OUR LADY OF GUADALUPE SCHOOL v. MORRISSEY-BERRU

THE PLAINTIFFS WERE ELEMENTARY SCHOOL TEACHERS RESPONSIBLE FOR TEACHING ALL SUBJECTS, INCLUDING RELIGION, AND FOR PRAYING WITH STUDENTS.

Plaintiffs Agnes Morrissey-Berru and Kristen Biel had nearly identical agreements to teach elementary students at Catholic schools Our Lady of Guadalupe School (OLG) and St. James School, respectively. Morriseey-Berru taught all subjects to fifth or sixth graders for several years. The curriculum included religion, which she also taught. She took religious education courses at the school’s request and was expected to attend faculty prayer services. Her yearly employment agreement stated that all of her duties as a teacher should be performed within the overriding commitment of developing and promoting a Catholic School Faith Community. Teachers were expected to model and promote Catholic faith and morals and were responsible for the “faith formation” of their students each day. Morrissey-Berru prepared her students for participation in Mass and for communion and confession and prayed with her students every day. In 2014, OLG suddenly demoted Morrissey-Berru to part time and then declined to renew her contract the following year. She filed a complaint with the EEOC alleging age discrimination and subsequently filed a lawsuit. OLG moved for summary judgment based on the ministerial exception, and the district court granted the motion. The Ninth Circuit reversed, but acknowledged that Morrissey-Berru had significant religious responsibilities.

Plaintiff Kristen Biel worked for St. James School as a substitute for part of a year and then as a full-time fifth grade teacher for a year. She taught all subjects, including religion. Her employment agreement was nearly identical to OLG’s. Like OLG, St. James stated that religious development was its first goal and required teachers to model the faith life, integrate Catholic principles into secular subjects, and prepare students to receive the sacraments. She was required to teach religion for 200 minutes per week and administer weekly tests on religion. She also worshipped with her students and prepared them for Mass. She was required to pray with her students every day. St. James declined to renew Biel’s contract after one year. She alleged that she was fired after requesting a leave of absence for breast cancer treatment. The district court granted summary judgment based on the ministerial exception. A divided Ninth Circuit panel reversed. The Supreme Court granted review and consolidated the two cases.

THE SUPREME COURT BACKTRACKED ON ITS PREVIOUS CRITERIA FOR THE MINISTERIAL EXCEPTION IN ORDER TO FIND THAT THE EXCEPTION APPLIED HERE.

The First Amendment protects religious institutions from government interference. Under the ministerial exception to employment discrimination laws, these laws do not apply to people holding certain positions in religious institutions. There is no rigid formula for qualification for the ministerial exception, though the Supreme Court previously identified four relevant circumstances in Hosanna-Tabor: (1) the title of “minister”; (2) the position reflects a significant degree of religious training followed by a formal process of commissioning; (3) the employee holds themselves out as a minister by accepting the formal call to religious service; and (4) the employee’s job duties reflect a role in conveying the church’s message and carrying out its mission. No single circumstance is essential, and these circumstances may vary from case to case. Simply giving someone the title of “minister” is insufficient, and the presence of such a title is not required for the exception. What matters is what the employee does. Educating children in their faith and training them to live their faith are at the very core of the mission of a private religious school. Both Morrissey-Berru and Biel performed vital religious duties. Therefore, both qualified for the ministerial exception. The Ninth Circuit misunderstood the Supreme Court’s previous Hosanna-Tabor decision, treating the four circumstances as a checklist to be weighed in every case. All relevant circumstances should be taken into account to determine whether the exception applies. Justice Sotomayor’s dissent, in which Justice Ginsburg joined, soundly criticized the majority for skewing the facts and twisting the careful analysis previously done in Hosanna-Tabor.

CELA Involvement: Thanks to CELA members Joseph Lovretovich and Cathryn G. Fund of JML Law for fighting the good fight.

United States Supreme Court. Filed 7/8/20. 140 S.Ct. 2049. Opinion by Justice Alito, concurrence by Justice Thomas, dissent by Justice Sotomayor.

