for
a writ of mandate, we issued an alternative writ and stayed the proceedings.
March 2007
Vol. 21, No. 3
A MESSAGE FROM
THE CELA CHAIR
We would like to thank all of you for your
2007 CELA Membership and contribution to the organization. We will strive to
continue to serve your needs as an
employee rights practitioner.
We would also like to thank this year’s
Sustaining Members for their gracious
support: Nancy L. Abrolat, Lawrance
A. Bohm, Carl A. Botterud, Roger R.
Carter, Scott Edward Cole, William M.
Crosby, Allan H. Cutler, David M.
deRubertis, Kathryn Burkett Dickson,
Lee R. Feldman, Shannon Foley, Carol
L. Gillam, John A. Girardi, J. Gary
Gwilliam, Jean K. Hyams, Marvin E.
Krakow, Dolores Y. Leal, Rita MirandaMorales, Stephen M. Murphy, Alicia
Olivares-Uyeda, Michelle A. Reinglass,
Robert C. Robinson, Douglas N.
Silverstein, Mark R. Thierman, Douglas
N. Thomason, Iris Weinmann, and Brad
Yamauchi. Sustaining Membership
dues are used to support CELA’s many
activities, including the Online List,
website, education, amicus, and legislative advocacy programs.
CELA Website Update. The Members
Only Brief Bank on celaweb.org has
expanded rapidly over the last few
months. We now have over 1,100 documents and 52 categories, and documents continue to be added.
“The adverse notice of findings was
deemed to be the final decision of the
SPB when it went unchallenged. Had
Arbuckle requested a hearing the SPB
would either have granted it, resulting in
a new SPB decision which could be
challenged by a writ of administrative
Upcoming Seminar. Mark your calendars for CELA’s upcoming “Getting
To and Through a Class Action Trial”
seminar on Friday, May 11, 2007, at
the Hacienda Hotel in El Segundo. You
won’t want to miss this full-day, advanced-level seminar on wage and hour
law, focusing on class actions. In addi-
(Cont'd on Page 3, CHAIR)
DECISIONS
(From Page 1)
mandamus, or the SPB would have
denied it, and adopted the notice of
findings as its own decision, which
similarly could be challenged. The fact
that the SPB has discretion whether to
grant a further hearing does not give a
claimant the right to abort the administrative remedies and proceed to court.
The statute and pertinent regulations
governing whistleblower claims contemplate a civil suit may be filed after the
SPB finds in favor of the claimant or fails
to issue findings, not where the SPB
finds against the claimant and the claimant fails to set that finding aside. The
unchallenged notice of findings, deemed
to be the SPB decision, is a quasijudicial decision that no retaliation occurred: It bars Arbuckle’s suit under
principles of issue preclusion (collateral
estoppel). Accordingly, the Board was
entitled to summary judgment and we
shall issue a writ so ordering.”
For Real Party in Interest Arbuckle:
Gaspar Garcia, Sacramento.
For Petitioners: Bill Lockyer, Attorney
General, Jacob Appelsmith, Senior
Assistant Attorney General, Alicia M.
B. Fowler, Lyn Harlan and Noreen P.
Skelly, Deputy Attorneys General.
Third Dist, 2/28/07; opinion by
Morrison with Scotland and
Nicholson concurring; 2007 WL
602934.
[Note: Aspects of the same issues
were recently addressed in Spencer v
Department of Water Resources, 2007
WL 678726, an unpublished Third District decision filed on March 7.]
SECOND DISTRICT AFFIRMS
SUMMARY JUDGMENT ON WAGE
DISCRIMINATION CLAIMS BY
CLASS OF LAWYERS
SUBCONTRACTED TO WORK IN
JUVENILE COURT
HALL v COUNTY OF LOS ANGELES.
In a decision filed on February 22, the
Second District affirmed summary judgment on class action claims of genderbased wage discrimination brought by
lawyers who had been hired as independent contractors in response to a
caseload crisis in the Los Angeles
County juvenile courts. The court wrote
in part as follows:
“In 1999, Hall filed a class action against
ALS [Auxiliary Legal Services, Inc.],
County Counsel, and the County, alleging ... that the ‘three defendants [were]
‘joint employers’ or a ‘single enterprise,’
and that ALS was merely a ‘payrolling
scheme’ that enables County Counsel
to maintain a ‘two-tier [attorney] work
force’ notwithstanding that all lawyers
did the same work under the same
working conditions. As characterized
by Hall, her ‘lawsuit is a federal and
state equal pay act and ... sex discrimination case brought on behalf of about
200 women attorneys channeled by the
County into the predominantly female
[ALS] unit while receiving substantially
less pay and benefits than the predominantly male ... ‘official’ [County Counsel] employee unit.’
“Hall contends County Counsel is her
‘common law’ employer and that, therefore, the appropriate ‘comparator’ is
male County Counsel lawyers who earn
more than she does. We agree with the
County that, even assuming Hall is
viewed as an employee of County Counsel, she is using the wrong comparator
and that the appropriate comparator is
male ALS lawyers.
“Because undisputed evidence establishes that, at any given time, ALS and
County Counsel both employed a substantial number of women and that,
within ALS, women were paid the same
as men, there is no basis for Hall’s use
of a male County Counsel lawyer as a
comparator. For this reason alone, Hall’s
claims fail as a matter of law...
“Assuming that Hall could justifiably
compare ALS female lawyers to County
Counsel male lawyers, summary judgment was proper because the undisputed evidence establishes that the
wage disparity between ALS and County
Counsel was based on an acceptable
business reason, which is a recognized
‘factor other than sex.’ [cites omitted]
-2-
CALIFORNIA
EMPLOYMENT
LAWYERS ASSOCIATION
Michelle Reinglass
Suite 170
Tel: (949) 587-0460
FAX: (949) 587-1004
Director:
Christina Krasomil
Encino, CA 91436-2412
Tel: (818) 907-7895
FAX: (818) 907-7474
EXECUTIVE BOARD
(Sherman Oaks)
Dolores Leal
(Los Angeles)
Eve Chesbro
(Pasadena)
Steven Pingel
(Long Beach)
Kathy Dickson
(Oakland)
Mika Spencer
(San Diego)
David Duchrow
(Los Angeles)
James P. Stoneman
(Claremont)
Phil Horowitz
(San Francisco)
Christopher Whelan
(Gold River)
Jean K. Hyams
(Oakland)
Jeffrey Winikow
(Los Angeles)
Toni Jaramilla
(Los Angeles)
Brad Yamauchi
(San Francisco)
Virginia Keeny
(Pasadena)
Bulletin Editor
Christopher Bello
Astoria, OR 97103
Ph: (503) 338-3891
DECISIONS
(From Page 2)
“The County’s undisputed evidence established that County Counsel’s use of
independent contractors was authorized by the County’s charter as a
gender-neutral cost-saving measure...
[¶] [T]he two-tier wage and benefits
system is not discriminatory because
there was a legitimate and non-discriminatory cost-savings purpose for
ALS’s existence... Accordingly, summary judgment was proper on this
ground.
“Hall contends her FEHA claims for
sex-based wage discrimination raise
disparate treatment and disparate impact issues that were not properly
resolved by summary judgment. We
disagree.
“Hall did not establish a prima facie
case of disparate treatment or disparate impact because she did not present
any evidence to show that the County
created ALS because of its effect on
female lawyers (or even that the County
was aware that the use of independent
contractors would lead to adverse consequences for female lawyers), or any
evidence to show that the creation of
ALS had a disproportionate adverse
effect on women.
“If we nevertheless assume for the
sake of argument that Hall had made
the required showing, it was met with
the County’s undisputed evidence of a
legitimate and gender-neutral business
reason for its actions (cost savings).
Hall’s claim that she showed pretext is
not borne out by the record. Although
her expert opined ... that ‘the disparity
in hiring between women into ALS
versus [County Counsel] is so significant that it can only be explained by
external factors, i.e., bias,’ there was
no evidence that ALS’s lawyers (male
or female) were precluded from applying to County Counsel for posted positions..., and no evidence to suggest
that ALS’s contract or compensation
decisions were the result of gender
bias.”
For plaintiffs: Blumenthal & Markham,
Norman B. Blumenthal, David R.
Markham, Kyle R. Nordrehaug; Clark
& Markham, R. Craig Clark, David R.
Markham; The Lewis Law Firm and
Murray Lewis.
For County of Los Angeles and Office of
County Counsel: Jones Day, Elwood
Lui, Philip E. Cook; Greenberg Traurig,
Scott D. Bertzyk, Karin L. Bohmdoldt;
Bergman & Dacey, Inc. And Gregory
M. Bergman.
For Auxiliary Legal Services: Charles
H. Goldstein.
Second Dist Div One, 2/22/07; opinion by Vogel with Mallano and Jackson concurring; 2007 DAR 3062, 2007
WL 529963.
FOURTH DISTRICT UPHOLDS
VALIDITY OF IWC WAGE ORDER
REGULATING ALTERNATIVE
WORKWEEK ELECTIONS
SMALL v SUPERIOR COURT
(BRINDERSON CONSTRUCTORS,
INC.). “Petitioners ... seek extraordinary relief from the trial court’s order
declaring invalid [Wage Order 16] promulgated by the California Industrial
Welfare Commission (IWC),” the Fourth
District wrote in a February 28 opinion.
“The wage order regulates the hours,
wages, and working conditions of California employees engaged in on-site
construction, drilling, logging, and certain mining operations. The trial court
declared the wage order invalid because
it was not accompanied by a sufficient
statement of the basis, was not properly
published, and contained an unworkable definition of ‘given craft,’ which made
the order unreasonable, arbitrary, capricious, and unfair. We disagree and grant
the petition.
“In 1999, the Legislature enacted Assembly Bill 60 ... known as the ‘EightHour Day Restoration and Workplace
Flexibility Act of 1999.’ (Lab Code, § 500
et seq.) ... AB 60 restored the eight-hour
workday and mandated overtime pay for
all nonexempt employees in all industries for work in excess of eight hours in
a workday. It allowed, however, an exception for employees working an alternative work schedule... An alternative
workweek schedule is ‘deemed adopted
only if it receives approval in a secret
ballot election by at least two-thirds of
affected employees in a work unit.’ (§
511, subd. (a).)
“AB 60 also required the IWC to adopt
orders ... consistent with its terms, including regulations regarding elections
to adopt and repeal alternative workweek schedules. (§ 517, subd. (a).)
“Wage Order No. 16-2001 ... became
CHAIR
(From Page 1)
tion to an update on new developments
in wage and hour law, the program will
address trial plans and procedures for
wage and hour class action litigation.
Seasoned veterans will discuss strategies and share their experiences, presenting trial plans and class proof including surveys, sampling, statistical
analysis, and expert testimony. This is
a high-quality program designed to help
plaintiffs’ attorneys create and execute
effective and manageable class action
trial plans. The seminar brochure and
registration form are available on
celaweb.org.
Save the Date. CELA’s Annual Conference is only six months away. This
year’s conference will be held Septem-3-
ber 27-29, 2007, at The Fairmont Hotel,
in San Jose. California Supreme Court
Justice Carol Corrigan will be our keynote speaker at the luncheon on Friday,
September 28. We will also be presenting the Joe Posner Award at this event.
On Saturday, September 29, Justice
Cruz Reynoso has agreed to be our
Diversity Luncheon keynote speaker.
This is a conference not to be missed. A
Conference Brochure with further details
will be mailed in a few months. We look
forward to seeing all of you in September.
Sincerely,
Michelle A. Reinglass
CELA Executive Board Chair
DECISIONS
(From Page 3)
effective January 1, 2001... Among other
things, it requires a new alternative
workweek schedule election whenever
‘the number of employees that are employed for at least 30 days in the work
unit that has adopted an alternative
workweek schedule increases by 50%
above the number who voted to ratify the
employer proposed alternative workweek schedule...’
“Petitioners are construction workers
[who] sued Brinderson for unpaid overtime wages allegedly owed for working
over eight hours in a day while working
an alternative workweek schedule. The
basis of the claim is that, although its
employees voted in December 1999 to
adopt a four 10-hour day alternative
workweek schedule, Brinderson did not
conduct further alternative workweek
schedule elections after January 1, 2000,
when AB 60 became effective. Petitioners also sought an extra hour of pay for
each day they were not provided with a
meal or rest period as required by Wage
Order 16, as well as wages for unpaid
travel time.
“After a hearing on [cross-motions for
determination of a preliminary legal issue], the court ... concluded Brinderson
had properly adopted an alternative
workweek schedule in December 1999
and that Wage Order 16 did not invalidate the alternative workweek schedule
or require another election...
“Petitioners contend the trial court erred
in concluding Wage Order 16 lacked
the required adequate statement as to
the basis, was not properly published,
and was ‘unreasonable, arbitrary, capricious, and unfair.’ We agree.
“The petition is granted. Let a writ of
mandate issue directing the superior
court to vacate its March 9, 2006 order
ruling Wage Order 16 invalid...”
For employee petitioners: Ellyn
Moscowitz.
For real party: Atkinson, Andelson, Loya,
Ruud & Romo.
For amicus Employers Group on behalf
of real party: Sidley Austin and Jeffrey
A. Berman.
Fourth Dist Div Three, 2/28/07; opinion by Rylaarsdam with Aronson
and Ikola concurring; 2007 WL
603064.
DISTINGUISHING HOFFMAN
PLASTICS, SECOND DISTRICT
HOLDS THAT UNDOCUMENTED
WORKERS ARE NOT PRECLUDED
FROM ASSERTING CLAIMS FOR
VIOLATIONS OF CALIFORNIA’S
PREVAILING WAGE LAW
REYES v VAN ELK, LTD. “Plaintiffs ...
were employed ... on allegedly public
works projects which were subject to
California’s prevailing wage law. (Lab.
Code, §§ 1720-1861.) Plaintiffs sued
Van Elk and others for failing to pay
prevailing wages. The Superior Court
[Los Angeles County, Judge William F.
Fahey] granted summary judgment in
favor of defendants on the grounds undocumented workers were precluded
by the federal Immigration Reform and
Control Act of 1986 ... and Hoffman
Plastic Compounds, Inc. v. NLRB (2002)
535 U.S. 137 from asserting such
claims. The superior court also found
the Supremacy Clause preempted California statutes declaring immigration
status irrelevant to claims under
California’s labor, employment, civil
rights and employee housing laws. Plaintiffs contend the IRCA and Hoffman do
not preclude undocumented workers
from asserting such claims and the
California statutes are not preempted...
We reverse the judgment and order the
superior court to enter an order denying
the motion for summary judgment.
“[A]s presented to this court, this case
does not involve a situation where undocumented workers submitted false
work authorization documents to a prospective employer... [T]he issue of
whether Hoffman requires that a wage
claim be denied if an employee submitted false authorization documents is
not before this court.
“In Hoffman, the court concluded that
allowing the NLRB ‘to award backpay to
illegal aliens would unduly trench upon
explicit statutory prohibitions critical to
-4-
federal immigration policy, as expressed
in IRCA.’
“Defendants argue Hoffman would prohibit plaintiffs’ action for unpaid prevailing wages because there is no basis to
restrict its reasoning to back pay... The
dissent in Hoffman noted the IRCA
does not address the enforcement of
other state laws. [cite omitted.] [¶] [W]e
are persuaded that Hoffman does not
prohibit plaintiffs from having standing
to raise claims for prevailing wages as
those claims are ... for work already
performed.
“Because legislation providing for the
payment of prevailing wages comes
under the historic police powers of the
state, the presumption is that legislation is not superseded by the IRCA.
Defendants do not cite any provision in
the IRCA preempting state wage and
hour legislation...
“Defendants argue the post-Hoffman
California statutes are in direct conflict
with Hoffman as they prevent or frustrate the accomplishment of federal
objectives. We conclude there is no
actual conflict between the IRCA and
the prevailing wage law... [¶] Allowing
employers to hire undocumented workers and pay them less than the wage
mandated by statute is a strong incentive for the employers to do so, which in
turn encourages illegal immigration. The
fact an employer pays a worker less
than the prevailing wage suggests the
employer knew the worker was undocumented. Moreover, it is not the public
which benefits from the savings...
“In Hoffman, the undocumented worker
obtained employment by using false
authorization documents; the court determined the award of back pay violated
the IRCA because it provided wages for
work not performed and for work that
could not have been performed without
violating the IRCA... In contrast to
Hoffman, the work at issue in the case
at bar had already been performed...
Allowing employers to hire undocumented workers and pay them less
than the prevailing wage would ... sub(Cont'd on Page 5, DECISIONS)
DECISIONS
(From Page 4)
vert the IRCA by condoning and encouraging future violations by employers.
Moreover, such awards do not condone
future unauthorized work; rather they
make it clear that employers should not
be allowed to profit from employing
undocumented workers and then exploiting them.
“In conclusion, we hold that Hoffman
and their undocumented status did not
prohibit plaintiffs from having standing
to raise their prevailing wage claim and
that the prevailing wage law and the
post-Hoffman statutes are not preempted by the IRCA. Accordingly, we
reverse the judgment and the order
granting summary judgment and direct
the superior court to enter an order
denying the motion for summary judgment.”
For plaintiffs: Herb Fox, Richard E.
Donahoo.
For CLRA as amicus on behalf of plaintiffs: Cynthia L. Rice, Julie Montgomery, Amanda Perez, Jennifer Ambacher.
For National Immigration Law Center,
Asian Pacific American Legal Center of
Southern California, Bet Tzedek Legal
Services, CRLA, Legal Aid Foundation
of Los Angeles, and Legal Aid SocietyEmployment Law Center as amici on
behalf of plaintiffs, Karen C. Tumlin and
Marielena Hincapie.
For defendants: Andrew C. Muzi and
Dana L. Harris.
Second Dist Div Seven, 3/14/07; opinion by Woods with Perluss and
Johnson concurring; 2007 DAR 3435,
2007 WL 755405.
FOURTH DISTRICT CONSTRUES
UNIQUE EXHAUSTION PROVISION
OF SECTION OF
WHISTLEBLOWER PROTECTION
ACT THAT COVERS EMPLOYEES
OF CAL STATE UNIVERSITY
OHTON v BOARD OF TRUSTEES OF
THE CALIFORNIA STATE UNIVERSITY. The Fourth District reversed the
dismissal of a civil action filed under the
provisions of the California Whistleblower
Protection Act that are specifically applicable to employees of the California
State University, (Gov Code § 8547.12).
The point of contention involved the
inclusion of a never previously construed phrase contained in § 8547.12,
subd (c) that is absent from the otherwise similar provision, (§ 8547.10), which
applies to employees of the University
of California. The Fourth District wrote in
part:
“We recognize the legislative history of
section 8547.12 subdivision (c) states
the CSU whistleblower protection statute should track section 8547.10, subdivision (c), which applies to employees
of [the University of California]... Although section 8547.12, subdivision (c)
is almost identical to section 8547.10,
subdivision (c), Ohton and amicus point
out section 8547.12, subdivision (c)
differs in one significant regard—it alone
contains the provision that the complainant may seek a remedy if the
university has not ‘satisfactorily addressed’ the complaint. Therefore, the
cases CSU relies upon that interpret
section 8547.10, subdivision (c) are not
dispositive. For these reasons, we agree
with Ohton that the court erred in concluding that CSU had timely addressed
the complaint, and Ohton was therefore
barred from pursuing a civil remedy for
damages.
“David Ohton, a strength and conditioning coach at SDSU ... filed an internal
administrative complaint alleging that
the head football coach , Tom Craft, and
other members of the athletic department retaliated against him in violation
of the California Whistleblower Protection Act (CWPA) (Government Code §
8547 et seq.) because he reported to a
university auditor information critical of
various athletic department personnel
and practices. The Board of Trustees of
California State University (CSU) investigated Ohton’s complaint and timely
issued a final decision. Ohton subsequently filed a civil action against CSU
and six individually-named defendants
and sought ‘economic, non-economic
damages according to proof,’ and ‘punitive damages as provided by law.’
“The defendants moved for summary
judgment, arguing Ohton was prohibited from bringing the civil action be-5-
cause (1) CSU timely addressed his
complaint under section 8547.12, subdivision (c); (2) Ohton failed to challenge
CSU’s decision through a writ of mandate; and (3) he failed to exhaust administrative remedies. The court granted
the motion on the sole basis that CSU
timely addressed Ohton’s complaint.
“Ohton contends he was entitled to
bring the civil action because, notwithstanding CSU’s timely administrative
decision, his claim of retaliation was not
‘satisfactorily addressed’ within the
meaning of section 8547.12, subdivision (c); he was not required to challenge CSU’s decision through a writ of
mandate because CSU’s proceedings
were not conducted in good faith and did
not provide him with adequate due process; and he was not required to exhaust the administrative remedy before
alleging new acts of retaliation in the
civil lawsuit... We agree with Ohton that
the court erred in finding that CSU
satisfactorily addressed his complaint.
We reverse and remand the matter with
instructions.
“The term ‘satisfactorily addressed’ is
not defined in the statute. To begin, we
reject CSU’s interpretation of the term
... which it purports to base on legislative history. CSU claims the term ‘must
be interpreted as simply requiring that
the complaint be addressed and a decision reached under the applicable administrative procedures within 18
months.’ Under this interpretation, in
effect, the words ‘satisfactorily addressed’ are read out of the statute, and
instead, the narrow focus is on CSU’s
timely completion of the investigation.
“There is no reason to conclude either
from the words of the statute or its
legislative history that the words ‘satisfactorily addressed’ signaled a departure from well established mandamus
standards and procedures... [¶] The
standard of review used in an ordinary
writ case is abuse of discretion.
“We reject Ohton’s contention that he
was not required to challenge the CSU
proceeding and final decision by filing a
DECISIONS
(From Page 5)
petition for writ of mandate. There is no
indication from the statute or its legislative history that an exception to the
requirement for a writ of mandate was
contemplated when section 8547.12
was enacted.
“This court has the inherent power to
remand this matter back to the trial
court to give Ohton an opportunity to
seek leave to amend to add a petition for
writ of mandate. [cite omitted] We believe it is appropriate under the unusual
circumstances of this case to remand.
This is the first case arising under section 9547.12, subdivision (c). The term
‘satisfactorily addressed’ has not been
previously interpreted and its application has proved troublesome to both
parties and the trial court.
“Although CSU claims Ohton can only
challenge its actions by writ of mandate, it prevailed below by convincing
the court to read the words ‘satisfactorily addressed’ out of the statute. Under
this approach, the issue is resolved not
by writ of mandate, but by consulting a
calendar. Ohton’s ‘objective good faith’
standard hints at the standards applicable under mandate. Indeed, the final
pages of Appellant’s opening brief read
like a memorandum of points and authorities in support of a petition for writ
of mandate.
“Whether Ohton may amend cannot be
determined at this stage of the proceedings because Ohton had not yet filed a
motion for leave to amend... To avoid
prejudicing the trial court’s decisions,
we will not attempt to render an advisory
opinion on a motion Ohton has not yet
filed.
“The judgment is reversed and remanded.
The trial court shall give Ohton an opportunity to seek leave to amend to add a
petition for writ of mandate and decide
all issues arising from the same.”
For plaintiff: Schoville & Arnell, Dennis
A. Schoville, Louis G. Arnell, James S.
Iagmin; Ross, Dixon & Bell, Jon R.
Williams and Lindsay J. Reese.
For California Faculty Ass’n as amicus
on behalf of plaintiff: Rothner, Segall &
Greenstone, Glenn Ellis Rothner and
Bernhard Rohrbacher.
For defendants: Gordon & Rees, Christopher B. Cato and Eric M. Volkert.
by O’Rourke with McConnell and
Huffman concurring; 2007 DAR 3600,
2007 WL 777860.
UNPUBLISHED COURT
OF APPEAL DECISIONS
SUMMARY JUDGMENT ON
FORMER UCLA EMPLOYEE’S
FEHA CLAIMS
INGRAM v REGENTS OF THE UNIVERSITY OF CALIFORNIA. In an unpublished opinion filed on February 28,
the Second District, Division Three, affirmed summary judgment on FEHA
claims by a former UCLA accounting
assistant, an African American, who
alleged that he was discharged because of his race, his disability, and
because he had requested medical
leave. According to the employer, the
plaintiff was discharged because he
would not accept supervision and office
rules, and because he could not be
trusted. The court wrote in part:
“This is plaintiff’s second appeal. In the
earlier appeal, we held the trial court
erred when it granted defendant a summary judgment that was based on
plaintiff’s not having filed a petition for a
writ of mandate to challenge adverse
findings made in a grievance procedure
taken pursuant to his collective bargaining agreement. However, we also determined that plaintiff’s causes of action
for wrongful termination, which he based
on public policy concerning medical
leave, disability, race/national origin,
and lunch breaks, are not viable because they are common law judicially
created torts, and claims against public
entities must be authorized by statute.
Our decision left standing five causes of
action. [Note: the earlier decision, also
unpublished, was filed on March 11,
2004, and appears at 2004 WL 440197.]
In affirming summary judgment on the
-6-
plaintiff’s FEHA claims, the court engaged in an extended discussion of the
continuing violation doctrine, referred
repeatedly to the plaintiff’s “inappropriate factual presentation in this appeal,”
and wrote as follows concerning the
plaintiff’s harassment causes of action:
“The trial court properly ruled that
plaintiff’s claims are not viable under the
prohibition in the FEHA against harassment based on race or disability... [¶]
Plaintiff alleged harassment based on
his termination, and on the written warnings, suspensions, job evaluation, and
counseling memo he received. However, those things are personnel management actions, and although they
may be found to be discriminatory,
personnel management decisions do
not support a claim of harassment.
(Reno v. Baird (1998) 18 Cal.4th 640,
645-647.) Harassing actions are the
types of conduct not necessary for the
performance of a supervisory job or the
management of the employer’s business. (Ibid.)”
For plaintiff: Mark Weidmann and Lee
Franck.
For defendants: Lewis, Brisbois,
Bisgaard & Smith, Allan Zuckerman
and Keri Lynn Bush.
Second Dist Div Three, 2/28/07; opinion by Croskey with Kitching and
Aldrich concurring; 2007 WL 602982
(unpublished).
EMPLOYER WAS SUBJECT TO
STRICT LIABILITY, THIRD DISTRICT
HOLDS, WHERE SUPERVISOR’S
HARASSING CONDUCT WAS NOT
“COMPLETELY PRIVATE” AND
WAS NOT “UNCONNECTED WITH
EMPLOYMENT”
MYERS v TRENDWEST RESORTS,
INC. Reversing summary adjudication
on FEHA sexual harassment causes of
action, while affirming summary adjudication on several related common law
claims, the Third District summarized
its reasoning in part as follows, in an
unpublished opinion filed on February
28:
DECISIONS
(From Page 6)
“[T]he trial court granted summary adjudication of the FEHA claims because
the incidents took place outside the
workplace, were not work-related, and
[the harassing supervisor] was acting
for his own personal interests rather
than Trendwest’s interests.
“The trial court erred because, in order
for the employer to avoid strict liability
for the supervisor’s actions under the
FEHA, the harassment must result from
a completely private relationship unconnected with the employment. Otherwise, the employer is strictly liable for
the supervisor’s actions regardless of
whether the supervisor was acting as
the employer’s agent. (State Dept. of
Health Services v. Superior Court (2003)
31 Cal.4th 1026 at p.1041 and fn.3.)
“Count two of plaintiff’s complaint alleged failure to take reasonable steps to
prevent sexual harassment as required
by the FEHA... [W]e agree with plaintiff
that summary adjudication of count two
was precluded by the existence of a
triable issue as to whether Trendwest
complied with its statutory obligation (§
12950) to inform plaintiff of remedies
available through the DFEH and FEHC.
“Plaintiff argues the trial court erred in
granting summary adjudication as to
the common law claims of sexual battery (count three), false imprisonment
(count six), and intentional infliction of
emotional distress (count four). We disagree.
“Applying Farmers [Ins. Group v County
of Santa Clara (1995) 11 C4th 992] to
the case before us, we conclude
Damlakhi’s sexual conduct towards
plaintiff was outside the scope of employment as a matter of law, motivated
by personal reasons unrelated to his job
duties and in violation of the employer’s
sexual harassment policy... As in Farmers, we consider it significant that
Trendwest is already subject to strict
liability under the FEHA for conduct of
Damlakhi as plaintiff’s supervisor. Thus,
common law liability is not needed to
advance the respondeat superior policy
justifications.
“Trendwest failed to establish entitle-
ment to summary adjudication regarding punitive damages... [¶] [W]e agree
with Trendwest that Damlahki was not a
corporate officer, director, or managing
agent within the meaning of Civil Code
section 3294 [but] Damlakhi’s status
alone does not resolve the question of
punitive damages. [¶] [K]nowledge by
upper management that Damlakhi was
unfit might provide a basis for punitive
damages under Civil Code section 3294,
and this basis was not addressed in
Trendwest’s separate statement of facts
concerning punitive damages.”
For plaintiff: Stephen C. Williams, Walnut Creek.
For defendant: Charles M. Louderback,
Payne & Fears, San Francisco.
Third Dist, 2/28/07; opinion by Sims
with Davis and Cantil-Sakauye concurring; 2007 WL 603501 (unpublished).
SECOND DISTRICT HOLDS THAT
DISCLOSURE REQUIREMENTS OF
“ETHICAL STANDARDS” WERE
MET EVEN THOUGH
DISCLOSURE WAS MADE BY
ARBITRATION SERVICE NOT BY
ARBITRATOR PERSONALLY
HOFFMAN v SUPERIOR COURT
(MERRITT). “Although an order denying a petition to vacate an arbitration
award is not appealable,” the Second
District, Division Three wrote in a February 28 unpublished decision relative to
a medical malpractice claim, “we treat
this appeal as a petition for writ of
mandate. Petitioner’s sole claim is that
an arbitrator’s failure to personally make
written disclosure required by the California Arbitration Act (Code Civ. Proc.,
§ 1280 et seq.) and the ‘Ethics Standards for Neutral Arbitrators in Contractual Arbitration’ ... violates section
1281.9 and requires vacation of the
arbitration award pursuant to section
1286.2. An arbitration service made
complete disclosure on behalf of the
neutral arbitrator, and there was no
claim or evidence that this disclosure
misrepresented or omitted material
matters which should have been disclosed. We hold that this disclosure
-7-
satisfied disclosure requirements, affirm the order denying the petition to
vacate the arbitration award, and deny
the petition for writ of mandate.”
For petitioner: Michael S. Duberchin.
Second Dist Div Three, 2/28/07; opinion by Kitching with Klein and Aldrich
concurring; 2007 WL 603101 (unpublished).
ARBITRATION WAS NOT
REQUIRED WHERE CBA MADE
NO EXPRESS REFERENCE TO
FEHA RIGHTS AND CONTAINED
NO EXPLICIT WAIVER OF RIGHT
TO JUDICIAL REDRESS OF
FEHA VIOLATIONS
PUNLA v TERMINAL MAINTENANCE
COMPANY. Relative to a union-represented employee’s assertion of a number of FEHA claims, the First District,
Division Five, denied the employer’s
motion to compel arbitration pursuant
to a collective bargaining agreement.
The court summarized its reasoning as
follows in an unpublished opinion filed
on March 5:
“The cases ... teach us that a ‘clear and
unmistakable waiver’ of statutory rights
does not arise from general language in
a collective bargaining agreement banning discrimination, or calling for the
arbitrability of disputes. Instead, such a
waiver only arises where there is a
specific, explicit and unambiguous incorporation of a specific statute banning discrimination, and a clear waiver
of the right to pursue those claims
outside the arbitration context. [cites
omitted] In the present case, there is no
explicit reference in the collective bargaining agreement to FEHA rights, nor
any explicit waiver of employee rights to
file a lawsuit under the terms of FEHA.
Therefore, Punla’s statutory FEHA
claims were not waived, and the petition
to compel arbitration was properly denied.”
For plaintiff: William Chi-Shing Kwong,
Minami Tamaki LLP, San Francisco.
DECISIONS
(From Page 7)
For defendants: Gary A. Angel, San
Francisco.
First Dist Div Five, 3/5/07; opinion by
Miller with Jones and Simons concurring; 2007 WL 645743 (unpublished).
NINTH CIRCUIT
INSTALLMENT PAYMENTS ON
PRE-1996 SETTLEMENT OF
DEFAMATION CLAIMS THAT
WERE RECEIVED AFTER
EFFECTIVE DATE OF 1996
AMENDMENT TO 26 USC § 104
WERE TAXABLE AS ORDINARY
INCOME
POLONE v COMMISSIONER OF INTERNAL REVENUE. In a March 12
decision by Thomas, amending a nowwithdrawn opinion that had been on filed
June 5, 2006, (449 F3d 1041), the Ninth
Circuit wrote in part as follows:
“This appeal presents the question of
whether payments received after the
effective date of amendments to 26
U.S.C. § 104(a)(2) based on a defamation settlement agreement executed
prior to the effective date can be excluded from gross income. We conclude that the amendments apply to
payments received after the effective
date of the amendment, and we affirm
the judgment of the Tax Court.
“Gavin Polone worked as a talent agent
at United Talent Agency... After terminating Polone, UTA spoke with various
entertainment industry trade publications, and made statements about
Polone’s termination. Specifically, UTA
alleged that Polone was terminated for
‘inappropriate behavior.’
“On April 24, 1996, Polone filed a complaint in the Los Angeles County Superior Court alleging, among other things,
wrongful termination and defamation.
Polone and UTA settled both claims on
May 3, 1996.
which is not at issue in this case. As
part of the settlement of the defamation
claim, UTA issued a press release retracting its previous statements about
Polone’s termination, and paid Polone
$4 million. The $4 million was paid in
four installments of $1 million, which
Polone received on May 3, 1996, November 11, 1996; May 5, 1997; and
November 11, 1998.
FEHA AND IMPLIED CONTRACT
CLAIMS WERE NOT PREEMPTED
BY IRCA WHERE, RATHER THAN
DISCHARGING UNWANTED
EMPLOYEE, EMPLOYER COULD
HAVE PLACED HIM ON LEAVE
WHILE EXPEDITIOUSLY
RESOLVING HIS VISA PROBLEM
“In May 1996, when Polone and UTA
settled, 26 U.S.C. § 104 exempted ‘the
amount of any damages received ... on
account of personal injuries or sickness’ from a taxpayer’s gross income...
The term ‘personal injuries’ in § 104 had
been interpreted to include damages
from settlements of defamation claims.
[cite omitted]
INCALZA v FENDI NORTH AMERICA,
INC. “We consider whether, in this case,
the Immigration Reform and Control Act
of 1986 (IRCA) preempts California labor laws that forbid employers from
firing an employee without good cause.
We also consider whether the [Central
District] abused its discretion in denying defendant’s motions for a new trial.
In both instances, our answer is No.
“Congress amended § 104 in August
1996 so that it exempted ‘the amount of
any damages ... received on account of
personal physical injuries or physical
sicknesses.’ The effective date of the
amendments was August 20, 1996, but
there was an exception to the amendment for ‘amount[s] received under a
written binding agreement, court decree, or mediation award in effect on (or
issued before) September 13, 1995.’
“Here, the Tax Court held that
preamendment § 104 applied to Polone’s
May 1996 payment from UTA, but that
post amendment § 104 applied to the
November 1996, May 1997, and November 1998 payments...
“Applying the plain language of § 104,
the Tax Court properly held that the
November 1996, May 1997, and November 1998 payments were taxable...”
For appellant: James M. Harris, Edwin
L. Norris, Jonathan M. Brenner, Sidley
Austin Brown & Wood LLP.
For CIR: Bridget M. Rowan, Kenneth L.
Greene, Eileen J. O’Connor, U.S. Dept.
of Justice.
Thomas joined by Farris and
Schiavelli; 2007 DAR 3321, 2007 WL
725736.
“Polone received $2 million as settlement of the wrongful termination claim,
“Incalza filed an action in California
Superior Court claiming that he was
wrongfully terminated 1) in violation of
an implied contract that he would be
fired only for good cause, and 2) because of his Italian heritage, in violation
of [FEHA]. Fendi removed the case to
federal court on the basis of diversity
jurisdiction, and filed a motion for summary judgment. It argued that Incalza’s
claims lacked merit because it was
compelled by IRCA to terminate him
when it discovered that his E-1 visa was
no longer valid. It further argued that
California law, to the extent it required a
different result, was preempted. The
district court denied the motion.
“A four-day jury trial followed. The jury
found for Incalza on the implied contract
claim, but for Fendi on the discrimination claim. It awarded Incalza
$1,088,440. The jury was instructed
that Fendi could discharge an employee
in good faith and for a fair reason, but
that it should find for Incalza if it found
that the stated reason was simply a
pretext... [The plaintiff presented evidence that the employer could have
obtained an H1-B visa for the plaintiff
when his E-1 visa became invalid, but
had chosen not to do because his
supervisor wanted him replaced.]
-8-
DECISIONS
(From Page 8)
“The parties agree that there is no conflict between California law and IRCA as
applied to an employer who is required
to terminate an employee by IRCA and
does so in order to comply with statute.
Under such circumstances, the employer can obey both laws because
compliance with IRCA provides good
cause, as defined by California law, for
terminating unauthorized aliens. The
point of contention that primarily divides
the parties is whether federal and state
law conflict when employer who is required by federal law to terminate an
unlawful alien does so, not because of
IRCA, but for reasons that are unlawful
under state law, and is required to pay
damages for the violation of state law.
The district court agreed with Incalza
and held that state and federal law do
not conflict under such circumstances
because California law requires only
that the employer pay damages for the
violation of state law, not that it employ
an alien in violation of federal law. Thus,
the district court ruled, the employer
can obey both laws by terminating the
employee, as required by federal law,
and, where the motive for termination is
contrary to state law, paying damages,
as required by such law.
“We need not reach the question decided by the district court, however.
There is no conflict in the case before us
for a narrower reason. Here, not only
was Incalza not discharged because of
his unauthorized employment status,
but Fendi could lawfully have taken
action other than discharge, and been
in compliance with IRCA. That Fendi
itself recognized that discharge was not
required is evidenced by its decision to
continue to employ Graziani [another
employee] while obtaining an H1-B visa
for him.
“Hoffman [Plastic Compounds v. NLRB
(2002) 535 US 137] did not address the
question of terminating employees
whose work authorization problems
could be expeditiously resolved by renewing an expired application or changing the form of an existing permit...
“In sum, we hold that Fendi was not
required by IRCA to terminate Incalza
because it could have suspended him
or placed him on leave without pay for a
reasonable period while he was obtaining a change in work authorization to
which he was entitled.”
For plaintiff: Carney R. Shegerian and
Donald Conway, Beverly Hills.
For defendant: Gene C. Schaerr, Winston & Strawn LLP, Washington DC,
and Laura R. Petroff and Jennifer
Rappoport, Winston & Strawn LLP, Los
Angeles.
Reinhardt joined by Brunetti and
Kozinski; 2007 WL 656355.
NINTH CIRCUIT AGREES WITH
SOME BUT NOT ALL OF
CENTRAL DISTRICT’S REASONS
FOR SHARPLY REDUCING FEE
AWARD IN ERISA CASE
WELCH v METROPOLITAN LIFE INSURANCE COMPANY. “Plaintiff-Appellant Vicki Welch appeals the [Central
District’s] order awarding her attorney’s
fees under 29 U.S.C. § 1132(g)(1). She
disputes the district court’s decisions
to award fees at an hourly rate of $250,
to apply across-the-board reductions in
the number of hours requested because
Welch’s attorneys block billed and billed
in quarter-hour increments and to disallow time incurred for discrete tasks
such as attorney conferences. We affirm the district court’s fee award in
most respects but reverse in part, holding that the district court erred in setting
Welch’s counsel’s hourly rate at $250
and in imposing a 20 percent acrossthe-board reduction for block billing. We
remand for a new determination of the
court’s fee award.
“Welch sued [MetLife] under [ERISA],
alleging that MetLife improperly denied
her benefits under a long-term disability
plan... Six months after Welch filed
suit, MetLife agreed to honor Welch’s
claim. Thereafter, Welch moved for an
award of costs and attorney’s fees...,
requesting $39,112 in fees for 11.5 hours
of work at $375 per hour and 87 hours of
work at $400 per hour (for work after
January 1, 2004)... [¶] The court’s reductions resulted in a final award of
$10,762 in attorney’s fees to Welch.
“The district court denied Welch’s fee
request for reimbursement at the rates
of $375 and $400 per hour, instead
-9-
finding $250 to be a reasonable rate.
This reduced rate was based on the
district court’s finding ‘[t]here is no evidence that Plaintiff’s counsel ever collects $375 or $400 per hour from paying
clients except as part of an award of
attorneys’ fees issued by a court’; the
court’s belief that Kantor & Kantor’s
hourly rates ‘have been inflated to include a contingency multiplier’; and the
court’s consideration of ‘the relevant
market rates in the community for this
type of matter.’ We conclude that the
district court clearly erred.
“Welch satisfactorily bore her burden of
demonstrating that $375 to $400 per
hour is in line with the prevailing market
rate by submitting two pieces of evidence: (1) rate determinations in other
cases litigated by the Kantor & Kantor
firm awarding fees at rates between
$300 and $375 per hour; and (2) declarations from comparable ERISA lawyers attesting that the market sustains
a rate above $400 per hour.
“We do not quarrel with the district
court’s authority to reduce hours that
are billed in block format... [¶] Nonetheless, the district court clearly erred in
applying a 20 percent reduction to all of
Welch’s requested hours. In fact, barely
more than half of all hours submitted by
Welch’s counsel were block billed...
“The district court reasonably concluded
that Kantor & Kantor’s practice of billing
by the quarter-hour resulted in a request
for excessive hours... Having reviewed
the firm’s summary time sheet, the
court found the hours were inflated because counsel billed a minimum of 15
minutes for numerous phone calls and
e-mails that likely took a fraction of the
time...
“The district court reduced Welch’s requested hours by 5.75 hours for time
spent in intra-office conferences, by 5
hours for preparation of a case analysis
memorandum, by 4 hours for time spent
conducting discovery-related activities,
and by 9 hours for preparation of Welch’s
motion for attorney’s fees. We affirm all
of these reductions... [¶] We decline
Welch’s invitation to nitpick ... because
she has presented insufficient evidence
to convince us that the district court’s
DECISIONS
(From Page 9)
determination was a clear error of judgment.”
the Washington law claim was required,
the Ninth Circuit held.
were regularly seen leaving work earlier
than minority drivers.
For plaintiff: Lisa S. Kantor and Glenn R.
Kantor, Northridge.
For defendants: Eric R. McDonough
and Lawrence E. Butler, Seyfarth Shaw
LLP, Los Angeles.
Fisher joined by Callahan and
Collins; 2007 DAR 3079, 2007 WL
656390.
For plaintiff: Michael C. Subit and Sean
M. Phelan, Seattle.
Shadur joined by Goodwin and
Kozinski; 2007 DAR 3208, 2007 WL
686350.
In denying summary judgment and summary adjudication of the plaintiffs’
claims, Judge Freeman conscientiously
applied the Yanowitz “totality of the
circumstances” approach to adverse
action analysis; emphasized that the
alleged “non-ultimate” actions could be
found actionably “adverse” by a jury;
and noted that the defendants had not
addressed all of the alleged instances
of improper conduct, and had not shown
that each alleged action failed the “materiality” test.
NINTH CIRCUIT REJECTS CLAIMS
OF INSTRUCTIONAL ERROR ON
FMLA CLAIMS BUT ORDERS
NEW TRIAL ON DISABILITY CLAIM
UNDER WASHINGTON STATUTE
GAMBINI v TOTAL RENAL CARE, INC.
Rejecting the plaintiff’s arguments concerning instructional error on FMLA
claims, the Ninth Circuit affirmed the
denial of the plaintiff’s motions seeking
judgment as a matter of law or a new
trial, following a defense verdict in the
United States District Court for the
Western District of Washington.
The plaintiff contended that an instruction concerning her FMLA interference
claim had failed to instruct the jury
accurately that the employer had the
burden of proving that her federallyprotected leave had not been a factor in
the termination decision. The evidence
was undisputed, the Ninth Circuit emphasized, that the employer would have
terminated the plaintiff for her conduct
regardless of whether she had taken her
FMLA leave, and a jury verdict is not
tainted by an erroneous instruction on a
burden of proof where the prevailing
party’s evidence was undisputed. A similar assertion of instructional error relative to a failure-to-reinstate claim was
rejected by the Ninth Circuit on the
basis of the same reasoning.
The Ninth Circuit agreed with the plaintiff
however, that the district court had erred
in refusing to give the following instruction, relative to a disability discrimination claim under the Washington Law
Against Discrimination: “Conduct resulting from the disability ... is part of the
disability and not a separate basis for
termination.” A remand for a new trial on
CALIFORNIA
SUPERIOR COURTS
UPS DRIVERS BEAT SUMMARY
JUDGMENT IN SAN MATEO
COUNTY ON FEHA RACE
DISCRIMINATION, DISABILITY
DISCRIMINATION, AND
RETALIATION CLAIMS
GINN, MORALES and RIVERA v UPS.
In three separate cases last month,
San Mateo County Superior Court Judge
Beth L. Freeman denied summary judgment on FEHA claims for race discrimination, disability discrimination, and
retaliation brought against United Parcel Service by current and former UPS
package car delivery drivers at the
company’s Menlo Park facility. The
plaintiffs allege that, since the arrival in
2002 of Northern District Division Manager Ron Meyer and Center Manager
Frank Leong, they have been subjected
to excessive overtime, excessive and
unjustified discipline, denial of assistance when requested, disparate levels
of scrutiny, and retaliation for the filing of
union grievances. A motion to consolidate trial was scheduled for March 20,
and trial was set for April 2, 2007.
The plaintiffs allege that Manager Ron
Meyer, widely known as the “blue-eyed
devil” because of his treatment of minority drivers, threatened plaintiff Mike Ginn
in a hallway during a union grievance
proceeding. Manager Frank Leong was
detected hiding packages and then disciplining the plaintiffs and other drivers
for missed deliveries. On a daily basis,
union stewards and drivers observed
blacks, Hispanics, and drivers who had
filed Workers’ Compensation claims or
union grievances in Meyer’s and Leong’s
offices for discipline. White drivers were
disciplined less frequently, if at all, and
-10-
Judge Freeman found triable issues of
fact with respect to the allegation that
plaintiff Ginn suffered an adverse action
when he was forced to take stress
leave, particularly in light of his allegation of lost wages. Judge Freeman also
rejected the argument that the terminations of two of the plaintiffs were noncognizable simply because they had
been upheld by Teamsters Local 278.
Judge Freeman wrote: “It can be inferred that there was a concerted effort
to pile up warnings and discharge notices in an effort to fire Rivera based
upon his protected activity.” Freeman
also reasoned that the filing of union
grievances alleging “discrimination” and/
or “harassment” constituted protected
activity even though the words “race” or
“racial” were not used.
With respect to punitive damages, Judge
Freeman stated that manager Leong’s
act of hiding packages and then disciplining drivers was “outrageous,” assuming that it could be proved. She also
refused to base summary adjudication
on the “self-serving” declarations of
managers Meyer and Leong, finding
them insufficient to pass the managing
agent test under White v Ultramar, Inc.,
or the burdens imposed by CCP § 437.
For plaintiffs: Spencer C. Young, Oakland.
For defendants: Paul Hastings Janofsky
& Walker, San Francisco.
San Mateo County Superior Court,
Nos. CIV 440973, CIV 441592, and
CIV 441593; information provided
by counsel.
•
•
•
FJUDITH
EBRUARYVLADECK:
CELA/DFEH
MEETING
1923-2007
by Eve Chesbro
Note: As this issue was going to press,
news was received that Suzy Ambrose
is leaving her position as DFEH Director. Eve Chesbro wrote as follows in a
March 17 CELA List message: “At last
week’s CELA/DFEH meeting, Suzy
Ambrose told us that she is leaving her
job as Director of the DFEH effective
May 1, although the transition is going
on now. Interestingly, she will become
the Executive Director of the State
Personnel Board. She does not know
who the new Director will be. She also
does not know who any interim Acting
Director will be. This means that CELA
will no longer be holding monthly CELA/
DFEH meetings, at least until such
time as the organization may be able to
establish a new relationship with the
new Director. I believe this also means
that many of the initiatives by CELA
with Suzy which have not been completed will become moribund until and
unless a new Director picks them up.
Suzy’s relationship with our organization was, in my experience, unique.
Although Suzy insists that she will
make every effort before she leaves to
have her successor carry on the CELA
relationship, the future is unknown.”
Our lively and interesting February 27
meeting with DFEH Director Suzy
Ambrose was attended by Kent Van
Koughnet, Enrique Martinez, Gina
Browne, Olivia Saunders, and Eve
Chesbro.
CELA To Work With DFEH To Revise
Complaint Forms. Eve had reported to
Suzy on several serious problems involving the failure of DFEH district offices to check boxes that reflect the
underlying complaint. Suzy’s response
was—let’s figure out what needs to be
changed on the complaint forms to
alleviate these problems.
Suzy said that the DFEH consultants
have been thoroughly trained in “boxchecking,” but obviously the problems
continue and proliferate. Suzy confirmed
that it is equally or more important to
check sufficient boxes on a complaint
accepted for investigation as on a rightto-sue complaint. The problems include
not checking any boxes, not checking
all the boxes reflecting the underlying
complaint, and not specifying retaliation in the “other” box. In addition, the
categorization of the boxes is confining
and misleading in several instances.
For example, the box for “CFRA denial”
does not on its face cover a wide variety
of CFRA violations, including CFRA
interference.
The discussion was wide-ranging on
this topic, and included Suzy’s suggestion of the possibility that the boxes
might be completely eliminated from
the complaint forms. The potential pitfalls of that approach were discussed.
There was also serious discussion of
conforming the DFEH practice to EEOC
practice, so that the complaint would
include all jurisdictional allegations but
the agency would make clear that only
certain allegations are being investigated. The issue then arises as to when
a RTS is issued as to all allegations,
investigated or not. This approach holds
promise for a revision in DFEH practice.
Suzy requested that CELA give her
ideas for revising the complaint forms,
particularly on the boxes issue, and
Suzy will continue to work on it from her
end. Gina and Eve will be submitting
ideas for revisions from CELA.
Suzy To Follow-Up On Oakland RTS
Delays. In light of CELA members’
complaints about delays of three or four
weeks or more in processing RTS requests out of the Oakland/SF office,
Suzy will look into the problem there.
Comments On Revisions To Sex
Harassment Regulations. Suzy said
that she will be considering further comments to the further revisions in the
proposed sex harassment regulations.
CELA through Eve will be submitting its
own comments, and Eve has asked for
assistance in that project.
All DFEH Directives Are Now On The
DFEH Website. This is a DFEH action
which has been requested by CELA for
some time and which Suzy has now
accomplished. A link to all DFEH Direc-11-
tives can be found on the DFEH website
on the left side “DFEH Policy and Procedures.”
Automatic RTS On Website To Be
Tested In September. Suzy has been
pursuing this idea (her own) for a year
and a half, including budgeting for a
consultant to design a website automatic RTS. Once the funds for the
consultant were approved by the Legislature, a consultant contract went out
for bid, and the chosen consultant has
been developing the concept for the
DFEH website. Suzy is still unclear
about the details of how the automatic
RTS will operate, although she knows
she wants it to be as clear and easy as
possible so that, hopefully, users of the
website can print out their own RTS.
She will continue to keep CELA updated.
Enhanced And Intensive Training
Of DFEH Staff. Eve had raised with
Suzy that it is apparent from consultant
feedback at the complainant level that
the consultants often have a deep misconception of how to do a basic discrimination analysis. For example, consultants have been dismissing pretext
evidence as merely “wrongful termination” support, rather than further evidence of discrimination. Suzy confirmed
that this concern has been conveyed to
Terry Fee, whom Suzy has arranged to
be on loan from her regular agency.
(Fee is currently an AJ at the EDD but
has extensive, credible and in-depth
background in the FEHA). Fee has
begun including that focus in her training, including a week-long training of all
new consultants, and a weekly training
of all staff at each DFEH district office.
Suzy will keep CELA updated about the
content and progress of the training as
she learns it from Fee.
14-Day Letter Language To Be Revised. In another CELA initiative, Suzy
has now agreed to work with suggestions from Eve to work up revisions to
the language of the “14 day letters” that
are sent to complainants after the em(Cont'd on Page 12, DFEH)
DFEH
(From Page 10)
ployer has mounted its defense in a
DFEH investigation. The letters ostensibly ask the complainant for further
information, but in fact are often drafted
so as to convey a mind set adverse to
the merits of the complainant’s allegations. These 14 day letters are later
used by the dark side, who can get
them through a request for the DFEH file
after the investigation is closed, to undercut the credibility of the complainant
in litigation or attempted pre-litigation
negotiation.
Proposal To Split The LA District
Office. In the newest DFEH budget
proposal, Suzy wants to propose splitting the LA District Office into three
separate offices. It is unlikely that the
spin-off offices will actually be in Ventura
or San Bernardino, where two offices
were closed in budget cutting several
years ago, but they will probably be part
way between LA and those two locations.
DFEH Staff Attorney Involvement In
District Office Investigation. Suzy
confirmed that it’s possible—and Eve
urged—that CELA attorneys get the
DFEH staff attorney assigned to a district office involved in the investigation
as soon as possible. The staff attorney
becomes involved if the District Administrator so directs the consultant: this
can be accomplished either by asking
the consultant to involve the attorney,
and/or by asking the District Director to
initiate that process. Having a staff attorney involved significantly elevates the
sophistication of the investigation and
the likelihood of a favorable outcome.
Deadline Extended For Comments
On Draft DFEH Manual Chapters.
Suzy has extended the deadline for
CELA comments on the draft DFEH
manual chapters on pregnancy, CFRA
and religion. Despite the importance of
that manual’s direction on those key
claims, only one CELA member has so
far responded to our request for comments. I will be sending the draft chapters to the List again and very much
hope that more members will take a
little time to submit their invaluable
comments.
•
C O M I N G
E V E N T S
April 24, 2007
NELA SPRING LOBBY DAY
Washington DC
(see www.nela.org for details)
May 11, 2007
Hacienda Hotel
El Segundo
(see www.celaweb.org for brochure and registration form)
May 17, 2007
IMPACT FUND’S 14th ANNIVERSARY RECEPTION
St. Francis Hotel
San Francisco
(see www.impactfund.org for details)
May 23, 2007
CELA LOBBY DAY
Sacramento
June 27-30, 2007
The Fairmont Hotel
San Jose
-12-
•
•
LEGISLATIVE UPDATE
SB 549
H.R. 1540
H.R. 985
Last month’s issue discussed the CELAsponsored “Bereavement and Mourning
Leave Bill.” (See CELA Bulletin, Feb
07, p.1.) On March 14, the following
message appeared on the CELA List
from CELA Legislative Committee member Peter Rukin.
On March 15, NELA distributed the
following information concerning the Civil
Rights Tax Relief Act of 2007. (Developments concerning employment lawrelated legislation in Washington are
regularly tracked in “On The Hill: NELA’s
Washington Report,” current and back
issues of which are posted on NELA’s
website: www.nela.org.)
The Whistleblower Protection Enhancement Act passed the House on March
14 by a vote of 331-94. As explained in
the February 22 issue of NELA’s on-line
Washington DC newsletter, On The
Hill, the WPEA would significantly improve both substantive and procedural
protections for federal employee
whistleblowers. It would, inter alia: (1)
allow whistleblowers federal jury trials,
with compensatory damages available,
if the MSPB fails to issue a timely final
decision; (2) remove the Federal Circuit’s
monopoly on whistleblower appeals; (3)
reverse the judge-made requirements of
‘irrefragable proof’ that the whistleblower
was the original source of the report of
a violation, and of immediate reporting
of the violation; (4) protect reports made
as part of job duties, (thus reversing
Garcetti v Ceballos for federal employees); (5) expand whistleblower and other
employment protections to employees
of federal contractors, the TSA, and
other agencies previously excluded; and
(6) recognize denial of a security clearance as an adverse employment action.
A CELA-sponsored bill has just been
introduced by California State Senator
Ellen Corbett. It provides all employees
with the right to take up to four days off
upon the death of a close family member. We now need your help. We must
submit letters of support in connection
with the hearings on the bill. If you know
of any circumstance where an employee
has been denied time off upon the death
of a family member, or been punished
for requesting or taking such time off,
please contact Jean Hyams, Steve
Pingel, or myself ASAP. The letters of
support can come from the employee or
the attorney, and need to discuss the
relevant specifics. You can obtain a
copy of the bill by going to Senator
Corbett’s
website
http://
dist10.casen.govoffice.com/ and clicking on “legislation.”
AB 1043
On February 23, CELA Legislative Committee Co-Chair David Lowe sent the
following message to the CELA List.
CELA’s bill to stop employers from
stripping workers of the protection of
California law or forcing them to litigate
their claims in other states was introduced by Labor Committee Chairman
Sandre Swanson. The bill is AB 1043.
There are four ways that you can help
advance this bill. (1) Contact me
([email protected]) if you have any examples of California workers being disadvantaged by a choice-of-law or choiceof-forum provision—we may need folks
to testify at a hearing in March or April;
(2) Volunteer to research legal issues if
they are raised in opposition to the bill;
(3) Identify and contact ally organizations for letters of support; and (4) Participate in CELA’s Lobby Day on May
23.
NELA is pleased to announce that today Representative John Lewis (D-GA)
introduced the Civil Rights Tax Relief
Act of 2007 (CRTRA) to end unfair
taxation of noneconomic damages by
those who have suffered unlawful discrimination or other violations of their
employment rights. It will also reduce
the taxes employees pay on monies
awarded as back-pay in lump sums by
allowing them to average the damages
over the years in which they would have
earned them so that they pay taxes at
fair and realistic marginal rates. Mr.
Lewis was joined by a bipartisan group
of original co-sponsors, including Representatives Deborah Pryce (R-OH),
Sander Levin (D-MI), Jim Ramstad (RMN), Xavier Becerra (D-CA), and Phil
English (R-PA). The bill number is H.R.
1540. In addition to having bipartisan
support in Congress, the CRTRA is
supported by employer and employee
groups alike. For employers, the CRTRA
will significantly reduce the costs of
employment and civil rights-related litigation. More cases will be settled before trial, and it will be less expensive for
employers to settle them. For employees who have to sue to vindicate their
rights, the CRTRA will limit their taxable
income only to the economic components of their awards. The CRTRA has
been NELA’s top legislative priority for
years. We succeeded in eliminating the
double taxation of attorneys’ fees in
2004, one of the three elements of the
original CRTRA. We’re ready to finish
the job.
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•
•
•
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BULLETIN
Published
Monthly
April 2007
Vol. 21, No. 4
CALIFORNIA
SUPREME COURT
IN UNANIMOUS OPINION,
SUPREME COURT HOLDS THAT
PAYMENTS FOR MEAL AND
REST PERIOD VIOLATIONS ARE
WAGES, NOT PENALTIES, AND
ARE THEREFORE SUBJECT TO
THREE-YEAR LIMITATIONS
PERIOD
MURPHY v KENNETH COLE PRODUCTIONS, INC. In a unanimous
opinion by Moreno filed on April 16, the
Supreme Court wrote in part as follows:
“This case presents two issues: first,
whether the ‘one additional hour of pay’
provided for in Labor Code section 226.7
constitutes a wage or premium pay
subject to a three-year statute of limitations (Code Civ. Proc., § 338) or a
penalty subject to a one-year statute of
limitations (Code Civ. Proc., § 340);
second, whether a trial court, conducting a de novo trial, can consider additional wage claims not presented in the
administrative proceeding before the
state Labor Commissioner. We conclude that the remedy provided in Labor
Code § 226.7 constitutes a wage or
premium pay and is governed by a
three-year statute of limitations and
that the trial court properly considered
the additional, but related, wage claims
during the de novo trial. Accordingly,
we reverse the contrary judgment of the
Court of Appeal.
“On October 16, 2002, Murphy filed a
wage claim with the Labor Commissioner. Murphy used the check-thebox form to raise claims for unpaid
overtime and waiting time penalties,
but did not know he could make a claim
for rest and meal period and itemized
pay statement violations... [¶] The Labor Commissioner issued a decision in
Murphy’s favor on July 14, 2003, finding
that KCP failed to establish that Murphy
was an exempt employee and awarding unpaid overtime, interest, and waiting time penalties. [¶] On August 6,
2003, KCP filed a notice for de novo
review.
JOIN US IN SACRAMENTO ON LOBBY DAY, MAY 23:
“A DAY TO PROTECT CALIFORNIA WORKERS”
by Jean Hyams, David Lowe, and Steve Pingel
CELA Legislative Committee Co-Chairs
On behalf of CELA’s Legislative Committee, we strongly urge you to join us
on May 23, 2007—“A Day To Protect
California Workers”—when CELA
members from around the state will
converge on Sacramento for CELA’s
inaugural Lobby Day. We’ll meet with
legislators to talk about the reality of
our clients’ lives, and about legislation
to make their lives better.
We know that you fight every day to
help ensure that California workers are
treated justly under existing law, and to
hold the line against employers who are
trying to chip away at existing protections. We’re asking you to take one day
out of the year to make change in
another way, by lobbying the California
legislature to enact CELA’s legislative
agenda.
CELA is the proud sponsor of two bills
currently before the legislature: SB
549, to create job-protected bereavement leave; and AB 1043, to prohibit
out-of-state choice of law and choice of
forum clauses in employment agreements. [See page ___, and CELA
Bulletin, March 07, p.13.]
Participating in Lobby Day is easy,
(and there is no cost to participate): all
you need to do is to get yourself to
Sacramento. Over breakfast at the Sterling Hotel from 8 to 10am we will provide
you with training about lobbying, and
introduce you to the legislators who are
carrying our bills—Assembly Labor
Committee Chair Sandre Swanson (AB
1043), and Senate Judiciary Committee Chair Ellen Corbett (SB 549). We’ll
handle the logistics of scheduling you
to meet in small groups with legislators
at the Capitol. After a day of lobbying
meetings, we’ll all reconvene for a reception at the hotel from 5 to 7pm, with
legislators and key staffers also in attendance. It will be a chance to de-brief
and to engage with other CELA members and legislators in an informal setting.
A Day To Protect California Workers
promises to be a full and rewarding
opportunity. Please RSVP, or address
any questions to Jean Hyams at
[email protected].
DECISIONS
(From Page 1)
“In May 2004, the trial court filed its
statement of decision and a judgment
awarding Murphy unpaid overtime, payments for missed meal and rest periods, penalties for failing to furnish itemized pay statements, waiting time penalties and prejudgment interest. The
court, applying the three-year statute of
limitations ... awarded payments for
meal and rest period violations dating
from October 2000. The court subsequently granted Murphy’s motion for
attorney fees and costs.
“KCP appealed from the judgment of the
trial court, arguing that the court erred in
addressing claims ... that had not been
previously raised before the Labor Commissioner. KCP also contended that
the payments ordered for the meal and
rest period violations were penalties,
and thus subject to the one-year statute
of limitations...
“The Court of Appeal affirmed in part and
reversed in part, holding that Labor Code
section 226.7 payments ... are penalties ... and that claims may not be
raised for the first time on de novo
appeal... We granted plaintiff’s petition
for review. [The First District’s opinion
appeared at 134 CA4th 728, 36 CR3d
418, and was summarized in CELA
Bulletin, Dec 05, p.7.]
“While the language of section 226.7 ...
appears to indicate the ‘additional hour
of pay’ ... is a wage ..., the language is
also reasonably susceptible of an interpretation that the hour of pay is a penalty... As a result we look to extrinsic
sources, such as the ostensible objectives to be achieved by the statute, the
evils to be remedied, the legislative
history, public policy, contemporaneous administrative construction and the
statutory scheme of which the statute
is a part.
“We conclude that the administrative
and legislative history of the statute
indicates that, whatever incidental behavior-shaping purpose section 226.7
serves, the Legislature intended section 226.7 first and foremost to compensate employees for their injuries. This
conclusion is consistent with our prior
holdings that statutes regulating condi-
tions of employment are to be liberally
construed with an eye to protecting
employees. [cites omitted.] [¶] We conclude that neither the behavior-shaping
function of section 226.7 nor the lack of
a perfect fit between the pay remedy
and the injury compel classifying the
remedy as a penalty.
“Finally, we recognize that the primary
purpose of the statutes of limitation is to
prevent plaintiffs from asserting stale
claims once evidence is no longer fresh
and witnesses are no longer available...
Because employers are required to keep
all time records, including records of
meal periods, for a minimum of three
years ... employers should have the
evidence necessary to defend against
plaintiffs’ claims.
“The [second] issue presented here,
whether the trial court properly permitted additional related wage claims in
the de novo trial that were not first
considered by the Labor Commissioner,
appears to be one of first impression...
[¶] [But] our previous decisions suggest
that a trial court’s power to hear a wage
dispute extends to the consideration of
related issues not reached by the Labor
Commissioner. [Post v. Palo/Haklar &
Associates (2000) 23 C4th 942; Smith
v Rae-Venter Law Group (2002) 29 C4th
345.]
“Permitting trial courts to exercise jurisdiction over the entire wage dispute ... is
consistent with trial courts’ broad discretion in adjudicating claims at trial.
[cite omitted.] [¶] Trial courts are
equipped to weigh the various considerations, e.g., whether the claims are
sufficiently related, whether the interests of judicial economy will be served,
and whether the employer will be prejudiced.
“[F]orcing Murphy to file an original civil
action to raise the additional claims
‘would appear inconsistent with the legislative purpose under Labor Code section 98 of providing an expeditious resolution of wage claims...’ (Post, supra,
23 Cal.4th at p. 951.) It is unclear what
interest would be served by allowing
trial courts to consolidate claims con(Cont'd on Page 3, DECISIONS)
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CALIFORNIA
EMPLOYMENT
LAWYERS ASSOCIATION
Michelle Reinglass
Suite 170
Tel: (949) 587-0460
FAX: (949) 587-1004
Director:
Christina Krasomil
Encino, CA 91436-2412
Tel: (818) 907-7895
FAX: (818) 907-7474
EXECUTIVE BOARD
(Sherman Oaks)
Dolores Leal
(Los Angeles)
Eve Chesbro
(Pasadena)
Steven Pingel
(Long Beach)
Kathy Dickson
(Oakland)
Mika Spencer
(San Diego)
David Duchrow
(Los Angeles)
James P. Stoneman
(Claremont)
Phil Horowitz
(San Francisco)
Christopher Whelan
(Gold River)
Jean K. Hyams
(Oakland)
Jeffrey Winikow
(Los Angeles)
Toni Jaramilla
(Los Angeles)
Brad Yamauchi
(San Francisco)
Virginia Keeny
(Pasadena)
Bulletin Editor
Christopher Bello
Astoria, OR 97103
Ph: (503) 338-3891
DECISIONS
(From Page 2)
tained in a civil action with those at
issue in a de novo trial, but prohibiting
trial courts from exercising their discretion to permit employees to raise additional wage-related claims at the de
novo trial.
“Furthermore, the Court of Appeal’s
conclusion ... undermines the legislative policy of encouraging employees
to use the Berman process.
“Finally, allowing trial courts to exercise their discretion ... is consistent
with the Legislature’s intent ‘to discourage frivolous and unmeritorious
appeals from the commissioner’s
awards.’ [cite omitted.] A party who
appeals a Labor Commissioner award
does so at its own peril. If the employer
appeals, and the employee obtains
representation, it is likely that the
employee’s attorneys will uncover additional, related facts and claims not
thoroughly examined at the administrative level when the claimant was
unrepresented. Just as an employer is
not bound by the defenses it raised in
the Berman process, but rather is entitled to abandon, change, or add defenses..., so may an employee raise
additional wage-related claims in the
de novo trial.
“We hold that section 226.7’s plain
language, the administrative and legislative history, and the compensatory
purpose of the remedy compel the
conclusion that the ‘additional hour of
pay’ is a premium wage, not a penalty.
We further hold that the trial court
properly exercised its discretion in
deciding to consider the additional, but
related, wage claims during the de
novo trial. The contrary judgment of the
Court of Appeal is reversed.”
For employee: Hastings Civil Justice
Clinic, Donna M. Ryu, Nancy M. Stuart,
and Miye A. Goishi.
For CELA, among numerous amici on
behalf of employee: Cohelan & Khoury
and Michael D. Singer.
Cal SC, 4/16/07; unanimous opinion by Moreno; 2007 DAR 4981, 2007
WL 1111233.
THIRD DISTRICT DECISION THAT
DRASTICALLY REDUCED JURY
AWARDS ON DISABILITY
DISCRIMINATION AND
HARASSMENT CLAIMS
ROBY v McKESSON HBOC. On April
18, the California Supreme Court announced that it will review the Third
District decision that reduced the overall jury award on disability discrimination and harassment claims from $19
million to $3.5 million. The Third District
held, inter alia, that the evidence did not
support the verdict for the plaintiff on the
harassment claim, and that $15 million
in punitives was excessive: an award of
$2 million in punitives “reached the
constitutional frontier.” (The Third
District’s December 26, 2006 decision
appeared at 146 CA4th 63, 53 CR3d
Bulletin, Jan 07, p.2.)
[In their Petition for Rehearing, plaintiff’s
attorneys David deRubertis, Charity
Kenyon, Norman Pine, and Christopher
Whelan argued: (1) there was no duplication of non-economic damages; (2)
the Third District omitted, misstated,
and downplayed critical facts supporting the harassment verdict; (3) the opinion misapplied Reno v Baird in reasoning that any conduct with an arguable
connection to management duties cannot support a harassment claim; (4) the
opinion’s constitutional analysis misapplied the Gore guideposts and misstated material facts; and (5) an absolute appellate reduction of the punitive
damages award was improper and the
court should have ordered a conditional
remittitur. (The Petition for Review is
posted on the CELA website,
www.celaweb.org, in the Public Brief
Bank section, and was summarized in
CELA Bulletin, Feb 07, p.13.)]
For plaintiff: David M. deRubertis, Charity Kenyon, Norman Pine, Christopher
H. Whelan.
For defendants: Howard, Rice,
Nemerovski, Canady, Falk & Rabkin,
Jerome B. Falk, Jr., Linda Q. Foy,
Jason M. Habermeyer; Fitzgerald,
Abbott & Beardsley and Sarah E.
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Robertson.
Cal SC, No. S149752; 4/18/07; 2007
DAR 5380.
SUPREME COURT TRANSFERS
PROP 64 RETROACTIVITY CASE
TO SECOND DISTRICT FOR
RECONSIDERATION IN LIGHT OF
MERVYN'S AND BRANICK
CONSUMER ADVOCACY GROUP v
KINTETSU. On March 21, the Supreme
Court transferred Kintetsu to the Second District, Division Eight, with directions to vacate its decision and to reconsider in light of Californians for Disability
Rights v Mervyn’s, LLC (2006) 39 C4th
223, and Branick v Downey Savings and
Loan Ass’n, (2006) 39 C4th 235. In its
May, 2005 decision, the Second District
took the position that the voters did not
intend Proposition 64 to apply to pending litigation. The decision appeared at
129 CA4th 540, 28 CR3d 775, and was
summarized in CELA Bulletin, May 05,
p.5. Review was granted on 9/28/05.
(Mervyn's held that Prop 64’s amendments to the UCL’s standing requirements do apply to cases pending at the
time the amendments took effect, but
Branick held that Prop 64 did not preclude the amendment of a UCL complaint to add a plaintiff who satisfies the
new standing requirements.)
Cal SC, 3/21/07; 2007 DAR 3848, 2007
WL 1063863.
NINTH CIRCUIT
DEFENDANTS FAILED TO MEET
CAFA STANDARD OF “LEGAL
CERTAINTY” AS TO AMOUNT IN
CONTROVERSY IN SEEKING
REMOVAL OF WAGE AND HOUR
CLASS ACTION
LOWDERMILK v UNITED STATES
BANK NATIONAL ASS’N. “In this case,”
a Ninth Circuit panel wrote in a March 2
opinion by Bybee, “we are called upon to
resolve a question of first impression:
DECISIONS
(From Page 3)
Under the Class Action Fairness Act of
2005 (‘CAFA’), Pub. L. 109-2, 119 Stat.
4 (2005), when the plaintiff has pled
damages less than the jurisdictional
amount, what must the defendant prove
in order to remove the case to federal
court? We reserved this question in
Abrego Abrego v The Dow Chemical
Co., 443 F.3d 676, 683 n.8 (9th Cir.
2006) (per curiam). [See CELA Bulletin, Apr 06, p.5.] We answer that the
party seeking removal must prove with
‘legal certainty’ that the amount in controversy is satisfied., notwithstanding
the prayer for relief in the complaint. We
conclude that the defendant in this case
failed to meet this burden, and we affirm
the judgment of the District Court [D
Oregon].
“Willene Lowdermilk filed a complaint in
Oregon state court on March 28, 2006,
on behalf of herself and a class of
employees ‘who worked for U.S. Bank
as hourly employees in the past six
years.’ Plaintiff sought relief for two
alleged violations of Oregon law. First,
she claimed U.S. Bank denied her full
compensation for the hours she worked
because Defendant had a policy of
rounding actual hours worked down to
the nearest tenth of an hour... Second,
plaintiff alleged that Defendant failed to
promptly pay her wages upon termination... In addition to damages and penalty wages, Plaintiff sought costs, attorneys’ fees, and interest, a sum Plaintiff
alleged in her prayer for relief was ‘in
total, less than five million dollars.’
“On August 16, 2006, the district court
held that it was bound by the complaint
as to the amount in controversy ‘unless
plaintiff’s prayer is determined to have
been made in bad faith.’ It held that
Defendant had not proved that Plaintiff’s
allegation was made in bad faith nor had
it met its burden of establishing jurisdiction under CAFA. Consequently, the
district court remanded the case to
state court.
“Defendant has provided some evidence
that the Plaintiff’s actual claims necessarily exceed $5,000,000. Additionally,
Defendants argue that we should count
potential attorneys’ fees toward the
amount in controversy.
“Although defendant bears the burden of
proving that the Plaintiff’s suit meets the
requirements of 28 U.S.C. § 1332(d), we
must consider what level of proof the
Defendant must meet... [¶] We think
the familiar ‘legal certainty’ standard
best captures the proof the defendant
must produce. We are joined in this
judgment by the Third Circuit ... [in]
Morgan v. Fay ... 471 F.3d at 474.
“By adopting ‘legal certainty’ as the
standard of proof, we guard the presumption against federal jurisdiction and
preserve the plaintiff’s prerogative, subject to the good faith requirement, to
forgo a potentially larger recovery to
remain in state court...
“Because the relevant Oregon statutes
provide for the payment of attorneys’
fees, we include the fees in the amount
in controversy.
“Defendant asserts that Plaintiff’s claim
for late payment of wages upon termination is worth more than $13,000,000 ...
