United States Supreme Court
BOSTOCK v. CLAYTON COUNTY, GEORGIA
THREE PLAINTIFFS BROUGHT DISCRIMINATION CASES IN DIFFERENT STATES AFTER THEY WERE FIRED FOR BEING GAY OR TRANSGENDER
There were three similar cases before the Supreme Court. Plaintiff Gerald Bostock worked as a child welfare advocate for Defendant Clayton County, Georgia. After Bostock began participating in a gay softball league, he was fired for conduct unbecoming a county employee. Donald Zarda worked as a skydiving instructor in New York. He was fired days after mentioning that he was gay. Aimee Stephens worked for a funeral home in Michigan. At first, she presented as male. After six years, she told the funeral home that she planned to present as a woman, and she was fired. All three brought suit under Title VII of the Civil Rights Act of 1964, which outlawed discrimination in the workplace based on sex. The Supreme Court granted certiorari to resolve a disagreement between the courts of appeals.
DISCRIMINATION BASED ON GAY OR TRANSGENDER STATUS IS DISCRIMINATION BASED ON SEX
Title VII prohibits employers from taking certain actions “because of” sex. An employer violates Title VII when it intentionally fires an individual employee based in part on sex. “[I]t is impossible to discriminate against a person for being homosexual or transgender without discriminating against that individual based on sex.” If a male and female employee are each attracted to men, and the employer fires the male employee for being attracted to men, the employer has discriminated against the male for traits or actions it tolerates from female employees. Similarly, an employer who allows employees to present as female if they identified as female at birth, but not if they identified as male at birth, is discriminating based on sex. In both situations, an “employee’s sex plays an unmistakable and impermissible role in the discharge decision.” If an employer fires any woman discovered to be a Yankees fan, but no men who are Yankees fans, the firing is because of sex, even though another factor is at play. Title VII “doesn’t care” whether multiple factors are at play; if “an employer would not have discharged an employee but for that individual’s sex, the statute’s causation standard is met.” The Supreme Court held: “At bottom, these cases involve no more than the straightforward application of legal terms with plain and settled meanings. For an employer to discriminate against employees for being homosexual or transgender, the employer must intentionally discriminate against individual men and women in part because of sex. That has always been prohibited by Title VII’s plain terms—and that ‘should be the end of the analysis.’”
United States Supreme Court. Decided 6/15/20. 10 S.Ct. 1731. Opinion by Justice Gorsuch.
California Courts of Appeal
GUTIERREZ v. BRAND ENERGY SERVICES OF CALIFORNIA, INC.
PLAINTIFF WAS NOT PAID FOR MANDATORY PRE-WORK TRAVEL TIME
Plaintiff/Appellant Gutierrez worked for Defendant/Respondent Brand Energy, helping to erect construction scaffolds. Pursuant to its collective bargaining agreement, Brand did not pay its employees for time spent prior to a mandatory meeting at the beginning of their shifts.
For example, Appellant Gutierrez testified that he had to spend about 45 minutes at the beginning of each shift getting through the employer’s gates, waiting for the transportation bus which the employer required him to take, and donning mandatory protective equipment.
Although such time would normally be compensable, Brand Energy did not pay for it pursuant to its collective bargaining agreement (CBA).
THE TRIAL COURT GRANTED SUMMARY JUDGMENT BASED ON THE PROVISIONS OF THE WAGE ORDER
Appellant Gutierrez sued on behalf of a purported class. He alleged Labor Code violations, chief among which was the failure to pay minimum wage for this pre-work employer-mandated activity.
The trial court granted summary judgment on the employer’s behalf. It did so under the auspices of California Wage Order No. 16-2001, §5(D), which it interpreted as allowing CBAs to waive the Labor Code’s minimum wage provisions.
THE APPELLATE COURT REVERSED, HOLDING THAT THE CBA DID NOT AND COULD NOT WAIVE THE MINIMUM WAGE
The Court of Appeal started its analysis by pointing out that the purpose of the Labor Code, and the enacting Wage Orders, was to protect employees. For that reason, they are to be interpreted liberally and with their remedial intent at the forefront of consideration.
In performing its interpretation, the Court of Appeal pointed out that the Labor Code takes precedence over the Wage Orders, since the Wage Orders were enacted by the Industrial Welfare Commission only through the power of the Legislature to allow it.
California’s minimum wage is discussed in Labor Code §1194(a), which requires that all work be paid at a rate at least equal to the minimum wage, and that this is true “[n]otwithstanding any agreement to work for a lesser wage . . . . “
In accordance with this, section 4 of Wage Order 16 requires every employer to pay the minimum wage for work performed (subject to certain exceptions not relevant here).
Similarly, section 5(A) requires the regular rate of pay (or premium pay, if applicable) for employer-mandated travel time.
Instead, the trial court had focused on section 5(D), which stated that “this section shall apply to any employees covered by a valid collective bargaining agreement unless the collective bargaining agreement expressly provides otherwise.”
The appellate court found that this provision did not apply in this case. Its reference to “this section” referred to §5, which included payment for travel time. It did not include §4, which required minimum wage.
The court left for another day the question of whether a wage order could enable parties to enter into a CBA which waived the minimum wage, Labor Code §1194(a)’s provisions notwithstanding.
CONCLUSION
California’s wage protections are strong and not waived lightly. Without an express provision allowing it, even a CBA cannot waive an employee’s right to the minimum wage.
CELA INVOLVEMENT
Congratulations to CELA Members Eric Grover and Scot Bernstein for this excellent result on behalf of California workers!
COA, 1st Dist., Div. 3, Filed 6/16/20; Opinion by Justice Jackson
OLABI v. NEUTRON HOLDINGS, INC.
PLAINTIFF ALLEGED THAT DEFENDANT INTENTIONALLY MISCLASSIFIED HIM AND OTHER WORKERS AS INDEPENDENT CONTRACTORS
Defendant/Appellant Neutron Holdings, Inc. (which does business as “Lime”) provides electric scooters for private transportation. Lime entered into an agreement with Plaintiff/Respondent Olabi to find, recharge, and relocate its scooters. Lime classified and paid Olabi as a 1099 independent contractor.
Olabi filed a claim for relief under the California Private Attorneys General Act (“PAGA”) and for unfair business practices under Ca. B&P Code §17200. Lime filed a petition to compel arbitration.
THE TRIAL COURT DENIED THE PETITION TO COMPEL ARBITRATION
California law prohibits the arbitration of penalties sought under PAGA. That is because a plaintiff who sues under PAGA’s auspices acts as an agent of the State, and the State’s interests in a civil court cannot be waived by a private litigant.
Victim-specific claims under PAGA, however, such as lost wages, are subject to arbitration.
Therefore, prior to the hearing on the petition to compel arbitration, Olabi dismissed his B&P §17200 claim. At the hearing, Olabi disavowed any intention of seeking victim-specific relief, and requested leave to amend the complaint.
The trial court denied the petition to compel arbitration, and granted Olabi leave to amend. Lime appealed.
THE TRIAL COURT DID NOT IMPROPERLY DEFER ITS DECISION
Lime argued first that the trial court improperly deferred it decision to give Plaintiff/Respondent Olabi the chance to amend his complaint. The appellate court held that that was not what happened.
Instead, the trial court ruled on the matter, and gave Olabi the chance to amend as part of its ruling.
THE ARBITRATION AGREEMENT MEANT WHAT IT SAID: PAGA CLAIMS WERE EXCLUDED
The court then looked at the arbitration agreement’s plain language. Although victim-specific claims are ordinarily arbitrable, the agreement excluded PAGA claims without exception. There was no reason to split any claims because the only remaining claims were under the auspices of PAGA, which was explicitly excluded from arbitration by the agreement.
CONCLUSION
Arbitration agreements that exclude PAGA claims without any exception will not be “saved” so as to inferentially include victim-specific claims. The agreement will be enforced according to its plain meaning.
CELA INVOLVEMENT
Congratulations to CELA Members Gay Crosthwait Grunfeld, Michael Freedman and Jenny Yelin for their win in this case!
COA, 1st Dist., Div. 5. Filed 6/19/20. Opinion by Justice Burns.
TAYLOR v. COUNTY OF LOS ANGELES
ATTORNEY TRAYLOR SUBMITTED MULTIPLE CONTRADICTORY INVOICES IN SUPPORT OF HIS REQUEST FOR ATTORNEY FEES
Michael Traylor, an attorney, represented the family of a man shot by police in a wrongful death action against Defendant County of Los Angeles. Traylor represented the Taylor family only briefly before the family replaced him. Traylor never turned his files over to the new attorneys. The Taylors’ case later settled for $7 million, and Traylor filed a notice of lien. Traylor submitted two invoices showing contradictory hours billed and no itemization. After repeated requests to itemize his billing, Traylor submitted a new invoice with a different, larger total number of hours, creating another contradiction. Traylor sought $308,000 in attorney fees. The trial court awarded just over $17,000. Traylor appealed, and the Court of Appeal affirmed.
AN ATTORNEY TAKES A RISK WHEN REQUESTING FEES WITHOUT PROVIDING ACCURATE TIME RECORDS IN SUPPORT
The Court of Appeal did a detailed analysis of Traylor’s billing, noting many discrepancies and noting “the degree of imprecision is considerable.” The Court noted seven separate reasons that the trial court would have been entitled to reject Traylor’s hourly claims as not believable. Instead, the trial court estimated a reasonable attorney fee award for Traylor, apparently awarding him compensation for 36 of the billed hours. First, the Court of Appeal faulted Traylor for having no court reporter at the attorney fee hearing, leaving no record of the trial court’s basis for its specific calculations. Second, the unexplained failure to provide a case file to the subsequent attorneys without explanation created an inference that Traylor had no file and had done no work on the case. Third, Traylor never explain the discrepancies in his invoices. Given these three issues, the trial court’s award to Traylor was “a discretionary act of grace” as “wise lawyers keep accurate time records.” Though billing records are not required, and a lawyer may testify as to his or her time, but a lawyer requesting fees with no billing records is taking a chance.
COA 2nd Dist, Div 8. Filed 6/10/20. 50 Cal.App.5th 205. Opinion by Justice Wiley.
WILLIAMS v. U.S. BANCORP INVESTMENTS, INC.
PLAINTIFF WILLIAMS SOUGHT TO BRING OVERTIME AND BREAK CLASS CLAIMS AGAINST DEFENDANT BANCORP AFTER A PREVIOUS CLASS WAS DECERTIFIED
In 2005, several plaintiffs filed the Burakoff class action against Defendant Bancorp, alleging overtime and meal and rest break violations. Class certification was granted in 2008. Plaintiff Williams joined Bancorp in 2007 and filed his own class action in 2010, alleging similar overtime and break violations. He proposed a class period beginning the day after the end of the Burakoff class period. Bancorp demurred, arguing that Williams was part of the certified class in Burakoff involving the same claims. The trial court agreed and stayed Williams’ case until the conclusion of the Burakoff proceedings. In 2011, the trial court in Burakoff granted Bancorp’s motion to decertify subclass A, and the Burakoff matter settled. Williams received compensation from the Burakoff settlement as a member of certified subclass B, regarding unpaid business expenses. Bancorp then demanded that Williams drop his class claims and arbitrate his individual claims and brought a motion to compel arbitration. Bancorp argued that the Burakoff decertification order collaterally estopped Williams from relitigating class certification since he was also a member of the Burakoff class. The trial court granted the motion and dismissed Williams’ class claims but expressly did not rule upon the rights of other putative class members. Williams appealed.
THE DEATH KNELL DOCTRINE APPLIES WHERE A PROPOSED CLASS HAS ONLY ONE NAMED PLAINTIFF AND THAT PLAINTIFF’S CLASS CLAIMS ARE TERMINATED
Normally, an order compelling a plaintiff to arbitrate is not immediately appealable. However, the death knell doctrine is an exception. Where an order allows a plaintiff to pursue individual claims but prevents the plaintiff from maintaining the claims in a class action, the order is immediately appealable because it is the death knell for the class claims. An order directing a plaintiff to arbitrate his claims individually rather than pursuing class claims in court falls within the scope of the death knell doctrine. Williams’ case falls under the death knell doctrine because Williams was the only named plaintiff, so the order terminating Williams’ class claims terminated the class action. Further, though the trial court excluded class members from its ruling, the court could make no ruling that would bind absent class members since it did not certify a class. The order was therefore immediately appealable.
THERE IS NO ISSUE PRECLUSION WHERE A CLASS WAS DECERTIFIED. AN ORDER DECERTIFYING A CLASS HAS NO PRECLUSIVE EFFECT ON UNNAMED CLASS MEMBERS.
The trial court refused to certify the Burakoff class because of insufficient community of interest. Collateral estopped (issue preclusion) bars relitigation of issues argued and decided in a prior proceeding. There are five requirements: (1) the issues in both proceedings must be identical; (2) the issue must have actually been litigated in the first proceeding; (3) the issue must have been necessarily decided in the first proceeding; (4) the decision in the first proceeding must be final and on its merits; and (5) the party against whom preclusion is sought must be the same as, or in privity with, the party to the former proceeding. Even if the five threshold elements are met, the court may still look to public policy before applying collateral estoppel. In particular, courts will not apply collateral estoppel if the party had no full and fair opportunity to litigate the issue in the prior proceeding. The Court of Appeal found that the absent class members in Burakoff were not parties for the purpose of assessing preclusion. Since class certification was denied in Burakoff, Burakoff never represented Williams. In addition, California state law specifically holds that an unnamed member of a certified class is not a party with a right to appeal unless that class member has intervened. For almost all purposes, unnamed parties are not considered “parties” to the litigation, even after a class is certified. