Recent Employment Law Decisions

California Courts of Appeal

This case addressed multiple issues: (a) Companies will be found to be a single employer, and therefore jointly liable, when they meet the “single employer” test. (b) Religious entities are not subject to FEHA, even with respect to retaliation claims. (c) Punitive damages are available under the Labor Code’s whistleblower statute

MATHEWS v. HAPPY VALLEY CONFERENCE CENTER, INC.

PLAINTIFF REPORTED THE EXECUTIVE DIRECTOR’S SEXUAL HARASSMENT OF HIS CO-WORKERS

Plaintiff Mathews was a cook and maintenance supervisor with Defendant Happy Valley Conference Center. Happy Valley rented its space out and provided services for seminars, retreats and camps. Happy Valley is a subsidiary of Defendant Church of Christ.

A co-worker confided in Plaintiff that Happy Valley’s Executive Director, Melinda Gunnerud, had sent him sexually suggestive text messages and acted sexually inappropriately in other ways as well. Plaintiff reported the matter to the Church’s general counsel.

DEFENDANTS FIRED PLAINTIFF MATHEWS WITHIN A MONTH

Defendants conducted an investigation, which uncovered another employee who had received sexually harassing text messages from Gunnerud. The investigators were nonetheless dismissive, characterizing the messages as merely inappropriate jokes, and instead questioning Plaintiff’s motivations in bringing the matter to their attention.

Gunnerud received a reprimand, but continued in her position and continued to supervise Plaintiff and the other employees. When Plaintiff complained about this, he was given a new supervisor. That supervisor, who had been made aware of Plaintiff’s complaints, fired Plaintiff within a month.

THERE WAS SUFFICIENT EVIDENCE TO FIND THAT DEFENDANTS CONSTITUTED A SINGLE EMPLOYER

The court determined that there was ample evidence to find the defendants to have been a single employer for liability purposes. It used the four part test found in Laird v. Capital Cities/ABC Inc., 68 Cal.App.4th 727 (1998): (a) interrelation of operations, (b) common management, (c) common control of labor relationships, and (d) common ownership or financial control.

Using the “substantial evidence” standard, the court found that there was more than enough to hold both entities liable as a

single employer. Testimony adduced at trial showed that Happy Valley managers reported to the Church hierarchy. The Church audited Happy Valley’s books. Most importantly, the Church was involved extensively in Happy Valley’s labor issues, including Plaintiff’s termination.

The trial court erred by failing to highlight “common control of labor relationships” as the most important factor, but the error was harmless, given the amount of evidence presented at trial.

RELIGIOUS ENTITIES ARE NOT LIABLE UNDER FEHA, EVEN FOR RETALIATION

The appellate court did find that the trial court erred in ruling that Defendants could be liable under FEHA, or that they had waived or were estopped from asserting otherwise. Even though the FEHA retaliation section holds liable any “person,” the court relied on the reasoning in Jones v. Lodge at Torrey Pines Partnership, 42 Cal.4th 1158 (2008) to find that the term did not intend to include religious entities. Nonetheless, Plaintiff maintained his entitlement to attorney’s fees because he had also sued under Title VII.

THE WHISTLEBLOWER STATUTE ALLOWS FOR PUNITIVE DAMAGES

Finding it to be a matter of first impression, the court also affirmed the punitive damages award under Ca. Lab. Code §1102.5. Although the statute provides for a penalty, it states that that penalty is available in addition to other remedies. Moreover, §1102.5 does not have “a complex and detailed remedial scheme” such that its remedies should be deemed exclusive.

CONCLUSION

This case has a number of conclusions and language favorable to plaintiffs. Importantly, although tacitly assumed before, it may be the first case to find explicitly that punitive damages are available under the Labor Code’s whistleblower statute.

CELA INVOLVEMENT

Congratulations to CELA members Lisa Peck and Devin Coyle for this excellent result.

Sixth Dist., Filed 12/16/19. Opinion by Justice Grover.

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Message from the Chair
By Elizabeth Riles, CELA Chair

Elizabeth Riles

Happy New Year to you all! I wanted to take this opportunity to once again say how honored I am to have been chosen to serve as the Chair of the Board of CELA for the next two years. CELA is an amazing organization. Every year we have our Annual Conference, the CELA Trial College, the Advanced Wage & Hour Seminar, two Diversity Leadership Summits, CELA Lobby Day, and a whole host of other programs. 2019 was no exception.

CELA, with the hard work of Mariko Yoshihara, our Legislative Counsel and Policy Director, took 8 sponsored and priority bills to Governor Newsom’s desk, and he signed 6 of them. These bills will make a huge impact in the lives of the workers that we all represent. These bills combat forced arbitration, codify the Dynamex decision, expand the statute of limitations for FEHA claims, provide penalties for late paychecks, eliminate no-rehire clauses, and provide real remedies to keep employers from delaying arbitration by not paying.

2020 is a year for clear vision. I envision CELA moving forward with its robust programming and continuing to expand its legislative influence. We are already moving toward that goal with an ambitious legislative agenda this year.

CELA is only able to be the great organization that it is because of the active participation of its members. All of the programs and legislative work happen because of amazing staff, but also because of the active participation of our membership. 2020 is a year to get involved and make a difference in many ways. I want to encourage every member to get involved in CELA this year. Join one of the many committees: Amicus Committee, Arbitration Task Force, Barristers Committee, CELA Voice, Diversity Outreach Committee, Education Committee, Immigrant Employee Rights Committee, Legislative Committee, Listserv Monitoring Committee, Mentor Committee, Practice Management /Technology Committee, Public Employee Committee, Racism and Sexism in the Judiciary Committee, Wage and Hour Committee, Women’s Committee, and Worker Outreach Committee. These committees are working to make the organization better for all of our membership, helping to shape and plan the great programming that we do for our members and the public, and working to improve the law and the courts for our clients. Participate in Lobby Day. Join your fellow

CELA members to advocate for bills that are going to make workplaces safer and healthier for your clients. Write an article for the Bulletin. Or, just share a victory or even a loss with us. The active participation of the membership is what makes CELA the thriving organization it is. I look forward to working for all of you and hearing from you this year!

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