California Supreme Court
DONOHUE v. AMN SERVICES, LLC
AMN Services’ practice of rounding meal period punches was illegal. Time records showing non-compliant meal periods raised a rebuttable presumption of meal period violations.
Defendant employer rounded meal periods in its timekeeping system. For example, where an employee was provided with a 21-minute lunch from 12:04 p.m. to 12:25 p.m., the timekeeping system, which rounded time punches to the nearest 10-minute increment, recorded the period as a 30-minute lunch from 12:00 p.m. to 12:30 p.m. In that scenario, an employee lost 9 of the 30 minutes to which they were entitled. The timekeeping system would not have flagged the lunch as a meal period violation. The Court of Appeal held that even small rounding errors can amount to a significant infringement on an employee’s right to a 30-minute meal period.
CELA Involvement: Thank you to Michael D. Singer and the Amicus Committee for their work on this case.
California Supreme Court. Filed 2/25/21. 11 Cal.5th 58. Opinion by Justice Liu.
California Courts of Appeal
BETANCOURT v. TRANSPORTATION BROKERAGE SPECIALISTS
Plaintiff Josue Betancourt, a delivery driver for Amazon, filed a putative class action lawsuit alleging wage and hour violations under California law. Amazon sought to enforce a pre-dispute arbitration agreement and class action waiver. Consistent with other courts in California that have considered this issue, the Court of Appeal affirmed the trial court’s order denying Amazon’s motion to compel arbitration. It held that: (a) Amazon last-mile delivery drivers are exempt from FAA coverage as being “engaged in interstate commerce” because their “transportation of goods wholly within a state are still a part of a continuous interstate transportation,” and (b) without the FAA, the class action waiver could not be enforced under California law.
COA First District, Division 3. Filed 3/29/21. 62 Cal.App.5th 552. Opinion by Justice Ioana Petrou.
CLARK v. SUPERIOR COURT (ARTHROSCOPIC & LASER SURGERY CENTER OF SAN DIEGO, L.P.)
Plaintiff Alicia Clark filed a DFEH complaint in which she failed to use Defendant ALSC’s registered business name and instead used two variations of Defendant’s legal name. Plaintiff named Oasis Surgery Center LLC and Oasis Surgery Center LP. Defendant’s registered business name was Oasis Surgery Center. She also individually named her former managers and supervisor of Defendant’s business. On a motion for summary adjudication, the trial court ruled that Plaintiff had failed to exhaust her administrative remedies. Plaintiff filed a writ, and the Court of Appeal reversed.
The purpose of FEHA’s exhaustion doctrine is to ease the burden on the court system and maximize the use of administrative agency expertise to resolve disputes regarding unlawful employment practices through a more economical means. It is “not to limit access to the courts.” A Plaintiff has not exhausted administrative remedies when they have withheld the name of “known or reasonably obtainable defendants at the administrative complaint level” and/or completely failed to identify any person or entity. This is because it defeats the purpose of permitting a Defendant to meaningfully participate at the administrative level. However, a DFEH Complaint that identifies the intended entity, though not perfectly, is sufficient. Here, Plaintiff satisfied exhaustion in naming two entities with similar names to Defendant and alleging the conduct of employees specific to Defendant. Any DFEH investigation would have revealed the true employer. Additionally, a DFEH complaint is still effective against an individual not named but described in the body of the complaint; the Court stated there was no reason to treat corporations differently.
CELA Involvement: Congratulations to CELA member Geoffrey C. Lyon of Lyon Law.
COA Fourth District, Division 1. Filed 3/19/21. 62 Cal.App.5th 289. Opinion by Justice Aaron.
CONTRERAS v. SUPERIOR COURT (ZUM SERVICES)
The Federal Arbitration Act does not apply to PAGA claims. The preliminary question of whether plaintiffs were “aggrieved employees” under PAGA could likewise not be decided in arbitration. Delegation of that question to an arbitrator frustrates the purpose of PAGA and is therefore prohibited under California law;
Plaintiffs filed suit against Defendant Zum Services under PAGA, alleging that Zum misclassified them and others as independent contractors, violating multiple provisions of the California Labor Code. The trial court granted Zum’s motion to compel arbitration as to the issue of the arbitrability of plaintiffs’ suit. Reversing the trial court, the Court of Appeal held that an arbitration agreement purporting to delegate issues under PAGA to an arbitrator, such as whether plaintiffs were “aggrieved employees,” was unenforceable.