[but] ... provides thin support for how it
arrived at these numbers... [¶] Until the
parties are able to more definitively ascertain the potential size of the class or
the extent of the damages, we cannot
base our jurisdiction on Defendant’s
speculation and conjecture. Even if we
include attorneys’ fees in the calculation, Defendant is no closer to carrying
its burden because we simply have no
basis for estimating the claims of the
individual class members...
“We acknowledge that strict construction of our jursidiction creates the potential for manipulation of the jurisdictional
rules by plaintiffs... CAFA mitigates
some of the potential for abuse by eliminating the one-year removal limitation...
Defendant points out ... that even though
a CAFA-qualified case may be removed
at a later date, critical decisions related
to class certification, discovery, and
trial procedures may be made in state
court before the case can be removed.
Such gamesmanship is possible under
our rules... [but] [t]here are cases—as
the instant case proves—in which the
plaintiffs cannot anticipate from the outset the value of their case. They are not
obligated to overstate their damages to
-4-
satisfy the defendant’s interest in a
federal forum, but may plead conservatively to secure a state forum...”
For plaintiffs: Jacqueline L. Koch, Portland.
For defendants: Timothy R. Volpert,
Portland.
Bybee joined by Thompson and
Kleinfeld; 479 F3d 994.
COMPANY WHOSE TRUCK
DRIVERS WERE “LURED AWAY”
SUFFICIENTLY STATED UCL AND
COMMON LAW CLAIMS AGAINST
COMPETITOR
CRST VAN EXPEDITED, INC. v
WERNER ENTERPRISES, INC. “This
case calls on us to decide whether,
under California law, a corporation’s
allegations that its competitor lured
away employees who had signed employment contracts, sufficiently states
two common law tort claims and one
state statutory claim.
“Appellant ... sued Werner Enterprises,
Inc. claiming Werner had intentionally
interfered with CRST’s employment
contracts by soliciting and hiring away
truck driver employees whom CRST
had trained at its expense. CRST additionally claimed Werner violated California Business and Professions Code §
17200 et seq., also known as the Unfair
Competition Law (‘UCL’), and had interfered with CRST’s prospective economic
advantage...
“The district court [Central District]
granted Werner’s ... 12(b)(6) motion to
dismiss ... without reasoned analysis
or explanation... The court also granted
Werner’s motion for attorneys’ fees for
CRST’s bad faith filing of the [subsequently withdrawn] trade secret claim.
We now reverse in full the district court’s
dismissal of CRST’s complaint. We
affirm the district court’s award of attorneys’ fees to Werner.
DECISIONS
(From Page 4)
“We emphasize the circumscribed reach
of our holdings. Our starting point is that
CRST adequately alleged ... intentional
interference with contract. Under the
California Supreme Court’s interpretation of the UCL, an adequate claim for
relief from a tortious business act or
practice effects a violation of the UCL
because the UCL is a ‘borrowing’ statute; hence, CRST adequately alleged a
violation of the UCL. It ‘borrows’ a common law ‘wrong’ to constitute a statutory ‘unlawful’ business practice. In turn,
having adequately alleged a violation of
the UCL, CRST has adequately alleged
that Werner’s acts were independently
wrongful so as to support a claim for
intentional interference with economic
advantage. [¶] Finally, we express no
opinion on the merits of CRST’s claims.”
for insubordination, patient abandonment, and the harassment of another
registered nurse when she refused the
order of a nurse supervisor to work in the
emergency room. Detabali filed suit
against St. Luke’s in San Francisco
Superior Court, alleging common law
claims under the FEHA for breach of
contract, breach of the covenant of good
faith and fair dealing, and claims under
the FEHA for discrimination on the basis of her race and national origin, retaliation, and harassment. She denied St.
Luke’s claim that her refusal to work in
the emergency room constituted insubordination because under the ‘cluster’
provision of the governing collective bargaining agreement, intensive care unit
nurses are not required to report to the
emergency room unit.
For plaintiff: Barry Levenstam, Scott T.
Schutte, Kathy A. Karcher, Jenner &
Block LLP, Chicago.
For defendant: Robert M. Waxman,
Andres Quintana, Ervin, Cohen & Jessup
LLP, Beverly Hills.
Bea joined by Tashima and Ikuta;
479 F3d 1099.
“St. Luke’s removed the action to federal court ... alleging that Detabali’s
contractual claims were preempted by
§ 301 of the LMRA. Detabali filed a first
amended complaint with the district
court, omitting the previous claims for
breach of contract, fraud, and breach of
the covenant of good faith and fair dealing, but alleging claims for employment
discrimination, retaliation, and harassment in violation of the FEHA, failure to
prevent discrimination, and tortious termination. The district court granted St.
Luke’s motion to dismiss..., ruling that
her FEHA discrimination and retaliation
claims were preempted by § 301... The
district court also held that Detabali
failed to support her harassment claim
with allegations that she was harassed
based on her race, national origin, or
age. Although the district court gave
Detabali leave to amend ... to plead
federal claims..., the court instructed
Detabali not to replead the preempted
claims, and to replead her harassment
claim with facts demonstrating that she
was harassed based on her membership in a protected class.
NORTHERN DISTRICT ERRED IN
FINDING THAT NURSE’S FEHA
CLAIMS WERE PREEMPTED BY
LMRA § 301
DETABALI v ST. LUKE’S HOSPITAL.
In an opinion by Milan D. Smith filed on
April 16, the Ninth Circuit, reversing
dismissal, held that Northern District
Judge Phyllis J. Hamilton erred in concluding that FEHA claims by a Filipina
nurse were preempted by § 301 of the
LMRA. The Ninth Circuit’s opinion reads
in part as follows:
“Lorraine Detabali, a 57-year-old Filipina
woman, was employed as an intensive
care unit nurse at St. Luke’s. She also
served as a union representative and
had been instrumental in negotiating
provisions of the collective bargaining
agreement concerning certain measures
to insure quality of care, patient safety,
and minimize liability exposure for
nurses. St. Luke’s terminated Detabali
“Detabali filed a second amended complaint, in which she repled the FEHA
claims. Detabali also failed to plead
additional factual allegations in support
of her harassment claim. The district
court granted St. Luke’s motion to dismiss Detabali’s second amended complaint and personally sanctioned
-5-
[plaintiff’s attorney Charles J.] Katz in
the sum of $1,000.
“The viability of Detabali’s FEHA claims
depends on whether she was legitimately terminated for refusing to work
outside her cluster. In order to make
this determination, the court will have to
refer to the cluster provision of the [CBA].
However, because there is no dispute
over the meaning of any terms within the
agreement, resolution of the central
issue—whether St. Luke’s discriminated
against Detabali in applying the agreement—does not depend on interpretation of the [CBA].
“We see no need to depart from a long
line of cases holding that FEHA employment discrimination claims are not
ipso facto preempted by § 301 of the
LMRA. [cites omitted.] We hold that the
district court erred in finding that
Detabali’s FEHA discrimination and
retaliation claims were preempted...,
and in dismissing these claims for failure to exhaust the grievance procedure... Because Detabali’s claims were
not preempted by § 301 of the LMRA,
the district court lacked jurisdiction over
her case and, therefore, we also reverse
the district court’s dismissal of her FEHA
harassment claim.
“Detabali argues that the district court
abused its discretion in imposing sanctions against Katz. St. Luke’s asserts
that we lack jurisdiction to review the
imposition of sanctions against Katz
because Detabali lacks standing to
appeal an order imposing sanctions
against her attorney and Katz was not
a named party in the notice of appeal.
“We disagree with St. Luke’s... [¶] Like
counsel in Retail Flooring [Dealers of
America, Inc. v Beaulieu of America,
LLC (9th Cir 2003) 339 F3d 1146], Katz
prepared, signed , and filed Detabali’s
notice of appeal. Although Detabali’s
notice of appeal differs from the notice of
appeal filed in Retail Flooring in that it
challenges the district court’s dismissal
of the FEHA claims in addition to the
order imposing sanctions, Katz’s intent
to appeal is clear from the face of the
appeal...
DECISIONS
(From Page 5)
“We hold that the district court abused
its discretion in imposing sanctions on
Katz. Katz’s repleading of Detabali’s
FEHA claims preserved them for this
appeal and our decision in this case
demonstrates the merits of his decision. We believe it would be perverse to
uphold an award of sanctions against
counsel for taking actions that ultimately
preserved his client’s right to proceed
with her case.”
For plaintiff: Charles J. Katz, Millbrae.
For defendants: Alex Hernaez, Kauff,
McClain & McGuire, San Francisco.
Smith joined by Gould and Covello;
2007 DAR 5025, 2007 WL 1112679.
NINTH CIRCUIT WILL NOT
REHEAR CASE IN WHICH IT HELD
THAT ALL MEMBERS OF CLASS
OF CLAIMS ADJUSTERS ARE
EXEMPT FROM FLSA’S
OVERTIME REQUIREMENT
In re FARMERS INSURANCE EXCHANGE v MILLER. On March 30, the
Ninth Circuit amended its October 26,
2006 opinion and denied petitions for
rehearing and rehearing en banc.
In the panel decision, (466 F3d 853,
summarized in CELA Bulletin, Oct 06,
p.3), the Ninth Circuit ordered entry of
judgment in favor of Farmers on overtime claims by a class of claims adjusters, holding that all of the adjusters in
the plaintiff class were exempt.
For plaintiffs: Steven G. Zieff, Kenneth
Sugarman, Rudy, Exelrod & Zieff, San
Francisco; James M. Finberg, Eve H.
Cervantez, Lieff Cabraser Heimann &
Bernstein, San Francisco; Michael
Rubin, Peder J. V. Thoreen, Altshuler,
Berzon, Nussbaum, Rubin & Demain,
San Francisco.
For defendants: Theodore J. Boutrous,
Jr., Deborah J. Clarke, Elisabeth C.
Watson, Gibson, Dunn & Crutcher, Los
Angeles; Barnes H. Ellis, James N.
Westwood, Stoel Rives LLP, Portland.
Ninth Circuit, 3/30/07; 2007 DAR 4429,
2007 WL 943982.
CALIFORNIA COURTS
OF APPEAL
SECOND DISTRICT REVERSES
JURY VERDICT THAT AWARDED
$42 MILLION TO L.A. COUNTY
POLICE OFFICERS WHO
ALLEGED THAT RACE
DISCRIMINATION CAUSED PAY
DISPARITY COMPARED TO
SHERIFF’S DEPUTIES
FRANK v COUNTY OF LOS ANGELES. “This is a race discrimination class
action brought by a class of minority
officers of the Los Angeles County Police against the County of Los Angeles... The County appeals from a judgment finding it liable for back pay and
other relief to all County police officers,
including nonminority officers, who were
employed when the class was certified... We conclude that the jury’s liability verdict on the theories of disparate
impact and disparate treatment racial
discrimination must be reversed. Plaintiffs failed to establish a basis for a
disparate impact claim as a matter of
law, and the jury’s verdict on disparate
treatment is not supported by the evidence...
“In summary, plaintiffs established that
some 70 percent of officers in the County
police classification are minority members and 30 percent are Caucasian,
while in the sheriff’s department, where
officers are better paid, the percentages
are reversed. That differentiation, by
itself, does not establish racial discrimination, and plaintiffs failed to present
evidence that the pay disparity is the
product of racial discrimination.
“We conclude that the jury’s special
verdict on the disparate impact theory
must be reversed because plaintiffs
failed to establish a prima face case of
racial discrimination. As in Wards Cove
[Packing Co. v Atonio (1989) 490 US
642] and Carter [v CB Richard Ellis, Inc.
(2004) 122 CA4th 1313], there was no
showing that the County’s policies had
a disproportionate adverse impact on
the class members because they are
minorities and thus members of a pro-6-
tected group. Instead, the evidence
established that the County’s policies
were to pay the class members, Caucasian and minority alike, less because
they were members of the County police rather than the LASD. Plaintiffs
presented no evidence that the County
established policies which worked as a
barrier or deterrent to minority application to and hiring by the LASD.
“Plaintiffs also alleged the County intentionally discriminated against them in
the establishment of their salary and
benefits, based on race. They argue,
correctly, that racial animus may be
proven by indirect or circumstantial evidence, and direct evidence of racial
discrimination is rarely available. [¶]
[But] we find no evidence from which the
jury could reasonably infer that County
police officers were paid less than the
LASD deputies because of intentional
racial discrimination.
“Plaintiffs presented expert testimony
by Dr. [James] Ginger comparing the
compensation of County police officers
with that of LASD deputy sheriffs. He
concluded that their work was functionally equivalent...
“We conclude that Dr. Ginger’s study
did not adequately take into consideration the various functions performed by
each department and the number of
officers assigned to those functions. In
addition, his field depositions gathered
information about types of incidents
dealt with by radio patrol officers, but
failed to take into account the critical
factor of the frequency with which the
officers dealt with these situations. We
are not told whether the number of
respondents was statistically reliable.
In light of these issues, we conclude
that the jury could not reasonably rely
on Dr. Ginger’s conclusion that the
duties of County police officers and
LASD deputies were functionally equivalent or comparable. This evidentiary
omission in plaintiffs’ case undermines
the rest of their experts’ testimony because the other experts assumed that
the duties of the officers were comparable. Since plaintiffs did not show that
DECISIONS
(From Page 6)
they are, they cannot establish their
basic premise: that they performed equal
work but were paid less because of
racial discrimination.
“Plaintiffs argue that they established
that race was a motivating factor in
establishing their salary and benefits.
[After examining] each category of evidence upon which they rely... [¶] [we
conclude that] plaintiffs’ claim of racial
intent is not supported by the record. It
may be that the County police officers
should be better compensated as a
class. That abstract issue is not before
us. The question is whether the pay
disparity was the product of intent to
discriminate based on race. We conclude that the jury could not reasonably
infer such intent from the record. Without it, the special verdict on disparate
treatment must be reversed.
“Plaintiffs had a full opportunity to
present their evidence, which was insufficient as a matter of law. No new trial is
warranted and the County is entitled to
judgment in its favor.”
[Note: Plaintiffs’ attorney Patricia
Bellasalma (Moorpark) was quoted in
the Daily Journal of April 13 as insisting
that the Second District panel had
cherry-picked the evidence. “I have no
kind words for three people I believe
have no judicial integrity whatsoever,”
she said. “But am I surprised? Am I
shocked at a results-oriented court?
No.”]
For plaintiffs: Patricia Bellasalma, J. L.
O’Donnell, Jr., Jennifer Kramer, Gerald
M. Serlin and Douglas G. Benedon.
For County: Jones Day, Elwood Lui,
Scott D. Bertzyk, Jeffrey B. Krzner;
Gutierrez, Preciado & House and Calvin
House.
Second Dist Div Four, 4/12/07; opinion by Epstein with Willhite and
Suzukawa concurring; 2007 DAR
4922, 2007 WL 1082287.
IN WAGE AND HOUR CLASS
ACTION, OPT-OUT NOTICE
ADEQUATELY PROTECTED
PRIVACY RIGHTS OF FORMER
EMPLOYEES DURING
PRECERTIFICATION DISCOVERY
BELAIRE-WEST LANDSCAPE, INC. v
SUPERIOR COURT (RODRIGUEZ).
“Real parties ... filed a putative class
action lawsuit against their former employer ... alleging wage and hour violations. During precertification discovery,
the trial court granted a motion to compel Belaire-West to provide the names
and contact information of all current
and former Belaire-West employees and
adopted a proposed notice to those
individuals that would have required them
to object in writing in order to prevent
information about them from being disclosed to the real parties in interest.
Applying Pioneer Electronics (USA),
Inc. v. Superior Court, 40 Cal.4th 360,
we conclude the opt-out notice adequately protects the privacy rights of
the current and former employees involved. We deny the writ. [Note: The
Pioneer Electronics decision was filed
on January 25, 2007, and was summarized in CELA Bulletin, Feb 07, p.2.]
“The Pioneer analysis leads us to conclude that opt-out notices will also suffice here. The contact information ...
deserves privacy protection. In fact, the
privacy concerns here are more significant than those in Pioneer, where the
complaining customers voluntarily disclosed their information to the company
in hope of gaining some relief for their
allegedly defective DVD players.
“While it is unlikely that the employees
anticipated broad dissemination of their
contact information when they gave it to
Belaire-West, that does not mean that
they would wish it to be withheld from a
class action plaintiff who seeks relief for
violations of employment laws...
[C]urrent and former Belaire-West employees [can] reasonably be expected
to want their information disclosed to a
class action plaintiff who may ultimately
recover for them unpaid wages that they
are owed.
“[T]he trial court implicitly found that no
serious invasion of privacy would result... That implicit finding is reasonable
and supported by the facts... Disclosure of the contact information with an
opt-out notice would not appear to unduly compromise either informational
privacy or autonomy privacy in light of
the opportunity to object to the disclosure, as the court specifically found that
there was no evidence of any actual or
threatened misuse of the information.
“While our conclusion that there is no
serious invasion of privacy ... obviates
any need to engage in further analysis,
we nonetheless observe that the balance of interests also supports the trial
court’s order... The balance of opposing
interests here tilts even more in favor of
the court’s disclosure order than it did in
Pioneer, because at stake here is the
fundamental public policy underlying
California’s employment laws.”
[Note: The Second District, Division 7,
issued another decision on April 9—
this one unpublished—reaching the
same conclusion as that reached in
Belaire-West. See Swissport Corporation v Superior Court (Battles) (2007)
2007 WL 1040987, involving a class
action alleging meal and rest break
violations. (William D. Becker for Real
Party in Interest).]
For employees: Nava Law Firm, Cesar
H. Nava, Santos Gomez, Stanley J.
Hodson; Cullen & Associates and Paul
T. Cullen.
For employer: Atkinson, Andelson, Loya,
Ruud & Romo, Robert R. Roginson and
Christopher S. Milligan.
Second Dist Div Seven, 4/9/07; opinion by Zelon with Perluss and Woods
1039547.
-7-
DECISIONS
(From Page 7)
IN WAGE AND HOUR ACTION,
TRIAL COURT DID NOT ABUSE
DISCRETION IN DECERTIFYING
SUBCLASS OF ACCOUNT
MANAGERS WHO EMPLOYER
CLAIMED FIT WITHIN “OUTSIDE
SALESPERSON” EXEMPTION
WALSH v IKON OFFICE SOLUTIONS,
INC. “Plaintiffs ... appeal from an order
decertifying one of several subclasses...
Appellants contend: (1) the order is
erroneous because it fails to identify
sufficiently the court’s reasons for decertification; (2) the evidence does not
support the trial court’s conclusion; and
(3) IKON’s motion was untimely and
procedurally defective in its failure to
comply with local rules of the San Francisco Superior Court. We affirm the
order.
“Appellant Walsh and another former
IKON employee filed this action in their
individual capacities, and on behalf of
other similarly-situated IKON employees ... alleging that IKON ... required
certain employees to work in excess of
eight hours per day, and in excess of 40
hours per week, without paying overtime wages... In addition, it was alleged, IKON failed to compensate employees for work without meal and break
periods..., unlawfully deducted costs
and expenses from wages..., and failed
to pay commission wages... Based on
these statutory violations, IKON allegedly perpetrated unlawful, unfair, and
fraudulent business practices (Bus. &
Prof. Code, § 17200) and was thus
liable for civil penalties under Labor
Code section 2698.
“Five subclasses were proposed, the
fourth of which is most important for
purposes of this appeal: ... (4) IKON
LDS Account Managers employed in
California between March 8, 2000, to
the present...
“By written order on January 11, 2006,
the trial court decertified the Account
Manager Subclass with the following
explanation: ‘Common issues of and
fact do not predominate ... as the circumstances of each class member’s
employment differs significantly from
every other member of the class. As a
result, individual hearings on both liability and damages are required for each of
the 150 or so class members, as well as
the two class representatives...’
“In context, the trial court’s explanation
was not so vague that we are unable to
determine whether substantial evidence
supports the decision. Appellants’ challenge to the order on this ground is
unavailing...
“We next consider whether the trial
court’s conclusion ... was supported by
substantial evidence... [¶] IKON classified all members of the Account Manager Subclass under the outside salesperson exemption, alleged this exemption as an affirmative defense, and relied
upon it in arguing that common questions of law and fact do not predominate...
“IWC Wage Order 4-2001 defines an
‘outside salesperson’ as ‘[A]ny person
... 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.’ The
outside salesperson exemption turns
on how the employee actually spends
his or her time as well as the employer’s
realistic expectations of the job and the
extent to which the employee diverges
from them. [cite omitted.]
“IKON presented evidence from deposition testimony ... that the performance
of [Account Managers’ common] tasks
varied significantly from individual to
individual and from office to office, based
on the account manager’s territory,
number of customers and job orders,
support from customer service representatives, and the personal approach
of each account manager to the job and
customers. [¶] Other evidence supported
IKON’s contention of a variation in work
performance among account managers...
“Our Supreme Court in Ramirez [v
Yosemite Water Co., (1999) 20 C4th
785] anticipated that the adjudication of
the outside salesperson exemption could
-8-
result in this very type of individualized
factual examination.
“In the final analysis, there was a sufficient evidentiary basis from which the
trial court could reasonably infer that
commonality was lacking due to the
differences in the subclass members’
work circumstances and how they approached their jobs...
“Appellants contend that the decision in
Sav-On [Drug Stores, Inc. v Superior
Court (2004) 34 C4th 319] held that the
existence of factors relevant to proving
the outside salesperson exemption under
Ramirez did not preclude class certification. We disagree... [¶] [T]he point [in
Sav-On] was that defendants could not
preclude certification per se merely
because there were factual circumstances that might require individual
proof; the Sav-On court did not strip the
trial court of its discretion to conclude
that, in light of the factual variations
among individual employees, the class
action device would not be a superior
mechanism...
“Appellants contend it was error to decertify the Account Manager Subclass,
even if individualized proof of a subclass
member’s work was required ... because appellants pursued their overtime wage claim in part on a theory of
‘deliberate willful misclassification.’ ...
Because this deliberate misclassification is common to all Account
Manager Subclass members, appellants argue, common questions predominate over individual issues.
“We disagree... Appellants cannot recover under Labor Code section 1194
unless the Account Manager Subclass
members were not, in fact, subject to
the outside salesperson exemption; that
determination requires consideration of
the individual circumstances of each
Account Manager Subclass member...
[¶] [Sav-On] does not suggest that
employers could be liable for classifying an employee without regard to the
law or facts if the employees turned out
to be classified correctly.”
DECISIONS
(From Page 8)
[Note: On April 16, the California Supreme Court issued an opinion in a
consumer class action that addresses
a number of issues concerning the criteria for class certification. Fireside Bank
v Superior Court (Gonzalez) 2007 WL
1112020.]
For plaintiffs: Daniel H. Qualls, Robin G.
Workman.
For defendant: Seyfarth Shaw, Gilmore
F. Diekmann, Jr., Catherine Dacre, Eric
E. Hill, Alfred L. Sanderson, Jr., Francis
J. Ortman, III, Joel M. Van Parys.
Gemello with Jones and Simons
615714.
NO FUNDAMENTAL PUBLIC
POLICY WAS VIOLATED BY
DISCHARGE OF TEACHER WHO
REPORTED THAT FOOTBALL
COACH HAD ADVISED STUDENT
TO TAKE PROTEIN DRINK
CONTAINING CREATINE
CARTER v ESCONDIDO UNION HIGH
SCHOOL DISTRICT. “James T. Carter
sued his employer ... claiming that
EUHSD wrongfully terminated his employment in violation of public policy. At
trial, Carter supported his allegations
by presenting evidence that EUHSD
declined to ‘reelect’ him to his probationary teaching position because, while
employed as a teacher at another school
district, Carter informed the athletic director there that the football coach had
recommended a nutritional supplement
to a student.
“After the jury found that Carter’s report
to the athletic director had been ‘a
motivating reason’ for EUHSD’s adverse
job action and that Carter was entitled
to damages of over $1,000,000, the trial
court entered judgment against EUHSD.
“As discussed in more detail below, we
are required by controlling precedent to
reverse. For an employer to be liable for
the tort of wrongful discharge in violation
of public policy, the employer’s conduct
must violate a public policy that is
‘fundamental,’ ‘well established’ and
‘carefully tethered’ to a constitutional or
statutory provision. (Gantt v. Sentry
Insurance (1992) 1 Cal.4th 1083, 1090,
1095.) The public policy upon which
EUHSD’s liability was based in the
instant case—characterized by Carter
on appeal as ‘the policy against teachers recommending weight-gaining substances to students’—fails to satisfy
these requirements. There may be
sound policy reasons to bar football
coaches from recommending weight
gaining substances to high school students, but as there is currently no law
that does so, any such prohibition must
be enacted explicitly by the Legislature, not implicitly by the courts. Thus,
while EUHSD’s decision to terminate
Carter may have been arbitrary, misguided and petty, it was not prohibited
by law or in contravention of well-established public policy, and thus provides
no basis for liability under California law.
“Carter argues that the pertinent public
policy ... is found in ‘Education Code
section 49423 [restricting school employees from assisting in the taking of
most medications under most circumstances], plus California Code of Regulations, sections 601 and 604’ which,
he argues, establish ‘the policy against
teachers recommending weight-gaining substances to students.’
“Section 49423 does not support
EUHSD’s liability in the instant case
because the public policy it establishes
was not violated by Carter’s termination. [¶] Section 49423 by its terms
does not prohibit any conduct. Instead,
it is expressly permissive, delineating a
circumstance under which the school
nurse ‘may’ assist in the administration
of medication to a student during the
school day... This absence of any explicit prohibition of any conduct and the
omission of any sanctions for noncompliance strongly suggest that section
49423 does not establish a fundamental public policy that could support a
wrongful termination claim.
“[E]ven if the statute is intended to
implicitly prohibit the actions it describes
absent written parental authorization,
those actions would not include Coach
-9-
Carberry’s suggestion that a student
could improve his college football recruitment prospects if he consumed a
protein drink at some unspecified time
in the future. [¶] The implementing regulations of the Department of Education
do not alter this analysis.
“We also reject Carter’s implicit argument that the judgment against EUHSD
is supported by California’s general
whistle-blower statute, Labor Code section 1102.5... [¶] Carter’s conduct ... is
not protected by section 1102.5. First,
as explained above, the information disclosed by Carter did not ‘disclose a
violation of state or federal statute, or a
violation or noncompliance with a state
or federal rule or regulation’... Second,
Carter’s conversation with [the athletic
director] was not motivated by his belief
that a law had been broken... Third,
even if Carter subjectively believed that
Carberry had violated a statute or regulation..., the record is devoid of anything
that would support a conclusion that his
belief was ‘reasonable.’ Protein shakes
containing creatine are not unlawful
under either state or federal law.”
For plaintiff: Ross, Dixon & Bell and Jon
R. Williams.
For amicus on behalf of plaintiff: Beverly
Tucker and Priscilla S. Winslow.
For defendant: Stutz, Artiano, Shinoff &
Holtz, Daniel R. Shinoff, Jeffery A. Morris and Paul V. Carelli, IV.
by Irion with McConnell and Benke
841257.
FACT THAT PLAINTIFF IN ACTION
FOR UNPAID WAGES WAS
SALARIED EXECUTIVE DID NOT
PRECLUDE HIS RECOVERY OF
ATTORNEYS’ FEES UNDER
LABOR CODE § 218.5
ON-LINE POWER, INC. v MAZUR.
“Cross-complainant David Mazur appeals from an order denying his motion
for attorney’s fees after settling his action for unpaid wages pursuant to a
DECISIONS
(From Page 9)
statutory offer of compromise. (Code
Civ. Proc., § 998.) Because the trial
court erred in ruling that Labor Code
provisions ensuring an employee’s right
to payment of wages did not apply to
salaried corporate executives, we reverse and remand for further proceedings.
“David Mazur sued his former employer
for unpaid wages... [fn.1. Mazur’s action was a cross-complaint filed in response to OLP’s action against Mazur
and others for stealing OLP’s trade
secrets. Mazur was granted summary
judgment in that action, which we recently affirmed...] [¶] On August 2,
2005, OLP mailed to Mazur a statutory
offer to compromise... [¶] Mazur ...
brought a motion to enforce the section
998 offer, have judgment entered, and
recover his attorney’s fees pursuant to
Labor Code section 218.5, along with
his costs...
“[T]he trial court issued a minute order
finding that Mazur was entitled to seek
his costs because the section 998 offer
was silent on that point. However, the
court found that Mazur was not entitled
to recover his attorney’s fees under
Labor Code section 218.5 because that
section was designed to protect workers who received an hourly wage, not
those who were compensated by salary
pursuant to a written employment contract. Mazur has appealed the order
denying his request for attorney’s fees.
“OLP contends Mazur was not entitled
to recover his attorney’s fees because
its section 998 offer called for the complete resolution of all of Mazur’s claims
and should therefore be read under
general contract principles to exclude
such fees. However, when a section
998 offer is silent about attorney’s fees
and costs, it cannot reasonably be
interpreted to exclude their recovery
and the prevailing party may seek them.
[cites omitted.]
“Taken as a whole, [Labor Code sections 200 through 204] indicate that for
purposes of the Labor Code, the salaries of executives are protected wages,
and that a cause of action for nonpayment of such wages falls under Labor
Code section 218.5.
“OLP contends that the trial court was
correct because Mazur’s action was
essentially one for breach of contract,
and the employment contract did not
include an attorney’s fee provision. To
the extent the trial court ruled that
Mazur’s concurrent breach of contract
cause of action precluded his resort to
the Labor Code, it also erred.”
For employee: Henry J. Josefsberg
For employer: Faryan A. Afifi.
Second Dist Div Eight, 4/17/07; opinion by Rubin with Cooper and Boland
1128874.
DENIAL OF MOTION TO COMPEL
ARBITRATION OF CONTRACT
CLAIMS BY DISCHARGED
EXECUTIVE
GIULIANO v INLAND EMPIRE PERSONNEL, INC. “In this breach of contract action, defendant employer appeals from the denial of its motion to
compel arbitration pursuant to plaintiff’s
employment contract. Defendant contends that plaintiff’s right to a judicial
forum for his unpaid wages claim under
Labor Code section 229 is preempted
by section 2 of the Federal Arbitration
Act..., which mandates the enforcement of arbitration clauses in contracts
involving interstate commerce... Defendant also argues that plaintiff’s ‘garden
variety’ breach of contract action is not
subject to the minimum requirements
for arbitration set forth in Armendariz...
which applies to unwaivable claims that
are ‘carefully tethered to statutory or
constitutional provisions’ [cite omitted]
such as discrimination in violation of
[FEHA] or wrongful discharge in violation of public policy... We reverse the
order denying the motion to compel
arbitration.
“[T]he interstate nature of Giuliano’s
employment [as corporation’s executive vice president and chief financial
officer] was undisputed, notwithstanding Giuliano’s contention to the con-10-
trary, and we therefore decide the issue
as a matter of law.
“Empire contends that the arbitration
clause ... is not governed by Armendariz
... We agree. [¶] In this case, Giuliano
argues that his statutory wage claim is
an unwaivable Tameny claim because
‘the right to be paid wages earned is part
of the public policy of the State of
California and is not waivable.’ But
Giuliano’s contract claim for a $5 million
to $8 million bonus and a $500,000
severance payment is distinguishable
from the statutory overtime or minimum
wage claims that were at issue in the
cases cited by Giuliano.
clause is not ambiguous and that the
related entities are subject to arbitration. We agree.
“In support of the order denying arbitration, Giuliano contends that the arbitration clause ... should be stricken as a
vague, unintelligible, unconscionable,
and invalid contract of adhesion. We
disagree.
“Giuliano also contends that the arbitration clause is procedurally unconscionable because it does not provide for
discovery, does not require a written
arbitration award, and does not require
the employer to pay for fees and costs
unique to arbitration. These are procedural requirements set forth in
Armendariz. As we have concluded that
Armendariz does not apply to this case,
Giuliano’s claim of procedural unconscionability fails.”
For plaintiff: Dempsey & Johnson,
Michael D. Dempsey and Arlene M.
Turinchak.
For defendant: Beck, De Corso, Daly,
Kreindler & Harris.
Second Dist Div Four, 3/26/07; certified for publication 4/19/7; opinion
by Suzukawa with Epstein and
Willhite concurring; 2007 DAR 5413,
2007 WL 891315.
DECISIONS
UNPUBLISHED COURT OF der. We now turn to a consideration of ON REMAND FROM SUPREME
the cases referenced by our high court.
COURT, FIRST DISTRICT
APPEAL DECISIONS
(From Page 10)
[Note: the cases summarized below
are a selection of the unpublished Court
of Appeal decisions filed during the
past month.]
FIRST DISTRICT ISSUES
ANOTHER OPINION CONCERNING
PROCEDURE FOR SUBSTITUTION
OF PLAINTIFF WITH PROP 64
STANDING
CALIFORNIANS FOR DISABILITY
RIGHTS v MERVYN’S. “This case has
had a strange procedural history on
appeal. We denied Mervyn’s motion to
dismiss the appeal, and the Supreme
Court reversed. We then granted
Mervyn’s motion to dismiss the appeal,
and the Supreme Court reversed. This
odd result is largely a product of the
difficulty of applying Proposition 64—
which is silent about its intended effect
on pending cases—to particular cases
in various stages of litigation. The result
is also the product, in part, of the way
the parties framed the issues.
“The parties’ initial focus was on whether
Proposition 64’s standing requirements
applied to pending cases. After the
Supreme Court found the measure applicable and remanded the case to us,
the parties’ focus shifted to the allowable means and manner of substituting
a plaintiff with standing. CDR never
asked to continue the appeal in its own
name but, instead, sought to substitute
a new plaintiff on appeal. We accepted
the issue as framed by CDR... Finding
no authority for substitution on appeal,
we granted the motion to dismiss. CDR
renewed its claimed right to substitution on appeal in its petition for review in
the Supreme Court. The Supreme Court
granted review and transferred the matter to us for reconsideration in light of
two cases, United Investors [Life Ins.
Co. v Waddell & Reed (2005)] 125
Cal.App.4th 1300, and Branick [v
Downey Savings & Loan Assn. (2006)]
39 Cal.4th 235. CDR never cited United
Investors to this court previous to the
Supreme Court’s grant and transfer or-
“These two cases, when read in conjunction, lead to the following conclusion: CDR is a party aggrieved by entry
of judgment against it and thus has
standing to appeal the judgment even if
CDR has no authority to maintain its
suit in superior court...; and if CDR
succeeds in its effort to reverse the
judgment on appeal, it may seek leave
in superior court to amend its complaint
to substitute a plaintiff who meets the
Proposition 64 standing requirement.
“Mervyn’s ignores the import of these
two cases and continues to argue against
substitution of plaintiff on appeal. While
the right to substitution on appeal was
CDR’s long-held position, it has now
changed position after receiving new
guidance from the Supreme Court. CDR
observes that, ‘[a]s is made plain by the
Supreme Court’s order and the holdings
in both cases, the issue facing this
Court now is whether to consider the
merits of the appeal, not whether to
allow the plaintiff to substitute a new
plaintiff prior to a merits determination.’
“We shall consider the merits of the
appeal. Proposition 64 does not compel
dismissal of the appeal given CDR’s
appellate standing as an aggrieved person... [¶] Our previous decision dismissing the appeal is vacated and
respondent’s motion to dismiss the
appeal is denied. Respondent’s brief on
the merits shall be filed within 30 days
after this opinion is final.”
For plaintiff: Holly Macleish Baldwin,
Sanford Jay Rosen, Rosen, Bien &
Galvan, LLP, Daniel Mason, Zelle,
Hoffman et al., Monique Oliver, The
Sturdevant Law Firm, San Francisco,
Sidney Wolinsky, Disability Rights
Advocates, Berkeley.
For defendant: Gloria Young Eun Lee,
Morrison & Foerster, San Francisco,
David Frank McDowell, Jr., Morrison &
Foerster, Los Angeles.
First Dist Div Four, 4/17/07; opinion
by Sepulveda with Ruvolo and
Reardon concurring; 2007 WL
1139693 (unpublished).
REJECTS ARGUMENTS AIMED AT
CIRCUMVENTING MEDIATION
CONFIDENTIALITY IN
CONNECTION WITH ARBITRATION
PROVISION IN SETTLEMENT
AGREEMENT
FAIR v BAKHTIARI. “On appeal from
the trial court’s denial of plaintiff’s motion to compel arbitration, we reversed
the judgment on the ground that the
document in question satisfied a statutory exception to the inadmissibility of
written or oral communications made
during mediation. We also concluded
that the document contained a valid
agreement between the parties to arbitrate all disputes. (Fair v. Bakhtiari,
Oct. 12, 2004, A100240). The California
Supreme Court granted review and reversed our decision. (Fair v. Bakhtiari
(2006) 40 Cal.4th 189 [summarized in
CELA Bulletin, Nov 04, p.4]). It held
that the document did not satisfy the
statutory exception to the inadmissibility of communications made during
mediation and remanded to this court
for further proceedings.”
The First District, Division 2, rejected all
three of the plaintiff’s contentions that
remained for decision, namely: (1) the
contention that the settlement terms
document was admissible under a statutory exception (Ev Code § 1123(a))
similar to the one (§ 1123(b)) found
inapposite by the Supreme Court; (2)
the contention that the defendants were
judicially estopped from invoking mediation confidentiality due to their repeated representations to the trial court
that the case settled in mediation; and
(3) the contention that the defendants
repeated disclosure of mediation communications waived their right to claim
mediation confidentiality.
For plaintiff: Gilbert R. Serota, Howard,
Rice, Nemerovski, Canady, Falk &
Rabkin, San Francisco.
For defendants: Arthur J. Shartsis, San
Francisco; Ronald Fox Garrity, South
San Francisco.
-11-
DECISIONS
(From Page 11)
First Dist Div Two, 4/6/07; opinion by
Kline with Haerle and Richman concurring; 2007 WL 1031708 (unpublished).
ARBITRATOR DID NOT FAIL TO
MAKE REQUIRED DISCLOSURES
IN CONNECTION WITH HIS
ACCEPTANCE OF NEW CASE
INVOLVING CURRENT COUNSEL
WHILE ARBITRATION WAS
PENDING
MARKMAN v O’HARE. Relative to a
contract dispute involving a sale of real
estate, the Fourth District rejected the
argument that the JAMS arbitrator, retired Judge James L. Smith, had failed
to make required disclosures when he
accepted employment in another case
involving one of the defense firms in the
instant case. The court wrote:
“Plaintiff ... appeals from a judgment
affirming an award of arbitration after
she moved to vacate it because the
arbitrator was biased and failed to make
required disclosures. We conclude there
was no actual or apparent bias on the
part of the arbitrator nor improper conduct in accepting a new matter with
counsel in the pending arbitration and
affirm... We also reject plaintiff’s suggestion that the arbitrator taking a new
case involving current counsel while an
arbitration is pending should be an automatic disqualifying event.”
For plaintiff: Law Offices of Ian Herzog,
Evan D. Marshall, Ian Herzog, and Amy
Ardell.
For defendants: Wentworth, Paoli &
Purdy and Jeanine A. Scalero.
Fourth Dist Div Three, 3/28/07; opinion by Rylaarsdam with Sills and
Bedsworth concurring; 2007 WL
SECOND DISTRICT IMPORTS
YANOWITZ ANALYSIS TO
CONTEXT OF SUBSTANTIVE
DISABILITY DISCRIMINATION AND
FINDS NO ADVERSE
EMPLOYMENT ACTION
MALAIS v LOS ANGELES CITY FIRE
DEPARTMENT. The Second District,
Division One, affirmed summary judgment on FEHA disability discrimination
claims by a fire department captain who
had been denied his desired reassignment after he lost a leg in a work-related
accident. “Malais contends,” the court
wrote, “that the trial court erred in finding
that because the Department offered
him other positions with comparable
pay and promotion opportunities, he did
not suffer an adverse employment action. We reject the contention and affirm
the judgment.
“In Yanowitz..., our Supreme Court reviewed what constitutes an adverse
employment action in a factually different but analytically similar context of an
employment discrimination lawsuit... [¶]
Applying these principles to the ... facts
before us, we conclude that the court
properly found that Malais did not suffer
an adverse employment action by being
limited to special duty assignments.
Although so limited, Malais continued
to receive promotions after his injury
until he reached the top of the Captain
II range. Moreover, although he was not
sure that he wanted to pursue them,
Malais had equal opportunities for promotion to higher positions.”
For plaintiff: Knapp, Petersen & Clarke,
Andre E. Jardini and Gwen Freeman.
For defendant: Claudia McGee Henry,
Assistant city Attorney, and Kim
Rodgers Westhoff, Deputy City Attorney.
Second Dist Div One, 3/29/07; opinion by Rothschild with Vogel and
Jackson concurring; 2007 WL 926611
(unpublished).
AFFIRMING SUMMARY
JUDGMENT, FIRST DISTRICT
HOLDS THAT EXPLANATION THAT
54-YEAR-OLD APPLICANT WAS
REJECTED BECAUSE HE WAS
“OVER-QUALIFIED” WAS NOT
DIRECT EVIDENCE OF AGE
DISCRIMINATION
REEVES v KAISER FOUNDATION
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HEALTH PLAN, INC. The First District,
Division 5, affirmed summary judgment
on an age discrimination claim brought
by a 54-year-old attorney who had unsuccessfully applied for a position with
Kaiser’s labor and employment group.
The court cited EEOC v Insurance Co.
of North America (9th Cir 1995) 49 F3d
1418 for the proposition that an
employer’s decision not to hire an applicant who is “overqualified” does not
constitute age discrimination. The court
distinguished Taggart v Time, Inc. (2d
Cir 1991) 924 F2d 43, where the Second
Circuit concluded that the term “overqualified” was a euphemism for “too
old.” In Taggart, the Ninth Circuit emphasized, the defendant’s criterion
“amounted to a label—‘overqualified’—
without any objective content... Here,
by contrast, [the decision-maker’s]
deposition testimony showed she was
concerned about appellant’s
overqualification for an objective reason: Someone with the range of experience that appellant possessed might
find the entry level job that Kaiser had
available to be boring.”
For plaintiff: Edwin Lamar Bradley II,
San Francisco.
For defendant: Deborah Jean Broyles,
Seth Lewis Neulight, and Thomas Edward Hill, Thelen Reid Brown Raysman
& Steiner.
Jones with Simons and Gemello
SECOND DISTRICT DENIES
WTVPP PLAINTIFF’S MOTION TO
STRIKE AS SLAPP SUIT
EMPLOYER’S COUNTERCLAIM
FOR CONVERSION,
MISAPPROPRIATION, AND
BREACH OF CONFIDENTIALITY
PLANNED PARENTHOOD LOS ANGELES v GONZALEZ. “Planned Parenthood Los Angeles terminated P.
Victor Gonzalez from his position as
vice-president of finance and administration in 2004. Gonzalez sued for wrong(Cont'd on Page 13, DECISIONS)
DECISIONS
(From Page 12)
ful termination in violation of public policy,
claiming his termination was in retaliation for identifying illegalities in PPLA’s
administrative procedures and operations. Gonzalez attached over 200 pages
of internal PPLA documents and files to
his first amended complaint. During
discovery, PPLA learned that Gonzalez
was in possession of additional PPLA
writings, which it claimed were confidential and proprietary. PPLA filed a
cross-complaint for conversion, misappropriation and breach of confidentiality. Gonzalez moved to strike the crosscomplaint ... as a strategic lawsuit
against public participation (SLAPP).
Gonzalez appeals the trial court’s denial of his anti-SLAPP motion... The
order is affirmed.”
For employee: Schuler & Brown, Jack
M. Schuler, Sam D. Ekizian, and
Maurice S. Newman.
For employer: Fields & Israel, Gary D.
Fields, Arlette B. Bolduc; Munger, Tolles
& Olson, Kathleen M. McDowell and
Freya K. Russell.
Second Dist Div Two, 4/12/07; opinion
by Doi Todd with Boren and Ashmann
EMPLOYER’S CORPORATE
COUNSEL COULD HAVE NO
LIABILITY AS MATTER OF LAW IN
CONNECTION WITH AGE
DISCRIMINATION AND CONTRACT
MANAGER
BECK v RESNICK. “Gerald V. Beck
appeals from a judgment dismissing his
complaint after the court sustained ...
demurrers ... without leave to amend.
Beck’s second amended complaint alleged he was victim of age discrimination, and was wrongfully terminated by
his fellow shareholders in JBZ, Inc. in
violation of an employment contract.
Beck named Resnick and the law firm
based solely on their role as JBZ’s
corporate counsel. We affirm, concluding the trial court correctly decided
Beck’s complaint did not pass muster
and could not be amended to do so... [¶]
Because Resnick and the law firm have
no liability as a matter of law, the court
properly sustained their demurrer.” The
complaint alleged causes of action for
breach of contract, professional negligence, intentional infliction of emotional
distress, and interference with contract.
For plaintiff: Lounsbery Ferguson Altona
& Peak, Erick R. Altona, Judith Hartwig,
and Alena Shamos.
For defendant: Vogt & Resnick and
Charles C. McKenna.
Fourth Dist Div Three, 4/12/07; opinion by Ikola with Rylaarsdam and
Fybel concurring; 2007 WL 1087574.
VERDICTS AND
SETTLEMENTS
FEDERAL EXPRESS SETTLES
RACE DISCRIMINATION CLASS
ACTION FOR $55 MILLION
SATCHELL v FEDEX EXPRESS. On
April 10, after several months of negotiations, the parties agreed to settle a
race discrimination class action for
nearly $55 million. The company will
also overhaul its pay, discipline, and
promotion practices. The settlement
awaits final approval by Northern District Judge Susan Illston.
James Finberg of Altshuler Berson was
lead counsel for a class of some 20,000
hourly employees and low-level operations managers who have worked in the
company’s western regional facilities
since October 1999. The suit was originally filed in state court in 2002, and
was removed to federal court the following year. The class was certified in
2005.
The plaintiffs alleged that Fed Ex Express, a unit that performs overnight
deliveries, had a culture of hostility toward people of color, and allowed racial
bias to infect its human resources division. As part of the agreement, FedEx
agreed to stop using as a prerequisite
for promotion a “Basic Skills Test” that
had sharply differential pass rates for
whites and minorities. The plaintiffs presented the expert testimony of a UC
Berkeley psychology professor who
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determined that the Basic Skills Test
was not a valid measure of job success
and could be replaced by a nondiscriminatory test.
With monetary payments of about $54.9
million, the settlement is believed to be
among the top ten discrimination verdicts historically in United States courts.
The total figure includes $15 million for
attorneys’ fees and costs, unspecified
claims administration costs, and up to
$360,000 for class representatives and
members who gave declarations.
Finberg credited Hunter R. Hughes III of
Rogers & Hardin in Atlanta, Georgia, for
successfully mediating the case, which
was scheduled to go to trial in early
May.
For plaintiffs: James Finberg; John
Burris; Waukeen McCoy; Kay
McKenzie Parker; Lieff, Cabraser,
Heimann & Bernstein; Schneider &
Wallace; Barry Goldstein.
For defendant: In-house counsel and
Gilmore Diekmann, Jr., Seyfarth Shaw.
USDC ND Cal, No. 03-2659; Judge
Susan Illston; information reported
in Daily Journal, 4/12/07.
CITY EMPLOYEE’S RETALIATION
AND WRONGFUL TERMINATION
CLAIMS SETTLE FOR
$3.6 MILLION
POLLARD v CITY OF EMERYVILLE.
On March 8, a $3.6 million settlement
was announced in a case involving retaliation and wrongful termination claims
brought by a 27-year-old planning technician for the City of Emeryville. The
total includes a $950,000 cash settlement, 13 years of paid administrative
leave with benefits, and $1.3 million in
attorneys’ fees and costs.
Leslie Pollard was terminated in April of
2005 following a psychiatrist’s report
that she was “unfit for duty.” Throughout
her employment with the City, Pollard
had challenged what she perceived to
be racially discriminatory and unfair
DECISIONS
(From Page 13)
treatment by City management. The
complaint alleged that the “fitness for
duty” examination was unwarranted and
that psychiatrist Stephen Raffle aided
and abetted the City and individual defendants in retaliation against Pollard
for her years of anti-discrimination advocacy on behalf of herself and others.
The complaint sought punitive damages against Raffle and the other individual defendants, (although the City,
as a public entity, was shielded from
such a claim).
Pollard, who was chief union steward at
the time of the firing, was one of two
African-Americans who, in the mid
1990s, had pursued and won a union
arbitration involving racial discrimination by the City. In early 2004, Pollard
and others raised new complaints of
racial harassment, this time involving
comments, drawings, and hostile behavior by a co-worker. After Pollard
complained that the City was doing
nothing to investigate the problem, and
stated that she was going to take the
matter out of the City’s hands, the city
manager and the director of human
resources treated Pollard’s statement
as a “threat” and ordered the psychiatric
exam.
The City hired Dr. Stephen Raffle, providing him with a chronology of Pollard’s
recent complaints which the City managers characterized as unfounded. After a two-and-a-half hour interview and a
few written tests, Raffle diagnosed Pollard as suffering from a personality disorder so severe that she could no longer
work. Pollard’s manager acknowledged
in deposition that Pollard was performing her job satisfactorily, and the City
refused her request that she be seen by
a neutral psychiatric examiner. The City
conducted a “reasonable accommodation” meeting, transcribed by a court
reporter, during which the City refused
to even identify the claimed psychological disorder.
resulting lawsuit. Raffle admitted in deposition that his conclusion that Pollard
suffered from a personality disorder was
based in part on her history of filing
union grievances, including allegations
of race discrimination.
In addition to filing her civil suit, Pollard
pursued union grievances that resulted
in an arbitrator’s ruling in December of
2006 that the City had violated the CBA
because the evidence did not support
the City’s justification for ordering the
fitness for duty exam. The arbitrator
also concluded that Raffle’s medical
opinion was inconsistent with Pollard’s
job performance, and ordered her reinstated with back pay and full benefits.
Pollard returned to work in late December, 2006, just two months prior to the
trial date. Between Pollard’s termination and her reinstatement she suffered
a wage loss of approximately $80,000,
which was included in the settlement
amount.
For plaintiff: Leslie F. Levy, Darci Burrell,
Jean K. Hyams, Boxer & Gerson, Oakland.
For defendants: Kathleen Maylin, John
Cowden, Jackson Lewis LLP, San Francisco.
Mediator: Mark S. Rudy, San Francisco.
Alameda County Superior Court, No.
RG05228855; information provided
by counsel.
•
•
After the lawsuit was filed, Pollard’s
attorneys discovered evidence that Raffle
had withheld his report until the City
agreed to indemnify him against any
claims based on his diagnosis of Pollard, and to pay him for his time in any
•
STATUS OF AB 1043
and SB 549
The following updates were provided by
CELA Legislative Committee Co-Chairs
David Lowe and Steve Pingel. (See last
month’s CELA Bulletin for additional
information on these two CELA-sponsored bills.)
AB 1043
CELA is sponsoring AB 1043, which
declares unconscionable and unenforceable any agreement imposed as a condition of employment that would have
the effect of forcing an employee to
litigate outside of California, or under
another state’s laws, claims that arose
from employment in California or the
seeking of employment in California.
The bill was introduced by Assembly
Member Sandre Swanson, Chair of the
Assembly Labor and Employment Committee.
AB 1043 passed the Assembly Labor
Committee on April 18. (An “aye” vote
by influential “business democrat” Cathy
Galgiani was a good sign that bodes
well for the bill’s eventual passage.) The
next hurdle will be the Assembly Judiciary Committee on May 1. CELA Legislative Committee Co-Chair David Lowe
testified in support of the bill on April 18,
and will do so again on May 1.
Consumer Attorneys of California
(CAOC) and the California Labor Federation, AFL CIO, have provided invaluable support, advice, and assistance in
moving AB 1043 forward, and have lobbied legislators and other organizations
on the bill’s behalf. (Special thanks to
Nancy Peverini of CAOC, and to Caitlin
Vega and Angie Wei of Cal Labor Fed.)
They have also written letters of support, as have the Legal Aid Society of
San Francisco-Employment Law Center, the East Bay Community Law Center, and other organizations.
So far, only the Civil Justice Association of California, (a pro-business tort
“reform” group), has written in opposi(Cont'd on Page 16, AB1043)
-14-
C O M I N G
E V E N T S
May 11, 2007
Hacienda Hotel
El Segundo
(See www.celaweb.org for brochure and registration form)
May 17, 2007
IMPACT FUND’S 14th ANNIVERSARY RECEPTION
St. Francis Hotel
San Francisco
(See www.impactfund.org for details)
May 23, 2007
CELA LOBBY DAY
Sacramento
(See page 1 for details)
June 27-30, 2007
The Fairmont Hotel
San Jose
-17-
CELA'S INAUGURAL LOBBY DAY
A DAY TO PROTECT CALIFORNIA WORKERS
WEDNESDAY, MAY 23, 2007
SACRAMENTO
YOUR PARTICIPATION IS CRITICAL!
Please RSVP or address any questions to:
Jean Hyams ([email protected]) or
Christina Krasomil ([email protected])
BULLETIN
Published
Monthly
CALIFORNIA
SUPREME COURT
COURT MAY NOT DENY
PETITION TO COMPEL
ARBITRATION ON GROUND THAT
STATUTE OF LIMITATIONS HAS
RUN ON UNDERLYING CLAIMS
WAGNER CONSTRUCTION CO. v
PACIFIC MECHANICAL CORP. In a
unanimous opinion by Werdegar filed
on May 21, the California Supreme
Court reversed the Second District in
holding that a court may not deny a
petition to compel arbitration on the
ground that the statute of limitations
has run on the claims the parties
agreed to arbitrate. The case involved
a subcontractor’s breach of contract
claims against a contractor. The Supreme Court wrote in part:
“When the parties to an arbitrable controversy have agreed in writing to arbitrate it and one has refused, the court
under [Code Civ Proc] section 1281.2,
must ordinarily grant a petition to compel arbitration. Exceptions to this rule
are recognized by statute and judicial
decision. That the statute of limitations has run on the underlying claims,
however, is not among the legislatively
or judicially recognized justifications
for denying a petition to compel.
“Delay in demanding or seeking to
compel arbitration can, indeed, justify
denying a motion to compel. But the
rules that enforce the requirements of
timely demands and petitions have
nothing to do with the statutes of limitation that create affirmative defenses
to the claims the parties have agreed to
arbitrate.
“A petition to compel arbitration must
be brought within four years after the
party to be compelled has refused to
arbitrate. [cite omitted] This rule has
nothing to do with the statute of limitations on the underlying claims... [¶]
This does not mean that a party may
postpone arbitration indefinitely by delaying the demand... [T]he Code of Civil
Procedure expressly permits a court to
deny a petition to compel arbitration on
the ground that ‘[t]he right to compel
arbitration has been waived by the petitioner...’ (§ 1281.2, subd. (a).)
“When no time limit for demanding
arbitration is specified, a party must
still demand arbitration within a reasonable time. [cite omitted]... [¶] Although
Wagner may have delayed unreasonably in seeking to compel arbitration,
the superior court expressly declined
to reach the issue because it erroneously concluded the statutes of limitations on Wagner’s contractual and statutory claims barred the petition to compel...
“[T]he superior court did not undertake
the factual inquiry necessary to determine whether Wagner has waived its
right to compel arbitration... We will
therefore remand the case for further
proceedings, during which the superior
court may conduct whatever additional
factual and legal inquiries are necessary to decide the issue of waiver.
Cal SC, 5/21/07; unanimous opinion
by Werdegar; 2007 DAR 7142, 2007
WL 1461900.
May 2007
Vol. 21, No. 5
FUENTES METHOD REMAINS
CORRECT WAY TO APPORTION
WORKERS’ COMP BETWEEN
CAUSES OF DISABILITY
BRODIE v WORKERS’ COMPENSATION APPEAL BOARD. “These consolidated cases present the following
question: When a worker suffers an
industrial injury that results in permanent disability, how should the compensation owed based on the current
level of permanent disability be discounted for either previous industrial
THREE NEW MEMBERS
JOIN CELA EXECUTIVE
BOARD
CELA is proud to announce the appointment of three new Board members. The size of the Board was temporarily reduced to sixteen with the resignations of Rene Barge and Cliff Palefsky
(who joined the CELA Advisory Board).
At the recent Board Retreat, (a more
complete recap of the Retreat will appear in next month’s Bulletin), the Board
voted to increase the number of seats
to nineteen, and to appoint three new
Board members: Wilmer Harris, Cynthia
Rice, and David DeRubertis.
Wilmer Harris practices with the firm of
Schonbrun, De Simone, Seplow, Harris & Hoffman LLP, in Pasadena. Cynthia
Rice is Director of Litigation, Advocacy
& Training with California Rural Legal
Assistance, Inc. in San Francisco. David
DeRubertis has his own practice in
Woodland Hills. Please WELCOME all
of the new Board members.
DECISIONS
(From Page 1)
injury or nonindustrial disabilities? The
issue was originally settled by this court
in Fuentes v. Workers’ Compensation
Appeal Bd. (1976) 16 Cal.3d 1, but the
2004 omnibus reform of California’s
workers’ compensation scheme created doubt as to whether the apportionment formula we adopted in Fuentes
had been superceded and a different
formula should now be employed. We
conclude it has not been superceded
and the Fuentes formula remains the
correct one to apply in apportioning
compensation between causes of disability.”
[Note: for a discussion of this major
victory for insurers and business interests, and other recent developments in
the workers’ comp area, see
www.workerscompzone.com, the blog
of Julius Young, a workers’ comp attorney with Boxer & Gerson in Oakland.]
by Werdegar; 2007 DAR 6181, 2007
WL 1288365.
CALIFORNIA COURTS
OF APPEAL
SUMMARY JUDGMENT ON
CFRA, TAMENY TORT, AND
DISABILITY DISCRIMINATION
CLAIMS
FAUST v CALIFORNIA PORTLAND
CEMENT. The Second District, Division
Three, reversed summary judgment in
an action in which a union-represented
mechanic asserted disability discrimination, CFRA, and Tameny tort claims.
The plaintiff experienced severe anxiety
and resulting physical symptoms in
connection with hostile treatment by
co-workers after they learned that he
had given the plant manager information
concerning internal theft and misconduct. The court held:
(1) Portland’s failure to establish that it
complied with its obligations to give
notice to Faust of his right to medical
leave precluded it from obtaining sum-
mary judgment with respect to the
plaintiff’s CFRA claims. “Portland’s papers below and on appeal,” the court
explained, “focus on Faust’s alleged
noncompliance with an employee’s obligations under the CFRA. Portland’s
basic premise is that Faust was insubordinate in taking an unauthorized leave
of absence and in failing to respond to
[the human resource manager’s] inquiries. However, Portland’s papers fail to
address the threshold issue of an
employer’s obligations under section
12945.2 and the implementing regulations... [T]here is nothing among the
207 facts in the separate statements of
undisputed facts to indicate Portland
posted notice or gave notice to Faust of
his rights under the CFRA. The separate statements establish that
Andersen, Portland’s human resource
manager, admitted she never informed
Faust of any right he may have to leave
under the CFRA or FMLA.”
(2) Because Portland admitted as much
in the plaintiff’s requests for admissions, the undisputed evidence established that Faust adequately notified
Portland of his need for CFRA leave.
“The remaining issue in this regard,” the
court wrote, “is Portland’s contention
that Faust unreasonably failed to respond to Portland’s follow-up inquiries
regarding his condition... On this record,
it cannot be said as a matter of law that
Faust ‘unreasonably refused to respond
to [Portland’s] questions seeking necessary information that would have assisted [Portland] in determining if Faust
was seeking a CFRA-qualifying leave.’
The record ... supports a conflicting
inference, namely, that it was Portland
which unreasonably refused to communicate with any of Faust’s representatives. That issue is for the jury.”
(3) A physician is not the only health
care provider who can certify a serious
health condition under the CFRA, and
the plaintiff’s chiropractor was not necessarily precluded from doing so.
(4) A triable issue was established as to
the plaintiff’s cause of action alleging
retaliation for the exercise of CFRA
-2-
CALIFORNIA
EMPLOYMENT
LAWYERS ASSOCIATION
Michelle Reinglass
Suite 170
Tel: (949) 587-0460
FAX: (949) 587-1004
Director:
Christina Krasomil
Encino, CA 91436-2412
Tel: (818) 907-7895
FAX: (818) 907-7474
EXECUTIVE BOARD
(Sherman Oaks)
Virginia Keeny
(Pasadena)
Eve Chesbro
(Pasadena)
Dolores Leal
(Los Angeles)
David DeRubertis
(Woodland Hills)
Steven Pingel
(Long Beach)
Kathy Dickson
(Oakland)
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)
Toni Jaramilla
(Los Angeles)
Brad Yamauchi
(San Francisco)
Bulletin Editor
Christopher Bello
Astoria, OR 97103
Ph: (503) 338-3891
DECISIONS
(From Page 2)
rights. Faust made out a prima facie
case by presenting evidence that he
was entitled to leave under the CFRA,
he availed himself of that right, and was
terminated for taking the leave to which
he was entitled. “Portland asserts it
legitimately discharged Faust for failing to respond to ... repeated inquiries.
However, Portland’s refusal to communicate with any of Faust’s representatives, particularly his workers’ compensation attorney, undermines
Portland’s contention...”
(5) “An interference claim under the
FMLA (and thus under the CFRA) does
not involve the burden-shifting analysis
articulated by the United States Supreme Court in McDonnell Douglas...
As stated in Bachelder v. America
West Airlines, Inc. (9th Cir. 2001) 259
F.3d 1112, 1131, ‘there is no room for
a McDonnell Douglas type of pretext
analysis when evaluating an ‘interference’ claim under this statute.’ A violation of the FMLA ‘simply requires that
the employer deny the employee’s entitlement to FMLA leave.’ (Xin Liu v.
Amway Corp. (9th Cir. 2003) 347 F.3d
1125, 1135.)
(5) “Because Faust has viable claims
for violation of the CFRA, it necessarily
follows that a triable issue exists with
respect to the fourth cause of action for
wrongful termination in violation of public policy.
(6) “With respect to the claim of disability discrimination, Portland moved for
summary judgment on the grounds
that, at the time of Faust’s termination..., he did not have a disability
within the meaning of of the FEHA, it
did not know whether Faust had an
alleged disability, it did not perceive
him as a qualified individual with a
disability, and Faust was not discharged
because of an alleged disability. Further, it had a legitimate, nondiscriminatory business reason for terminating
Faust and Faust could not establish
that Portland’s reasons were false and
pretextual. These arguments are unavailing.
“Faust presented evidence that Portland was aware of his orthopedic con-
dition at the time it terminated his
employment... Dr. Andalib’s work status report ... advised Portland that Faust
was ‘unable to perform regular job duties...' [¶] Portland’s proffered ‘legitimate, nondiscriminatory reason...’ is
that Faust was insubordinate for failing
to communicate with [human resources]. We have already discussed
the so-called failure to communicate
and it is unnecessary to reiterate that
discussion here.”
For plaintiff: Horton & Lines, Horton &
DeBolt and Laura L. Horton.
For defendant: Jackson Lewis, Robert
D. Vogel and Joanie L. McGuire.
Second Dist Div Three, 5/10/07; opinion by Klein with Croskey and
Aldrich concurring; 2007 DAR 6613,
2007 WL 1365776.
ORDER THAT DENIED MOTION
TO COMPEL ARBITRATION OF
EXECUTIVE’S BREACH OF
CONTRACT CLAIMS
GIULIANO v INLAND EMPIRE PERSONNEL, INC. The Second District,
Division Four, reversed the denial of an
employer’s motion to compel arbitration of a former executive’s claim for
non-payment of a $5 million to $8 million profit-sharing bonus and a $500,000
severance payment. The court wrote:
“In this appeal, Empire seeks to enforce
the ... arbitration clauses contained in
the: (1) employment agreement that
Giuliano had signed and initialed upon
accepting the offer of employment; (2)
the employee handbook that was mentioned in the employment contract; and
(3) the employee bonus plan that
Giuliano had signed upon accepting the
offer of employment.
“The complaint alleged that the employment contract’s arbitration clause was
invalid and unenforceable under Labor
Code section 229, which provides a
judicial forum for statutory wage claims.
Empire moved to compel arbitration,
contending that Labor Code section
229 was preempted by section 2 of the
-3-
FAA... In anticipation of Giuliano’s claim
that the arbitration clause is unenforceable under Armendariz, Empire argued
that the arbitration clause was not invalid because both parties were ‘on equal
footing, with equal rights to arbitration by
a neutral arbiter in accordance with the
rules of the American Arbitration Association or Judical Arbitration and Mediation Services, both of which comply with
the Armendariz standard.’
“The trial court denied Empire’s motion
to compel arbitration on the grounds
that: (1) the arbitration clause was ‘vague
and unintelligible’ as to which parties
were bound by the agreement; (2) the
FAA did not preempt Giuliano’s wage
claim because his employment contract did not involve interstate commerce;
and (3) the arbitration clause was unconscionable and invalid under
Armendariz.
“[T]he interstate nature of Giuliano’s
employment was undisputed, notwithstanding Giuliano’s contention to the
contrary, and we therefore decide the
issue as a matter of law... Significantly,
Giuliano alleged in his complaint that
Empire was engaged in ‘business
throughout Arizona and California.’
clause contained in Giuliano’s employment agreement is not governed by the
requirements set forth in Armendariz...
We agree... [¶] We distinguish ... cases
[that involve] unwaivable statutory claims
for federally mandated overtime and minimum wage payments, whereas this case
involves a breach of contract claim... [¶]
Armendariz does not apply to this case
because it is not based on the FEHA or
a fundamental public policy that is tied
to a constitutional or statutory provision.
clause is not ambiguous and the related
entities are subject to arbitration. We
agree... [¶] On this record, the only
reasonable inference to be drawn is that
all the affiliated Empire entities are bound
by the employment contract’s arbitration clause.
DECISIONS
(From Page 3)
“In support of the order denying arbitration, Giuliano contends that the arbitration clause in the various agreements
should be stricken as a vague, unintelligible, unconscionable, and invalid contract of adhesion. We disagree.
“In finding the arbitration clause in
Lagatree [v Luce, Forward, Hamilton &
Scripps (1999) 74 CA4th 1105] was not
unconscionable, the court noted that,
‘as Gilmer and its progeny make clear,
the compulsory nature of a predispute
arbitration agreement does not render
the agreement unenforceable on grounds
of coercion or for lack of voluntariness.’
(74 Cal.App.4th at p. 1129.)
Giuliano also contends that the arbitration clause is procedurally unconscionable because it does not provide for
discovery, does not require a written
arbitration award, and does not require
the employer to pay for fees and costs
unique to arbitration. These are procedural requirements set forth in
Armendariz. As we have concluded that
Armendariz does not apply to this case,
Giuliano’s claim of procedural unconscionability fails.”
For plaintiff: Dempsey & Johnson,
Michael D. Dempsey and Arlene M.
Turinchak.
For defendants: De Corso, Daly,
Kreindler & Harris, Charles L. Kreindler
and Edward E. Alon.
Second Dist Div Four, 3/26/07; publication ordered 4/19/07; 2007 DAR
5413, 2007 WL 891315.
CITY OF SANTA BARBARA
VIOLATED LAB CODE § 132a BY
REQUIRING INDUSTRIALLYINJURED EMPLOYEES TO USE
VACATION TIME FOR MEDICAL
APPOINTMENTS
ANDERSEN v WORKERS’ COMPENSATION APPEAL BOARD. The City of
Santa Barbara violated Labor Code §
132a, it was held by the Second District, Division Six, by following a written
policy that required industrially-injured
workers to use earned vacation time
rather than sick leave to attend medical
appointments, while permitting workers
with non-industrial injuries to use sick
leave for that purpose.
Section 132a provides in pertinent part:
“It is the declared policy of this state that
there should not be discrimination
against workers who are injured in the
course and scope of their employment.”
The anti-discrimination provisions of
section 132a are not limited to protecting only its enumerated rights, such as
workers’ compensation ratings or
awards, the Second District held. “An
employer action that ‘in any manner ...
discriminat[es]’ against an industrially
injured employee to the detriment of his
or her receipt or exercise of employment rights is compensable under section 132a. [cite omitted.]”
For employee: Allan S. Ghitterman,
Russell R. Ghitterman, and Benjamin
P. Feld.
For city: Goldman, Magdalin & Krikes
and Rolla Norton, Jr.
Second Dist Div Six, 4/19/07; opinion by Coffee with Gilbert and Perren
1153010.
NINTH CIRCUIT
O’MELVENY & MYERS’
ARBITRATION AGREEMENT
CONTAINED MULTIPLE
ARMENDARIZ DEFECTS THAT
COULD NOT BE SEVERED
DAVIS v O’MELVENY & MYERS. In an
action by a paralegal asserting violations of FLSA and California Labor Code
requirements relating to overtime pay
and meal and rest periods, a Ninth
Circuit panel wrote as follows in a unanimous opinion by District Judge Samuel
P. King (D Hawaii) sitting by designation.
“Plaintiff Jacqueline Davis appeals from
the [Central District’s] order dismissing
her action and compelling arbitration
under 9 U.S.C. § 4 based upon an
arbitration agreement with her former
employer... On appeal, Davis challenges
the enforceability of the arbitration agree-4-
ment, contending that it is unconscionable under California law. The merits of
the underlying claims in her complaint
are not at issue here. Because the
arbitration agreement is unconscionable
under California law, we reverse and
remand.
“[I]n a very real sense the DRP was
‘take it or leave it.’ The DRP’s terms
took effect three months after they were
announced regardless of whether the
employee liked them or not. An
employee’s option was to leave and
work somewhere else.
“O’Melveny concedes that its employees were not given an option to ‘opt out’
and preserve a judicial forum... But,
O’Melveny argues—and the district court
agreed—that the three months of notice
nevertheless satisfies the concern of
oppression behind this [Armendariz]
factor. It relies on a ‘marketplace alternatives’ theory used in cases outside
the employment context.
“It is impossible, however, to square
such reasoning with explicit language
from Ingle v. Circuit City Stores, Inc.,
328 F.3d 1165, 1172 (9th Cir. 2003)
(Ingle I) and Ferguson [v Countrywide
Credit Industries, Inc.] 298 F3d at 784,
specifically rejecting the argument that
a ‘take it or leave it’ arbitration provision
was procedurally saved by providing
employees time to consider the
change... [¶] In short, the DRP is procedurally unconscionable.
“Davis challenges the DRP’s notice provision. It allows one year within which to
give notice from when any claim is
‘known to the employee or with reasonable effort ... should have been known to
him or her.’ Davis contends that this
notice provision is a substantively unconscionable shortened statute of limitations and that it deprives her of potential application of a ‘continuing violation’
theory.
“The challenged provision covers more
than merely ‘notice’; it also requires a
demand for mediation within a year...
Under the DRP, then, mediation is a
DECISIONS
(From Page 4)
mandatory prerequisite to arbitration.
The one-year notice provision thus functions as a statute of limitations. Because mediation precedes the arbitration, the ‘notice provision’ requires the
whole claim to be filed within a year.
One cannot, for example, give written
‘notice’ within a year, but otherwise file
a claim later under a longer statute of
limitations. In short, if the claim is not
filed within a year of when it should have
been discovered, it is lost...
“Under Ingle I, [Circuit City Stores v]
Adams [(9th Cir 2002) 279 F3d 889], and
[Circuit City Stores v] Mantor [(9th Cir
2003) 335 F3d 1101] (and the subsequent California appeals court decision
in Martinez [v Master Protection Corp.
(2d Dist 2004) 118 CA4th 707, 12 CR3d
663]), the DRP’s one-year universal
limitation period is substantively unconscionable when it forces an employee
to arbitrate employment-related statutory claims.
“Next, Davis challenges the confidentiality provision. She argues that it is
overly broad and therefore substantively
unconscionable under Ting v. AT & T,
319 F.3d 1126 (9th Cir. 2003)... [¶] Here,
the DRP’s confidentiality clause as written unconscionably favors O’Melveny.
The clause precludes even mention to
anyone ‘not directly involved in the mediation or arbitration’ of ‘the content of
the pleadings, papers, orders, hearings, trials, or awards in the arbitration’
or even ‘the existence of a controversy
and the fact that there is a mediation or
an arbitration proceeding.’ Such restrictions would prevent an employee from
contacting other employees to assist in
litigating (or arbitrating) an employee’s
case. An inability to mention even the
existence of a claim to current or former
O’Melveny employees would handicap
if not stifle an employee’s ability to
investigate and engage in discovery...
As written, the terms are too broad and
implicate Ting’s concerns.
“Davis also challenges the DRP’s nonmutual provision exempting O’Melveny
from arbitration for ‘claims by the Firm
for injunctive and/or other equitable relief for violations of the attorney-client
ANTI-PLAINTIFF CLASS ACTION BILL AB 1505 FAILS IN COMMITTEE ON MAY 8
Concerning CAOC’s efforts in defeating
AB 1505, CELA Member Tracee Lorens
(San Diego) wrote as follows in a May 8
CELA List message: “David Lowe, Steve
Pingel and I went to Sacramento a
couple of weeks ago to meet with CAOC
President Ray Boucher and their amazing lobbyists, Nancy Peverini, Nancy
Drabble, and Lee-Ann Traton to ask for
their help in killing this bill. As many of
you know, the bill would have decimated class action practice in California. Thanks to CAOC, the bill died in
committee today. The tort ‘reformers’
and Nicole Parra could not even get a
second when a motion was made to call
the vote. I want to personally thank all
who helped in this effort and to remind
everyone that even though we don’t
always hear about CAOC’s hard work,
they are warriors for us all and we
appreciate their support.” On May 8,
CAOC issued the following press release.
Consumer Attorneys of California is
pleased to announce that after successful lobbying, the class action lawsuit bill, AB 1505 by Assembly Member
Nicole Parra (D-Hanford), did not pass
the Assembly Judiciary Committee today and is effectively dead for this year.
Brad Seligman of The Impact Fund and
Caitlin Vega of the California Labor Federation, as well as other labor groups,
seniors, and CAOC President-Elect Don
Ernst, provided powerful testimony
against the bill. Assembly Member Van
Tran (R-Costa Mesa) moved the bill but
it failed to receive a second and therefore failed without a vote.
As you may also be aware, the Civil
Justice Association of California (CJAC)
has raised the threat of an initiative on
this issue. Be assured, (as in connection with the past three initiative threats
on attorney fees, construction defect/
ADA litigation, and punitive damages),
the CAOC will remain vigilant in protecting your rights. We are investigating the
extent of the threat while building our
offense.
In a press conference on April 25, Asm.
Parra claimed that AB 1505 would have
done nothing to prevent legitimate class
cases from being brought. She said that
she was only trying to prevent lawyers
from gaining large verdicts involving little
compensation to plaintiffs, and that AB
1505 was an attempt to align state law
with federal law. In fact, AB 105 was an
attempt to undermine the civil justice
-5-
system by effectively killing the ordinary citizen’s right to bring a class
action lawsuit in California, and to deprive of their day in court hundreds of
thousands of economically injured or
abused Californians.
