PARKER DRILLING MANAGEMENT SERVICES, LTD. v. NEWTON

EMPLOYEES WERE NOT PAID FOR STANDBY TIME, EVEN THOUGH THEY COULD NOT LEAVE THE WORKSITE

Plaintiff Brian Newton worked for Defendant Parker Drilling on a drilling platform off the coast of California. Parker Drilling paid Newton for his time on duty but did not pay him for his time on standby, during which he could not leave the drilling platform. Newton filed a class action in California state court alleging violations of California’s minimum wage and overtime laws. Parker removed the case to federal court. The parties agreed that Parker Drilling’s platforms were subject to the Outer Continental Shelf Lands Act (OCSLA), which provides that all law on the Outer Continental Shelf (OCS) is federal law and deems the adjacent state’s laws applicable only to the extent they apply to the situation and are not inconsistent with federal law. The district court concluded California law should not apply because the federal Fair Labor Standards Act provided a comprehensive wage and hour scheme with no significant gaps. The Ninth Circuit vacated and remanded, holding that state law was applicable under the OCSLA if it pertained to the subject matter at issue, a standard satisfied by California wage and hour laws. The Supreme Court granted certiorari.

STATE LAW DOES NOT APPLY ON THE OUTER CONTINENTAL SHELF UNLESS FEDERAL LAW DOES NOT ADDRESS THE LEGAL ISSUE IN DISPUTE

State law may not be adopted where federal law addresses the relevant issue. State law is only applicable on the OCS if there is a gap in federal law. Federal law is exclusive in its regulation of the OCS under the OCSLA, and state law is only adopted as a surrogate for federal law where federal law does not address the issue at hand.

United States Supreme Court. Decided 6/10/19. 139 S.Ct. 1881. Opinion by Justice Thomas.

Full Decision

DOE v. SUPERIOR COURT (SOUTHWESTERN COMMUNITY COLLEGE DISTRICT)

SOUTHWESTERN SUCCESSFULLY DISQUALIFIED PLAINTIFF’S COUNSEL FOR COMMUNICATING WITH A CURRENT EMPLOYEE WHO ALSO EXPERIENCED SEXUAL HARASSMENT

Plaintiff Jane Doe was a student and employee in the campus police department at Defendant Southwestern College. She filed a lawsuit alleging sexual harassment and sexual assault by several of her supervisors. She alleged that her immediate supervisor harassed two other female employees, one of whom was identified as Andrea. Doe’s attorney Mr. Corrales noticed Andrea’s deposition. Southwestern’s attorney stated that Andrea was entitled to representation and that he was in the process of obtaining conflict counsel for her. The next day, Corrales notified defense counsel that he now represented Andrea. Defense counsel argued that Corrales improperly contacted Andrea because she was Southwestern’s current employee and would be provided counsel by Southwestern. Defense counsel moved to disqualify Corrales. The trial court granted the motion.

AN EMPLOYER CANNOT FORCE A CURRENT EMPLOYEE TO ACCEPT COUNSEL IT PROVIDES

The pertinent ethical rule is Rule 4.2, which prohibits an attorney from contacting a person he knows to be represented by another attorney in that matter. In the case of a represented corporation or entity, Rule 4.2 prohibits communications with a current employee if any act or omission by that person may be binding on or imputed to the entity for purposes of liability. The first question was whether Corrales knew Andrea had representation when he contacted her. There was no evidence in the record to support this. Southwestern had no right to force Andrea to accept their offer of representation or any counsel they selected for her. Since Andrea did not respond to the offer of counsel, and neither accepted nor rejected it, she did not agree to be represented by Southwestern’s conflict counsel or anyone else.