CELA Involvement: Congratulations to Shannon Liss-Riordan of Lichten & Liss-Riordan, PC.
COA Second District, Division 5. Filed 3/1/21. 61 Cal.App.5th 461. Opinion by Justice Rubin.
CURTIS v. SUPERIOR COURT OF LOS ANGELES COUNTY (CALIFORNIA EMPLOYMENT LAWYERS ASSOCIATION)
An unknown CELA member forwarded appellant Robert Curtis an email from CELA’s confidential listserv, in violation of that member’s contract with CELA. Curtis, an attorney, provided the email to his client and his client’s trial counsel, who attached the email to a court filing in the Saccio case. CELA filed suit against Doe defendants and conducted discovery to ascertain the identity of the listserv breacher. Curtis, a witness but not a defendant, refused to identify the breacher at deposition, citing attorney work product privilege. CELA filed a motion to compel. The trial court granted the motion and ordered Curtis to identify the breacher. Curtis appealed. Though the matter was not immediately appealable, the Court, citing the “unusual circumstances” of the case, chose to hear it as a petition for writ of mandate. The Court then denied the petition.
There are five factors to consider when assessing the propriety of treating an appeal as a writ petition: whether (1) waiting for a final judgment might lead to unnecessary trial proceedings, (2) the briefs and record included the necessary elements for a proceeding for writ of mandate, (3) there was no indication that the trial court would appear as a party in a writ proceeding, (4) the appealability of the order was not clear, and (5) the parties urged the court to decide the issues rather than dismiss the appeal. The Court of Appeal noted that the trial court’s order that Curtis disclose the name of the breacher might never be appealable since the issue would become moot once Curtis disclosed the name. Likewise, the matter was fully briefed, the record contained all of the necessary elements for a writ of mandate, and there was no indication the trial court would elect to appear. Therefore, it would serve no purpose to require Curtis to file a writ petition and have the parties re-file their briefs.
Attorney work product is governed by Code of Civil Procedure section 2018.030. Section (a) covers absolute work product, and section (b) covers qualified work product. Curtis claimed that the breacher was his non-testifying expert in the Saccio case. There was no case law directly on point, as the case law generally dealt with experts’ opinions, not whether the actual identities of the experts were subject to privilege. In claiming absolute work product protection under section (a), Curtis was required to show that disclosure would convey tactical information or attorney impressions from the Saccio case. Curtis failed to meet his burden and was not entitled to absolute work product protection. However, because disclosure of the breacher could affect Curtis’ ability to consult with him and prepare future cases, Curtis made a foundational showing of possible qualified work product protection under section (b). The Court did not hold that Curtis was in fact entitled to qualified work product protection. If the breacher’s identity was protected, CELA was required to show that denial of disclosure of the identity would unfairly prejudice CELA in preparing its case or result in an injustice. CELA provided more than enough evidence of injustice since it could not prosecute its case until the breacher was identified. Since the Court found that CELA met this burden, whether Curtis was entitled to qualified work product protection was not essential to the holding.
CELA Involvement: Thank you to CELA members Tracy L. Fehr and Bernard Alexander of Alexander Morrison + Fehr LLP and David deRubertis of The deRubertis Law Firm, APC.
COA Second District, Division 7. Filed 3/24/21. 62 Cal.App.5th 453. Opinion by Justice Feuer.
DOE v. WESTMONT COLLEGE
DOE SUCCESSFULLY APPEALED HIS SUSPENSION FROM WESTMONT COLLEGE AFTER HE WAS ACCUSED OF SEXUAL ASSAULT IN AN INTERNAL PROCESS THAT HE CLAIMED VIOLATED HIS DUE PROCESS RIGHTS.
