California Courts of Appeal
MARTINEZ v. O’HARA
PLAINTIFF MARTINEZ’S ATTORNEY MADE INAPPROPRIATE STATEMENTS IN HIS FILINGS
Plaintiff Fernando Martinez sued Defendant O’Hara and several entities for FEHA and wage violations. The wage claims were resolved before trial, the jury found for Martinez on the FEHA claim, and the judge found for Defendants in a bench trial of the remaining claims. Martinez moved for $146,000 in attorney fees based on the $8,080 jury verdict. The trial court denied the fee motion, and Martinez appealed. The Court of Appeal affirmed the denial of attorney fees pursuant to Chavez v. City of Los Angeles since the verdict was less than $25,000. The Court of Appeal reported Martinez’s attorney Benjamin Pavone to the State Bar for gender bias, and the published portion of the Opinion deals only with Mr. Pavone’s misconduct.
MAKING STATEMENTS OF GENDER BIAS AND ACCUSING A JUDICIAL OFFICER OF INTENTIONALLY REFUSING TO FOLLOW THE LAW ARE ETHICAL VIOLATIONS
Disrespectful statements in court papers are grounds for both attorney discipline and contempt. Mr. Pavone referred to one of the female judge’s rulings as “succubustic,” referring to a succubus, “defined as a demon assuming female form which has sexual intercourse with men in their sleep.” Use of this word demonstrated bias or prejudice based on gender, which qualifies as reportable misconduct. In briefs and other filings, an attorney may not accuse a judicial officer of intentionally refusing to follow the law, acting unlawfully due to bias for or against a party, or similar. Mr. Pavone’s Notice of Appeal and appellate briefs accused the trial court of intentionally refusing to follow the law and preventing plaintiff from receiving notice of entry of judgment to thwart plaintiff’s appeal. There was no support in the record for such assertions, and they also constituted reportable misconduct.
COA 4th Dist, Div. 3. Filed 2/28/19. 32 Cal.App.5th 853. Opinion by Justice Fybel.
MYERS v. RALEY’S
THE TRIAL COURT DENIED CLASS CERTIFICATION BASED ON LACK OF COMMONALITY
Plaintiffs were non-exempt maintenance technicians at Defendant Raley’s grocery stores. Plaintiffs sought certification of a class of Food Service, Refrigeration, and Electrician technicians. Raley’s persons most knowledgeable testified that Raley’s had uniform policies applying to all technicians regarding meal breaks, use of personal tools, and unpaid time for travel to the first store of the day and home from the last store of the day. In opposing class certification, Raley’s contradicted its PMKs and argued that it had no uniform policies for technicians. The trial court denied the motion for class certification, finding that there was no well-defined community of interest and common issues of law and fact did not predominate. Plaintiffs appealed.
AT THE CLASS CERTIFICATION STAGE, THE COURT MUST ANALYZE WHETHER THE EMPLOYER RETAINED A UNIFORM RIGHT TO CONTROL, NOT WHETHER THE EMPLOYER EXERCISED UNIFORM CONTROL
The parties seeking class certification bear the burden of establishing a well-defined community of interest among class members. The Court of Appeal reviews the trial court’s decision on class certification for abuse of discretion, unless the trial court has evaluated class certification using improper criteria. If improper criteria were used, or the trial court engaged in incorrect legal analysis, reversal is required. As a result, the appellate court must review the trial court’s reasons for denying class certification, regardless whether other grounds support denial of class certification. Here, the trial court found lack of commonality without providing its reasons for that finding. The proper analysis at class certification was whether Raley’s right to control its technicians was sufficiently uniform to permit classwide assessment, not what degree of control Raley’s actually exercised. The lack of analysis prevented the appellate court from reviewing the trial court’s reasoning, necessitating reversal: “A trial court cannot stymie appellate review by simply remaining mute and thereby failing to reveal whether it used either improper criteria or an incorrect legal analysis.”
CELA INVOLVEMENT
Congratulations to CELA member Matthew Righetti, as well as John Glugoski and Michael Righetti, of Righetti Glugoski.
COA 3rd Dist. Filed 2/13/19, publication ordered 3/12/19. 32 Cal.App.5th 1239. Opinion by Justice Raye.
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.
SALGADO v. CARROWS RESTAURANTS, INC.
PLAINTIFF SALGADO SUED, AND THEN SIGNED AN ARBITRATION AGREEMENT
Plaintiff Salgado sued Food Management Partners dba Carrows for employment discrimination and civil rights violations. She filed her lawsuit in November 2016.