RULE 4.2 DOES NOT PROHIBIT COMMUNICATION WITH EMPLOYEE-WITNESSES WHO MADE NO ACTIONS OR OMISSIONS THAT COULD CAUSE THE EMPLOYER TO INCUR LIABILITY

The second question was whether Andrea was a current employee covered by Rule 4.2(b)(2) as someone who could bind Southwestern in litigation. It is well-settled that, for purposes of Rule 4.2, every employee of a represented organization is not a represented person. Rule 4.2 affirmatively permits opposing counsel to contact current employees who are not officers, directors, or managing agents, as long as the current employees are not separately represented by counsel and their acts or omissions cannot constitute an admission establishing liability. There was no evidence that Andrea committed any act or omission that could bind Southwestern. As a victim of sexual harassment and a “me too” witness for Jane Doe, Andrea had knowledge of the allegations, but her actions or omissions did not create liability for Southwestern. “The purpose of the Rule is not to wall off every employee with firsthand knowledge of the relevant facts and prevent them from being asked questions.” As a matter of law, communication with a sexual harassment “me too” witness does not concern an act or omission by that witness that may be binding upon the organization for purposes of liability.

COA 4^th Dist., Div. 1. Filed 6/13/19. 36 Cal.App.5^th 199. Opinion by Justice Dato.

Full Decision

ESPARZA v. SAFEWAY, INC.

DEFENDANT SAFEWAY DID NOT PAY PREMIUM WAGES FOR MISSED MEAL PERIODS UNTIL JUNE 2007

Prior to June 17, 2007, Defendant Safeway did not pay premium wages for missed meal periods. Plaintiff Esparza and others brought claims under the unfair competition law (Bus. & Prof. Code §17200) and Labor Code in April 2007. On July 7, 2008, the plaintiffs served the LWDA with a PAGA notice. The LWDA sent a notice later that month declining to investigate. Seven months later, the plaintiffs filed a second amended complaint adding PAGA claims to the lawsuit. The trial court granted class certification of the UCL claim. Safeway moved for summary adjudication. The trial court granted the motion, finding that the plaintiffs had not shown class-wide meal period violations. The court also struck the PAGA claims, finding that the limitations period deadline was June 17, 2008. Since the PAGA notice to the LWDA was sent after June 17, 2008, the statute of limitations barred the PAGA claim. Plaintiffs appealed, and the Court of Appeal affirmed.

SUMMARY ADJUDICATION OF THE UCL CLAIM WAS PROPER WHERE PLAINTIFFS MADE NO ATTEMPT TO QUANTIFY DAMAGES

A practice of not paying premium wages for missed meal periods can violate the UCL. Plaintiffs argued that the UCL claim was based on Safeway’s class-wide practice of ignoring Labor Code section 226.7, not on unpaid premium wages, a practice that denied Safeway’s employees the value of working for an employer who did not ignore the Labor Code’s protections. The plaintiffs proposed to use the market value of the statutory protections to estimate damages and did not seek the unpaid premium wages. Since the plaintiffs did not provide a methodology for determining the money lost by class members and made no attempt to quantify the loss, summary adjudication was proper.

THE RELATION BACK DOCTRINE DID NOT APPLY BECAUSE PLAINTIFFS DID NOT EXHAUST WITH THE LWDA WITHIN ONE YEAR OF THE END OF THE CLASS PERIOD.

Before bringing a PAGA action, an aggrieved employee must give the LWDA written notice of the facts and theories supporting the allegations of Labor Code violations (Labor Code §2699.3). PAGA actions have a one-year statute of limitations. Continuing or recurring violations may result in a continuous accrual, wherein a cause of action accrues each time a wrongful act occurs, triggering a new limitations period. Under the relation back doctrine, an amended complaint may be deemed filed at the time of an earlier complaint if both complaints rest on the same set of facts, involve the same injury, and refer to the same instrumentality. The plaintiffs’ complaint was limited to actions occurring before June 17, 2007. No PAGA notice was served on the LWDA until July 2008, more than on year later. The relation back doctrine does not apply to the initial court complaint because the plaintiffs were required to exhaust with the LWDA within the limitations period and did not. Moreover, the initial complaint did not allege any PAGA claims.

COA 2^nd Dist., Div. 4. Filed 6/10/19, modified on denial of rehearing 6.28.19. 36 Cal.App.5th 42. Opinion by Justice Manella.