Doe was accused of sexual assault by another Westmont College student. The college conducted an internal investigation and hearing, resulting in the decision to suspend Doe for two years. Doe petitioned for writ of mandamus to overturn the decision. The trial court agreed Doe had not been given a fair hearing, and the appellate court affirmed that ruling. The underlying case was published. Doe then sought attorney fees under Code of Civil Procedure section 1021.5. The trial court found that Doe’s case primarily benefitted him and that an award of fees would unfairly punish Westmont for appealing the case. The Court of Appeal reversed, finding that the case provided a significant public benefit: It benefitted not just Doe, but future victims of assault, future accused students, and the administrators tasked with investigating sexual assault complaints. The mere fact that a case is deemed publishable supports the “public benefit” argument. The Court of Appeal remanded the case to the trial court to address whether: (1) private enforcement was “necessary”; and (2) the financial burden of private enforcement warrants subsidizing the successful party’s attorneys.
THE TRIAL COURT MUST EVALUATE WHETHER AN AWARD OF SECTION 1021.5 FEES IS APPROPRIATE BY BALANCING THE BENEFITS TO THE LITIGANT WITH THE PUBLIC INTEREST(S) SERVED BY THE LITIGATION.
Section 1021.5 authorizes an award of fees in cases where: (1) the litigant has enforced an important right affecting the public interest; (2) there is a significant benefit to the public, not just the litigant; and (3) the necessity and burden of private enforcement make an attorney fee award appropriate. The first prong can be satisfied if there has been a published decision in the case, suggesting that the appellate court has already determined there is a public interest in the litigation. In this case, the subject of sexual assault investigations had been frequently litigated and was in the news, further establishing that Doe’s case involved the public interest. Doe’s case successfully challenged Westmont’s internal procedures – procedures which would impact others going forward, thereby satisfying the second prong of “significant benefit” to people other than Doe. What the trial court in Doe had failed to adequately consider was the third prong: whether the costs to Doe of litigating the case outweighed any financial benefits to him from so doing. Unfortunately, the decision provides little guidance on how the trial courts are to weigh these factors. The Court of Appeal provided no guidance regarding how the trial court should apportion fees to those litigation issues that furthered the public’s interests (recoverable under §1021.5) and those that solely benefitted Doe’s interests (non-recoverable).
COA Second District, Division 6. Filed 1/25/21, modified 2/8/21. 60 Cal.App.5th 753. Opinion by Justice Tangeman.
EARLY v. BECERRA
EARLY ATTEMPTED TO LIMIT THE POOL OF APPLICANTS FOR ATTORNEY GENERAL BY CLAIMING BECERRA’S INACTIVE BAR STATUS MADE HIM INELIGIBLE FOR THE OFFICE UNDER GOVERNMENT CODE SECTION 12503.
Round One of this case involved Eric Early’s petition for mandate, seeking to have Xavier Becerra declared ineligible to run for Attorney General in November 2018 because Becerra had not been an active member of the state bar for the previous five years. [Early himself was running for the position.] The petition required the Sixth District to interpret Government Code section 12503 mandating that candidates be “admitted to practice” for at least five years prior to the election. In a prior published decision, the appellate court held that inactive status bar members were “admitted to practice” even if they were not actively practicing law. This case involved Round Two: Becerra’s attempt to recover his fees under CCP section 1021.5 in opposing Early’s petition. Fees had been awarded by the trial court, though he had cut the fees sought.
FEES UNDER SECTION 1021.5 ARE RECOVERABLE WHEN A PARTY IS FORCED TO DEFEND LITIGATION, RESULTING IN A PUBLISHED DECISION CONFERRING A SIGNIFICANT BENEFIT ON THE PUBLIC.
Becerra’s fees were recoverable under section 1021.5 because Becerra’s defense of the petition resulted in a published decision that conferred a significant benefit on the public (expanding the pool of applicants for AG). It helped that Early had likewise argued (in Round One) that the issue before the court was significant and of public interest because it would waste taxpayer money and cause voter confusion if an ineligible candidate (Becerra) was included on the ballot. The Court of Appeal concluded that the financial burden Becerra incurred in defending the petition outweighed any personal pecuniary benefit he might receive because any benefit he might receive was speculative since he had no guarantee of election. Becerra was forced to defend the petition since no public entity could do so on his behalf. The Court of Appeal affirmed the amount of fees awarded by the trial court, including for the fee motion itself, noting that an “experienced trial judge is the best judge of the value of legal services rendered in the trial court.” Note: while this decision was grounded in election law, the court reiterated that publication of a decision is “strong evidence” that the underlying case vindicated an important right.