The most glaringly anti-consumer provisions of AB 1505 would have: (1) Required each individual class member to
prove his or her claim and extent of
damages, and required trial evidence on
both the plaintiff and defense side to be
“substantially the same” for everyone—
a provision which if applied literally would
have eliminated class actions as a tool
for obtaining justice; (2) given the defendant the unprecedented right to bypass
class counsel and communicate directly with class members to make a
settlement offer; (3) stayed discovery
directed to the merits until the class
was certified, thus creating a catch-22
by prohibiting plaintiffs from collecting
the evidence necessary to prove the
viability of their claims in the certification process.
•
•
•
DECISIONS
(From Page 5)
privilege or work product doctrine or the
disclosure of other confidential information.’
Berzon; 2007 DAR 6741, 2007 WL
1394530.
“It may be that a provision allowing a law
firm immediate access to a court for a
limited purpose of seeking injunctive
relief to protect confidential attorneyclient information could constitute a
legitimate business justification because
such relief would fit into an unarbitrable
category of ‘public injunction’—a proposition of California state law which ...
has not been addressed in a published
California opinion and which we need
not decide here. Even assuming such
an injunction were not arbitrable, however, the DRP’s provisions are not so
limited... As written, then, the DRP’s
non-mutual exception allowing it a judicial remedy to protect confidential information ... is ‘one-sided and thus substantively unconscionable.’ [cite omitted.]
JAPAN FCN TREATY DID NOT
PREEMPT LAB CODE § 1102.5
WHISTLEBLOWER CLAIMS
AGAINST JAPAN AIR LINES
“Davis challenges as void against public
policy the DRP’s prohibition against
most administrative actions... [¶] Even
if the DRP does not preclude the Department of Labor or California Labor
Commissioner from instituting independent actions, the DRP precludes any
individual complaint or notification by an
employee to such agencies. By not
allowing employees to file or to initiate
such administrative charges, the DRP
is contrary to the same public policies
relied upon in Gilmer and Armendariz...
Therefore, the DRP’s prohibition of administrative claims is void.
“[T]he DRP is procedurally unconscionable and contains four substantively
unconscionable or void terms... These
provisions cannot be stricken or excised without gutting the agreement...
[¶] The arbitration agreement is unconscionable under California law. We reverse and remand for proceedings not
inconsistent with this opinion.”
For plaintiff: Peter M. Hart, Los Angeles.
For defendant: Adam P. Koh-Sweeney,
Scott H. Dunham, and Anne E. Garrett,
O’Melveny & Myers, Los Angeles.
King joined by McKeown and
VENTRESS v JAPAN AIRLINES. The
Ninth Circuit reversed judgment on the
pleadings entered by a federal district
court in Hawaii on claims under Lab
Code § 1102.5(b) brought by two United
States citizens formerly employed by a
Hawaii corporation, (HACS), to provide
flight crews to Japan Air Lines. The
complaint alleged that the plaintiffs were
harassed and had their assignments to
JAL cancelled after they filed a complaint against JAL and HACS in the
Central District of California alleging
that JAL had required a seriously ill pilot
to fly in June 2001, in violation of U.S.
and Japanese aviation laws as well as
JAL’s own operations manual. At issue
was the scope of article VIII(1) of the
Friendship, Commerce, and Navigation
Treaty between the United States and
Japan, which provides: “Nationals and
companies of either Party shall be permitted to engage, within the territories
of the other Party, accountants and
other technical experts, executive personnel, attorneys, agents and other
specialists of their choice.” The Ninth
Circuit wrote:
“[T]he district court erred by construing
article VIII(1)to confer on Japanese
employers blanket immunity from state
employment law. In the district court’s
view, JAL’s immunity was sufficiently
broad that judgment was appropriate
even though the pleadings were silent
on whether the plaintiffs were replaced
by Japanese citizens. In other words,
the district court believed that JAL has
a treaty right to ignore domestic employment law even for personnel decisions that involved only non-Japanese
citizens. Taken to its logical conclusion, such an expansive construction of
article VIII(1) would lead to absurd results, such as exempting foreign employers from collective bargaining laws...
"As the circuits that have addressed the
question have uniformly found, the main
purpose of article VIII(1) is to guarantee
the ability of each signatory’s companies the ability to staff critical managerial and technical positions overseas
with their fellow citizens. California’s
whistleblower protection laws merely
prevent JAL from retaliating against
employees for reporting and resisting
the employer’s domestic law violations;
the laws in no way conflict with JAL’s
limited treaty right to discriminate in
favor of Japanese citizens. In the absence of conflict, there can be no preemption.”
For plaintiffs: Martin Ventress, pro se;
Charles H. Brower, Shawn A. Luiz,
Honolulu.
Goodwin joined by Beezer and
Tallman; 2007 DAR 5592, 2007 WL
1192010.
ON DE NOVO REVIEW OF
DENIAL OF DISABILITY PENSION
BENEFITS, DISTRICT COURT
ABUSED DISCRETION IN
ADMITTING EVIDENCE EXTRINSIC
TO ADMINISTRATIVE RECORD
OPETA v NORTHWEST AIRLINES
PENSION PLAN FOR CONTRACT
EMPLOYEES. “Ioane John Opeta appeals the district court’s judgment that
he is not ‘totally and permanently’ disabled [by a back injury], and therefore
ineligible for a disability pension under
the Northwest Airlines Pension Plan for
Contract Employees, which is administered by Northwest Airlines and regulated by ... ERISA. We must determine
whether the district court, in conducting
a de novo review of the Plan’s denial of
benefits, abused its discretion by admitting evidence extrinsic to the administrative record. We hold that because
the circumstances did not clearly establish that the evidence was necessary to the district court’s review,
Friedrich v. Intel Corp., 181 F.3d 1105,
110-11 (9th Cir. 1999), the district court
abused its discretion by admitting the
-6-
DECISIONS
(From Page 6)
evidence. Therefore, we reverse the district court’s judgment and remand for a
grant of benefits under the Plan.
“During opening statements, over
Opeta’s objection, the district court allowed Northwest to read a textual description of a previously undisclosed
surveillance videotape of Opeta... [¶]
The videotape depicted Opeta doing
yard work for approximately two hours
and thirty minutes... [¶] [O]n crossexamination Northwest surprised Dr.
Gold [an orthopedic specialist who performed an Independent Medical Examination and made a “final and binding”
determination] by playing the videotape. Dr. Gold then testified that if he
had been provided with the videotape at
the time of his ... evaluation, he would
not have concluded that Opeta was
totally and permanently disabled.
“While de novo is the correct standard of
review in this case, the district court
abused its discretion by failing to conduct the proper analysis before admitting extrinsic evidence...[¶] In Mongeluzo
v. Baxter Travenol Long Term Disability
Benefit Plan [(9th Cir 1995) 46 F3d 938]
... we held that extrinsic evidence could
be considered only under certain limited circumstances. We cited with approval the rule ... that the district court
should exercise its discretion to consider evidence outside the administrative record ‘only when circumstances
clearly establish that additional evidence
is necessary to conduct an adequate
de novo review.’ [cite omtted.]
“Here, the district court admitted several pieces of extrinsic evidence, including the videotape ... without conducting the proper analysis... Because
we conclude that none of the extrinsic
evidence was necessary to conduct an
adequate de novo review, we hold that
the district court abused its discretion
in admitting the evidence...
“[B]ased on the plain terms of the Plan
and binding nature of Dr. Gold’s pretrial
opinion, the district court erred as a
matter of law by awarding a judgment in
Northwest’s favor. We therefore reverse
the district court’s judgment and re-
mand for an award of benefits under the
Plan consistent with this opinion.”
For plaintiff: Lisa S. Kantor, Glenn R.
Kantor, Northridge; Russel G. Petti, La
Canada.
For defendant: Thomas B. Ackland,
Jason Orlandi, Barger & Wolen LLP,
Los Angeles.
Wardlaw joined by Wallace and
McKeown; 2007 DAR 6381, 2007 WL
1309742.
REHEARING EN BANC IS
ORDERED IN CASE IN WHICH
PANEL HELD THAT UPS FAILED
TO ESTABLISH BUSINESS
NECESSITY DEFENSE TO ADA
CLAIMS BY DRIVERS WHO
FAILED TO MEET HEARING
STANDARD
BATES v UNITED PARCEL SERVICE,
INC. On April 24, the Ninth Circuit
ordered rehearing en banc in the case in
which a three-judge panel held that
UPS failed to establish a business necessity defense to ADA claims by a
class of drivers denied employment
because they were unable to meet a
Department of Transportation hearing
standard that did not apply to the category of vehicles in question. The panel
decision by Berzon, joined by B. Fletcher
and Gibson, appeared at 465 F3d 1069,
and was summarized in CELA Bulletin, Oct 06, p.1.
Ninth Circuit, 4/24/07; 2007 WL
1228781.
CAL-WARN CLAIMS BY
GROCERY WORKERS IN
CONNECTION WITH LOCKOUT
WERE NOT SUBJECT TO LMRA
§ 301 PREEMPTION
DALL v ALBERTSON’S, INC. In an
unpublished decision filed on May 14,
the Ninth Circuit reversed the Central
District’s judgment dismissing California WARN Act claims with prejudice
-7-
and its ruling that those claims were
subject to complete preemption under
LMRA § 301.
“After the expiration of a CBA,” the Ninth
Circuit explained, “a labor dispute arose
between a group of employers and their
employees, who were members of the
United Food & Commercial Workers
International Union. The employers had
previously formed a mutual aid pact
whereby all signatories would lockout
their employees in the event of a strike.
After the Union called a strike against
one of the signatory-employers, Ralph’s
Grocery Company and Albertson’s, Inc.
pursuant to the mutual pact, initiated a
lockout of their employees. Appellees
did not give their employees 60 days’
notice of the lockout.
“On October 14, 2003, the Union filed a
lawsuit against Appellees alleging that
they violated the Cal WARN Act by
failing to provide employees with 60
days’ notice of a ‘mass layoff.’ On
February 27, 2004, the Union and
Appellees simultaneously entered into
a new CBA and a Labor Dispute Settlement Agreement. This agreement required the Union to waive, release, and
dismiss all claims pertaining to the
labor dispute... The Union accordingly
dismissed the Cal-WARN claim.
“On October 12, 2004, Appellants, as
individuals of a putative class of grocery
store employees subjected to the mass
layoff by Appellees, filed their own CalWARN claims against Appellees in state
court. Appellees removed these claims
to federal court based on § 301 preemption. The district court denied Appellants’ motion to remand and granted
Appellees’ motion for dismissal pursuant to Rule 12(b)(6)... Appellants timely
appealed the ruling of preemption and
dismissal.
“Like the plaintiffs in Cramer [v Consolidated Freightways, Inc. (9th Cir 2001)
255 F3d 683], Appellants base their
claims on rights conferred by a California statute, not a CBA. The Cal-WARN
Act grants the right to 60 days’ notice of
a mass layoff regardless of whether an
DECISIONS
(From Page 7)
employee works subject to a CBA.
Because the Settlement Agreement or
any CBA in the present case did not
provide a right to 60 days’ notice of a
mass layoff there is no federal claim
under § 301 that would supplant Appellants’ state law claim.
“[A] defendant cannot, merely by injecting a federal question into an action that
asserts what is plainly a state-law claim,
transform the action into one arising
under federal law... The Settlement
Agreement in this case is only relevant
to Appellees’ asserted defenses of
waiver, release, and duty to arbitrate...
[¶] [A] § 301 issue arises only because
of Appellees’ defense, and not from the
face of the complaint. As such, the ...
district court lacked removal jurisdiction. Therefore, we REVERSE and
REMAND to the district court with instructions to remand the case to state
court and to determine if an award of
attorney’s fees for improper removal is
appropriate in this case.”
For plaintiffs: Steven J. Kaplan, Beverly
Hills; David M. DeRubertis, Woodland
Hills.
For defendants: Lawrence J. Gartner,
Kauff, McClain & McGuire LLP; David L.
Bacon, Linda S. Husar, David N.
Buffington, Thelen, Reid, Brown,
Raysman & Steiner, LLP, Los Angeles.
Ninth Circuit, 5/14/07; Judges Farris,
Gould, and Duffy (Memorandum
Opinion); 2007 WL 1423727 (unpublished).
UNPUBLISHED COURT
OF APPEAL DECISIONS
[Note: only a selection of the unpublished Court of Appeal decisions filed
during the past month are briefly summarized below.]
SUMMARY JUDGMENT IS
REVERSED ON RACE
DISCRIMINATION AND RELATED
CLAIMS
PRESTON v SASCO ELECTRIC. The
Sixth District reversed summary judg-
ment on claims of race discrimination,
retaliation, Tameny tort, and negligent
supervision, but affirmed summary judgment on a harassment claim that it held
was untimely. The Santa Clara County
Superior Court had granted summary
judgment on the grounds that the harassment claim was time-barred, the
retaliation claim was barred by the
plaintiff’s failure to exhaust administrative remedies, and the remaining claims
were not supported by evidence sufficient to withstand adjudication as a
matter of law.
“Defendants ... supplied evidence that
economic conditions, rather than racial
hostility, accounted for the lack of work
offered to plaintiff in 2002 and early
2003. Defendants also provided evidence
supporting their assertion that plaintiff
was terminated because he was thought
to have abandoned his job. Plaintiff
responded to this showing, however,
with specific evidence of [supervisor]
Kincaid’s ‘strong racial animus against
African Americans.’ He disputed
Kincaid’s estimate of the number of
calls he received about work availability. He provided a different set of employees with whom he was comparing
his assigned hours... And he presented
declarations and deposition testimony
... supporting his account of Kincaid’s
racial slurs and Kincaid’s use of the
word ‘nigger.’ [¶] Other employees testified to more general indications of
Kincaid’s racial animus.
“From this evidence ... we conclude that
plaintiff produced ‘substantial responsive evidence’ that Kincaid’s proffered
reasons for reducing and then terminating plaintiff’s work hours were false or
pretextual.
“Defendants asserted that plaintiff had
failed to exhaust his administrative remedies for any acts occurring before December 19, 2002, because he received
his right-to-sue letter from DFEH on
December 19, 2003. On appeal, defendants apply this argument to the second and third causes of action, for
harassment and retaliation.
“Defendants’ primary challenge to this
cause of action was that Kincaid did not
-8-
make any harassing comments within
the one-year period permitted by the
FEHA. Plaintiff responded that the harassment claim encompassed the reduction and termination of his hours...
[¶] Harassment, however, is distinct
from discrimination... [¶] We agree with
the trial court that the allegation based
on [the alleged racial remarks] was
untimely. [¶] Moreover, plaintiff did not
allege harassment in [his DFEH] complaint.
“Plaintiff argues that the harassing remarks were part of a continuing violation
of the FEHA... [¶] [W]e agree with the
trial court that the reduction in work
assignments and termination of employment were not sufficiently similar to
the disparaging racial remarks that occurred outside the limitations period...
The trial court correctly adjudicated this
cause of action as a matter of law.
“[However] we agree with plaintiff that
the alleged acts of retaliation—cutting
plaintiff’s hours, unjustifiably criticizing
his performance on the job, and terminating him—were sufficiently related to
the earlier discrimination as to be encompassed in the DFEH complaint.
“The claim of negligent supervision,
[though not the claims of negligent hiring and negligent training], withstands
summary adjudication. Plaintiff’s evidence suggests that Kincaid was unrestrained in his racial invective... If plaintiff can prove discrimination at trial, he
may be able to show that SASCO was
liable for failing to prevent such conduct
by adequate supervision.”
For plaintiff: S. John Ota, Minami Tamaki
LLP, San Francisco, Robert L. Rusky,
San Francisco.
For defendant: Simon Anthony Mazzola,
Quadros & Johnson LLP, San Mateo.
Sixth Dist, 5/16/07; opinion by Elia
with Rushing and Premo concurring; 2007 WL 1431862 (unpublished).
DISASTER PREPAREDNESS: WHAT WE NEED TO BE DOING NOW
by Jeffrey K. Winikow
Disasters come in all shapes and forms,
man-made and natural. The question in
California is not whether a disaster will
occur—earthquake, flood, fire, potential terrorism—but when. While we can’t
predict the specifics, we can predict
with relative certainty that within the
next five years there will be some event
that will dramatically affect the personal
and professional lives of many of our
members.
law firms have vast resources at their
disposal, we only have one another.
And if we do not begin to think about
disaster-related issues now, it may be
too late.
The purpose of this article is to initiate
a discussion into the ways that CELA
can help our members mitigate the
devastating affects of local and/or regional disasters in California. While large
Off-Site Backup for Data. A disaster
does not need to completely destroy
your office building in order to cripple
your law practice: a building may be
yellow-tagged or red-tagged for months
There are many lessons to be learned
from the aftermath of 9/11 and Katrina.
Due to space limitations, this article will
highlight only a few of the things that we
all need to be thinking about.
at a time. In planning for disaster-related contingencies, little purpose is
served by maintaining your office’s backup system at the same site as all of your
other records. Keeping back-up at home
may be helpful, though in the case of a
regional disaster like Katrina you may
be shut out of your home for as long as
you are shut out of your office.
Keeping Blackberry PINs of Staff
and Colleagues. In a disaster, communication systems will be pushed
beyond their breaking point, especially
in the first couple of days. One of the
things that helped large firms navigate
through the early days of Katrina was
(Cont'd on Page 12, DISASTER)
DECISIONS
(From Page 8)
CLASS CLAIMS BELONGED IN
COURT AND WERE NOT
SUBJECT TO NASD
ARBITRATION
CLARK v FIRST UNION SECURITIES.
The Second District, Division Three,
agreed with the Superior Court that the
plaintiff stock brokers class UCL claims
were not subject to NASD arbitration.
The court wrote:
“The [Form U-4] arbitration agreement
before us did not include an agreement
to arbitrate all claims. Rather, it specifically made inarbitrable putative class
and class action causes of action. Rule
10301(d) specifically states that claims
‘submitted as a class action shall not
be eligible for arbitration under this Code
at the Association. [¶] ... Any claim filed
by a member or members of a putative
or certified class action is also ineligible
for arbitration...’ (Rule 10301(d)(1)(2)...)
As the SEC approval order confirmed,
Rule 10301(d) was designed to put
class and putative class actions into
the forum that could handle them—the
court. As the 1992 approval order states,
the NASD Code’s arbitration requirement was never meant to apply to putative or certified class actions. ‘Enter-
taining such claims through arbitration
at the NASD would be difficult, duplicative and wasteful.’”
For plaintiffs: Knapp, Petersen & Clarke
and Stephen M. Harris.
For defendant: Reed Smith LLP, Margaret M. Grignon, Alisa M. Chevalier,
Michele J. Beilke and Zareh
Jaltorossian.
Second Dist Div Three, 5/9/07; opinion by Aldrich with Klein and Croskey
the court held, to support the conclusion that the rules had been changed
and a second exam had been conducted specifically to favor a white employee who been excluded from the first
exam, but there was insufficient evidence to support the conclusion that
the City had favored the white employee
because of his race. “All of the evidence
indicates that the decision was made
for reasons other than Carlson’s race or
the race of the individuals remaining on
the register of eligibles at the time the
decision was made,” the court concluded.
INSUFFICIENT EVIDENCE
SUPPORTED JURY VERDICTS IN
FAVOR OF THREE AFRICANAMERICAN EMPLOYEES ON
CLAIMS OF RACIALLY
DISCRIMINATORY NONPROMOTION
Sufficient evidence did, however, support the jury verdict in favor of one of the
plaintiffs on a retaliation claim, the court
held. The plaintiff had reasonably believed that the promotion procedure had
been racially discriminatory, and sufficiently proved a causal connection between his complaints and his discharge.
McMILLIAN v CITY OF LOS ANGELES. The Second District, Division
Three, reversed a judgment on a jury
verdict for three African-American city
employees on their claims of racially
discriminatory failure to promote. The
plaintiffs presented sufficient evidence,
Citing Wasti v Superior Court (2006)
140 CA4th 667, the court wrote as
follows concerning an issue relating to
the exhaustion of administrative remedies. “Plaintiff McMillian did not personally or by certified mail serve the
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DECISIONS
(From Page 9)
defendants with his retaliation DFEH
complaints. Defendants argue this constitutes a failure to exhaust... We disagree... [¶] In this case, plaintiff
McMillian sought only right-to-sue letters, not a DFEH investigation. As such,
he was not required to personally serve
defendants with his DFEH retaliation
complaints, and his failure to do so
presents no bar to his recovery.” The
case was remanded for a new trial on
damages.
For plaintiffs: David Peter Cwiklo.
For defendants: Gerald M. Sata, Deputy
City Attorney.
Second Dist Div Three, 4/24/07; opinion by Croskey with Klein and
Kitching concurring; 2007 WL
SUMMARY JUDGMENT IS
AFFIRMED ON RACE AND
GENDER DISCRIMINATION AND
HARASSMENT CLAIMS, BUT
REVERSED ON CLAIM FOR
FAILURE TO ACCOMMODATE
PREGNANCY
KOBBERVIG-HARRELL v NIKE, INC.
The Second District, Division Seven,
reversed summary judgment on a former
salesperson’s claim that Nike had failed
to accommodate the plaintiff’s pregnancy, but the court affirmed summary
judgment on race and gender discrimination and harassment claims. Concerning discrimination, the court held
that the plaintiff had failed to raise an
issue of pretext concerning Nike’s contention that the plaintiff had been discharged because of customer complaints and unethical conduct.
“In addition to her other claims of FEHA
violations,” the court wrote, “KobbervigHarrell alleged Nike ‘committed unlawful employment practice(s) ... by failing
to make all reasonable accommodations [for her pregnancy].’ Nike failed to
address that claim in its motion for
summary judgment... Nike [subsequently] argued a failure-to-accommodate claim had not been pleaded or, in
the alternative, Kobbervig-Harrell was
not disabled as a matter of law and thus
was not entitled to an accommodation.
The trial court ... apparently agreed with
one or both of these arguments. This
was error.
“To be sure, the complaint itself is
barely adequate... Yet there is little
question that the complaint put Nike on
notice of the failure-to-accommodate
claim... If Nike wished to clarify those
allegations, its obligation was to do so,
either in a demurrer challenging the
complaint’s sufficiency or in discovery
prior to making its motion for summary
judgment/summary adjudication.
“Nike’s failure to address this claim in
its moving papers is not salvaged by its
reply... Having failed to address this
claim in its moving papers, the motion
should have been denied without regard
to arguments made either in the opposition or the reply.”
For plaintiff: Gary B. Ross and Andrew
B. Morrison.
For defendant: Kirkpatrick & Lockhart,
Nicholson Graham, Paul W. Sweeney,
Jr., Christopher J. Kondon, and Myra B.
Villamor.
Second Dist Div Seven, 4/18/07; opinion by Perluss with Johnson and
Zelon concurring; 2007 WL 1140421
(unpublished).
ADMINISTRATIVE REMEDIES
WERE NOT EXHAUSTED WHERE
DFEH CHARGE FAILED TO
MENTION HARASSMENT AND
RETALIATION
BRUN v TRUCKEE-TAHOE AIRPORT
DISTRICT. The Third District affirmed
summary judgment on harassment,
retaliation, and Tameny tort claims
brought by an airport employee who had
suffered an epileptic seizure while off
duty and had returned to work after
negotiating a “mutually acceptable”
accommodation agreement, but who
had subsequently been subjected to a
series of actions by supervisors that
resulted in his termination.
“Brun’s DFEH charge never mentioned
‘harassment’ or ‘retaliation,’ the court
wrote. “Brun ... argues that we should
ignore his failure ... because the form
lacked boxes to check ‘harassment’
and ‘retaliation’ as grounds for his claim.
‘The selection of the type of discrimination alleged, i.e. the selection of which
box to check, is in reality nothing more
than the attachment of a legal conclusion to the facts alleged.’ [cite omitted.]
[T]he factual statement is the ‘crucial
element’ of the charge. [cite omitted.]
Here, the factual statement made no
mention of ‘harassment’ or ‘retaliation.’
“We also reject Brun’s claim, made for
the first time on appeal, that he exhausted his administrative remedies as
to the individual defendants by securing
right-to-sue notices as to each defendant after he filed his civil action in
superior court.
“The California Tort Claims Act ... generally exempts public entities from common law tort liability... Brun’s admitted
failure to file a tort claim for wrongful
termination in violation of public policy
barred his civil action for damages on
that cause of action.”
For plaintiff: Robert V. Cohune, Truckee;
Jeffrey K. Winikow, Los Angeles.
For defendants: Carl L. Fessenden,
Porter, Scott, Weiberg & Delahant, John
D. Adkisson, Hanson, Bridgett, Marcus,
Vlahos & Rudy, Sacramento.
Third Dist, 4/26/07; opinion by CantilSakauye with Davis and Hull concurring; 2007 WL 1219691 (unpublished).
DEFAMATION CLAIM AGAINST
CO-WORKER WAS BASED ON
PETITIONING ACTIVITY AND TRIAL
COURT THEREFORE ERRED IN
DENYING SLAPP MOTION
VALLE v AGUILAR. “Elio Antonio Valle
sued [his co-worker] Yolanda Aguilar
for defamation. Aguilar filed a special
motion pursuant to Code of Civil Procedure section 425.16, known as the anti(Cont'd on Page 11, DECISIONS)
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DECISIONS
(From Page 10)
SLAPP ... statute, to strike Valle’s
defamation claim. The trial court denied
the motion and Aguilar appeals. We
conclude that the conduct underlying
the defamation claim is protected under
the anti-SLAPP statute and that the
statute of limitations prevents Valle from
establishing a probability of prevailing
on his claim. We therefore reverse the
judgment... [¶] [T]he principal thrust of
Valle’s defamation claim is based on
[Aguilar’s] petitioning activity [in obtaining a TRO against Valle and petitioning
for an injunction prohibiting civil harassment.]”
For plaintiff: Alan B. Bayer and Heather
Elizabeth Borlase, San Francisco.
For defendant: Daniel Patrick Hoffer,
Manhattan Beach.
First Dist Div Two, 5/3/07; opinion by
Lambden with Kline and Haerle
TRIAL COURT ERRED IN
GRANTING SUMMARY JUDGMENT
ON CLAIM THAT PLAINTIFF WAS
DISCHARGED FOR SAFETY
COMPLAINTS IN VIOLATION OF
PUBLIC POLICY EXPRESSED BY
CAL-OSHA
ROMERO v LA POWER JOINT VENTURE. “Plaintiff Al Romero ... brought
the instant action seeking damages for
wrongful termination in violation of public policy. Romero alleges he was fired
from his position with defendants, the
Los Angeles Power Joint Venture et al.
in retaliation for making numerous complaints about the safety and effectiveness of a control and monitoring system for a power plant that defendants
were renovating... Romero appeals from
the dismissal of the action after the trial
court granted defendants’ motion for
summary judgment. We hold that
Romero has demonstrated numerous
triable issues of material fact precluding
summary adjudication of his cause of
action for wrongful termination against
public policy based on California’s Occupational Safety and Health Act (CalOSHA), Labor Code section 6310. Ac-
cordingly, the judgment is reversed.”
For plaintiff: A. Thomas Hunt; Jonathan
W. Biddle.
For defendant: Seyfarth Shaw, LLP,
Ann Kotlarski, Catherine A. Evans, Timothy L. Hix.
Second Dist Div Three, 5/2/07; opinion by Aldrich with Klein and Croskey
SUMMARY JUDGMENT WAS
CORRECTLY GRANTED ON
ETHNIC DISCRIMINATION AND
HARASSMENT CLAIMS BY
SENIOR FINANCIAL ANALYST OF
EGYPTIAN DESCENT
LEVSEY v CALLEGUS MUNICIPAL
WATER DISTRICT. “Appellant Salwa
Levsey appeals a summary judgment
... on her employment discrimination
action under ... FEHA. Born in Egypt
and of Egyptian ethnic descent, she
asserted causes of action for ethnic
discrimination and hostile work environment... The trial court ruled that Levsey
did not suffer an adverse employment
action and that there was no evidence of
harassment sufficiently severe and pervasive to constitute a hostile work environment. We agree and affirm.”
The Second District held that changes
in her department that reduced her duties did not materially affect the terms
and conditions of her employment. “[I]t
would be unreasonable to conclude that
those changes were likely to impair
Levsey’s job performance or prospects
for advancement,” the court wrote. Moreover, the court added, “[n]o evidence
links [a co-worker’s] ethnic hostility
with the changes implemented...”
Concerning harassment, the court
wrote: “In this case, Boyd, a receptionist, made sporadic racial remarks to
Levsey, a senior financial analyst.
Boyd’s remarks were utterances of ethnic epithets which engendered offensive feelings in Levsey, but were not
sufficient to establish a hostile environment.”
For plaintiff: Joseph M. Lovretovich, D.
Aaron Brock.
Second Dist Div Six, 5/2/07; opinion
by Coffee with Yegan and Perren
SUMMARY JUDGMENT WAS
CORRECTLY GRANTED ON
TAMENY TORT CLAIM AND
RETALIATION CLAIM UNDER LAB
CODE § 1102.5
SIDOCK v CITY OF CHULA VISTA.
The Fourth District, Division One, affirmed summary judgment on retaliation and Tameny tort claims brought by
an administrative office assistant in the
City’s police department. The court held:
(1) the Yanowitz materiality test for
assessing an “adverse employment
action” applies to claims for retaliation
under Labor Code § 1102.5; (2) the
conduct at issue here differed “in degree” from the conduct at issue in
Yanowitz: none of the conduct alleged
here—heightened scrutiny, personal
slights, and “poor office demeanor”—
suggested that the plaintiff’s job was in
jeopardy, and it wasn’t clear that the
plaintiff had been singled out for negative treatment; and (3) the plaintiff did
not allege a cognizable public policy for
purposes of her Tameny tort claim: her
reporting to the police of a technical
battery committed against her at the
workplace did not affect the public at
large.
For plaintiff: James M. Mangione,
Wingert, Grebing, Brubaker & Ryan,
San Diego.
For defendant: Phillip L. Kossy, Luce,
Forward, Hamilton & Scripps, San Diego; Office of the City Attorney, Chula
Vista.
by Aaron with Nares and McIntyre
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DISASTER
(From Page 9)
the ability to communicate with one
another through Blackberry PINs, as
opposed to going through a server or
using cell phones. Lawyers in New
Orleans kept lists of their staff members’ Blackberry PIN numbers, and this
proved to be one of the only effective
means of communication during that
disaster. Keeping lists of Blackberry
PINs at your office will do very little
good, however, if you can’t get to the
office. Again, proper planning requires
off-site access to information.
Alternative Office Space Compacts.
In New York, there is a compact among
fifty or so law firms to provide space for
firm management in the event of another
disaster that closes one or more office
buildings. There is no reason we couldn’t
do something similar. We might want to
consider developing a plan where each
CELA member could have one local and
one non-local member to call on in the
event of a disaster for temporary space,
the use of a computer, and other things
that might be necessary to keep a
practice up and running. An attorney in
Century City might want to have arrangements with two different lawyers,
for example, one in the San Fernando
Valley and one in San Francisco, to
cover a situation in which a disaster is
so significant that it shuts down the
entire city of Los Angeles for a period of
time.
Warehousing of Computers. Personally, I think that joint warehousing of
computers is too ambitious a project for
CELA to undertake, though New Orleans firms that actually warehoused
old computers were better able to resume operations than other firms that
had to scramble to find whatever supplies they could in other areas of the
country. The one thing that people
should consider, however, is holding on
to their old computers instead of just
giving them away. One option would be
for people to send their old computers to
CELA, which can store them in a remote area and make them available to
members on an as-needed basis in the
event of a disaster. (It’s easy to use a
home computer for office-related purposes, but your home may also be
affected by the disaster.)
Insurance Information and Coverage. One of the things that helped
lawyers weather the storm after Katrina
was Business Interruption Insurance.
Given that most of us earn a large
percentage of our income from contingency fees, however, we would have to
anticipate more than our share of hassles
with insurance companies. People may
want to explore whether to obtain this
type of insurance, or whether there may
be a role for a CELA group policy.
With respect to health insurance, everyone should be able to access information relating to the plan’s out of
network provisions. If you provide insurance to your staff, you should make
sure that you have an effective means of
distributing this information to staff
members in the event of a disaster that
requires people to relocate.
Basic Business-Related Disaster
Planning. It is important to at least
begin thinking about a number of other
basic types of preparation, including
having a three day supply of food and
water in the office for yourself and staff;
keeping flashlights at the office; and
having information about mail and phone
re-routing.
Basic Personal-Related Disaster
Planning. Everyone should make an
effort to organize and safeguard personal records. You may want to keep
duplicate sets in different locations.
One set can be maintained at home in
a fireproof and waterproof container that
is easily transportable in the event of an
emergency. One set can be kept in a
local safe deposit box. And another set
can be kept in a safe deposit box out of
state that will be relatively easy to
access in the event of a disaster, e.g.,
in Las Vegas or Phoenix. These records
should include, at a minimum: birth
certificate/adoption papers; marriage
license; social security cards; passports; will; powers of attorney; prior
year’s tax return; property tax statement; bank statements; investment
account information; mortgage statement; utility bills; loan payment infor-
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mation; property insurance information;
and health insurance cards. And all
three sets of records should be updated
at least once a year.
This article is intended to be only the
first step in any disaster plan, and its
primary value is to stimulate thought
rather than to provide answers. If you
believe that CELA can be of any assistance in coordinating disaster plans, or
if you have ideas to propose, please do
not hesitate to speak up. Through our
collective strength, hopefully we will be
able to weather any storm that arises.
•
•
•
CELA FILES AMICUS BRIEF IN EDWARDS v ARTHUR ANDERSON
On May 13, CELA filed an amicus brief
with the California Supreme Court in
Edwards v Arthur Anderson (2006) 142
CA4th 603, 47 CR3d 788, the case in
which the Second District rejected any
“narrow restraint” exception to the prohibition of non-compete agreements contained in Business and Professions
Code § 16600. The brief was written by
Jeff Winikow, with contributions by Barry
Wolf, Cliff Palefsky, Tim Kolesnikow,
and Jim Stoneman. The brief’s “Summary of Argument” reads as follows:
The questions raised in this case affect
legal rights and policy issues far broader
than those simply arising from Business and Professions Code Section
16600. While CELA fully concurs with
the points and authorities presented by
Mr. Edwards in his Answering Brief,
CELA submits this amicus brief to highlight the legal and practical impact that
restrictive covenants may have on workers involuntarily displaced from their
jobs.
In the wrongful termination context it is
often difficult to reconcile a common law
duty to mitigate damages with a covenant not to compete with one’s former
employer. Indeed, the duty to mitigate
only extends to one’s obligation to seek
and accept “substantially similar” employment, yet employers who promul-
gate restrictive covenants seek to subject workers to suit if they do just that,
i.e., accept employment too similar to
their former jobs. To suggest that a
“narrow restraint” only affects some
portion of the array of potential employment opportunities is to ignore that the
narrow universe of jobs affected by a
restrictive covenant is often the very
same narrow universe of jobs to which a
mitigation duty attaches. Indeed, in this
very case, Arthur Anderson has plead
“failure to mitigate,” while at the same
time it has argued for an expansive right
to prevent former employees from working for others.
Moreover, from a policy standpoint, recognizing a “narrow restraint” exception
to Business and Professions Code
Section 16600 impacts both the interests of the State and the interests of an
aging workforce. The State should be
concerned whenever there is an underutilization of resources, especially in
California’s rural counties where the
market for skilled personnel like physicians may not be as plentiful as in other
areas of the State. And individuals—
especially older workers—need to be
concerned about obtaining jobs should
they become involuntarily displaced from
their current ones. When older workers
have to compete for jobs outside of the
arena where their specialized skill and
knowledge makes them most marketable, then the so-called “narrow restraint” becomes more like an untenable straight-jacket.
Finally, in cases where a company
retaliates against an employee for not
signing a so-called standard form agreement, liability is premised upon the
conscious decision to retaliate and not
upon the company’s draftsmanship.
When an employer compels its
workforce to sign form agreements, then
the employer better make sure that its
agreements are lawful as written. This
is not a particularly onerous burden to
bear, especially when Arthur Anderson
carved out some, but not all, nonwaivable claims from its otherwise comprehensive release. Companies which
promulgate over-reaching agreements
should act at their own peril when they
exercise their considerable power over
the worker because the worker refused
to sign the over-reaching agreement.
Whether or not Arthur Anderson intended to chill the exercise of statutory
rights, such as the right to indemnification under Labor Code Section 2802, it
has done just that. In “refusal to sign”
cases, the court should construe agreements from the prospective of a reasonable worker reading it.
•
C O M I N G
E V E N T S
June 27-30, 2007
The Fairmont Hotel
San Jose
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•
•
PROFILES
DECISIONS
(From Page 14)
(From Page 11)
Among her most memorable professional moments, Pam lists winning an
$11.2 million verdict against Mary Kay,
and, on a scarier note, once delivering a
settlement check to a client who threatened her with a gun.
SLAPP MOTION WAS
CORRECTLY GRANTED TO
STRIKE DEFAMATION CLAIM
ARISING FROM SEXUAL
HARASSMENT INVESTIGATION
Pam loves her cairn terrier Ruby, and
her “adopted niece,” a high school senior whose family is from Russia and
who now works in Pam’s office—an
experience which has apparently dissuaded her, at least for the time being,
from pursuing a legal career. She nonetheless brightens up Pam’s life, and
undoubtedly Pam brightens hers.
SERRATO v CITY OF CARSON. “Plaintiff Joseph Serrato appeals from an
order granting defendants’ special motion to strike plaintiff’s second cause of
action for defamation. He contends the
granting of the motion was contrary to
the purpose of Code of Civil Procedure
section 425.16, the anti-SLAPP statute. He further contends that granting
the motion was improper, in that he
demonstrated a probability of prevailing
on the merits... We disagree and affirm
the order
•
•
•
“Plaintiff’s first cause of action, against
the City, was for constructive termination. His second cause of action, for
defamation, was against all defendants.
His third cause of action, against the
City, was for race, age and handicap
discrimination...
“Plaintiff argues (1) that the anti-SLAPP
statute only applies to causes of action
arising out of a defendant’s exercise of
the right to free speech; (2) California
has traditionally found defamatory
speech to be unprotected under the
Constitution; (3) California courts have
found statutes prohibiting knowingly
false reports to be constitutional; therefore (4) denying defendants anti-SLAPP
protection would comport with the purpose of the anti-SLAPP statute.
“Plaintiff’s argument is without merit.
The anti-SLAPP statute applies to
causes of action for defamation. [cites
omitted.] [¶] Additionally, the antiSLAPP statute applies to statements
such as those at issue here, made in
the course of an official investigation
into allegations of [sexual harassment]...
“Moreover ... plaintiff cannot establish a
probability of prevailing on the merits.
Defendants’ statements, made within
the course of an official investigation
into allegations of misconduct, were
privileged [cites omitted], and defen-
-15-
dants are immune from tort liability for
those statements.”
For plaintiff: Joel A. Spivak.
For defendants: Aleshire & Wynder,
Colin J. Tanner and Anthony R. Taylor.
Second Dist Div One, 4//2/7/07; opinion by Jackson with Mallano and
Rothschild concurring; 2007 WL
LEGISLATIVE UPDATE
ASSEMBLY PASSES CELA’S
BILL TO PROHIBIT MANDATORY
FORUM SELECTION AND
CHOICE-OF-LAW PROVISIONS
AB 1043. On May 17, the California
Assembly passed CELA’s bill which
declares unconscionable and unenforceable any agreement imposed as a condition of employment that would have
the effect of forcing an employee to
litigate outside of California, or under
another state’s laws, claims that arose
from employment in California or the
seeking of employment in California.
CELA Legislative Committee Co-Chair
David Lowe sent the following message
to the Listserv: “All Dems voted for the
bill; all Repubs voted against. Please
join me in thanking the Assembly Democrats and the bill’s author, Assembly
Member Sandre Swanson. Please also
join me in thanking CAOC and the
California Labor Federation for their crucial support and assistance. Next stop:
the Senate. Assuming all goes well
there, we will be working hard to get the
governor’s support.”
•
•
•
FAREWELL LETTER FROM OUTGOING DFEH DIRECTOR SUZY AMBROSE
The following message was received by
Eve Chesbro and forwarded to the CELA
List on May 1, 2007.
I wanted to let you know that I have
officially left DFEH as Director and,
effective today, I am the newly appointed Executive Officer of the State
Personnel Board. It has been a pleasure collaborating with you over the last
three years. Though it will never be the
right time for me to leave DFEH, I feel
that DFEH is, at least, moving in a
positive direction. Though there is still
much to do, in looking back I am amazed
that we were able to make so many
improvements in such a short time with
very limited resources. I credit not only
the extremely hard-working and dedicated DFEH staff, but also our many
partners such as you. Without getting
into our many legal victories, a few of the
more significant accomplishments include:
—Upgrades to the Communication Center equipment and training for the Communication Center staff, resulting in a
decrease in caller wait time to less than
one minute on both the English and
Spanish lines.
—Comprehensive investigator training
in all of our district offices.
—Revisions to the disability, CFRA,
pregnancy, religion, and sexual harassment chapters of the Case Analysis
Manual, which are finalized and in the
process of being reproduced and distributed to the staff.
—Development of an on-line complaintfiling and appointment-scheduling system so that complainants will have automated access 24 hours a day, 7 days
a week. This project is well into development and is projected to be operational
by October 2007.
—Establishment of a volunteer mediation program.
—Establishment of an intake center in
-16-
San Bernardino.
—Establishment of an intake center at
the EEOC offices in San Francisco.
—Opening on May 4, 2007 of an intake
center in Ventura at the Center for
Dispute Settlement.
—The addition of fifteen new positions
in July of 2006, and a current budget
proposal to add another seventeen positions in July of 2007.
I feel so fortunate to have been given the
opportunity to play a small part in this
very important cause over the last twenty
years. It’s been a privilege to work with
my colleagues at DFEH and with you
and your organization. Thank you for
your support.
•
•
•
BULLETIN
Published
Monthly
June 2007
Vol. 21, No. 6
UNITED STATES
SUPREME COURT
5-4 DECISION REJECTS
PREVAILING VIEW THAT EACH
PAYCHECK INFECTED BY PAST
DISCRIMINATION IS SEPARATE
TITLE VII VIOLATION THAT
INITIATES NEW 180-DAY
CHARGE FILING PERIOD
LEDBETTER v THE GOODYEAR TIRE
& RUBBER CO. Affirming an Eleventh
Circuit decision, (421 F3d 1169), the
Supreme Court wrote in part as follows, in a 5-4 opinion by Alito filed on
May 29, (with Stevens, Souter, and
Breyer joining Ginsburg’s dissent):
“The District Court granted summary
judgment in favor of Goodyear on several of Ledbetter’s claims, including her
Equal Pay Act claim, but allowed others, including her Title VII pay discrimination claim, to proceed to trial. In
support of this latter claim, Ledbetter
introduced evidence that during the
course of her employment several supervisors had given her poor evaluations because of her sex, that as a
result of these evaluations her pay was
not increased as much as it would have
been if she had been evaluated fairly,
and that these past pay decisions continued to affect the amount of her pay
throughout her employment... [T]he jury
found for Ledbetter and awarded her
backpay and damages.
FIRST ANNUAL CELA LOBBY DAY IS
A SMASHING SUCCESS
REPORT ON CELA’S
MAY 11 WAGE & HOUR
SEMINAR
by Steven Pearl
CELA held its Third Annual Advanced
Wage and Hour Seminar, “Getting To
and Through a Class Action Trial,” on
May 11, at the Hacienda Hotel in El
Segundo. The seminar featured many
of the leading authorities on California
wage and hour class actions.
(Cont'd on Page 3, W & H SEMINAR)
MESSAGE FROM THE
JOE POSNER AWARD
COMMITTEE
Dear CELA Members:
We thank all of you who submitted
nominations for this year’s Joe Posner
Award. Ours was a difficult task. All of
the nominees were outstanding! However, one in particular stood out as
having demonstrated all of those qualities that made Joe so special.
by Laura L. Horton
On May 23, 2007, the 34 participants
in our First Annual CELA Lobby Day
fulfilled Phil Horowitz’s dream of political activism, (and incidentally celebrated Steve Pingel’s birthday), when
we converged on Sacramento to lobby
for CELA-supported legislation. The
result was a warm reception, (well, at
least from the Democrats), and increased visibility for CELA’s power.
At the top of the agenda was SB 549,
the Bereavement Leave bill, which,
when passed, will allow an employee
to take up to four days of leave following the death of a close family member. Even the Republican legislators
were hard-pressed to offer up any real
criticism. In fact, most of the legisla-
tors and staffers we spoke to were
surprised to learn that current law provides no such protection, and we gave
them real-life examples of discharged
or disciplined workers. (Special thanks
to the following CELA members, for
their extraordinary efforts in getting this
legislation off the ground: Jean Hyams,
Alexis McKenna, Lisa Maki, Steve
Pingel, David Lowe, Curt Surls, Peter
Rukin, and Zachary Cincotta.)
We also lobbied intensively for AB
1043, the “California Law for California
Workers” bill, to make void and unenforceable any agreement imposed as a
condition of employment that would
(Cont'd on Page 5, LOBBY DAY)
It is with great pleasure that we announce that the Joe Posner Award this
year will be given to our long-time CELA
member Jeff Winikow. Jeff has devoted
himself tirelessly to raising the profile of
the plaintiffs’ bar in the eyes of the
public and the judiciary. He has brought
new levels of erudition to CELA’s appellate work. He has been a voice of
reason tempering our internal debates.
And he’s a damn smart lawyer who we
should be glad is on our side. We look
forward to honoring Jeff in San Jose.
(Please remember to add your congratulatory notes to Jeff in this year’s
Conference Journal!)
In Solidarity,
Nancy Bornn, Dolores Leal,
Cliff Palefsky, Jim Stoneman
DECISIONS
(From Page 1)
“On appeal, Goodyear contended that
Ledbetter’s pay discrimination claim
was time barred with respect to all pay
decisions made prior to September 26,
1997—that is, 180 days before the filing
of her EEOC questionnaire. And
Goodyear argued that no discriminatory act relating to Ledbetter’s pay occurred after that date.
“The Eleventh Circuit reversed, holding
that a Title VII pay discrimination claim
cannot be based on any pay decision
that occurred prior to the last pay decision that affected the employee’s pay
during the EEOC charging period. The
Court of Appeals then concluded that
there was insufficient evidence to prove
that Goodyear had acted with discriminatory intent in making the only two pay
decisions that occurred within that time
span, namely a decision made in 1997
to deny Ledbetter a raise, and a similar
decision made in 1998.
“Ledbetter ... sought review of the following question: ‘Whether and under
what circumstances a plaintiff may bring
an action under Title VII ... alleging
illegal pay discrimination when the disparate pay is received during the statutory limitations period, but is the result
of intentionally discriminatory pay decisions that occurred outside the limitations period.’
“In light of disagreement among the
Courts of Appeals as to the proper
application of the limitations period in
Title VII disparate-treatment pay cases,
compare 421 F.3d 1169 [Ledbetter below], with Forsyth v. Federation Employment & Guidance Serv., 409 F.3d
448 (C.A.D.C. 2005), we granted certiorari...
“In addressing the issue whether an
EEOC charge was filed on time, we
have stressed the need to identify with
care the specific employment practice
that is at issue. [National Railroad Passenger Corp. v.] Morgan, 536 U.S. at
110-111, 122 S.Ct. 1061. Ledbetter
points to two different employment practices as possible candidates. Primarily, she urges us to focus on the paychecks that were issued to her during
the EEOC charging period..., each of
which, she contends, was a separate
act of discrimination. Alternatively,
Ledbetter directs us to the 1998 decision denying her a raise, and she argues that this decision was ‘unlawful
because it carried forward intentionally
discriminatory disparities from prior
years.’ Both of these arguments fail
because they would require us to jettison the defining element of the legal
claim on which her Title VII recovery
was based.
“The instruction provided by [United Airlines, Inc. v.] Evans [431 US 553],
[Delaware State College v.] Ricks [449
US 250], Lorance [v. AT & T Technologies, Inc., 490 US 900], and [National
Railroad Passenger Corp. v.] Morgan,
[536 U.S. 101] is clear. The EEOC
charging period is triggered when a
discrete unlawful practice takes place.
A new violation does not occur, and a
new charging period does not commence, upon the occurrence of subsequent nondiscriminatory acts that entail adverse effects resulting from the
past discrimination.
“[Ledbetter] argues simply that
Goodyear’s conduct during the charging period gave present effect to discriminatory conduct outside of that period... But current effects alone cannot
breathe life into prior, uncharged discrimination.
“Bazemore [v Friday (1986) 478 US
385] stands for the proposition that an
employer violates Title VII and triggers a
new EEOC charging period whenever
the employer issues paychecks using
a discriminatory pay structure. But a
new Title VII violation does not occur ...
when an employer issues paychecks
pursuant to a system that is ‘facially
nondiscriminatory and neutrally applied.’
Lorance, 490 U.S., at 911. The fact that
precharging period discrimination adversely affects the calculation of a neutral factor (like seniority) that is used in
determining future pay does not mean
that each new paycheck constitutes a
new violation and restarts the EEOC
charging period.
“Ledbetter places significant weight on
-2-
CALIFORNIA
EMPLOYMENT
LAWYERS ASSOCIATION
Michelle Reinglass
Suite 170
Tel: (949) 587-0460
FAX: (949) 587-1004
Director:
Christina Krasomil
Encino, CA 91436-2412
Tel: (818) 907-7895
FAX: (818) 907-7474
EXECUTIVE BOARD
(Sherman Oaks)
Virginia Keeny
(Pasadena)
Eve Chesbro
(Pasadena)
Dolores Leal
(Los Angeles)
David DeRubertis
(Woodland Hills)
Steven Pingel
(Long Beach)
Kathy Dickson
(Oakland)
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)
Toni Jaramilla
(Los Angeles)
Brad Yamauchi
(San Francisco)
Bulletin Editor
Christopher Bello
Astoria, OR 97103
Ph: (503) 338-3891
DECISIONS
(From Page 2)
the EPA which ... prohibits paying
unequal wages for equal work because
of sex... Stating that ‘the lower courts
routinely hear [EPA] claims challenging pay disparities that first arose outside the limitations period,’ Ledbetter
suggests that we should hold that Title
VII is violated each time an employee
receives a paycheck that reflects past
discrimination.
“The simple answer to this argument is
that the EPA and Title VII are not the
same. In particular, the EPA does not
require the filing of a charge with the
EEOC or proof of intentional discrimination... Ledbetter originally asserted
an EPA claim, but that claim was
dismissed by the District court and is
not before us. If Ledbetter had pursued
her EPA claim, she would not face the
Title VII obstacles that she now confronts. [FN9: The Magistrate Judge
recommended dismissal of Ledbetter’s
EPA claim on the ground that Goodyear
had demonstrated that the pay disparity resulted from Ledbetter’s consistently weak performance... The Magistrate Judge also recommended dis-
missing the Title VII disparate-pay claim
on the same basis... Ledbetter objected to the Magistrate’s disposition of
the Title VII and EPA claims, arguing
that the Magistrate Judge had improperly resolved a disputed factual issue...
The District Court sustained this objection as to the ‘disparate pay’ claim, but
without specifically mentioning the EPA
claim... While the record is not entirely
clear, it appears that at this point
Ledbetter elected to abandon her EPA
claim...]
“Ledbetter’s policy arguments for giving
special treatment to pay claims find no
support in the statute and are inconsistent with our precedents. [FN11:
Ledbetter argues that the EEOC’s endorsement of her approach in its Compliance Manual and in administrative
adjudications merits deference. But we
have previously declined to extend Chevron deference to the Compliance
Manual..., and similarly decline to defer
to the EEOC’s adjudicatory positions.
The EEOC’s views in question are based
on its misreading of Bazemore...]”
In dissent, Ginsburg wrote in part as
follows:
“Ledbetter charged, and proved at trial,
that within the 180-day period, her pay
was substantially less than the pay of
men doing the same work. Further, she
introduced evidence sufficient to establish that discrimination against female
managers..., not performance inadequacies on her part, accounted for the pay
differential... That evidence was unavailing, the Eleventh Circuit held, and the
Court today agrees, because it was
incumbent on Ledbetter to file charges
year-by-year, each time Goodyear failed
to increase her salary commensurate
with the salaries of male peers. Any
annual pay decision not contested immediately (within 180 days), the Court
affirms, becomes grandfathered, a fait
accompli beyond the province of Title VII
ever to repair.
“The Court’s insistence on immediate
contest overlooks common characteristics of pay discrimination. Pay disparities often occur, as they did in Ledbetter’s
W & H SEMINAR
(From Page 1)
The day started with a welcome from
the seminar’s organizer, Aaron Kaufman
(Walnut Creek), and a presentation by
CELA Executive Board member Mika
Spencer (San Diego) acknowledging
and thanking Donna Ryu of the Hastings
Civil Justice Clinic. Donna was lead
counsel for the plaintiff in Murphy v
Kenneth Cole Productions, Inc., 40
C4th 1094, 56 CR3d 880 (the case
holding that payments for meal and
rest period violations are wages not
penalties). Steve Pingel (Long Beach)
spoke briefly on legislative efforts underway in Sacramento, including plans
for CELA’s first annual Lobby Day,
(see page 1).
The first panel of the day focused on
developments of the past year, and
things to watch for in the year to come.
Steve Pearl (Encino) moderated the
panel with Aashish Desai (Irvine) and
Anne Stevason of the Division of Labor
Standards Enforcement. Donna Ryu
sat in on the panel, giving further insight
on Murphy.
David Borgen (Oakland) then moderated a panel on class action trial planning, with Eve Cervantez (San Francisco), Retired Alameda County Superior Court Judge Ronald Sabraw, and
Michael Singer (San Diego). The panel
gave excellent advice on the use and
impact of trial plans at both the class
certification and trial stages. I found
particularly interesting Judge Sabraw’s
comments on his decision to deny
certification in Dunbar v. Albertson’s,
and what made that a difficult case that
could have gone either way.
Several well-known experts formed the
next panel, moderated by Steve Zieff
(San Francisco). Professor of Statistics Richard Drogin addressed strategies for taking useable statistical
samples. U.C.L.A. Professor David
Lewin, an authority on human resources
and management practices, spoke on
the use of survey evidence and observa-3-
tional studies. And Karen Jo Koonan, a
consultant with the National Jury Project
and past National President of the National Lawyers Guild, spoke on framing
wage and hour issues at trial.
The last panel of the day focused on war
stories from attorneys (and one judge)
who have actually taken a wage and
hour case through trial. Aaron Kaufmann
moderated the panel, joined by Los
Angeles County Superior Court Judge
Stephen Czuleger, Jessica Grant (San
Francisco), Matt Righetti (San Francisco), and Steve Zieff.
CELA provided an excellent book of
materials that includes a survey of postSav-On class certification decisions; an
update of recent important decisions;
sample motions, declarations, trial plans,
motions in limine, and jury instructions;
and articles written by the seminar’s
experts.
DECISIONS
(From Page 3)
case, in small increments; cause to
suspect that discrimination is at work
develops only over time. Comparative
pay information, moreover, is often hidden from the employee’s view... Small
initial discrepancies may not be seen
as meet for a federal case, particularly
when the employee, trying to succeed
in a nontraditional environment, is averse
to making waves.
“It is only when the disparity becomes
apparent and sizable ... that an employee in Ledbetter’s situation is likely
to comprehend her plight and, therefore, to complain. Her initial readiness
to give her employer the benefit of the
doubt should not preclude her from later
challenging the then current and continuing payment of a wage depressed
on account of her sex.
“Our precedent suggests, and lower
courts have overwhelmingly held, that
the unlawful practice is the current payment of salaries infected by a genderbased (or race-based) discrimination—
a practice that occurs whenever a paycheck delivers less to a woman than to
a similarly situated man. See Bazemore
v. Friday, 478 U.S. 385, 395 (1986)
(Brennan, J., joined by all other Members of the Court, concurring in part).
“In light of the significant differences
between pay disparities and discrete
employment decisions of the type identified in Morgan, the cases on which the
Court relies hold no sway.
“Congress never intended to immunize
forever discriminatory pay differentials
unchallenged within 180 days of their
adoption. This assessment gains weight
when one comprehends that even a
relatively minor pay disparity will expand exponentially over an employee’s
working life if raises are set as a percentage of prior pay.
“A clue to congressional intent can be
found in Title VII’s backpay provision.
The statute expressly provides that
backpay may be awarded for a period of
up to two years before the discrimination charge is filed... This presumption
indicates that Congress contemplated
challenges to pay discrimination com-
mencing before, but continuing into, the
180-day filing period.
“In tune with realities of wage discrimination, the Courts of Appeals have overwhelmingly judged as a present violation the payment of wages infected by
discrimination. [cites omitted.]
“This is not the first time the Court has
ordered a cramped interpretation of Title
VII, incompatible with the statute’s broad
remedial purpose... Once again, the
ball is in Congress’ court. As in 1991,
the Legislature may act to correct this
Court’s parsimonious reading of Title
VII.”
[Note: On May 30, the day after the
decision was issued, Senators Kennedy,
Harkin, Clinton, and Mikulski announced
their intention to introduce legislation to
overrule Ledbetter. And Representatives
Rosa DeLauro, George Miller, and
Eleanor Holmes Norton announced that
they will introduce companion legislation in the House. On June 12, Lilly
Ledbetter testified before the House
Education and Labor Committee, along
with Wade Henderson of the Leadership
Council for Civil Rights, and Deborah
Brake of the University of Pittsburgh
Law School.
[On June 14, NELA conducted an online seminar, (or “webinar”), entitled
“Fighting Back: Litigating Discrimination Cases After Ledbetter v. Goodyear,”
with a panel that included Alice W.
Ballard, Paul W. Mollica, Prof. Eric
Schnapper, and Richard T. Seymour.
Contact NELA for information about
accessing the webinar and obtaining
the papers prepared by the panelists.]
For plaintiff: Kevin K. Russell, Amy
Howe, Howe & Russell, Washington
DC; Pamela S. Karlan, Stanford Law
School, Supreme Court Litigation Clinic;
Robert L. Wiggins, Jr., Jon C. Goldfarb,
Wiggins, Childs, Quinn & Pantazis,
Birmingham, Alabama.
For employer: Glen D. Nager.
USSC, 5/29/07; opinion by Alito
joined by Roberts, Scalia, Kennedy,
and Thomas; dissenting opinion by
Ginsburg joined by Stevens, Souter,
and Breyer; 127 S Ct 2162.
SUPREME COURT AFFIRMS
VALIDITY OF DOL REGULATION
THAT EXEMPTS AGENCYEMPLOYED “COMPANIONSHIP
SERVICES” PROVIDERS FROM
FLSA’S MINIMUM WAGE AND
OVERTIME PROVISIONS
LONG ISLAND CARE AT HOME, LTD.
v COKE. The syllabus of a unanimous
opinion by Breyer filed on June 11 reads
in part as follows:
“The Fair Labor Standards Amendments
of 1974 exempted from the minimum
wage and maximum hours rules of the
[FLSA] persons ‘employed in domestic
service employment to provide companionship services for individuals unable to care for themselves.’ 29 U.S.C.
§ 213(a)(15). Under a Labor Department
regulation ... the exemption includes
those ‘companionship’ workers ‘employed by an ... agency other than the
family or household using their services.' 29 CFR § 552.109(a). However,
DOL’s ‘General Regulations’ also define the statutory term ‘domestic service employment’ as ‘services of a
household nature performed by an employee in or about a private home ... of
the person by whom he or she is employed.’ § 552.3 (emphasis added).
“Respondent, a ‘companionship services’ provider to the elderly and infirm,
sued petitioners, her former employer
Long Island Care and its owner, seeking
minimum and overtime wages they allegedly owed her. The parties assume
the FLSA requires the payments only if
its ‘companionship services’ exemption does not apply to workers paid by
third-party agencies such as Long Island Care. The District Court dismissed
the suit, finding the third-party regulation valid and controlling. [267 FS2d
332]. The Second Circuit found the
regulation unenforceable and set the
judgment aside. [376 F3d 118].
“Held: The third-party regulation is valid
and binding. [¶] The regulation does not
exceed the DOL’s delegated authority.
Given the DOL’s expertise, satisfactory
-4-
DECISIONS
(From Page 4)
answers to [the set of complex questions raised] may well turn upon its
thorough knowledge of the area and
ability to consult at length with affected
parties. It is therefore reasonable to
infer that Congress intended its broad
grant of definitional authority to the DOL
to include the authority to answer such
questions.”
USSC, 6/11/07; unanimous opinion
by Breyer; 2007 DAR 8508, 2007 WL
1661472.
CERTIORARI IS GRANTED IN
ADEA CASE IN WHICH TENTH
CIRCUIT HELD THAT DISTRICT
COURT SHOULD HAVE ADMITTED
TESTIMONY OF OTHER
EMPLOYEES WHO ALLEGED
DISCRIMINATION IN SAME RIF
MENDELSOHN v SPRINT/UNITED
MANAGEMENT COMPANY. On June
11, the Supreme Court announced a
grant of certiorari to review a Tenth
Circuit decision, (466 F3d 1223), that
reversed a judgment on a jury verdict for
the employer in an ADEA action on the
ground that the district court should not
have excluded the testimony of other
older employees who alleged similar
discrimination in the same RIF. Such
testimony was relevant to the question
of the employer’s discriminatory intent,
the Tenth Circuit held, and its probative
value was not outweighed by the danger
of prejudice.
The district court had erred, the court
held, in accepting the employer’s argument that under the “same supervisor
rule” of Aramburu v The Boeing Co. (10th
Cir 1997) 112 F3d 1398, any reference
to alleged discrimination by any supervisor other than the plaintiff’s was irrelevant. That rule has no application, the
court held, where, as here, the plaintiff
claimed to have been a victim of a
company-wide discriminatory RIF.
USSC, No. 06-1221; 6/11/07; 2007 WL
736557 (Mem).
U.S. SUPREME COURT WILL
REVIEW SECOND CIRCUIT
ADEA DECISION THAT HELD
THAT INTAKE QUESTIONNAIRE
AND AFFIDAVIT CONSTITUTED
EEOC “CHARGE”
HOLOWECKI v FEDERAL EXPRESS
CORP. On June 4, 2007 the United
States Supreme Court granted certiorari to review a Second Circuit decision
in an ADEA action, (440 F3d 558), that
held: (1) an Intake Questionnaire and
accompanying verified affidavit constituted an EEOC “charge” that fulfilled
ADEA’s exhaustion requirements and
LOBBY DAY
(From Page 1)
force an employee to litigate outside of
California, or under another state’s laws,
claims that arose from employment in
California. Reaction to this bill seems to
be divided along party lines. (Thanks
are due to Steve Pingel, David Lowe,
and Scot Bernstein for their efforts in
connection with AB 1043.)
CELA members also discussed and
urged support for other employee rights
bills, such as AB 537, which would
expand the CFRA’s narrow definition of
“family members” whom an employee
may take leave to care for; AB 1707,
which would provide a definitive statement of an employee’s right to inspect
and copy personnel files; AB 220, which
would apply to firefighters and firstresponders the same Procedural Bill of
Rights that currently applies to police
officers; and AB 500 and AB 1264,
which would provide attorneys the option to make certain court appearances
telephonically, and eliminate unnecessary court appearances.
After our busy day of lobbying, John
Vaclavik and The James Street Group
sponsored a cocktail reception where
participants decompressed and
swapped stories of the day. Curt Surls’
encounter with a Fox News broadcaster
clone was enlightening as to how certain legislators evaluate pending legislation—they regurgitate information from
the Chamber of Commerce web site!
Janet Koehn appreciated the sole Democrat she spoke with, since she was
otherwise cast adrift in a sea of Republicans. Overall, the participants were
encouraged at the amount of support
our bills received and the welcoming
attitude of many legislators and their
staffs.
CELA Lobby Day is an important benefit of CELA membership, and something that we should all be involved with.
We have an incredible opportunity to
present a powerful presence in Sacramento, develop and steer worker-friendly
legislation, and possibly to open the
minds of legislators who haven’t considered the effects of a proposed bill on
their constituents.
Special thanks to Christina Krasomil for
-5-
providing excellent and well-organized
notebooks for each participant, and to
Lisa Maki for taking on the Herculean
task of making the telephone calls necessary to arrange all the meetings with
legislators. Our Legislative Committee,
including its co-chairs Jean Hyams,
Steve Pingel, and David Lowe, should
receive huge accolades for laying the
groundwork, coordinating the event, and
making this amazing opportunity available to CELA members.
And thanks also, of course, to the 34
participants: George Allen, Scot
Bernstein, Robert Bowman, Zachary
Cincotta, William Crosby, Kathryn
Dickson, Gail Glick, Joan Herrington,
Phil Horowitz, Laura Horton, Jean
Hyams, Rebecca Kagin, Janet Koehn,
David Lowe, Alexis McKenna, Lisa Maki,
Enrique Martinez, Noreen Mazelis,
Moira McQuaid, Larry Organ, Steve
Pingel, Pam Pitt, Michelle Reinglass,
Peter Rukin, Jean Schaefer, Sarah
Schlehr, Mika Spencer, Jim Stoneman,
Curt Surls, Jill Telfer, Elisa Ungerman,
Richard Vaznaugh, Jack Vetter, and
Stephan Wattenberg.
DECISIONS
(From Page 5)
satisfied the EEOC’s interpreting regulations specifying a charge’s required
content; and (2) an EEOC charge filed
by a fellow employee was sufficient to
permit other employees who never filed
EEOC charges to take advantage of the
“single filing” or “piggybacking” rule.
USSC, No. 06-1322; 6/4/07; 2007 WL
989595 (Mem).
SUPREME COURT WILL DECIDE
WHETHER ERISA ALLOWS
INDIVIDUAL EMPLOYEE TO SUE
EMPLOYER OVER LOSSES IN
RETIREMENT ACCOUNT
LaRUE v DeWOLFF, BOBERG &
ASSOC., INC. On June 18, the United
States Supreme Court granted certiorari to review a Fourth Circuit decision,
(450 F3d 570), that held that a claim by
a participant in a 401(k) plan, that his
employer/administrator had failed to
follow his directions for making changes
to investments in his plan account,
resulting in losses, was not cognizable
under ERISA’s breach-of-fiduciary-duty
civil enforcement subsection. Recovery
under that subsection, the Fourth Circuit held, has to inure to the benefit of
the plan as a whole, not to a particular
person. Nor, the Fourth Circuit held,
was the claim cognizable under ERISA’s
“other appropriate equitable relief” subsection, given the absence of allegations of unjust enrichment, unlawful
possession, or self-dealing on the
employer’s part.
USSC, No. 06-856; 6/18/07; 2007 WL
1730445 (Mem).
CALIFORNIA
SUPREME COURT
SUPREME COURT WILL
ADDRESS QUESTION WHETHER
INDIVIDUAL MAY BE HELD
PERSONALLY LIABLE FOR
RETALIATION UNDER FEHA
JONES v LODGE AT TORREY PINES
PARTNERSHIP. On June 13, the Supreme Court announced that it will review the Fourth District’s February 8
decision that appeared at 147 CA4th
475, 54 CR3d 379. (See CELA Bulletin, Feb 07, p.4.) The issue to be briefed
and argued is limited to the following:
Whether an individual may be held personally liable for retaliation under FEHA.
The Fourth District, Division One, reversed JNOV that had been granted by
San Diego County Superior Court Judge
Richard E. Strauss, and reinstated a
judgment on a jury verdict for the plaintiff, a former restaurant manager, on
claims for sexual orientation harassment and retaliation. On the individual
liability issue, the Fourth District wrote:
“We agree with Walrath [v Sprinkel
(2002) 99 CA4th 1237] and Taylor [v
City of Los Angeles Dept. of Water &
Power (2006) 144 CA4th 1216] that an
individual supervisor can be held liable
for retaliation under section 12940, subdivision (h).” (The Supreme Court denied review in Taylor on February 14,
2007.)
(Another principle issue in Jones involved the meaning of “adverse employment action” for purposes of a retaliation claim: the Fourth District held that
the trial court erred in applying the
“overly restrictive” definition endorsed in
McRae I, (McRae v Department of Corrections (2005) 127 CA4th 779, 25 CR3d
911)—a definition that the Fourth District pointed out was inconsistent with
the Yanowitz “totality of the circumstances” approach.)
For plaintiff: Scott H. Toothacre.
For defendant: Theresa Osterman
Stevenson of Wilson, Petty, Kosmo &
Turner.
Cal SC, 6/13/07; 2007 DAR 8858.
SECOND DISTRICT’S “PENALTIES
NOT WAGES” DECISION IS
TRANSFERRED BACK FOR
RECONSIDERATION IN LIGHT OF
MURPHY
MILLS v SUPERIOR COURT (BED,
BATH & BEYOND). On May 23, the
-6-
Supreme Court ordered the matter transferred to the Second District with directions to vacate its decision and to reconsider in light of Murphy v Kenneth
Cole Productions (2007) 40 C4th 1094.
In its January 2006 decision in Mills, the
Second District held that payments
specified by Labor Code § 226.7 for
missed meal and rest breaks are penalties, not wages. The opinion appeared
at 38 CR3d 497, and was summarized
in CELA Bulletin, Feb 06, p.4. Review
was granted 4/12/06.
Cal SC, 5/23/07; 2007 DAR 7479, 2007
WL 1695191.
CALIFORNIA COURTS
OF APPEAL
FOURTH DISTRICT REVERSES
DEFENSE VERDICT BECAUSE
MISCONDUCT OF JUDGE JAMES
BROOKS DEPRIVED PLAINTIFFS
OF FAIR TRIAL
HALUCK v RICOH ELECTRONICS. In
a June 1 opinion by Rylaarsdam, the
Fourth District, Division Three, reversed
a judgment for the employer on the
grounds that the trial judge’s misconduct “so infected the proceedings that
the plaintiffs were deprived of a fair trial.”
The panel condemned Judge James
Brooks for, inter alia, having improper
ex parte contract with defense counsel,
using handmade signs to overrule objections, using a “red card” system to
discourage attorneys from talking, and
creating a “circus atmosphere” that included the overruling of an objection to
defense counsel’s singing of the “Twilight Zone” theme music to mock the
plaintiffs’ arguments. [In November of
2006, James Brooks, a judge in Orange
County since 1987, was publically admonished for similar behavior by the
California Commission on Judicial Performance. See www.cjp.ca.gov.] The
Fourth District wrote in part:
“Plaintiffs ... appeal from a judgment in
favor of defendants ... on their complaint
DECISIONS
(From Page 6)
for employment discrimination on the
ground the trial judge’s misconduct so
infected the proceedings they were deprived of a fair trial.
“We conclude the trial judge’s conduct
was sufficiently egregious and pervasive that a reasonable person could
doubt whether the trial was fair and
impartial and reverse on that ground. On
remand, the case shall be assigned to
a different judge. Because we reverse,
the motion for sanctions is denied. As
to defendants’ cross-appeal, the court
properly found the [Japanese Friendship, Commerce and Navigation Treaty
of 1953] did not bar the action...
“Based on the nature of this appeal, few
of the underlying facts are relevant.
Plaintiffs ... sued Ricoh and certain of
its employees for damages for statutory
and common law discriminatory employment practices, claiming they were
passed over for promotions, and Litton
ultimately wrongfully terminated, because they were Caucasian and complained about racial discrimination. After a 30-day plus trial, the jury returned
a defense verdict.”
For plaintiffs: Michelle A. Reinglass,
Marjorie G. Fuller.
For defendants: Callahan & Blaine and
Jim P. Mahacek.
Bedsworth concurring; 2007 DAR
8154, 2007 WL 1589424.
LABOR CODE § 1194
AUTHORIZES AWARD OF
ATTORNEYS’ FEES INCURRED IN
TRIAL COURT WHEN EMPLOYEE
PREVAILS IN § 98.2 “APPEAL”
FROM ADMINISTRATIVE
DECISION
EICHER v ADVANCED BUSINESS
INTEGRATORS, INC. “In a trial de novo
in the superior court after an unsuccessful claim to the Labor Commissioner,” the Third District wrote in a June
12 opinion, “Michael J. Eicher, a former
employee of Advanced Business Integrators, Inc. (ABI), obtained judgment
in his favor for unpaid overtime compensation, along with prejudgment interest
and attorney’s fees. On appeal from the
judgment, ABI asserts Eicher was an
exempt administrative employee and
was not entitled to overtime compensation. ABI also asserts the trial court’s
award was excessive and the court
erred in awarding attorney’s fees pursuant to Labor Code section 1194. We
shall conclude (1) ABI did not carry its
burden of establishing that Eicher was
an exempt employee; (2) the damage
award was excessive; and (3) the
attorney’s fee award was authorized.
We shall reverse the judgment with
directions. We shall affirm the order
awarding attorney’s fees and remand
for the trial court to determine the amount
of attorney’s fees for this appeal.
“Eicher filed a claim with the Labor
Commissioner for overtime compensation... After a hearing, the Labor Commissioner found in favor of ABI... [¶]
Eicher appealed to the superior court for
a trial de novo... The trial court entered
judgment in favor of Eicher for $56,353.
ABI filed a notice of appeal from the
judgment.
“On Eicher’s motion, the trial court
awarded him $40,000 in attorney’s fees
pursuant to section 1194, as well as
$16,503.60 in prejudgment interest (on
the overtime compensation) and $420.12
in costs. ABI filed a notice of appeal
from this post-judgment order.
“Eicher’s duties were comparable to
those of the claims representatives in
Bell [v Farmers Ins. Exchange (2001)
87 CA4th 805]... [¶] In summary, Eicher
was an employee who engaged in the
core day-to-day business of ABI. He
had no personal effect on the policy or
general business operations of ABI or
its customers. We therefore conclude
the trial court did not err in determining
that ABI failed to carry its burden of
establishing that Eicher was an exempt
administrative employee.
“For the purpose of billing customers,
ABI kept track of Eicher’s time. Eicher
was required to account for at least 40
hours per week. This included, however, paid time off (PTO). Therefore,
-7-
ABI’s billing system record of Eicher’s
hours was not necessarily the time he
worked... [¶] On appeal, ABI renews its
argument that the trial court improperly
included as hours worked the time that
Eicher was off with pay. We find merit in
this argument and will order the damages reduced accordingly... [¶] By subtracting $9,735.75 from the award..., we
arrive at the highest amount of unpaid
overtime pay ($46,617.25) supported
by the evidence and reasonable inferences drawn from the evidence. The
award, therefore, must be reduced to
that amount.