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BAYRAMOGLU v. NATIONSTAR MORTGAGE LLC

DEFENDANT NATIONSTAR SUCCESSFULLY MOVED FOR SUMMARY JUDGMENT BASED ON THE PLAINTIFFS’ FACTUALLY DEVOID INTERROGATORY RESPONSES

Plaintiffs Sukru and Gulay Bayramoglu attempted to refinance their home mortgage with their loan servicer CitiMortgage. Though a plan was agreed upon, CitiMortgage never provided the plaintiffs with the loan modification agreement and commenced foreclosure proceedings. Defendant Nationstar then took over the plaintiffs’ loan. Nationstar offered Plaintiffs a new loan modification agreement, which the plaintiffs signed, though the total loan balance listed was too high. The plaintiffs sued both mortgage providers. Nationstar moved for summary judgment, claiming the plaintiffs’ interrogatory responses showed that they lacked the evidence necessary to support their claims. In response to interrogatories asking for all facts supporting each cause of action, the plaintiffs had merely referred Nationstar to documents without providing facts. The trial court found the plaintiffs’ interrogatory responses “factually devoid” and granted summary judgment. The plaintiffs appealed, and the Court of Appeal reversed.

NATIONSTAR FAILED TO MEET ITS BURDEN ON SUMMARY JUDGMENT AND SHOULD HAVE FILED A MOTION TO COMPEL REGARDING THE PLAINTIFFS’ INTERROGATORY RESPONSES.

The plaintiffs’ interrogatory responses relied on CCP 2030.230, which allows an interrogatory response to reference documents where the response would necessitate the making of a compilation or summary from the documents. The trial court’s assumption that this response meant the Plaintiffs had no supporting facts was error. If the documents referenced show relevant facts, then the plaintiffs did not lack facts. However, the plaintiffs’ reliance on CCP 2030.230 may have been improper, and Nationstar’s remedy was to file a motion to compel. Therefore, the trial court improperly shifted the burden of production to the plaintiffs on MSJ.

COA 3^rd Dist. Filed 7/1/20. 51 Cal.App.5th 726. Opinion by Justice Blease.

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COLLIE v. THE ICEE COMPANY

PLAINTIFF ALLEGED A PAGA CLAIM

Plaintiff/Respondent Collie filed a single cause of action under California’s Labor Code Private Attorneys General Act (“PAGA”).

THE TRIAL COURT DENIED THE PETITION TO COMPEL ARBITRATION

Defendant/Respondent Icee petitioned to compel arbitration of Collie’s individual claim. It argued that because the parties had agreed to bilateral arbitration only, he could not bring a PAGA claim in arbitration on behalf of other employees. Since he was bound as having arbitration as the only forum, he could not bring a claim on behalf of other employees anywhere.

The trial court denied the petition.

PAGA CLAIMS CANNOT BE COMPELLED TO ARBITRATION BY A PRE-DISPUTE AGREEMENT

In both Iskanian v. CLS Transportation Los Angeles LLC  and Betancourt v. Prudential Overall Supply, the courts have held that PAGA claims cannot be compelled to arbitration by pre-dispute agreement. That is because the claimant stands in the shoes of the State of California, which, having not agreed to arbitrate, cannot be made to do so. Because employees are not deputized to act for the State prior to filing their complaint, they have no ability to bind the State to an arbitration agreement.

ISKANIAN AND BETANCOURT SURVIVE THE EPIC DECISION

The US Supreme Court’s decision in Epic Systems Corp. v. Lewis does not affect this outcome. In Epic, the US Supreme Court stated that the NLRA’s protection of collective action does not overcome the FAA with respect to class action waivers in arbitration agreements. But Epic did not address the unique nature of PAGA claims, in which the State is a real party in the case.

CONCLUSION

Pre-dispute arbitration agreements cannot compel PAGA plaintiffs into arbitration. The US Supreme Court’s holding in Epic does not mandate otherwise.