COA Third District. Filed 2/8/21. 60 Cal.App.5th 726. Opinion by Justice Raye.
HERNANDEZ v. JENSEN
Defendant Maria Jensen hired two healthcare aides to provide in-home care for her elderly parents. In providing care, one of the aides reached into the bedroom closet to retrieve an oxygen tank. The removal of the tank caused a loaded rifle to fall and discharge. The bullet from the gun struck and injured the other healthcare aide, Plaintiff Annet Hernandez. Defendant Jensen knew her father had handguns and rifles in the house but failed to either secure the firearms or warn the healthcare workers of their presence. A jury found Defendant Jensen liable for negligence and awarded total damages of $3.61 million. Defendant Jensen appealed, and the Court of Appeal affirmed.
JENSEN HAD A DUTY TO SECURE AND WARN IN-HOME HEALTHCARE AIDES OF LOADED FIREARMS LOCATED IN AREAS OF THE HOME IN WHICH THEY WORKED.
California law establishes the general duty of each person to exercise, in his or her activities, reasonable care for the safety of others. (Civ. Code, § 1714, subd. (a) [“everyone is responsible, not only for the result of his or her willful acts, but also for an injury occasioned to another by his or her want of ordinary care or skill in the management of his or her property or person, except so far as the latter has, willfully or by want of ordinary care, brought the injury upon himself or herself.”].) A few considerations, when balanced together, may justify departure from the general duty of care: foreseeability factors (foreseeability of harm, degree of certainty that plaintiff was injured, and connection between defendant’s conduct and injury) and policy factors (moral blame, preventing future harm, burden of imposing duty, and availability of insurance). No such exception applied in this case, in part, because it was foreseeable that in-home healthcare workers may accidentally be shot in a home containing unsecured, loaded firearms.
COA Second District, Division 7. Filed 3/17/21. 61 Cal.App.5th 1056. Opinion by Judge McCormick, sitting by assignment.
KARTON v. ARI DESIGN & CONSTRUCTION
KARTON PREVAILED AGAINST UNLICENSED CONSTRUCTION CONTRACTOR AND WAS AWARDED ATTORNEY FEES
David Karton sued his home remodeling contractor Ari Design and Construction, Inc. (“Ari”), alleging Ari owed $35,096, while Ari claimed it owed $13,000. Karton won a judgment for damages and penalties amounting to $133,792.11 plus post-judgment interest under Labor Code section 7031, which allows recovery of all money paid to an unlicensed contractor. Karton filed a motion for attorney fees in the trial court for $287,640 and was awarded $90,000.
ATTORNEY FEES WERE PROPERLY REDUCED FOR OVERLITIGATING THE CASE
The filings in the case demonstrated Karton went “so far beyond what was necessary on this matter.” As a result, the fee request was “excessive by a lot.” The benchmark for attorney fees is reasonableness based on the lodestar approach or the percentage-of-recovery approach. Under either approach, the fees requested were excessive. The simple nature of the case did not justify spending more than 600 hours, nor did it merit a fee award far in excess of the amount alleged or recovered. The Court of Appeal affirmed the reduced fee award.
LEGAL COSTS WERE PROPERLY REDUCED BASED ON ATTORNEY’S INCIVILITY
The Trial court correctly noted the incivility in Karton’s briefing. Attorney skill is a traditional touchstone for deciding whether to adjust a lodestar. Civility is an aspect of skill. Excellent lawyers deserve higher fees, and excellent lawyers are civil. Incivility tends to increase the friction, extent, and cost of litigation.
COA Second District, Division 8. Filed 3/9/21, as modified on denial of rehearing 3/29/21. 61 Cal.App.5th 734. Opinion by Justice Wiley.