“The trial court awarded $40,000 in
attorney’s fees to Eicher pursuant to
section 1194, which allows a prevailing
employee to recover attorney’s fees in a
‘civil action’ for unpaid overtime compensation. ABI contends the trial court
was without authority to award attorney’s
fees, because section 1194 does not
apply to section 98.2 ‘appeals’ from
administrative decisions, and section
98.2 does not authorize fees in this
case. We shall conclude section 1194
authorizes an award of attorney’s fees
for fees incurred in the trial court when
an employee prevails in the trial court in
a section 98.2 ‘appeal’ from an administrative decision.”
[Note: In a June 13 message on the
CELA Listserv, Matthew Goldberg, Staff
Attorney at the Legal Aid Society-Employment Law Center, wrote concerning the Eicher decision: “A fee award—
pursuant to 1194.2 trumping 98.2—for
an employee’s affirmative appeal of a
Labor Commissioner ODA is great news.
For those of us who routinely toil in the
morass of Labor Commissioner Berman
hearings (and de novo appeals), this is
a big victory. Absolutely changes the
dynamic with respect to employee de
novo appeals.”]
For plaintiff: Guenard & Bozarth, B.
Ross Bozarth and Galen T. Shimoda.
For defendant: Downey Brand, Daniel J.
Coyle and Cassandra M. Ferrannini.
with Nicholson and Robie concurring; 2007 DAR 8675, 2007 WL
1678244.
DECISIONS
(From Page 7)
RETALIATION PLAINTIFF FAILED
TO RAISE ISSUE OF PRETEXT RE
EXPLANATION THAT SHE HAD
BEEN DISCHARGED FOR
SPENDING COMPANY TIME ON
OUTSIDE BUSINESS
LOGGINS v KAISER PERMANENTE
INTERNATIONAL. Affirming summary
judgment that had been granted by the
San Diego County Superior Court on
FEHA retaliation and Tameny tort
claims, the Fourth District, Division One,
wrote in part as follows in an opinion
filed on May 14 and certified for publication on June 7:
“Plaintiff Dianne Loggins filed this action against her former employer ...
alleging her employment was terminated in retaliation for her complaint
that her supervisor had discriminated
against her because of her race. Kaiser
contended Loggins’s employment was
terminated because Kaiser’s investigation confirmed Loggins had devoted
excessive work time and work resources
to furthering her outside personal business, in violation of Kaiser’s policies.
“Loggins, an African-American, was
employed by Kaiser for 24 years. During her tenure, she made numerous
complaints that Kaiser had subjected
her to harassment and discrimination
because of her race. These complaints
apparently had no adverse effect on her
promotions and pay increases. Her
penultimate complaint, filed with the
DFEH in January 2003, asserted she
was denied equal pay bonuses. Three
months later, with this 2003 charge
pending, Loggins received the highest
performance rating she had received in
three years, and received a 4 percent
pay increase.
“On August 8, 2003, Kaiser received an
anonymous telephone call ... concerning Loggins. The caller reported that,
since 2002, Loggins had been using
Kaiser’s office facilities, materials and
resources for work related to Loggins’s
privately owned boarding home business, the Kellogg’s Care & Group Home
(Kellogg’s)... On August 18, 2003, [Human Resources manager] Sampson
informed Loggins that, pending further
investigation, she would be placed on
administrative leave...
“Loggins claimed that on August 11,
one week before she was informed of
her suspension, she telephoned KPCC’s
hotline ... and complained that [her
supervisor] Murnane was harassing and
discriminating against her because of
her race. However, Kaiser’s business
records contain no record of her August
11 complaint...
“[Human Resources representatives]
James and Evans concluded, based on
their investigation, that Loggins had
engaged in an unacceptable use of
Kaiser resources... On November 10,
2003, they informed Loggins of her
employment termination... Murnane did
not participate in the decision...
“The trial court ... granted the motion for
summary judgment. The court ruled
that, under Fisher v. San Pedro Peninsula Hospital (1989) 214 Cal.App.3d
590, 615, the January 2003 DFEH claim
was too remote in time to support her
retaliation claims and therefore only her
August 11, 2003 complaint to the KPCC
hotline could potentially support her
claim. However, there was no record
confirming that complaint was made
and, even had she made the complaint,
the only competent evidence showed
the investigative action that led to her
employment termination began ... earlier..., thereby precluding any inference
that the adverse action was in retaliation for the alleged August 11 complaint. Finally, the court concluded that,
even ignoring these deficiencies in
Loggins’s effort to establish a prima
facie case, Kaiser’s evidence showed
its actions were based on legitimate,
nondiscriminatory considerations ... and
Loggins had not produced any evidence
of pretext...
“Although Loggins’s alleged August 11
hotline complaint is uncorroborated
...we may not decide factual issues on
summary judgment... Loggins’s averment raises a factual issue of whether
she engaged in protected conduct that
was temporally close to and preceding
the adverse employment action, which
-8-
sufficed to shift the burden to Kaiser
under the McDonnell Douglas framework, and the trial court’s contrary conclusion was erroneous.
“Loggins asserts that California Fair
Employment & Housing Com. v. Gemini
Aluminum Corp. (2004) 122 Cal.App.4th
1004, quoting dicta from Hanson v.
Lucky Stores, Inc. (1999) 74 Cal.App.
4th 215, holds an employer does not
satisfy its burden to articulate a nondiscriminatory reason for the termination
unless the employer satisfies the additional affirmative burden of showing the
procedure by which the employee was
terminated was ‘validly and fairly devised and administered.’ Loggins argues that, because there were issues of
fact whether Kaiser ‘fairly administered’
the procedure ... Kaiser did not satisfy
its burden in the second step of the
McDonnell Douglas framework. However, we disagree with Gemini’s suggestion... [T]he quoted language from
Martin, while permitting an employee to
show the employer unfairly administered its procedures as part of the
employee’s evidentiary presentation in
support of the employee’s claim of pretext, does not support the principle that
an employer has an additional burden
(as part of the second phase of the
McDonnell Douglas framework) to prove
the legitimacy of its termination procedures to negate a discrimination presumption.
“We conclude Kaiser provided sufficient
evidence showing a legitimate reason
for Loggins’s employment termination,
thereby shifting to her the obligation to
produce substantial responsive evidence
from which a trier of fact could find
Kaiser’s articulated reason untrue and
pretextual.
“We agree with McRae [v. Department
of Corrections and Rehabilitation (2006)
142 Cal.App.4th 377] that temporal proximity, although sufficient to shift the
burden to the employer ... does not,
without more, suffice also to satisfy the
secondary burden borne by the employee to show a triable issue of fact on
whether the employer’s articulated reason was untrue and pretextual.
DECISIONS
(From Page 8)
“Loggins asserts she raised a triable
issue of fact on the issue of pretext
because there was evidence other similarly situated employees who also engaged in extracurricular business activities at work did not suffer adverse
employment action... However, there
was no evidence her coworkers devoted
substantial time and resources to pursuing their own business during work,
and it was undisputed below that Kaiser
investigated her allegations about coworkers’ extracurricular business activities and found the activities were de
minimus... [¶] We conclude that ... the
trial court correctly granted Kaiser’s
motion for summary judgment.”
For plaintiff: Joel C. Golden.
For defendants: Thelen, Reid, Brown,
Raysman & Steiner, Deborah J. Broyles
and Ellen M. Papadakis.
Fourth Dist Div One, 5/14/07, certified for publication, 6/7/07; opinion
by McDonald with Huffman and Irion
1395393.
DISMISSAL OF TAMENY TORT
CLAIM AGAINST EMPLOYER
WHO TERMINATED PLAINTIFF
WHEN HE COMPLAINED TO
POLICE OF CO-WORKER’S
THREATS OF VIOLENCE
FRANKLIN v MONADNOCK COMPANY. “Plaintiff and appellant Calvin
Franklin filed a first amended complaint
... alleging a single cause of action for
wrongful termination of employment in
violation of public policy. Plaintiff alleged that a coworker in the workplace
had threatened to have plaintiff and
three other employees killed, that defendants did nothing in response to his
complaint to them about the threats,
that the coworker thereafter assaulted
him with a screwdriver, that plaintiff
reported the assault to the police, and
that plaintiff was terminated ... as a
result of his complaints to defendants
and the police. The trial court sustained
defendants’ demurrer ... without leave
to amend and entered a dismissal order.
“On appeal from the dismissal order, we
hold that plaintiff’s allegations are sufficient to state a claim for wrongful termination based on the public policies that
require employers to provide a safe and
secure workplace and encourage employees to report credible threats of
violence in the workplace. We therefore
reverse the dismissal order.
“Labor Code section 6400 et seq. and
Code of Civil Procedure section 527.8,
when read together, establish an explicit public policy requiring employers
to provide a safe and secure workplace,
including a requirement that an employer take reasonable steps to address credible threats of violence in the
workplace.
“Defendants further contend that the
policies upon which plaintiff relies are
not predicated on any duties that would
benefit the public at large... That is not
a reasonable interpretation of plaintiff’s
allegations... [P]laintiff’s conduct inured
to the benefit of the public... [¶] Plaintiff’s
allegations ... involve both the public
interest in a safe workplace at issue in
Hentzel [v Singer Co. (1982) 138 CA3d
290], and the public interest in a crimefree workplace at issue in Collier [v
Superior Court (1991) 228 CA3d 1117]...
Accordingly, the allegations ... satisfy
the public benefit requirement...”
For plaintiff: Mark Weidmann and Lee
K. Frank.
For defendants: Seyfarth Shaw LLP,
Eric M. Steinert and Michael D. Mandel.
Second Dist Div Five, 5/24/07; opinion by Mosk with Turner and Kriegler
1501711.
SECOND DISTRICT REJECTS
PREVAILING DEFENDANT’S
ENTITLEMENT TO ATTORNEYS’
FEES WHERE PRINCIPAL CLAIM
IS UNDER STATUTE WITH ONEWAY FEE-SHIFTING PROVISION
WOOD v SANTA MONICA ESCROW
COMPANY. The significance of this
June 7 opinion by the Second District in
a non-employment context was sum-9-
marized as follows in a June 10 CELA
Listserv message from Rene Barge:
“The gist of the opinion is that the
prevailing defendant was not entitled to
attorneys’ fees where the plaintiffs’ main
claim was based on alleged violations of
elder abuse statutes which provide for
one-way fee-shifting for plaintiffs only.
But further, the court also held that the
defendant was not even entitled to attorneys’ fees in connection with the plaintiffs’ tort and contract claims because
they 'arose from the same transaction.'
This could be a great case for wage and
hour claims, where the main statutory
claim has a one-way fee-shifting provision. You can pile on related tort and
contract and other claims without a fear
of the defense getting attorneys’ fees
under § 218.5, so long as the claims
arise from the underlying protected
claim, (usually for overtime or minimum
wages).”
For plaintiff: William B. Steinmeyer and
Thomas M. Roth.
For defendant: Nordman, Cormany, Hair
& Compton, and Meghan B. Clark.
Second Dist Div Six, 6/7/07; opinion
by Gilbert with Yegan and Coffee
1636442.
SECOND DISTRICT HOLDS, INTER
ALIA, THAT EQUITABLE TOLLING
IS POTENTIALLY AVAILABLE TO
PLAINTIFF WHO FILES LATE
DFEH CHARGE
McDONALD v ANTELOPE VALLEY
COMMUNITY COLLEGE DISTRICT.
“Plaintiffs, John McDonald, Sylvia
Brown, and Sallie Stryker, appeal after
the summary judgment motions of defendant ... were granted. The summary
judgment motions were granted on the
sole ground the plaintiffs’ administrative
complaints were not filed with the DFEH
within the one-year time period specified in Government Code section 12960,
subdivision (d)... We reverse the order
granting summary judgment against Mr.
McDonald and Ms. Brown. However, we
DECISIONS
(From Page 9)
affirm the order granting summary judgment as to Ms. Stryker."
As to plaintiff McDonald, the Court of
Appeal explained that a series of discriminatory acts had been alleged, culminating in an act of retaliation just prior
to his filing of the administrative charge.
Since McDonald thus alleged at least
one FEHA violation occurring less than
a year prior to the charge, summary
judgment should not have been granted.
“We need not discuss the parties’ remaining contentions as they relate to
Mr. McDonald,” the court wrote.
Concerning plaintiff Brown, the Court of
Appeal applied the doctrine of equitable
tolling, since during most of the period
between the dates of the discriminatory
actions and the filing of the FEHC
charge, she had been pursuing internal
remedies with school administrators.
After an extended discussion of the
legislative history and relevant case
law, the court rejected the defendant’s
contention that traditional equitable tolling principles do not apply to the section 12960(d) one-year statute of limitations to file an administrative complaint
with the DFEH. “[W]e conclude,” the
court wrote, “this case is materially
different from Lantzy [v Centex Homes
(2003) 31 C4th 363], and equitable tolling is potentially available to a discrimination plaintiff who files an administrative complaint more than one year after
an act of unlawful discrimination.”
With respect to plaintiff Stryker, however, summary judgment was properly
granted, the Court of Appeal held, because her allegations in the civil court
action differed substantially from those
alleged in the administrative charge.
“The second amended complaint,” the
court wrote, “bears absolutely no relationship to the claim raised in the November 15, 2002 administrative complaint of failure to promote on May 15,
2001. None of the allegations in the
second amended complaint refer to the
failure to promote on May 15, 2001.”
For plaintiffs: Gregory W. Smith; Bradley C. Gage.
For defendant: Carpenter, Rothans &
Dumont, Steven J. Rothans and Justin
Reade Sarno.
Second Dist Div Five, 6/1/07; opinion by Turner with Armstrong and
Kriegler concurring; 2007 DAR 8211,
2007 WL 1575511.
NINTH CIRCUIT
EASTERN DISTRICT APPLIED
ERRONEOUS HEIGHTENED
STANDARD IN FINDING EVIDENCE
OF PRETEXT INSUFFICIENT TO
RAISE FACT ISSUE AT SUMMARY
JUDGMENT STAGE
NOYES v KELLY SERVICES. “In this
employment discrimination case, we
address the plaintiff’s burden to raise a
triable issue of fact as to pretext under
the familiar McDonnell Douglas burdenshifting regime in the context of a less
familiar claim of ‘reverse’ religious discrimination. Lynn Noyes alleges that a
supervisory employee at her former
employer ... was a member of a small
religious group, the Fellowship of
Friends, and that he repeatedly favored
and promoted other Fellowship members. Noyes claims that she was passed
over for a promotion because she does
not adhere to the religious beliefs of the
Fellowship, and that a Fellowship member was promoted instead. She appeals
the [Eastern District’s] order granting
summary judgment ... on her Title VII
disparate treatment claim and dismissing her state law claims for lack of
subject matter jurisdiction.
“We reverse the grant of summary judgment as to Noyes’ disparate treatment
claim because the district court misapplied the applicable standard on summary judgment and because genuine
issues of material fact exist as to pretext. We also reverse the dismissal of
Noyes’ state law claims and remand
with instructions to the district court to
consider whether it may exercise diversity or supplemental jurisdiction over
those claims.
“Noyes lodged a verbal complaint about
Heinz’s discriminatory employment
practices with Kelly Services’ Human
-10-
Resources Department in May 2001.
She claimed Kelly Services did nothing
in response, and Kelly Services pointed
to no evidence in the record indicating
otherwise. Noyes then filed an administrative charge of discrimination with the
[DFEH] in August 2001.
“In December 2002, Noyes filed this
action, alleging claims for: (1) employment discrimination in violation of 42
U.S.C. § 1981a3 and 42 U.S.C. § 2000e2 (‘Title VII’), (2) employment discrimination in violation of ... Cal. Gov’t Code
§ 12940, (3) failure to promote in violation of public policy, (4) breach of employment contract, (5) breach of the
covenant of good faith and fair dealing,
and (6) intentional infliction of emotional
distress.
“The district court granted summary
judgment as to the Title VII claims, and
dismissed the state law claims for lack
of subject matter jurisdiction after declining to exercise supplemental jurisdiction under 28 U.S.C. § 1367.
“Although we have not previously outlined the precise contours of a prima
facie showing of reverse religious discrimination, the district court’s application of Godwin [v Hunt Wesson, Inc. (9th
Cir 1998) 150 F3d 1217] was appropriate. The district court concluded that
Noyes’ evidence was sufficient to make
out a prima facie case of disparate
treatment..., and Kelly Services does
not challenge that conclusion on appeal. Of course, the ‘protected class’
element is not comparable because
Noyes does not claim she was part of a
protected class... [¶] We recognize, as
did the district court, that it is appropriate to tailor the elements of a prima
facie showing according to the particular circumstances of each case...
“Kelly Services offered several pieces of
evidence in support of its selection of
Jilesen rather than Noyes... This evidence meets Kelly Services’ burden to
articulate a legitimate, nondiscriminatory reason for its employment decision...
DECISIONS
(From Page 10)
“Where the evidence of pretext is circumstantial, rather than direct, the plaintiff must present ‘specific’ and ‘substantial’ facts showing that there is a genuine issue for trial... However, that requirement is tempered by our observation that, in the context of Title VII
claims, the burden on plaintiffs to raise
a triable issue of fact as to pretext is
‘hardly an onerous one.’ Payne v. Northwest Corp., 113 F.3d 1079, 1080 (9th Cir
1997).
“The district court did not apply the
proper law governing proof of pretext,
but, rather, imposed a heavier burden
on Noyes at summary judgment. According to the district court, to show
pretext, Noyes had to ‘show both that
[Kelly Services’ proffered] reason was
false, and that discrimination was the
real reason.’ This formulation can be
traced to a statement in St. Mary’s
Honor Center v. Hicks, 509 U.S. 502
(1993), which addressed a merits determination rather than summary judgment... [C]onsidered in the proper procedural posture, St. Mary’s Honor Center clearly does not alter the burden on
summary judgment.
“We reiterate that at the summary judgment stage, a plaintiff may raise a
genuine issue of material fact as to
pretext via (1) direct evidence of the
employer’s discriminatory motive or (2)
indirect evidence that undermines the
credibility of the employer’s articulated
reasons. [cite omitted.]
“Noyes countered Kelly Services’ purported nondiscriminatory reasons ...
with specific, substantial evidence that
undermined the credibility of those reasons. Noyes’ overarching complaint is
that membership in the Fellowship permeated the promotion process... The
claim is made against the backdrop
that Heinz recognized that perceived
favoritism to Fellowship members was
an ongoing issue. Noyes pointed to
evidence that she was more qualified for
the job than Jilesen and that Heinz’s
actions deprived her of fair and full consideration for the promotion... Viewing
Noyes’ circumstantial evidence of pretext through the proper lens on summary judgment, we conclude that Noyes
raised a triable issue of fact such that
summary judgment was inappropriate.
“Once the district court concluded that
Noyes raised a triable question that the
promotion decision was not consistent
with Kelly Services’ stated reasons, the
question of whether the ‘real reason’ for
the promotion decision was unlawful
discrimination should have gone to the
jury. Instead, the district court required
Noyes to prove the ultimate issue of
unlawful discrimination—that ‘she was
passed over for the promotion specifically because she was not a member of
the Fellowship.’ In doing so, the district
court erroneously heightened the standard on summary judgment.
“The district court also downplayed
Noyes’ statistical evidence... Although
we agree that [the] statistical evidence
standing alone was insufficient to raise
a triable issue of fact, coupled with
Noyes’ other evidence, the numerical
picture buttressed Noyes’ challenge...
“After declining to exercise its discretionary supplemental jurisdiction in the
absence of any remaining federal claim,
the district court dismissed Noyes’ state
law claims for lack of subject matter
jurisdiction... However, Noyes’ complaint alleged diversity jurisdiction ... as
an alternative basis for jurisdiction over
the state law claims. Although Kelly
Services agrees that diversity jurisdiction exists, because subject matter
jurisdiction is a threshold issue, on
remand, jurisdiction must be determined
by the court, not by concession by the
parties... [¶] [T]he district court should
reconsider whether to exercise supplemental jurisdiction under [28 U.S.C.] §
1367, in light of our remand for trial on
Noyes’ Title VII disparate treatment
claim.”
For plaintiff: M. Catherine Jones, Nevada City.
For defendant: Tyler M. Paketau, Winston & Strawn, San Francisco.
McKeown joined by Hug and
Moskowitz; 2007 DAR 8287, 2007 WL
1531824.
STATE WAGE AND HOUR AND
RELATED CLAIMS FOR UNPAID
TRAVEL TIME AND OVERTIME
WERE NOT PREEMPTED BY
LMRA § 301
BURNSIDE v KIEWIT PACIFIC CORP.
“The named plaintiffs in this case (whom
we shall call Burnside...) represent approximately 270 former and current
employees of defendant Kiewit Pacific
Corporation. Burnside alleges that
Kiewit never compensated the employees for time they spent traveling from
designated meeting sites to their jobsites
and from those jobsites back to the
designated meeting sites. Kiewit,
Burnside further alleges, required them
to undertake this round trip daily; they
were not allowed to get to the jobsites
on their own. This appeal requires us to
decide a single question: Whether the
employees’ claims, brought under state
law, are preempted by section 301 of
the LMRA... We hold that they are not,
reverse the district court’s decision to
the contrary, and remand with instructions to remand to the Superior Court of
San Diego County.
“Burnside estimates that the combined
meeting and travel time added two to
two-and-one-half hours of work to each
employee’s day. Burnside also represents that each employee already
worked more than eight hours every day
and more than forty hours every week...
In total, Burnside ‘conservatively estimates’ that Kiewit owes the employees
more than $16 million in wages.
“At all times relevant to this litigation,
many of the terms and conditions of
each employee’s work for Kiewit were
governed by one of five collective bargaining agreements... [¶] Agreements
1, 4, and 5 ... make clear that the
‘Contractor’ is ‘responsible for payment
of wages’ for round-trip commutes from
‘the reporting point ... to the jobsite,’
unless the employee has reported to
that initial meeting point ‘voluntarily.’ [¶]
Agreements 2 and 3 are silent regarding
the existence of a ‘daily initial reporting
place’... and so do not address whether
-11-
DECISIONS
(From Page 11)
the employer would be responsible for
compensating his employees for any
time spent traveling between these two
points.
UNPUBLISHED
CALIFORNIA COURT OF
APPEAL DECISIONS
ted to enforce and benefit from the
agreement. [cite omitted.] After reviewing the record, we conclude Miles did
not meet his burden.
“Burnside made no mention of these
CBAs in the complaint... Instead, the
complaint set forth three claims, all
based on state law. Specifically, the
employees alleged: (1) violations of [B
& P] Code §§ 17200 et seq, on the
theory that non-payment of wages, overtime, and employment taxes and benefits gave Kiewit an unfair competitive
advantage...; (2) violations of ... Wage
Order 16-2001, and sections 200, 500,
510, and 1198 of the California Labor
Code, for unpaid regular and overtime
wages...; and (3) conversion...
[Note: The following are summaries of
only a selection of the unpublished
Court of Appeal decisions filed during
the past month.]
“‘Whether or not an arbitration agreement is operative against a person who
has not signed it involves a question of
‘substantive arbitrability’ which is to be
determined by the court.’ [cite omitted.]
[¶] Miles cites Dryer v. Los Angeles
Rams (1985) 40 Cal.3d 406 and 24 Hour
Fitness, Inc. v. Superior Court (1998)
66 Cal.App.4th 1199, for the proposition
that nonsignatory defendants are entitled to the benefit of the arbitration
clause if they were acting as agents for
the signatory defendant.
“[W]e hold that Burnside’s claims are
not preempted by section 301 and may
go forward under state law because [per
Morillion v Royal Packing Co. (2000) 22
C4th 575, and Allis-Chalmers Corp. V
Lueck (1985) 471 US 202] (1) the right
to be compensated for employer-mandated travel time is a right conferred by
state law, independent of the CBAs;
and (2) the matter at hand can be
resolved without interpreting the CBAs...
“As in Lingle [v Norge Div. Of Magic
Chef, Inc. (1988) 486 US 399], Kiewit
cannot maintain that its employees’
claims are preempted merely because
a state court eventually will have to
determine whether the travel was compulsory, even if a court would have had
to undertake the same inquiry to enforce rights contained in Agreements 1,
4, and 5...”
For plaintiffs: George F. Schaefer, San
Diego.
For defendant: Thomas R. Kaufman,
Seyfarth Shaw, Los Angeles.
Berzon joined by Pregerson and W.
Fletcher; 2007 DAR 9222, 2007 WL
1760747.
FOURTH DISTRICT HOLDS THAT
LAW FIRM PARTNER WHO
HARASSED EMPLOYEE COULD
NOT ENFORCE ARBITRATION
AGREEMENT BETWEEN
EMPLOYEE AND FIRM
ABOU-KHALIL v MILES. “Douglas
Miles, the managing partner of a law
firm, appeals from the trial court’s order
denying his motion to compel arbitration of Diana Abou-Khalil’s third through
seventh causes of action. The court
determined Abou-Khalil, the firm’s executive assistant, did not have to arbitrate her claims brought against Miles
in his individual capacity for assault,
battery, intentional infliction of emotional distress, and violations of Civil
Code sections 51.7 and 52.4. Finding
none of Miles’s contentions on appeal
have merit, we affirm the order.
“In October 2005, the firm hired AbouKhalil as an executive assistant. She
signed an ‘Employee Acknowledgment
and Agreement’ which contained an
arbitration provision... [¶] Eight months
later, Abou-Khalil filed a complaint for
damages against Miles... Abou-Khalil
also demanded arbitration of her claims
against the Firm, and its head of human
resources, Heidi Griffin, alleging the
same causes of action with the exception of the Civil Code violations. In her
arbitration demand, Abou-Khalil also
added several new claims: (1) the Firm
failed to prevent harassment (Gov. Code
§ 12940); (2) wrongful termination; and
(3) violation of Business and Professions Code section 17200.
“We first address the issue of standing.
Miles did not sign the agreement containing the arbitration provision.
Nonsignatories have the burden of demonstrating why they should be permit-12-
“We have independently reviewed the
entire complaint, and conclude the allegations certainly show Abou-Khalil’s
claims arose while she was at work.
And it is undisputed her injuries were
caused by a partner at the Firm, on a
normal work day, and during a workrelated lunch meeting. However, we
found no allegations from which it must
necessarily be inferred Miles was acting as the Firm’s agent when he purportedly assaulted, battered, and/or intentionally caused Abou-Khalil emotional
distress.
“In both Dreyer and 24 Hour, the principal affirmatively accepted the agency
relationship. This is a crucial piece of
evidence missing in this case, and the
reason those cases are distinguishable. There is no supporting declaration
from the Firm in this case. Other than
the pleadings, there is only Miles’s
declaration discussing three arbitration
agreements he believes support the
motion: (1) his agreement with the Firm
to arbitrate any dispute arising from his
employment; (2) the Firm’s employee
handbook indicating all disputes arising
from his employment must be arbitrated; and (3) the Firm’s revised handbook containing a similar arbitration
provision. He does not assert the claims
relate to actions within the scope of his
employment, or were ratified by the
principal (the Firm). There is no persuasive authority to support Miles’s claim
to be acting as an agent for the Firm
DECISIONS
(From Page 12)
regarding the events giving rise to AbouKhalil’s dispute with him personally.
“Certainly, if this case concerned a
dispute over Abou-Khalil’s salary, benefits, or wrongful termination, we would
not hesitate to hold Miles was acting as
an agent for the Firm in dealing with
such matters. However, this case involves a dispute of a much different kind:
torts arising from a sexual encounter
between two adults. We cannot conclude as a matter of law Miles was the
Firm’s agent for all purposes. There is
simply no evidence indicating that the
Firm intended its partners to sexually
assault, batter, or emotionally distress
its executive assistants.
“Miles argues Abou-Khalil is equitably
estopped from asserting he cannot enforce the arbitration agreement. He argues her claims against him and the
Firm ‘are based on the same set of
facts...’ He claims the complaint alleges all defendants acted in concert to
harm her. We are unpersuaded.
“It is not enough to simply have claims
with some facts in common. We do not
find Abou-Khalil’s claims against the
Firm and Miles to be ‘intimately founded
in and intertwined’ with the employment
agreement. Contrary to Miles’s argument, Abou-Khalil did not allege all the
defendants acted in concert to assault,
batter, or cause emotional distress.
The allegations of joint action related to
her first and second cause of action
(sexual harassment in the work environment and retaliation), which the court
determined were subject to arbitration.
“The court’s order regarding the motion
to compel arbitration is affirmed. Respondent shall recover her costs on
appeal.”
[Note: The principles under which a
nonsignatory may be bound by an agreement to arbitrate were also recently at
issue in a Second District decision filed
on May 29 in a non-employment case,
Matthau v Superior Court (William Morris Agency), 2007 DAR 7809, 2007 WL
1532347.]
For plaintiff: Finlayson, Augustini &
Williams, Michael R. Williams and
Sharyl Bilas Garza.
For defendant: Fisher & Philips, James
J. McDonald, Jr., and Christopher J.
Boman.
Fourth Dist Div Three, 6/4/07; opinion by O’Leary with Sills and
Bedsworth concurring; 2007 WL
claims like that of Hogan, which involved events that concluded months
before the agreement became effective.
The NDR provides that, ‘if necessary,
the arbitrator will determine whether
any particular claim or person is subject
to the [NDR] Program.’ Thus, while
Hogan denies that her discrimination
claim is covered by the NDR, she concedes that issue is for the arbitrator,
rather than the court, to determine.
FIRST DISTRICT REVERSES
DENIAL OF MOTION TO COMPEL
ARBITRATION OF DISABILITY
CLAIM, REJECTING
UNCONSCIONABILITY AND
ARMENDARIZ ARGUMENTS
“Hogan submits that the NDR is unconscionable insofar as it may extend to
pre-existing claims. She ... argues that
the obligation to arbitrate is not truly
bilateral as to pre-existing claims because Nordstrom has the power to decide whether to require the employee to
enter into the NDR, and thus to dictate
which pre-existing claims are arbitrated.
HOGAN v NORDSTROM, INC. “Defendant Nordstrom, Inc. appeals from an
order denying its motion to compel
arbitration of Sharon Hogan’s disability
discrimination claim under [FEHA]. The
issues are whether the parties’ arbitration agreement is unconscionable, and
whether the agreement satisfies the
requirements for arbitration of FEHA
claims. Because the arbitration agreement is not substantively unconscionable, we find no grounds to deny enforcement of the agreement, and reverse the order denying the motion to
compel arbitration.”
After missing some months of work
because of an auto accident, the plaintiff had asked to return to work with
restrictions. Nordstrom refused that request, and denied her request for accommodations. About four months after that denial, the plaintiff filed discrimination charges with the DFEH. Two
months thereafter, she was permitted to
return to work, and was required to
attend a meeting regarding Nordstrom’s
Dispute Resolution Program and to sign
an “NDR Acknowledgment Form.” According to her declaration, the plaintiff
believed that if she did not sign the
Form, her job would be in jeopardy.
“We begin with the assumption that the
NDR, which is limited to claims arising
from or connected with ‘current or future’ employment, could nonetheless
be interpreted to require arbitration of
-13-
“This argument is unpersuasive... Hogan
was not singled out ..., and there is no
likelihood that Nordstrom adopted the
NDR out of concern for her particular
case. Nor did Nordstrom make the NDR
immediately effective; it gave those like
Hogan with pre-existing claims a window of time within which to file them in
court... Thus, while there might be situations where it would be substantively
unconscionable to require arbitration of
pre-existing claims, this is not one of
them.
“The next allegedly unconscionable
aspect of the NDR stems from a provision notifying the employee that he or
she is responsible for paying ‘[a]ny
costs to produce evidence you request,
including, but not limited to, deposition
costs or discovery requests.’ ... [¶][T]he
NDR merely and permissibly requires
the employee to bear the same discovery costs he or she may incur in a court
action.
“The other allegedly unconscionable
facet of the NDR is its provision for
payment of attorneys’ fees if a court
action is instituted over a covered claim...
[¶] Hogan ... contends that the potential
fee liability ... will impermissibly chill
employee challenges to the NDR. However, it is sufficient that both sides are
DECISIONS
(From Page 13)
equally exposed to the same liability for
breach of the agreement. No authority
suggests that a neutral fee provision
can be deemed unconscionable merely
because it is of relatively greater consequence to the party with lesser financial
resources.
“For the foregoing reasons, the NDR is
not substantively unconscionable. In
view of that holding, we need not address any issues of procedural unconscionability.
“Hogan contends that the discovery
cost provision ... violates the second
and fifth of the [Armendariz] requirements, but, as we have explained, that
provision does not require employees to
pay unreasonable costs. Nor does the
discovery cost provision allow for only
‘minimal discovery’... There are no limitations on discovery under the NDR
other than those the arbitrator may
impose, and ‘AAA rules governing discovery [in employment disputes] are
fair to claimants.’ (Lagatree [v Luce,
Forward, Hamilton & Scripps] 74 CA4th
at p.1130, fn. 21.)
“Hogan argues that the NDR does not
provide for neutral arbitrators because it
limits the pool of arbitrators to members
of the AAA, which Hogan describes as
‘an arbitral forum in which Nordstrom is
a ‘repeat player.’ [E]ven where relatively
few arbitrators are available for appointment..., courts ‘are not prepared to say
without more evidence the ‘repeat player
effect’ is enough to render an arbitration
agreement unconscionable.’ (Mercuro
v. Superior Court (2002) 96 Cal.App.4th
167, 178-179.)”
For plaintiff: Gerald Andrew Clausen,
Allan Joseph Gomes, McCormac &
Associates, San Francisco.
For defendant: Mitchell F. Boomer, Jackson, Lewis, et al, San Francisco.
First Dist Div One, 6/11/07; opinion
by Marchiano with Stein and
Margulies concurring; 2007 WL
RETALIATION CLAIM ARISING
FROM COUNTY’S INVESTIGATION
OF DISCRIMINATION CLAIM
SHOULD HAVE BEEN STRICKEN
AS SLAPP SUIT
GALLANIS-POLITIS v MEDINA. “A
Los Angeles County employee sued
the County and a County official, asserting discrimination claims under
state and federal law. In her third
amended complaint, the employee also
asserted a retaliation claim, and sued
two other County supervisory employees... She alleged the two supervisors
obstructed her efforts to obtain bilingual
bonus pay by conducting a pretextual
investigation and preparing a report
falsely concluding she was not entitled
to bilingual pay. The two supervisors
filed a special motion to strike the complaint under the anti-SLAPP statute...
They contended that the retaliation claim
against them arose from protected First
Amendment activity, as the investigation was conducted and the report was
prepared in response to a request from
counsel for the County in connection
with the employee’s discovery requests
in the ongoing lawsuit. The supervisors
further asserted the employee could not
prevail on the merits of her retaliation
claim because the litigation privilege
operated as an absolute bar to her
claim. We agree with the supervisors on
both points, and reverse the order of the
trial court denying their special motion
to strike the retaliation claim.”
For plaintiff: Gregory R. Ellis and, on the
briefs, Alexander & Yong, J. Bernard
Alexander and Tracy L. Fehr.
For defendants: Thomas, Donahue,
Thomas & Hurevitz; Greines, Martin,
Stein & Richland.
Second Dist Div Eight, 5/25/07; opinion by Boland with Rubin and Flier
THIRD DISTRICT AFFIRMS
SUMMARY JUDGMENT ON
DISABILITY DISCRIMINATION
CLAIM BY UPS SUPERVISOR
OSTENSIBLY DISCHARGED FOR
“INTEGRITY VIOLATION”
-14-
KING v UNITED PARCEL SERVICE,
INC. “This case is not about whether a
long-term supervisory employee of UPS
asked or encouraged a driver to falsify a
timecard to bring it into compliance with
federal regulations limiting driving time,”
the Third District wrote in an unpublished May 23 opinion, “but whether
UPS had an honest, good faith belief
that the [supervisor] had violated its
integrity policy when it fired him. There
is no dispute that the driver did falsify his
timecard. The falsification occurred ...
about two months after plaintiff Richard
King returned to work following a fourmonth medical leave of absence for a
blood disorder. Finding no triable issues of material fact, the trial court
granted UPS’s motion for summary
adjudication of plaintiff’s causes of action for discrimination, failure to provide
reasonable accommodation, breach of
an implied contract to terminate only for
good cause, and defamation. We affirm.
“Plaintiff accuses UPS of ‘cloak-anddagger’ techniques in an undercover
conspiracy to get rid of him. But he fails
to identify the culprits... [N]one of [the
men he complains about] were involved
in the decision to terminate him, and his
dispute with them about his hours and
responsibilities preceded his disability
leave.
“[Concerning the alleged failure-to-accommodate], [w]e agree with the trial
court that plaintiff has not sustained his
burden of demonstrating a genuine issue of material fact given his failure to
get additional clarification from his doctor to specifically restrict his hours and
to communicate his limitations to his
supervisors.
“This case has regrettable consequences for plaintiff, who worked for
UPS almost 30 years and claims to
have lost all of his medical benefits
when he was close to retiring. We are
not empowered to determine whether
plaintiff deserved to be discharged for
the integrity violation UPS management
honestly believed he committed. Even
if, as plaintiff insists, he was innocent of
DECISIONS
(From Page 14)
the charges leveled against him, the law
does not condemn managerial mistakes
so long as his employer honestly believed the reasons for his termination.
Because he has failed to present substantial evidence that the decision was
anything more than a mistake by demonstrating triable issues of pretext, bad
faith, or malice, we must affirm the
summary judgment in favor of UPS.”
For plaintiff: Marjorie E. Manning, Bolling,
Walter & Gawthorp, Anthony M. Perez,
Sacramento.
For defendant: Sarah A. Jain, Paul,
Hastings, Janofsky & Walker, San Francisco.
Third Dist, 5/23/07; opinion by Raye
with Nicholson and Hull concurring;
VERDICTS AND
SETTLEMENTS
FOLLOWING COURT TRIAL,
PLAINTIFF IS AWARDED $2,000
IN ECONOMIC DAMAGES AND
$545,000 FOR EMOTIONAL
DISTRESS ON RACE
NAIDU v CALIFORNIA PUBLIC UTILITIES COMMISSION. In a Statement of
Decision filed on June 1, San Francisco
County Superior Court Judge Ronald E.
Quidachay found in favor of the plaintiff
on all four causes of action asserted:
racial discrimination, racial harassment,
retaliation, and failure to stop discrimination. The court summarized the
plaintiff’s allegations as follows:
“[P]laintiff alleges that (1) beginning
March 2004 plaintiff’s CPUC supervisor
Moshen Kazemzadeh [of Iranian origin
and Muslim faith] harassed and discriminated against him because of his
national origin [Indian] and/or religion
[Hindu] creating a hostile work environment; (2) plaintiff complained about the
supervisor’s conduct to the CPUC’s
EEO officer who found his hostile work
environment allegations to be true; (3)
the CPUC supervisor did not heed the
CPUC’s EEO officer’s recommenda-
tion and the supervisor continued to
harass and discriminate and retaliate
against him, and the CPUC took no
action to stop the continuing discrimination and harassment; (4) from
plaintiff’s filing of his internal CPUC
complaints of March 2004 and July
2004 and his April 12, 2005, June 15,
2005, and August 30, 2005, discrimination complaints with the California
EEOC, his supervisor’s harassment and
discriminatory acts increased; and (5)
as a result of exercising his protected
rights of filing the internal and external
harassment and discrimination
complaint(s) against the supervisor(s)/
CPUC, he was retaliated against through
their ‘progressive’ disciplinary process
that resulted in negative evaluations
and ultimately an adverse action pay
reduction against plaintiff.”
Concerning damages, Judge Quidachay
wrote: “The parties have stipulated that
Mr. Naidu’s economic damages amount
to $1,872 for reduced pay and $312 for
docked pay, not including pre-judgment
interest. Pre-judgment interest can be
addressed in plaintiff’s post-trial motion
for equitable relief if the parties cannot
resolve the issue. The Court awards
Mr.Naidu $2,184 for economic damages.
“Based on the totality of the evidence
including Dr. Carlos Anderson’s and
Mr. Naidu’s testimony, the Court finds
Mr. Kazemadeh’s and CPUC’s severe
and pervasive unlawful conduct and
actions from March 2004 to present and
continuing caused Mr. Naidu to suffer
emotional distress. The Court awards
Mr. Naidu $545,000 as damages for his
emotional distress... Mr. Naidu is entitled to recover attorney’s fees and
costs of suit.”
For plaintiff: Richard M. Rogers, Mayo
& Rogers, San Francisco.
San Francisco County Superior
Court, No. CGC-05-444782; 6/1/07;
Judge Ronald E. Quidachay; Statement of Decision provided by counsel.
LOS ANGELES JURY AWARDS
$750,000 ON DEFAMATION
CLAIM, WHILE RETURNING
DEFENSE VERDICT ON CLAIM
FOR WRONGFUL TERMINATION
REGALIA v THE NETHERCUTT COLLECTION. On May 16, a jury in Los
Angeles County Superior Court (Central) returned a plaintiff’s verdict and
awarded $750,000 on a defamation
claim (poll: 10-2), while voting 12-0 for
the defense on a claim for wrongful
termination. The defense had refused to
make any settlement offer. The allegations and evidence were summarized
as follows by plaintiff’s counsel:
“Michael Regalia began his career at
age 23 as a painter for J.B. Nethercutt,
Sr., a collector of antique and classic
automobiles. At the time of his termination in 2005, he was 52 years old and
had risen to the position of president of
the Nethercutt Collection, the not-forprofit museum and restoration facility
founded by the senior Nethercutt. Following the death of the senior Nethercutt
in late 2004, the Collection fired Regalia
without cause because he objected to
the misuse of charitable funds for the
private benefit of Jack B. Nethercutt II
and his family, and because he was
viewed as unwilling to cooperate in a
scheme to use the Collection to evade
state and federal taxes.
“The lawsuit included a common law
claim for wrongful termination in violation of three public policies: (1) the
public policy requiring that non-profit
charitable and educational corporations
use their funds only for the benefit of the
public; (2) the public policy requiring the
payment of taxes; and (3) the public
policy prohibiting employers from retaliating against employees for refusing
to participate in an activity that would
result in the violation of a state or federal
statute, rule, or regulation. A claim was
also asserted against Jack B. Nethercutt
individually for tortious interference with
contract and with advantageous business relations and opportunities. And
the successful slander claim was as(Cont'd on Page 16, DECISIONS)
-15-
DECISIONS
(From Page 15)
serted against both named defendants
for falsely telling people that Regalia
had been fired for demanding a finder’s
fee to which he was not entitled, and
because he had a violent temper.”
For plaintiff: Marvin Krakow.
For defendants: Robert Baker.
Los Angeles County Superior Court
(Central), No. BC348782; 5/16/07;
Judge Susan Bryant-Deason; information provided by counsel.
LEGISLATIVE UPDATE
[Note: See www.leginfo.ca.gov for information about the provisions and status
of bills pending in the California legislature. For information on bills pending in
the United States Congress, see the
Library of Congress’s website,
www.thomas.loc.gov.]
SB 549. On June 6, CELA’s Bereavement Leave bill passed the California
Senate by a vote of 23-13. It was sent to
the Assembly Labor & Employment
Committee on June 11, with a hearing
scheduled for June 20.
SB 622. A bill, introduced by Alex
Padilla (D-LA), to make it unlawful to
willfully misclassify workers as independent contractors and to establish
civil penalties for such willful
misclassification. The bill passed the
Senate on June 4 and was sent to the
Assembly Labor & Employment and
Judiciary Committees.
SB 836. A bill, introduced by Sheila
Kuehl (D-LA), to add familial status to
the list of characteristics that are prohibited bases of discrimination under
FEHA’s employment provisions, and to
define “familial status” to include “being
an individual who is or will be caring for
or supporting a family member.” The bill
passed the Senate on May 31 and was
sent to the Assembly Labor & Employment and Judiciary Committees.
AB 435. A bill, introduced by Julia
Brownley (D-LA), to extend the statute
of limitations for a civil action alleging
sex-based wage discrimination from two
years to four years where there is no
willful misconduct, and from three years
to five years in cases involving willfulness, and to extend the time period for
which employers must maintain wage
and job classification records from two
years to five years. The bill passed the
Assembly on June 7 and was sent to
the Senate Committee on RLS for assignment.
appears to outline different ways to
prove sex, pregnancy, and disability
discrimination based on stereotyping
evidence of workers who have caregiving
responsibilities. Indeed, the guidance
incorporates some of the theories presented at NELA’s 2006 seminar ‘Beyond Stereotypes: Discovering and Proving Hidden Bias in Employment Cases.’”
•
AB 1043. CELA’s bill to prohibit mandatory forum selection and choice-of-law
provisions as conditions of employment
passed the Assembly on May 17, and
was referred to the Senate Judiciary
Committee on May 23, with a hearing
scheduled for June 19.
H.R. 1540. As noted in the May 31
edition of NELA’s Washington Report
On The Hill, this year’s version of the
Civil Rights Tax Relief Act has added
fourteen new co-sponsors since its introduction in March. (The bill was referred to the House Ways and Means
Committee on March 15.) See
www.nela.org for details.
S. 1345 and H.R. 2232. On May 9,
Senators Daniel Akaka (D-HW) and
Susan Collins (R-ME), and Representatives Henry Waxman (D-CA) and Tom
Davis (R-VA) introduced identical companion bills, The Clarification of Federal
Employment Protections Act, to make
clear that federal employees are protected against discrimination on the
basis of sexual orientation. The bills
would add sexual orientation as a prohibited basis for action under 5 USC §
2302(b)(1). It would also specifically
“repudiate any assertion that Federal
employees are not protected from discrimination on the basis of sexual orientation,” referring to the much-criticized
interpretation of the law by Special Counsel Scott Bloch.
EEOC ENFORCEMENT GUIDANCE.
On May 23, the EEOC issued new
“Enforcement Guidance: Unlawful Disparate Treatment of Workers with
Caregiving Responsibilities,” No.
915.002. (See www.eeoc.gov/policy/
guidance.) According to the May 31
edition of NELA’s Washington Report
On The Hill, “the EEOC’s guidance
-16-
•
•
PLANNING FOR
CELA’S 20TH ANNUAL
CONFERENCE
CELA’s 20th Annual Conference is about
three months away—September 2729, 2007. We have reserved a limited
block of rooms at the Conference site,
the Fairmont Hotel in San Jose. If you
plan to stay there, you should contact
them no later than September 6, at
(800) 346-5550, or www.fairmont.com.
CELA’s group rate is $165 for a single/
double, or $225 for a one-bedroom suite.
Be sure to mention that you are attending the CELA conference—the promotional code is GRCAL1.
Remember that on Thursday, September 27—the day before the Conference
proper—CELA will present a full-day
seminar, (from 10am to 5:30pm), entitled Intake Through Trial of a Disability Discrimination Case.
On both Friday the 27th and Saturday
the 28th, registration and breakfast will
run from 8am to 9am, with general
sessions beginning at 9am. Friday’s
reception and auction will take place
from 5pm to 8pm, and the final session
on Saturday will end at 3pm.
•
•
•
BULLETIN
Published
Monthly
CALIFORNIA
SUPREME COURT
DECISION THAT HELD THAT
STATE EMPLOYEE WAS
ESTOPPED FROM FILING CIVIL
SUIT WHERE SHE HAD FAILED
TO REQUEST HEARING AFTER
ADVERSE FINDINGS BY SPB
STATE BOARD OF CHIROPRACTIC
EXAMINERS v SUPERIOR COURT
(ARBUCKLE). On June 27, the California Supreme Court announced that it
will review the Third District’s February
28 decision that held that a state
employee was collaterally estopped
from bringing a civil tort action where
she had not requested a hearing after
receiving an adverse “notice of findings” from the State Personnel Board.
The underlying case involves allegations that the State Board of
Chiropractice Examiners took adverse
employment actions against Arbuckle
in retaliation for her whistleblowing activities. The Third District’s opinion appeared at 148 CA4th 142, 55 CR3d
Bulletin, March 07, p.1.
For real party: Gaspar Garcia, Sacramento.
Cal SC, 6/27/07; 2007 DAR 10087,
2007 WL 1988538.
AFFIRMING SIXTH DISTRICT,
SUPREME COURT HOLDS THAT
EMPLOYER’S MALICIOUS
PROSECUTION CLAIM AGAINST
FORMER EMPLOYEE’S
ATTORNEYS WAS NOT BARRED
BY POST-JUDGMENT
SETTLEMENT
SIEBEL v MITTLESTEADT. Agreeing
with the Sixth District’s May 2004 decision, (118 CA4th 406, 12 CR3d 906;
summarized in CELA Bulletin, May
04, p.5), the California Supreme Court
held that a malicious prosecution claim
by an employer against the attorneys
who had represented a former employee
in a wrongful termination action was not
precluded by the fact that, after a judgment in favor of the employer, the parties had reached a settlement that
compromised the sums awarded. The
Supreme Court agreed that the present
situation was distinguishable from that
in Ferreira v Gray, Cary, Ware &
Friedenrich (2001) 87 CA4th 409. A
post-judgment settlement constitutes
a “favorable termination,” the Supreme
Court held, when the malicious prosecution plaintiff received a favorable
judgment in the underlying action and
settled without giving up any portion of
the judgment in his or her favor.
For employer: Blecher & Collins;
Greines, Martin, Stein & Richland.
For employee’s attorneys: Tony J.
Tanke; Gary L. Simms; Russell S.
Roeca; Daniel W. Hager; Murphy,
Pearson, Bradley & Feeney.
by Corrigan; 2007 DAR 10802, 2007
WL 2027804.
July 2007
Vol. 21, No. 7
JOHN C. McCARTHY
1923 - 2007
by James Stoneman
It is with great sadness that I commemorate the passing, at age 83, of a
truly great lawyer and CELA co-founder,
John C. McCarthy. John passed away
peacefully at his home, among family,
the last week of June, after a very
productive life and a courageous battle
with cancer. I had the privilege of practicing with John for twelve exciting years.
I realize that many current CELA members don’t remember John, who went
into semi-retirement around 1996. At
that time our organization had less than
100 members, and we now have over
700, most of whom have joined in the
last five years. So I’ll try to share my
thoughts and feelings about this inspirational teacher, author, mentor, pioneer, and enormously effective lawyer.
John absolutely loved CELA, and it is
important to recognize that many of our
members’ recent accomplishments and
successes have been achieved on the
shoulders of people like John. Those of
(Cont'd on Page 10, JOHN MCCARTHY)
AUTHORS SOUGHT FOR SPECIAL ISSUES OF CELA
BULLETIN TO BE DISTRIBUTED TO JUDGES
The CELA Executive Board has approved a plan to publish two special
issues of the CELA Bulletin for distribution to California Superior Court Judges.
Each issue will feature five articles, of
about 2,000 words each, by CELA
members on topics of importance to
employment law practitioners. Please
submit proposed article topics to Wilmer
Harris by September 1, 2007,
([email protected]). We’ll
then need to receive the finished articles on the selected topics by November 1, 2007.
•
•
•
DECISIONS
(From Page 1)
CALIFORNIA COURTS
OF APPEAL
UNLIKE UNDER UCL,
REPRESENTATIVE CLAIMS
UNDER PAGA NEED NOT BE
BROUGHT AS CLASS ACTIONS
ARIAS v SUPERIOR COURT
(ANGELO DAIRY). In an opinion filed on
July 24, the Third District issued a
peremptory writ of mandate directing
the San Joaquin County Superior Court
to vacate its order striking wage and
hour causes of action brought pursuant
to the PAGA by a former dairy employee who sought damages and injunctive relief in his representative capacity for the interest of other current
and former employees. The court
reached a different conclusion, however, with respect to the plaintiff’s UCL
claims. “At issue in this appeal,” the
Third District wrote, “is whether an individual bringing an action on behalf of
himself and others under the Unfair
Competition Law (UCL) (Bus. & Prof.
Code, § 17200 et seq.) and the Labor
Code Private Attorneys General Act
(PAGA) (Lab. Code, § 2698 et seq.)
must bring his representative claims as
a class action.
“We shall conclude that the UCL requires that a representative claim be
brought as a class action because the
UCL requires compliance with the class
action provisions of Code of Civil Procedure section 382. (Bus. & Prof. Code, §
17203.) We shall further conclude that
the PAGA expressly allows a person to
prosecute a representative claim without requiring that it be brought as a
class action.
“[Concerning UCL claims,] under the
prior law [pre-Proposition 64] ... a private plaintiff was authorized ... to bring
a representative action ‘not certified as
a class action...’ (Kraus v. Trinity Management Services, Inc. (2000) 23
Cal.4th 116, 126, fn.10.) [¶] Arias argues that the plain language of Proposition 64 is clear and unambiguous, and
that it contains no requirement that a
representative suit be brought as a class
action. We shall conclude that although
Proposition 64 does not on its face
require a representative claim to be pled
as a class action, it requires that the
claim comply with section 382, which is
commonly understood to authorize
class actions. The requirement that a
representative claim comply with section 382 makes plain that a representative UCL claim must be pursued as a
class action. To the extent that Proposition 64 presents any ambiguity, we
resolve it by the indicia of the voters’
intent. That intent, as set forth in the
official ballot pamphlet, was that representative claims under the UCL be
brought as class actions.
“The PAGA was adopted to empower
aggrieved employees to act as private
attorneys’ general and to authorize them
to seek civil penalties for Labor Code
violations that previously could be assessed only by state agencies...
-2-
CALIFORNIA
EMPLOYMENT
LAWYERS ASSOCIATION
Michelle Reinglass
Suite 170
Tel: (949) 587-0460
FAX: (949) 587-1004
Director:
Christina Krasomil
Encino, CA 91436-2412
Tel: (818) 907-7895
FAX: (818) 907-7474
EXECUTIVE BOARD
(Sherman Oaks)
Virginia Keeny
(Pasadena)
Eve Chesbro
(Pasadena)
Dolores Leal
(Los Angeles)
David DeRubertis
(Woodland Hills)
Steven Pingel
(Long Beach)
Kathy Dickson
(Oakland)
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)
Toni Jaramilla
(Los Angeles)
Brad Yamauchi
(San Francisco)
Bulletin Editor
Christopher Bello
Astoria, OR 97103
Ph: (503) 338-3891
DECISIONS
(From Page 2)
"Both the language of the PAGA and
the express intent of the Legislature
indicate that an aggrieved employee
may bring an action on behalf of other
employees without complying with the
requirements of a class action. Labor
Code section 2699 specifically states
that an aggrieved employee may bring
an action on behalf of other employees,
‘[n]otwithstanding any other provision
of law...’ The wording of the PAGA ... is
similar to the former wording of Bus. &
Prof. Code section 17204... Non-class
representative actions were authorized
under [that statute].
“The Legislature has made clear that
an action under the PAGA is in the
nature of an enforcement action ...
designed to protect the public and
penalize the defendant for past illegal
conduct. Restitution is not the primary
object of a PAGA action, as it is in
most class actions. [cites omitted]
Thus, both the purpose and the language of PAGA indicate an enforcement action on behalf of others need
not be brought as a class action.”
For plaintiff: California Rural Legal Assistance, Blanca A. Banuelos and
Michael Meuter.
For real parties: Anthony P. Raimondo
and Michael C. Saqui.
Third Dist, 7/24/07; opinion by Blease
with Raye and Hull concurring; 2007
WL 2111017.
NEXUS BETWEEN ALLEGED
HARASSMENT AND PLAINTIFF’S
GENDER AND RACE WAS
NEGATED WHEN SHE
ANSWERED “NO” AND “I DON’T
KNOW” WHEN ASKED IF
HARASSERS’ CONDUCT WAS
PROMPTED BY DISCRIMINATORY
MOTIVE
JONES v R. J. DONOVAN CORRECTIONAL FACILITY. In a opinion filed
on June 14 and ordered published on
July 3, the Fourth District, Division
One, affirmed summary judgment on
an African-American corrections
officer’s FEHA hostile environment
claim, as well as on her claims for race
discrimination, retaliation, and related
state law torts. (The plaintiff’s claims for
assault and battery, the intentional and
negligent infliction of emotional distress, and negligent retention were
barred by the doctrine of workers’ compensation exclusivity, the court held.)
The court wrote in part:
“We conclude, based on the totality of
the circumstances, Jones failed to
present a triable issue of material fact
from which it reasonably could be inferred she suffered harassment prohibited by FEHA. Specifically, Respondents, in their moving papers, pointed
to Jones’s testimony in which several
times she was asked whether the comments and complaints her coworkers
made about her were prompted by gender or race. Jones repeatedly answered,
‘No’ and ‘I don’t know.’ The absence of
the nexus between the alleged harassment and Jones’s gender negates her
FEHA claim.
“Jones’s claim also fails for the independent reason that she did not produce evidence that the conditions she
complained of were sufficiently severe
or pervasive to constitute harassment.
As the trial court concluded..., ‘These
incidents are akin to being a collection
of isolated and objectively non-discriminatory events.’ We regard the wheelbarrow incident as the most severe ...
because it involved physical conduct.
[The plaintiff alleged that during an argument a co-worker had ‘banged her body
around,’ and that she had sought medical attention for neck, wrist, and shoulder pain.] However, it was a one-time
occurrence, which was unrelated to her
gender. Several of her other complaints
similarly were either regarding discrete
incidents or matters that were not severe... There is no evidence that the
male coworkers’ ‘daily criticisms’ were
severe because, as recounted in Jones’s
deposition testimony, they amounted
to no more than comments that she
was ‘not doing her job.’
“[Concerning the plaintiff’s disparate
treatment claim], as we have noted,
there is no nexus shown between the
coworkers’ conduct and Jones’s gen-3-
der or race; therefore, she cannot make
out a claim for discrimination. Jones
likewise failed to produce evidence rebutting Respondents’ proffered reasons
for certain employment decisions or
mak[ing] a showing they were merely
pretexts for discriminatory conduct.
Based on the above, any slights or
offenses Jones complains about did not
rise to the level of discrimination.
“[Concerning alleged retaliation], Respondents demonstrated that Jones
failed to provide any evidence disputing
Respondents’ claim she suffered no
adverse change in the terms and conditions of her employment. Specifically,
she never experienced a loss or reduction in her classification, position, salary, benefits and work hours; and her
employment was not terminated. She
failed to make out a claim she was
constructively discharged because no
evidence showed her employer intentionally created or knowingly permitted
working conditions so intolerable or aggravated that a reasonable employee in
her position would have felt compelled to
resign.
“Jones merely listed, but did not separately discuss, the nine instances of
claimed adverse employment action;
rather, she alleged that these actions,
collectively, formed a pattern of conduct
that adversely changed the terms and
conditions of her employment. Respondents correctly point out Jones’s briefing is deficient because it relies on block
citations to her deposition testimony...
“In any event, we point out that, ‘as a
threshold matter, we need not and do
not decide whether each alleged ... act
constitutes an adverse employment
action in and of itself.’ (Yanowitz, 36
Cal.4th at p. 1055.) Jones’s allegations
are not supported by specific facts showing that a triable issue of material fact
exists as these causes of action... In
short, there is no evidence, and it is not
reasonable to infer, that Jones’s work
conditions were materially altered.”
For plaintiff: Donald R. Holben & Associates, Leah Marie Peer.
DECISIONS
(From Page 3)
For defendants: Chris A. Knudsen,
Theodore S. Drcar, Deputy Attorneys
General.
Fourth Dist Div One, 6/14/07, publication ordered 7/3/07; opinion by
O’Rourke with Huffman and
McDonald concurring; 2007 WL
1705671.
tions, Inc. (2007) 40 Cal.4th 1094...)
We explain in our discussion, post, why
we have decided to proceed with this
appeal despite any mootness resulting
from the recent filing of Murphy. [The
court reasoned that the matter was of
general public interest and likely to
recur.]
LABOR COMMISSIONER
IMPROPERLY ISSUED
“PRECEDENT DECISION” ON
PAYMENTS FOR MISSED MEAL/
REST PERIODS IN
CIRCUMVENTION OF APA’S
RULE-MAKING REQUIREMENTS
“We shall conclude appellants show
reversible error because the
Commissioner’s attempt to issue a binding precedent decision was an invalid
circumvention of the APA’s rulemaking
requirements. However, we shall conclude appellants fail to show reversible
error with respect to the untimely processing of claims. We shall affirm in
part and reverse in part.”
CORRALES v BRADSTREET. The
Sacramento County Superior Court
erred in part, a Third District panel held
in an opinion filed on July 10, in denying
a petition for writ of mandate and complaint for declaratory relief. “Appellants
complain,” the court explained, “then
[Labor] Commissioner Donna Dell (1)
violated statutory duties relating to timely
processing of employee claims under
Labor Code section 98, and (2) improperly issued a precedent decision purporting to be binding in all section 98
hearings, in circumvention of rulemaking
requirements of the Administrative Procedure Act (Gov. Code, § 11340 et seq.
(APA).) [Note: See CELA Bulletin,
June 05, p.7, for a summary of the
purported precedent decision, Hartwig v
Orchard Commercial, Inc. (Cal. Dept. of
Industrial Relations, DLSE, May 11,
2005, No. 12-56901RB), and for a note
concerning its apparent illegality as
analyzed by CELA member Suzanne
Murphy.]
“The underlying substantive issue is
whether payments for missed meal/
rest periods ... constitute wages or
penalties. The precedent decision characterized such payments as penalties,
with the apparent result of smaller potential recoveries due to a shorter limitations period and unavailability of other
statutory penalties. While this appeal
was pending, the California Supreme
Court issued an opinion holding section
226.7 payments are wages, not penalties. (Murphy v. Kenneth Cole Produc-
For plaintiffs: California Rural Legal Assistance, Michael M. Meuter, Melissa
Barrios, Alegria De La Cruz, and Cynthia
L. Rice.
For defendant: DLSE, Anne P. Stevason
and Anne Hipshman.
with Hull and Robie concurring; 2007
WL 1978025.
BROAD NO-HIRE PROVISION IN
CONTRACT BETWEEN
SOFTWARE CONSULTANT AND
CLIENT VIOLATED POLICY
FAVORING EMPLOYEES’
FREEDOM OF MOVEMENT
VL SYSTEMS, INC. v UNISEN, INC.
The Fourth District, Division Three, reversed a judgment in favor of a software
consulting company which had sued a
client for hiring-away one of the
company’s employees in violation of a
no-hire provision of the consulting contract. The court explained as follows its
conclusion that the no-hire provision
was unenforceable as a matter of law:
“According to VLS, ‘this case has absolutely nothing to do with an [e]mployee’s
freedom of movement or covenants not
to compete between employer and employee. Nor does this case involve any
issues involving employer/employee relations... [¶] The subject contract did
not ‘preclude’ Star Trac from hiring David
-4-
Rohnow... Rather, the contract simply
called for the payment of a fixed sum to
VL Systems should they choose to do
so.’
“We disagree with VLS and hold that
paragraph 6 is not enforceable. Our
analysis begins with Business and Professions Code section 16600 which
states: ‘Except as provided in this chapter, every contract by which anyone is
restrained from engaging in a lawful
profession, trade, or business of any
kind is to that extent void.’
“[T]he question becomes whether two
parties can agree on a no-hire provision
as a matter of contract. Freedom of
contract is an important principle... This
type of contractual provision, however,
may seriously impact the rights of a
broad range of third parties. In this case,
those third parties not only included the
VLS employees who actually performed
work for Star Trac under the contract,
but all of those who did not, including
Rohnow, who was not even employed
by VLS at the time.
“[W]e take no position on whether a
more narrowly drawn and limited no-hire
provision would be permissible under
California law. Paragraph 6, however, is
in no sense narrowly drawn—it is a very
broad provision covering not only solicitation by Star Trac, but all hiring, and it
applies to all VLS employees, regardless of whether they worked [on the Star
Trac contract] or were even employed
[by VLS] at the time. Such a broad
provision is not necessary to protect
VLS’s interests and is outweighed by
the policy favoring freedom of mobility
for employees. It is therefore unenforceable.”
For VL Systems: David R. Calderon,
Orange.
For Unisen (Star Trac): Hema C. Bhamre,
Newport Beach.
Fourth Dist Div Three, 6/25/07; opinion by Moore with Rylaarsdam and
Ikola concurring; 2007 WL 1807001.
DECISIONS
(From Page 4)
NINTH CIRCUIT
REVERSING JUDGMENT FOR
ADEA PLAINTIFF, NINTH CIRCUIT
HOLDS THAT AS MATTER OF
LAW EVIDENCE DID NOT
SUPPORT CONSTRUCTIVE
DISCHARGE FINDING
POLAND v CHERTOFF. “After a bench
trial,” a Ninth Circuit panel wrote in a
July 20 opinion by Gould, “the district
court [D Oregon] entered a judgment in
favor of James R. Poland, a former
employee of the United States Customs Service, on his employment discrimination claim... Specifically, the district court held the Customs Service
liable for violating [ADEA] by retaliating
against Poland after he filed Equal
Employment Opportunity complaints
and by constructively discharging Poland by transferring him to a new job in
a new location. The district court based
its damage award [of $339,130] solely
on the theory that Poland had been
constructively discharged... On the
Secretary’s appeal, we affirm the district court’s determination that the Customs Service unlawfully retaliated
against Poland... We reverse the district court’s conclusion that the Customs Service’s transfer of Poland
amounted to a constructive discharge,
and we vacate the district court’s order
awarding damages to Poland on a constructive discharge theory. We also
vacate the district court’s award of attorneys’ fees to Poland. We remand the
case to the district court so that Poland
can amend his complaint to seek the
remedies available under his retaliation
theory.
“The Secretary first argues that Poland
did not establish his claim of retaliation... [¶] This situation—one where a
subordinate employee with bias ... precipitates an investigation that leads to
an adverse employment action but an
employee without bias makes the final
decision to take the adverse action—
raises difficult issues not yet addressed
by our circuit...
“First, we could adopt a simple ‘but for’
causation test... Under a ‘but for’ standard, any time a biased employee, in
response to a plaintiff’s protected activity, sets in motion the process that
leads to an adverse employment action, the employer would be liable, even
if the employer then conducted an entirely independent inquiry and decisionmaking process insulated from the animus of the biased employee...
“The second rule we consider is the one
suggested in this case by the Secretary. The Secretary urges that we should
impute a subordinate’s animus to his or
her employer only in cases in which the
subordinate dominates the investigatory process and the final decision is a
perfunctory approval of the biased
subordinate’s inclination. Courts have
termed this standard the ‘rubber stamp’
or ‘cat’s paw’ approach...
“We hold that if a subordinate, in response to a plaintiff’s protected activity,
sets in motion a proceeding by an
independent decisionmaker that leads
to an adverse employment action, the
subordinate’s bias is imputed to the
employer if the plaintiff can prove that
the allegedly independent adverse employment decision was not actually independent because the biased subordinate influenced or was involved in the
decision or decisionmaking process...
“[Here] we agree with the district court
that the [biased subordinate’s] animus
and his role in defining the scope of the
inquiry and in leading the inquiry panel
to evidence unfavorable to Poland unlawfully tainted the decision to transfer
Poland... We affirm the district court’s
judgment in favor of Poland on his ADEA
retaliation claim...
“[But] under the facts found by the
district court, Poland was not, as a
matter of law, constructively discharged.
Neither the district court’s factual findings nor any other evidence in the record
indicates that Poland’s working conditions in Virginia [after his transfer from
Oregon] were so poor that they trumped
his motivation to earn a living... In fact,
Poland worked in Virginia for five months
before deciding to retire. Even after he
-5-
decided to retire, Poland worked the
same job for three more months. As a
matter of law, these are not the actions
of someone who finds his working conditions so intolerable that he felt compelled to resign...
“Poland never testified that he felt compelled or forced to resign... Instead,
Poland testified that he decided to take
early retirement because the extended
separation from his family was difficult
and because his new position in Virginia was ‘a career ender.’ That testimony is not enough...
“Because the court did not award Poland any other damages or form of relief,
Poland ... is therefore not a prevailing
party. We thus vacate the district court’s
order awarding attorneys’ fees and costs
to Poland... In the event Poland obtains
any form of relief on remand, he will have
secured a material change in the legal
relationship ... and once again he will be
a prevailing party entitled to attorneys’
fees and costs...”
Judge Richard A. Paez wrote in part as
follows, concurring and dissenting in
parts: “In light of [Poland’s] testimony,
which the district court found credible,
and the seven or eight years of discrimination and retaliation prior to the demotion in Poland’s duties, there was ample
evidence for the district court, as trier of
fact, to find that Poland was subjected
to treatment sufficiently intolerable that
a reasonable employee would have felt
compelled to resign... [¶] Nor is the
majority’s reversal of the district court’s
factual finding justified simply because
Poland worked for about five months
after his demotion before resigning. We
have never held that continuing to work
for a period of months following an
adverse employment action precludes
a constructive discharge finding.”
For plaintiff: Kevin Keaney, Portland.
Gould with Rawlinson concurring
and Paez concurring and dissenting in parts; 2007 WL 2069651.
DECISIONS
(From Page 5)
ADA PLAINTIFF’S EVIDENCE
RAISED FACT ISSUES AS TO
TIMING OF DECISION TO
ELIMINATE HER POSITION
RELATIVE TO HER DISCLOSURE
OF IMPAIRMENT
KINNEY v EMMIS OPERATION CO.
Reversing summary judgment on ADA
and Oregon statutory claims, the Ninth
Circuit wrote in a July 2 memorandum
opinion:
“Kinney was diagnosed with lupus in
1988. Beginning in August of 2001, she
worked for defendants for nineteen
months, and was promoted from parttime news trainee to an associate producer position. On April 2, 2003,
Kinney’s supervisor informed her that
she was being reassigned from her
daytime position to an overnight associate producer position. Kinney stated
that she would be unable to accept the
position, because her lupus prevented
her from working an overnight shift. On
April 7, 2003, she gave her supervisor a
doctor’s letter confirming that she was
unable to work overnight... The next
day, Kinney was notified that KOIN was
eliminating her daytime position, and
did not have another position for her.
“[T]he district court based its decision
on its conclusion that a reasonable trier
of fact could only conclude that KOIN
eliminated Kinney’s position before it
knew of Kinney’s impairment, and that
Kinney was terminated because she
was unable to accept the only available
position for which she was eligible. The
district court’s decision rests on the
timing of KOIN’s decision to eliminate
Kinney’s daytime associate producer
position. However, the record raises a
genuine issue of material fact whether
the premise of the district court’s decision is correct.
“Kinney provided proof of the close temporal proximity between her disclosure
that she had lupus and her discharge by
alleging that her supervisor did not inform her that her daytime position was
being eliminated during their April 2,
2003, meeting, when Kinney disclosed
that she had lupus, and that instead she
was first informed that the position was
being eliminated on April 8, 2003, the
day after Kinney provided KOIN with a
doctor’s note confirming her impairment.
Kinney also offered documentation from
Defendants showing that as of April 15,
2003, her daytime position was still
included in the 2004 budget... Kinney’s
testimony and evidence both raise issues as to the timing of KOIN’s decision
sufficient to go to a jury, regardless of
any explanations Defendants have offered regarding the sequence of events.”
For plaintiff: Nathan Karman, Portland.
For defendant: Amy Joseph Pedersen,
Dennis Westlind, Portland.
Ninth Circuit, 7/2/07; memorandum
before Pregerson, Leavy, and
Rymer, (one judge dissenting); 2007
WL 1959092 (unpublished).
PLAINTIFF FAILED TO RAISE
FACT ISSUES ON
DISCRIMINATION, RETALIATION,
AND RELATED COMMON LAW
CLAIMS
Diyorio has not demonstrated any basis for a reasonable belief on her part
that her employers were behaving in a
discriminatory manner towards her, and
she cannot claim the protection of §
12940(h). [FN3. Although we doubt that
Diyorio’s offhand remark was sufficient
to amount to a ‘complaint’ of age discrimination, we need not reach that
issue.]
“Three of Diyorio’s remaining claims are
premised on her allegations of age and
gender discrimination: (1) wrongful termination in violation of public policy; (2)
intentional infliction of emotional distress; and (3) violation of California’s
unfair competition law... Given Diyorio’s
failure to come forward with evidence
that would allow a reasonable factfinder
to find that defendants discriminated
against her, those claims also fail.
“Finally, Diyorio alleges that she was
fired in violation of an implied-in-fact
employment contract providing that she
would not be fired without cause. She
also argues that once defendants put
her on a short-term performance improvement plan with a deadline of February 1, 2003, to meet its goals, this
action amounted to a promise that she
would not be fired before that date.
“We assume without deciding that
Diyorio established a prima facie case
of age and gender discrimination. Defendants, however, have offered several
legitimate, nondiscriminatory reasons
for Diyorio’s discharge... Diyorio has
failed to discredit any of these reasons.
Nor has she put forward any other appreciable evidence of discriminatory
motive on defendants’ part...
“Here, Avaya’s written personnel policies provide that employment ... is atwill. Although Diyorio points to the longevity of her employment, this factor
standing alone cannot overcome
California’s presumption that employment is at-will and Avaya’s express
policies affirming that principle. [cite
omitted] The fact that a company official
allegedly asked Diyorio to stay on with
Avaya rather than taking an early retirement in 2001 is also insufficient to show
an implied-in-fact contract... Finally,
there is no suggestion anywhere in
Diyorio’s short-term development plan
that her job was secure until February
2003. [FN4. Although Diyorio pled a
separate claim [for breach of the implied
covenant], California law ... does not
allow such a stand-alone claim in the
circumstances of this case.”]
“Diyorio also asserts that defendants
fired her in retaliation... In this case,
DIYORIO v AT&T. The Ninth Circuit
affirmed the Central District’s grant of
summary judgment on causes of action
for age and gender discrimination, retaliation, Tameny tort, i.i.e.d., violation
of implied contract, violation of the implied covenant, and violation of the unfair competition law (B & P Code §
17200 et seq.). The court wrote in part:
-6-
DECISIONS
(From Page 6)
For plaintiff: Keith A. Fink, Los Angeles.
For defendant: Stefan R. Miller, Torrance.
Ninth Circuit, 6/25/07; memorandum
opinion before Trott, Tashima, and
Rawlinson; 2007 WL 1853629 (unpublished).
DISTRICT OF
COLUMBIA CIRCUIT
ON REHEARING, DC CIRCUIT
ABANDONS ITS ORIGINAL
POSITION AND UPHOLDS
TAXATION OF AWARD FOR
EMOTIONAL DISTRESS
MURPHY v INTERNAL REVENUE SERVICE. On July 3, the D.C. Circuit, on
rehearing, abandoned the position it
took in the August 2006 decision in
which it held that IRC § 104(a)(2) violates the Sixteenth Amendment insofar
as it fails to exclude from taxable gross
income non-economic damages for
emotional distress and injury to reputation. (See Murphy v IRS (DC Cir 2006)
460 F3d 79, reh’g granted, 12/22/06;
summarized in CELA Bulletin, Aug 06,
p.10.)