Full Decision

PEARL V. CITY OF LOS ANGELES

PLAINTIFF PEARL ALLEGED HARASSMENT ON THE BASIS OF PERCEIVED SEXUAL ORIENTATION AND RETALIATION

Plaintiff James Pearl worked as a supervisor for the City of Los Angeles in its Department of Public Works, Bureau of Sanitation. During that time, he was subjected to significant abuse and retaliation.

According to Pearl, and as substantiated by witnesses, one of the department’s managers created a digital image of Pearl and one of his subordinates embracing on a pair of jet skis. Employees who viewed the image testified that it was intended to depict Pearl and his subordinate as same-sex lovers. The image was spread around the office widely, as were rumors that the two were engaged in a homosexual affair, both in and out of the office.

Following a DFEH complaint, Pearl was transferred and subsequently fired. He was reinstated after an administrative hearing, but the rumors had become so pervasive that his own wife asked him if he had been fired because of his affair with his male subordinate.

His return to work saw him faced with similar, continued harassment, including sex toys and other materials suggesting he was gay being left on his workdesk.

The harassment became so bad that Pearl suffered elevated blood pressure, ultimately collapsing at work and being rushed to the hospital. It was determined, and never disputed at trial, that he experienced malignant hypertension, resulting in atrial fibrillation. These conditions could result in permanent organ damage, and potentially early onset dementia. Experts testified that it was caused by his hypertension resulting from the harassment and retaliation at work.

THE JURY ALLOWED OVER $17M IN DAMAGES

The jury returned a unanimous verdict in favor of the plaintiff on liability. The jury was nearly unanimous on damages, allowing $10 million in past noneconomic damages and $5 million in future economic damages, with over $2 million in economic damages.

THE JUDGE REDUCED THE AWARD BY $5 MILLION

In post trial motions, the trial judge conditionally granted a new trial on damages only. The judge found that the $10 million in past noneconomic damages was excessive, and was the result in part of plaintiff’s counsel asking the jury to “send a message” to the City. In a scathing rebuke, the judge also stated that the obvious perjury on the part of the City’s witnesses was so blatant and disturbing that this likely inflamed the jury as well. The court found that the $10 million in past noneconomic damages was allowed by the jury in an attempt to punish the City.

Lamenting that the City should gain any advantage from its own witness’ perjury, the trial judge nonetheless conditioned the new trial on the plaintiff’s rejection of a remittitur: the plaintiff could accept a reduction of $5 million in past economic damages, or the court would order a new trial, pursuant to CCP §662.5(a)(2). The plaintiff accepted the remittitur, the new trial motion was denied, and judgment was entered for over $12 million against the City.

THE TRIAL COURT DID NOT ERR IN GRANTING THE REMITTITUR

On appeal, the City argued that the remittitur was improper, and that a new trial should unconditionally have been granted. The City pointed out that the trial judge found the award to be punitive, and therefore could not ascertain the correct damages.

The appellate court disagreed. It pointed out the trial court’s role as the 13^th juror, an independent factfinder, upon remittitur. Therefore, the deference normally accorded a jury verdict was translated to an abuse of discretion standard when reviewing a granting of demurrer.

As an independent factfinder, the trial court had broad powers to review the record and determine a reasonable level of damages. This differs markedly from an appellate court’s power to review an award of damages, which is narrow. That is because the trial court hears all the evidence and observes all the witnesses’ live testimony, while the appellate court is limited to the cold record.

This distinguished Schelbauer v. Butler Manufacturing Co., 35 Cal.3d 442 (1984), in which the trial court was reversed when it apportioned 5% liability to the plaintiff, and ordered a remittitur of 5% of damages. The Schelbauer court held that the trial judge’s power on remittitur was limited to reducing excess damages, not reapportioning liability. Unlike here, the damages in Schelbauer were not reduced, but only reapportioned. Schelbauer was therefore inapposite.