MANHAN v. GALLAGHER
Plaintiffs filed an action against their landlord for breach of contract and bad faith retention of security deposits. During litigation, the plaintiffs filed two motions to compel and requested monetary sanctions. The trial court granted the plaintiffs’ motions and requests for sanctions. Thereafter, the plaintiffs filed a request for dismissal of the entire action without prejudice. On the same day, Defendant Gallagher filed a motion for reconsideration of the sanction orders and submitted a declaration that plaintiffs’ counsel had misrepresented their hourly fee. Before the motion for reconsideration could be heard, the clerk entered dismissal of the case. The plaintiffs failed to file an opposition to Gallagher’s motion for reconsideration. The trial court granted Gallagher’s motion to set aside the sanctions, due in part to the misrepresentations of plaintiffs’ counsel. The plaintiffs appealed, arguing the trial court lacked jurisdiction, and the Court of Appeal affirmed the trial court’s order.
THE COURT MAY RETAIN JURISDICTION AFTER DISMISSAL OR JUDGMENT TO DECIDE MOTIONS INVOLVING COLLATERAL STATUTORY RIGHTS
“Sanction orders or judgments of five thousand dollars ($5,000) or less against a party or an attorney for a party may be revived on an appeal by that party after entry of final judgment in the main action, or, at the discretion of the court of appeal, may be reviewed upon petition for an extraordinary writ.” (Code Civ. Proc., § 904.1, subd. (b).) This provision has consistently been interpreted as permitting an appeal from sanction orders after a voluntary dismissal of the case. Although most orders after dismissal are void because the court lacks jurisdiction, an exception to this rule applies when a post-dismissal or post-judgment motion involves “collateral statutory rights” – i.e., statutory rights not directly based on the merits of the underlying proceedings. The Court reasoned that retaining jurisdiction was consistent with the critical function that reconsideration performs, which is to allow courts to correct errors and thereby prevent miscarriages of justice.
COA First District, Division 3. Filed 3/26/21. 62 Cal.App.5th 504. Opinion by Justice Fujisaki.
MORGAN V. J-M MANUFACTURING CO., INC.
A PLAINTIFF WHO PROVIDES SUFFICIENT EVIDENCE TO SUPPORT A JURY VERDICT HAS MET THEIR BURDEN, EVEN IF CONTRADICTORY EVIDENCE EXISTS.
Defendant J-M Manufacturing, a company that sold an asbestos cement pipe, alleged that the plaintiff failed to provide “substantial evidence” that the plaintiffs had come into contact with its specific asbestos cement pipe in the 1970s and 1980s. Plaintiff Norris testified that he encountered a 10-foot pipe with Defendant’s name on it, but Defendant only sold a 13-foot pipe. As such, Defendant argued that either the pipe was not Defendant’s at all or that it could have been either Defendant’s pipe or someone else’s pipe. However, the Court found that “witnesses are not required to have perfect memories” and that a jury may accept or reject parts of testimony even if contradictory. Here, there was sufficient evidence to support the jury’s verdict, given that it could have rejected Plaintiff’s position that he only saw a 10-foot pipe but accepted that he saw Defendant’s name on the pipe.
UPON REQUEST, A COURT SHOULD PROVIDE CORRECT NON-ARGUMENTATIVE JURY INSTRUCTIONS STATING RULES OF LAW BUT NOT PROVIDE INSTRUCTIONS THAT ELABORATE ON MATTERS OF EVIDENCE.
Defendant requested a jury instruction that it was not liable to Plaintiff for the period prior to 1983 because in 1983 it acquired portions of another pipe operations company through bankruptcy “free of all present and future liabilities.” The trial court refused to give the instruction. The Court of Appeal reasoned that it would be an error for the trial court to advance an argumentative instruction that goes “too particularly to the fact relied on by one of the parties.” The Court also affirmed the trial court’s reasoning that Defendant did not seek an instruction on successor liability, impliedly finding that such an instruction would have been appropriate. Instead, Defendant improperly focused its instruction on particular facts. Furthermore, the jury awarded fault consistent with plaintiffs’ allegations of exposure to different asbestos pipes at different times, demonstrating that Defendant was not prejudiced.
TO ESTABLISH A CORPORATION ACTED WITH MALICE SUFFICIENT TO SUPPORT PUNITIVE DAMAGES, A PLAINTIFF CAN SHOW THAT INFORMATION MOVED UP THE CORPORATE LADDER TO THE POINT WHERE CORPORATE POLICY WAS FORMULATED.