“The Government petitioned for rehearing en banc,” the court explained, “arguing for the first time that, even if Murphy’s
award is not income, there is no constitutional impediment to taxing it because a tax on the award is not a direct
tax and is imposed uniformly. In view of
the importance of the issue thus belatedly raised, the panel sua sponte vacated its judgment and reheard the
case.”
The case involves a suit brought by the
plaintiff to recover income tax she paid
on $70,000 in compensatory damages
awarded in an administrative action
against her former employer alleging
“blacklisting” claims under various
whistleblower statutes. She contended
that her award should have been excluded from her gross income because
it was compensation received “on account of personal physical injuries or
physical sickness.” In the alternative,
she made the constitutional argument
that the DC Circuit surprisingly accepted
in its August 2006 opinion. On rehearing, the court wrote in part as follows,
first addressing a jurisdictional issue:
“Insofar as the Congress in 28 U.S.C. §
1346(a)(1) has waived sovereign immunity with respect to suits for tax refunds,
that provision specifically contemplates
only actions against the ‘United States.’
Therefore, we hold the IRS, unlike the
United States, may not be sued eo
nomine in this case.
LEGISLATIVE UPDATE
[Note: See www.leginfo.ca.gov for information about the provisions and status
of bills pending in the California Legislature. For information on bills pending
in the United States Congress, see the
Library of Congress’s website,
www.thomas.loc.gov. NELA’s “Action
Center” for bills in Congress is
www.capwiz.com/nela/home.]
SACRAMENTO
“Although the pre-1996 version of §
104(a)(2) was at issue in O’Gilvie [v
United States (1996) 519 US 79], the
Court’s analysis of the phrase ‘on account of,’ which phrase was unchanged
by the 1996 amendments, remains controlling here. Murphy no doubt suffered
from certain physical manifestations of
emotional distress, but the record clearly
indicates the Board awarded her compensation only ‘for mental pain and
anguish’ and ‘for injury to professional
reputation.’ We conclude Murphy’s damages were not ‘awarded by reason of, or
because of, ... [physical] personal injuries,’ O’Gilvie, 519 U.S. at 83. Therefore, § 104(a)(2) does not permit Murphy
to exclude her award from gross income.”
SB 549. On July 12, Steve Pingel of
CELA's Legislative Committee testified
before the Assembly Appropriations
Committee on CELA’s Bereavement
Leave bill. It passed out of committee on
an 11-5 party-line vote, and headed to
the Assembly floor. (The bill had passed
the Senate on June 6 by a vote of 23-13.)
Addressing the constitutional argument,
the court reasoned that even assuming
that a damages award for non-physical
injuries does not constitute taxable income under the Sixteenth Amendment,
the federal tax levied upon such an
award is not a “direct” tax and is thus not
subject to the apportionment requirement of Article I, Section 9 of the Constitution. “The tax is uniform throughout
the United States,” the court concluded,
“and therefore passes constitutional
muster [under Article I Section 8].”
SB 836. A bill, introduced by Sheila
Kuehl (D-LA), to add familial status to
the list of characteristics that are prohibited bases of discrimination under
FEHA’s employment provisions, and to
define “familial status” to include “being
an individual who is or will be caring for
or supporting a family member:” passed
the Senate on May 31; passed out of
the Assembly Labor and Employment
Committee on July 3 and out of he
Judiciary Committee on July 10.
[Note: See www.nela.org for information concerning the Civil Rights Tax
Relief Act of 2007, (S. 1689, H.R. 1540).]
DC Circuit, 7/3/07; opinion by
Ginsburg joined by Rogers and
Brown; 2007 WL 1892238.
SB 622. A bill, introduced by Alex
Padilla (D-LA), to make it unlawful to
willfully misclassify workers as independent contractors and to establish
civil penalties: passed the Senate on
June 4; passed out of the Assembly
Labor and Employment Committee on
June 21 and the Judiciary Committee
on July 3, and was then sent to the
Assembly Committee on Appropriations.
AB 435. A bill, introduced by Julia
Brownley (D-LA), to extend the statute
of limitations for a civil action alleging
sex-based wage discrimination from two
years to four years where there is no
willful misconduct, and from three years
to five years otherwise, and to extend
the time period for which employers
must maintain wage and job classifica(Cont'd on Page 8, DECISIONS)
-7-
DECISIONS
(From Page 7)
tion records from two years to five years:
passed the Assembly on June 7; passed
out of the Senate Committees on Judiciary and Labor and Industrial Relations, and was sent to the Senate Appropriations Committee on July 11.
AB 1043. CELA’s bill to prohibit mandatory forum selection and choice-of-law
provisions as conditions of employment:
passed the Assembly on May 17, and
passed out of the Senate Judiciary
Committee on June 27.
WASHINGTON
S.1689. On June 25, a companion bill to
H.R. 1540, the “Civil Rights Tax Relief
Act of 2007,” was introduced in the
Senate by Jeff Bingaman (D-NM) and
Susan Collins (R-ME).
S.1782 and H.R.3010. On July 12, Sen.
Russ Feingold (D-WI) and Rep. Hank
Johnson (D-GA) introduced parallel versions of the Arbitration Fairness Act of
2007, a comprehensive bill to effectively
ban arbitration clauses from all consumer and employment contracts.
H.R.2015. On April 24, Rep. Barney
Frank (D-MA) introduced the Employment Non-Discrimination Act to prohibit
employment discrimination on the basis of sexual orientation or gender identity. On May 4, the bill was sent to the
House Judiciary Committee’s Subcommittee on the Constitution, Civil Rights,
and Civil Liberties.
H.R.2821. On June 22, less than a
month after the Ledbetter decision was
filed, the “Ledbetter Fair Pay Act of
C O M I N G
E V E N T S
The Fairmont Hotel
San Jose
October 19-20, 2007
NELA FALL SEMINAR
Representing Workers in Individual and Collective
Actions under the FLSA
Sheraton New Orleans Hotel
November 9-11, 2007
CAOC’s 46th ANNUAL CONVENTION
Westin St. Francis Hotel, San Francisco
(see www.caoc.com for details)
-8-
2007” was introduced in the House by
George Miller (D-CA) with 31 co-sponsors. The bill would “amend Title VII,
ADEA, the ADA, and the Rehab Act to
clarify that a discriminatory compensation decision or other practice that is
unlawful under such acts occurs each
time compensation is paid pursuant ot
the discriminatory compensation decision or other practice.” On July 20, a
companion bill, The Fair Pay Restoration Act, was introduced in the Senate
by Tom Harkin (D-IA) with many cosponsors.
•
•
•
JOHN MCCARTHY
(From Page 10)
panies in which he adamantly maintained that the denial of insurance benefits should be a tort. He was among the
pioneers in using the implied covenant
of good faith and fair dealing as a vehicle
to obtain tort damages. During the
1970s, John consistently maintained
that a tort remedy for denial of insurance
benefits was the only way to achieve
justice in cases where small amounts
of benefits were at issue. Without a tort
remedy, he reasoned, insurers could
get away with paying only the benefits
(which they had owed all along) at the
conclusion of the litigation—and only
then in the few cases where they got
caught. John handled a number of important appellate insurance bad faith
cases, including Silberg v California
Life Ins. Co. (1974) 11 C3d 452, the first
case upholding a policyholder’s verdict
awarding tort damages for the bad faith
denial of insurance benefits.
During the mid-1970s, John detoured
into environmental law, with great impact. In his landmark case, Friends of
Mammoth v Mono County, the Supreme
Court decided that the California Environmental Quality Act applies to private
development and requires Environmental Impact Reports. That, of course,
gave birth to the EIR industry. As a
result, John became involved in other
environmental litigation, much of it in
Sonoma County. He was also hired by
the City of Beverly Hills to stop plans to
build about thirty skyscrapers in Century City. (Part of his investigation in
that case revealed that an earthquake
fault runs right under Beverly Hills High
School, a fact no one seems to know
how to handle to this day.)
In the late 1970s, John came to believe
that the bad faith tort doctrine had a role
to play in the employment context. He
became particularly interested when he
read a portion of the Second District’s
subsequently-reversed decision in
Tameny v Atlantic Richfield: “At an
earlier time,” the Second District wrote,
“it was axiomatic that an employee at
will was engaged wholly at the pleasure
of his employer and was subject to
discharge at any time, for any reason,
irrespective of motive. The presence of
morals in the marketplace of human
labor was at best dubious and not a
subject of any great interest in laissez
faire economics. We think the axiom is
still the law and has continuing vitality.”
This got John’s attention, and he spent
a good part of his remaining career
dedicated to what he called “the revolutionary idea that morality does have a
role in the marketplace of human labor.”
In 1979, John tried to verdict the first
private sector, non-union, at-will wrongful discharge (tortious bad faith) case in
the entire country, Shannon v Geico,
LASC No. C72668. (He later went into
temporary mourning when, in December of 1988, the Supreme Court in the
Foley case decreed that the implied
covenant provides only a contract remedy in the context of employment contracts.)
During the next couple of years, John
took more cases in the relatively new
field of non-union wrongful termination,
and met others who were doing the
same. These pioneers noticed that they
were being outgunned in terms of resources, knowledge, and strategy—
the corporate employers had the Paul
Hastings of the world to pound plaintiffs
into the ground. John and a few others
discussed this problem, and ultimately
decided to found CELA, dedicated to
the improvement of the quality of representation provided by the plaintiff’s
employment bar. John served on the
Board from the organization’s founding
in1986 until about 1992. He was fond of
calling CELA a “statewide law firm,” and
from its inception we all followed the rule
of which Michelle Reinglass reminded
us at the last Annual CELA Conference:
“CELA members always take calls from
other CELA members.” [Editor’s note:
CELA’s “official” historian, Susan
Hartley, provides the following details:
in addition to John, CELA’s original
Executive Board included Chair Bill
Crosby, Susan Hartley, Joe Posner,
Bill Quackenbush, Bennett Rolfe, and
Jim Stoneman. That Board was elected
at the very first CELA meeting, which
was called by Bill Crosby and was held
on November 8, 1986.]
John was one of the best trial lawyers of
his time, and obtained many significant
-11-
verdicts. This was the result of his
intensity, but also due to his excellent
understanding and empathy, and to a
superior story-telling ability. He could
really talk to jurors, (although not always to judges). He got jurors to understand the plight of his clients. Perhaps
his greatest win, and certainly the largest, was the $38 million verdict against
the Las Vegas Hilton in 1988, after a
four-month trial. Our own Dolores Leal
co-tried the case with John as an EEOC
trial lawyer, on behalf of 37 blackjack
dealers. It was the largest verdict in
California that year.
John was a master in the use of dramatic, visceral language to sear his
point into the brains of listeners, (whether
they be jurors, judges, opposing attorneys, or his own associates and partners). Employees had been “stripped of
their rights.” “Beancounters” looking for
“an immediate fix to the bottom line”
were often behind age discrimination.
Corporate executives “duped” employees by “sneaking” an at-will clause into
the employee handbook. The long term
employee was “discarded like a used
tissue” by “greedy” executives.
Finally, John was supremely dedicated
to the improvement of the trial skills of
other plaintiffs’ lawyers. He spoke at
countless programs and wrote countless articles for CTLA (now CAOC),
NELA, CELA, and ATLA, and he held
leadership roles in most of those organizations. He wrote some of the first
books on insurance bad faith and wrongful discharge, and did so much more
that I’m sure others will remember.
[Editor’s note: John recruited the current editor of the CELA Bulletin in 1989—
I had gotten to know John while working
for Lawpress on the annual updates for
his books on insurance bad faith (first
edition 1976), and wrongful discharge
(first edition 1985), both of which have
now gone through multiple editions and
are still in print and being annually
supplemented.]
While John’s passing is a tremendous
loss, his spirit and mission has left a
legacy—your hard work representing
(Cont'd on Page 12, JOHN McCARTHY)
JOHN MCCARTHY
(From Page 11)
victims of corporate abuse. The Dedication in his books speaks to all of us: “To
those trial lawyers whose vision, determination, and abilities will continue to
lead the way towards a system of justice for all.”
•
•
•
COLLEAGUES REMEMBER
JOHN McCARTHY
John McCarthy was a true champion of
justice for the underdog. When I started
practicing in the mid-70s and through
the 80s, his books on insurance bad
faith and wrongful termination were primary sources to me in learning the law
and practice tips. No one was more
active and passionate in educating lawyers at CEB, CTLA, and other seminars
during this period, and he helped shape
the law with memorable verdicts and
published appellate decisions.
There was no better teacher than John
on how to try a case or write an appellate brief. I recall meeting with John in
his office for advice on how to prepare for
trial in my first big employment case.
John was a real mentor, and it was truly
a pleasure working with him, with Joe
Posner, and with other founding CELA
Board members in establishing the first
statewide organization for employee
rights attorneys.
John was a great lawyer, and a real
pioneer in the cause of employee rights.
He will long be remembered.
employees. I know I always felt invigorated after listening to John’s hearty
calls to “Charge!”
—Susan Hartley
There are two vivid visions I have of
John—one was of the warrior standing
at the podium at the founders’ meeting
of CELA, inspiring us to unite to defeat
the unlimited resources of those who
would trample the rights of workers. The
other was of an angel gracefully skiing
in front of me down the black diamonds
of Beaver Creek, urging me to again
follow his lead. John was an inspiration,
a pioneer, and a true champion of the
people! He was deeply loved and will be
forever missed.
I was a new trial lawyer in 1988 when I
co-counseled the Brooks v Las Vegas
Hilton case with John. The experience
John created, not only during the fourmonth trial, but also during the pre-trial
phase, was memorable and truly educational. We represented 37 individuals
(casino dealers) in a discrimination/
wrongful termination case in Las Vegas. John was an amazing teacher. He
was able to organize our clients and our
trial team into an integrated operation.
He had the ability to make the trial team
laugh when we were frustrated and cry
when needed to relieve the tension. He
was a wonderful storyteller and his ability to connect with the jury was masterful.
—Dolores Leal
—Nancy Bornn
John’s passion for workers and those
who are victimized by “capitalism without a conscience” never waned. His
commitment to CELA as a community
of advocates for workers never faltered.
Many years ago, when I first joined
CELA, I was fortunate enough to spend
time talking to John at conferences. He
was just beginning his retirement, but
his vision inspired me to look beyond
myself and my clients to reach out to all
of you.
—Eve Chesbro
John was a tower of courage, intellect,
and dedication on whose shoulders we
now stand.
—Janet Koehn
—William Crosby
I always loved John’s passion for employee rights, his passion for educating
new lawyers, and his passion for having
a group of plaintiff employment lawyers
to counter the resources of a major
defense firm. He always talked about
the David and Goliath battle we all fight.
He, like a lot of us, saw CELA as a
means to help level the playing field, (or,
as we thought of it, the battlefield). He
was a founding CELA Board Member
who was full of fire for strengthening,
advocating, and promoting the rights of
-12-
John was one of those “unforgettable
characters” who come along only a few
times in life, and I’m happy to have
known him. I skied with John when he
was about 82. Of course, he skied
circles around me. His books and talks
were an inspiration and his spirit lives on
in CELA.
—Steve Pingel
John will always be that vibrant, energetic, passionate person I watched in
his 80s schussing down slopes faster
than I could ever aspire to.
—Michelle Reinglass
BULLETIN
Published
Monthly
CALIFORNIA
SUPREME COURT
ABILITY TO PERFORM
ESSENTIAL JOB FUNCTIONS IS
PART OF PRIMA FACIE CASE
OF DISABILITY DISCRIMINATION
UNDER FEHA
GREEN v STATE OF CALIFORNIA.
Reversing a Fourth District decision
that was issued two years ago, (132
CA4th 97, 33 CR3d 254; summarized
in CELA Bulletin, Aug. 05, p.6), the
Supreme Court, in a 4-3 decision filed
on August 23, disagreed with the Court
of Appeal’s conclusion that the defendant has the burden of proving, as an
affirmative defense, that a disability
discrimination plaintiff is unable to perform essential job functions. The Fourth
District had rejected the argument that
the plaintiff has the burden of proving
his capacity to perform as part of the
prima facie case, and had affirmed jury
awards totaling $2.6 million. The Supreme Court explained the issue and
its conclusion in part as follows:
“The Americans with Disabilities Act
(ADA) requires that plaintiffs prove they
are ‘qualified individuals’ under the statute, i.e., that they have the ability to
perform a job’s essential duties before
they can prevail in a lawsuit for discrimination. (42 U.S.C. § 12112(a).)
Although California’s Fair Employment
and Housing Act ... does not expressly
include the term ‘qualified individual,’
the question here is whether it includes a similar requirement. In 1997,
a Court of Appeal held that it does.
(Brundage v. Hahn (1997) 57
Cal.App.4th 228, 235.) The Court of
Appeal here held that it does not. [¶]
After reviewing the statute’s language,
legislative intent, and well-settled law,
we conclude the FEHA requires employees to prove that they are qualified
individuals under the statute just as the
federal ADA requires. We therefore reverse the Court of Appeal’s judgment.
“As the legislative history discloses,
the Legislature amended the FEHA in
1992 by clarifying that an employee
must be able to perform the ‘essential
duties with reasonable accommodations.’ (Stats. 1992, ch. 913, § 1, p.
4282.) In passing the amendment, at
least one legislative analysis observed
the Legislature’s ‘conformity [to the
ADA rules] will benefit employers and
businesses because they will have one
set of standards...’ [cite omitted.] It is
clear, then, that the Legislature incorporated the ADA requirement with full
knowledge of the purpose the language
serves in the ADA... Thus, even if there
were some conceivable ambiguity regarding the burden issue prior to that
point in time, no such ambiguity existed afterward.
“Plaintiff contends that the employer
bears the burden... In support of this
argument, plaintiff points to language in
the FEHA stating the statutory provisions apply to any person making a
discrimination claim. In plaintiff’s view,
this particular language in the FEHA
differs significantly from the ADA, which
omits the ‘any person’ language and
instead reflects an unambiguous intent
to protect a ‘qualified individual’ only.
August 2007
Vol. 21, No. 8
THE CLASS ACTION
KILLER INITIATIVE
by L. Tracee Lorens
Tracee Lorens is a member of CELA’s
Wage and Hour Committee and the
Board of Governors of CELA’s ally, the
Consumer Attorneys of California
(CAOC).
On July 13, 2007, the Civil Justice
Association of California (CJAC), formerly known as The Association for
California Tort Reformers, filed an Initiative they called The California Class
Action Fairness Act which would have
effectively banned class actions in the
State of California. CJAC’s Board of
Directors is made up of big PhRMA,
insurance companies, big oil, automobile manufacturers, the California Chamber of Commerce, etc.
The Initiative expressly sought to repeal all previous court decisions relating to class actions and to replace that
body of law with statutes that would
have made it virtually impossible for
employees and consumers to bring
class action lawsuits in the State of
California. The proponents initially
sought to have the Initiative appear on
the June 2008 ballot.
“The Court of Appeal agreed with plaintiff, reasoning that the statutory phrase
The measure sought to abolish the
judicial policy in California in favor of
class actions, and to effectively deny
class action status if the defendant
could show any defense unique to a
single plaintiff’s individual injuries. The
Initiative implied that if the defendant’s
acts or practices are subject to a state
or federal agency’s oversight, a class
action could not proceed. It would have
required plaintiffs to pay the costs of
notifying the class, and eliminated the
(Cont'd on Page 15, CLASS ACTION)
DECISIONS
(From Page 1)
‘any person’ applies to any plaintiff alleging a claim of disability discrimination under the FEHA. (§ 12940, subd.
(a).) The court interpreted the FEHA’s
use of this phrase to mean that a plaintiff
need not prove that he or she satisfies
the ADA’s ‘qualified individual’ requirement, but that lack of qualification would
be an affirmative defense.
“We are not persuaded. The FEHA’s
use of the term ‘any person’ in listing the
various forms of prohibited discrimination does not warrant disregard of the
specific language unambiguously providing that an adverse employment action on the basis of disability is not
prohibited if the disability renders the
employee unable to perform his or her
essential duties even with reasonable
accommodation. When read together
with subdivision (a)(1), subdivision (a)’s
reference to ‘any person’ cannot reasonably be understood to specially alter the ordinary burden of proof set forth
in Evidence Code section 500. Had the
Legislature actually intended to relieve
a plaintiff employee of the burden of
proving an actionable discrimination on
the basis of disability, thereby departing significantly from federal law, we
believe it could and would have done so
in a more conspicuous manner.
“The jury here was never instructed that
plaintiff must prove that he was able to
perform the job’s essential functions.
For this reason, defendant was prejudiced by the failure to so instruct, and
we believe defendant is entitled to a new
trial, with proper instructions, unless
the evidence shows as a matter of law
that plaintiff cannot meet his burden.”
In a lengthy and persuasive dissenting
opinion joined by Kennard and Moreno,
Werdegar wrote in part as follows:
“To reach its ... conclusion, the majority
ignores the statute’s structure, distorts
its legislative and regulatory history,
and relies on inapposite authority. But
fundamentally, a single logical error
pervades the majority’s discussion.
Because section 12940, subdivision
(a)(1) relieves employers from liability
for firing or refusing to hire a disabled
person if the disability prevents that
person from performing the position’s
essential functions, the majority reasons, proof of ability to perform must be
part of the plaintiff’s case... This syllogism rests on the false premise that no
affirmative defense exists or can exist
to a claim of disability discrimination. In
fact, as I will explain, section 12940
provides for several affirmative defenses,
inability to perform being only one.
“In effect, the majority creates a presumption that people with disabilities
cannot perform in the workplace.... [T]he
rule that individuals with disabilities are
presumed unable to work until they
prove otherwise is not one intended by
the Legislature. The majority simply
reads it into the statute.”
For plaintiff: Norman Pine, Beverly Tillett
Pine, David H. Greenberg.
For CELA as amicus: Jeffrey K. Winikow.
For amici Legal Aid Society-Employment Law Center, Disability Rights
Advocates, DREDF, and Disability
Rights Legal Center, Claudia Center,
Lewis Bossing, and Elizabeth Kristen.
For defendant: Jacob A. Appelsmith,
Assistant Attorney General; Elizabeth
Hong, Vincent J. Scally, Jr., Silvia M.
Diaz, and Michelle Logan-Stern, Deputy
Attorneys General.
For defense amici Employers Group
and California Employment Law Council, Paul, Hastings, Janofsky & Walker,
Paul W. Crane, Katherine C. Huibonhoa,
and Jaime D. Byrnes.
Cal SC, 8/23/07; opinion by Chin
with George, Baxer, and Corrigan
concurring; dissenting opinion by
Werdegar joined by Kennard and
Moreno; 2007 DAR 12799, 2007 WL
2388920.
EMPLOYEE PROFIT-SHARING
PLAN DID NOT CONSTITUTE
PROHIBITED SHIFTING OF COSTS
BACK ONTO EMPLOYEES
PRACHASAISORADEJ v RALPHS
GROCERY COMPANY, INC. “We confront a significant question of California
wage law,” Baxter wrote in a 4-3 majority opinion filed on August 23. “Defen(Cont'd on Page 3, DECISIONS)
-2-
CALIFORNIA
EMPLOYMENT
LAWYERS ASSOCIATION
Michelle Reinglass
Suite 170
Tel: (949) 587-0460
FAX: (949) 587-1004
Director:
Christina Krasomil
Encino, CA 91436-2412
Tel: (818) 907-7895
FAX: (818) 907-7474
EXECUTIVE BOARD
(Sherman Oaks)
Virginia Keeny
(Pasadena)
Eve Chesbro
(Pasadena)
Dolores Leal
(Los Angeles)
David DeRubertis
(Woodland Hills)
Steven Pingel
(Long Beach)
Kathy Dickson
(Oakland)
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)
Toni Jaramilla
(Los Angeles)
Brad Yamauchi
(San Francisco)
Bulletin Editor
Christopher Bello
Astoria, OR 97103
Ph: (503) 338-3891
DECISIONS
(From Page 2)
dant Ralphs Grocery Company, Inc. ...
implemented a written incentive compensation plan whereby certain employees of each store were eligible to
receive, over and above their regular
wages, supplementary sums based
upon how the store’s actual Plan-defined profits, if any, for specified periods compared with preset profitability
targets. For both target an actual
puposes, profits were determined by
subtracting store operating expenses
from store revenues. Plaintiff claims
the Plan’s formula for calculating these
supplemental profit-sharing payments
thus violated California statutes, rules,
and decisions that prohibit an employer from shifting certain of its costs
to employees by withholding, deducting, or recouping them from wages or
earnings, or otherwise obliging employees to contribute to them.
“The Plan was not illegal, we conclude,
simply because, pursuant to normal
concepts of profitability, ordinary business expenses, such as storewide
workers’ compensation costs, and
storewide cash and merchandise
losses, were figured in, along with such
other store expenses as the electric
bill and the costs of goods sold, to
determine the store’s profit, upon which
the supplementary incentive compensation payments were calculated. By
doing so, Ralphs did not illegally shift
those costs to employees. After fully
absorbing the expenses at issue,
Ralphs simply determined what remained as profits to share with its
eligible employees in addition to their
normal wages.
“In sum, we are persuaded that the
reasoning of Ralphs Grocery [Co. v
Superior Court (2003) 112 CA4th 1090]
is flawed, and the authorities on which
that decision relied are distinguishable. Ralphs’s ICP, as described in
plaintiff’s complaint, was not illegal on
the grounds plaintiff asserts. We will
therefore reverse the instant Court of
Appeal judgment [122 CA4th 29, 18
CR3d 514; summarized in CELA Bulletin, Sept 04, p.5].
In a dissent joined by Kennard and
Moreno, Werdegar insisted that “[t]his
is a case of statutory interpretation.
Labor Code section 3751 prohibits
employers from directly or indirectly
passing all or any part of their workers’
compensation costs back to their employees through deductions from their
employees’ compensation. Ralphs Grocery Company, Inc.’s compensation
plan does just that. Whatever this court’s
views concerning the reasonableness
and desirability of such plans, judicial
notions of policy are irrelevant if the
Legislature’s policy decision, as embodied in the text of the statute, compels a different result. It does so here.”
For plaintiff: Fred Kumetz, Stephen
Glick; Ian Herzog; Paul R. Fine, Scott
A. Brooks, Craig S. Monita.
For amici Asian Law Caucus, Asian
Pacific American Legal Center, Golden
Gate Women’s Employment Rights
Clinic, La Raza Centro Legal, The Legal
Aid Society-Employment Law Center,
and Stanford Community Law Clinic:
Golstein, Demchak, Baller, Borgen &
Dardarian, Laura L. Ho and Nina Ravin.
For amicus CAOC: Evan D. Marshall.
For defendant: Thelen Reid & Priest,
Thomas E. Hill, Robert Spagat; Horvitz
& Levy, Barry R. Levy and Daniel J.
Gonzalez.
For defense amici Employers Group
and California Employment Law Council: Gibson, Dunn & Crutcher, Deborah
J. Clarke, Elisabeth C. Watson, and
Lisa A. Barr.
For defense amicus California Grocers
Association: Littler Mendelson, J. Kevin
Lilly, Diane Kimberlin, and James E.
Hart.
Cal SC, 8/23/07; opinion by Baxter
with George, Chin, and Corrigan
concurring; dissenting opinion by
Werdegar joined by Kennard and
Moreno; 2007 DAR 12823, 2007 WL
2388914.
DECISION THAT HELD THAT
EQUITABLE TOLLING PRINCIPLES
APPLY TO LIMITATIONS PERIOD
IN GOV CODE § 12960(d)
McDONALD v ANTELOPE VALLEY
COMMUNITY COLLEGE DISTRICT. On
August 15, the Supreme Court announced that it will review the Second
District decision that held that equitable
tolling is potentially available to a plaintiff
who files a DFEH charge beyond the
one-year period specified in Gov Code §
12960(d). During most of the period
between the dates of the discriminatory
actions alleged in the present case and
the filing of the plaintiff’s DFEH charge,
the plaintiff had been pursuing internal
remedies with school administrators,
and the Second District accordingly
denied a motion for summary judgment.
(The Second District’s June 2007 opinion appeared at 151 CA4th 961, 61
CR3d 62, and was summarized in CELA
Bulletin, June 07, p.9.)
For plaintiffs: Gregory W. Smith; Bradley C. Gage.
Cal SC, 8/15/07; 2007 DAR 12440.
CALIFORNIA COURTS
OF APPEAL
SUBSTANTIAL EVIDENCE
SUPPORTED FINDING THAT FED
EX DRIVERS ARE EMPLOYEES,
NOT INDEPENDENT
CONTRACTORS, AND ARE
ENTITLED TO REIMBURSEMENT
OF EXPENSES
ESTRADA v FEDEX GROUND PACKAGE SYSTEM, INC. Holding that substantial evidence supported the trial
court’s finding that the members of a
class of FedEx delivery drivers are employees, not independent contractors,
and are entitled, under Labor Code §
2802, to the reimbursement of some of
their expenses, the Second District,
Division One, wrote in part as follows in
-3-
DECISIONS
(From Page 3)
a lengthy August 13 opinion by Vogel:
“Three drivers brought this class action
... contending that, for the limited purpose of their entitlement to reimbursement for work-related expenses, they
were employees, not independent contractors. They sought reimbursement
and declaratory and injunctive relief,
and obtained class certification for their
reimbursement claim. In a trifurcated
trial, the court found the drivers were
employees within the meaning of Labor
Code section 2802 (Phase I), ordered
FedEx to reimburse some (about $5
million, including prejudgment interest)
but not all of their expenses (Phase II),
and ordered FedEx to pay the drivers’
costs and attorneys’ fees (about $12.3
million).
“This is the third appeal in this case. In
Estrada I, we held that orders dismissing some potential class members were
not appealable, and dismissed the appeal as premature. (Estrada v. RPS,
Inc. (2005) 125 Cal.App.4th 976 [summarized in CELA Bulletin, Jan 05,
p.6].) In Estrada II, we reversed all of the
equitable orders, resolving those issues against the drivers and in favor of
FedEx. (Estrada v. FedEx Ground Package System, Inc. (2006) [2006 WL
3378246, summarized in CELA Bulletin, Nov. 06, p.6).] On this appeal, we
consider FedEx’s challenges to the trial
court’s class certification order, the
court’s Phase I finding that the drivers
are employees, its Phase II reimbursement awards, and its post-trial attorneys’ fee award. On the drivers’ crossappeal, we consider their challenges to
limitations imposed on the Phase II
reimbursement awards and to the pretrial orders dismissing potential class
members (the issue prematurely before
us in Estrada I). We affirm the finding
that the drivers are employees, the
certification order, and the finding that
attorneys’ fees are recoverable, but reverse the fee award because the amount
must be reconsidered, reverse two orders limiting the scope of reimbursable
expenses, and remand to the trial court
for further proceedings and recalculation of the attorneys’ fee award.
“The trial court found that ... the drivers
are employees within the meaning of
Labor Code section 2802. FedEx contends the trial court is wrong. We disagree.
“Because the Labor Code does not
expressly define ‘employee’ for purposes
of section 2802, the common law test of
employment applies. [cite omitted] The
essence of the test is the ‘control of
details' ... but there are a number of
additional factors... [¶] The parties’ label is not dispositive and will be ignored
if the actual conduct establishes a different relationship. [cites omitted]
“FedEx contends the trial court misapplied the test ... and made ‘insupportable inferences of fact’ in determining
that the drivers are employees. We
disagree. [¶] First, FedEx’s assumptions are wrong. Although it is true that
the Operating Agreement says ‘the
manner and means’ to satisfy the objectives of the contract ‘are within the
discretion of the [drivers],’ and that FedEx
does not have the ‘authority to impose
any term or condition’ to the contrary,
the evidence shows unequivocally that
FedEx’s conduct spoke louder than its
words... The same is true with regard to
FedEx’s claim that it cannot terminate
the drivers at-will. Although the Operating Agreement provides for termination
with cause, it also provides for
nonrenewal without any cause at all—
and substantial evidence established
that FedEx discharges drivers at will.
“Second and most significantly, the trial
court’s findings are supported by substantial evidence. FedEx’s control over
every exquisite detail of the drivers’
performance, including the color of their
socks and the style of their hair, supports the trial court’s conclusion that
the drivers are employees, not independent contractors.
“FedEx contends the drivers’ claims
were unsuitable for class treatment...
[T]he claim is that individual facts predominated over the common issues.
We disagree... [¶] On this record ... it is
clear that common issues—whether the
drivers were employees and, if so, which
expenses were reimbursable—predomi-4-
nated. The anecdotal evidence was admitted to show FedEx’s power to interpret the Operating Agreement and was
relevant to the class as a whole, not just
to the drivers who happened to be the
subject of a particular anecdote.
“FedEx contends that, assuming the
drivers are employees, FedEx already
indemnified them for the expenses due
under section 2802. As did the trial
court, we disagree... [¶] According to
FedEx ... the settlement formula in the
Operating Agreement ‘effectively provided reasonable compensation’ for the
drivers’ business expenses. FedEx is
wrong.
“The Operating Agreement obligates
the drivers to provide their own trucks,
scanners, and clean uniforms, and to
‘bear all costs and expenses incidental
to operation’ of the trucks, including
maintenance, cleaning, depreciation,
fuel, oil, tires, repairs, taxes, licenses,
tolls, and insurance... As for the ‘settlement,’ the Operating Agreement provides that it is ‘for services provided,’ not
expenses incurred (for example, ‘contractor and van availability’). FedEx’s
suggestion that the settlement formula
is keyed to specific expenses and, as
such, includes reimbursement for those
expenses, is not supported by any
evidence.
“FedEx contends the attorneys’ fee
award is ‘manifestly improper’... [¶] The
trial court reduced the [requested] fee
by 18 percent (finding the amount
‘slightly bloated’) but otherwise granted
the motion (including the 2.0 multiplier)
and gave Estrada a total of $12,373,875
for costs and fees, noting the risk inherent in a contingent fee, the ‘financial
burden of private enforcement,’ and the
years of ‘long, hard-fought’ and ‘labor
intensive’ litigation involving ‘enforcement of an important right’ that conferred a ‘significant benefit on a large
class’... We reject FedEx’s claim that
fees were not recoverable in this case
but agree that the amount must be
reduced [because of the reversal of the
equitable orders in Estrada II] and that
the same facts cannot be used to trig(Cont'd on Page 5, DECISIONS)
DECISIONS
(From Page 4)
ger the application of [Code Civ Proc]
section 1021.5 and justify a multiplier.”
Finally addressing five issues raised by
Estrada on his cross-appeal, four challenging the trial court’s rulings vis-a-vis
the damages proved during the Phase II
trial, and the fifth revisiting the dismissal
orders that were the subject of Estrada
I, the court concluded, inter alia, that
remand was necessary for further proceedings to determine the amounts to
which the drivers are entitled for out-ofpocket expenses and the amount due
for their work accident insurance premiums.
For plaintiffs: Ellen Lake, Leonard
Carder, Lynn Rossman Faris, and Beth
A. Ross.
For defendant: Seyfarth Shaw, James
A. Nelson; O’Melveny & Myers, Walter
Dellinger, Robert M. Schwartz, Chris A.
Hollinger, and Jonathan D. Hacker.
Second Dist Div One, 8/13/07; opinion by Vogel with Mallano and Jackson concurring; 2007 DAR 12305,
2007 WL 2297469.
FEDERALLY CHARTERED
CREDIT UNIONS ARE NOT
IMMUNE FROM PUNITIVE
DAMAGES, AND REDUCTION IN
COMPENSATORIES DID NOT
REQUIRE CORRESPONDING
REDUCTION IN PUNITIVES
McGEE v TUCOEMAS FEDERAL
CREDIT UNION. In an opinion filed on
August 2, the Fifth District rejected the
argument that a federally chartered credit
union cannot be held liable for punitive
damages absent an express waiver of
sovereign immunity. Nor, the court held,
had the trial court been required to
reduce the punitive damages award when
it reduced the award of compensatory
damages. The two issues arose on
appeal from a judgment in favor of the
plaintiff on FEHA claims for retaliation,
disability discrimination, failure to engage in an interactive process, and
failure to provide reasonable accommodation.
The jury had awarded the plaintiff, the
defendant’s Vice President of Lending
who had taken a leave of absence for
cancer surgery and chemotherapy,
$2,041,558 in compensatory damages
in addition to $1.2 million in punitives
against the credit union and $7,000 in
punitives against the credit union’s CEO.
The trial court had conditionally granted
a new trial motion unless the plaintiff
accepted a reduction of the compensatory damages by $750,000.The plaintiff
accepted the reduction, and the trial
court refused to remit any portion of the
punitive damages.
Concerning sovereign immunity, the Fifth
District held that “...when analyzed within
the framework set forth by United States
Supreme Court, it must be concluded
that the ‘sue and be sued’ clause in the
federal credit union enabling legislation
presumptively waives immunity from
punitive damages. Since appellants have
failed to clearly show the applicability of
an exception to this waiver presumption, sovereign immunity does not apply.”
And concerning the second issue, the
court emphasized that “...a reduction in
compensatory damages does not mandate a corresponding reduction in punitive damages. There is no requirement
that the original ratio between compensatory and punitive damages as measured by the jury remain. (Betts v.
Allstate Ins. Co. (1984) 154 Cal.App.3d
688, 201 Cal.Rptr. 528.) Rather, the
court must evaluate the case based on
... the nature of the defendant’s acts,
the amount of compensatory damages,
and the defendant’s wealth...
“Applying the considerations above to
this case, it cannot be concluded that
the punitive damages were excessive
as a matter of law. Appellants’ conduct
was reprehensible... Moreover, the award
bears a reasonable relation to the actual damages as reduced, approximately 1 to 1. Further, there is no
evidence that the award will constitute
an undue burden on the Credit Union or
precipitate financial ruin. [¶] By issuing
the one remittitur but not the other, the
court made an implied finding that the
punitive award was correct. [cite omit-5-
ted.] Deference to the trial court is
appropriate in this case.”
For plaintiff: Norman Pine and Beverly
Tillett Pine, Los Angeles; Peter Sean
Bradley, Fresno; Andrew B. Jones,
Fresno.
For defendants: Horvitz & Levy, Peter
Abrahams and Robert H. Wright,
Encino; Borton, Petrini & Conron, J.
David Petrie and Sean T. O’Rourke.
Fifth Dist, 8/2/07; opinion by Levy
with Cornell and Dawson concurring; 2007 DAR 11846, 2007 WL
2214898.
SUPERIOR COURT DID NOT ERR
IN GRANTING ANTI-SLAPP
MOTION TO STRIKE DEFAMATION
FOOTBALL COACH
McGARRY v UNIVERSITY OF SAN
DIEGO. In an opinion filed on July 17
and ordered certified for publication on
August 15, the Fourth District, Division
One, affirmed orders granting the defendants’ anti-SLAPP motions to strike
defamation claims brought by the
University’s former head football coach.
(The employment termination aspect of
McGarry’s lawsuit was not at issue in
the present appeal.) The defamation
claims were premised on statements
contained in a newspaper article reporting the reasons for the plaintiff’s termination, and on statements made by a
university official during a meeting with
parents of members of the football team.
The court summarized the plaintiff’s
contentions on appeal and its conclusions as follows:
“On appeal, McGarry argues the antiSLAPP law was inapplicable because
neither the statements to the press nor
the statements to the parents qualified
as protected conduct under the antiSLAPP law. He alternatively asserts
that, even if the anti-SLAPP law does
apply, the trial court’s ruling must be
reversed for two distinct reasons. First,
he argues that, insofar as his defamation claim was rooted in the statements
DECISIONS
(From Page 5)
to the parents, he demonstrated a probability of success on the merits. Second, he argues that insofar as his defamation claim was rooted in the statements in the article, the trial court’s
application of the Shield Law [to deny
the plaintiff’s motion to compel the deposition of newspaper reporters] was error
and had the effect of precluding him
from discovering evidence necessary to
satisfy his burden to show a likelihood
of success on the merits of his claim.
“[T]he considerations outlined in Terry
[v Davis Community Church (2005) 131
CA4th 1534] convince us the statements concerning McGarry’s employment termination qualify for anti-SLAPP
treatment. His termination was of concern to a substantial number of people,
and it is difficult to imagine a greater
‘closeness’ between the topic of the
public interest (the termination) and the
challenged statements (the reasons for
the termination)... Finally, [the defendants] did not by their conduct create a
defense by thrusting McGarry into the
public eye; McGarry’s role as head
coach of a local university’s football
team already made him a public figure,
and his employment termination was
already a topic of widespread public
interest.
“We conclude the trial court correctly
found the complained-of conduct was
speech in connection with a public issue or a matter of public interest...
Accordingly, the burden shifted to
McGarry to show there was a reasonable probability he would prevail on the
merits at trial...
“McGarry asserts he was not a limited
purpose public figure, and therefore need
not meet the more stringent constitutional malice standards and its associated quantum of proof. [¶] Numerous
courts ... have concluded professional
collegiate athletes and coaches are at
least limited purpose public figures.
[cites omitted]... [¶] McGarry voluntarily entered the public arena as a college
football coach, and the statements dealt
exclusively with his performance of the
public role he voluntarily undertook. We
conclude McGarry was a limited purpose public figure for purposes of the
allegedly defamatory statements.
“We conclude McGarry did not show he
was likely to prevail on the merits of his
claim, insofar as it was based on [the
official’s statement to the football team
parents arguably implying that the coach
had been terminated for unspecified
immoral behavior] for at least two reasons. [¶] First, we conclude the complained-of statement was not reasonably susceptible of being interpreted to
imply a provably false assertion of fact.
[¶] The amorphous nature of the implied
assertion is fatal for a second reason.
McGarry’s evidence did not demonstrate malice, i.e., that Lyons subjectively believed her statement was (or
was likely) a false statement.
“[Concerning the statements reported
in the newspaper article] [u]nder Playboy Enterprises, Inc. [v Superior Court
(1984) 154 CA3d 14], we do not believe
a limited disclosure can be deemed to
waive the immunity for refusing to reveal
unpublished information, including the
unidentified source of the information.
[¶] McGarry cites no pertinent authority
supporting his claim that the reporters’
immunity was waived. Because the
Shield Law [Cal Const, art. I, § 2, subd.
(b); Evid Code § 1070(a)] is absolute on
its face ... we conclude the reporters
could not be compelled to reveal the
sources for their article.
“[McGarry] asserts the limited information he sought was outside the protections of the Shield Law because he
sought only an order compelling the
reporters to, in effect, repeat under oath
the facts stated in the article... [H]e
argues he was entitled to obviate the
University’s hearsay objection to the
article... [¶] We conclude that it is
unnecessary to determine whether the
Shield Law precludes deposing the reporters for the limited purposes proposed by McGarry... [C]ompelling the
reporters to authenticate or verify the
article’s content would not have provided McGarry with evidence that would
have satisfied his anti-SLAPP burden.”
For plaintiff: Robert N. Hocker.
For defendants: Luce, Forward, Hamilton
& Scripps, Philip L. Kossy and Richard
-6-
R. Spirra.
by McDonald with Nares and Irion
WL 2040578.
APPLICATION OF
“ADMINISTRATIVE/PRODUCTION
WORKER DICHOTOMY” LEADS
TO CONCLUSION THAT CLAIMS
ADJUSTERS ARE NON-EXEMPT
EMPLOYEES UNDER WAGE
ORDER 4-2001 AS WELL AS
UNDER WAGE ORDER 4
HARRIS v SUPERIOR COURT (LIBERTY MUTUAL INS. CO). “In these
original proceedings,” the Second District, Division One wrote in a lengthy
August 16 opinion, “we hold that plaintiffs are not exempt from the overtime
compensation requirements imposed
by California law. Defendants are insurance companies. Plaintiffs are the companies’ claims adjusters, who seek
damages based on overtime work for
which they allege they were not properly paid. Plaintiffs’ claims are governed
by two different California regulations:
Wage Order 4 applies to claims arising
before October 1, 2000, and Wage Order 4-2001 applies to claims arising
thereafter. The matter is before us on
the parties’ cross-petitions for writ review.
“[The] dispute turns on the relationship
between the administrative exemption
and a legal distinction known in the
case law as the ‘administrative/production worker dichotomy’... [T]he trial court
originally certified plaintiffs’ proposed
class on the ground that application of
the administrative/production worker
dichotomy was a predominant issue
and could well be dispositive with respect to the administrative exemption.
Later, however, the court revisited the
issue and decertified the class for all
claims arising after October 1, 2000, on
the ground that under Wage Order 42001, but not under Wage Order 4, the
adminstrative/production worker dichotomy is neither dispositive nor a
DECISIONS
(From Page 6)
predominant issue that would justify
class treatment of plaintiffs’ claims.
“As the trial court recognized, the only
cases interpreting the administrative
exemption under Wage Order 4 are Bell
v. Farmers Ins. Exchange (2001) 87
Cal.App.4th 805 (hereafter Bell II), and,
to a more limited extent, Bell v. Farmers
Ins. Exchange (2004) 115 Cal.App.4th
715 (hereafter Bell III). There is no case
law interpreting the administrative exemption under Wage Order 4-2001.
Under Wage Order 4 as interpreted by
the Bell cases, the administrative/production worker dichotomy would indeed
be predominant and dispositive in cases
like the one before us.
“The trial court concluded that the federal regulations expressly incorporated
in Wage Order 4-2001 [but not in Wage
Order 4] compel the conclusion that
claims adjusters can be exempt administrative employees notwithstanding the
administrative/production worker dichotomy... [¶] [But] because the federal regulations must be used as a
guide to interpreting Wage Order 4, and
because Wage Order 4-2001 expressly
incorporates the federal regulations, we
agree with the parties that the analysis
of the administrative exemption should
be the same under both wage orders.
(See Eicher v. Advanced Business Integrators, Inc. (2007) 151 Cal.App.4th
1363, 1371-1373 [applying Bell’s Wage
Order 4 analysis to a claim governed by
Wage Order 4-2001].)
“We agree with the Bell cases concerning the role of the dichotomy under
Wage Order 4, and we hold that the
dichotomy plays the same role under
Wage Order 4-2001. On that basis, we
grant plaintiffs’ petition and deny defendants’ petition...
“The undisputed facts show that plaintiffs are primarily engaged in work that
falls on the production side of the dichotomy, namely, the day-to-day tasks
involved in adjusting individual claims.
They investigate and estimate claims,
make coverage determinations, set reserves, negotiate settlements, make
settlement recommendations for claims
beyond their settlement authority, iden-
tify potential fraud, and so forth. None of
that work is carried on at the level of
management policy or general operations. Rather, it is all part of the day-today operation of defendants’ business...
[¶] [N]o evidence shows that even a
single plaintiff primarily engages in [work
that might fall on the administrative side
of the dichotomy].
“We direct the trial court to vacate its
October 18, 2006 order (1) denying
plaintiffs’ motion for summary adjudication and (2) partially granting defendants’ motion to decertify the class,
and to enter a new and different order (1)
granting plaintiffs’ motion for summary
adjudication of defendants’ affirmative
defense based on the administrative
exemption and (2) denying in its entirety defendants’ motion to decertify
the class.”
For employees: Lerach, Coughlin, Stoia,
Geller, Rudman & Robbins, Theodore J.
Pintar, Steven W. Pepich, and Kevin K.
Green; Cohelan & Khoury, Timothy D.
Cohelan and Isam C. Khoury; Spiro,
Moss, Barness & Harrison, Dennis F.
Moss and Ira Spriro.
For Liberty Mutual: Sheppard, Mullin,
Richter & Hampton, Douglas R. Hart,
Robert J. Stumpf, and Geoffrey D.
DeBoskey; William V. Whelan and
Karin Dougan Vogel.
Second Dist Div One, 8/16/07; opinion by Rothschild with Mallano concurring and Vogel dissenting; 2007
DAR 12495, 2007 WL 2325580.
WRONGFULLY DEMOTED
SCHOOL EMPLOYEE WAS NOT
ENTITLED TO BACK PAY FOR
PERIOD IN WHICH HE WAS ON
MEDICAL LEAVE FOR NONWORK-RELATED ILLNESS
DAVIS v LOS ANGELES UNIFIED
SCHOOL DISTRICT PERSONNEL
COMMISSION. “The primary question
on appeal,” the Second District, Division One wrote in a June 28 opinion, “is
whether an employee who is wrongfully
demoted is entitled to full back pay for
a period when he was not available for
work due to a nonindustrial illness. We
-7-
conclude that, because back pay is a
make-whole remedy, intended to restore the employee to the financial situation that would have existed but for the
employer’s wrongful conduct, an employee is not entitled to earnings he or
she would not have received in any
event. We also conclude that the employee in this case was not entitled to
immediate reinstatement given that he
was medically unable to return to work.”
The case involved the director of the
LAUSD’s information systems branch
who had been wrongfully demoted because of allegations of misconduct that
a hearing officer subsequently found
were unsupported by the evidence. But
the employee had begun a disability
leave of absence before he learned of
the demotion, did not work during his
demotion, and was medically unable to
work in his prior position after the Personnel Commission upheld his appeal.
“His illness,” the court emphasized,
“not his demotion or employment, was
the sole cause of his inability to work...
"The employer established that a wrongfully demoted employee would not have
received a salary because of an illness
unrelated to his demotion and employment. Under the causation principles
applied by the California and federal
courts, the Commission properly concluded that Davis was not entitled to
lost earnings for the period of his unavailability. He would not have been
able to work and would not have had any
earnings regardless of whether the
LAUSD had demoted him.”
For plaintiff: Audrey Y. Ripley.
Second Dist Div One, 6/28/07; opinion by Mallano with Rothschild and
Jackson concurring; 152 CA4th 1122,
62 CR3d 69.
DECISIONS
(From Page 7)
UNITED STATES
SUPREME COURT
SUPREME COURT REVERSES
NINTH CIRCUIT ON ERISA ISSUE
INVOLVING PERMISSIBLE
METHODS OF BENEFIT PLAN
TERMINATION
BECK v PACE INTERNATIONAL
UNION. Reversing the Ninth Circuit,
(427 F3d 668), the United States Supreme Court, in a unanimous opinion by
Scalia filed on June 11, addressed the
question “...whether an employer that
sponsors and administers a singleemployer defined-benefit pension plan
has a fiduciary obligation under [ERISA]
to consider a merger with a
multiemployer plan as a method of terminating the plan.” As explained in the
case Syllabus:
“Respondent PACE International Union
represented employees covered by
single-employer defined-benefit pension
plans sponsored and administered by
Crown, which had filed for bankruptcy.
Crown rejected the union’s proposal to
terminate the plans by merging them
with the union’s own multiemployer plan,
opting instead for a standard termination through the purchase of annuities...
The Ninth Circuit acknowledged that
the decision to terminate a pension plan
is a business decision not subject to
ERISA’s fiduciary obligations, but reasoned that the implementation of a
termination decision is fiduciary in nature. It then determined that merger was
a permissible termination method and
that Crown therefore had a fiduciary
obligation to consider PACE’s merger
proposal seriously, which it had failed to
do.
“Held: Crown did not breach its fiduciary
obligations in failing to consider PACE’s
merger proposal because merger is not
a permissible form of plan termination
under ERISA... The parties agree that
section 1341(b)(3)(A)( i ) refers to the
purchase of annuities, and that clause
(ii) allows for lump-sum distributions.
These are by far the most common
[termination] methods. To decide that
merger is also a permissible method,
the Court would have to disagree with
the Pension Benefit Guaranty Corporation (PBGC), the entity administering
the federal insurance program that protects plan benefits... The Court has
traditionally deferred to the PBGC when
interpreting ERISA. Here, the Court
believes that the PBGC’s policy is based
upon a construction of the statute that
is permissible, and indeed the more
plausible.”
For union: Christian L. Raisner,
Weinberg, Roger & Rosenfeld, Alameda;
Julia Penny Clark, Laurence Gold, Douglas L. Greenfield, Leon Dayan,
Kathleen M. Keller, Bredhoff & Kaiser,
Washington DC.
USSC, 6/11/07; unanimous opinion
by Scalia; 127 S Ct 2310.
NINTH CIRCUIT
IN EN BANC DECISION, NINTH
CIRCUIT HOLDS THAT TITLE VII
IS VIOLATED BY CALCULATION
OF SERVICE CREDIT THAT
EXCLUDES TIME SPENT ON
PREGNANCY LEAVE DURING
YEARS PRECEDING PASSAGE
OF PREGNANCY DISCRIMINATION
ACT
HULTEEN v AT&T CORP. Rejecting
the argument that its conclusion was
based on an impermissible retroactive
application of the 1979 Pregnancy Discrimination Act, the Ninth Circuit wrote
as follows in an en banc opinion by
Wardlaw filed on August 17.
“This appeal presents an issue previously decided on virtually identical facts
sixteen years ago in Pallas v. Pacific
Bell, 940 F.2d 1324 (9th Cir. 1991), cert.
denied, 502 U.S. 1050 (1992). There we
held that Pacific Bell violated Title VII in
calculating retirement benefits after the
effective date of the Pregnancy Discrimination Act of 1978, (PDA), 42
U.S.C. § 2000e(k), when it gave service
credit in those calculations for all prePDA temporary disability leave taken
by employees except leave by reason
of pregnancy. Pallas, 940 F.2d at 132627. Here, a three-judge panel of our
court, in a now-withdrawn opinion, held
that AT&T Corporation, successor in
interest to Pacific Bell and Pacific Telephone and Telegraph, did not violate
Title VII by engaging in identical conduct. The panel reasoned that Pallas no
longer controlled because it was inconsistent with intervening Supreme Court
authority governing retroactivity principles. Hulteen v. AT&T Corp., 441
F.3d 653, 664 (9th Cir. 2006) (citing
Landgraf v. USI Film Prods., 511 U.S.
244 (1994)). [The withdrawn Hulteen
decision was summarized in CELA
Bulletin, March 06, p.3.] Because we
conclude that Pallas is not “clearly
irreconcilable” with intervening authority, see Miller v. Gammie, 335 F.3d 889,
900 (9th Cir. 2003) (en banc), we affirm
the district court’s application of Pallas
to the undisputed facts presented here
and its award of summary judgment
against AT&T. We further hold that our
conclusion in Pallas that calculation of
service credit excluding time spent on
pregnancy leave violates Title VII was,
and is, correct.”
In dissent, O’Scannlain, joined by
Rymer, Bybee, and Callahan, summarized his position as follows: “By concluding that Pallas ... remains good
law, the majority erroneously perpetuates a circuit split with the Sixth and
Seventh Circuits. [fn.1: Compare Pallas
... with Ameritech Benefit Plan Comm.
v. Communication Workers of Am.,
220 F.3d 814 (7th Cir. 2000), and Leffman
v. Sprint Corp., 481 F.3d 428, 433 (6th
Cir. 2007). No circuit has followed our
decision in Pallas.] I believe that Pallas
was wrong then and is wrong now.”
For plaintiff: Henry S. Hewitt, Blythe
Michelson, and M. Suzanne Murphy,
Oakland.
For defendant: Joseph R. Guerra, Sidley,
Austin, Brown & Wood, Washington
DC.
Ninth Circuit en banc, 8/17/07; opinion by Wardlaw joined by ten others; dissent by O’Scannlain joined
by Rymer, Bybee, and Callahan;
2007 DAR 12527, 2007 WL 2332071.
-8-
DECISIONS
(From Page 8)
CLASS ACTION WAIVER IN
CONSUMER ARBITRATION
AGREEMENT WAS
PROCEDURALLY AND
SUBSTANTIVELY
UNCONSCIONABLE
SHROYER v NEW CINGULAR WIRELESS SERVICES, INC. “In this case,”
a Ninth Circuit panel wrote in an August
17 opinion by Reinhardt, “we consider
whether a class arbitration waiver in
[New Cingular’s] standard contract for
cellular phone services is unconscionable under California law, and whether
the Federal Arbitration Act preempts a
holding that the waiver is unenforceable. We hold that the waiver is unconscionable, and, thus, unenforceable,
and that the invalidation of the contract
provision is not preempted by the Federal Arbitration Act. Accordingly, we
reverse the district court’s order compelling arbitration. [Fn.1. Our conclusion here is similar to that reached by
district judges in the Northern, Central
and Southern Districts of California in at
least ten other cases. [cites omitted].]
“Applying [California] law to the class
arbitration waiver at issue here, we conclude that under the test set forth in
Discover Bank v. Superior Court of Los
Angeles, 36 Cal.4th 148 (Cal. 2005),
the waiver is both procedurally and substantively unconscionable and, therefore, unenforceable.
“First, as in Discover Bank, Cingular’s
Agreements ... are ‘consumer’ contracts. They are also ‘contracts of adhesion’... [¶] Second, the Cingular Agreements occurred ‘in a setting in which
disputes between the contracting parties predictably involve small amounts
of damages’... At most, Shroyer and
similarly situated class members suffered individual damages in the hundreds of dollars, an objectively small
amount...
“Third, Shroyer’s complaint plainly
‘allege[s] that the party with the superior bargaining power has carried out a
scheme to deliberately cheat large numbers of customers out of individually
small amounts of money’... [¶] Because all three parts of the Discover
Bank test are satisfied, Cingular’s class
arbitration waiver is both procedurally
and substantively unconscionable and
cannot be enforced.”
The Ninth Circuit rejected two arguments aimed at distinguishing the
present context from that at issue in
Discover Bank, holding: (1) the existence of “marketplace alternatives” cannot bar a finding of procedural unconscionability; and (2) the potential availability of attorneys’ fees and costs to
the prevailing party does not “ameliorate the problem.” Finally, the court
rejected either express or “conflict” preemption as a barrier to the application of
California law, and noted that due to the
contract’s nonseverability clause,
Cingular’s entire arbitration clause was
void by its own terms.
For consumers: William Weinstein,
Wechsler Harwood LLP, NYC; Robert
K. Friedl, Kirtland & Packard LLP, El
Segundo.
For Cingular: Donald M. Falk, Mayer,
Brown, Rowe & Maw, Palo Alto; Evan
Tager and Timothy C. Lambert, Mayer,
Brown, Rowe & Maw, Washington DC.
Reinhardt joined by Nelson with
separate concurrence by Rymer;
2007 DAR 12554, 2007 WL 2332068.
FACT ISSUES WERE RAISED ON
HOSTILE ENVIRONMENT CLAIM,
AND EMPLOYER COULD NOT
ESTABLISH “SECOND PRONG” OF
FARAGHER AFFIRMATIVE
DEFENSE
CRAIG v M & O AGENCIES, INC. The
Ninth Circuit reversed summary judgment in part on Title VII sex harassment
claims brought by a company branch
manager who had been subjected to
persistent sexual propositions, including physical assault, by the company’s
interim President. (The court also addressed a number of issues relative to
several Arizona common law claims.)
With respect to liability under a hostile
environment theory, the Ninth Circuit
disagreed with the District Court, (D
-9-
Ariz), and held that there were sufficient
triable issues to overcome summary
judgment with respect to the issue of
severity, and concerning the alteration
of the terms and conditions of employment. Moreover, the court held, the
employer did not successfully assert
the Ellerth/Faragher “reasonable care”
affirmative defense, since the plaintiff’s
“minor [19-day] delay in reporting the
behavior did not meet the stringent standard outlined in Faragher.” (Because
the affirmative defense failed on the
“second prong,” the court did not address the sufficiency of the employer’s
investigation and remedial action, which
the plaintiff asserted had been a “sham.”)
The Ninth Circuit held, however, that the
plaintiff failed to make out a prima facie
case for liability on a theory of quid pro
quo harassment. The court emphasized
that the plaintiff had not acquiesced to
her supervisor’s demands, and had been
neither demoted nor fired, although she
testified that at one point she felt she
that she would have to consent to keep
her job. The supervisor’s comment “I
just don’t think I can work with you
anymore” was insufficient, the court
said, to cause a reasonable woman to
believe that retaining her job was being
conditioned on submission. (After reporting the harassment, she had been
assured by senior executives that her
job was not, in fact, in jeopardy.)
Concerning claims against individual
supervisors, the court wrote: “We have
long held that Title VII does not provide
a separate cause of action against supervisors or co-workers. See Holly D.,
339 F.3d at 1179; Pink v. Modoc Indian
Health Project, Inc., 157 F.3d 1185,
1189 (9th Cir. 1998); Miller v. Maxwell’s
Int’l, Inc., 991 F.2d 583, 587-88 (9th Cir.
1993). Consequently, we affirm the district court’s grant of summary judgment
for [two individual managers].”
For plaintiff: Ivan K. Mathew and Susan
T. Mathew, Phoenix.
For defendants: Stephanie J. Quincy
and Gregg J. Tucek, Phoenix.
Bybee joined by Goodwin and
Smith; 2007 WL 2264635.
DECISIONS
(From Page 9)
NINTH CIRCUIT PANEL ADOPTS
PRESUMPTION THAT EEOC
RIGHT-TO-SUE LETTERS ARE
RECEIVED THREE DAYS AFTER
MAILING
PAYAN v ARAMARK MANAGEMENT
SERVICES LIMITED PARTNERSHIP.
The plaintiff’s Title VII claims for sexual
harassment, retaliation, and discrimination were untimely, the Ninth Circuit
held in an August 2 opinion, where her
lawsuit had been filed ninety-eight days
after the EEOC’s right-to-sue letter was
issued. (The plaintiff noted in her opening brief that she did not know the exact
date on which the letter arrived.) The
Ninth Circuit wrote:
“Martha E. Payan appeals the district
court’s [D Ariz] dismissal of her Title VII
claims... This appeal turns on one narrow and discrete issue—how to determine whether a Title VII action brought
in district court after the receipt of an
EEOC right-to-sue letter has been timely
filed when the actual date of receipt by
the litigant is unknown. Although we
have addressed this question in a handful of previous cases, our earlier holdings fail to provide sufficient clarity to
resolve the current case. Here, we seek
to establish a coherent rule to apply to
Payan’s case. Under that rule, we hold
that in the absence of evidence of actual
receipt, we will apply a three-day mailing presumption to determine notice of
a right-to-sue letter. We conclude that
Payan’s claims are untimely and affirm
the district court’s decision granting
summary judgment for Aramark.
“Payan is correct that because the
statute of limitations is an affirmative
defense, the defendant bears the burden of proving that the plaintiff filed
beyond the limitations period. [cites
omitted.] Contrary to Payan’s argument,
however, the defendant may do so by
raising the limitations defense and providing sufficient evidence to support the
presumption. Here, Aramark has raised
the defense and offered proof of the
right-to-sue letter. Thus, the undisputed
facts established in Payan’s case are
that the EEOC issued a right-to-sue
notice letter to Payan on September 26,
2003, that the EEOC mailed the letter to
Payan’s address of record, and that
Payan received the notice letter at this
address. From that basis, we must
calculate Payan’s date of receipt.
“We begin with the presumption that the
letter's issuance date is also the date
on which the letter was mailed... [This]
assumption[ ] may be rebutted with
evidence to the contrary... [¶] Having
established the mailing date, we next
calculate Payan’s receipt of her rightto-sue notice... [¶] Our cases ... do not
resolve the question... It appears that in
one cases we used the issuance date
as the receipt date. See Edwards v.
Occidental Chem. Corp., 892 F.2d 1442,
1444-45 (9th Cir. 1990)... In another
case we found timely an action filed 94
days after the EEOC letter was apparently mailed. See Ortez v. Wash. County,
88 F.3d 804, 807 (9th Cir. 1996).
“With no clearly applicable rule in our
own precedent, we may look to other
federal courts for insight. Most courts,
including the Supreme Court, have presumed a receipt date of three days after
EEOC letter issuance. [cites omitted.]
At least one court, the Sixth Circuit, has
used a five-day presumption. [cite omitted.] In addition, some courts have suggested, though not applied, a sevenday presumption. [cites omitted.]
“We adopt the three-day presumption.
The three-day presumption accords with
Federal Rule of Civil Procedure 6(e)...
This rule is well-known, and is reasonable in this context as in other aspects
of civil litigation... Based on the Supreme Court’s use of the three-day
presumption in Baldwin [County Welcome Ctr. v. Brown (1984) 466 US 147],
its adoption by an overwhelming number of circuits, and its basis in Federal
Rule of Civil Procedure 6(e), we adopt
the three-day presumption as the governing standard for this circuit... [¶]
[W]e affirm the district court’s decision
granting summary judgment for Aramark
on Payan’s claims.”
For plaintiff: Mark E. McKane, Kirkland
& Ellis, San Francisco.
For defendant: Thomas L. Hudson,
Meghan H. Grabel, Osborn Maledon,
-10-
Phoenix.
Bybee joined by Kleinfeld and
Whaley; 2007 DAR 11806, 2007 WL
2199270.
UNPUBLISHED
CALIFORNIA COURT OF
APPEAL DECISIONS
[Note: The following are summaries of
only a selection of the unpublished
Court of Appeal decisions filed during
the past month.]
SECOND DISTRICT HOLDS
UNCONSCIONABLE AND
UNENFORCEABLE FOR LACK OF
MUTUALITY AND COSTS
PROVISION
LOUIE v SUPERIOR COURT (PPG
INDUSTRIES). In an opinion filed on
August 15, the Second District, Division Two, issued a peremptory writ of
mandate directing the trial court to set
aside its order compelling arbitration of
FEHA claims. The court held that the
agreement was procedurally and substantively unconscionable and unenforceable under Armendariz because:
(1) it improperly required an employee
to pay for the presence of a court reporter; (2) it provided that an arbitration
award is always final and binding as to
an employee, but not as to the employer; and (3) it required arbitration
only of the types of claims most likely to
be brought by employees. The offending provisions were not severable, the
Second District held.
For petitioner: Michael D. Anderson
and Nina Poladian.
For real party: Kirkpatrick & Lockhart.
Second Dist Div Two, 8/15/07; opinion by Ashmann-Gerst with Boren
and Chavez concurring; 2007 WL
DECISIONS
(From Page 10)
SIXTH DISTRICT AFFIRMS
JUDGMENT ON JURY VERDICT
FOR PLAINTIFF ON CLAIM FOR
BREACH OF IMPLIED “GOOD
CAUSE” CONTRACT
WEI v GREAT WALL TECHNOLOGY
CO. In an opinion filed on August 28, the
Sixth District held, inter alia, that substantial evidence supported the jury’s
finding that the parties had entered into,
and that the employer had breached, an
implied in fact “good cause” contract.
The plaintiff had been discharged only
five weeks after being hired as the president of a high-tech start-up company.
The court emphasized: (1) the absence
of any handbook provision or written
memorandum either insisting on the atwill nature of employment, or suggesting any limitation on the employer’s
discharge power; (2) oral assurances
that the plaintiff would be the highest
paid employee in the company and that
he would be sent a formal employment
contract; (3) the plaintiff’s provision of
independent consideration beyond the
usual rendition of services in an employer/employee relationship.
For plaintiff: John P. Cardosi, San Jose.
For defendant: Thomas R. Hogan, San
Jose.
Sixth Dist, 8/28/07; opinion by
McAdams
with
BamattreManoukian and Duffy concurring;
SUMMARY JUDGMENT ON
DISABILITY DISCRIMINATION AND
RELATED CLAIMS
SIEGEL v NEWSPAPERS FIRST, INC.
The Second District, Division Three,
affirmed summary judgment on disability discrimination and related claims
brought by a former sales assistant
discharged, ostensibly, as part of a
company downsizing. The court held,
inter alia: (1) biased comments by a
non-decision maker were not “direct
evidence” of discriminatory animus; (2)
the timing of the discharge tended to
disprove causation, and the plaintiff failed
to present any other circumstantial evidence of a discriminatory motive; (3) the
defendant presented undisputed evidence that the plaintiff had been terminated as part of a bona fide RIF necessitated by adverse economic conditions. The court also held that no fact
issues were raised on a failure to accommodate claim, (the defendant
showed that it had granted all accommodations requested, and that the plaintiff had never asked for the accommodations she now insisted were denied);
and on a harassment claim, (a
supervisor’s biased remarks were infrequent and insufficiently severe).
For plaintiff: Carney R. Shegerian.
For defendant: Hughes, Hubbard &
Reed.
Second Dist Div Three, 8/24/07; opinion by Aldrich with Croskey and
Kitching concurring; 2007 WL
SIXTH DISTRICT FINDS SEVERAL
UNCONSCIONABLE PROVISIONS
IN ARBITRATION AGREEMENT
BETWEEN FRANCHISOR AND
FRANCHISEE
McGUIRE
v
COOLBRANDS
SMOOTHIES FRANCHISE. The Santa
Clara County Superior Court did not
abuse its discretion, the Sixth District
held, in refusing on grounds of unconscionability to compel arbitration of a
dispute between a franchisor and a
franchisee. The contract was one of
adhesion, the court held, and its substantively unconscionable provisions
included: (1) a ban on any arbitral award
of punitive damages; (2) an “inherently
one-sided” prohibition against consolidated or class proceedings; and (3) a
forum selection clause that was the
product of “procedural oppression and
unfair surprise” and that involved the
burden of arbitrating claims concerning
a California franchise in New York. The
unconscionable provisions were not
severable, the court held.
For plaintiffs: Peter Clark Lagarias, San
Rafael.
For defendants: Farella, Braun & Martel,
San Francisco.
Sixth Dist, 8/22/07; 2007 WL 2381545
(unpublished).
EVIDENCE COULD SUPPORT
FINDING THAT PHONE CALL BY
BIASED NON-DECISION MAKER
WAS “BUT FOR” CAUSE OF
ADVERSE ACTIONS
WILLIAMS v SUN MICROSYSTEMS,
INC. The Sixth District reversed summary judgment on a FEHA sexual orientation discrimination claim. (The court
affirmed summary adjudication, however, as to a number of tort and Labor
Code claims.) The court wrote in part:
“Plaintiff alleged that he is a gay male,
that he was performing competently,
that he suffered discipline in the form of
written reprimands, unfavorable performance evaluations, and demotion, and
that he was denied a promotion, a raise,
a bonus, and an award of stock options,
based upon his sexual orientation.
Plaintiff’s evidence of discriminatory intent was Pavey’s [a supervisor’s] alleged anti-homosexual comments to
[co-workers]... If a jury were to interpret
Pavey’s comments as reflecting a negative opinion of gay men, the temporal
relationship between her remarks and
her call to Harpster [the decision-maker]
could raise the inference that the telephone call was motivated by that negative opinion. Further, it is undisputed
that Pavey’s telephone call to Harpster
precipitated the investigation that led
Harpster to rescind the favorable evaluation he had issued just a few weeks
prior to the telephone call and to issue
the unfavorable evaluations and compensation decisions that plaintiff challenges here. This evidence is sufficient
to support a finding that Pavey’s telephone call ... was a ‘but-for’ cause of the
adverse employment actions.”
-11-
DECISIONS
(From Page 11)
For plaintiff: Marc A. Eisenhart, San
Jose.
For defendant: Danielle Ochs-Tillotson,
Oakland.
Sixth Dist, 8/7/07; opinion by Premo
with Rushing and Elia concurring;
position of Manager in the Department
of Environmental Health.
VERDICTS AND
SETTLEMENTS
The primary decision-maker, Arturo
Aguirre (deceased), claimed through
videotaped testimony that Ms. Comey
was unqualified and “too emotional,”
and that her management style—too
friendly with subordinates—was inappropriate. At no time had Mr. Aguirre
documented the basis for any of his
criticisms.
LOS ANGELES JURY FINDS FOR
PLAINTIFF ON DISCRIMINATORY
NON-PROMOTION CLAIM BY
MANAGER AT COUNTY
DEPARTMENT OF
ENVIRONMENTAL HEALTH
Just prior to trial, the County made a
settlement offer of $175,000, which was
increased to $250,000 on the condition
that the plaintiff voluntarily retire. Plaintiff demanded $1.25 million, to include
costs and attorney fees. (The case was
mediated three times by Nikki Tolt.)
COMEY v COUNTY OF LOS ANGELES. On July 23, 2007, Plaintiff Janet
Comey, a 32-year employee of the
County of Los Angeles, Environmental
Health Services, prevailed on a gender
discrimination claim against the County
of Los Angeles. The jury found that Ms.
Comey had been subjected to genderbased discrimination, and awarded her
$768,286. (The jury was unanimous on
all issues, except for an 11-1 vote on the
issue of adverse action.) Post trial motions addressing costs, including attorney fees, remain. (The plaintiff will also
be seeking an injunction ordering that
she be promoted to the Bureau Director
position.)
For plaintiff: Bernard Alexander,
Alexander & Yong.
For County of Los Angeles: Michael
Thomas, Thomas, Donahue, Thomas &
Hurevitz.
Los Angeles County Superior Court
(Central), 7/23/07; No. BC 346146;
Judge Elizabeth A. White; information provided by counsel.
Ms. Comey has held the title of Manager for approximately ten years. Evidence was presented concerning her
substantial qualifications, her impeccable employment history, and her accomplishments with the County, including the creation of a nationally recognized Lead Unit.
During nine of her ten years as a Manager, Ms. Comey received no performance evaluations, in violation of Civil
Service rule 20.02. Meanwhile, a number of men were appointed to “acting”
Bureau Director positions, thereby being “groomed” for permanent promotion.
(All of them had received at least two
performance evaluations.) No women
have ever been promoted above the
with respect to Title VII pay discrimination claims. The vote was 225 to 199,
(on party lines except for two Republicans voting for and six Democrats voting against.) A companion bill, The Fair
Pay Restoration Act, (S.1843), was
introduced in the Senate on July 20.
S.1894. On August 2, the Senate passed
The Support for Injured Servicemembers
Act, an expansion to the FMLA that
increases maximum leave time from
twelve weeks to six months for families
of wounded military personnel.
S.1881. On July 26, the ADA Restoration Act of 2007 was introduced in the
Senate by Senators Tom Harkin (D-IA)
and Arlen Specter (R-PA). The House
companion bill, H.R.3195, had 181 cosponsors, including 38 Republicans, as
of August 3. The bill would, inter alia,
prevent the courts from considering the
use or non-use of mitigating measures
when deciding whether an employee
has a qualifying disability.
S.1928. On August 1, the Equal Remedies Act of 2007 was introduced in the
Senate. The bill would remove the caps
on damages under Title VII and the
ADA.
PENDING LEGISLATION
•
H.R.2821. On July 31, the House passed
the Ledbetter Fair Pay Act of 2007 to
reinstate the “paycheck accrual rule”
C O M I N G
E V E N T S
The Fairmont Hotel
San Jose
October 19-20, 2007
NELA FALL SEMINAR
November 9-11, 2007
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•
•
WHY HAVE YOGA CLASSES AT A PLAINTIFFS LAWYERS’ CONFERENCE?
by Mary Dryovage
It is difficult for people to choose between professional activities and self
care. But if you don’t take time out to
care for your body, the lifestyle of indoor
sedentary work will take its toll on your
well-being.
