Recent Employment Law Decisions

California Supreme Court

Court May Use Percentage Method to Calculate Common Fund Fee Award

LAFITTE V. ROBERT HALF INTERNATIONAL INC.

“A class action employment lawsuit settled before trial for $19 million, with the agreement that no more than a third of that recovery would go to class counsel as attorney fees. In seeking the trial court’s approval of the settlement, class counsel sought the maximum fee amount, $6,333,333.33. After considering information from class counsel on the hours they had worked on the case, applicable hourly fees, the course of the pretrial litigation, and the potential recovery and litigation risks involved in the case, the trial court—over the objection of one class member—approved the settlement and awarded counsel the requested fee.

The objecting class member contends the trial court’s award of an attorney fee calculated as a percentage of the settlement amount violates a holding of this court in Serrano v. Priest (1977) 20 Cal.3d 25, 141 Cal.Rptr. 315, 569 P.2d 1303 (Serrano III), to the effect that every fee award must be calculated on the basis of time spent by the attorney or attorneys on the case. (See Serrano III, at p. 48, fn. 23, 141 Cal.Rptr. 315, 569 P.2d 1303.) We disagree. Our discussion in Serrano III of how a reasonable attorney fee is calculated was made in connection with an award under the “private attorney general” doctrine. (See id. at pp. 43–47, 141 Cal.Rptr. 315, 569 P.2d 1303.) We clarify today that when an attorney fee is awarded out of a common fund preserved or recovered by means of litigation (see Serrano III, supra, at p. 35, 141 Cal.Rptr. 315, 569 P.2d 1303), the award is not per se unreasonable merely because it is calculated as a percentage of the common fund.”

The Court disapproved Jutkowitz v. Bourns (1981) 118 Cal.App.3d 102, 173 Cal.Rptr. 248.

Law Office of Lawrence W. Schonbrun and Lawrence W. Schonbrun, for Plaintiff and Appellant.
Law Offices of Kevin T. Barnes, Kevin T. Barnes, Gregg Lander, Los Angeles; Law Offices of Joseph Antonelli, Joseph Antonelli, Janelle Carney, Chino Hills; Hilaire McGriff and Mika M. Hilaire, Los Angeles, for Plaintiffs and Respondents.
Paul Hastings, Judith M. Kline, Los Angeles, and M. Kirby C. Wilcox, San Francisco, for Defendants and Respondents.
Cal. 8/11/16 opinion by Werdegar, Cantil-Sakauye, Chin, Corrigan, Liu,  Cuéllar, and Kruger concurring; concurring opinion by Liu; ___ P.3d ___, 205 Cal.Rptr.3d 555, 2016 WL 4238619.

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Message from the Chair
By Jean K. Hyams, CELA Chair

Jean K. Hyams

Jean K. Hyams

On behalf of the CELA Board, I invite everyone to join us in Costa Mesa later this month for our 29th annual conference. For educational value and incomparable community, the CELA Conference is not to be missed! This year, we are honored to welcome Senator Hannah-Beth Jackson, the author of California’s Fair Pay Act, as our luncheon keynote on Friday, September 23rd. That same day, the Joe Posner Award will be presented to Bernard Alexander for his many contributions to CELA as a colleague, board member, past President and the driving force behind the CELA Trial College. Saturday, September 24th, will bring us together to hear words of wisdom and encouragement from José Padilla, Executive Director of California Rural Legal Assistance, which celebrates its 75th anniversary this year. Registration is still open for the conference and the full day Wage and Hour Boot Camp on Thursday, September 22nd.

While most of this message will focus on lessons from 19th century workers’ rights history, it is wonderful to note that CELA has stepped firmly into the 21st Century with this edition of the Bulletin. Our new look and features come thanks to the creativity and vision of our Administrative Director, Christina Krasomil, staffer Alexandra Menna, Board member Laura Horton, and Bulletin Editor Joan Herrington. Thank you!