Punitive damages are appropriate where the Plaintiff has proven by clear and convincing evidence that the defendant is “guilty of oppression, fraud, or malice.” In the case of a corporate employer, the employer’s officer, director, and/or managing agent must have “advanced knowledge and conscious disregard, authorization, ratification or act of oppression, fraud or malice.” A Plaintiff is not required to demonstrate that a “particular committee or officer” acted with malice, as requiring so would inoculate a corporation against liability through the “sheer size of the management structure.” Instead, a Plaintiff can demonstrate that the corporate actions are pervasive enough for a jury to infer that the corporate hierarchy had the requisite intent. However, a Plaintiff must provide at least circumstantial evidence that the necessary information moved up the corporate ladder “to a point where corporate policy was formulated. These inferences cannot be based on merely speculation.” In this case, Plaintiff, failed to meet the evidentiary requirements.
COA Second District, Division 1. Filed 01/27/2021, publication ordered 2/18/21. 60 Cal.App.5th 1078. Opinion by Justice Chaney.
MOSTAFAVI LAW GROUP, APC v. LARRY RABINEAU, APC
Defendants Larry Rabineau, APC and Larry Rabineau (collectively “Rabineau”) served Plaintiff Mostafavi Law Group (MLG) with a statutory offer to compromise. The offer did not indicate the manner of acceptance. MLG’s counsel hand-wrote on the offer that “Plaintiff Mostafavi Law Group accepts the offer” and filed a notice of acceptance with the trial court. The court entered judgment in favor of MLG pursuant to section 998. Thereafter, following a dispute over payment of attorney fees and costs, Rabineau filed a motion to vacate the judgment, arguing that the offer was invalid because it failed to include an acceptance provision and, therefore, the judgment was void. The trial court agreed, and the Court of Appeal affirmed.
PARTIES MUST STRICTLY ADHERE TO THE CLEAR REQUIREMENTS OF CCP 998
Code of Civil Procedure section 998, requires, among other things, that “the written offer shall include…a provision that allows the accepting party to indicate acceptance of the offer by signing a statement that the offer is accepted.” (Code Civ. Proc., § 998, subd. (b).) This provision is known as the “acceptance provision.” The Court of Appeal held that requiring parties to comply with the clear language of section 998 “by invalidating an offer when it omits an acceptance provision, or any other statutory requirement” will eliminate confusion, uncertainty, and encourage settlements.
COA Second District, Division 4. Filed 3/3/21. 61 Cal.App.5th 614. Opinion by Justice Curry.
WILSON v. THE LA JOLLA GROUP
THE TRIAL COURT DENIED CERTIFICATION ON ALL CLAIMS DUE TO INDIVIDUALIZED ISSUES
Plaintiffs filed a class action against The La Jolla Group (“LJG”) on behalf of all signature gatherers for political campaigns classified as independent contractors in California. Plaintiffs alleged misclassification claims including minimum wage, overtime pay, meal and rest breaks, expense reimbursement, timely final wage payment, and itemized wage statements. The trial court denied certification of all claims, finding that “Plaintiffs have not met their burden that common questions of law and fact predominate,” nor did Plaintiffs satisfy the superiority requirement. Although misclassification was a common question, individual issues would predominate any trial to answer that common question. Adjudication of each claim would require an individualized showing of liability, not just damages. The circumstances of each signature gatherer varied, such as whether they work alone and whether they work for other companies. Signature gatherers may have worked for multiple brokers at the same time, and work performed on any given day could be compensated by one of several brokers because the same signature form can be handed to different brokers for compensation.
THE COURT OF APPEAL REVERSED DENIAL OF CERTIFICATION AS TO THE WAGE STATEMENT CLAIM BUT OTHERWISE AFFIRMED
The Court of Appeal affirmed the order except as to wage statement claims. Under an abuse of discretion standard, the Court of Appeal held the trial court could correctly find the experiences of each signature gatherer were so varied that the benefits of a class action would be undermined by numerous individual issues. The Court of Appeal remanded with instructions for the trial court to consider superiority of the wage statement claim alone because neither the trial court’s order nor the briefing provided any grounds to refuse certification of the wage statement claim on the basis of manageability or superiority.