It is 7:00 a.m. Yoga mat in hand, I am
looking for the conference room. When
I arrive, the yoga teacher, Tony Eason,
is setting up mats and props. The room
fills up and the class begins, and others
straggle in, parking their coffee at the
edge of the room. “Breathe deep, draw
oxygen into your thighs.” We do the
Awkward Pose, as the morning light
streams into the room. For a moment,
I am no longer thinking about my pending Court of Appeals brief. My whole
world consists of keeping my back
straight and my legs bent. There might
seem to be a contradiction between the
role of aggressive advocate and the
dreamy world of meditation and yoga.
A wide variety of students are in the
class. Nancy, a tennis afficionado who
has been practicing yoga for ten years
or more, uses the class to stretch her
muscles. Kathy, who does sea kayaking
on the weekends, likes the strengthening poses. Harvey uses yoga classes to
release the tension in his lower back.
Rob was delighted to try yoga away
from home, without risking the ridicule
of his buddies at the health club. Some
have never been in a yoga class, but
have heard about the healing properties
of yoga and want to check it out. The
teacher makes gentle suggestions to
modify the poses to make it easier for
them.
noticed attorneys on the courthouse
steps, panting. Colleagues arrive at
cocktail parties on crutches, due to
mishaps which happen on the way to
trial. I have a friend who quit the practice
of law, on doctor’s orders, due to chronic
back pain. The stressful, sedentary lives
of trial lawyers feature irregular hours,
high stakes and unpredictable outcomes. By mid-life, the casualties can
be dire. It takes self-awareness to live
in a balanced way. Asanas are both
physical poses and mental exercises.
They provide balance by connecting the
mind and body.
In Light on Life, B.K.S. Iyengar talks
about the cultivation of tenacity and
perseverance in yoga, as well in life.
Obviously, yoga is not the only answer—there are plenty of other paths,
like running, singing, biking, skiing,
dancing, meditating, and other forms of
activity or stillness involving focus on
the breath.
I discovered during law school that I had
more energy and thought more clearly if
I went to the gym at UAW’s Solidarity
House at 5:00 p.m., rather than continuing to work until I was so exhausted that
all I could do was eat dinner and fall
asleep. After years of admittedly inter-
mittent yoga practice, I find that I have
good cardio numbers and have gotten
better at establishing rapport with my
clients. I feel more alert and present.
(This is not without cost: I could have
taken on more clients or finished reading the novel for my book club.)
This will be the fifth year that we have
taken the time to begin the CELA conference day with a yoga class. The
reasons for beginning the day with this
ritual are complex—relax, strengthen,
focus, and unfocus By educating CELA
members not only on the law, but also
about tools that enhance the practice of
law, we support our members in living
full lives. We contribute to CELA’s members not only by presenting papers on
litigation techniques, but also by supporting positive life-style changes.
The class ended with us lying in
Shivasana, or “Corpse Pose.”This is a
five minute rest, in which the mind is
clear and relaxed and the body rejuvenates. Then I rose, eager to greet my
friends in the hotel lobby.
Bring your stretchy clothes and join us
for yoga class from 7:00 - 8:15 am on
September 27, 2007, at the CELA conference at the Fairmont in San Jose.
Tony is trained in Iyengar Yoga, which
is notable for using props like straps
and pillows to place the body in the
correct position. He has developed a
specialized yoga sequence. See, http:/
/ynottony.com/ He knows how to work
people at their own “edge,” whether they
are touching their toes for first time in
years or maximizing a hamstring stretch
by using a towel around the foot.
All too often, by the time a litigator gets
competent in the practice of law, physical problems begin to develop. I have
CELA member Sam Rudolph and Instructor Terri Pitts
at the 2006 CELA Conference.
-14-
CLASS ACTION
(From Page 1)
court’s discretion to allocate that cost.
The measure called for staying all discovery directed solely to the merits of
the claims or defenses until after the
court ruled on certification, while at the
same time mandating the court to consider the substantive elements of the
plaintiff’s case, as well as any affirmative defenses. This would have shifted
the burden of proof on affirmative defenses to the plaintiffs, while specifically precluding the plaintiffs from obtaining the discovery necessary to address those issues.
At the same time, the measure aimed
to prohibit discovery of the identity of
potential class members, (at least until
the court upheld the plaintiff’s standing
to assert the claim), thereby ensuring
that only the defendant employers would
have the information necessary to properly prepare for class certification or
trial. Finally, the measure would require
the plaintiffs to establish that the claims
and defenses are “substantially the
same” among all members as to liability, as well as damages. In my career,
I have yet to certify a class action where
the class members’ damages are “substantially the same.” The distinction
between the current rule requiring “similarity,” and the Initiative’s language requiring that issues of law or fact common to the class be substantially the
same can not be overstated.
Injunctive relief would not be allowable
in an action seeking monetary damages. And the Act would permit automatic appeals of class certification orders, delaying our cases by years.
Since this Initiative was filed, CAOC
and a group of coalition partners, especially the Foundation for Taxpayer and
Consumer Rights (FTCR), worked tirelessly gathering data from claims administrators across the nation to prove
that the Initiative would not save the
State of California money and might
well cost hundreds of millions of dollars
in taxes paid from class action settlements. Brad Seligman was actively involved on behalf of CELA and other civil
rights organizations in the coalition opposing this odious initiative. Similarly,
data was gathered to establish the bil-
lions of dollars received by non-profit
organizations in the State of California
via cy pres disbursements.
At the same time, CAOC filed two
counter initiatives and two versions of a
competing initiative. The counter initiatives are called “The No Say No Pay
Act,” and “The Corporate Accountability Act.” The former requires publicly
traded corporations annually to report
executive compensation and to give
shareholders of California corporations
the right to approve the compensation of
Directors and Executive Officers. “The
Corporate Accountability Act” is intended to deter deceptive and fraudulent corporate conduct. n addition to
the penalties provided for under any
other provision of law, it creates liability
for Executive Officers or Directors that
impacts their compensation or financial
benefits during the time when legal
violations occur. This is intended to
protect consumers against the kind of
corporate fraud that led to the collapse
of Enron and WorldCom, with any monies collected to be paid to the Victims of
Corporate Fraud Compensation Fund.
You can access these initiatives at
www.caoc.com/classactioninitiative.
On August 27, 2007, after a milliondollar war chest had been collected to
defeat the Initiative, CJAC and the Chamber of Commerce withdrew it from the
State Attorney General’s office. Their
explanation was that the timing of the
June 2008 election and the State’s
political climate made passage of the
proposal uncertain at best. The president of CJAC stated, “For us, there was
the possibility that what we thought
would be a quiet election could be an
explosive one.”
At the time they filed this Initiative,
CJAC and the Chamber of Commerce
certainly did not believe that the June
Primary would be “an explosive one.”
They likely believed that the voter turnout would be light, due to the fact that
California’s Presidential Primary will be
held in February and the General Election in November. Reading between the
lines, one might assume that what
caused this “change of heart” was their
realization that attorneys, civil rights,
-15-
environmental, and labor organizations—
and all of us who support consumers
and employees in this state—had a
message and the will to raise enough
resources to get it to the voters. This
was not going to be another Prop. 64,
and we were going to do whatever it took
to defeat this Initiative.
However, we must continue to work
together to ensure that their Initiative is
not re-filed for the November 2008 ballot—the current CJAC threat—and that
we have a fund in place to discourage
corporate leaders from attempting to
insulate themselves from responsibility
now and into the future. Polling showed
that if the voters knew corporate entities
were behind the anti-class action Initiative it would not have passed. The only
way to ensure voter awareness is to
raise enough money to purchase the
advertising time necessary to educate
California consumers before they vote.
Needless to say, CJAC’s Board of Directors have all the resources they need,
at their fingertips, to purchase air time
to promote anti-consumer initiatives
such as this one. So even though the
Initiative has currently been withdrawn,
we must continue to organize and activate our members so that big PhRMA,
insurance companies, big oil, auto
manufacturers, and the California Chamber of Commerce realize that we are a
force to be reckoned with—that we will
never give up the fight for consumers
and employees against those intent on
violating their rights.
•
•
•
SCHOLARSHIPS AVAILABLE FOR UPCOMING CELA CONFERENCE
The purpose and function of CELA’s
Diversity Committee is to recruit and
retain members, with an emphasis on
increasing broad diversity in our organization. Through scholarships, outreach,
and educational programs, the Committee looks to diverse communities to
expand our membership and leadership
base, and works to foster understanding of diversity issues in our practices.
The Committee welcomes and encourages the representation of traditionally
under-represented groups within its
membership and Board—including
people of color, women, the LGBT community, and people with disabilities.
As part of that effort, CELA is offering
scholarships for those who wish to attend CELA’s upcoming Conference on
September 27-29, at the Fairmont Hotel
in San Jose. Depending on financial
need, the scholarship will pay for part or
all of the attendance fee for the Conference. For a scholarship application,
contact CELA’s Administrative Director, Christina Krasomil, at (818) 9077895, or [email protected]. Applications must be received by September 14, 2007.
•
-16-
•
•
Published
Monthly
BULLETIN
September 2007
Vol. 21, No. 9
CALIFORNIA
SUPREME COURT
CLASS ARBITRATION WAIVERS
ARE “FREQUENTLY IF NOT
INVARIABLY” UNENFORCEABLE
IN CONNECTION WITH
OVERTIME CLAIMS
GENTRY v SUPERIOR COURT (CIRCUIT CITY STORES, INC.). “In this
case,” Moreno wrote in his 4-3 majority
opinion filed on August 30, “we consider whether class arbitration waivers
in employment arbitration agreements
may be enforced to preclude class
arbitrations by employees whose statutory rights to overtime pay ... allegedly
have been violated. We conclude that
at least in some cases, the prohibition
of classwide relief would undermine
the vindication of the employees’
unwaivable statutory rights and would
pose a serious obstacle to the enforcement of the state’s overtime laws.
Accordingly, such class arbitration
waivers should not be enforced if a trial
court determines, based on the factors
discussed below, that class arbitration would be a significantly more effective way of vindicating the rights of
affected employees than individual ar-
bitration. We therefore reverse the judgment of the Court of Appeal upholding
the class arbitration waiver [37 CR3d
790, summarized in CELA Bulletin,
Jan 06, p.5] and remand for the above
determination.
“Another issue posed by this case is
whether a provision in an arbitration
agreement that an employee can opt
out of the agreement within 30 days
means that the agreement is not procedurally unconscionable, thereby insulating it from employee claims that the
arbitration agreement is substantively
unconscionable or unlawfully exculpatory. As explained below, a finding of
procedural unconscionability is not required to invalidate a class arbitration
waiver if that waiver implicates
unwaivable statutory rights. But such a
finding is a prerequisite to determining
that the arbitration agreement as a
whole is unconscionable. Plaintiff in
this case argues that other terms of the
arbitration agreement were substantively unconscionable and that the entire agreement should not be enforced.
Contrary to the Court of Appeal, we
conclude the present agreement has
an element of procedural unconscionability notwithstanding the opt-out provi(Cont'd on Page 2, DECISIONS)
CELA’S BILLS IN SACRAMENTO
Both SB 549, CELA’s Bereavement
Leave bill, and AB 1043, the bill to
prohibit mandatory forum selection and
choice-of-law provisions, were sent to
the Governor’s desk in early September. SB 549 passed out the Assembly
on Sept 4 by a vote of 44 to 31, and the
Senate concurred in the Assembly’s
amendments on September 6 by a vote
of 24 to 14. AB 1043 passed out of the
Senate on September 5 by a vote of 21
to 14, and the Senate’s amendments
were concurred in on September 6 by a
vote of 47 to 30. (For information on the
bills’ provisions, and to track developments, see www.leginfo.ca.gov.)
LETTER TO MEMBERS
CONCERNING CHANGES
TO LISTSERV
PROTOCOLS
from Michelle Reinglass (CELA
Chair) and David Duchrow
(Incoming CELA Chair)
Greetings:
The CELA OnTopic listserv is the most
valuable benefit of CELA membership
for many members. Protocols regarding listserv participation are often difficult to apply in such a way that everyone would agree that they are “fair.”
In the past year, following approved
protocols, CELA members have been
suspended from the OnTopic listserv
when they represent employers against
other listserv participants. That rule
was expanded to exclude from OnTopic
participation anyone who works in a
firm with someone who represents an
employer against an OnTopic participant. In addition, CELA members who
represent unions (and other OnTopic
participants in their firms) have been
suspended when they represent a union
which is being sued by someone who is
represented by an OnTopic participant.
Further, the CELA member-opponents
were prohibited from having a “side
agreement” between themselves to
essentially “opt out” of the protocol
prohibiting OnTopic participation. (Note
that the same exclusions did not apply
to the OffTopic listserv.)
The purpose of this letter is to advise
you of significant changes to some of
the OnTopic listserv protocols. Members who participate on the CELA
(Cont'd on Page 12, PROTOCOLS)
DECISIONS
(From Page 1)
sion, and therefore remand for a determination of whether provisions of the
arbitration agreement were substantively
unconscionable.
“Discover Bank [v Superior Court (2005)
36 C4th 148] was not intended to suggest that consumer actions involving
minuscule amounts of damages were
the only actions in which class action
waivers would not be enforced. Rather,
Discover Bank was an application of a
more general principle: that although
‘[c]lass action and arbitration waivers
are not, in the abstract, exculpatory
clauses’ [cite omitted], such a waiver
can be exculpatory in practical terms
because it can make it very difficult for
those injured by unlawful conduct to
pursue a legal remedy. Gentry argues
persuasively that class action waivers
in wage and hour cases and overtime
cases would have, at least frequently if
not invariably, a similar exculpatory effect for several reasons, and would therefore undermine the enforcement of the
statutory right to overtime pay.
“First, individual awards in wage and
hour cases tend to be modest... [¶] A
second factor ... is that a current employee who individually sues his or her
employer is at greater risk of retaliation... [¶] Third, some individual employees may not sue because they are
unaware that their legal rights have
been violated.
“We also agree with the Bell [v Farmers
Ins. Exchange (2004) 115 CA4th 715]
court that ‘class actions may be needed
to assure the effective enforcement of
statutory policies even though some
claims are large enough to provide an
incentive for individual action...’ [cite
omitted.] In other words, absent effective enforcement, the employer’s cost
of paying occasional judgments and
fines may be significantly outweighed
by the cost savings of not paying overtime.
“We cannot say categorically that all
class arbitration waivers in overtime
cases are unenforceable... [¶] Nonetheless, when it is alleged that an employer has systematically denied proper
overtime pay to a class of employees
and a class action is requested notwithstanding an arbitration agreement that
contains a class arbitration waiver, the
trial court must consider the factors
discussed above... If it concludes, based
on these factors, that a class arbitration
is likely to be a significantly more effective practical means of vindicating the
rights of the affected employees than
individual litigation or arbitration, and
finds that the disallowance of the class
action will likely lead to a less comprehensive enforcement of overtime laws...,
it must invalidate the class arbitration
waiver...
“If [on remand] the trial court invalidates
the waiver on public policy grounds,
then the parties may proceed to class
arbitration ... unless the trial court invalidates the arbitration agreement altogether for reasons discussed in the
next section of this opinion... We believe that severance is particularly appropriate in the case of class arbitration
waivers...
“The Court of Appeal concluded, and
Circuit City argues, that the fact that an
employee had 30 days to opt out of the
agreement means that the terms of the
agreement, including the class arbitration waiver, are not procedurally unconscionable and are therefore enforceable. But the validity of a class arbitration waiver was analyzed in the previous
part of this opinion in terms of unwaivable
statutory rights rather than unconscionability... Therefore, if the trial court on
remand finds the class arbitration waiver
invalid using the factors set forth ..., that
waiver will not be enforced.
“Gentry does challenge provisions of
the arbitration agreement other than the
class arbitration waiver, however, and
argues that the entire arbitration agreement is unconscionable and unenforceable... [B]ecause this issue may remain viable on remand, we will address
the Court of Appeal’s holding that the
arbitration agreement was not unconscionable because Gentry had a 30day period to opt out...
“We conclude that the Court of Appeal
erred in finding the present agreement
-2-
CALIFORNIA
EMPLOYMENT
LAWYERS ASSOCIATION
Michelle Reinglass
Suite 170
Tel: (949) 587-0460
FAX: (949) 587-1004
Director:
Christina Krasomil
Encino, CA 91436-2412
Tel: (818) 907-7895
FAX: (818) 907-7474
EXECUTIVE BOARD
(Sherman Oaks)
Virginia Keeny
(Pasadena)
Eve Chesbro
(Pasadena)
Dolores Leal
(Los Angeles)
David DeRubertis
(Woodland Hills)
Steven Pingel
(Long Beach)
Kathy Dickson
(Oakland)
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)
Toni Jaramilla
(Los Angeles)
Brad Yamauchi
(San Francisco)
Bulletin Editor
Christopher Bello
Astoria, OR 97103
Ph: (503) 338-3891
DECISIONS
(From Page 2)
free of procedural unconscionability...
[T]here are several indications that
Gentry’s failure to opt out ... did not
represent an authentic informed choice.
“First and foremost, the explanation of
the benefits of arbitration in the [handbook] was markedly one-sided...
[A]lthough the handbook alluded to
some of the shortcomings of arbitration
in the general sense, it did not mention
any of the additional significant disadvantages that this particular arbitration
agreement had compared to litigation.
These included the following: First, the
agreement provided for a one-year statute of limitations as opposed to a threeyear statute of limitations provided under Code of Civil Procedure section 338
..., and a four-year statute of limitations
for unfair competition claims... Second, the agreement provided a limitation of remedies to backpay ‘only up to
one year from the point at which the
[employee] knew or should have known
of the events giving rise to the alleged
violation of the law,’ whereas an employee filing suit could potentially recover backpay for a three-year period
from the date the cause of action actually accrued. Third, the agreement imposed a maximum of $5,000 in punitive
damages... Fourth, the agreement contained a provision that parties will ‘generally’ be liable for their own attorney
fees, with the arbitrator having the ‘discretion’ to award the employee attorney
fees, as opposed to section 1194’s
provision that a prevailing employee ‘is
entitled to’ reasonable attorney fees
and costs.
“Although an employee who read Circuit City’s nine-page single-spaced
document ... would have encountered
the above provisions, only a legally
sophisticated party would have understood that these rules and procedures
are considerably less favorable to an
employee than those operating in a
judicial forum... [A]nd contrary to the
dissenting opinion’s contention otherwise, it is unrealistic to expect anyone
other than higher echelon employees to
hire an attorney to review what appears
to be a routine personnel document.
“Moreover, it is not clear that someone
in Gentry’s position would have felt free
to opt out. The materials ... made clear
that Circuit City preferred that the employee participate in the arbitration program... The lack of material information
about the disadvantageous terms ...
combined with the likelihood that employees felt at least some pressure not
to opt out ... leads to the conclusion
that the present agreement was, at the
very least, not entirely free from procedural unconscionability.
CELA GOVERNANCE TASK FORCE BEING FORMED
from Kathy Dickson and Jeff Winikow
As many of you know, CELA has
always operated through an all-volunteer Board, designed to represent a
cross-section of our membership. There
are competing viewpoints, both within
and outside the Board, concerning
CELA governance, and we would like
to form a Task Force on Governance to
study the experience of other organizations that have open elections to fill all
or some of their Board seats. The Task
Force will then issue recommendations to the CELA Board regarding this
issue.
To be effective, this Task Force must
be comprised of CELA members with
differing views. We hope to have a
representative cross-section of our membership serving on the Task Force,
which will include both current Board
members and non-Board members. CoChairing the Task Force will be Kathy
Dickson and Jeff Winikow.
At this point, we anticipate that an
effective Task Force will consist of about
ten members, although everyone in the
organization will be encouraged to express thoughts and ideas directly to the
Task Force members. Anyone wishing
to serve as a member of the Task Force
should contact CELA Administrative
Director
Christina
Krasomil:
[email protected].
“[W]e remand the matter to the Court of
Appeal with directions to remand to the
trial court to determine whether the class
arbitration waiver is void. Unless the
issue is mooted, the trial court must
also determine on remand whether the
original 1995 arbitration agreement or an
amended agreement controls the
present case and whether the controlling agreement has substantively unconscionable terms. If so, the court
must determine whether these terms
should be severed, or whether instead
the arbitration agreement as a whole
should be invalidated.”
For petitioner: Dennis P. Riordan, San
Francisco; Matthew Righetti, San Francisco; John Glugoski; Ellen Lake, Oakland.
For amici CELA et al: Altshuler, Berzon,
Nussbaum, Rubin & Demain, Michael
Rubin, Dorthea Langsam, San Francisco; Cliff Palefsky, San Francisco.
For amici Trial Lawyers for Public Justice et al: Goldstein, Demchak, Baller,
Borgen & Dardarian, Laura L. Ho, Oakland, and Joseph E. Jaramillo.
As amicus for petitioner: Michael H.
Crosby, San Diego.
For real party: Berry & Block, Sacramento; Jones Day and Steven B. Katz,
Los Angeles.
Cal SC, 8/30/07; opinion by Moreno
with George, Kennard, and
Werdegar concurring; dissenting
opinion by Baxter with Chin and
Corrigan concurring; 2007 DAR 13433,
2007 WL 2445122.
CALIFORNIA COURTS
OF APPEAL
APPLYING FEHA STANDARD,
OBSCENE THREAT WAS NOT
SUFFICIENTLY “SEVERE” TO
CONSTITUTE ACTIONABLE
HARASSMENT UNDER
CIV CODE § 51.9
HUGHES v PAIR. In an opinion filed on
September 10, the Second District, Division 5, affirmed summary judgment on
a claim under Civil Code § 51.9, a statute
-3-
DECISIONS
(From Page 3)
enacted in 1994 that prohibits sexual
harassment by a person engaged with
the plaintiff in a designated “business,
service, or professional relationship.”
The plaintiff alleged that she had been
sexually harassed by one of the trustees of her deceased husband’s estate,
who, in a phone call, had suggested
that the trust would give her what she
wanted if she would be “nice” to him.
The court recounted as follows a subsequent incident at a museum exhibit:
“The only thing Pair said to her was, ‘I’m
going to get you on your knees and fuck
you one way or another.’ This statement was made in close proximity to
Pair’s son and [the plaintiff’s son.].”
Holding that the term “sexual harassment” has the same meaning in § 51.9
as in FEHA and Title VII, the Second
District explained in part as follows its
conclusion that the defendant’s conduct was not actionable:
“The undisputed evidence in this case
reveals that Suzan cannot establish
quid pro quo sexual harassment because Pair’s statements did not alter
their relationship in any way. No tangible action occurred as a result of
Pair’s conduct.
“Because there was no quid pro quo
sexual harassment, Suzan can only
prevail if Pair’s conduct rose to the level
of being ‘pervasive or severe.’ Suzan
understandably does not contend that
Pair’s sexual harassment was pervasive... She does argue, however, that
Pair’s conduct was severe and the trial
court erred in looking to cases interpreting the FEHA and Title VII to determine
the meaning of ‘severe’... Suzan argues
that the FEHA and Title VII definitions of
‘severe’ ... have no relevance to the
types of relationships protected from
sexual harassment under section 51.9.
“The trial court correctly ruled that the
words ‘pervasive or severe’ have the
same meaning under section 51.9 as
they are given in the well-settled case
law decided under the FEHA and Title
VII... In cases under the FEHA and Title
VII, the issue is whether the sexually
harassing conduct is severe enough to
‘create an abusive work environment.’
[cite omitted.] Under section 51.9, the
issue is whether the sexually harassing
conduct is pervasive or severe enough
to cause a plaintiff to suffer ‘economic
loss or disadvantage or personal injury,
including, but not limited to, emotional
distress or the violation of a statutory or
constitutional right...' (§ 51.9, subd.
(a)(4).) Whether in the employment context ... or ... under section 51.9, the
ultimate issue of whether the defendant’s
conduct is pervasive or severe comes
down to the same considerations.
“In its survey of pertinent authority,
Herberg [v California Institute of the
Arts (2002) 101 CA4th 142] recognized
that a single incident generally is insufficient to establish a hostile work environment... Although plaintiffs argue that
‘even a single incident of severe harassment may be sufficient’ to establish
liability..., a review of the cases they
cite reveals that a single incident must
be severe in the extreme and generally
must include either physical violence or
the threat thereof.
“As in Herberg, the nature of the alleged
sexual harassment of Suzan by Pair
‘does not begin to approach the severity
of rape or violent sexual assault or even
milder forms of unwanted physical contact.’ [cite omitted.] Suzan was not
physically touched. The comments
made by Pair in the telephone call were
ambiguous... Although Suzan was disturbed and distressed by Pair’s coarse
and vulgar comments at the King Tut
exhibit, his statement was an ‘isolated
inciden[t]’ that cannot remotely be considered ‘extremely serious,’ as required
by the Supreme Court. ([Clark County
School Dist. v] Breeden, supra, 532
U.S. at p. 271.) To allow Suzan’s action
to proceed to trial would require an
interpretation of the word ‘severe’ that is
inconsistent with its meaning under the
FEHA and Title VII... Although the conduct attributed to Pair was grossly inappropriate, it is simply not actionable
under section 51.9.”
In a dissenting opinion, Armstrong disagreed with the majority’s importation of
employment cases into Civil Code section 51.9 jurisprudence, emphasizing
that the Legislature specified that the
statutes are independent. Moreover,
-4-
Armstrong wrote:
“When Hughes rejected his advances,
Pair followed up with a brazen, obscene
threat, made in a public place, in earshot of Hughes’s son and his own... He
exhibited a complete abandonment of
his fiduciary duty to [Hughes’s son],
indicating that he was willing to ignore
the constraints of the law. He did so in
public, in front of children, indicating a
willingness to ignore all normal rules of
civilized behavior... There are triable
issues of fact...”
For plaintiff: Hillel Chodos and Deborah
Chodos.
For defendant: Melanie C. Ross.
Second Dist Div Five, 9/10/07; opinion by Kriegler with Mosk concurring and Armstrong dissenting; 2007
WL 2584712.
ADVERSE RESULT IN LABOR
GRIEVANCE ARBITRATION DID
NOT HAVE BINDING EFFECT ON
STATUTORY CLAIMS WHERE
M.O.U. DID NOT EXPLICITLY SO
PROVIDE
MARCARIO v COUNTY OF ORANGE.
In an opinion filed on September 19, the
Fourth District reversed a judgment on
the pleadings that had been entered
against a County employee who alleged that, in retaliation for his filing of a
non-employment-related federal qui tam
action against the city, he had been
reassigned and demoted. The plaintiff
pleaded causes of action for workplace
retaliation in violation of Labor Code §
1102.5, violation of civil rights in violation of 42 USC § 1983, and i.i.e.d. The
court wrote in part, in an opinion by
Bedsworth:
“Anita Marcario appeals from a judgment on the pleadings entered in favor of
her employer, the County of Orange.
The trial court concluded the [adverse]
resolution of an earlier labor grievance,
pursued through a binding arbitration in
accordance with terms of a Memorandum of Understanding (MOU) between
DECISIONS
(From Page 4)
the County and Marcario’s union, precluded Marcario’s claim for damages
based upon retaliation in violation of the
Labor Code, and her remaining two
claims were barred by the applicable
statute of limitations. Marcario argues
the court erred, because the arbitration
of her labor grievance could not be given
binding effect with regard to statutory
claims unless the MOU clearly specified that it would be; and any statutes of
limitations were tolled during the time
she participated in the internal grievance procedure.
“We agree with Marcario on both counts.
A significant number of California appellate courts have already held that the
arbitration of a labor grievance, conducted pursuant to the terms of a collective bargaining agreement, cannot
have binding effect as against the
employee’s claims for violation of statute, unless the agreement states explicitly that it will. The MOU in this case
said no such thing. The County’s argument to the contrary is based upon
cases which are distinguishable...
“As for the tolling issue, Marcario correctly points out that equitable tolling
should be applied whenever (1) a plaintiff pursues one of several remedies in
good faith; and (2) defendant is not
prejudiced. Because this case was resolved on a motion for judgment on the
pleadings, there was simply no evidence from which the court might have
properly drawn the conclusion that
Marcario was not entitled to such tolling...”
For plaintiff: Mark Rosen.
For defendant: William L. Haluck, Benjamin P. de Mayo, and Wanda S. Florence.
Fourth Dist, 9/19/07; opinion by
Bedsworth with Moore and Aronson
WL 2717197.
WAGE AND HOUR CLAIMS BY
CLASS OF FLIGHT ATTENDANTS
WERE PREEMPTED BY RAILWAY
LABOR ACT
FITZ-GERALD v SKYWEST AIRLINES,
INC. In an opinion filed on September
19, the Second District, Division 6,
affirmed summary judgment on wage
and hour claims brought by a class of
current and former Skywest flight attendants. The Second District agreed with
the trial court that the claims were
preempted by the Railway Labor Act,
(45 USC § 151 et seq.), and that application of IWC Order No. 9-2001 would
violate the Airline Deregulation Act of
1978, (49 USC § 41713(b)(1)).
For plaintiffs: Norman Pine and Beverly
Tillett Pine; Bruce N. Anticouni; Thomas Slovak and Lucien Van Hulle.
For defendant: Paul D. Fogel, Margaret
A. Grignon, Raymond A. Cardozo, Dennis Peter Maio and Reed Smith; Ford &
Harrison and Norman A. Quandt,
Patricia T. Stambelos, Assistant General Counsel.
Second Dist Div Six, 9/19/07; opinion by Yegan with Gilbert and Perren
WL 2728371.
NINTH CIRCUIT
TSA AIRPORT SECURITY
SCREENER DISCHARGED FOR
UNION ACTIVITIES HAS RIGHT TO
JUDICIAL REVIEW OF FIRST
AMENDMENT CLAIMS
AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES LOCAL v
STONE. “Plaintiffs-Appellants American Federation of Government Employees, Local 1 (‘AFGE’) and John Gavello
appeal the [Northern District’s] dismissal
of their action against the Administrator
of the Transportation Security Administration (‘TSA’) in his official capacity.
The district court held that PlaintiffsAppellants were not entitled to judicial
review of their claims that the TSA
violated their First Amendment Rights
by disciplining them and then discharging Gavello, a TSA security screener,
for engaging in union activities. The
district court also held that AFGE lacked
standing.
“We reverse. If Congress wishes to
deny federal employees the ability to
-5-
redress alleged constitutional violations,
it must state its intention clearly. We
conclude that the statutory scheme
governing TSA security screeners does
not express a clear intention on the part
of Congress to preclude judicial review
of screeners’ constitutional claims. The
district court therefore has subject matter jurisdiction over Plaintiffs-Appellants’
action. We further conclude that AFGE
has standing.
“When Congress established the TSA
and federalized airport security
screeners in late 2001, it set out specific hiring and training requirements for
TSA security screeners... It then included a catchall provision giving the
TSA Administrator significant discretion over the employment of security
screeners...
“Pursuant to its catchall authority, the
TSA Administrator issued a Human
Resources Management Letter ... which
declared that all screeners are subject
to a one-year probationary period and
‘may be terminated at any time’ during
that period... Although the letter provides that the TSA will ‘state the reason
for the termination’ of probationary
screeners, it also provides that such
screeners have ‘no right of reply’ and
may not bring an administrative appeal... By contrast, nonscreener TSA
employees are covered by the ‘personnel management system’ of the FAA...
The FAA’s personnel management system, which operates parallel to the Civil
Service Reform Act of 1978 (‘CSRA’),
allows employees, including employees with less than one year of service,
to appeal personnel actions to the Merit
Systems Protection Baord and to seek
judicial review of MSPB decisions...
“Having no administrative recourse,
Plaintiffs-Appellants filed suit in federal
district court on April 1, 2004, claiming
that the TSA violated their First Amendment speech and associational rights
‘by penalizing Mr. Gavello’s exercise of
his legal right of advocacy of union
membership.’
DECISIONS
(From Page 5)
“The [district] court reasoned that ...
Congress’s decision not to extend the
CSRA’s protections to TSA screeners
... indicated that Congress did not intend to permit screeners to obtain judicial review of personnel decisions. The
court explained that AFGE lacked standing because the complaint did not allege that Gavello was actually a member of AFGE, and because Gavello’s
claims were unreviewable.
“The district court concluded that AFGE
had no standing to sue either on its own
behalf or on behalf of Gavello. The court
rested its decision partly on the ground
that Gavello was not entitled to review of
his First Amendment claims and partly
on the ground that the complaint did not
specify that Gavello was an AFGE
member. As we explain in the next
section, Gavello’s claims are reviewable. We ... conclude that, even if Gavello
is not an AFGE member AFGE satisfies both constitutional and prudential
requirements for standing...
“In the district court, the government
argued successfully that Plaintiffs-Appellants’ suit should be dismissed on
jurisdictional grounds. The Supreme
Court subsequently granted certiorari in
Whitman v. Department of Transportation, 126 S.Ct. 2014 (2006) (per curiam), another case involving the right of
a federal employee to obtain judicial
review of constitutional claims. In its
briefing in Whitman, the government
adopted a position that was contrary to
the position it had taken before the
district court in the present case. Specifically, the government accepted that
the language of the CSRA did not provide the clarity necessary to foreclose
judicial review of an employee’s constitutional claims. [cite omitted.] The Supreme Court in Whitman did not decide
the reviewability question. However,
consistent with its arguments in
Whitman, the government now
‘concede[s] that total preclusion of [an
employee’s] equitable constitutional
claims could not be sustained’ and
agrees with Plaintiffs-Appellants that
dismissal for lack of jurisdiction was
inappropriate. Despite the government’s
turnaround, we have an independent
duty to determine our jurisdiction.
“Consistent with Mitchum [v Hurt (3d Cir
1995) 73 F3d 30] and Spagnola [v Mathis
(DC Cir 1998) 859 F2d 223], and with
the position of both sides in this case,
we conclude that the district court erred
when it dismissed Plaintiffs-Appellants’
suit for lack of subject matter jurisdiction. We hold that the statutory scheme
governing Gavello’s employment does
not clearly state an intention on the part
of Congress to preclude judicial review
of constitutional claims. Plaintiffs-Appellants are therefore entitled to seek
equitable relief based on the alleged
violation of their First Amendment rights.
part as follows: “Anthony L. Williams
appeals the district court’s dismissal of
his complaint alleging violations of the
Federal Airline Deregulation Act’s
Whistleblower Protection Program (the
‘WPP’), 49 U.S.C. § 42121, and related
state law claims. At issue in this case
is whether an aggrieved employee may
bring a suit in federal district court to
allege violations of the WPP. We hold
that the WPP does not create such a
right of action and affirm the [Northern
District’s] dismissal of Williams’s action on the basis that the district court
lacked subject matter jurisdiction.
“[T]he government argues that their claim
for back pay should be dismissed on
sovereign immunity grounds... The government readily admits that it did not
raise this argument before the district
court, and we decline to address it here.
We leave it to the district court to decide
the issue on remand...
“In September 2004, Williams filed a pro
se complaint against United, alleging
retaliatory discrimination under the WPP
and three state law tort claims. He
claimed that United terminated him in
retaliation for a dispute related to an
alleged safety violation. The district court
exercised jurisdiction over the federal
claim pursuant to 28 U.S.C. § 1331, and
supplemental jurisdiction over his state
law claims. Williams’s retaliatory discrimination claim was dismissed on
summary judgment, and his state law
claims were dismissed under Federal
Rule of Civil Procedure 12(b)(6).
“As a fallback position, the government
argues that we should dismiss Plaintiffs-Appellants’ action pursuant to FRCP
12(b)(6) for ‘failure to state a claim upon
which relief can be granted.’ The government did not file a Rule 12(b)(6) motion
in district court... [and] we decline to
consider the government’s argument in
the first instance.”
For employee: Mary Dryovage, San
Francisco.
For AFGE: Mark D. Roth, Joe Goldberg,
Gony Frieder.
For government: William G. Kanter,
Mark W. Pennak, U.S. Department of
Justice.
Ninth Circuit, 9/5/07; opinion by W.
Fletcher joined by Tashima and
Holland; 2007 DAR 13725, 2007 WL
2482144.
WHISTLEBLOWER PROTECTION
PROVISIONS OF FEDERAL
AIRLINE DEREGULATION ACT DO
NOT SUPPORT PRIVATE RIGHT
OF ACTION
WILLIAMS v UNITED AIRLINES, INC.
In an opinion by McKeown filed on
August 31, the Ninth Circuit wrote in
-6-
“On appeal, United does not challenge
the district court’s exercise of jurisdiction. Nonetheless, we are ‘obliged to
raise questions of the district court’s
subject-matter jurisdiction sua sponte.’
[cite omitted]... We uphold the dismissal of the action not on the merits
but because the district court lacked
jurisdiction...
“[T]he WPP established a detailed administrative scheme for the investigation and resolution of claims brought by
airline employees... [¶] In exercising
jurisdiction, the district court noted that
the administrative filing requirement ...
is phrased permissively... Focusing on
this language, the district court concluded that ‘exhaustion of administrative remedies’ was not required before
bringing a claim under the WPP in
federal district court.
“[T]he ‘may’ language in [49 U.S.C.] §
DECISIONS
(From Page 6)
42121(b)(1) merely confers authority on
the Secretary of Labor to accept complaints from aggrieved employees.
Whether the WPP grants federal district courts jurisdiction to entertain claims
alleging violations of the WPP is a
separate question.
“Because the WPP does not expressly
grant a right of action in federal district
court, we consider whether there is an
implied right of action under the statute... [¶] The plain language of the WPP
supports the view that Williams is a
member of the special class the statute
was designed to protect... [¶] [But] ...
there is no evidence that Congress
intended to create a direct remedy in
federal district court. Because Congressional intent is clear, the third and
fourth factors in Cort [v Ash (1975) 422
US 66] are unnecessary to our analysis... [¶] The legislative history of the
WPP does not warrant a different conclusion.
“The dismissal of Williams’s federal
claim requires dismissal of his state law
claims... Although diversity jurisdiction
provides an independent basis for federal jurisdiction over state law claims,
complete diversity is lacking in this
case...”
For plaintiff: Anthony L. Williams, pro
se.
For defendants: Michael Mankes and
Michael G. Pedhirney, Littler
Mendelson, San Francisco.
McKeown joined by Siler and Bea;
2007 WL 2458504.
SUMMARY JUDGMENT ON
SEVERAL STATUTORY CLAIMS
BROUGHT BY REJECTED
APPLICANT FOR POLICE
OFFICER POSITION IN ARIZONA
NILSSON v CITY OF MESA. Affirming
summary judgment on claims brought
by a rejected applicant for a police
officer position, the Ninth Circuit held:
(1) because she had signed a waiver in
connection with her job application, the
plaintiff waived her right to assert ADA
and § 1983 claims that were predicated
on actions taken during the employer’s
background investigation; (2) the plaintiff had failed to exhaust administrative
remedies with respect to claims under
the Arizona Employment Discrimination Act; and (3) although the plaintiff
stated a prima facie case of retaliation
under Title VII and the AEDA, she failed
to raise a genuine issue of material fact
as to the assertedly pretextual nature of
the defendant’s explanation that her
application had been rejected because
she had failed a psychological exam,
not because she had filed an EEOC
charge against a former employer.
For plaintiff: David F. Gaona, Phoenix.
For defendant: Mark T. Steadman,
Mesa.
Rawlinson joined by Gould and
Covello; 2007 DAR 14307, 2007 WL
2669788.
AFFIRMING SUMMARY
JUDGMENT ON WARN ACT
CLAIMS, NINTH CIRCUIT HOLDS
THAT CONSTRUCTION WORKERS
AT SCATTERED PROJECTS
WERE NOT EMPLOYED AT
SUFFICIENTLY LARGE “SINGLE
SITE”
BADER v NORTHERN LINE LAYERS,
INC. Affirming summary judgment on
WARN Act claims, the Ninth Circuit
explained that “[t]his case presents the
question of whether construction workers’ ‘site of employment’ is the company headquarters or the workers’ actual work site, under the Act’s implementing regulations. We conclude that
it is the latter. Consequently, Plaintiffs
have not demonstrated that 50 or more
laid-off employees worked at a single
site of employment...
“Because none of the construction
project locations was geographically
proximate to [company headquarters
in] Billings or to any other construction
project location, Billings and the various
project sites are separate sites of em-7-
ployment under 20 C.F.R. § 639.3(i)(1)(5). NLL therefore had 50 employees at
a ‘single site’ only if the number of
remote construction workers can be
aggregated with the number of headquarter employees. To consider this
possibility, we look to § 639.3(i)(6)’s
provision for ‘outstationed workers.’
“Section 639.3(i)(6) counts certain categories of mobile employees as part of
a site of employment distinct from that
at which they are physically located,
that site being the site of their home
base for WARN Act purposes. Plaintiffs
contend that all NLL employees who
work outside of Billings are
‘outstationed,’ that Billings is their home
base, and that the Billings headquarters is therefore the ‘single site of employment’ for all NLL employees...
“We disagree with Plaintiff’s interpretation of the regulation... Plaintiffs have
not demonstrated that Billings meets
any of the criteria for assignment as
NLL remote workers’ site of employment. Specifically, Plaintiffs have not
demonstrated that Billings was: (1) the
site to which workers were assigned as
their home base; (2) the site from which
work was assigned; or (3) the site to
which the workers reported.”
For plaintiffs: Kenneth D. Peterson, Billings, Montana.
For defendants: Mark J. Levine, Houston, Texas.
Tashima joined by Hall and
Callahan; 2007 DAR 14032, 2007 WL
2581110.
OVERTIME CLAIMS WERE
RELEASED ONLY WITH REGARD
TO TIME PERIOD SPECIFIED ON
WH-58 STANDARD FORM
SETTLEMENT RECEIPT
DENT v COX COMMUNICATIONS LAS
VEGAS, INC. “In March 2004,” the Ninth
Circuit wrote in a September 10 opinion
by B. Fletcher, “plaintiff-appellant accepted overtime compensation that was
DECISIONS
(From Page 7)
owed him by his former employer, MC
Communications, pursuant to a settlement supervised by the Department of
Labor in accordance with Fair Labor
Standards Act... Dent signed a WH-58
standard form ‘Receipt for Payment of
Lost or Denied Wages, Employment
Benefits, or Other Compensation,’ which
was prepared by the DOL and certified
by MC Communications, acknowledging receipt of payment of unpaid wages
‘for the period beginning with the workweek ending 5-04-02 through the workweek ending 10-11-03.’
“On August 27, 2004 Dent commenced
this suit claiming unpaid overtime wages
under the FLSA ... as well as supplemental Nevada State statutory wage
payments. The defendants/appellees
... moved to dismiss Dent’s FLSA claim
on the ground that it had been released,
in full, by the March 2004 settlement.
The district court [D Nevada] granted
the motion...
“On appeal, Dent agrees that the March
2004 settlement fully waived his right to
pursue any claims for the period specified on the WH-58... He maintains,
however, that the settlement does not
bar him from seeking compensation
earned prior to that period. [¶] The issue
... is thus whether the DOL-supervised
settlement ... released Dent’s claims
under the FLSA for wages earned prior
to April 28, 2002. We hold that it did not.
“As summed up by the brief of Cox
Communications, the defendants’ position is that ‘no matter what time period
the Secretary used in calculating the
settlement amount,’ [29 USC] § 216
requires that the settlement addressed
all unpaid wages owed to Dent and
extinguished all future claims.
“We do not find, however, that the plain
meaning of 29 U.S.C. § 216(b) unambiguously compels such a conclusion...
The statutory language of the FLSA
does not reject the possibility of a settlement payment and resulting waiver that
are tied to a specified time period.
“[W]e conclude that Dent’s claims were
released only with regard to the time
period specified on the WH-58. We
therefore ... reverse the district court’s
dismissal of Dent’s causes of action
under the FLSA accruing on or between
August 27, 2001 and April 27, 2002.”
For plaintiff: David Borgen, Oakland;
Leon Greenberg, Las Vegas.
For defendants: Rick D. Roskelley and
S. Libby Henninger, Littler Mendelson,
Las Vegas; William D. Deveney, Atlanta, Georgia; Carol Davis Zucker and
Chantel D. Carmouche, Las Vegas.
Ninth Circuit, 9/10/07; opinion by B.
Fletcher joined by Clifton and Shea;
2007 DAR 14021, 2007 WL 2580754.
SUMMARY JUDGMENT ON FIRST
AMENDMENT CLAIMS BY
ARIZONA POLICE OFFICER
DISCHARGED FOR OPERATING
PORNOGRAPHIC WEBSITE
DIBLE v CITY OF CHANDLER. “Ronald
and Megan Dible appeal from the district court’s [D Arizona] grant of summary judgment against them in their
action against the City of Chandler,
Arizona, the Chandler Police Department, and the Chandler Police Chief...
Principally, the Dibles assert that Ronald
Dible was a police officer whose rights
under the First Amendment ... were
violated when he was terminated for
participating in (performing in, recording
and purveying) a sexually explicit
website with his wife. We affirm.
“The Supreme Court [in City of San
Diego v Roe (2004) 543 US 77] surveyed First Amendment law as it related to government employees, and
set forth an analytical framework for
consideration of the issue. The Court
first recognized that ‘[a] government
employee does not relinquish all First
Amendment rights ... just by reason of
his or her employment.’ [cite omitted.]
That said..., there are two paths of
analysis, depending on whether the
speech is related or unrelated to the
person’s employment... [¶] As in Roe,
the result would be same ‘under either
line of cases.’ The Dibles cannot prevail. We will explain.
“If we determined that Ronald Dible’s
activities were related to his public
employment, we would [consider the
Pickering balancing test]... [B]efore an
employee is even entitled to have the
balancing test applied, the ‘speech must
touch on a mater of public concern.’
[cite omitted.] [Dible’s] activities were
simply vulgar and indecent. They did
not constitute speech on a matter of
public concern...
“If we determined that Ronald Dible’s
activities were unrelated to his public
employment, we would also have to
apply a balancing test... [¶] [T]he interest of the city in maintaining the effective and efficient operation of the police
department is particularly strong. It would
not seem to require an astute moral
philosopher or a brilliant social scientist
to discern the fact that Ronald Dible’s
activities, when known to the public,
would be ‘detrimental to the mission
and functions of the employer.’ [cite
omitted.] And although the government’s
justification cannot be mere speculation, it is entitled to rely on ‘reasonable
predictions of disruption.’ [cite omitted.]
“In fine, whether Ronald Dible’s activities were related to his employment or
not, the City could discipline him for
those activities without violating his First
Amendment rights.
“The Dibles also claim that their First
Amendment rights to privacy and freedom of association were violated by the
City... [I]n a case of this nature, a
governmental employee cannot avoid
the strictures of the balancing tests that
we have heretofore described by attempting to resurrect fallen speech
claims as privacy and associational
claims. Those First Amendment claims
must also necessarily fall with the Dibles’
speech claims.”
In a separate opinion, Canby concurred
in the result because “any rational trier
of fact would find that Dible would have
been discharged for making false statements to police department investigators, had he not been discharged for his
-8-
DECISIONS
(From Page 8)
website activity.” But Canby insisted
that “Dible’s expressive website conduct was an unconstitutional ground for
his discharge.” Canby emphasized that
“because Dible’s expressive activity was
not employment related, the police department must demonstrate that the
alleged harm caused by his expression
was ‘real, not merely conjectural.’ [cite
omitted.] The evidence of harm in this
case is so insubstantial that it can be
characterized as ‘conjectural.’”
For plaintiffs: Keith M. Knowlton, Mesa,
Arizona.
For defendants: Katherine E. Baker,
Scottsdale.
Fernandez joined by Schroeder;
separate opinion by Canby concurring in judgment; 2007 DAR 13692,
2007 WL 2482147.
CENTRAL DISTRICT CORRECTLY
VACATED ARBITRATION AWARD
FOR “EVIDENT PARTIALITY” OF
ARBITRATOR
NEW REGENCY PRODUCTIONS, INC.
v NIPPON HERALD FILMS, INC. “This
case arises from the arbitration of a
contract dispute between a film production company and a film distribution
company. The [Central District] vacated
the arbitration award based on the neutral arbitrator’s failure to disclose that
during the arbitration, he began work as
a senior executive with a company that
was negotiating with a production executive of one of the parties to the
arbitration to finance and co-produce an
important motion picture.
“We hold that vacatur by the district
court for ‘evident partiality’ of the arbitrator was proper under the Federal Arbitration Act. We conclude that the lack
of evidence of the arbitrator’s actual
knowledge of the ongoing negotiation
does not prevent a finding of evident
partiality because, under the circumstances of this case, the arbitrator had
a duty to investigate possible conflicts
resulting from his new employment and
to disclose that employment to the
parties. We therefore affirm the deci-
sion of the district court.
“We are aware of only one court of
appeals that has adopted a per se rule
that a finding of evident partiality is
precluded by an arbitrator’s lack of ‘actual knowledge of the information upon
which [an] alleged conflict was founded.'
Gianelli Money Purchase Plan & Trust
v. ADM Investor Servs., Inc., 146 F.3d
1309, 1313 (11th Cir. 1998). In Gianelli,
the Eleventh Circuit disapproved of our
decision in Schmitz [v Zilveti (9th Cir
1994) 20 F.3d 1043]. But even if we were
persuaded that Schmitz was wrongly
decided, we would be bound to follow it
as the law of our circuit.”
For appellant: Howard L. Horwitz, Beverly
Hills.
For appellee: Charles N. Shephard, Los
Angeles.
Ninth Circuit, 9/4/07; opinion by W.
Fletcher joined by Pregerson and
Berzon; 2007 WL 2472467.
DISTRICT COURT MADE
IMPERMISSIBLE CREDIBILITY
DETERMINATION IN GRANTING
SUMMARY JUDGMENT ON
RETALIATION CLAIM
TAHERI v EVERGREEN AVIATION
GROUND LOGISTICS ENTERPRISES, INC. In an unpublished opinion filed on August 31, the Ninth Circuit
reversed summary judgment on a retaliation claim brought under the Alaska
Human Rights Act. The court wrote as
follows in a Memorandum opinion (with
Wallace dissenting):
“The Alaska Human Rights Act tracks
federal civil rights law... [¶] We agree
with the district court that Taheri established a prima facie case of retaliation
because he was terminated shortly after he complained ... that Evergreen
was discriminating against him based
on national origin, race, religion, and
age. We also agree that Evergreen met
its burden of producing a non-discriminatory reason for terminating Taheri:
that on three or more occasions he was
-9-
found sleeping on the job. We conclude, however, that Taheri present evidence raising a genuine factual dispute
whether Evergreen’s proffered reason
... was pretextual.
“The district court reached the opposite
conclusion after determining that there
was no evidence that Kegley was aware
of other employees who slept at work
but were not punished, and because
other similarly situated employees had
also been disciplined for sleeping on the
job. In making this determination, the
district court failed to consider the evidence in the light most favorable to
Taheri. Instead, the court made a credibility determination that favored
Kegley’s account over that of Taheri and
his co-workers. Taheri’s evidence that
sleeping on the job between shifts was
rampant, practiced by employees and
supervisors alike, and visible almost
daily, calls into question Kegley’s testimony that he was unaware that this
practice was taking place. In addition,
Taheri presented evidence that Kegley
was involved in addressing Taheri’s discrimination complaint and was aware of
Miller’s retaliatory animus and threats,
yet based his termination decision in
part on Miller’s ... disciplinary action.”
For plaintiff: Theodore J. Stepovich,
Anchorage.
For defendant: Brian Peters, Ford &
Harrison, Los Angeles; Patricia G.
Griffith, Ford & Harrison, Atlanta.
Ninth Circuit, 8/31/07; Memorandum
opinion by Noonan and Paez with
Wallace dissenting; 2007 WL
DECISIONS
(From Page 9)
UNPUBLISHED
CALIFORNIA COURT OF
APPEAL DECISIONS
[Note: Only a selection of the past
month’s unpublished Court of Appeal
decisions is summarized below.]
AFFIRMING SUMMARY
JUDGMENT ON RETALIATION
CLAIM, FIRST DISTRICT HOLDS
THAT UC BERKELEY MANAGER
FAILED TO PROVIDE EVIDENCE
OF SUBSTANTIAL AND
DETRIMENTAL EMPLOYMENT
ACTION
SAWYERS v THE REGENTS OF THE
UNIVERSITY OF CALIFORNIA. Affirming summary judgment on a retaliation
claim brought by an African American
managerial employee of the UC Berkeley Athletics Department, the First District, Division Five, engaged in an extended discussion of the Yanowitz standards before concluding that, “whether
viewed individually or in the aggregate,
Sawyers has provided no evidence of
any substantial and detrimental employment consequence sufficient to
constitute an actionable adverse employment action.”
For plaintiff: Daniel Mark Siegel, Oakland.
For defendant: Paul David Fogel, San
Francisco.
First Dist Div Five, 8/30/07; opinion
by Needham with Simons and
Gemello concurring; 2007 WL
BANK WAS NOT ENTITLED TO
SUMMARY JUDGMENT ON
NATIONAL BANK ACT
PREEMPTION GROUNDS WHERE
IT FAILED TO ESTABLISH THAT
NOMINAL “VICE PRESIDENT” IN
REALITY HAD DUTIES OF BANK
“OFFICER”
RAMANATHAN v BANK OF AMERICA.
Reversing summary judgment on
Tameny tort and various discrimination
claims, the First District, Division Three,
held that because the defendant bank
had failed to prove that the plaintiff was
“an officer” of the bank under Wells
Fargo Bank v Superior Court (1991) 53
C3d 1082, it had not been entitled to
summary judgment on grounds of preemption under Section 24 (Fifth) of the
National Bank Act, according to which
“officers” may be dismissed “at pleasure.” (The court noted that “courts have
... acknowledged the doctrine of preemption protects national banks that
dismiss their officers ... from state law
discrimination claims..., although in this
regard, courts have differed on whether
such preemption is total or partial.”)
“[W]e hold that where an employee
asserts that his or her position as ‘Vice
President’ is not vested with any of the
duties or responsibilities normally associated with such a position—as
Ramanathan did here—then to obtain
summary judgment on preemption
grounds ... the Bank must show the
employee is ‘an officer’...”
For plaintiff: Daniel Louis Feder, San
Francisco.
For defendant: Patricia Kruse Gillette,
San Francisco.
First Dist Div Three, 8/30/07; opinion
by Horner with McGuiness and
Siggins concurring; 2007 WL
WAREHOUSE WORKER WITH
SUPERVISORY DUTIES FAILED
TO ESTABLISH NON-EXEMPT
STATUS
BRAGG v ORGANIC MILLING CO.
Affirming summary judgment on overtime claims, the Second District, Division Three held that the evidence demonstrated that the plaintiff’s duties were
largely managerial and did not raise a
triable issue concerning application of
the executive exemption. The plaintiff
alleged that he had worked for defendant in a salaried clerical and/or warehouse position for twenty-five years,
and did so in excess of 40 hours per
week without receiving straight time or
-10-
overtime compensation for the overtime
hours he worked.
“There is considerable evidence,” the
court wrote, “that far more than one-half
of plaintiff’s work time was devoted to
‘duties which meet the test of the exemption.’ Speaking in general terms,
among other things, those tasks consisted of his various coordination activities for pickups and deliveries; his prioritizing and checking of the warehouse
workers’ work; his attention to workers’
time cards, overtime and meal break
times; his lining up mechanical repair
work for broken machinery and adjusting workers’ schedules at such times;
his assistance in scheduling work hours
for the office employees he supervised;
and his attention to necessary discipline and safety issues.”
For plaintiff: Irving Meyer.
For defendant: Gordon & Rees.
Second Dist Div Three, 8/29/07; opinion by Croskey with Klein and Aldrich
IN SEX HARASSMENT ACTION,
PLAINTIFF RAISED TRIABLE
ISSUES AS TO SEVERITY AND
AS TO HARASSERS’ STATUS AS
SUPERVISORS
FUENTES v AUTOZONE, INC. “Marcela
Fuentes appeals from summary judgment ... on her complaint for sexual
harassment, intentional infliction of
emotional distress and slander. Plaintiff
argues that she presented evidence
that her individual harassers were supervisors and therefore defendant is
strictly liable... We find triable issues of
material fact ... as to whether the individual harassers were supervisors and
as to whether the harassment was severe.
“A major issue on appeal is whether [the
harassers] were supervisors or managers within the meaning of ... Government Code section 12940, subdivision
DECISIONS
(From Page 10)
(j)... [¶] Defendant’s evidence that Garcia
and Carrillo were not supervisors under
FEHA focused on their lack of authority
to hire, fire, lay off, recall, promote,
demote, transfer, suspend or increase
or decrease the pay of other employees. But ... the definition of ‘supervisor’
under FEHA goes beyond such authority and addresses the responsibility to
direct the plaintiff.
“The Garcia and Williams declarations,
together with the evidence submitted by
plaintiff, establish that Garcia, as acting
store manager, had responsibility for
the daily operation of the store. Based
on the statement that the parts sales
manager cannot schedule work for other
employees without approval of the store
manager, we infer that the store manager does have that authority. Williams’s
description of the PSM position held by
Carrillo reveals that he had the authority
to ‘request assistance from other employees to perform routine tasks related
to inventory, sales, cashier, or other
store support when needed.’ This raises
a triable issue of material fact as to
whether Carrillo had the authority to
‘assign’ or ‘direct’ plaintiff within the
meaning of section 12926, subdivision
(r)).
“The trial court ruled that defendant was
entitled to summary adjudication of the
sexual harassment cause of action on
the merits, finding that plaintiff had not
C O M I N G
presented evidence of anything beyond
ordinary flirtation. We disagree with this
characterization of the evidence... [¶]
Plaintiff cites evidence of physical touching by Garcia, as well as sexually explicit and hostile statements by both
Garcia and Carrillo...”
For plaintiff: Matthew J. Matern, Sandra
M. Falchetti, Paul J. Weiner, and
Caroline H. Lee.
For defendant: Littler Mendelson, Jeremy A. Roth, Gregg C. Sindici, and Tina
M. Fryar.
Second Dist Div Four, 9/10/07; opinion by Epstein with Willhite and
Suzukawa concurring; 2007 WL
UNITED STATES
DISTRICT COURTS
PHARMACEUTICAL SALES
REPRESENTATIVES ARE
ALLOWED TO PROCEED WITH
COLLECTIVE ACTION ALLEGING
FLSA OVERTIME VIOLATIONS
DELGADO v ORTHO-McNEIL, INC. In
the first week of September, District
Judge Cormack Carney in Santa Ana
issued a ruling that permits plaintiffs’
counsel to notify about 8,000 current
and former Ortho-McNeill pharmaceuti-
E V E N T S
October 19-20, 2007
NELA FALL SEMINAR
cal sales representatives that they may
participate in a collective action alleging
FLSA overtime violations. The litigation
is one of more than a dozen overtime
cases across the country brought
against major drug companies by outside salespeople. (In mid-July, U.S.
District Judge John F. Walter in Los
Angeles allowed plaintiffs to contact
potential class members in Balyasny v
Bayer Corp., CV 06-7594-JFW. Steven
G. Zieff is lead plaintiffs’ counsel in the
Bayer case.)
For plaintiffs: Aashish Y. Desai, Mower,
Carreon & Desai.
For defendant: John S. Battenfeld, Morgan, Lewis & Bockius.
USDC, SD Cal., SACV-07-263-CJC;
Judge Cormack Carney; information reported in Daily Journal, 9/7/
07.
•
•
•
OCTOBER EVENTS
Monday, October 22, at 5pm, CELA/
LEFTJAW members will join others in
the workers’ rights community at The
Stand in Century City for an informal
send-off for Eve Hill, who is stepping
down as the Executive Director of the
Disability Rights Legal Center in Los
Angeles. The Stand, (described by the
organizers as “a high end hot dog joint
serving beer and wine”), is located at
2000 Avenue of the Stars, in the park
between the Century Towers and the
CAA Building.)
Thursday, October 25, in Long Beach,
CELA will sponsor a dinner program at
which Genie Harrison and Robert Kitson
will discuss their $7.93 million discrimination, harassment, and retaliation verdicts against the Los Angeles Fire Department. Included will be a discussion
by Genie, Robert, and trial tech
extraordinaire Jason McClure of their
use of technology during litigation and
trial. The event will take place from 6pm
to 10pm at the Westin Hotel in Long
Beach. (The program will be repeated in
Northern California, with details to be
announced.)
October 25, 2007
CELA DINNER PROGRAM ON LAFD VERDICTS
Westin Long Beach
(See this page for details)
November 9-11, 2007
-11-
PROTOCOLS
(From Page 1)
listservs are expected to know the protocols and abide by them. The actual
revised protocols follow below.
requests of more senior listserv participants. Note that no member will be
required to agree to a side agreement.
The CELA Board has been evaluating
the suspension protocols over the past
year, and a Listserv Committee was
established to, among other things,
monitor the listservs and to develop and
apply protocols. The Listserv Committee was busy resolving not only one-onone conflicts between the employee
attorney and employer attorney, but
also conflicts involving multiple attorney
firms, and the difficult issues that arise
when an employee sues a union, and
both are represented by listserv members.
(2) Situations in which a CELA member
represents an employee against a unionas-employer will be handled on a case
by case basis. The attorneys involved
must contact Christina Krasomil and
disclose the conflict. Union representation issues will be relayed by the CELA
List Monitoring Committee to the CELA
Board, and will be addressed on a “case
by case” basis in order to determine
whether a conflict truly exists, and how
the conflict should be addressed. Every
effort will be made to allow both attorneys (and their firms) to remain on the
listserv. As a general rule, when a union
is being sued, but not as the employer,
there will not be a suspension of either
member, but the case may not be
discussed on the listserv.
At least one member of the Listserv
Committee spoke to every member who
was suspended from the listserv for any
reason, when possible, in order to encourage those people to participate in
the development of better protocols.
Members of the Listserv Committee
and Board also solicited feedback from
the membership at large and evaluated
responses to an earlier survey sent out
to the membership, to consider how to
balance everyone’s interests and
thereby come up with more workable
protocols.
The Listserv Committee developed protocols, which were further modified by
the members of the Board. Here are the
highlights of the new protocols, which
have been approved by the Board and
are now in effect:
(1) The general rule remains that “[a]
CELA member on the List who represents or is aligned with the interests of
an employer, and who is adverse to the
interests of an employee represented
by a CELA member on the List, will be
removed from the OnTopic List for the
duration of the matter.” However, “side
agreements” will now be allowed, meaning that if the two members involved—
the employee’s attorney and the
employer’s attorney—make a side
agreement, the employer’s attorney may
stay on the OnTopic listserv, although
the agreement must prohibit discussion of the case being litigated between
the two members. The old rule did not
allow side agreements, since there was
a concern that newer or less experienced attorneys would accede to the
(3) The suspension will only apply to
OnTopic posts. Moreover, any member
suspended from OnTopic may also pose
questions through Christina Krasomil.
A third option is for a suspended member to create his or her own list of
attorneys and ask questions of that
group.
(4) A “conflict wall” protocol will be
developed to isolate the individual
attorney(s) acting in an employer defense capacity, as opposed to suspending the entire firm. Pending the
creation of a workable “conflict wall”
resolution, the individual and firm suspensions will continue.
(5) The Board further determined that
the running of the listservs should be
turned over to the members who participate. Thus, a Listserv Monitoring Committee will be developed, consisting of
CELA member volunteers. Toward that
end, an introductory informal assembly
will be held at the CELA Conference, on
Friday, September 28, 2007, following
the last session. Former Listserv Committee members Toni Jaramilla, Bernard Alexander, Eve Chesbro and David
Duchrow will answer questions from
interested members, and take the names
of people who would like to be trained in
monitoring, developing, and nurturing
the listservs. More information will be
provided before the conference. Any
interested person who will not be able to
-12-
attend that initial informal meeting may
contact any one of the former Listserv
Committee members for further information. Training is anticipated to take
about one hour, and will be done online.
Former Listserv Committee member
Michael Baltaxe will chair the new
Listserv Monitoring Committee.
On behalf of the CELA Board and the
former Listserv Committee, we hope
that these new conflict protocols provide everyone with maximum access to
this wonderful member benefit.
•••
CELA LIST PROTOCOLS
Please remember that CELA is an organization dedicated not only to ensuring
that the rights of employees are not
trampled, but we’re also a collegial
organization designed to assist one
another in fighting the same fight against
employers and defense counsel with
limitless resources.
The CELA List was developed in order
to help us be on a level playing field with
defense counsel who have access to
numerous attorneys within their firms
and within their local employment defense organizations. In developing the
CELA List, we wanted the participants
to be able to have a candid dialogue with
other CELA members about their cases,
judges, opposing counsel, and mediators.
The List protocols were approved and
adopted by the CELA Board. If you
continue as a member of the List, CELA
will assume that you agree to abide by
the following. (If you do not agree to
abide by the following, please immediately notify CELA’s List Administrator,
Christina Krasomil, and you will be
removed from the List.)
(1) The CELA OnTopic List is for
topics related to plaintiff’s employment law. This means representation
of employees in disputes with employers. We also recognize that occasionally employees may be defendants in a
dispute with an employer. Please do
not post messages to the List about
anything else. This protocol is critical.
PROTOCOLS
(From Page 12)
The OnTopic list is for:
• Questions about plaintiff’s employment law
• Questions about law practice management
• Any other issues directly affecting
plaintiff’s employment law
The OffTopic List is for:
• Attorney referrals outside plaintiff’s
employment law
• Questions regarding a non-plaintiff’s
employment law case (so long as it is
not employment defense)
• Employment law posts by individuals
who have been “conflicted” off the
OnTopic list
• A political issue or announcement
you just have to talk about—so long
as it is free of flaming or derogatory
references
All messages not related to plaintiff’s
employment law must be sent to
CELA’s “Off Topic” List. The CELA
OnTopic List must be focused on our
common interest of employment law.
Further, postings about non-employment cases run a higher risk of conflict
with another CELA member or a lawyer
in a CELA member’s firm.
(2) The CELA OnTopic List is for
employment law topics of interest
to the entire List. Please do not use
the List for messages that contain only
expressions of gratitude to an individual
or other personal messages. For example, messages that state only “thank
you,” “go get em,” “fax it to me,” “I want
it too,” etc. must be sent to the individual rather than to the entire List. (An
expression of gratitude or other personalized comment can be appended to a
larger substantive message of interest
to the entire List.)
Every message that you post on the
List must include your personal information, including name, address, phone
number, fax number, and email address, so that replies can be made only
to you.
(3) The CELA OnTopic List is a shared
responsibility. CELA cannot guarantee the confidentiality of the communications on the List and believes it is the
obligation of every participant to observe the confidentiality of the List.
Every List participant must omit infor-
mation which would identify a client
from all messages posted to the List.
Information gained from the List can
only be shared with persons who are
regular CELA members and who qualify
for List access, persons who function
as staff for regular CELA members and
who are cautioned to maintain the confidentiality of the information, and persons whose practice of law could not
place them in an adversarial position to
the practice of a regular CELA member
and who are cautioned to maintain the
confidentiality of the information.
Information gained from the List must
not be shared with lawyers who would
not qualify as regular CELA members
because their representation of employers is greater than allowed for by
CELA membership rules, and their practice of law could place them in an
adversarial position to a regular CELA
member. This would include other lawyers in a regular CELA member’s firm.
It is the responsibility of every List
participant in every case to determine
whether another List participant or another List participant’s firm is an opposing counsel. Every List participant must
observe the confidentiality of the List
and not post a List message concerning a matter which involves another List
participant or participant’s firm as an
opposing counsel.
Any comment posted is the writer’s
opinion. CELA encourages the exchange
of honest, candid opinions on the List.
As a List user, you understand and
agree that all comments that you or
others place on this List regarding any
judge, mediator, counsel, or other individual are merely expressions of nonactionable opinion protected by the First
Amendment. If you express anything
other than positive opinions about an
individual in a List message, you must
make clear in the message that it is
your honest opinion and is not a statement of fact or the opinion of CELA.
quests to exchange opinions. As a
CELA List user, you understand and
agree that all exchanges and statements on the List regarding judges,
mediators, counsel, and others are reasonable responses to reasonable requests to exchange opinions for the
purposes of improving our ability to
represent our clients effectively.
(5) Do not flame or personally attack
any other user on the List. Using
derogatory language towards any other
user on the List is forbidden. Do not
engage in a flame war with other users
on the List. Do not personally attack
other users on the List. Insults or personal criticisms directed at other users
are forbidden. Please keep our common focus—fairness and justice in the
workplace.
(6) The content of messages posted
on the CELA OnTopic List may be
used on the CELA web site. Any
message posted to the CELA OnTopic
List which contains legal citations, briefs,
motions, or portions of these or similar
documents may be posted on the CELA
Web site’s “Members Only” section at
the discretion of the CELA Board or its
designated committee. When a message is posted on the CELA OnTopic
List containing such a document, the
CELA OnTopic List participant who
posted the List message has given
consent that the document may be
posted on the CELA Web site’s “Members Only” section. You are requested
to copy all messages containing attached documents to the CELA Administrative Director, Christina Krasomil, at
[email protected].
CONFLICT PROTOCOLS
It is incumbent upon all List participants
to identify whether their opponent, or a
member of their opponent’s firm, is a
CELA member, and to determine the
application of the conflict protocols.
Do not communicate to non-list participants that a specific list participant has
made critical comments about a particular individual.
(7) Individual Conflict. A CELA member on the List who represents or is
aligned with the interests of an employer, and who is adverse to the interests of an employee represented by a
CELA member on the List, will be re-
(4) All exchanges on the CELA
OnTopic List are responses to re-
-13-
PROTOCOLS
(From Page 13)
moved from the OnTopic list for the
duration of the matter, unless there is a
Side Agreement, (see “Side Agreements” section).
This conflict protocol potentially applies
to the representation of an employer or
interests aligned with an employer before any litigation or administrative process is initiated, to the representation
of individuals adverse to the interests of
an employee in an employment matter,
and to the representation of an employer in an employment-related matter
even when the employer is identified as
the ostensible plaintiff in a matter.
If you are a CELA member on the List
who represents or is aligned with the
interests of an employer, and are adverse to the interests of a CELA-represented employee on the List, it is your
responsibility to immediately contact
Christina Krasomil and inform her of the
conflict. You will be removed from the
List for the duration of the matter.
During the appeal stage of a case, a
CELA member who represents or is
aligned with the interests of an employer, and is adverse to the interests of
an employee represented by a CELA
member on the List, will not have access to the List during certain stages of
the appeal.
Recognizing that the appeal process
may be very lengthy, removal from the
List during the appeal process will begin
only after the clerk’s transcript on appeal is prepared. CELA members who
are adversaries during the appeal process must notify Christina Krasomil
immediately upon notification that the
clerk’s transcript has been prepared.
(8) Side Agreements. If a CELA attorney on the plaintiff-employee side in a
litigation is facing an employer-defendant represented by a CELA member,
both CELA members can enter into a
Side Agreement. If both CELA members are amenable to continued participation on the List, and agree not to
discuss their specific case on the CELA
List, the CELA member representing
the employer-defendant may remain on
the List.
(9) Union Representation Issues. If
you are a CELA member participating
on the List and are representing a Unionemployer facing a plaintiff-employee
represented by a CELA member, it is
your responsibility to immediately contact Christina Krasomil and inform her
of the conflict. The provisions of Paragraphs (7) and (8) above, governing
conflicts and side agreements respectively, will then apply.
Union representation issues will be addressed on a “case by case” basis by
the CELA List Monitoring Committee
which will make recommendations to
the Board, in order to determine whether
a conflict truly exists, and how the
conflict should be addressed. Every
effort will be made to allow both attorneys (and their firms) to remain on the
listserv.
(10) Potential Conflict. Before gaining
access to the List, each new List applicant must first answer a series of questions in order to confirm that the applicant does not represent and is not
aligned with the interests of an employer adverse to the interests of an
employee represented by a CELA member on the List. Before applying for
admission to the List, it is the responsibility of every List applicant to determine whether they are representing or
aligned with the interests of an employer adverse to a CELA member on
the List who is representing an employee. If your opponent is a CELA
member, you will not be given List
access until the conclusion of that
matter, unless there is a Side Agreement, (see “Side Agreements” paragraph).
(11) Firm Conflict. A “conflict wall”
protocol will be developed to isolate the
individual attorney(s) acting in a defense capacity, as opposed to suspending the entire firm. Pending the
creation of a workable “conflict wall”
resolution, the individual and firm suspensions will continue.
This protocol addresses circumstances
where the firm of a CELA member on the
List represents an employer, or interests aligned with the employer, adverse
to the interests of an employee represented by a CELA member on the List.
This may occur, even though the firm
CELA member on the List is not directly
responsible for representing the em-14-
ployer or interests aligned with the
employer. Under those circumstances,
the firm associated with the CELA List
user will be removed from the List during
the duration of the matter. (The Board is
aware that this protocol may cause
concern among CELA members on the
List and is sensitive to those concerns.
The Board believes that the firm conflict
protocol may evolve in response to those
concerns as potential application of this
protocol occurs.)
(12) Temporarily Suspension Alternatives. Temporarily suspended List
participants and firms have alternatives
available, including posting to OffTopic
about their plaintiff’s employment cases,
or creating their own contact list of
CELA members, in order to exchange
information. As a means of allowing
limited access to suspended participants to discuss matters unrelated to
the conflict, posts can be made to
OnTopic on behalf of the suspended
participant through Christina Krasomil,
CELA’s Administrative Director.
(13) Monitoring Committee. CELA’s
List issues are addressed by a List
Monitoring Committee, made up of
CELA volunteer members who do not
serve on the Executive Board, and who
work on a rotating basis. The Committee monitors list violations, and will
communicate directly with members
about the “day to day” violations, (e.g.,
“me too,” “thanks”). Anyone wishing to
make a complaint or inquiry about any
listserv posting may contact Michael
Baltaxe, the Chair of the Listserv Monitoring Committee, (or whoever is currently the committee chair). Michael
Baltaxe can be reached at
[email protected].
More serious violations, such as those
which would involve a potential suspension, shall be brought to the CELA
Board’s Executive Committee, (which
consists of Michelle Reinglass, David
Duchrow, Kathy Dickson, Phil Horowitz,
Dolores Leal, and Jim Stoneman). You
may also bring any complaint or inquiry,
of any nature, to Christina Krasomil,
who will pass it along to the correct
people.
•
•
•
-16-
Published
Monthly
BULLETIN
CALIFORNIA COURTS
OF APPEAL
TRIAL COURT IMPROPERLY
WEIGHED EVIDENCE IN
GRANTING SUMMARY
JUDGMENT ON AGE
REID v GOOGLE, INC. In an opinion
filed on October 4, the Sixth District
reversed summary judgment on six
age discrimination-related claims
brought by an electrical engineer who
had been hired by Google at age 52 as
Director of Operations and Director of
Engineering, and then terminated at
age 54, ostensibly because of job elimination. “The conflicting evidence that
Google’s stated reasons for Reid’s termination changed after Reid was terminated,” the court wrote, “coupled with
Reid’s statistical evidence, evidence of
ageist comments, and demotion create a triable issue of fact as to pretext.”