A few weeks after filing her lawsuit, Plaintiff Salgado signed an arbitration agreement. She subsequently added two new corporate defendants.
THE ARBITRATION AGREEMENT LANGUAGE ENCOMPASSED THE LAWSUIT
The Carrows entities petitioned to compel arbitration. The trial court denied the petition, ruling that the arbitration agreement didn’t encompass a lawsuit which was filed before the agreement was signed.
The appellate court reversed. It examined the language of the arbitration agreement, which provided, “The Company and I agree and acknowledge that we will utilize binding arbitration as the sole and exclusive means to resolve all disputes which may arise out of or be related in any way to my application for employment and/or employment . . . .”
As in the trial court below, Plaintiff Saldano argued that the “which may arise out of” contemplated only future claims, that is, claims that arose after the arbitration agreement was signed. Carrows responded that, not only was this ambiguous, but it ignored the second phrase, including disputes which may “be related in any way” to her employment.
The appellate court agreed with Carrows. Finding the language unambiguous, and in any event resolving any ambiguities that did exist in favor of enforcing the arbitration agreement, the appellate court reversed and remanded.
It remanded for factual findings related to unconscionability, another argument that Plaintiff Saldano had made. Specifically, the trial court should make factual findings as to whether Carrows knew that Saldano was represented by counsel at the time she was required to sign the agreement, and it should factor that into its unconscionability decision.
CONCLUSION
Otherwise enforceable arbitration agreements will have their language broadly construed. They can encompass actions that accrued prior to their signature.
COA, Second District, Division 6. Filed 2/26/19; Published 3/25/19; Opinion by Presiding Justice Gilbert.
SU v. STEPHEN S. WISE TEMPLE
DEFENDANT TEMPLE RAN A PRESCHOOL THAT DID NOT PROVIDE ITS TEACHERS WITH BREAKS OR OVERTIME PAY
Labor Commissioner Julie Su sued Defendant Stephen S. Wise Temple on behalf of preschool teachers employed by Temple. Temple, a religious institution, failed to provide the teachers with breaks or overtime pay. Temple asserted that it ran a religious school and that the teachers were ministerial employees. The trial court granted summary judgment for Temple, holding that the ministerial exception barred all claims. The Court of Appeal reversed.
TEMPLE DID NOT HOLD THE TEACHERS OUT AS MINISTERS, AND MANY TEACHERS WERE NOT JEWISH OR PART OF TEMPLE’S RELIGIOUS COMMUNITY
The ministerial exception exempts religious institutions and their ministers from various employment laws. However, Temple did not consider its teachers to be ministers, nor did the teachers consider themselves ministers. Temple’s preschool teachers spent much of each school day engaging the children in play with blocks and puzzles and teaching reading, writing, and math. They also taught social skills and assisted with meals and snacks. The curriculum had a religious component introducing the children to Jewish holidays, religious rituals, Judaic observance, Jewish values, music, singing, and dance. Temple’s teachers were not required to be Jewish, have any formal Jewish education, to be knowledgeable about Jewish beliefs and practices, or to adhere to Temple’s theology. Temple did not refer to the teachers as “ministers” or an equivalent label. Several of the teachers were not Jewish, and one taught catechism at a church. The ministerial exception does not apply merely because a teacher provides religious instruction. The teacher must also personify the religious institution’s beliefs and minister to the faithful. Here, many of the teachers were not members of Temple’s religious community and many were not Jewish. Therefore, the teachers were not ministers.
COA 2nd Dist, Div. 3. Filed 3/8/19. 32 Cal.App.5th 1159. Opinion by Justice Lavin.
ZAKARYAN v. THE MEN’S WEARHOUSE, INC.
ZAKARYAN SIGNED AN ARBITRATION AGREEMENT
Plaintiff Zakaryan resigned from Men’s Wearhouse in November 2016. He subsequently brought wage claims against his former employer, allegation violation of California’s Private Attorneys General Act (“PAGA”) on behalf of himself and his co-workers.
Prior to his resignation, Plaintiff Zakaryan had signed an arbitration agreement, requiring him to arbitrate any employment disputes, but specifically excluding PAGA claims (which have already been excluded by California courts from mandatory arbitration).
THE TRIAL COURT DENIED THE MOTION TO COMPEL
Defendant Men’s Wearhouse moved to compel. It asked the trial court to split the individual wage and hour issues from the remaining PAGA claims, sending only the former to arbitration while keeping the latter in court. The trial court declined to do so, denying the motion altogether. Defendant Men’s Wearhouse appealed.
