Recent Employment Law Decisions

California Courts of Appeal

Drivers can be transportation workers, for purposes of exemption from the Federal Arbitration Act, if their driving affects interstate commerce. This can be true even if they only drive intrastate, so long as their transportation work is part of an interstate chain of transportation.

NIETO v. FRESNO BEVERAGE CO.

PLAINTIFF NIETO SUED FOR WAGE AND HOUR VIOLATIONS; THE TRIAL COURT DENIED THE ARBITRATION PETITION

Plaintiff Daniel Nieto worked as a delivery driver for Defendant Fresno Beverage Co., Inc. After he was fired, he pursued a putative class action for wage and hour violations.

Defendant Fresno Beverage petitioned to compel arbitration. Plaintiff Nieto opposed on the ground that he was a transportation worker, and the Federal Arbitration Act (“FAA”) has an exemption for transportation workers. Therefore, Plaintiff Nieto argued, the FAA did not apply and did not preempt Ca. Lab. Code §229, which allows wage claims to proceed in court even in the presence of an otherwise valid arbitration agreement.

The trial court agreed and denied the petition. Defendant Fresno Beverage appealed.

THE FAA EXEMPTS TRANSPORTATION WORKER FROM ITS COVERAGE

Although the FAA is intended to insure the liberal application of arbitration agreements, it specifically excludes “transportation workers” from its reach, which term was first coined by the US Supreme Court in Circuit City Stores, Inc. v. Adams. The Circuit City court defined “transportation workers” as workers “actually

engage in the movement of goods in interstate commerce.”

STAYING WITHIN STATE LINES DOES NOT DISQUALIFY A DRIVER FROM THE FAA EXEMPTION FOR TRANSPORTATION WORKERS

As a matter of first impression in California, the appellate court found that the mere fact that Nieto never left the state for work did not mean that his job did not engage in interstate commerce. In its petition below, Defendant Fresno Beverage admitted that it bought much of its wares from out of state, and that Nieto was part of an unbroken chain of interstate transportation.

This, the appellate court concluded, was sufficient to find that Nieto was “engage[d] in the movement of good in interstate commerce.” He did not have to leave the state, so long as the job he performed facilitated such movement.

Defendant Fresno Beverage failed to argue against the Ca. Lab. Code §229 provisions, and so the appellate court refused to consider it when raised in reply.

CONCLUSION

This is an excellent result for intrastate drivers in California. This creative argument was found to be correct and carried the day.

CELA INVOLVEMENT

CELA Members Kenneth Yoon, Stephanie Yasuda and Brian Lee of Yoon Law, as well as Douglas Han, Shunt Tatavos-Gharajeh, and Daniel Park of Justice Law Corporation, won this case for California’s workers.

COA, 5th Dist. Filed 3/7/19; ordered published 3/22/19, Opinion by Presiding Justice Detjen.

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Legislative Update
By Mariko Yoshihara, CELA Legislative Counsel & Policy Director

CELA-Sponsored Bills Gain Traction in Sacramento

 

Mariko Yoshihara

Over the last couple of months, the Legislature has been in overdrive, convening countless policy committee hearings in order to review and vote on the hundreds of bills introduced this session. At this stage, I’m happy to report, all of CELA’s sponsored legislation has advanced through their policy committee hearings with strong support from Democratic members and, in some cases, even with bipartisan support. Our promising bills focus on wage theft, sexual harassment, forced arbitration, equal pay, and family leave.