COA Fourth District, Division 1. Filed 3/12/21. 61 Cal.App.5th 897. Opinion by Justice Guerrero.
Ninth Circuit
C.L. v DEL AMO HOSP., INC.
Plaintiff C.L., a survivor of severe abuse, obtained a service dog for the purpose of ameliorating her PTSD, dissociate identity disorder, anxiety, and depression. Unable to afford a certification program, Plaintiff self-trained her dog to assist her. She then sought inpatient treatment at Defendant’s treatment center and requested to bring her dog. Defendant denied her request. After a bench trial, the district court found for Defendant, and Plaintiff appealed. The Ninth Circuit reversed.
The Ninth Circuit held that there is no specific certification requirement to be classified as a service dog. The District Court incorrectly relied on the testimony of a Service Dog training expert who stated that she could not certify Plaintiff’s dog under her company’s policy, whose requirements were more rigorous than the ADA’s requirements, to rule that Plaintiff’s dog was not a service dog. The expert also testified that she believed Plaintiff’s dog was a service dog, albeit one not certified by her company. The Ninth Circuit rejected the district court’s analysis for three reasons: (1) the ADA defines a service dog based on its functionality to a person with a disability, not its training; (2) the DOJ has consistently rejected a formal certification requirement; and (3) permitting a person to self-train a service animal furthers the goals of the ADA, since formalized training can be prohibitively expensive.
Ninth Circuit. Filed 3/30/21. 992 F.3d 901. Opinion by Judge Gould.
CLARKE v. AMN SERVICES
THE REGULAR RATE OF PAY MUST INCLUDE ALL WAGES BUT NOT ALL AMOUNTS PAID
The FLSA requires payment of “not less than one and one-half times the regular rate” of pay for any hours over 40 in a week. 29 U.S.C. § 207(a)(1). With some exceptions, the regular rate of pay must include “all remuneration for employment paid to, or on behalf of, the employee.” 29 U.S.C. §207(e). The California Labor Code adopts the FLSA’s definition of the regular rate of pay. See California Division of Labor Standard Enforcement, DLSE Enforcement Policies and Interpretations Manual, § 49.1.2 (2019). The regular rate of pay need not include certain amounts such as “payments made for occasional periods when no work is performed…; reasonable payments for traveling expenses, or other expenses, incurred by an employee in the furtherance of his employer’s interests…; and other similar payments….” 29 U.S.C. § 207(e)(2).
PER DIEM PAYMENTS OPERATE AS WAGES THAT MUST BE INCLUDED IN THE REGULAR RATE OF PAY
AMN, a healthcare staffing company, pays nurses and technicians (“clinicians”) a per diem amount based, in part, on the federal Continental United States reimbursement rates. When calculating the regular rate of pay, AMN includes per diems as wages for clinicians working within 50 miles of their tax home but does not otherwise include per diem as wages. AMN argued the per diem payments were provided to reimburse for the cost of meals, housing, and incidentals while working at least 50 miles away from their tax home. AMN bore the burden of establishing that the payments qualified for an exemption. Plaintiffs argued per diem payments operated as wages because: (i) AMN included per diem benefits in the “weekly pay” when recruiting clinicians; and (ii) per diem applied to shifts worked away from home and did not compensate for non-working time or for direct expenses.
The Court applied a payment-function test which examines several factors such as: whether the per diem is proportional to time worked, whether payments are made regardless of whether any actual costs are incurred, and whether the employer requires any attestation that costs were incurred. The Court of Appeals held the per diem payments were improperly excluded from Plaintiffs’ regular rate of pay for purposes of calculating overtime pay. The trial court had granted summary judgment in favor of the employer AMN regarding the regular rate of pay issue. Reviewing de novo, the Ninth Circuit Court reversed summary judgment and remanded for the district court to enter partial summary judgment in plaintiffs’ favor as to whether the per diem payments should be included in the regular rate of pay.
9th Circuit. Filed 2/8/21. 987 F.3d 848. Opinion by Judge Berzon.