CELA INVOLVEMENT

Congratulations to CELA Members Heather Davis, Amir Nayebdadash, and Priscilla Gamino of Protection Law Group for their win in this case.

COA, 4th Dist., Div. 2. Filed 7/20/20. Opinion by Justice Menetrez.

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GARNER v. INTERSTATE OIL CO.

PLAINTIFFS ALLEGED A CLASS ACTION

Plaintiff/Appellant alleged class claims of employment issues against Defendant/Respondent Inter-State Oil Company. He sought certification of the class.

THE TRIAL COURT GRANTED THE PETITION TO COMPEL ARBITRATION

Inter-State Oil filed a petition to compel arbitration of the individual claim. It asserted that the arbitration agreement included a class action waiver, and therefore only the individual claims could be brought at all. The trial court granted the petition.

THE PLAIN LANGUAGE OF THE STATUTE GOVERNED THE MATTER

The appellate court reversed. It looked at the statute’s plain language to determine the contract’s meaning. It noted that arbitration of class actions was specifically provided for by the contract’s language.

Respondent Inter-State Oil argued that the class action waiver nonetheless precluded such a finding. The court pointed out that the class action waiver prohibited only “civil class action lawsuit[s] . . . . “ Finding that a “lawsuit” referred to court actions, and not to arbitrations, the court held that, reading the contract as a whole, the class action could be brought in arbitration.

CONCLUSION

Arbitration agreements, like all other contracts, will be interpreted according to their plain meaning. Waiver of a right, including the right to participate in a class action, will not be read into a contract that states otherwise.

CELA INVOLVEMENT

Congratulations to CELA members Douglas Han, Shunt Tatavos-Gharajeh, and Alexandra Asterlin.

COA, 3^rd Dist. Filed 6/26/20, publication ordered 7/23/20. Opinion by Justice Mauro.

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KEC v. SUPERIOR COURT (R.J. REYNOLDS TOBACCO COMPANY)

DEFENDANT R.J. REYNOLDS USED A BROAD ARBITRATION AGREEMENT THAT INCLUDED PAGA CLAIMS

Plaintiff Nichole Kec brought individual, class, and PAGA claims against her employer R.J. Reynolds. R.J. Reynolds moved to compel arbitration for all claims except the PAGA claim, though the arbitration agreement impliedly included PAGA claims. The arbitration agreement stated that the parties waived their rights to class actions, collective actions, “or other representative action whether in court or in arbitration.” The agreement also stated that the waiver section could not be modified or severed from the agreement for any reason. The agreement specified that it was null and void if a court found the waiver provision unenforceable. The trial court granted the motion, reasoning that the agreement was enforceable since R.J. Reynolds had not sought to compel the PAGA claims to arbitration. Kec filed a writ, and the Court of Appeal reversed.

THE ARBITRATION AGREEMENT WAS VOID.

California law prohibits pre-dispute waivers of PAGA claims. The agreement’s broad language including all representative actions included PAGA claims. The waiver provision was therefore void. Where a contract has a single object, and that object is unlawful in whole or in part, the entire contract is void. The arbitration agreement plainly stated that the waiver provision could not be modified in any way. Yet R.J. Reynolds attempted to modify it by seeking arbitration of all claims except the PAGA claim. R.J. Reynolds could not selectively enforce its arbitration agreement.

COA 4^th Dist, Div. 3. Filed 6/19/20, publication ordered 7/9/20. 51 Cal.App.5th 972. Opinion by Justice Ikola.

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MARTINEZ v. BARONHR, INC.

Defendant BaronHR hired Plaintiff Joseph Martinez. Both Martinez and a representative of BaronHR signed an arbitration agreement, but neither initialed the jury waiver paragraph. The jury waiver paragraph was bolded and had a blank beside it labeled “INITIAL”. After Martinez filed a lawsuit, BaronHR moved to compel arbitration. The trial court denied the motion, finding ambiguity as to whether Martinez had agreed to waive his right to jury trial. BaronHR appealed, and the Court of Appeal reversed.