In the committee hearings, we’ve been able to tell compelling, first-hand stories of our members’ courageous clients —to prove greater protections are needed. With our bill to ban “No Rehire” clauses in settlement agreements, CELA member Andrea Rosa’s client testified before the Assembly Judiciary Committee about egregious sexual harassment and assault that resulted in the perpetrator being moved around in other departments (with pay bumps), while she was forced to settle her claim and agree to never again work at the job she loved. In support of our bill to provide statutory penalties to workers who are not paid on time, a client from CELA’s non-profit member Legal Aid at Work testified about working at a popular restaurant in San Francisco, but never getting her paycheck on time and, as a result, being threatened with eviction when she was late paying her rent. For

our bill to extend the filing deadline for employment discrimination and harassment claims, CELA member Toni Jaramilla testified before the Assembly Labor Committee along with her brave client who told her story about being sexually harassed and assaulted at her workplace. While she waited for her supervisors to deliver on their promise to address what had happened to her, she missed her one-year filing deadline with the Department of Fair Employment and Housing. And just this week, CELA member Noah Lebowitz testified before the Senate Judiciary Committee about his experience of employers strategically withholding the payment of arbitration fees in order to stall proceedings or gain advantages in arbitration and thus why our bill to deter and punish such tactics is necessary for justice. On the other side of the debate, we were able to help set aside two pieces of threatening legislation that would have significantly weakened pay stub protections under the Labor Code and enforcement under the Private Attorney General Act.

We will continue to move our bills forward through fiscal hearings before they advance to the floor for a full vote at the end of May. Our work is not done. We must continue to advocate to a new governor and new representatives that stronger workplace laws are still needed in California. CELA members: please contact me about clients or cases impacted by these policies.

 

CELA-Sponsored Bills Advancing to Floor Vote

AB 9 (Reyes D) Employment discrimination: limitation of actions. This bill would extend the filing deadline for harassment and discrimination claims under the Fair Employment and Housing Act makes from 1 to 3 years.

AB 403 (Kalra D) Retaliation actions. This bill would extend the period to file a complaint with the Division of Labor Standards Enforcement to within 3 years after the occurrence of the violation. This bill would also allow a prevailing employee to recover reasonable attorneys’ fees for whistleblower claims brought under Section 1102.5.

AB 673 (Carrillo D) Failure to pay wages: penalties. This bill would amend Labor Code Section 210 so that penalties for late payment of wages may be recovered by the Labor Commissioner (LC) or the affected employee as part of a hearing pursuant to the LC’s authority under the labor code or in an independent civil action.

AB 749 (Stone, Mark D) No Rehire Clauses. This bill would ban “No Re-Hire” clauses that restrict employment opportunities for workers settling a sexual harassment or other employment dispute.

SB 135 (Jackson D) Family leave. This bill would expand the scope of the California Family Rights Act (CFRA) to prohibit employers with 5 or more employees to refuse to grant an employee request to take up to 12 weeks of unpaid leave for family care and medical leave if the employee had 180 days of service with the employer. The bill would expand the definition of “family care and medical leave” to include baby bonding leave if an employee has identified the child as their designated person and caregiving leave to care for a grandparent, grandchild, sibling, domestic partner or designated person who has a serious health condition.

SB 171 (Jackson D) Employers: pay data reporting. This bill would require private employers with 100 or more employees to submit a pay data report to the Department of Fair Employment and Housing that contains specified wage information.

SB 707 (Wieckowski D) Arbitration agreements: enforcement. This bill would provide individuals who have been forced into arbitration with procedural options and remedies when the company refuses to pay the required arbitration fees.

CELA-Supported Bills (partial list*)

AB 5 (Gonzalez D) Worker status: independent contractors. This bill would codify the Dynamex v. Superior Court decision and clarify its application. The bill would provide that the factors of the “ABC” test be applied in order to determine the status of a worker as an employee or independent contractor for all provisions of the Labor Code, unless another definition or specification of “employee” is provided. The bill would codify existing exemptions for specified professions that are not subject to wage orders of the Industrial Welfare Commission or the ruling in the Dynamex case. The bill would state that its provisions do not constitute a change in, but are declaratory of, existing law.

AB 51 (Gonzalez D) Forced Arbitration. This bill would prohibit an employer from threatening, retaliating or discriminating against, or terminating any applicant for employment or any employee because of the refusal to consent to the waiver of any right, forum, or procedure under the Fair Employment and Housing Act or the California Labor Code, including the right to file a civil action.