The court explained the evidence and
its principal holdings as follows:
“Reid presented statistical evidence of
Google’s practices through the declaration of Professor Norman Matloff, a
statistician with 30 years experience in
the field.... [¶] Matloff ... reported that
he observed a statistically significant
negative correlation between age and
CELA’S LEGISLATIVE COMMITTEE TO THE
GOVERNOR: “WE’LL BE BACK”
On October 13, Gov. Schwarzenegger
vetoed both of our bills, SB 549, (Bereavement Leave), and AB 1043,
(Choice of Law/Forum.) His veto messages
can
be
found
at
www.leginfo.ca.gov.
The Legislative Committee Chairs,
(Jean Hyams, David Lowe, and Steve
Pingel), want to thank the many CELA
members who helped in CELA’s first
effort to pass our own bills. CELA did
itself proud—from conception last December, to drafting and redrafting, finding authors, co-authors, and allies
during the winter, testifying several
times in committee hearings during
the spring and summer, participating
in Lobby Day in May, and writing letters and postcards in the past couple
months. Getting both of our bills out of
the Legislature was a real accomplishment.
The Legislative Committee will now be
considering possible goals for 2008,
including having the vetoed bills reintroduced, and writing legislation to clarify
the issue of internal and judicial remedy
exhaustion. Please email us your suggestions for legislation you would like
to see.
On a related note, also on October 13
the Governor actually signed AB 220,
The Firefighters Procedural Bill of
Rights, which prescribes rights related
to, inter alia, political activity, interrogation, punitive action, and administrative
appeals. For details, see www/
leginfo.ca.gov.
October 2007
Vol. 21, No. 10
CELA’S 2007
ANNUAL CONFERENCE:
AN APPRECIATION
DAY ONE
by Jim Guziak
It just keeps getting better folks! Kudos
are in order for the CELA members who
planned and pulled off our 20th annual
conference in San Jose. The varied
topics, the wonderful speakers and the
incredible source materials have all
made this an event that left everyone
who attended (roughly 200 attendees)
energized and renewed.
Despite good intentions, I missed the
opening day morning yoga session.
However, my brain got some serious
exercise during the balance of the day’s
activities. Outgoing chair Michelle
Reinglass got things off to an enthusiastic start with her welcoming and opening remarks. That was followed by a
fascinating panel discussion moderated by Kathryn Burkett Dickson with
members Nathan Goldberg, Genie
Harrison, and Sam Wells, on the sometimes neglected task of making the
pain real for jurors in cases involving
significant claims of emotional distress.
The topic was especially timely for me,
as I was then prepping a difficult sex
harassment case for trial.
After the break, members had to make
some difficult choices between competing panel discussions throughout
the balance of the day. I attended the
discussion on negotiating employment
and severance agreements which included panelists Doug Silverstein and
Gina DeVito. The quality of the presen(Cont'd on Page 15, CONFERENCE)
DECISIONS
(From Page 1)
performance rating. Specifically, for every 10 year increase in age, there was
a corresponding decrease in performance rating... [¶] [And] Matloff found a
29 percent decrease in bonus amount
related to every 10 year increase in
age...
“Google challenges the statistical evidence offered by Reid on numerous
grounds, including Matloff’s methodology and sample sizes analyzed. In its
order, the trial court issued a ruling
pursuant to Biljac Assoc. v. First Interstate Bank (1990) 218 Cal.App.3d 1410,
1419-1429, declining to rule on the specific evidentiary objections, instead opting to rely only on ‘competent and
admissible evidence.’ (Ibid.)
“With regard to the trial court’s duty
when presented with objections to evidence in the summary judgment context, the weight of current authority is
contrary to the holding in Biljac, and
seems to agree that (1) the trial court is
obligated to rule expressly on all objections, and (2) the court’s failure to do so
may effect a ‘waiver’ of objections, so
that they are not preserved for appellate
review.
“However, we believe the Biljac decision
was substantially correct, and was
surely more nearly correct that its critics have been. Indeed, based on Biljac,
in the absence of express rulings by the
trial court, as in the present case, we
presume either that the trial court ruled
correctly on evidentiary questions, or
that the court overruled all objections it
did not expressly sustain.
“Here, Google filed proper objections to
the statistical evidence ... that the trial
court did not expressly rule upon. We
infer from the lack of an express ruling
on the objections that the trial court
impliedly overruled them, and considered the evidence when ruling on summary judgment. And we may consider
the issue of the admissibility of the
statistical evidence on appeal because
we do not find the lack of a ruling creates
waiver.
“Statistical evidence is clearly admissible in the present case. An employee
such as Reid may produce statistical
evidence regarding an employer’s practices to show that the challenged action
is consistent with a pattern of discrimination. [¶] Here, based on our inference
from the lack of an express ruling, we
find the trial was correct in considering
the statistical evidence... Despite considering the statistical evidence, however, the trial court clearly erred when it
determined that there was no triable
issue of material fact arising from that
evidence. Importantly, Google does not
offer conflicting expert testimony to dispute Reid’s statistical findings; rather,
Google’s counsel offers arguments about
why the findings are not sound. Such
argument goes to the weight of the
statistical evidence, a task reserved for
a jury, not a court on summary judgment.
“Reid asserts that a general ‘youthful’
atmosphere at Google ... demonstrates
the environment was biased against
older workers. [¶] In addition, Reid offers statements made regarding his
age... [¶] [And] when Reid was terminated from employment, he was told
twice ... that he was not a ‘cultural fit’ at
Google.
“Google argues at length that the comments Reid offers were stray remarks
that do not raise a triable issue of fact as
to pretext. The so-called ‘stray remarks’
rule allows courts to deem racist or
sexist remarks insufficient to support
denial of summary judgment if the remarks are considered ‘stray.’ We cannot view such a rule as anything other
than the assumption by the court of a
factfinding role.
“We do not agree with suggestions that
a ‘single, isolated discriminatory comment’ [cite omitted], or comments that
are ‘unrelated to the decisional process’ are ‘stray’ and therefore insufficient to avoid summary judgment. [cite
omitted.] There are certainly cases that
in the context of the evidence as a
whole, the remarks at issue provide
such weak evidence that a verdict resting on them cannot be sustained. But
such judgments must be made on a
-2-
CALIFORNIA
EMPLOYMENT
LAWYERS ASSOCIATION
David J. Duchrow
11340 W. Olympic Blvd.
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)
Virginia Keeny
(Pasadena)
Eve Chesbro
(Pasadena)
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)
Bulletin Editor
Christopher Bello
Astoria, OR 97103
Ph: (503) 338-3891
NELA NEWS
October issues of NELA’s electronic
newsletters @NELA and Advocates in
Action included the following information and announcements
resources found on the internet, resources available through NELA, circuit reports, committee updates, and
contact information.”
“NELA Executive Director Terisa E.
Chaw is pleased to announce that
Bruce A. Frederickson has become
NELA’s President. Mr. Frederickson
has served on the NELA Executive
Board since 2002. For three years, he
was NELA’s Vice President of Public
Policy, during which time he worked
tirelessly on passage of the Civil Rights
Tax Relief Act and saw the attorneys’
fees provision become law in 2004.
Until recently, Mr. Frederickson was
NELA’s First Vice President. He is cochair of NELA’s Membership Committee, and serves on the organization’s
Legislative and Policy Committee, Strategic Planning Committee, and the
program committee for NELA’s Spring
2008 trial practice seminar. Mr.
Frederickson is also a member of the
Metropolitan Washington Employment
Lawyers Association’s Board of Directors. He is a partner in the Washington
DC-based law firm of Webster,
Frederickson, Heinrichsen, Correia &
Puth, PLLC. The firm is perhaps most
noted for its sex discrimination class
action, Hartman v Powell, which settled
for a record-breaking $508 million, plus
more than $25 million for 48 claims
tried and decided. Since 1986, Mr.
Frederickson has taught trial practice
as an adjunct professor at the Washington College of Law of the American
University.” [Note: Former NELA President Kathleen Bogas resigned from
that position on October 8 in response
to controversy within the organization
surrounding her role as trial counsel for
sexual harassment defendant Isiah
Thomas. Her resignation letter appeared
on the CELA ontopic listserv on October 9.]
“NELA’s Ethics and Sanctions Committee monitors NELANet for ethical
questions that arise. Recently an inquiry was posted asking for advice on
how a lawyer might ethically protect his
or her fees in a contingency case if the
client decides to settle for less money
than the attorney recommends. The
ensuing discussion led the Committee
to prepare a thorough memo on the
subject, which includes a discussion of
the relevant law as well as some practical advice. In short, properly drafted
fee-protective provisions in the original
retainer agreement are enforceable, but
attorneys seeking to enforce them
should proceed with great care in drafting their retainers, in giving advice to the
client considering the settlement, and
in deciding whether to enforce the retainer or reach some sort of compromise with the client. The Committee’s
entire memo can be downloaded from
www.nela.org/NELA/docDownload/
10944. More tips are provided by the
Committee at www.nela.org/SAFER.”
“The Class & Collective Actions Committee is proud to announce the launch
of their Committee Resource page at
www.nela.org/classcollectiveactions.
The committee’s page provides helpful
information for NELA members and
plaintiffs’ lawyers, including a collection of class and collective actions
“Thanks to all who attended our fall
seminar in New Orleans, 'Representing
Workers in Individual & Collective Actions under the FLSA,' on October 1920. This seminar had the highest attendance of any our seminars since 2000.
NELA’s scholarship program ensured
that over 35 legal services and public
interest organizations were represented.
Special thanks to our co-sponsors,
Farmworker Justice, The Impact Fund,
the National Employment Law Project,
and the Southern Poverty Law Center.
Seminar material will be available for
electronic download soon. If you wish to
order audio CDs of the seminar presentations, an order form can be downloaded at www.nela.org/NELA/
docDownload/11117.
The following updates on ENDA, (the
Employment Non Discrimination Act),
appeared in the October 18 issue of
NELA’s Washington Report, On The
Hill, and the October 22 issue of NELA’s
-3-
on-line newsletter Advocates in Action:
“The past two weeks have been ones of
intense activity for the LGBT community. A concerted effort was made to get
hard commitments of support from Representatives for a gender identity inclusive bill. But that goal proved elusive, at
least for now. Thus today, October 18,
2007, the leadership went forward with
its plan for the House Education & Labor
Committee to mark up a new bill that
bans employment discrimination on the
basis of sexual orientation only, not
discrimination on the basis of gender
identity (H.R. 3685). The bill was reported out of Committee favorably by a
vote of 27-21. Four Democrats voted
against the bill because it doesn’t include gender identity: Representatives
Yvette Clarke (NY), Rush Holt (NY),
Dennis Kucinich (OH), and Linda
Sanchez (CA).”
“On Wednesday, October 24, 2007, the
House of Representatives will have the
historic opportunity to extend civil rights
protections by enacting ENDA. But the
bill that will be brought to the floor will
outlaw workplace discrimination on the
basis of sexual orientation only, not
discrimination on the basis of gender
identity, as originally introduced.
“To ensure that ENDA covers the entire
LGBT community, Representative
Tammy Baldwin (D-WI) is planning to
offer an amendment to add gender identity back into the bill.” (NELA asked
members to contact their representatives urging votes in favor of the Baldwin
amendment.)
•
•
•
DECISIONS
(From Page 2)
case-by-case basis in light of the entire
record, and on summary judgment the
sole question is whether they support
an inference that the employer’s action
was motivated by discriminatory animus. Their ‘weight’ as evidence cannot
enter into the question.
“In addition to the statistical evidence
and comments of coworkers and supervisors as evidence of pretext, Reid also
asserts his demotion ... to head of
Google’s graduate program that was
eliminated shortly thereafter is also evidence of pretext.
“Here, we see little difference between
the district court in Torre [v Casio, Inc.
(3d Cir 1994) 42 F3d 825] and the trial
court in this case. In granting summary
judgment in favor of Google, the trial
court resolved a number of factual issues in dispute, such as the weight and
value of Reid’s statistical evidence, the
validity and weight of the ageist comments made by decision makers...,
and whether the newly created position
... was in fact a way-station for Reid’s
ultimate termination. These evidentiary
evaluations are clearly the purview of
the jury, and not the decision of the trial
court on summary judgment.
“Finally ..., by our evaluation, the question of whether Google changed its
position on the reasons for Reid’s termination is clearly disputed... In addition,
Google’s claim that Reid was terminated for poor performance is also disputed... [¶] The conflicting evidence
that Google’s stated reasons for Reid’s
termination changed after Reid was
terminated, coupled with Reid’s statistical evidence, evidence of ageist comments, and demotion create a triable
issue of fact as to pretext.
“Google argues that it is entitled to an
inference against discrimination, because ... the only person responsible
for Reid’s termination was ... over 50 at
the time... Specifically, Google asserts
that because Rosing was responsible
for both hiring and firing Reid within a
short period of time, there is a ‘strong
inference’ that there was no discriminatory motive... We take Google’s invitation to be no more than an attempt to
use persuasive evidence as a guise for
undisputed evidence. The argument that
Rosing ... would not discriminate against
another person over 50 years old may
prove effective (or not) in closing argument before a jury, but it is not an
inference we will make on summary
judgment... [¶] Although Google is correct in its assertion regarding [West v]
Bechtel [(2002) 96 CA4th 966], and the
inference against discrimination, it is
incorrect in asserting that there is undisputed evidence that Rosing was solely
responsible for Reid’s hiring and termination... Therefore, Google is not entitled to an inference of no discrimination.”
On a separate issue, the Sixth District
rejected the argument that the trial court
erred in striking Reid’s allegations of
unlawful hiring and promotion claims
under the UCL. The court wrote:
“Reid’s lawsuit was filed before Proposition 64 was passed. Google filed a
motion to strike the UCL provisions of
Reid’s complaint using Proposition 64
as support, and asserting that Reid was
not harmed by Google’s hiring practices... [¶] By Reid’s own admission, he
was hired by Google the only time he
ever applied for employment. The basis
of his claim, that Reid spoke with some
Vice Presidents at Google about securing another position at Google when he
was terminated, does not qualify as a
rejected application for employment...
In addition, Reid never applied for a
promotion at Google.
“Reid asserts the trial court erred in
striking his prayer for restitution under
the UCL, and specifically asserts he
should have the right to seek the unvested
stock options he had at the time of his
termination... [¶] However, unvested
stock options are not owned by the
option holder... [¶] Here, Reid’s stock
options were not earned at the time of
his termination, because they had not
yet vested. Reid at most had an expectancy interest in the options, however,
such interest does not constitute ownership for the purpose of restitution... [¶]
Because an ownership interest is required in order to seek restitution under
the UCL ... the trial court was correct in
-4-
striking the claim for restitution...”
For plaintiff: Duane Morris, Barry L.
Bunshoft, Ray L. Wong, Paul J. Killion,
Lorraine P. Ocheltree, Eden Anderson.
For defendant: Wilson, Sonsini,
Goodrich & Rosati, Fred W. Alvarez,
Marina C. Tstalis, Gary M. Gansie,
Marvin Dunson III.
Sixth Dist, 10/4/07; opinion by Rushing with Premo and Elia concurring;
66 CR3d 744, 2007 DAR 15443.
CLASS ACTION WAIVER, AND
PROVISION FOR ARBITRATION
OF UNCONSCIONABILITY ISSUES,
WERE TWO SUBSTANTIVELY
UNCONSCIONABLE TERMS THAT
RENDERED ADHESIVE
AGREEMENT ENTIRELY
UNENFORCEABLE
MURPHY v CHECK ‘N GO OF CALIFORNIA, INC. “Defendant ... appeals
from an order denying its motion to
compel arbitration of a wage and hour
case filed by plaintiff Lisa Murphy. The
main issues are whether the class action waiver in the arbitration agreement
is unconscionable, a question we review with the benefit of the recent decision in Gentry v. Superior Court (2007)
42 Cal.4th 443, and whether that question should be resolved by the court,
rather than by an arbitrator appointed
under the agreement. We conclude that
the court was empowered to decide the
unconscionability issue, agree with its
ruling that the class action waiver is
unconscionable, and affirm the order
denying the motion to compel arbitration.
“Plaintiff worked for defendant, a payday lending company, for eight years
ending in 2005; for the last seven of
those eight years she held the position
of ‘salaried retail manager.’ She sued
defendant in February 2006, alleging
that defendant misclassified its salaried retail managers as exempt employees under state labor laws. The suit
asserts causes of action on behalf of
the class of salaried retail managers for
DECISIONS
(From Page 4)
violation of Business and Professions
Code section 17200 et seq., and failure
to pay or provide overtime compensation, accurate itemized wage statements, adequate meal and rest periods, and wages upon termination...
comply with the law... As a matter of
simple economics, a few individual
settlements or even lost trials or arbitrations will be more than made up for
exponentially by the savings from the
decision to (mis)classify employees...
“Plaintiff signed defendant’s ‘Dispute
Resolution Agreement’ in June 2004...
She states that no one explained the
agreement to her, or told her that she
had the option to revise or opt out of the
agreement...
“In [his] order denying the motion to
compel arbitration, [San Francisco
County Superior Court Judge Ronald E.
Quidachay] determined that: (1) [the
trial court] had the power to rule on the
unconscionability issues; (2) the parties’ agreement ... was a contract of
adhesion; (3) the agreement’s class
action waiver was unconscionable under Discover Bank v. Superior Court
(2005) 36 Cal.4th 148; (4) the
agreement’s provisions for arbitration of
unconscionability issues and pre-existing claims were also substantively unconscionable; and (5) the unconscionable terms could not be severed from
the agreement. All of these determinations are challenged in this appeal.
“The agreement covers all claims arising from or relating to plaintiff’s employment, other than claims she would file
with governmental agencies that enforce employment insurance or discrimination laws. Covered claims include
‘any assertion by you or us that this
agreement is substantively or procedurally unconscionable...’ Section 3.5.2
provides for arbitration by the American
Arbitration Association ... and states in
bold print that ‘you and we agree that an
arbitration firm may not arbitrate a Covered Claim as a class action or a representative action and may not otherwise
consolidate the Covered Claim with the
claims of others.’
“Plaintiff opposed the motion [to compel] on unconscionability grounds. In
addition to her declaration, plaintiff lodged
declarations of her counsel and two
other attorneys experienced in wage
and hour cases attesting to the difficulty
of prosecuting such cases individually
rather than as class actions. The attorneys stated that, given the relatively
small sums of money involved in individual cases, it is difficult for plaintiffs to
find counsel willing to take them, despite the availability of statutory attorneys’ fees. The attorneys further opined
that class actions were the only effective way to redress wage and hour
violations. They each stated: ‘The blunt
reality is that employers want to limit
class actions because they do not want
to reform business practices [and] reduce profits—regardless of the legality
of the practices... [I]f the employer can
limit attacks on its global classification
decision to the odd lawsuit or arbitration
here and there, it will have no incentive
to truly examine whether its practices
“Defendant notes that arbitrable claims
under the agreement include ‘any assertion by you or us that this Agreement
is ... unconscionable... [¶] While the
language of the agreement could not be
clearer, plaintiff’s alleged assent to this
provision was vitiated by the fact that it
was set forth in a contract of adhesion...
We can infer from [the] evidence that
plaintiff reasonably expected that she
was required to sign the contract as a
condition of continued employment.
Defendant submitted no evidence to the
contrary, and the provision ... permitting
the employee to ‘consult with an independent attorney,’ without more, certainly did not compel a contrary finding.
“Generally speaking, there are two judicially imposed limitations on the enforcement of adhesion contracts or provisions thereof. The first is that such a
contract or provision which does not fall
within the reasonable expectations of
the weaker or ‘adhering’ party will not be
enforced against him. The second—a
principle of equity applicable to all contracts generally—is that a contract or
provision ... will be denied enforcement
if ... it is unduly oppressive or ‘unconscionable.’ [cites omitted]
“Both limitations on enforceability are
present here... [P]arties would not ordinarily expect that an arbitrator, rather
than a court, would determine his or her
own jurisdiction. The provision for arbitrator determinations of unconscionabililty is also itself substantively unconscionable... The agreement is facially mutual ... but, as plaintiff points
out, the provision is entirely one-sided
because defendant cannot be expected
to claim that it drafted an unconscionable agreement.
“The class action waiver in the case at
bench is ... ‘patently one-sided’ [cite
omitted] and Discover Bank applies
when the class action waiver is ‘in
practice the exemption’ of defendant
from responsibility... This issue was
essentially a factual question, and
plaintiff’s declarations of counsel were
the only evidence presented on that
question... Those opinions constituted
substantial evidence supporting the
court’s ruling that the class action waiver
provisions of the agreement were ‘exculpatory clauses’ under Discover Bank,
and therefore substantively unconscionable.
“Defendant argues that the court erred
by refusing to enforce the entire arbitration agreement, rather than severing the
clauses it found to be unconscionable...
[¶] Here ... at least two aspects of the
arbitration agreement are unconscionable... ‘[G]iven the multiple unlawful
provisions, the trial court did not abuse
its discretion in concluding that the
arbitration agreement is permeated by
an unlawful purpose.’ Armendariz, supra, 24 Cal.4th at p. 124), and that the
agreement as a whole should not be
enforced.
“Gentry does not dictate a contrary
result. While the court ‘believe[d] that
severance is particularly appropriate in
the case of class action waivers’ (Gentry, supra, 42 Cal.4th at p. 466), this
statement referred to a situation where
‘an arbitration agreement contains a
single term in violation of public policy’
(ibid.). The opinion went on to note that
severance would be an open issue in
-5-
DECISIONS
(From Page 5)
Gentry if it were determined that the
agreement contained multiple unconscionable terms.”
For plaintiffs: Keller Grover, LLP, Eric A.
Grover, Jade Butman, Elizabeth A.
Acevedo.
For defendant: Squire, Sanders &
Dempsey, Alexandra A. Bodnar, Casey
J. T. McCoy, Mark C. Dosker.
by Marchiano with Stein and
Margulies concurring; 2007 DAR
15905, 2007 WL 3016414.
SUPPOSING THAT FEE
MULTIPLIER WAS REQUIRED TO
ACCOUNT FOR OUT-OF-TOWN
COUNSELS’ HIGHER RATES, AND
PLAINTIFF FAILED TO MAKE
ADEQUATE SHOWING OF
UNAVAILABILITY OF LOCAL
COUNSEL
NICHOLS v CITY OF TAFT. With respect to a motion to fix attorneys fees
following the settlement of sexual harassment claims, the Fifth District wrote
in part as follows in an October 2 opinion:
“[P]laintiff presented evidence of the
reasonableness of her attorneys’ customary rates of compensation. Her attorneys were members of a large out-oftown law firm [Morrison & Foerster] with
offices in Los Angeles and San Francisco, and their usual fees were considerably higher than would be charged in
the local Kern County area. Defendant
insisted that the fee award must be
limited to the reasonable rate for comparable legal services in the local community. In an apparent compromise,
the trial court applied local (Kern County)
rates for purposes of reaching an initial
lodestar figure, and then enhanced the
lodestar by a multiplier of 1.33. When
the math was done, plaintiff was awarded
$471,374.24 in attorney fees. The court
explained it was obligated to apply the
multiplier based on its reading of this
court’s decision in Horsford v. Board of
Trustees of California State University
(2005) 132 Cal.App.4th 359. Defendant
appeals, contending the trial court applied the incorrect legal standard or
otherwise abused its discretion when it
(1) mistakenly presupposed it was required to apply a fee multiplier..., and (2)
improperly considered out-of-town
counsel’s higher rates for a fee multiplier without an adequate evidentiary
showing. We agree, and will remand to
allow the trial court to exercise its discretion whether or not to apply a multiplier based on consideration of all the
appropriate factors.
“[I]n a proper case where a threshold
showing has been made that obtaining
local counsel was impracticable, a trial
court should consider the need to hire
more expensive out-of-town counsel as
a factor in determining the base fee
used in the lodestar figure or in evaluating whether to apply a lodestar enhancement... [¶] [I]t is clear from
plaintiff’s declaration that, although she
had concerns that she would be unable
to find adequate representation, no effort was made to retain local counsel.
Despite the fact that plaintiff failed to
make an adequate threshold showing,
the trial court proceeded to impose a fee
multiplier based on the out-of-town attorneys’ higher rates.
“Use of a fee multiplier to compensate
for the higher rates of out-of-town counsel requires a sufficient showing—which
plaintiff failed to make in this case—that
hiring local counsel was impracticable...
Otherwise, the rule tethering the lodestar to local rates would be effectively
bypassed, since a trial court could always account for out-of-town rates
through the ‘backdoor’ by means of a
multiplier, even when there was no showing that local attorneys were unavailable. Additionally, as noted earlier, the
trial court mistakenly believed that it
was required to impose a multiplier
whenever a FEHA plaintiff hires out-oftown counsel from a higher fee market.
No such mandatory multiplier rule exists in the law, and we have already
concluded that reversal is warranted on
that ground alone. On remand, the trial
court shall exercise its sound discretion to impose a multiplier (or not) based
upon a consideration of the relevant
-6-
lodestar adjustment factors in this case,
but without consideration of the out-oftown attorneys’ higher rates.”
In an unpublished portion of the opinion
addressing a number of other attorneys’
fees issues, the court wrote, inter alia:
“[D]efendant argues the attorney fee
award was punitive, since the case
settled before trial and the award greatly
exceeded the [$175,000] compensatory damages paid. We find the contention to be without merit. Although it is
true that a settlement was reached, that
did not occur until shortly before trial,
and the record clearly reflects that this
case was aggressively litigated by defendant... It was also reasonably necessary for plaintiff to conduct a great
deal of discovery in preparing her case
for trial. [¶] Moreover, it is not uncommon for attorney fee awards to exceed
compensatory damages in FEHA
cases.”
For plaintiff: Morrison & Foerster, Arturo
J. Gonzalez, Eric A. Tate, Samantha P.
Goodman.
For defendant: Liebert Cassidy
Whitmore, Shelline K. Bennett and
Desiree Reed-Francois.
Fifth Dist, 10/2/07; opinion by Kane
with Harris and Hill concurring; 66
CR3d 680, 2007 WL 2836555.
EMPLOYER’S SICK LEAVE AND
DISABILITY POLICIES AND
PRACTICES WERE NOT
INCONSISTENT WITH TREATMENT
OF EMPLOYEES AS EXEMPT
FROM OVERTIME
REQUIREMENTS
SUMUEL v ADVO, INC. “Plaintiffs ... on
behalf of a class of employees and
former employees of ADVO, Inc., sued
ADVO and one of its managers for
unpaid overtime compensation and
monetary penalties. On cross-motions
for summary judgment or summary
adjudication, the trial court granted summary judgment to ADVO. The issue
raised by this appeal is whether ADVO’s
paid disability leave policy and prac(Cont'd on Page 7, DECISIONS)
DECISIONS
(From Page 6)
tices violated the ‘salary basis test’
utilized under federal and state labor
regulations to determine whether an
employee is exempt from overtime pay
requirements. We find no error in the
trial court’s determination of this issue,
and affirm the judgment in favor of ADVO.
“[The plaintiffs] alleged that ADVO repeatedly made various impermissible
deductions from its employees’ salaries, including deductions made when
employees were out of work due to
illness, that were inconsistent with and
rendered unlawful ADVO’s treatment of
the employees as exempt from overtime.
“ADVO filed a cross-motion ... seeking
a determination as a matter of law that
its sick leave and short-term disability
policy and practices did not affect the
exempt status of its salaried employees.
“[T]he evidence shows, at most, a triable issue of material fact with respect
to whether ADVO took salary deductions for full-day absences when employees went on disability leave after
working a partial week. However, we
find no triable issue of material fact,
under either federal or state law, with
respect to whether such deductions
were taken in accordance with a bona
fide plan, policy, or practice of providing
compensation for loss of salary caused
by disability. Accordingly, the trial court
properly granted summary judgment to
ADVO.”
For plaintiffs: Mary T. Dumont, Donald
L. Tasto, Jay B. Koslofsky.
For defendants: Winston & Strawn,
Jonathan M. Cohen, Krista M. Enns.
by Margulies with Stein and Swager
WL 2822770.
UNITED STATES
SUPREME COURT
CERTIORARI IS GRANTED IN
CASE IN WHICH SECOND
DISTRICT HELD THAT FAA DOES
NOT PREEMPT LABOR CODE
PROVISION REQUIRING LABOR
COMMISSIONER TO FIRST
ADJUDICATE LEGALITY OF
TALENT AGENCY CONTRACT
FERRER v PRESTON. On September
25, the United States Supreme Court
announced a grant of certiorari to review
a Second District decision, (145 CA4th
440), that held that the Federal Arbitration Act does not preempt California
law, the Talent Agencies Act, (Lab Code
§ 1700 et seq.), requiring the Labor
Commissioner to first adjudicate the
legality of a contract between an attorney who rendered services for personnel in the motion picture and television
industry and a television performer. The
question was whether the attorney was
a “personal manager” who could lawfully operate without a license, or an
unlicensed “talent agent.” In the latter
case, the contract, which included a
standard AAA arbitration clause, was
void. The Second District wrote:
“The question before us is who has
original jurisdiction to make the determination of the validity of the parties’
contract. Defendant contends that the
question of the contract’s validity should
be determined by the arbitrator, and the
trial court therefore erred in refusing to
compel arbitration. We disagree.
“The trial court here correctly applied
Buchwald v. Superior Court (1967) 254
Cal.App.2d 347 in refusing to order
arbitration and staying the proceedings
until the Commissioner resolved the
question before him. [¶] Defendant is
unable to distinguish the facts in the
present case from the facts in
Buchwald...
“Defendant also argues that the Federal
Arbitration Act ... preempts California
law requiring the Commissioner to first
adjudicate the legality of the contract.
-7-
Defendant relies on the case of Buckeye Check Cashing, Inc. v. Cardegna
(2006) 546 U.S. 440, 126 S.Ct. 1204.
[¶] Buckeye is inapposite, however.
Buckeye did not involve an administrative agency with exclusive jurisdiction
over a disputed issue. Buckeye did not
consider whether the FAA preempts
application of the exhaustion doctrine...
Buckeye did not discuss whether a
challenge to a contract as a whole
should first have been made to an administrative agency where there is a
statute vesting the agency with exclusive original jurisdiction to decide a
challenge based on specific grounds.”
For defendant attorney: Joseph D.
Schleimer, Beverly Hills.
For client: Mitchell, Silberberg & Knupp,
Ronald A. DiNicola, Douglas W.
Bordewieck, Kirsten E. Miller, robert M.
Dudnik, Los Angeles.
USSC, 9/25/07; 2007 WL 1339440.
NINTH CIRCUIT
CENTRAL DISTRICT ERRED IN
ON § 1981 AND FEHA RACE
DISCRIMINATION AND
RETALIATION CLAIMS
METOYER v CHASSMAN. In an opinion filed on September 26, the Ninth
Circuit, in an opinion by Nelson joined
by Rawlinson, with Bea concurring and
dissenting in parts, reversed summary
judgment on a number of race discrimination and retaliation claims brought by
the Screen Actors Guild’s former affirmative action administrator. The court
held that, as in the case of a Title VII
claim following the amendments contained in the 1991 Civil Rights Act, a
defendant cannot raise a mixed-motive
defense to liability for discrimination
claims brought under § 1981. “The mixedmotive defense, even if proven as an
undisputed fact, does not provide a
basis for summary judgment in a § 1981
discrimination case,” the court wrote.
The court held otherwise, however, with
respect to retaliation claims. “In Stegall
DECISIONS
(From Page 7)
v. Citadel Broadcasting Company,” the
court wrote, “we applied the mixedmotive defense to liability in a Title VII
retaliation case. 350 F.3d 1061, 1062,
1068 (9th Cir. 2004). Since a claim under
§ 1981 follows the same legal principles
as those applicable in a Title VII case ...
we hold that the mixed-motive defense
to liability for retaliation ... also applies
to this retaliation claim brought under §
1981. Therefore, if the mixed-motive
defense to retaliation is proven as a
undisputed fact, it can provide a basis
for summary judgment.” The majority
opinion continues in part as follows:
“In May, 2001 the Screen Actors Guild
fired Dr. Patricia Heisser Metoyer, an
African American, after PricewaterhouseCoopers concluded that Metoyer
authorized payment in excess of $30,000
of funds available for Guild use to friends,
business partners, and her husband’s
production company. Metoyer responded by bringing multiple claims
against the Guild, including federal race
discrimination and retaliation claims
under 42 U.S.C. § 1981 and state law
discrimination claims under FEHA. The
district court granted summary judgment in favor of the Guild on all claims.
We reverse in part and find that Metoyer
has raised a triable issue of fact on all
but one of the federal and state race
discrimination and retaliation claims.
“Metoyer’s complaint alleged three §
1981 claims: (1) discrimination in the
terms, conditions or privileges of employment based on SAG’s failure to
confirm her as National Director of Affirmative Action [the title she alleged she
had been orally promised when hired];
(2) wrongful termination; and (3) retaliation. We affirm summary judgment on
the claim of discrimination in the terms,
conditions or privileges of employment,
but reverse the grant of summary judgment on Metoyer’s wrongful termination
and retaliation claims.
“Metoyer’s claim [for discrimination in
the terms, conditions or privileges of
employment] fails because, due to the
parol evidence doctrine, there is no
admissible evidence establishing that
the Guild had a contractual obligation to
confirm her as the National Director of
Affirmative Action... [¶] [T]he Guild offered and Metoyer accepted employment as the Guild’s Executive Administrator of Affirmative Action. Together,
the Guild’s offer letter and Metoyer’s
acceptance letter constitute an integrated employment contract...
“Metoyer’s second contention is that
the district court erred in granting summary judgment as to her claims of
discriminatory termination under § 1981.
The district court ... determined that the
plaintiff ‘failed to present specific and
substantial’ circumstantial evidence of
pretext... [¶] Metoyer contends that ...
she presented both direct and circumstantial evidence demonstrating that
SAG management harbored discriminatory animus toward African Americans. We agree.
“Metoyer presented direct evidence of
discrimination in the form of several
remarks by members of senior management [Schick and Chassman] suggesting the existence of racial bias. We
have held that bigoted remarks by a
member of senior management may
tend to show discrimination, even if
directed at someone other than the
plaintiff. [cite omitted.] Furthermore, we
have held that remarks by such a
decisionmaker tend to show bias, even
if several years old. [cite omitted.]... [¶]
The Guild is correct ... that there is no
evidence linking Schick to the termination decision, but there is evidence that
raises a genuine issue of material fact
as to the role of Chassman in the firing
decision... [¶] Even if Chassman is not
considered the ultimate decision-maker
... a trier of fact could conclude that
Chassman influence or participated in
the decisonmaking process.
“Metoyer presented both direct and circumstantial evidence of retaliation for
bringing discrimination complaints to
the attention of SAG management and
highlighting the fraudulent Equal Employment Opportunity (EEO-1) report
submitted to the EEOC... Metoyer was
told that it was not her business to raise
complaints of racial discrimination...
When [she] failed to heed the warnings
... senior staff responded to the relayed
complaints with discriminatory com-8-
ments about African Americans...
[W]hen [she] raised the fraudulent EEO1 report to SAG senior management
and announced her intention to discuss
the discrepancies and present the discrimination complaints by employees
to SAG’s national plenary session...,
Schick responded vindictively... Shortly
before the plenary session, Metoyer
was suspended ... ostensibly because
of the findings from the PwC audit...
“We hold that SAG has not presented
sufficient evidence to support summary
judgment based on the mixed-motive
defense... While the facts of [Metoyer’s]
misconduct are undisputed, SAG’s
contention that it would have made the
same decision is undermined by
Metoyer’s declaration that other persons engaged in [similar] questionable
practices ... and faced no discisplinary
consequences... [¶] In addition ... there
was also evidence in the record that the
PwC audit was not a completely unbiased investigation...
“[Finally], the district erred in interpreting Metoyer’s [ambiguous] statement
as stipulating to dismissal of her FEHA
claims... [F]or the dismissal to be effective, it must be unqualified and unambiguous. Here, Metoyer’s statement in
her brief is too ambiguous to constitute
such consent. The statement [Dr.
Metoyer] ‘is prepared to dismiss’ may
mean something other than she is dismissing. [¶] We therefore reverse the
district court’s grant of summary judgment on the state law discrimination
and retaliation claims for the same reasons we reverse on the federal law
discrimination and retaliation claims.”
For plaintiff: Marco Simons, Lauren
Teukolsky, Anne Richardson, Hadsell
& Stormer, Pasadena; Rick Hicks,
Eugenia Hicks, Beverly Hills.
For defendant: Catherine B. Hagen,
Eric J. Amdursky, Renee M. Spigarelli,
Ryan Rutledge, O’Melveny & Myers,
Newport Beach.
Nelson joined by Rawlinson; concurring and dissenting opinion by
Bea; 2007 WL 2781909.
DECISIONS
(From Page 8)
ERISA DOES NOT PREEMPT
STATE LAW CLAIMS BY ESTATE
OF DECEASED EMPLOYEE
ALLEGING THAT EMPLOYER
BREACHED PROMISE TO
CONTINUE LIFE INSURANCE
COVERAGE
MILLER v RITE AID CORP. In an opinion filed on October 11, Judge Reinhardt
wrote in part as follows: “This case
presents the question whether the estate and alleged beneficiaries of an
employee who was neither enrolled in,
nor eligible for, a life insurance plan
regulated by ERISA at the time of her
death (which preceded the time this
action was filed) may bring an ERISA
claim. We hold that these parties may
not bring such a claim, and therefore
ERISA does not preempt Appellants’
state law claims.
“Connie Miller was employed by Rite
Aid from approximately 1981 until her
death on February 13, 2002. For some
unknown period of time, Rite Aid made
deductions from Miller’s paycheck to
pay for life insurance through a group
plan provided by ReliaStar Life Insurance Company. Appellants claim that
the ReliaStar policy provided for a benefit of approximately $150,000 and that
Miller’s children were the beneficiaries
of the policy.
“In February 2001, Miller was diagnosed
with terminal cancer and was placed on
disability until her death one year later.
On July 1, 2001, before Miller’s death,
Rite Aid terminated its ReliaStar plan
and replaced it with a group plan provided by Standard Insurance Company.
Miller was not enrolled in the Standard
life insurance plan because she was not
included in the list of employees exempt from the plan’s ‘active at work’
requirement... Therefore, Miller was not
enrolled in a group life insurance plan
after Rite Aid terminated the ReliaStar
plan. Miller also did not convert the
ReliaStar group plan into an individual
plan.
“Appellants allege, without any details,
that Rite Aid ‘offered, as part of the
employment agreement, that [Miller]
would be provided with life insurance.’
Appellants also allege that after Miller
became terminally ill Rite Aid representatives assured her that she would continue to have life insurance through the
time of her death...
“In their Amended Action, [the beneficiaries] alleged breach of insurance
contract against ReliaStar and, in the
alternative, against Standard... Alternatively, Appellants alleged breach of
employment contract against Rite Aid
for failing to provide Miller with life insurance. The Millers also alleged that Rite
Aid negligently failed to ‘ensure that
[Miller’s] fringe benefits would be preserved.’ [¶] The district court [D Oregon]
granted summary judgment on the preemption ground and dismissed the action...
“At the time of Miller’s death she did not
qualify as a ‘participant’ in any ERISA
life insurance plan because at that time
she was not covered by any life insurance policy and she did not have a
colorable claim to benefits under any
plan.
“Rite Aid’s first argument is that the
extent to which it failed to provide life
insurance depends on the terms of the
ReliaStar policy... But a party does not
become a ‘participant’ in a plan merely
because the court will have to look to
the terms of a terminated plan to determine the employer’s liability for failure
to create a new plan...
“Rite Aid’s second argument is that we
should consider Miller a ‘participant’ in
the ReliaStar ERISA plan because Miller
was eligible to convert that plan to an
individual policy... [¶] But ... converted
plans are not ERISA plans. Such plans
cover members as individuals, not as
employees, and an employee benefit
plan must cover at least one employee
to constitute an ERISA plan... Even if
Miller had converted the ReliaStar plan,
that would not make her a ‘participant’
in any ERISA plan...”
For plaintiffs: J. Michael Alexander,
Swanson, Lathen, Alexander & McCann,
Salem, Oregon.
For defendant: Bruce A. Rubin and
-9-
Jennifer J. Roof, Portland.
Reinhardt joined by Hall and Smith;
2007 DAR 15628, 2007 WL 2948900.
UNITED STATES
DISTRICT COURTS
LANGUAGE OF “SUMMARY PLAN
DESCRIPTION” PREVAILED OVER
THAT OF PLAN’S “MASTER
DOCUMENT” AND PLAINTIFFS
WERE THUS ENTITLED TO
PENSION BENEFITS FOR YEARS
OF SERVICE WITH
PREDECESSOR COMPANY
VAZQUEZ v CARGILL, INC. In an opinion filed on September 11, Judge
Cormac Carney of the Southern District
awarded pension benefits to the plaintiffs based on their combined years of
service for their original employer in
addition to their years at an acquiring
company. (The plaintiffs are now seeking prejudgment interest and attorneys’
fees.) The court summarized the facts
and its reasoning as follows:
“This ERISA trial involved a dispute over
pension benefits owed to plaintiffs ...
under the pension plans ... Cargill, Inc.
and Associated Companies Salaried
Employees’ Pension Plan, and Cargill,
Inc. and Associated Companies Pension Plan for Production Employees.
Plaintiffs are each retirees who worked
for over 35 years at the same oil facility
in Fullerton. This facility was owned and
operated for many years by HuntWesson until it was acquired by Cargill
in 1990. Plaintiffs contend that when
Cargill acquired the Fullerton facility
and employed them, it promised them
that they would receive pension benefits for their years of service for both
Hunt-Wesson and Cargill. Plaintiffs also
contend that they and other employees
were provided a summary plan description for the Production Plan indicating
that they would receive pension benefits for all their years of service at the
Fullerton facility. Defendants, on the
DECISIONS
(From Page 9)
other hand, deny that Plaintiffs are entitled to pension benefits for their years
at Hunt-Wesson, relying on the Production Plan master document that expressly excludes years of service at a
predecessor company from the calculation of pension benefits.
“After considering all the evidence presented by the parties, as well as the
arguments of their counsel, the Court
finds in favor of Plaintiffs. If a conflict
arises between an ERISA plan master
document and a summary plan description more favorable to an employee, the
summary plan description controls. In
light of the wording of the summary plan
description implying the Plaintiffs would
receive pension benefits for all their
years of service at the Fullerton facility,
as well as the representations made to
Plaintiffs by Cargill that were consistent
with that implication, Plaintiffs are entitled to receive pension benefits for
their years of service at the Fullerton
facility beginning January 1, 1964.
“The court adopts the parties’ stipulated
damages amounts [$431,143] and orders Defendants to make payments to
the Plaintiffs in accordance with that
stipulation.”
For plaintiffs: Firouzeh Simab, Michael
S. Ahmad, Michelle A. Reinglass.
For defendant: Gordon A. Letter, Littler
Mendelson, Los Angeles; Nancy L.
Ober, Littler Mendelson, San Francisco.
USDC SD Cal, 9/11/07; opinion by
Carney; 2007 WL 2681711.
UNPUBLISHED
CALIFORNIA COURT OF
APPEAL DECISIONS
[Note: The following summaries represent only a selection of the recent
unpublished Court of Appeal decisions.]
FOURTH DISTRICT ORDERS
SUPERIOR COURT TO VACATE
CLASS CERTIFICATION ORDER IN
WAGE AND HOUR ACTION BY
RESTAURANT EMPLOYEES
BRINKER RESTAURANT CORP. v
SUPERIOR COURT (HOHNBAUM). In
a detailed 20-page opinion filed on October 12, the Fourth District summarized the claims and its holdings as
follows:
“Plaintiffs and real parties in interest ...
sued defendants ... on behalf of themselves and similarly situated current
and former California hourly restaurant
employees ... alleging that Brinker had
violated numerous California wage and
hour laws and California’s Unfair Competition Law (Bus. & Prof. Code § 17200
et seq.). Specifically, plaintiffs alleged
that Brinker failed to provide certain rest
breaks or meal periods, or compensation in lieu thereof ... and also required
them to ‘work off the clock’ during meal
periods.
“Brinker petitions for a peremptory writ
of mandate directing the trial court to
vacate an order certifying the proposed
class. The principal question ... is
whether the trial court abused its discretion in certifying the class based on
its determination that common questions regarding meal periods and rest
breaks—specifically the ‘common legal issue’ of ‘what [Brinker] must do to
comply with the Labor Code’—predominate over individual issues.
“We conclude that the class certification order is erroneous and must be
vacated because (1) the order rests on
improper criteria and incorrect assumptions with respect to the rest break
claims, and the court abused its discretion in finding that those claims are
amenable to class treatment; (2) the
court’s ‘rolling five-hour’ meal period
ruling in its July 2005 order was erroneous, and thus the class certification
order rests on improper criteria with
respect to the rolling five-hour meal
period claims; (3) the class certification
order rests on an incorrect assumption
with respect to the meal period claims
to the extent those claims are based on
the theory that Brinker had a duty to
ensure that its hourly employees took
the meal periods it provided to them,
and thus the court abused its discretion
in finding that these claims are amenable to class treatment; and (4) the
-10-
court incorrectly assumed it did not
have to examine the elements of plaintiffs’ ‘off-the-clock’ claims, and thus
abused its discretion by finding without
such an examination that those claims
are amenable to class treatment. Accordingly, we order that a peremptory
writ shall issue with directions that the
superior court vacate its order granting
class certification.”
For real parties: Timothy D. Cohelan, L.
Tracee Lorens, William Turley, Frederick
P. Furth.
For petitioners: Rex S. Heinke, Karen
Joyce Kubin, Akin, Gump, Strauss,
Hauer & Feld, Los Angeles.
Fourth Dist Div One, 10/12/07; opinion by Nares with Haller and
O’Rourke concurring; 2007 WL
HOLDING THAT FACT ISSUE WAS
RAISED AS TO EMPLOYER’S
KNOWLEDGE OF PLAINTIFF’S
LEARNING DISABILITY, FOURTH
DISTRICT REVERSES SUMMARY
JUDGMENT ON DISABILITY
FUREY v BLOCKBUSTER, INC. The
San Diego County Superior Court erred
in granting summary judgment on disability discrimination claims brought by
a video rental store clerk with a learning
disability, the Fourth District held in an
unpublished opinion filed on July 11.
Emphasizing, inter alia, the steps an
employer must take to engage in a
meaningful interactive process with an
employee whose cognitive disability may
impede his or her communication of the
need for accommodation, the court wrote
in part as follows:
“Furey contends the trial court erred in
granting summary judgment as to each
of her causes of action because the
court acknowledged there was evidence
she was a ‘qualified individual with a
disability,’ who could perform the job
duties either with or without reasonable
accommodation. She contends the trial
court nevertheless failed to recognize
DECISIONS
(From Page 10)
[evidence] that Blockbuster ... had actual or constructive knowledge of such
disability, sufficient to raise triable issues of fact about (1) discrimination
against her on the basis of her disability, by taking adverse actions against
her for pretextual reasons; or (2) failure
to make reasonable accommodations...; or alternatively (3) failure to
respond to her evident needs and requests for such an interactive process
to accommodate her disability, or inadequate responses... Furey asserts she
presented sufficient evidence from which
a trier of fact could conclude she was
unreasonably prevented from performing her job functions and was therefore
constructively terminated in violation of
public policy.
“After setting forth our standard of review and applicable rules of law for
resolving these FEHA claims, we examine the evidence and ultimately conclude the trial court erroneously granted
summary judgment.”
For plaintiff: Christopher J. Hayes, Grace,
Hollis, Lowe, Hanson & Schaeffer, San
Diego.
For defendant: Michael S. Kalt, Wilson,
Petty, Kosmo & Turner, San Diego.
Fourth Dist Div One,7/11/07; opinion
by Huffman with McConnell and
McIntyre concurring; 2007 WL
1991450.
ETHICS STANDARDS WERE NOT
VIOLATED BY ARBITRATOR’S
FAILURE TO DISCLOSE SON’S
PRIOR EMPLOYMENT WITH FIRM
REPRESENTING DEFENDANTS
NOLDER v THE PERMANENTE MEDICAL GROUP. In an action for medical
malpractice, the Sixth District held as
follows in an unpublished opinion filed
on September 28:
“Alexa Nolder, the successor-in-interest to deceased plaintiff Leisa Lewis,
challenges the superior court’s denial of
Lewis’s petition to vacate an arbitration
award in favor of defendants. Lewis
claims the arbitration award should have
been vacated because the neutral arbi-
trator submitted an inaccurate disclosure and failed to disclose that his son
had previously been employed as an
attorney at the law firm that was representing defendants in the arbitration.
We conclude that the neutral arbitrator
was not required to disclose this information and that this information and the
neutral arbitrator’s inaccurate disclosure (that no member of his family had
ever been associated with an attorney
for a party) did not create a basis for
vacating the arbitration award.”
For plaintiff: Amy Eskin, San Francisco.
For defendant: George Clause, San
Jose; Kennedy P. Richardson, Oakland.
Sixth Dist, 9/28/07; opinion by Mihara
with Bamattre-Monoukian and Duffy
STRESS-RELATED INABILITY TO
WORK UNDER PARTICULAR
SUPERVISOR DOES NOT
CONSTITUTE LIMITATION ON
MAJOR LIFE ACTIVITY
ADAMS v SUTTER NORTH MEDICAL
FOUNDATION. In an unpublished opinion filed on October 2, the Third District
affirmed summary judgment on disability discrimination and failure to accommodate claims brought by a coordinator
in the defendant foundation’s Marketing
Department who suffered from stressrelated problems caused by her difficulty in getting along with her supervisor.
The court held, inter alia, that
Colmenares v Braemar Country Club,
Inc. (2003) 29 C4th 1019 did not overrule the holding in Hobson v Raychem
Corp. (1999) 73 CA4th 614 that the
inability to work under a particular supervisor does not constitute a FEHA
disability. “We further conclude,” the
Third District wrote, “that applying the
mere ‘limitation’ test (as opposed to the
federal ‘substantial limitation’ test), the
inability to work under a particular supervisor does not constitute a limitation
on a major life activity.”
-11-
For plaintiff: Robert P. Biegler, Sacramento.
For defendant: Susan L. Schoenig,
McDonough, Holland & Allen, Sacramento.
with Raye and Cantil-Sakauye concurring; 2007 WL 2834551 (unpublished).
FOURTH DISTRICT AFFIRMS
SUMMARY JUDGMENT ON
DISCRIMINATION AND
RETALIATION CLAIMS BY WHITE
MALE TELEPHONE OPERATOR
DENIED FULL-TIME POSITION
BECAUSE OF LACK OF
BILINGUAL FLUENCY
WHALEY v STATE OF CALIFORNIA
EMPLOYMENT DEVELOPMENT
DEPT. In an unpublished opinion filed
on September 21, the Fourth District
affirmed summary judgment on discrimination and retaliation claims brought by
a white male telephone operator employed at the EDD’s call center. In
January of 2005, the plaintiff had received a favorable ruling by an SPB
administrative law judge with respect to
his contention that EDD’s bilingual requirement for the conversion of parttime to full-time positions was racially
discriminatory on a disparate impact
theory, and the SPB had ordered that
Whaley be appointed to a full-time position with back pay. The ALJ also found,
however, that “no credible evidence supported a disparate treatment theory,”
and the plaintiff did not file a petition in
superior court challenging the SPB’s
decision.
In July of 2005, the plaintiff, having
received a right-to-sue letter, filed an
action in San Diego County Superior
Court alleging (1) racial and national
origin discrimination based on a disparate impact theory; (2) racial and national origin discrimination based on a
disparate treatment theory; (3) retaliation in response to his internal and
DFEH complaints about discrimination
and cooperation with authorities in their
DECISIONS
(From Page 11)
investigations and with the ALJ in his
administrative hearing; and (4) retaliation in violation of Labor Code § 1102.5
for alleged whistleblowing actions. (In
January 2006, the trial court sustained
a demurrer to the fourth cause of action.)
EDD’s motion for summary judgment
argued: (1) Whaley could not establish
that he suffered an adverse employment action; (2) there was no nexus
between Whaley’s protected activity
and EDD’s actions; (3) EDD had legitimate, nondiscriminatory reasons for its
actions; and (4) Whaley’s discrimination claims were barred by the applicable statute of limitations and the doctrines of collateral estoppel and the
failure to exhaust administrative remedies.
Concerning (1), the Fourth District held
that the plaintiff had only provided sufficient supporting evidence with respect
to nine of the 29 adverse acts he alleged, and concluded that “[c]onsidering
the totality of the circumstances ... they
do not constitute adverse employment
actions by EDD within the meaning of
the FEHA and Yanowitz.”
Concerning (4), the court wrote: “EDD’s
decision in November 2002 not to convert Whaley’s position to a full-time
position was a single, discrete action,
rather than a continuing course of conduct. That decision acquired a sufficient
degree of permanence within the meaning of Richards [v CH2M Hill, Inc. (2001)
26 C4th 798] in November 2002... EDD’s
conversion of Whaley’s position to a
full-time position in May 2004 pursuant
to the SPB’s order did not ... denote the
end of the period of a continuing violation in denying him that conversion...
“[T]he statute of limitations defense is
sufficient by itself to support the trial
court’s conclusion that EDD was entitled to summary adjudication... Nevertheless, we briefly note that Whaley’s
second cause of action is also barred
by the doctrines of collateral estoppel
and exhaustion of judicial remedies...
[¶] Whaley’s failure to pursue his judicial remedy and challenge the SPB’s
rejection of his disparate treatment
theory resulted in the finality of the
decision, involving application of the
doctrine of collateral estoppel.”
For plaintiff: Joel C. Golden, San Diego.
For defendant: Office of the Attorney
General, San Diego.
Fourth Dist, 9/21/07; opinion by
McDonald with Haller and Irion concurring; 2007 WL 2745205 (unpublished).
SUMMARY JUDGMENT ON
CLAIMS OF DISCRIMINATION AND
RETALIATION FOR EXERCISE OF
CFRA RIGHTS
AMARIA v BANK OF AMERICA. “Plaintiff and appellant Yasmine Asmaria sued
... Bank of America ... for wrongful
termination... Amaria, a long-term employee of the Bank, alleged, among
other things, that her termination was in
retaliation for her alleged exercise of
rights pursuant to the CFRA... Amaria
also alleged that defendants discriminated and harassed her for alleged exercise of rights pursuant to the CFRA.
“The trial court granted summary judgment/adjudication in favor of defendants.
We affirm. As to Amaria’s third and fifth
causes of action for discrimination and
retaliation for her alleged exercise of
rights under the CFRA, the Bank presented evidence that her termination
was for a legitimate non-discriminatory
and non-retaliatory reason. Amaria failed
to raise a triable issue of ... pretext...
“As to Amaria’s fourth cause of action
for harassment for allegedly exercising
rights under the CFRA, Amaria failed to
raise a triable issue of material fact that
defendants’ conduct in terminating her
constituted anything other than the exercise of routine personnel duties, upon
which harassment claims cannot be
based. (Reno v. Baird (1998) 18 Cal.4th
640, 646-647).
“As to Amaria’s sixth cause of action for
breach of an implied employment contract to be terminated only for good
cause, Amaria failed to raise a triable
-12-
issue ... that her employment was anything other than at will.” The court quoted
Dore v Arnold Worldwide, Inc. (2006) 39
C4th 384 for the proposition that an
express written at-will provision, signed
by the employee, cannot be overcome
by evidence of a prior or contemporaneous implied-in-fact good cause agreement, and emphasized that the unwritten “good cause” policy alleged by the
plaintiff was directly inconsistent with
the Bank’s at-will policies as stated in
its manuals and as contained in an
“Employment Agreement” executed by
the plaintiff in 1999.
For plaintiff: Carney R. Shegerian.
For defendant: Payne & Fears, Jane M.
Flynn and Karen O. Frankudakis.
Second Dist Div Three, 9/24/07; opinion by Kitching with Klein and
Croskey concurring; 2007 WL
WAS PROCEDURALLY
UNCONSCIONABLE AND
SUBSTANTIVELY ONE-SIDED
WHERE AMBIGUOUS SEPARATE
AGREEMENT ARGUABLY
ALLOWED JUDICIAL FORUM
FOR INTELLECTUAL PROPERTY
CLAIMS
COLOMBO v BNC MORTGAGE, INC.
In an unpublished opinion filed on September 26 relative to several claims
relating to allegations of sexual harassment and retaliation, the Third District
affirmed the denial of the employer’s
petition to compel arbitration. The court
agreed with the trial court that elements
of both procedural and substantive unconscionability were present, and rejected the employer’s argument that
“...once an employee signs, at the
employer’s behest, an arbitration agreement that states it was voluntarily entered into, the employee can never challenge the circumstances surrounding
the execution of the agreement, since
such evidence implicates the express
terms of the agreement [and violates
DECISIONS
(From Page 12)
the parol evidence rule].” The Third district continued in part as follows:
“Plaintiffs’ declarations establish the
basis for the trial court’s finding of procedural unconscionability. Plaintiffs
were urged to hurriedly sign paperwork
that included the [arbitration] Agreement. None of the plaintiffs had the
opportunity to change any of the terms
of the document. Each plaintiff needed
her job, a job that required she sign the
Agreement. Given the unequal bargaining power, the rushed atmosphere, and
the lack of opportunity to question or
change the arbitration obligation, we
find the Agreement procedurally unconscionable.
“We agree with the trial court’s assessment that the Agreement subjects employment disputes to arbitration, but
the [separate] IP Agreement allows for
legal recourse in intellectual property
disputes. As such, the Agreement lacks
mutuality and is substantively unconscionable.
“BNC is correct in noting that the IP
Agreement does not explicitly state
that BNC may pursue intellectual property disputes in court... But if, as BNC
posits, the Agreement’s arbitration
clause covers intellectual property disputes, the rights ‘at law and in equity’
language in the IP Agreement is superfluous. At best, the language is ambiguous. However, BNC is the source of the
ambiguity which permits it to choose a
preferred construction based on the
nature of the legal dispute... [H]ad the
present dispute involved a purported
violation of the IP Agreement, BNC
could just as plausibly claim that, as an
aspect of its rights ‘at law and in equity,’
it could seek judicial relief against an
offending employee. [¶] It is inherently
unfair to give BNC such flexibility.”
For plaintiff: Gary Gwilliam, Oakland;
Daniel U. Smith, Kentfield.
For defendant: Alexander McLain
Sperry, Orrick, Herrington & Sutcliffe,
Sacramento.
Third Dist, 9/26/07; opinion by Raye
with Hull and Robie concurring; 2007
WL 2783328 (unpublished).
STATE BAR COURT
WHISTLEBLOWER’S CLAIMS
WERE LARGELY BARRED BY
PRECLUSIVE EFFECT OF
FEDERAL COURT JUDGMENT
KONIG v STATE BAR OF CALIFORNIA. “Plaintiff is a former attorney on the
staff of the State Bar of California,” the
First District, Division One explained in
an unpublished opinion filed on September 28. “His complaint alleges that
he became aware of unethical and improper conduct by judges of the State
Bar Court. When his superiors refused
to take steps to report this misconduct,
plaintiff notified various regulatory bodies. Thereafter, he was subjected to a
number of negative employment actions ... and he eventually resigned his
position.
“Plaintiff initially sued the State Bar and
several of his superiors in federal district
court. The district court dismissed without prejudice all of his claims against
the State Bar on Eleventh Amendment
grounds and eventually granted summary judgment on his claims against
the individual defendants. After plaintiff
refiled his claims in state court, the
superior court granted judgment on the
pleadings, holding that the claims were
barred by the preclusive effect of the
federal judgment or were otherwise legally deficient. We reverse in part, concluding that plaintiff’s claim for defamation against the State Bar and the individual defendants acting in their official
capacities is not barred by the federal
judgment. We otherwise affirm.”
For plaintiff: Alan Konig, San Francisco,
pro per.
For defendants: John vonLoewenfeldt,
San Francisco.
by Margulies with Marchiano and
Swager concurring; 2007 WL 2819655
(unpublished).
VERDICTS AND
SETTLEMENTS
[Editor’s note: Members with a verdict
or settlement to report are strongly
urged to complete a copy of the form
that is available for that purpose from
Administrative Director Christina
Krasomil, and to return it to the CELA
Bulletin editor.]
SONOMA COUNTY JURY
AWARDS $230,000 TO FORMER
SOFTBALL COACH ON GENDER
DISCRIMINATION CLAIM
ELZE v BOARD OF TRUSTEES OF
THE CALIFORNIA STATE UNIVERSITY. On June 12, 2007, a Sonoma
County Superior Court jury found in
favor of the plaintiff, the defendant
university’s former head softball coach,
on a claim of gender discrimination, and
awarded her $117,068 for past and future economic loss, and $112,000 for
emotional distress.
The plaintiff proved that she had been
treated differently from similarly situated male coaches in connection with
three personnel decisions: (1) a decision to suspend her in mid-season; (2)
a second decision to extend the suspension for the remainder of her contract; and (3) a decision to terminate her
from employment by the non-renewal of
her contract. The university unsuccessfully contended that the decisions had
been made for legitimate business reasons and without a discriminatory motive.
For plaintiff: David C. King, Petaluma.
For defendant: Gaylynn Kirn Conant,
Oakland.
Sonoma County Superior Court, No.
SCV 237663; 6/12/07; Judge Elaine
Rushing; information provided by
counsel.
•
-13-
•
•
THE PETROVSKA CASE IS NOT OVER
by William Crosby
Anyone who has tried a medical malpractice case knows how difficult it can
be to persuade a jury to second guess
a doctor’s judgment. My task in Jannike
Petrovska v Loma Linda University was
even more difficult, as I had to persuade
the jury that the unanimous vote of
twelve doctors, including department
heads, to dismiss my client from medical school was for discriminatory, bad
faith reasons. I very much regret to
report that following a fourteen day trial,
the San Bernardino Superior Court jury
returned a defense verdict in this most
important case of my 36 years of practicing law. My efforts to obtain justice for
Ms. Petrovska are not over, however, as
I intend to file appeals to the Supreme
Court, if necessary.
Ms. Petrovska’s case involved a single
cause of action for discrimination based
on disability under the Unruh Civil Rights
Act. A paraplegic with limited use of her
hands since 1980, (when she was shot
four times in the back in a murder
attempt), Ms. Petrovska has a life-long
dream of being a physician. Following
her injury, her goal has been to own a
ranch where she can care (and be a role
model) for children with spinal cord
injuries. She has won numerous athletic events, (including the Wheelchair
Olympics), and gained national recognition as co-founder of a clinic that
treats paralyzed patients with electrical
stimulation to restore partial use of their
limbs.
After her graduation suma cum laude
from La Sierra University as a pre-med
major in 2000, she was accepted into
LLU’s School of Medicine. She was
accommodated reasonably well during
her first two years, although the school
was not fully wheelchair accessible. It
was understood that her live-in helper,
Ralph Clark, would assist her in certain
activities such as clinical procedures,
picking up campus mail and e-mails,
and helping her in traversing the sloped
campus.
Because of physical difficulties resulting from a broken leg, and emotional
stress due to a protracted divorce pro-
ceeding after her husband left her, Ms.
Petrovska obtained permission to have
her second year of medical school split
into two years. In the middle of her third
year, she and Mr. Clark suffered severe
respiratory injuries, including prolonged
disorientation and severe headaches,
as a result of toxic gas inhalation when
the heater in their home malfunctioned.
Due to these health problems, and because she was now living alone for the
first time in 20 years, (Mr. Clark having
left because of his own health problems), Ms. Petrovska requested a further extension of her sophomore year.
The Academic Review Committee
placed Ms. Petrovska on a leave of
absence until the beginning of the 2003
fall term, but ordered her to complete all
of her second year course requirements
by May 28, 2004. Other conditions were
imposed, including that she establish a
relationship with a mental health care
provider. The ARC minutes also reflected unjustified concerns regarding
alleged “unprofessional conduct.”
Ms. Petrovska requested more time to
heal, but was ordered by the Dean’s
office to return to school in the fall term.
The Dean of Student Affairs began to
treat her in an accusatory and increasingly hostile manner. In February of
2004, Ms. Petrovska suffered third degree burns on her legs due to scalding
water from a malfunctioning water
heater. She was required to have a
home care burn nurse, and was unable
to complete her clinical requirements
by the May 28, 2004 deadline.
When the Assistant Dean refused to
grant her the extra time she needed to
complete the physical exam of a patient, or to allow her to use an adaptive
ophthalmoscope for an eye exam, she
inquired of the Department of Justice
and was advised of her rights as a
disabled student. When the Assistant
Dean learned of this, a special meeting
of the Accommodations Committee was
held and Ms. Petrovska was granted
these accommodations. But her failing
grade in pathophysiology was not reversed.
-14-
In September of 2004, the ARC Committee met to consider Ms. Petrovska’s
dismissal for her alleged failure to meet
the conditions the Committee had previously imposed. Ms. Petrovska was
not provided advance notice of the specific charges against her, nor was she
allowed to be present to confront witnesses against her. The ARC members, (most of whom did not know Ms.
Petrovska personally and relied on misinformation provided by the Dean’s office), unanimously voted to dismiss her.
Ms. Petrovska’s dismissal was upheld
following a “kangaroo court” hearing of
her appeal by the Executive Committee, which was chaired by the school’s
Dean. She was denied meaningful due
process throughout these proceedings.
The ARC minutes note her dismissal
due, inter alia, to an alleged “long term
pattern of irresponsibility” and “lack of
integrity in financial matters.” The only
evidence regarding her finances was
her choice to pay her tuition during the
late period.
Ms. Petrovska’s expert, Jay Finkelman,
Ph.D., testified that the slanderous allegations against her were a result of
various failures of the school to provide
reasonable accommodations. These
failures included the denial of a student
helper to pick up daily mail and e-mails,
denial of assistance in transportation
around campus, inadequate training of
staff, and, most importantly, failure to
allow additional time for her to heal from
the toxic gas and burn injuries and from
her diagnosed anxiety and post traumatic stress disorder. Ms. Petrovska’s
claim of discrimination was based in
part on disparate treatment, since other
students had been allowed up to seven
years to graduate based on special
circumstances.
The defense expert on accommodation, Sharon Kawai, M.D., (herself a
paraplegic), testified that despite Ms.
Petrovska’s good grades she was illsuited to practice medicine because of
her “non-cognitive deficiencies.” She
(Cont'd on Page 15, PETROVKA CASE)
PETROVSKA CASE
(From Page 14)
added, patronizingly, that because of
Ms. Petrovska’s many other accomplishments, she “didn’t need to be a
doctor” to help humanity.
Judge Janet Frangie denied reinstatement based on the jury’s defense verdict on damages. We intend to move for
a new trial and JNOV based, among
other grounds, on the judge’s refusal to
give special instructions defining the
specific accommodations required in
the post-graduate professional school
context, as required by the Americans
With Disabilities Act, (incorporated into
the Unruh Act in 1992).
Although the post-trial motions are expected to be denied, hopefully the Fourth
District Court of Appeal, (and the Su-
preme Court if necessary), will scrutinize the record and clarify the law pertaining to the duty to accommodate and
disability discrimination generally. In
my view, something akin to a strict
liability standard needs to be applied in
the case of a disabled student who can
show failure to accommodate according to standards set forth in legislation
or applicable administrative regulations.
It was indeed disheartening that this
jury was unable or unwilling to clear Ms.
Petrovska’s good name, and to perceive the gross injustice which prevented her from pursuing her life’s calling. She intends to apply to a foreign
medical school where there is some
prospect of her acceptance despite the
stigma resulting from LLU’s actions.
As a post script, I will be representing
Ms. Petrovska in early December in a
negligence action against the company
that installed the defective gas heater.
Had it not been for the injuries caused
by that company’s negligence, she
would not have needed the accommodations the school denied her, and she
could have fulfilled her dream. Her damages in the negligence action should be
substantial, and hopefully can be used
toward establishing the ranch for disabled children. The Petrovska case is
not over.
•
•
•
CONFERENCE
(From Page 1)
tations and materials—and even the
questions posed by those present—
was truly inspiring. There were also
spirited and helpful sessions on recovering statutory awards of attorneys’ fees,
(Lisa Maki, Richard Pearl, and Mark
Talamantes), and on special issues in
cases involving immigrant workers,
(Enrique Martinez, Evangelina
Hernandez, Christopher Ho, and Virginia Villegas).
Friday’s luncheon was highlighted by
tributes to CELA’S founding members,
and the presentation of the Joseph
Posner Award. Presiding over the luncheon, Michelle Reinglass movingly
shared her memories of founding member John C. McCarthy, who passed
away in June, [see the July issue of the
CELA Bulletin]. Founding member William M. Crosby was also honored. Fred
Ashley described Bill (a Republican) as
“Lincolnesque,” and credited Bill with
influencing him to transition his practice
from the defense to the employee side.
Other founding members of CELA who
were present and honored included
Susan J. Hartley and James P.
Stoneman.
Joe Posner’s wife Tina and daughter
Michele were present to honor Jeffrey
K. Winikow as this year’s recipient of
the Joseph Posner Award, and Mrs.
Posner read from the eulogy that Jeff
delivered at Joe’s funeral in 2000. Accepting the Award on behalf of himself
and his wife, who Jeff said deserved an
equal share, Jeff described his own
evolution, following his marriage, from
management-side labor lawyer to
plaintiff’s attorney. Jeff told of an influential incident early in his career when
someone mistook him for an employeeside attorney, and expressed admiration for that role. Jeff said the incident
helped him decide to make the switch.
The afternoon panels were also excellent, presenting us with some varied
choices. A panel on winning at arbitration was moderated by Deborah
Rothman with panelists Hon. Raul
Ramirez, Deborah Kochan, and Marvin
Krakow. At the same time, another
panel, (Arlo Garcia Uriarte, Anthony
Luti, Cynthia Rice, and Amy Semmel),
provided insights into current practice
and developments under PAGA—the
Private Attorneys General Act. A third,
highly entertaining panel captured my
attention, as guest NELA board members Bruce Fredrickson, Dennis Egan,
Diane King, and Robert Richardson
shared their insights and stories about
-15-
“best opening statements.” After the
afternoon break, the largest panel of the
day, (John Igarashi, Darci Burrell, Gay
Carroll, James DeSimone, Kelly Stimpel
Martinez, and Elisa Ungerman), reminded us all, in plenary session, that
winning doesn’t come easy!
We closed out the day with the annual
CELA cocktail party, mixer, and silent
and live auctions. It was great mingling,
networking, and meeting the faces behind so many helpful list-serv postings.
Although I am a longstanding member,
I made new friends, and truly basked in
the glow of being around so many likeminded advocates for justice in the
workplace!
DAY TWO
The second day’s formal sessions began with the annual employment law
update by Cliff Palefsky, Steve Pingel,
Steven Serratore, and Sharon Vinick.
This critical summary of new cases
from the state and federal courts always
demonstrates the impressive breadth of
the issues addressed by CELA members. (Dozens of decisions involving,
(Cont'd on Page 16, CONFERENCE)
CONFERENCE
(From Page 15)
among many other issues, the FLSA
and state wage and hour laws, disability
discrimination, class certification, and
arbitration agreements are summarized
and discussed in the CELA Conference
materials that can be ordered on the
CELA website.)
ment motions by the defense bar, and
the rising level of proof necessary to
defeat summary judgment motions. The
panel urged plaintiffs’ lawyers to use
summary judgment motions affirmatively
to resolve undisputed issues and affirmative defenses.
We were joined at the Diversity Committee Luncheon by the Hon. Cruz
Reynoso, former California Supreme
Court Justice, former member of the
U.S. Civil Rights Commission, and current faculty member at U.C. Davis, King
Hall Law School. Justice Reynoso spoke
of the need to embrace diversity in our
schools and our practice, and the fundamental role of lawyers in bringing
justice to low income communities and
people of color. His remarks were particularly well-received, and they undoubtedly served as an inspiration to the
many law students attending the conference as recipients of CELA’s diversity scholarships.
-- Cynthia Rice
Bringing the day to a close, Noah
Lebowitz, Michael Hallerud, Hon, Jaime
Jacobs-May, and Ellen Lake addressed
the increasing use of summary judg-
THE DISABILITY
DISCRIMINATION SEMINAR
CELA’s disability discrimination seminar, held on the Thursday before the
Conference, could not have been more
timely in light of the California Supreme
Court’s recent (August 23) decision in
Green v State of California (2007) 42
C4th 254. The seminar was a huge draw
and the room was filled to overflowing.
Considering the difficulty of disability
discrimination cases, this speaks volumes about the passion and tenacity of
CELA members.
to the seminar, not only because of our
incredible speakers, but because of the
seminar’s inclusive scope—from client
intake to trial.
After getting some terrific practical tips
in the morning from trail blazers David
deRubertis, Jean Hyams, Bernard
Alexander, Arash Homanpour, and
David Duchrow, Norm Pine gave a
wrenching description of his trials and
tribulations in Green.
After a productive lunch discussing the
landscape after Green, we had some
great afternoon panelists, including
workplace investigations guru Michael
Robbins, National Jury Project consultant Carol Bauss, and arbitrator and
mediator, retired Judge Demetrios
Agretelis.
If you could not make the seminar, the
massive materials are available and
invaluable, particularly the section on
discovery.
-- Debora S. Vierra
It was especially uplifting to meet so
many new members who were attracted
C O M I N G
E V E N T S
November 9-11, 2007
November 29, 2007
DISABILITY RIGHTS LEGAL CENTER GALA
Omni Hotel, Los Angeles
(see www.disabilityrightslegalcenter.org for details)
October 3-4, 2008
CELA’S 2008 ANNUAL CONFERENCE
(with skills seminar on October 2)
Hilton Pasadena
-16-
Published
Monthly
BULLETIN
November 2007
Vol. 21, No. 11
entitled to no deference), the Supreme
Court continued in part as follows:
CALIFORNIA
SUPREME COURT
EMPLOYER MAY REIMBURSE
EMPLOYEES FOR AUTOMOBILE
EXPENSES BY PAYING HIGHER
SALARY OR COMMISSIONS,
BUT PAYMENTS MUST BE
APPORTIONED AND MUST BE
ADEQUATE FOR FULL
REIMBURSEMENT
GATTUSO v HARTE-HANKS SHOPPERS, INC. In a unanimous opinion by
Kennard filed on November 5, the California Supreme Court wrote in part as
follows:
“Labor Code section 2802, subdivision
(a), requires an employer to indemnify
its employees for expenses they necessarily incur in the discharge of their
duties. May an employer satisfy this
statutory obligation by paying employees increased wages or commissions
instead of separately reimbursing them
for their actual expenses?
“We conclude that an employer may
satisfy its statutory reimbursement
obligation by paying employees enhanced compensation in the form of
increases in base salary or increases
in commission rates, or both, provided
there is a means or method to apportion the enhanced compensation to
determine what amount is being paid
for labor performed and what amount is
reimbursement for business expenses.