Auspiciously, this edition of the CELA Bulletin will arrive soon after Labor Day. As we return to work reinvigorated by the long weekend and ready to redouble our efforts to protect and advance the rights of workers, it’s good to remember that the origin story of this holiday is not written in dainty proclamations, but in blood and struggle.

jeans-september-picture-1

Strikers Achieved a Complete Blockade of Freight and Passenger Cars

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Deputies Trying to Move an Engine and Car During the Pullman Strike

In the year 1894, George Pullman, owner of the Pullman Company, maker of railway sleeping cars slashed salaries for many of his workers by as much as forty percent. As workers suffered cuts, salaries for management remained stable. Indeed, according to a contemporaneous account by local minister and activist Rev. William Carwardine, the company was actually increasing its workforce to handle new orders at the time workers’ wages were gutted. From his vantage point, the company was using a recent recession to squeeze out more in profit.

The pressure on workers did not come only in the form of lowered wages. George Pullman was the architect of the most famous, if not infamous, “company town” named, not surprisingly, Pullman, Illinois. In Pullman’s town, the company controlled not just employee wages, but also collected their rent and utilities. It was commonplace for the factory workers who built the famous Pullman cars to live in a continuous state of indebtedness to the company that employed them.

The breaking point came on May 11, 1894, when 4,000 American Railway Union workers began a strike and boycott that triggered a nationwide transportation nightmare for freight and passenger traffic. At its peak, the strike involved about 250,000 workers in more than 25 states. Workers rose up defiantly in many cities; President Grover Cleveland called in army troops to break the strike, and more than a dozen people were killed in the struggle. This is just one of hundreds of times that union workers have paid for rights in blood. Six weeks later, on June 28, Congress, at the urging of Cleveland and in an overture to the labor movement, named the first Monday in September “Labor Day.”

When I first thought to focus this column on Labor Day, I had planned to highlight the huge role that organized labor has played and continues to play in securing rights and benefits for workers. Like the 40-hour workweek, the end to child labor, and the weekend, Labor Day was brought to us by the organized effort of union workers.

Then (in the surprising context of Sunday service at my local Unitarian Universalist congregation) I learned that woven into the history of the Pullman Strike is a story about the supporting role lawyers can play to advance the cause of workers. It seems that, as the strike went on, the railroad companies arranged to attach mail cars to every train with a Pullman car, so they could call in the federal troops when the strikers “impeded the U.S. mail” by blocking the trains. This ultimately served as justification to imprison the union leader, Eugene V. Debs, on a conspiracy charge.

Watching this chicanery in action was a young lawyer who worked in the general counsel’s office of the Chicago & Northwestern Railway Company. Appalled by what he saw and moved by the resolve of the workers, the lawyer quit his job and marched over to the prison to offer his services to Debs. The lawyer’s name was Clarence Darrow, who later in his life became even more famous for his defense of the teaching of evolution in the Scopes trial. But in 1894, the Railway Strike changed the trajectory of Darrow’s early career and he remained involved in workers’ rights during the critical period of labor history that saw the end of child labor and the beginning of occupational safety standards and a regulated work week.

Though many of us represent clients whose legal claims and work lives seem far removed from the world of strikes, collective bargaining and organized workforces, I hope that every CELA member can embrace Darrow and Debs as our activist ancestors. We are also lucky to count as CELA members many union lawyers who can claim a direct line of descent as they work day in and day out to safeguard the collective rights of workers.

This year, the CELA Board chartered a task force to look closely at how a deeper and stronger relationship with labor and union attorneys can advance CELA’s mission to protect and expand the legal rights of working women and men through litigation, education and advocacy. The task force, which held its first meeting in August, includes board members, CELA members who represent unions, CELA’s Administrative Director Christina Krasomil, and CELA’s Legislative Counsel & Political Director Mariko Yoshihara. Our work on the task force is just beginning and anyone who has ideas to contribute is welcome to contact me.

As we move past Labor Day, let us all remember that we stand on the shoulders of union workers and labor unions in the struggle for the rights of workers. Within CELA, let us make sure that solidarity is written in the present tense.

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