CONCLUSION

As an independent factfinder, the trial court’s power in remittitur is broad and will not be disturbed unless there is an abuse of discretion.

CELA INVOLVEMENT

CELA members Todd Nevell and Daniel Sheldon of Sheldon & Nevell brought this case to its successful conclusion.

COA, 2^nd Dist., Div. 7, Filed 6/18/19. Opinion by Presiding Judge Perluss

Full Decision

ROSS V. COUNTY OF RIVERSIDE

PLAINTIFF ROSS COMPLAINED INTERNALLY THAT HIS EMPLOYER WAS VIOLATING THE LAW

Plaintiff Ross was a deputy district attorney with the Riverside District Attorney’s Office. Working in the Homicide Unit, he was assigned a case formerly handled by a different attorney. That attorney sent a memo to Ross, indicating that she thought the defendant was factually innocent. This was true despite the defendant’s confession, which the previous attorney asserted was coerced.

Ross came to agree with the previous attorney’s assessment, especially after gathering additional exculpatory evidence. Several times, he was told by his supervisors not to turn the exculpatory evidence over to opposing counsel. Ross repeatedly recommended that the case against the defendant be dismissed. Although he believed that the failure to turn over evidence and to dismiss the case violated the defendant’s constitutional rights, he never articulated that belief to his supervisors.

The case against the criminal defendant was ultimately dismissed.

PLAINTIFF ROSS SUFFERED FROM NEUROLOGICAL SYMPTOMS

At the same time that Plaintiff Ross was learning about the exculpatory evidence, he experienced symptoms of a neurological disorder. His doctors were having difficulty diagnosing it, and eventually suggested that it could have been an autoimmune condition.

Ross requested accommodations, and the County required documentation of them. The County placed additional restrictions on Ross’ work, which Ross deemed so onerous that they constituted a constructive termination.

SUMMARY JUDGMENT WAS WRONGLY GRANTED AGAINST THE WHISTLEBLOWER CLAIM

The trial court granted summary judgment against Ross, including his claim of whistleblower retaliation under Ca. Lab. Code §1102.5. The appellate court reversed, reciting the long-standing rule that an employee need not be articulate or even expressly state that the law was being violated in order to be protected by the statute. The employee need only report activity that the employee reasonably believed would violate a law or regulation. The employee need not have expressed which law or regulation would be violated.

SUMMARY JUDGMENT WAS ALSO WRONGLY GRANTED AGAINST THE DISABILITY CLAIMS

The trial court also dismissed the disability discrimination and related claims on the sole ground that Ross did not have a disability under the definition of the Fair Employment and Housing Act.

The appellate court reversed here, too. The definition of disability is broad under California law, including impairments that are disabling, potentially disabling, or perceived as disabling or potentially disabling. See Ca. Gov’t. Code §12926.1(b). Finding that repeated absences from work for medical appointments demonstrate a limitation on the major life activity of working, the appellate court found that there was a triable issue as to whether Ross was disabled.

CONCLUSION

The whistleblower statutes, as well as the FEHA, are remedial statutes. They should be broadly construed, in particular with respect to their definitions of “protected activity.”

CELA INVOLVEMENT

Congratulations to Janet Gusdorff of Gusdorff Law, Timothy Sottille, Michael Baltaxe, Jeremy Scherwin, and Payam Aframian of Sottille Baltaxe, for successfully litigating this case.

COA, 4^th Dist., Div. 1, Filed 6/20/19, Opinion by Presiding Judge McConnell

Full Decision

NEI CONTRACTING AND ENGINEERING, INC. v. HANSON AGGREGATES PACIFIC SOUTHWEST, INC.