CALIFORNIA AUTHORITIES ARE SPLIT
The Court of Appeals recognized first that there is a split in California authority on this issue. In Esparza v. KS Indus., LP, the court found that such a division was proper. The court in Lawson v. ZB, NA held that the two different issues could not be divided in that way.
THE ZAKARYAN COURT AGREED WITH THE LAWSON DECISION
The Zakaryan court relied on the “primary rights” theory: that is, “one injury gives rise to only one claim for relief.” Therefore, even though Zakaryan sought damages both for himself and his co-workers, the gravamen of a PAGA claim is the right of the State, and not of any of the individual employees. That right cannot be divided so as to defeat the interest of the State – which did not sign the arbitration agreement – in its access to the courts.
CONCLUSION
Trial courts that deny petitions to arbitrate and class action waivers will be upheld by the appellate courts. PAGA claims are not subject to mandatory arbitration, and courts will not countenance attempts to get around this fact.
CELA INVOLVEMENT
CELA member Jamie Serb helped litigate this matter, along with the Turley & Mara Law Firm.
COA, Second District, Division 2. Filed 3/28/19. Opinion by Justice Hoffstadt.
Ninth Circuit
GARCIA v. SALVATION ARMY
PLAINTIFF CLAIMED SHE WAS HARASSED AND RETALIATED AGAINST
Plaintiff Garcia worked for Defendant Salvation Army as a social services coordinator. The Salvation Army is an evangelical ministry.
Over the course of her employment, Plaintiff Garcia stopped attending church services and, in the words of the court, “left the church.” She nonetheless continued working for the Salvation Army.
Plaintiff Garcia alleged that she subsequently experienced religious harassment and retaliation. Moreover, she took a medical leave for fibromyalgia, during which the Salvation Army fired her when she did not return to work despite being cleared by her doctor. Garcia therefore further alleged a failure to accommodate her disability.
The trial court granted summary judgment. It held that the religious organization exemption (“ROE”) of Title VII granted immunity to suit under that statute to the Salvation Army. Even though the defense was raised for the first time on summary judgment, the district court held that it was jurisdictional and could be raised at any time. It granted summary judgment on the failure to accommodate claim on the merits. Garcia appealed.
THE RELIGIOUS ORGANIZATION EXEMPTION APPLIED TO THE SALVATION ARMY
The court began its analysis with an examination of Title VII’s ROE, codified at 42 USC §2000e-1(a), which states that its proscriptions against discrimination do not apply to religious organizations as delineated within the statute. Reviewing precedent referring to the Salvation Army as a “church,” the court rejected appellant’s argument that the 15% of its revenue generated from sales of goods disqualified it for the exemption.
THE ROE APPLIES TO RETALIATION AND HARASSMENT CLAIMS
Since the ROE applied to the Salvation Army, the court next considered whether it applied to retaliation and harassment claims. This was an issue of first impression for the Ninth Circuit, so it reviewed the decisions of other jurisdictions.
Finding that other courts have extended the ROE’s reach to retaliation and harassment issues, the Ninth Circuit did as well. Since the ROE used the term “employment,” that term needed to be harmonized with its use throughout the statute, encompassing all issues in employment. The Ninth Circuit therefore held that Congress intended the ROE to apply not just to hiring and firing, but also to harassment and retaliation claims.
THE ROE IS NOT JURISDICTIONAL, BUT IT WILL NOT BE WAIVED UNLESS THERE IS PREJUDICE
The trial court, noting that the ROE is an affirmative defense and that failure to assert an affirmative defense ordinarily waives it, nonetheless held that the ROE was jurisdictional and could be raised at any time.
The Ninth Circuit disagreed. It referred to a “bright line rule” that if Congress doesn’t call a statutory limitation jurisdictional, then it is not. Even an employer with fewer than 15 employees – an affirmative defense – can waive that defense by failing to assert it timely, and fall under Title VII’s purview.
Here, however, there was no prejudice in failing to assert the affirmative defense in the answer. The court held that there is no prejudice if the affirmative defense would have been dispositive had it been timely raised.
CONCLUSION
The Religious Organization Exemption of Title VII is broad, and will preclude suit under that statute against most religious organizations.
CELA INVOLVEMENT
CELA member James H. Cordes litigated this matter.
9th Circuit. Filed 3/18/19, Opinion by District Judge Korman, sitting by designation.