“As we will explain, our conclusion
differs somewhat from that reached by
the trial court and Court of Appeal, and
the differences affect the analysis of
another issue presented here, whether
the trial court abused its discretion in
denying class certification. Accordingly,
we reverse the Court of Appeal’s judgment and remand the matter to that
court for further proceedings consistent
with our opinion.”
The action was brought by “Outside
Sales Representatives” of a marketing
company who are required to drive their
personal cars in the discharge of their
duties. According to the employer,
OSRs are paid a higher base salary and
commission rates than other sales representatives to compensate them for
automobile expenses.
Affirming a Superior Court order concerning the meaning of Lab Code §
2802, the Second District had emphasized that “...we do not express any
opinion as to whether Harte-Hanks has
actually indemnified any of its OSRs for
all of his or her automobile expenses via
increased compensation, but only that
section 2802 does not prevent HarteHanks from doing so in this manner.”
The Second District had also affirmed
an order denying certification of the
case as a class action, agreeing with
the superior court’s conclusion that
common issues did not predominate
over questions affecting individual members. (The Second District’s October
27, 2005 opinion appeared at 35 CR3d
Bulletin, Nov 05, p.7.)
After reviewing the relevant DLSE policy
statements and DLSE advice and opinion letters as evidence of the DLSE’s
interpretation of the statute, (while noting that the DLSE’s interpretation was
“Because of the onerous burdens that
the actual expense method imposes on
both employer and employee, few employers use this method to determine
reimbursement for work-required use of
employees’ own automobiles, and both
parties agree that the actual expense
method is not the only method that an
employer may use... Both parties agree
CELA TO PRESENT
DECEMBER 7 SEMINAR:
“AN INTRODUCTION TO
TRIAL PRESENTATION
SOFTWARE”
On Friday, December 7, 2007, CELA
will present a half-day seminar entitled
“An Introduction to Trial Presentation
Software,” covering the use of trial technology in your employment litigation
practice. The seminar will be held in two
locations: in Pasadena at two times,
(from 9am to noon, or from 1:30 pm to
4), and in San Francisco from 9am to
noon.
Seasoned trial attorneys will introduce
and demonstrate various types of trial
technology software, including programs such as Sanction, Trial Director,
and Microsoft Access, and discuss
how software is used to organize and
retrieve voluminous documentation, and
how to use presentation software effectively during trial. 2.75 hours of MCLE
credit will be available. See
www.celaweb.org for seminar brochure
and registration form. For further information, contact CELA Administrative
Director Christina Krasomil at (808)
907-7895; [email protected].
DECISIONS
(From Page 1)
that an employer may also use the
mileage reimbursement method.
“The DLSE interpretive bulletin [No. 847] said that the mileage rate could be
set by agreement of the parties... We
agree that, as with other terms and
conditions of employment, a mileage
rate for automobile expense reimbursement may be a subject of negotiation
and agreement... Under section 2804,
however, any agreement made by the
employee is null and void insofar as it
waives the employee’s rights to full
expense reimbursement... Therefore,
the existence of an agreement ... would
not relieve the employer of the statutory
obligation to provide complete reimbursement, nor would it preclude an
employee from challenging the sufficiency of a reimbursement payment
that was calculated using the agreed
mileage rate.
“We [also] agree with Harte-Hanks, and
also with the trial court and the Court of
Appeal, that section 2802 does not
prohibit an employer’s use of a lumpsum method ..., provided that the amount
paid is sufficient to provide full reimbursement for actual expenses... [¶] Of
course, an employee must be permitted to challenge the amount of a lumpsum payment as being insufficient under section 2802...
“[W]e next consider whether the employer must segregate the lump sum
from other compensation or whether, as
the trial court and the Court of Appeal
concluded, the employer instead may
pay the lump sum in the form of an
increase to the employee’s base salary
or commissions... [¶] We conclude that
an employer may satisfy its ... obligation under section 2802 by paying employees enhanced compensation in the
form of increases in base salary or
commission rates, provided the employer establishes some means to identify the portion of the overall compensation that is intended as expense reimbursement, and provided also that the
amounts so identified are sufficient to
fully reimburse the employees for all
expenses actually and necessarily incurred.
“The remaining issue is whether the trial
court abused its discretion in denying
[class certification]. [¶] Harte-Hanks
has taken the position that as to the
members of [the] proposed class, it
fulfilled its reimbursement obligation ...
by paying them higher commission rates
and higher base salaries... As we explained in the previous section, the
validity of this claim will turn on the
resolution of these questions: (1) Did
Harte-Hanks adopt a practice or policy
of reimbursing outside sales representatives for automobile expenses by paying them higher commission rates and
base salaries...? (2) If so, did it establish a method to apportion the enhanced
compensation payments between compensation for labor performed and expense reimbursement? (3) If so, was
the amount paid for expense reimbursement sufficient to fully reimburse the
employees...?
“Neither the trial court nor the Court of
Appeal framed the class certification
issue in that way, and so neither court
considered whether these inquiries are
capable of resolution on a class-wide
basis. Accordingly, the class certification issue is to be reconsidered on
remand.”
For plaintiffs: Hollins Schechter, Andrew S. Hollins, Kathleen M. K. Carter,
Jeffrey R. Gillette, Alicia K. Berry, and
Christine Arnold.
For Employee Rights Center as amicus
on behalf of plaintiffs: Thomas L. Tosdal.
For defendant: Seyfarth Shaw, Raymond
R. Kepner, Ann Haley Fromholz, John
A. Van Hook, and Holger G. Besch.
For Employers Group as amicus on
behalf of defendant: Winston & Strawn.
For Employment Law Council as amicus on behalf of defendant: Paul,
Hastings, Janofsky & Walker and Paul
Grossman.
by Kennard; 2007 DAR 16553, 2007
WL 3243861.
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)
Virginia Keeny
(Pasadena)
Eve Chesbro
(Pasadena)
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)
Bulletin Editor
-2-
Christopher Bello
Astoria, OR 97103
Ph: (503) 338-3891
DECISIONS
(From Page 2)
SUPREME COURT ORDERS
FOURTH DISTRICT TO VACATE
OPINION THAT REVERSED
CLASS CERTIFICATION ORDER
IN WAGE AND HOUR CASE
BRINKER RESTAURANT CORP. v
SUPERIOR COURT (HORNBAUM). On
October 31, the Supreme Court filed
the following order: “At the request of
the Court of Appeal, review is granted
on this court’s own motion. The cause
is transferred to the Court of Appeal,
Fourth Appellate District, Division One,
with directions to vacate its opinion and
reconsider the matter as it sees fit. The
petition for review is denied as moot.
The requests for publication are denied
as moot.”
In an unpublished opinion filed on October 12, (2007 WL 2965604; summarized in CELA Bulletin, Oct 07, p.10),
the Fourth District had ordered the
superior court to vacate a class certification order in a wage and hour action
by restaurant employees involving a
number of claims involving rest breaks
and meal periods.
For employees: Timothy D. Cohelan,
L. Tracee Lorens, William Turley,
Frederick P. Furth.
Cal SC, 10/31/07; 2007 DAR 16441
(order).
CALIFORNIA COURTS
OF APPEAL
PUBLIC EMPLOYEE WAS NOT
REQUIRED TO EXHAUST CBA’S
GRIEVANCE ARBITRATION
PROCEDURE BEFORE FILING
FEHA DISCRIMINATION CLAIMS
ORTEGA v CONTRA COSTA COMMUNITY COLLEGE DISTRICT. In an
opinion filed on November 9, the First
District, Division Five, held that the
superior court had erred in dismissing
FEHA and common law claims brought
by the defendant’s former head football
coach on the ground that the plaintiff
had failed to exhaust the administrative
remedies provided by a CBA. “Because
the District’s internal grievance procedures were created by a CBA and
culminated in an arbitration,” the Court
of Appeal wrote, “neither administrative
nor judicial exhaustion applies to bar
Ortega’s claims.” The court further explained:
“After his demotion..., Ortega filed a
statement of grievance on April 7, 2004,
alleging a violation of the CBA. College
president Helen Carr sent Ortega a
memo denying the grievance on April
16, citing a failure to follow proper procedure and a failure to comply with
grievance timelines.... Ortega requested
a Level III fact-finding panel. The union
and the District each suggested a panel
member; however, the process proceeded no further.
“Ortega filed a complaint with the [DFEH]
and received a right-to-sue notice on
April 26, 2004. On August 12, 2004,
Ortega filed a complaint in the Contra
Costa Superior Court against the College (the demotion action)... His complaint included three causes of action:
(1) race discrimination..., (2) intentional
infliction of emotional distress, and (3)
negligent supervision... In his complaint,
Ortega alleged that he had exhausted
all of his administrative remedies.
“On November 28, 2005, the District
filed a motion to dismiss based on
Ortega’s failure to exhaust the applicable grievance process, which the
court granted.
“When his employment contract was
not renewed, Ortega filed a second
statement of grievance on June 28,
2005, alleging he was improperly terminated. This grievance was denied for
failure to properly request a hearing and
for failure to allege any specific violations of the CBA. It appears that no
further action was taken pursuant to the
CBA grievance procedure.
“Ortega received a second right-to-sue
notice from the DFEH on June 29, 2005.
He filed a complaint related to his termination against the District on December 27, 2005 (the termination action).
This complaint included five causes of
-3-
action: (1) race discrimination..., (2) intentional infliction of emotional distress,
(3) negligent supervision, (4) retaliation...,
and (5) wrongful termination in violation
of public policy. Ortega alleged he exhausted all of the administrative remedies required by the FEHA.
“On April 12, 2006, the trial court sustained [a] demurrer without leave to
amend. The court’s order stated,
‘[Ortega] invoked the grievance process
in order to challenge his termination.
[Ortega] has not alleged that he has
exhausted his administrative remedies.
This court is without jurisdiction to hear
this case.’ On May 8, 200, the court
entered judgment dismissing the complaint in favor of the District.
“The District relies on Schifando [v City
of Los Angeles (2003)] 31 Cal.4th 1074,
Johnson v. City of Loma Linda (2000) 24
Cal.4th 61, and Page v. Los Angeles
County Probation Dept. (2004) 123
Cal.App.4th 1135 to argue Ortega’s
FEHA claims ... were barred by his
failure to exhaust his internal administrative remedies.
“[U]nder Schifando, a public employee
may choose to ignore statutory civil
service remedies for employment discrimination and proceed directly to the
courts to obtain relief under the FEHA.
However, under Johnson, if the public
employee elects to utilize the civil service remedies provided and receives an
adverse finding, that finding binds the
trial court in any subsequent FEHA
action, unless the finding is overturned
in a mandate proceeding. Finally, as
Page explains, if the public employee
has had an evidentiary hearing during
the civil service proceedings, the employee may not opt out of those proceedings before a final decision is
reached in order file a FEHA claim in
court. Instead the employee must exhaust the administrative remedies provided, until a final decision is obtained
and, if the decision is adverse, exhaust
the judicial remedy by pursuing mandate relief.
DECISIONS
(From Page 3)
“The District argues that Ortega chose
to initiate the internal grievance procedure provided in the CBA ... and the
doctrines of administrative and judicial
exhaustion bar his lawsuits. But the
District ignores the critical difference
between the decisions it relies upon,
where the employees’ administrative
remedies were provided by statute, and
Ortega’s cases, where his internal remedies were provided in a CBA.
“The CBA grievance procedure does not
eliminate the right to a jury’s determination of important state statutory rights
afforded to individual workers... The District never argues that there is a ‘clear
and unmistakable’ waiver of the judicial
forum in the CBA.
“The District’s reliance on Johnson,
Schifando and Page is misplaced; none
of those decisions involved a public
employee subject to a CBA that vested
control in the union over the fact-finding
component of the grievance procedure.
Because the CBA provides for arbitration of employee complaints, Ortega’s
utilization of this grievance process does
not bar his state court FEHA actions
against the District. In both his demotion and his termination cases, Ortega
alleged that he timely filed a complaint
with the DFEH, and this is sufficient to
plead exhaustion. (Williams v. Housing
Authority of Los Angeles (2004) 121
Cal.App.4th 708, 721.)
“We [also] conclude [Ortega] was not
required to exhaust the available administrative procedures for [his] nonstatutory claims... [because] each of the
nonstatutory claims is FEHA-related...”
For plaintiff: Sundeen Salinas & Pyle;
Leah Hess.
For defendant: John A. Shupe.
by Simons with Jones and Needham
WL 3317832.
UNITED STATES
SUPREME COURT
SUPREME COURT HEARS
ARGUMENT IN CASE FROM
NINTH CIRCUIT INVOLVING
ENFORCEABILITY OF
PROVISIONS THAT ALLOW FOR
EXPANDED JUDICIAL REVIEW OF
ARBITRATION AWARDS
HALL STREET ASSOCIATES v
MATTEL. On November 7, the United
States Supreme Court heard argument
in a Ninth Circuit case that raises an
issue over which the circuits have split:
whether parties can agree to arbitration
provisions that allow for more expansive
judicial review than is provided for under
the FAA. The case involves a dispute
over liability for environmental contamination and clean-up costs at an Oregon
toy manufacturing facility. The arbitration agreement in question specifies
that a United States District Court judge
may vacate or modify an award because
of an arbitrator’s legal or factual errors,
and, pursuant to that provision, a federal
judge in Oregon found the arbitrator’s
ruling incorrect.
In an unpublished memorandum opinion, however, the Ninth Circuit reversed,
citing Kyocera Corp. v Prudential-Bache
Trade Servs., Inc. (9th Cir. 2003) (en
banc), for the proposition that the FAA
does not permit expanded judicial review. “Although the arbitrator’s assessment of the merits in this case contains
possible errors of law,” the panel majority (Goodwin and Reinhardt) wrote,
“those errors are not a sufficient basis to
overrule an arbitration award.” (196 Fed
Appx 476, 2006 WL 2193411.) The
Supreme Court’s decision is expected
by the end of June.
For Hall Street (seeking enforcement of
expanded review provision): Carter
Phillips of Sidley Austin.
For Mattel: Beth Brinkmann of Morrison
& Foerster.
USSC, No. 09-970.
NINTH CIRCUIT
UNION VIOLATED TITLE VII AND
BREACHED DUTY OF FAIR
REPRESENTATION BY FAILING
TO PURSUE FEMALE UNION
MEMBER’S GRIEVANCES
BECK v UNITED FOOD AND COMMERCIAL WORKERS UNION, LOCAL
99. In an opinion by Ikuta filed on November 1, the Ninth Circuit wrote in part
as follows:
“Local 99 ... appeals from the district
court’s [D Arizona] determination that
Local 99 violated Title VII and breached
its duty of fair representation in connection with the termination of one of its
members, Cheryl Beck. Local 99’s appeal requires us to consider the proper
role of comparative evidence in a Title
VII case against a union and the framework that must be applied to a member’s
claim that the union breached its duty of
fair representation. We ... affirm the
district court’s decision.
“At Beck’s request, Local 99 filed a
grievance contesting Beck’s termination [for alleged use of profanity]... [Local 99’s] attorney opined that an arbitrator would ‘almost certainly’ conclude
that termination for a second incident of
profanity constituted just cause [for discharge] when the first incident [had]
resulted in an unchallenged written
warning less than three months earlier.
Local 99 subsequently informed Beck
that it would not arbitrate her grievance.
“After obtaining a right-to-sue letter from
the EEOC, Beck filed the present action ... alleging that Local 99 discriminated against her on the basis of her
sex ... and that Local 99 breached its
duty to represent her fairly. The case
proceeded to a bench trial.
“Beck bore the burden of proving that
Local 99’s actions were motivated by
intentional sex discrimination. Beck
sought to carry this burden by demonstrating that the grievances of two similarly situated men were handled by the
-4-
DECISIONS
(From Page 4)
same Local 99 representatives with
greater zeal than her grievances and the
grievance of another similarly situated
female...
“The district court inferred from Beck’s
evidence regarding the three employees that Local 99’s decisions not to
pursue Beck’s grievances were fueled
by discriminatory animus... [and] ...
entered judgment in favor of Beck on her
Title VII claim.
“With respect to Beck’s duty of fair
representation claim, the district court
... determined that Local 99’s failure to
file a grievance contesting the April
warning constituted an arbitrary, discriminatory, and bad faith failure to perform a ministerial action. The district
court also concluded that Local 99’s
decision not to arbitrate Beck’s July
termination was the result of discrimination and bad faith.
“[T]he district court awarded Beck
$16,304 in lost wages, $125,000 in
compensatory damages for emotional
distress, $50,000 in punitive damages,
and attorneys fees and costs, not yet
fixed.
“The district court determined that Local 99’s failure to file a grievance with
respect to Beck’s April warning did not
stem from Local 99’s exercise of judgment, but was instead a ministerial act.
Local 99 contests the district court’s
ruling, contending that its decision ...
was a rational exercise of judgment...
[¶] Where [as here] a union has agreed
to file a grievance but fails to file the
grievance in a timely fashion, the union’s
error is properly characterized as ‘failure to perform a ministerial act required
to carry out [its] decision.’ [cite omitted]
[¶] Local 99’s failure to challenge Beck’s
April warning effectively extinguished
her right to challenge her ultimate termination... [¶] Because ... Beck’s ultimate termination was a direct consequence of that breach, we need not
decide whether Local 99 also breached
the duty of fair representation in declining to subsequently arbitrate Beck’s
July termination.
“[Relative to the Title VII claim] Local 99
... argues that Beck could not raise an
inference of discrimination based on
two similarly situated males and one
similarly situated female, because an
inference of discriminatory intent does
not arise as a matter of law where the
statistical evidence is based on too
small a sample size, does not present
a ‘stark pattern’ of discrimination, and
does not ‘account for possible nondiscriminatory variables.’
“Our cases do not always clearly distinguish between statistical evidence that
is non-probative because it is based on
too small a sample size, and permissible comparative evidence of one or
more similarly situated individuals. However, in general, we have upheld inferences of discriminatory motive based
on comparative data involving a small
number of employees when the plaintiff
establishes that he or she is ‘similarly
situated to those employees in all material respects.’ [cites omitted]
that the Eleventh Amendment barred
sex discrimination and retaliation claims
brought by two discharged members of
the Alaska governor’s office, the Ninth
Circuit, in a November 8 opinion by
Noonan with Wallace concurring and
Paez dissenting, rejected the argument
that Congress abrogated the States’
Eleventh Amendment immunity to private claims for damages under the Government Employee Rights Act, 42 USC
§ 2000e-16a et seq. The plaintiffs, the
Director of the Office of the Governor in
Anchorage, and one of the governor’s
special staff assistants in that same
office, had been discharged because of
alleged election activities on behalf of a
candidate of the opposition party.
Noonan wrote in part:
For plaintiff: Helen Perry Grimwood,
Phoenix.
For defendant: Michael T. Anderson,
Davis, Cowell & Bowe, San Francisco.
Ikuta joined by Hall and
O’Scannlain; 2007 DAR 16461, 2007
WL 3197089.
“In 1972, Congress held extensive hearings on discrimination in the treatment
of the ten million or more employees of
state and local governments. On the
basis of these hearings, the relevant
committees found extensive gender and
racial discrimination by the States... No
special mention, one way or the other,
was made of highly-placed employees
serving in posts close to the Governor of
a State. As enacted in 1972, the Equal
Employment Opportunity Act based on
the hearings excluded from its protection elected officers and ‘any persons
chosen by such officer to be on such
officer’s personal staff’ and employees
‘on the policymaking level’ or serving
the official as ‘an immediate adviser...
The legislative history shows an acute
awareness in the Senate of the undesirability of sweeping such key persons
under the general prohibitions of discrimination.
IN DISCRIMINATION CASE
BROUGHT BY MEMBERS OF
ALASKA GOVERNOR’S STAFF,
CONGRESS DID NOT VALIDLY
ABROGATE STATES’ ELEVENTH
AMENDMENT IMMUNITY IN
ENACTING GOVERNMENT
EMPLOYEE RIGHTS ACT
“In 1991, the Equal Employment Opportunity Act of 1972 was amended by
GERA... GERA wiped out the existing
exemption of members of an elected
official’s personal staff, those serving
the official on a policymaking level, and
those serving as immediate advisers.
GERA was enacted with no findings by
Congress as to state practices of discrimination against employees at this
level of government. Without such findings was GERA a proportionate re-
“Here, Beck’s evidence was comparative in nature, rather than statistical...
We cannot say that, as a matter of law,
such evidence was an insufficient basis
for the district court’s conclusion... [T]he
district court’s findings are not clearly
erroneous.”
STATE OF ALASKA v EEOC. Holding
-5-
DECISIONS
(From Page 5)
sponse to an identified evil? If not, GERA
failed to meet the criteria set by the
Supreme Court. See City of Boerne v.
Flores, 521 U.S. 507, 520 (1997).
“The EEOC argues that the necessary
findings had already been made in the
hearings that preceded enactment of
the Equal Employment Opportunity Act
of 1972... [But] in 1972, Congress
thought of state policymakers as different from other state employees, so
Congress specifically excluded them
from coverage. The exclusion is at least
an indication that the hearings did not
establish an existing evil in the selection and retention of a governor’s close
associates. Nothing in the record shows
that a pattern of gender discrimination
as to a governor’s staff, advisers, and
policymakers existed in 1991 when
GERA was enacted. The absence of
such evidence is very critical. Very few
modern governors, it may fairly be assumed unless the contrary were shown,
would intentionally discriminate on the
basis of race or gender in choosing key
advisers, and very few modern governors who did discriminate would be
likely to keep their office.
“We do not believe that GERA is a
proportionate response to a widespread
evil identified as the predicate of this
legislation. Accordingly, we grant the
Governor’s Office’s appeal and remand
to the EEOC with directions to dismiss
the suit.”
For Office of the Governor: Richard W.
Postma, Jr., Anchorage.
For EEOC: Stephanie Marcus, Washington DC.
Noonan with concurring opinion by
Wallace and dissenting opinion by
Paez; 2007 DAR 16747, 2007 WL
3287655.
WHERE COUNSEL WHO HAD
NOT CONSENTED TO
ELECTRONIC SERVICE FAILED
TO RECEIVE NOTICE OF
HEARING SENT ONLY BY EMAIL, DISMISSAL OF ACTION
FOR HIS FAILURE TO APPEAR
WAS ABUSE OF DISCRETION
CALDERON v IBEW LOCAL 47. In a
short per curiam opinion filed on November 13, a Ninth Circuit panel held that
District Judge Manuel L. Real of the
Central District abused his discretion in
dismissing the case for lack of prosecution when counsel for the plaintiff failed
to appear at a scheduled hearing. The
court wrote in part:
“The district court’s dismissal of the
complaint was based entirely on
counsel’s failure to attend the show
cause hearing... While failure to attend
a scheduled hearing may justify the
imposition of some sanction ... we doubt
that the drastic remedy of dismissal
could be justified by a single such
event... We need not consider the question, however, because there is a far
more fundamental problem here:
Plaintiff’s counsel was not given proper
notice of the show cause hearing. Counsel was notified only by email, yet the
rules did not authorize service by electronic means... There is no evidence
that Calderon or his lawyer consented
to electronic service.
For plaintiff: Stanley R. Raskin, Torrance.
For defendant: Ellen Greenstone and
Glenn Rothner, Pasadena.
Ninth Circuit, 11/13/07; per curiam
opinion before Kozinski, Tashima,
and McKeown; 2007 DAR 16861, 2007
WL 3342764.
IN UNPUBLISHED MEMORANDUM
OPINION, NINTH CIRCUIT
REVERSES SUMMARY
JUDGMENT IN OVERTIME ACTION
AGAINST UPS
MARLO v UNITED PARCEL SERVICE.
In an unpublished memorandum opinion filed on October 25, a Ninth Circuit
panel, (Kozinski, McKeown, and Jones),
reversed summary judgment that had
been granted by Central District Judge
Dean Pregerson on a claim that UPS
misclassified its Full-Time Supervisors,
(about 1200 class members state-wide).
“Marlo has raised material issues of
fact,” the Ninth Circuit wrote, “related to
whether the FTS ‘customarily and regularly exercise discretion and independent judgment.’ Cal. Code Regs. tit. 8,
§ 11090(1)(A)(1)(d) (2005). Accordingly,
summary judgment as to that issue
was improper.” The supervisors argued
that UPS uses highly standardized procedures that effectively preclude them
from making independent decisions.
“Where the rules do not authorize service by email, counsel has no obligation
to check his email on a regular basis for
possible orders from the court...
[Note: In a CELA List message on
October 26, plaintiffs’ attorney Mark
Peters noted that an audio file of the
argument is available on the Ninth
Circuit’s website, www.ca9.uscourts.
gov]
“The district judge’s unseemly haste in
dismissing this case, and his failure to
heed the perfectly plausible (and meritorious) explanation proffered by plaintiff in his motion for reconsideration, has
cost the parties significant money and
delay in pursuing this wholly unnecessary appeal. Justice suffers when judges
act in such an arbitrary fashion. We
apologize to the parties and admonish
the district judge to exercise more care
and patience in the future.”
For plaintiffs: John A. Furutami, Mark
Peters, Furutami & Peters, LLP; G.
Scott Emblidge, Rachel Sater,
Moscone, Emblidge & Quadra, LLP.
For defendant: George W. Abele, Paul,
Hastings, Janofsky & Walker, LLP, Los
Angeles.
Ninth Circuit, 10/25/07; memorandum opinion, (Kozinski, McKeown,
District Judge Robert E. Jones, D Or,
by designation); 2007 WL 3194122
(unpublished).
-6-
DECISIONS
(From Page 6)
UNPUBLISHED
CALIFORNIA COURT OF
APPEAL DECISIONS
[Note: The following brief summaries
represent only a selection of the unpublished decisions recently filed by the
California Courts of Appeal.]
EMPLOYER’S OFFICER COULD
ENFORCE ARBITRATION
AGREEMENT ONLY IN
CONNECTION WITH CLAIMS
RELATING TO CONDUCT WITHIN
SCOPE OF HIS AUTHORITY
MOORE v SOTHEBY’S INTERNATIONAL REALTY, INC. “Defendants
and appellants Sotheby’s ... and Frank
Symons ... appeal from the trial court’s
order denying in part their petition to
compel arbitration of claims asserted
by plaintiff... Plaintiff, who worked for
Sotheby’s as an independent contractor, filed a complaint alleging causes of
action against Symons for intentional
infliction of emotional distress, and
against both Symons and Sotheby’s for
negligence and wrongful termination in
violation of public policy. The trial court
granted the petition to compel arbitration of the claims asserted against
Sotheby’s, based on a written agreement to arbitrate, but denied the petition
as to the claims against Symons. We
reverse the order denying the motion to
compel arbitration of the wrongful termination cause of action against Symons,
and affirm the order in all other respects.
“Plaintiff opposed the petition on various
grounds, including that Symons was
not a party to the arbitration agreement... [¶] Although Symons is not a
signatory to the arbitration agreement...,
a non-signatory may compel contractual arbitration in certain circumstances... [¶] In this case, Symons’s
agency relationship with Sotheby’s and
the doctrine of equitable estoppel allow
Symons to enforce the agreement to
compel arbitration of plaintiff’s wrongful
termination cause of action. The allegations made in connection with that cause
of action pertain solely to Symons’s
actions as an officer of Sotheby’s... All
of the alleged misconduct attributable
to Symons in connection with the wrongful termination cause of action falls
within the scope of his authority as an
officer of Sotheby’s... Plaintiff’s wrongful termination cause of action also
alleges substantially interdependent
conduct by Symons and Sotheby’s.
Sotheby’s liability for wrongful termination is based solely on Symons’s conduct as a corporate officer. Principles of
equitable estoppel therefore allow
Symons to invoke the arbitration agreement...
“The same principles do not apply, however, with regard to plaintiff’s causes of
action against Symons for negligence
and intentional infliction of emotional
distress. The allegations on which those
causes of action are based include
conduct by Symons that predates his
tenure as an officer of Sotheby’s. Because [those] causes of action concern
Symons’s conduct solely in his capacity as an individual, they fall outside the
scope of [the] arbitration agreement.”
For plaintiff: Girardi Keese, Thomas V.
Girardi and Keith D. Griffin; Streeter &
Nangano and Bruce J. Tackowiak.
For defendant: Manning & Marder, Kass,
Ellrod, Ramirez, Mary M. Kocsis and
Julie Fleming.
Second Dist Div Two, 11/7/07; opinion by Chavez with Boren and
Ashmann-Gerst concurring; 2007 WL
JUDGMENT ON JURY VERDICT
FOR EMPLOYER ON DISABILITY
DISCRIMINATION AND
RELATED CLAIMS
ROSE v J. PAUL GETTY TRUST.
“Plaintiff filed this action alleging nine
causes of action: breach of contract,
breach of the implied covenant..., disability discrimination, retaliation under
FEHA, retaliation under CFRA, retaliation under the Labor Code, harassment,
wrongful termination in violation of public policy, and intentional infliction of
emotional distress.
“The trial court granted summary adjudication of plaintiff’s causes of action for
breach of contract and breach of the
implied covenant ... based on the fact
that her employment was at-will. It
granted summary adjudication of her
retaliation causes of action, finding
plaintiff’s complaints about ... harassment were not a protected activity under
FEHA, she failed to show defendant
terminated her because she took a
leave of absence under CFRA or denied
her the leave to which she was entitled.
It granted summary adjudication of
plaintiff’s harassment cause of action,
finding no evidence she was harassed
due to her disability.
“The trial court denied summary adjudication of plaintiff’s ‘disability discrimination’ cause of action under FEHA,
finding a triable issue of fact as to
whether defendant could have provided
the requested accommodation. It denied summary adjudication of her
causes of action for wrongful termination in violation of public policy and
intentional infliction of emotional distress based on the continued viability of
her disability discrimination cause of
action.
“The case thereafter was tried before a
jury. During trial, plaintiff’s causes of
action for [wtvpp] and [iied] were dismissed as duplicative and potentially
confusing to the jury. The trial court
granted a directed verdict as to plaintiff’s
cause of action for termination under
CFRA, finding no evidence that plaintiff
was retaliated against or terminated for
taking her CFRA leave. The jury found in
favor of defendant on plaintiff’s causes
of action for disability discrimination
based on failure to accommodate and
wrongful termination. The trial court
entered judgment in favor of defendant.”
In affirming the judgment, the Second
District rejected a number of arguments
relating to the granting of defense motions in limine, and held, inter alia, that
summary adjudication had been properly granted on the FEHA retaliation
claim because the plaintiff had failed to
introduce evidence that the harassment
-7-
DECISIONS
(From Page 7)
of which she had complained was based
on her disability—there was evidence
that the plaintiff herself acknowledged
that the supervisor had not known of her
disability at the time the harassment
took place.
For plaintiff: Charles T. Mathews, Jeffrey A. Rager, Roxanne Huddleston.
For defendant: Mitchell, Silberberg &
Knupp, Patricia H. Benson and Suzanne
M. Steinke.
Second Dist Div One, 10/31/07; opinion by Jackson with Mallano and
Rothschild concurring; 2007 WL
FRESNO COUNTY SUPERIOR
COURT ERRED IN GRANTING
SUMMARY JUDGMENT ON
IMPLIED CONTRACT CLAIMS
FRIES v SAVE MART SUPERMARKETS, INC. “Respondent Save Mart
Supermarkets, Inc. fired appellant Debra
Fries for falsifying her time card and
lying about it in a subsequent investigation. Fries sued for wrongful termination
under four legal theories.
“In this appeal, Fries challenges the
superior court’s order granting summary adjudication on her two contractbased theories of recovery. The superior court determined those theories
had been negated because the undisputed facts established Fries was an atwill employee. Fries disagrees, claiming triable issues of fact exist.
“We conclude as follows: (1) An agreement to terminate only for good cause is
not the sole way to contractually limit
an employer’s right to terminate at-will
employees for any or no cause; other
contractual restrictions may be created
by an implied-in-fact agreement. (2)
Fries’s deposition testimony, which indicated she was not told expressly,
orally or in writing, that she could not be
discharged by Save Mart except for
good cause, did not clearly and unequivocally contradict statements in her
declaration about what Save Mart’s
documents and personnel did express.
(3) The trial court did not abuse its
discretion in overruling Save Mart’s evidentiary objections. (4) Triable issues
of material fact exist regarding whether
the parties had an implied-in-fact agreement that limited Save Mart’s right to
terminate Fries at will. (5) the erroneous
grant of the motion for summary adjudication was not harmless error because
it deprived Fries of the opportunity to
present a theory of recovery that could
have been resolved in her favor by the
trier of fact.”
For plaintiff: Law Offices of Wagner &
Jones, Nicholas J. P. Wagner and Christine M. Adams.
For defendant: Lang, Richert & Patch,
Charles Trudrung Taylor and John C.
Fowler.
Fifth Dist, 10/30/07; opinion by
Dawson with Harris and Wiseman
FACT THAT § 998 SETTLEMENT
OFFER WAS SILENT ON
SUBJECT OF ATTORNEYS’ FEES
DID NOT MEAN THAT SUPERIOR
COURT COULD NOT ENTERTAIN
MOTION TO AWARD THEM
PARNALA v PLYCON TRANSPORTATION GROUP, INC. “Plaintiff and
respondent Rita Parnala filed suit against
defendant and appellant Plycon ... and
an individual employed by it, alleging
sexual discrimination and harassment.
Prior to the trial date, Plycon tendered
an offer of compromise pursuant to
Code of Civil Procedure section 998.
The offer stated that Plycon would, to
settle the case, pay Parnala $60,000 in
exchange for a dismissal with prejudice. The offer was silent regarding the
payment of attorney fees or costs.
Parnala accepted the section 998 offer.
After payment of the $60,000, Parnala’s
counsel filed a motion seeking both
attorney fees and costs, a motion which,
as modified in terms of amount, the trial
court granted. Plycon then filed a motion pursuant to section 473 to set aside
that award. The trial court denied the
motion and Plycon appeals from that
order. We agree with the trial court and
affirm its order.
“Since the briefs in this case were filed,
yet another of our sister courts has
weighed in... In On-Line Power, Inc. v
Mazur (2007) 149 Cal.App.4th 1079,
the court agreed ... that when a section
998 offer ‘is silent about attorney’s fees
and costs, it cannot reasonably be
interpreted to exclude their recovery’...”
For plaintiff: Eugene Taylor Franklin,
Hayward.
For defendant: Jonathan Berres Cole,
Sherman Oaks; Mark Elliott Saltzman,
Tarzana.
First Dist Div Two, 10/30/07; opinion
by Haerle with Lambden and
Richman concurring; 2007 WL
FIRST DISTRICT HOLDS THAT
JNOV WAS NOT WARRANTED
BUT THAT TRIAL JUDGE
REASONABLY RE-WEIGHED
EVIDENCE IN GRANTING NEW
TRIAL MOTION ON GENDER
DISCRIMINATION AND
RETALIATION CLAIMS
CLARK v WESTREC MARINA MANAGEMENT, INC. “A jury awarded plaintiff Bette Clark $177,926.29 in damages
against defendant ... on causes of action for gender discrimination and retaliation under [FEHA] and wrongful termination in violation of public policy. She
appeals from orders by the trial court
granting Westrec’s motions for new trial
and [JNOV].
“We agree with Clark that the evidence
presented at trial was legally sufficient
when viewed in the light most favorable
to the verdict, and that the motion for
JNOV should have been denied. However, the trial court was entitled to reweigh the evidence when considering
the motion for new trial, and it did not
abuse its discretion in concluding that
-8-
DECISIONS
(From Page 8)
the verdict on the discrimination claims
was against the weight of the evidence.
We reverse the order granting JNOV,
but affirm the order granting a new trial.”
For plaintiff: William Francis Adams,
Pleasonton; Alan Charles Dell’Ario,
Oakland.
For defendant: Michael McCarthy,
Sherman Oaks; Thomas James Ready,
Encino.
by Needham with Simons and
Gemello concurring; 2007 WL
THIRD DISTRICT HOLDS THAT
ON RETALIATION AND RELATED
CLAIMS BY EMPLOYEE WHO
REPORTED OVERTIME
VIOLATIONS TO MANAGEMENT
HORANGIC v EBARA TECHNOLOGIES, INC. In an unpublished opinion
filed on October 26, the Third District
reversed summary judgment on a claim
that the plaintiff had been retaliated
against for reporting a violation of overtime wage law. “On the evidence presented,” the court wrote,” a reasonable
jury could conclude that [the plaintiff’s
supervisor] initiated [an investigation
into plaintiff’s alleged performance deficiencies] because he learned that plaintiff
was escalating his complaints about
the overtime issue and [the supervisor]
decided to get rid of an irritant. A reasonable jury could also conclude that
the purpose of the [investigator’s] report
was to make a case against plaintiff in
order to justify his termination. These
may not be the only inferences that may
be drawn from the evidence, or even the
most likely, but they are permissible
ones. Therefore, plaintiff established the
existence of an issue of fact on the
issue of pretext, and defendants were
not entitled to summary adjudication on
the retaliation claim.
“For the same reasons we conclude
plaintiff has satisfied his burden of establishing a material issue of fact on his
retaliation claim, we conclude plaintiff
has a right to go forward on his wrongful
termination claim. Both claims are based
on the same conduct—termination in
response to reporting the overtime issue to management... [¶] [And] we
[also] necessarily conclude defendants
were not entitled to summary adjudication on plaintiff’s claim for intentional
infliction of emotional distress...
causes of action... [¶] California courts
have held individual supervisors liable
for employment actions that amount to
unlawful retaliation. [cites omitted] [¶]
Because each of plaintiff’s causes of
action is based on his claim of termination in violation for engaging in a protected activity, [the supervisor] may be
held personally liable.”
For plaintiff: Susan J. Sheridan, Sacramento.
For defendants: Michael W. Kelly, San
Francisco.
Third Dist, 10/26/07; opinion by Hull
with Davis and Raye concurring;
•
“The parties contend plaintiff’s unfair
business practice claim lives or dies
with his retaliation and wrongful termination claims. Therefore ... his sixth
cause of action also was not subject to
summary adjudication.
“Plaintiff contends material issues of
fact remain regarding [the supervisor’s]
personal liability on plaintiff’s various
C O M I N G
E V E N T S
December 7, 2007
CELA SEMINAR: "INTRODUCTION TO TRIAL PRESENTATION SOFTWARE"
Pasadena and San Francisco
(see page 1 and www.celaweb.org for details)
October 3-4, 2008
CELA’S 2008 ANNUAL CONFERENCE
(with skills seminar on October 2)
Hilton Pasadena
-9-
•
•
-12-
Published
Monthly
BULLETIN
December 2007
Vol. 21, No. 12
of his or her current position, does the
ADA require:
CALIFORNIA
SUPREME COURT
SUPREME COURT ORDERS
RECONSIDERATION OF THREE
DECISIONS INVOLVING
ENFORCEABILITY OF CLASS
ACTION WAIVERS IN
ARBITRATION AGREEMENTS
KONIG v U-HAUL COMPANY; JONES
v CITIGROUP; MASSIE v RALPHS
GROCERY. On November 28, the California Supreme Court transferred three
cases back to the Courts of Appeal
with directions to vacate their decisions and to reconsider them in light of
Gentry v Superior Court (Circuit City
Stores, Inc.) (2007) 42 C4th 443.
The Konig decision was published at
52 CR2d 244, and was summarized in
CELA Bulletin, Dec 06, p.2. The Jones
decision was published at 38 CR3d
Bulletin, Feb 06, p5; and the unpublished Massie decision appears at 2007
WL 1395580. The Gentry decision was
summarized in CELA Bulletin, Sept
07, p.1.
.
Cal SC, 11/28/07; 2007 DAR 17872,
2007 WL 4303049 (Konig); 2007 DAR
17844, 2007 WL 4303045 (Jones);
2007 DAR 17826 (Massie).
SECOND DISTRICT’S
HARASSMENT DECISION
INVOLVING CIVIL CODE § 51.9
HUGHES v PAIR. On November 28,
the Supreme Court granted review in a
case in which the Second District,
Division Five, affirming summary judgment, held that the term “sexual harassment” has the same meaning under Civil Code § 51.9 as under FEHA,
and that the obscene threat at issue
was not sufficiently severe to be actionable. That Civil Code provision prohibits
sexual harassment by a person engaged with the plaintiff in a designated
“business, service, or professional relationship,” and the plaintiff alleged that
she had been harassed by a trustee of
her deceased husband’s estate. The
Second District’s opinion appears at
2007 WL 2584712, and was summarized in CELA Bulletin, Sept 07, p.3.
For plaintiff: Hillel Chodos and Deborah
Chodos.
For defendant: Melanie C. Ross.
Cal SC, 11/28/07; 2007 DAR 17537.
UNITED STATES
SUPREME COURT
CERTIORARI IS GRANTED TO
ADDRESS ADA ISSUE
CONCERNING RIGHT TO
REASSIGNMENT AS
REASONABLE ACCOMMODATION
HUBER v WAL-MART STORES, INC.
On December 10, the Supreme Court
announced a grant of certiorari to review
an Eighth Circuit decision, (486 F3d
480), and to address a question posed
as follows in the employee’s petition for
certiorari:
“If a disability prevents an employee
from performing the essential functions
“(a) that the employer reassign the
employee to a vacant, equivalent position for which he or she is qualified, as
the Tenth and District of Columbia Circuits have held; or
“(b) that the employer merely permit the
employee to apply and compete with
other applicants for the vacant, equivalent position for which he or she is
qualified, as the Seventh and Eighth
Circuits have held.”
In the case below, the Eighth Circuit
reversed the granting of the employee’s
cross motion for summary judgment
and remanded for entry of judgment in
favor of the employer, holding that the
ADA “is not an affirmative action statute” and does not require an employer
to reassign a qualified disabled employee to a vacant position when such
a reassignment would violate a legitimate nondiscriminatory policy of the
employer to hire the most qualified
candidate. The employer had hired a
AUTHORS SOUGHT FOR
SPECIAL ISSUES OF
CELA BULLETIN TO BE
DISTRIBUTED TO JUDGES
CELA is again soliciting articles for two
special issues of the CELA Bulletin to
be distributed to California judges as
well as to CELA members. Please
submit proposed article topics to Wilmer
Harris, (Wharris@sdshhlaw. com) by
January 8. Articles on the selected
topics, approximately two pages in
length, will then be due on February 15,
2008.
DECISIONS
(From Page 1)
more qualified employee for a vacant
equivalent position, even though the
plaintiff could have performed the duties
of that job, and had assigned the plaintiff
to a lower-paying position instead.
USSC, No. 07-480; 12/10/07; 2007 DAR
18213, 2007 WL 2978334.
NINTH CIRCUIT
PANEL FILES REVISED OPINION
AFFIRMING ORDER THAT
CERTIFIED CLASS OF CURRENT
AND FORMER WAL-MART
EMPLOYEES ASSERTING SEX
DUKES v WAL-MART, INC. On December 11, a three-judge panel issued
a slightly revised 2-1 opinion that reached
the same conclusion as the now-withdrawn version that was filed on February
6, 2007, (474 F3d 1214, summarized in
CELA Bulletin, March 07, p.8). The
panel again affirmed the Northern
District’s order certifying a class of over
two million current and former Wal-Mart
employees who are asserting sex discrimination claims.
The largest substantive change in the
revised opinion involves the instruction
to District Judge Martin Jenkins that he
consider dropping class members who
were no longer employed by Wal-Mart
at the time the complaint was filed. The
relevant portion of the revised opinion
reads as follows:
“Wal-Mart’s final contention is that,
because a substantial number of the
putative class members no longer work
for Wal-Mart and, thus, no longer have
standing to seek injunctive or declarative relief, injunctive and declaratory
relief cannot possibly predominate over
monetary relief for purposes of certifying this class under Rule 23(b)(2).
“We agree with Wal-Mart to this extent:
those putative class members who were
no longer Wal-Mart employees at the
time Plaintiffs’ complaint was filed do
not have standing to pursue injunctive or
declaratory relief. [cites omitted]
“This does not mean that the entire
class must fail. Those putative class
members who were still Wal-Mart employees as of June 8, 2001 ... do have
standing to seek the injunctive and
declaratory relief requested ... and we
are satisfied that these putative class
members would reasonably bring this
suit to put an end to the practices they
complain of ‘even in the absence of a
possible monetary recovery’... Accordingly, class certification under Rule
23(b)(2) was appropriate at least as to
these plaintiffs.
“We thus remand to the district court for
a determination of the appropriate scope
of the class in light of the above observation and in light of any evidence presented to it regarding which putative
class members were still Wal-Mart
employees as of June 8, 2001.”
For employees: Brad Seligman, Jocelyn
D. Larkin, The Impact Fund, Berkeley;
Joseph M. Sellers, Christine E. Webber,
Julie Goldsmith Reiser, Cohen, Milstein,
Hausfeld & Toll, Washington DC; Irma
D. Herrera, Debra A. Smith, Equal
Rights Advocates, San Francisco;
Stephen Tinkler, Charles Firth, Tinkler
& Firth, Santa Fe, New Mexico; Debra
Gardner, Public Justice Center, Baltimore, Md; Steve Stemerman, Elizabeth A. Lawrence, Davis, Cowell &
Bowe, San Francisco; Merit Bennett,
Santa Fe.
For Wal-Mart: Theodore J. Boutrous,
Jr., Gibson, Dunn & Crutcher, Los Angeles.
Pregerson joined by Hawkins with
Kleinfeld dissenting; 2007 DAR
18233, 2007 WL 4303055.
EVEN SUBSEQUENT TO
AMENDMENTS CONTAINED IN
1991 CIVIL RIGHTS ACT,
NO § 1981 ACTION MAY BE
BROUGHT AGAINST STATE
ACTORS
PITTMAN v STATE OF OREGON.
-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)
Virginia Keeny
(Pasadena)
Eve Chesbro
(Pasadena)
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)
Bulletin Editor
Christopher Bello
Astoria, OR 97103
Ph: (503) 338-3891
DECISIONS
(From Page 2)
“Helen Pittman appeals from dismissal
of an employment discrimination claim
brought under § 1981 against the Employment Department of the State of
Oregon. The district court dismissed
the § 1981 action, holding that the
statute does not provide a cause of
action against states. We affirm.
“Under this circuit’s case law, § 1981
contains a right of action against municipalities. Fed’n of African Am. Contractors v. City of Oakland, 96 F.3d
1204 (9th Cir. 1996). The plaintiff maintains that Federation should be extended to permit a § 1981 cause of
action against a state, while the State
contends otherwise. After surveying
the statutory language and history in
light of the governing case law, we
must agree.
“[I]n Jett v. Dallas Independent School
District, 491 U.S. 701 (1989) ... [t]he
Court ... held that the prohibition on
discrimination by a state or its officials
contained in § 1981 can be enforced
against state actors only by means of
§ 1983...
“Two years after Jett, Congress passed
the Civil Rights Act of 1991, Section
101 of which added two new subsections to 42 U.S.C. § 1981. The new
subsection (c) provides: ‘The rights
protected by this section are protected
against impairment by nongovernmen-
tal discrimination and impairment under color of State law.’
“Plaintiff contends that the addition of
subsection (c) to § 1981 overruled Jett
to create a cause of action against both
municipalities and arms of the state...
She argues ... that subsection (c) contains an implied right of action against
both municipalities and state actors.
“All of the other circuits to reach the
question have held that the 1991 amendments ... did not overrule Jett, and that
there is still no cause of action against
municipalities or other state actors.
[cites omitted] [¶] We, however, in
Fed’n of African Am. Contractors v. City
of Oakland, 96 F.3d 1204 (9th Cir. 1996),
concluded that the addition of subsection (c) overruled Jett to create a cause
of action against municipalities.
“We ... reject the extension of Federation to suits against arms of the state...
Most notably, the reasoning of Federation depended in part on its conclusion
that implication of a cause of action
against municipalities under § 1981
‘imposes no substantive change on
federal civil rights law,’ because it did
not expand the remedies available under § 1981 beyond those already available under § 1983. The Employment
Department argues that, in contrast,
recognizing a cause of action against
state actors under § 1981 would, in fact,
NELA NEWS
Notable recent postings on www.nela
.org have included:
—The October 25 statement by NELA
Executive Board Member Cathy
Ventrell-Monsees before a subcommittee of the House Judiciary Committee in support of the Arbitration Fairness Act, H.R. 3010, and information
concerning the December 12 hearing
on the Senate’s version of the bill, (S.
1782), before the Senate Judiciary
Committee’s subcommittee on Civil
and Constitutional Rights, (chaired by
Russ Feingold).
—A message to NELA members on
ENDA, the Employment Non-Discrimination Act, (H.R. 3685), from NELA
President Bruce Fredrickson.
—A summary of recent and pending
developments in Federal whistleblower
legislation included in the On The Hill:
NELA’s Washington Report, (in the
archived November 29 issue).
—A call from NELA’s Program Director
Stefano G. Moscato for information concerning clients or others who have had,
or are in danger of having, claims dismissed because of the Ledbetter decision. Members of the Ledbetter Fix
Coalition are moving forward on a grass
roots effort to lobby targeted Senate
fence-sitters. Contact smoscato@
nelahq.org.
expand the remedies available under
that statute beyond those available under § 1983. On examination, that is so.”
For plaintiff: Glenn Solomon, Portland.
For defendant: Marc Abrams, Oregon
Department of Justice, Salem.
Berzon joined by Fisher and Barzilay;
2007 DAR 17956, 2007 WL 4246114.
CALIFORNIA COURTS
OF APPEAL
IN ABSENCE OF EVIDENCE OF
SIGNED AGREEMENT,
ARBITRATION WOULD NOT BE
COMPELLED MERELY BECAUSE
HANDBOOK STATED THAT ALL
EMPLOYEES WOULD BE
REQUIRED TO SIGN ARBITRATION
AGREEMENTS
MITRI v ARNEL MANAGEMENT COMPANY. The Fourth District, Division Three
wrote in part as follows in an opinion filed
on December 12:
“Plaintiffs ... sued their former employer,
Arnel Management Company, Arnel’s
owner, George Argyros, and [three] Arnel
supervisors ... for, inter alia, sexual discrimination and harassment. Defendants
filed a motion to compel arbitration of
plaintiffs’ claims on the ground plaintiffs
had each signed a binding arbitration
agreement. The trial court denied the
motion based on defendants’ failure to
prove the existence of any such agreement to arbitrate. Defendants contend
the trial court erred by denying their
motion.
“We affirm. Arnel’s employee handbook
states, ‘[a]s a condition of employment,
all employees are required to sign an
arbitration agreement’ and further states,
‘[e]mployees will be provided a copy of
their signed arbitration agreement.’ Defendants have not produced evidence of
signed arbitration agreements. Defendants nevertheless contend the handbook’s reference to arbitration is suffi(Cont'd on Page 4, DECISIONS)
-3-
DECISIONS
(From Page 3)
cient to force plaintiffs to arbitrate their
claims. As discussed in detail post,
defendants’ argument is wholly without
factual or legal merit.
“[T]he documents submitted by defendants do not show either plaintiff ever
consented to binding arbitration... The
arbitration agreement provision in the
employee handbook generally states
an Arnel policy that ‘[a]ny dispute arising out of the employment with the
Company, as allowed by law, will be
settled by binding arbitration.’ The provision explains such an arbitration ‘will
be conducted by the American Arbitration Association,’ and describes some
of the parameters of such an arbitration
(e.g., written request triggers arbitration, Arnel agrees to ‘equitably’ share
arbitration expenses, and prevailing
party is awarded attorney fees). The
arbitration agreement provision, however, does not stop here. It also states
that pursuant to Arnel’s policy, ‘[a]s a
condition of employment, all employees are required to sign an arbitration
agreement.’ This provision completely
undermines any argument by defendants the provision in the handbook
itself was intended to constitute an
arbitration agreement between Arnel
and its employees. The provision further
states, ‘[e]mployees will be provided a
copy of their signed arbitration agreement’—thus reinforcing an intent to have
employees sign a separate arbitration
agreement to effectuate Arnel’s policy
of arbitrating employment claims. Defendants have not produced any evidence of the existence of such an
arbitration agreement signed by either
plaintiff."
The court distinguished Asmus v Pacific Bell (2000) 23 C4th 1, DiGiacinto v
Ameriko-Omserv Corp. (1997) 59 CA4th
629, and Craig v Brown & Root, Inc.
(2000) 84 CA4th 416. “[T]he question in
Asmus,” the court wrote, “was whether
[a] unilateral contract, once formed,
could be unilaterally modified or terminated by the employer. [¶] In contrast,
the core issue in this case ... is whether
the documents prepared by Arnel show
an express bilateral contract was entered into through which the parties
agreed to arbitrate.
“In [DiGiacinto] ... the appellate court
noted, ‘the majority line of cases supports the proposition that as a matter of
law, an at-will employee who continues
in the employ of the employer after the
employer has given notice of changed
terms or conditions of employment has
accepted the changed terms and conditions.’
“Both Asmus ... and DiGiacinto ... are in
inapposite because ... the arbitration
agreement provision contained in the
employee handbook here placed plaintiffs on notice that they would be required to enter into a separate agreement with Arnel. As this record shows,
neither plaintiff entered into an arbitration agreement.
“Unlike the arbitration agreement provision in the Arnel Employee Handbook,
the memorandum in Craig v. Brown &
Root, Inc. established in and of itself the
employer’s dispute resolution program,
and did not include an express agreement that its employees sign an arbitration agreement. Therefore, Craig v. Brown
& Root, Inc. is inapposite.
“Defendants also contend the signed
arbitration agreement required by the
arbitration agreement provision in the
Arnel Employee Handbook was impliedly
unnecessary to establish an arbitration
agreement between Arnel and plaintiffs.
However, such an interpretation of the
arbitration agreement provision contradicts that same provision’s express term
requiring a signed agreement.
“Defendants next argue the acknowledgment receipt form signed by each
plaintiff constitutes evidence of each
plaintiff’s acquiescence to the arbitration agreement provision in the employee handbook.... [¶] Conspicuously
absent from the acknowledgment receipt form is any reference to an agreement by the employee to abide by the
employee handbook’s arbitration agreement provision.
“We cannot and will not create a term of
a contract between the parties that the
evidence does not show was ever agreed
upon by the parties.”
For plaintiffs: Patricia J. Grace.
For defendants: Paul, Hastings,
Janofsky & Walker, Michael A. Hood,
Sherri Fanger McInnes, Karin K. Sherr.
Fourth Dist Div Three, 12/12/07; opinion by Fybel with Moore and Ikola
concurring; 2007 WL 4328443.
JUDGMENT FOR PLAINTIFF ON
CLAIMS FOR RETALIATION AND
FAILURE TO ENGAGE IN
INTERACTIVE PROCESS
WYSINGER v AUTOMOBILE CLUB
OF SOUTHERN CALIFORNIA. In an
opinion filed on November 29, the Second District, Division 6, affirmed a judgment for the plaintiff based on jury findings that the employer had retaliated
against the plaintiff because he filed an
age discrimination complaint and that
the employer had failed to engage in an
interactive process regarding the
plaintiff’s disability. The jury found that
the plaintiff had sustained economic
damages of $204,000 and non-economic
damages of $80,000, and added $1
million in punitive damages. While thus
finding for the plaintiff on two of his
claims, the jury rejected additional
claims for failure to provide a required
reasonable accommodation, disability
discrimination, and age discrimination.
The court wrote in part as follows:
“ACSC contends denying Wysinger a
transfer to Ventura is not a FEHA adverse employment action... [¶] ACSC
claims that the Ventura position would
not have changed Wysinger’s employment status. ACSC’s human resources
manager testified, however, it would
have been a promotion... [¶] ACSC
contends it is not responsible for Kane’s
retaliatory conduct. But an employer
generally can be held liable for the
retaliatory actions of its supervisors...
“ACSC notes that Wysinger filed the
EEOC claim in December 1999. The
decision not to transfer him to Ventura
occurred between 2002 and 2003. It
claims these events are too remote to
-4-
DECISIONS
(From Page 4)
be causally connected. A long period
between an employer’s adverse employment action and the employee’s
earlier protected activity may lead to the
inference that the two events are not
causally connected... But if between
these events the employer engages in a
pattern of conduct consistent with a
retaliatory intent, there may be a causal
connection... Here Wysinger was not
invited to serve on management committees, to apply for management positions and was treated ‘with coldness.’
“ACSC contends the trial court’s instruction [on retaliation] was inadequate
under Akers v. County of San Diego
(2002) 95 Cal.App.4th 1441. There, the
Court of Appeal held that instructions ...
are insufficient without the phrase, ‘the
employer’s retaliatory conduct must
have been a substantial and material
adverse effect on the terms and conditions of ... employment.’
“[But] the combined effect of [the instructions actually given] required jurors to decide the retaliation issue by
excluding employer conduct which
would be trivial under Yanowitz or insubstantial under Akers. It required jurors
not to include management decisions
which involved ordinary discretion, even
if the jurors found the conduct to be
unfair. Wysinger had to prove animus
and retaliation.
“Moreover, ACSC’s actions had a substantial and material impact on the
conditions of employment. The refusal
to promote Wysinger is an adverse
employment action under FEHA.
(Yanowitz, supra, 36 Cal.4th at p. 1055.)
There was also a pattern of conduct, the
totality of which constitutes an adverse
employment action.
“[T]he verdicts on the reasonable accommodations issue and the interactive process claim are not inconsistent.
They involve separate causes of action
and proof of different facts... [¶] Here the
jury could find there was no failure to
provide a required accommodation because the parties never reached the
stage of deciding which accommodations were required. ACSC prevented
this from happening by its refusal to
engage in the interactive process.”
The court also rejected a number of
defense contentions concerning the
calculation of damages, holding, inter
alia: (1) sufficient evidence supported
the award of damages for future wage
loss; (2) the jury had been entitled to
find that the supervisor whose animus
fueled the retaliation was a “managing
agent” for punitive damages purposes;
(3) the punitive damages award was not
excessive nor constitutionally disproportionate; and (4) an award of attorneys fees totaling $978,791, (including
a multiplier of 1.1), was not excessive
despite the fact that the plaintiff had
prevailed on only two of eight claims.
For plaintiff: Dan Stormer, Virginia
Keeny, Nigel A. Whitehead.
For defendant: Reed Smith, Margaret
M. Grignon, Zareh Jaltorassian,
Sheppard, Mullin, Richter & Hampton,
Jeffrey A. Dinkin, Deborah Lynn Martin
and John K. Beckley.
Second Dist Div Six, 11/29/07; opinion by Gilbert with Coffee and Perren
WL 4200632.
ONE-YEAR LIMITATIONS PERIOD
APPLIES WHERE CLAIM IS FOR
WAITING TIME PENALTIES ONLY
AND NOT FOR UNDERLYING
WAGES
McCOY v SUPERIOR COURT (KIMCO
STAFFING SERVICES, INC.). The
Fourth District denied a petition for writ
of mandate that had asked the court to
reverse an order striking as time-barred
portions of a complaint seeking waiting
time penalties for late payment of wages.
The trial court was correct, the Fourth
District held, in striking allegations seeking waiting time penalties for longer
than one year before the date the complaint was filed. The court rejected the
argument that, pursuant to Labor Code
section 203, when an action seeks
waiting time penalties only, the statute
of limitations is the same as when a
plaintiff sues for both back wages and
penalties which, in this case, the employee contended, was four years.
-5-
“Plaintiff’s complaint,” the court wrote,
“alleges he was an employee of ... an
agency that provides temporary employees. He is the lead plaintiff in a
putative class action seeking waiting
time penalties under section 203 for
defendant’s alleged failure to timely pay
final wages on completion of temporary
work assignments in violation of Labor
Code sections 201 and 202. The complaint alleges that, instead of paying
plaintiffs upon discharge or within 72
hours or resignation, defendant paid
them on the next scheduled pay day.
Plaintiff is not suing for the underlying
wages; he admits those were paid.
“Defendant ... maintained the governing
statute of limitations was one year pursuant to [Code of Civil Procedure] section 340(a). [¶] The court agreed with
defendant, finding that because plaintiff
sued for waiting time penalties only and
not wages, section 203 did not apply.
Since the Labor Code does not contain
a statute of limitations for an action
seeking those penalties alone, section
340(a), the general one-year statute of
limitations for penalties, controlled.
“Plaintiff contends the statute of limitations in section 203 applies to any
action for penalties, regardless of
whether there is also a claim ‘for the
wages from which the penalties arise.’
[¶] We agree with plaintiff to the extent
the period set out in section 203 applies
to actions for waiting time penalties
sought in conjunction with back wages.
But for suits seeking penalties alone,
the objective of section 203, the legislative intent, and the common sense
meaning of the section’s language persuade us defendant’s interpretation is
correct.”
For plaintiff: Spiro Moss Barness, Los
Angeles, and Gregory N. Karasik.
For real party: Paul, Hastings, Janofsky
& Walker, Stephen L. Berry and Julie D.
Schisler, Costa Mesa.
Ikola concurring; 2007 WL 4171456.
DECISIONS
(From Page 5)
PLAINTIFF WAS ENTITLED TO
FEES AND COSTS AS
PREVAILING PARTY ON
DISCRIMINATION CLAIMS WHERE
SECTION 998 OFFER OF
COMPROMISE DID NOT
EXPRESSLY EXCLUDE THEM
ENGLE v COPENBARGER AND
COPENBARGER. “Staci Engle appeals
from a post-judgment order that denied
her motion for attorney fees and costs in
this action [for sex harassment and
related claims]. The case settled when
Engle accepted a statutory offer to compromise that said nothing about fees or
costs. Engle argues she is entitled to
statutory costs as the prevailing party,
including fees authorized by statute.
We agree and reverse.
“Engle’s fee motion requested costs as
the prevailing party (Code Civ. Proc., §
1032, subd. (b).) As an item of costs,
she asked for attorney fees authorized
by statute (Code Civ. Proc., § 1033.5,
subd. (a)(10)(B).) The statutory fee provision relied on was Government Code
section 12965, subdivision (b)...
“The trial judge denied the motion for
two reasons. First, he found the statement in the offer about the claims released was broad enough to include
any claim for fees. Second, he said it
was impossible to say from the language of the offer whether Engle had
prevailed on any of her discrimination
claims.
“Engle argues she is entitled to fees
because they were not expressly excluded in the offer to compromise. She
is right... [¶] This case falls squarely
within the rule that a party who secures
a recovery by accepting a section 998
offer is entitled to costs and fees unless
they are excluded by the offer. Engle
should have been awarded costs and
fees.
“Copenbarger argues the language of
the offer is more encompassing than
that found in any of the cases, since
Engle agreed to ‘release and discharge
of any and all claims, of whatever nature
(substantive and procedural) which plain-
tiff may have against the defendants.’ It
asserts the only reasonable reading of
this provision is that Engle’s claim for
fees was released. We cannot agree.
“The rule is that a section 998 offer to
compromise excludes fees only if it
says so expressly. It is a bright line rule:
The only question is does the offer
address fees or not? We are unaware of
any case that suggests a broadly-worded
release clause in a section 998 offer can
serve to waive a prevailing party’s fee
claim, and none are cited by
Copenbarger. If Copenbarger meant the
offer to include Engle’s attorney fees, it
was a simple enough matter to spell out
that condition. Certainly it was simple
enough that the firm had it figured out by
the next day, when it tendered a release
that included fees.
“We do not know why the release was
written in terms broader than the offer.
But we are convinced the bright-line rule
exists precisely to avoid disputes such
as this one about whether there was
manipulation or misunderstanding... If
Copenbarger wanted a fee waiver, it
should have put one in the offer. Since
the offer was silent on fees, it did not bar
a later fee motion.
“Copenbarger argues Engle did not prevail on the discrimination claims, so she
was not entitled to fees. The argument
has three prongs... None are persuasive.
“Copenbarger first argues that most of
the statutory discrimination claims were
barred by a one-year statute of limitations... But the time to raise a statute of
limitations defense was prior to settlement, not after...
“The next prong of the argument builds
on the statute of limitations point. The
firm argues the trial judge acted within
his discretion in denying fees, since he
found the $35,000 settlement was sufficient recompense for the single actionable incident of sexual harassment,
and he found that adding a fee award
would result in an unfair windfall. The
problem here is that no such findings
were made...
“Finally, Copenbarger argues that there
was no way to discern whether Engle
won on the discrimination claims or the
tort claims, so it was a proper exercise
of discretion for the trial judge to deny
fees for this reason. We disagree. [¶]
The misconduct alleged ... was sexual
in nature... There were no other allegations—nothing that would have supported a tort recovery but not one on the
discrimination claims... There is no doubt
that Engle received $35,000 on the
discrimination claims, and there was no
leeway—or discretion—to find otherwise.”
For plaintiff: Mark D. Margarian.
For defendant: Paul D. Copenbarger,
Santa Ana, and Kathleen M. Hatley.
Fourth Dist Div Three, 11/26/07; opinion by Bedsworth with Rylaarsdam
and Aronson concurring; 2007 WL
4157292.
JNOV ON SEX HARASSMENT
CLAIM AND NEW TRIAL ORDER
ON DAMAGES FOR RETALIATION
MOKLER v COUNTY OF ORANGE. In
an opinion filed on November 26, the
Fourth District, Divison Three wrote in
part as follows:
“Defendants County of Orange and Chris
Norby appeal from the trial court’s denial of their motion for JNOV following a
jury determination that the County terminated Pamela Mokler in violation of
California’s whistleblower statute, Labor Code section 1102.5, and that Norby
sexually harassed Mokler, creating a
hostile work environment under FEHA...
Defendants contend the trial court erred
because Mokler’s failure to exhaust her
administrative remedies barred her from
pursuing her retaliatory discharge claim.
Defendants also challenge the sufficiency of the evidence to support her
claims for retaliation and sexual harassment. Mokler appeals the trial
court’s order granting the County a new
trial on damages, conditioned on Mokler
refusing a damage award remitted from
-6-
DECISIONS
(From Page 6)
approximately $1.6 million to $125,000.
Mokler challenges the sufficiency of the
evidence to support the trial court’s
statement of reasons for overturning the
jury’s damages verdict.
“We conclude the County waived its
exhaustion defense by failing to raise it
before trial. We also conclude that substantial evidence supports Mokler’s retaliatory dismissal claim. Mokler’s
sexual harassment claim against Norby
fails, however, because Norby’s alleged
harassment was not sufficiently severe
or pervasive to alter the conditions of
Mokler’s employment and create an
abusive working environment. We also
conclude substantial evidence supports
the new trial order on damages. We
therefore reverse the trial court’s order
denying JNOV as to Mokler’s harassment claim, but otherwise affirm the
remainder of the JNOV order. We also
affirm the new trial order.
“As recognized by Green [v City of
Oceanside (1987) 194 CA3d 212], it is
generally accepted that courts may
excuse the failure to exhaust all available administrative remedies where the
agency indulges in unreasonable delay. [cites omitted] By waiting to raise
exhaustion until afer a full trial on the
merits, the County unmistakably engaged in ‘unreasonable delay.’
“The County contends its failure at trial
to raise exhaustion ... on Mokler’s retaliation claim did not waive the issue
because the County had successfully
asserted exhaustion on Mokler’s breach
of contract and wrongful termination
claims in pretrial motions... [¶] [But]
Mokler’s breach of contract and wrongful termination claims essentially duplicated her retaliation claim; therefore,
the trial court did not foreclose her
ability to recover damages when it
granted the County’s motion to dismiss
on exhaustion grounds. Thus, Mokler’s
incentive to vigorously oppose the
County’s exhaustion defense to her
breach of contract and wrongful termination claims was substantially less
than if the County had raised exhaustion against her entire case.
“More importantly, the trial court never
provided Mokler the opportunity to
present evidence on the futility exception in response to the County’s pretrial
motions... Accordingly, Mokler never
received a full opportunity to present
evidence supporting her contention that
exhaustion would have been futile. We
therefore reject the County’s contention
that it preserved its exhaustion defense
as to Mokler’s retaliation claim.
“[Relative to the whistleblower claim
under Labor Code section 1102.5] [w]e
conclude substantial evidence supports
a finding that Mokler reasonably believed [that a proposed change] in the
reporting requirements of [the County
Office on Aging’s] contracts department represented a material change
requiring state approval ... [and that] the
jury reasonably could infer the County’s
allegations constituted a trumped-up
effort to justify their retaliatory termination of Mokler.
“Following established precedent, we
conclude [that the three alleged] acts of
harassment fall short of establishing ‘a
pattern of continuous, pervasive harassment’ [cite omitted]. Norby did not supervise Mokler or work in the same
building with her. The first incident involved no touching or sexual remarks;
rather, Norby uttered an isolated but
boorish comment on Mokler’s marital
status. The second incident did not
occur at work, and involved a minor
suggestive remark and nonsexual touching. The third incident involved touching
when Norby placed his arm around
Mokler and rubbed his arm against her
breast in the process. The touching,
however, was brief and did not constitute an extreme act of harassment.
Norby’s request for Mokler’s home address was brazen, but this conduct falls
short of what the law requires to establish a hostile work environment. Norby’s
derogatory statement regarding Mexicans was unmistakably foul and offensive, but not sexual... [¶] We therefore
reverse that portion of the trial court’s
order denying JNOV on Mokler’s FEHA
claim for sexual harassment.
“Mokler contends insufficient evidence
supports the new trial order. We disagree. [¶] The considerable deference
-7-
Code of Civil Procedure section 657
affords the jury when a trial judge is
considering a new trial motion is exceeded only by the deference afforded
the trial judge when the appellate court
reviews an order granting a new trial.
“The evidence Mokler cites in challenging the new trial order does not demonstrate that any of the six items noted by
the court [in its statement of reasons]
were either unsupported or contradicted
by the evidence at trial. The jury’s failure
to award damages for harassment meant
that all of the damages flowed from the
retaliatory termination. Although Mokler
testified she felt threatened and humiliated by the County’s actions surrounding her termination, she did not require
medical or professional attention. True,
Mokler did introduce evidence of her
positive reputation in the field, but the
evidence did not show the County damaged her reputation in any way, or that
she was scorned or ridiculed by the
public. Indeed, that Mokler was unemployed for only two weeks suggests
Mokler’s reputation remained unimpaired.... Because the trial court’s reasons are supported by substantial evidence, we affirm the new trial order.”
For plaintiff: H. Brian Card, Robert H.
Purvali, Stuart B. Esner, Andrew N.
Chang.
For defendants: Horvitz & Levy, Frederic
D. Cohen, Kim L. Nguyen; Lynberg &
Watkins, Norman J. Watkins and William F. Bernard.
Fourth Dist Div Three, 11/26/07; opinion by Aronson with O’Leary and
Ikola concurring; 2007 DAR 17358,
2007 WL 4148594.
RELEASE OF RIGHTS IN
SEVERANCE AGREEMENT
COULD NOT BE ENFORCED TO
EXTENT IT DEALT WITH CLAIMS
OF TERMINATION BASED ON
EMPLOYEE’S MEMBERSHIP IN
MILITARY SERVICE
PEREZ v ULINE, INC. “Plaintiff Brian
Perez appeals from a judgment on his
DECISIONS
(From Page 7)
complaint ... for wrongful termination,
breach of oral contract, failure to pay
overtime wages..., and defamation,
claiming the court erred in enforcing a
severance agreement that was against
public policy contained in, among other
things, the Uniformed Services Employment and Reemployment Rights
Act of 1994 (38 U.S.C. § 4301 et seq),
and obtained under duress. We determine that because USERRA directs
that its provisions may not be eliminated by a contract, the release of
rights in the severance agreement may
not be enforced to the extent it deals
with the claims of termination based on
plaintiff’s membership in the military or
the military service. As to plaintiff’s
other claims for defamation and overtime payments, there is no basis to
invalidate the release and we affirm.”
For plaintiff: Stanley M. Becker; Shuff
Law Firm and John J. Gulino.
For defendant: David G. Freedman.
Ikola concurring; 2007 DAR 18977,
2007 WL 4260646.
JUDGMENT ON JURY VERDICT IN
FAVOR OF SALES MANAGER
DISCHARGED FOR REPORTING
FRAUDULENT BUSINESS
PRACTICES
CASELLA v SOUTHWEST DEALER
SERVICES INC. “Plaintiff Zachery
Casella sued his former employer and
its president ... for wrongful termination
in violation of public policy, fraud, and
fraudulent inducement of employment
in violation of Labor Code section 970.
Casella claimed his employment was
terminated because he reported
SouthWest’s participation in some of
its car dealership clients’ fraudulent
business practices...
“SouthWest filed a cross-complaint
against Casella for misappropriation of
trade secrets and breach of the parties’
employment agreement. SouthWest
dismissed its misappropriation of trade
secrets claims before trial.
“A jury returned a special verdict in favor
of Casella on each of his claims against
defendants, and awarded Casella a total of $480,003. The jury also found in
favor of Casella with regard to
SouthWest’s breach of the employment agreement claim.
“Defendants appealed from the judgment. Casella appealed as well, contending the trial court erred by failing to
award him more prevailing-party attorney fees. We affirm the judgment in full.
[¶] We reject each of defendants’ contentions of error as follows:
“1. We hold the public policy underlying Casella’s wrongful termination in
violation of public policy claim is tethered to Penal Code section 387 which
proscribes theft by false pretense
through fraudulent misrepresentations.
Thus, the trial court did not err by
refusing dismiss that claim.
“2. Defendants’ challenge to the trial
court’s denial of their motion for judgment notwithstanding the verdict (JNOV)
fails on the grounds substantial evidence (1) showed that SouthWest required Casella to aid and abet its car
dealership clients in fraudulent activities as defined in Penal Code section
487, and (2) supported the inference
that at the time he hired Casella,
[SouthWest’s president] knew Casella
would be required to help track the
fraudulent activities of those SouthWest
clients.
“3. Defendants have failed to show the
trial court abused its discretion in making evidentiary rulings which prejudiced
them.
“4. Defendants have failed to show the
trial court erred in instructing the jury.
“5. The trial court properly denied
defendants’ motion for a new trial after
discharging its responsibilities under
Code of Civil Procedure section 657.
“With regard to Casella’s cross-appeal,
we conclude the trial court correctly
declined to award Casella the portion of
attorney fees he incurred in prosecuting
his tort claims against defendants be-8-
cause here, as in Exxess Electronixx v.
Heger Realty Corp. (1984) 64
Cal.App.4th 698, the attorney fees provision contained in the employment
agreement expressly limits the recovery of prevailing-party attorney fees to
those incurred in seeking to enforce
that agreement.”
For plaintiff: Lee A. Wood, Jeffrey R.
Salberg, and Richard Allen Jorgensen.
For defendants: J. Scott Russo.
Fourth Dist Div Three, 12/12/07; opinion by Fybel with Moore and Aronson
WL 4328440.
•
•
•

2007 CELA Bulletins - California Employment Lawyers Association

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