AB 170 (Gonzalez D) Employment: sexual harassment: liability. This bill would require a client employer to share with a labor contractor all civil legal responsibility and civil liability for harassment for all workers supplied by that labor contractor.

AB 171 (Gonzalez D) Employment: sexual harassment. This bill would prohibit an employer from discharging or in any manner discriminating or retaliating against an employee because of the employee’s status as a victim of sexual harassment, as defined by the California Fair Employment and Housing Act. The bill would establish a rebuttable presumption of unlawful retaliation under the Labor Code if an employer takes adverse action against the employee within 90 days of the employer knowing about the victim’s status.

AB 555 (Gonzalez D) Paid sick leave. This bill would expand the state’s paid sick leave program to provide an employee with no less than 40 hours or five days of sick leave by the 200th calendar day of employment.

AB 628 (Bonta D) Employment: victims of sexual harassment: protections. This bill would allow victims of sexual harassment to take time off from work to obtain legal relief and other services in the same manner that existing law allows victims of domestic violence, sexual assault, and stalking to take time off from work, and extends the right to job-protected leave to family members, as defined, of all victims.

AB 648 (Nazarian D) Wellness programs. This bill would prohibit employers from discriminating against persons who decline to participate in a wellness program and ensures that only essential health information is collected.

AB 668 (Gonzalez D) Courthouses: Privilege from civil arrest. This bill would provide that no person shall be subject to civil arrest in a courthouse while attending a court proceeding or having legal business in the courthouse.

AB 1223 (Aguiar-Curry D) Living organ donation. This bill would require a private or public employer to grant an employee an additional unpaid leave of absence, not exceeding 30 business days in a one-year period, for the purpose of organ donation.

AB 1478 (Carrillo D) Employment discrimination. This bill would provide a private right of action under Labor Code Section 230 and 230.1 for an employee who is discharged or discriminated or retaliated against by their employer due to, among other reasons, their status of being a victim of domestic violence, sexual assault, and stalking, and entitles a prevailing plaintiff to reasonable attorney’s fees and other relief the court deems proper.

SB 41 (Hertzberg D) Civil actions: damages. This bill would prohibit the estimation, measure, or calculation of civil damages from being based on, or considering, race, ethnicity, gender, religion, or sexual orientation.

SB 188 (Mitchell D) Discrimination: hairstyles. This bill would amend The California Fair Employment and Housing Act to provide that the definition of race include traits historically associated with race, including, but not limited to, hair texture and protective hairstyles, and would define protective hairstyles for purposes of these provisions.

SB 218 (Bradford D) Employment discrimination enforcement: local government. This bill, among other things, would authorize the legislative body of a local government to enact their own antidiscrimination laws relating to employment, including establishing remedies and penalties for violations.

SB 518 (Wieckowski D) Public records: court costs and attorney’s fees. This bill would clarify that notwithstanding Code of Civil Procedure Section 998, the court must award court costs and reasonable attorney’s fees to the requester should the requester prevail in litigation under the California Public Records Act.

Status: all bills are moving to a full floor vote by the end of May.

*For a full list of bills, visit www.cela.org. If you have any experience or feedback related to any of these bills, please email mariko@cela.org.

 

CELA-Opposed Bills

AB 443 (Flora R) Wage records: private attorney general actions: attorney’s fees. This bill would limit attorney’s fees in connection with an action brought pursuant to the Labor Code Private Attorneys General Act (PAGA) for a violation of Labor Code Section 226.

Status: Withdrawn

AB 789 (Flora R) Itemized wage statements. This bill would require, for a violation of the itemized wage statement requirements of the Labor Code, that an employee or representative give prescribed notice of the alleged violation to the employer and give the employer 65 days to cure the alleged violation. The bill would allow an action to commence only if the alleged violation is not cured within that period.

Status: Withdrawn

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