A SIGNATORY TO A CONTRACT IS DEEMED TO HAVE AGREED TO ALL TERMS OF THE CONTRACT

Since Martinez admitted that he signed the arbitration agreement, he therefore is deemed to have assented to all of the terms of the agreement. The signature lined clearly stated that the employee “agrees to be legally bound by all of the terms of this agreement” and reiterated that the employee had no right to pursue claims in court or before a jury. Therefore, the failure to provide initials was inconsequential.

COA 2^nd Dist, Div. 4. Filed 7/8/20. 51 Cal.App.5th 962. Opinion by Justice Currey.

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MATTEI v. CORPORATE MANAGEMENT SOLUTIONS, INC.

SEVERAL COMPANIES INVOLVED IN A COMMERCIAL SHOOT FAILED TO PAY LIGHTING TECHNICIANS ON TIME

Plaintiff Alyosha Mattei and others sued Defendant Corporate Management Solutions (CMS) for wage and hour violations related to the production of a television commercial for Ulta Beauty. The plaintiffs were lighting technicians and members of a union. The production of television commercials is governed by a series of collective bargaining agreements between the union and the Association of Independent Commercial Producers (AICP). CMS is a member of the AICP and signed the Commercial Production Agreement (CPA) that governed the Ulta Beauty commercial. The Ulta Beauty commercial was run by an advertising agency and production company. The production company was not a signatory to the CPA and paid CMS to borrow its signatory status, a common practice.  After the advertising agency did not pay the production company on time, the production company then could not pay the wages owed, and the employees received their wages several weeks late. Mattei and the plaintiffs then sued the advertising agency, the production company, and CMS. The trial court determined that CMS was not an employer and granted summary judgment in favor of CMS. The plaintiffs appealed, and the Court of Appeal reversed.

CMS FAILED TO MEET ITS BURDEN OF PRODUCTION REGARDING JOINT EMPLOYER STATUS AND WAS NOT ENTITLED TO SUMMARY JUDGMENT

On summary judgment, the moving party bears the burden of showing that the plaintiff cannot establish one or more elements of a cause of action. The employer must present evidence to support this burden. The question whether an employment relationship exists is generally for the trier of fact. However, if there is no dispute regarding the evidence or inferences therefrom, then the existence of an employment relationship is a question of law. The applicable IWC Wage Order has three definitions of “to employ”: (1) to exercise control over the wages, hours, or working conditions; or (2) to suffer or permit to work; or (3) to engage, thereby creating a common law employment relationship. CMS presented no evidence that signatories to the CPA who lend out their signatory status are relieved of responsibility to ensure compliance with the CPA. In addition, CMS shared control over payroll with the production company, allowing a trier of fact to conclude that CMS was a joint employer. CMS was in a position to prevent unlawful pay. Therefore, CMS may have been an employer and was not entitled to summary judgment.

COA 2^nd Dist, Div. 7. Filed 6/22/20, as modified 7/14/20. 52 Cal.App.5th 116. Opinion by Presiding Justice Perluss.

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TORRECILLAS v. FITNESS INTERNATIONAL, INC.

PLAINTIFF SIGNED TWO ARBITRATION AGREEMENTS

Plaintiff/Respondent Torrecillas worked for Defendant/Appellant Fitness International for almost 20 years. During that time, he was promoted from sales associate to Vice President of Personal Training.

In 2008, Fitness International required Torrecillas to sign an arbitration agreement. That agreement was superseded by a subsequent arbitration agreement in 2013, which Torrecillas was required to sign upon receiving a promotion.

THE TRIAL COURT DENIED THE PETITION TO COMPEL ARBITRATION ON THE GROUND OF UNCONSCIONABILITY

In the trial court, Fitness International petitioned to compel arbitration. The trial court denied the petition, finding that the agreement was both procedurally and substantively unconscionable.

THE APPELLATE COURT REVERSED. IT FOUND NEITHER PROCEDURAL NOR SUBSTANTIVE UNCONSCIONABILITY

In reversing the trial court, the appellate court held that there was “little or none” with respect to evidence of procedural unconscionability. In so finding, the court stated that “[w]hether the agreement as or was not a contract of adhesion is not the core question,” and that “the core issues are surprise and oppression.” That directly contradicts Baltazar v. Forever 21, Inc., 62 Cal.4^th 1237 (2016) which stated that “[o]rdinary contracts of adhesion . . . contain a degree of procedural unconscionability even without any notable surprises . . . . “ Id. at 1244. That instruction by our Supreme Court didn’t seem to sway the lower court here.

Instead, the court here found no surprise because the arbitration agreement had an underlined header and language that the court considered to be direct and clear. As for oppression, the court found none because of a declaration submitted by Fitness International’s representative that the agreement was “negotiated and executed” by the parties. The court found no evidence to contradict that, ignoring the evidence that it stated itself: the contract was a form contract and showed no evidence of having been altered from its original form in any way. If it was in fact reasonably negotiated – which the court itself admitted seemed unlikely —  the plaintiff received nothing from that negotiation.

The court therefore ignored Baltazar’s mandate, and continued on to find little or no substantive unconscionability either.

CONCLUSION

This poorly reasoned case ignores California Supreme Court precedent and the facts, even as the court itself characterizes them. It should remain an outlier.

COA, 2^nd Dist., Div. 8, Filed 7/21/20; Opinion by Justice Wiley.

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JUDD v. WEINSTEIN

ASHLEY JUDD CLAIMED SEXUAL HARASSMENT AND RETALIATION BY HARVEY WEINSTEIN

Plaintiff/Appellant Ashley Judd, a famous movie actress, alleged that Hollywood movie producer Harvey Weinstein sexually harassed her during a business meeting. Judd alleged that Weinstein required her to meet him in his room, asked her if he could give her a massage, and asked her to watch him shower. Judd alleged that she refused each such advance.

Judd alleged that Weinstein then took affirmative steps in retaliation. Specifically, Judd alleged that Weinstein told the makers of the Lord of the Rings trilogy not to cast Judd because Weinstein had had a “bad experience” with her, and that she was a “nightmare” to work with. In a later interview, one of the makers of Lord of the Rings stated that Weinstein’s assertion was the direct reason Judd was not cast in the blockbuster, multi-billion dollar movie franchise.

Judd sued under Ca. Civ. Code §51.9, which prohibits sexual harassment and retaliation outside of the employment context, but in relationships similar to those enumerated by the statute.

The trial court sustained a Rule 12(b)(6) motion, and Judd appealed.

THERE IS A POWER IMBALANCE IN THE RELATIONSHIP BETWEEN ACTOR AND PRODUCER

Weinstein argued first that the case could not fit under §51.9 because it was not similar to the other relationships enumerated. In fact, Weinstein claimed, the other relationships were so ad hoc that there seemed to be nothing to bind them together at all.

The appellate court disagreed. Section 51.9 described a number of relationships, each of which involve a power balance. They include, among others, teacher-student, landlord-tenant, and physician-patient. (The statute was later amended to include directors and producers, but that version of the statute did not apply to Judd’s claim). It took no stretch to imagine that a new (at the time) actress like Judd was on the wrong end of a power imbalance with a powerful producer like Weinstein. Judd’s previous appearance in films produced by Weinstein created the relationship necessary at the time of the incidents for the statute to apply. Moreover, the subsequent retaliation certainly fell within the statute’s purview.

It did not matter, despite Weinstein’s assertion, that the relationships were not always so power imbalanced, and that sometimes an actor could have greater power than the producer. The matter was a fact-specific inquiry, and could not be resolved by 12(b)(6) motion.

Weinstein pointed out that the statute excluded employment relationships. The court held that whether their relationship was one involving employer-employee was a factual question for a jury to decide.

CONCLUSION

The relationships enumerated in §51.9 are illustrative, not exclusive. The commonality is the imbalance of power in those relationships.

9^th Circuit, Filed 7/29/20. Opinion by Judge Murguia.

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