Plaintiff NEI Contracting was a customer of concrete supplier Defendant Hanson Aggregates. Hanson received orders via its phone system. The phone system warned that calls may be monitored for quality assurance but did not state that the call was being recorded. NEI sued Hanson for violation of California’s Invasion of Privacy Act, for unauthorized recording of cell phone calls. Hanson changed its telephonic admonition to warn that calls may be recorded. The trial court certified a class of callers to Hanson’s phone system. Hanson moved for decertification, identifying nine customers who knew about and accepted Hanson’s recording of calls and arguing that NEI had not met the commonality and predominance requirements for class certification. The district court agreed and decertified the class. The case proceeded on an individual basis. On the morning of trial, NEI informed the court that it would pursue claims based on a single recorded call. The district court found that NEI lacked standing to seek damages on its individual claim. NEI appealed the decertification order but not the judgment in Hanson’s favor on the individual claim. A plaintiff who lacks standing to bring an individual case cannot be a class representative. Since NEI appealed only the class decertification order and did not appeal the ruling on standing, the individual plaintiffs did not have standing and could not be class representatives.

9^th Circuit. Filed 6/5/19. 926 F.3d 528. Opinion by Judge Gleason.

Full Decision

RODRIGUEZ V. NIKE RETAIL SERVICES

PLAINTIFF WAS PART OF A CERTIFIED CLASS

Plaintiff Rodriguez worked for Nike in its Gilroy, California retail store. As a non-exempt employee, Rodriguez was required to undergo uncompensated inspections as they left the store.

Although the case did not discuss the purpose of these end-of-shift inspections, they sometimes required a search through the employee’s personal belongings. The length of the inspections varied, and sometimes lines formed, requiring some employees to wait longer than others, all while not being compensated.

The district court certified a class of Nike employees, alleging violations of California’s Labor Code and Business & Professions Code §17200, who were required to undergo these uncompensated inspections.

THE DISTRICT COURT FOLLOWED THE FEDERAL DE MINIMIS DOCTRINE AND GRANTED SUMMARY JUDGMENT

Nike brought a summary judgment motion against the certified class, which the district court granted. Applying the federal de minimis doctrine, the court found that (a) it was administratively difficult to record the time spent during inspections, since the store had punch clocks in the back, not in the front where the inspections occurred, (b) the aggregate amount of time was small, and (c) the fact that the uncompensated time occurred regularly did not outweigh the other two factors.

THE NINTH CIRUCIT HAD CERTIFIED THE DE MINIMIS QUESTION TO THE CALIFORNIA SUPREME COURT

In the meantime, the Ninth Circuit had certified the question to the California Supreme Court, through another case named Troester v. Starbucks Corp., 680 F.Appx. 511 (9^th Cir. 2016), as to whether the federal de minimis doctrine applied to claims brought under California’s Labor Code.

The California Supreme Court found that it did not. In Troester v. Starbucks Corp., 5 Cal.5^th 829 (2018), the court ruled that the federal de minimis doctrine would result in less protection for California workers than California law required. It found that the “administratively difficult” factor should not be applied because the ability to record time worked is more readily available to the employer than the employee. Moreover, while he federal de minimis doctrine has 10 minutes as a threshold for “aggregate amount” of time spent, our Supreme Court rejected this in favor of a “minute,” or very small, standard.

NEITHER FEDERAL NOR CALIFORNIA LAW WARRANTED SUMMARY JUDGMENT IN THIS CASE

The California Supreme Court ruled on Troester only after initial briefing before the 9^th Circuit in this case. Thus, Appellant Rodriguez was allowed to strike his brief and submit a new one.

The Ninth Circuit agreed that, since the federal de minimis standard did not apply, the district court’s reasoning could not stand in this case. The Troester court explicitly did not decide, however, whether California de minimus doctrine applied to wage and hour claims.

Assuming that it did, the Ninth Circuit held that it would still not change the result. The California Supreme Court did not clearly establish a threshold amount of time below which it would be considered de minimus, but the Ninth Circuit took some of the court’s wording to assume that anything at a minute or more should not be discounted. Based on the evidence in this case, summary judgment was reversed.

CONCLUSION

California law is more protective of workers’ rights, especially wages, than federal law. Federal law will not apply if it decreases those protections.

9^th Circuit, Filed 6/28/19, Opinion by Judge Rakoff, Dist. Judge, sitting by designation.

Full Decision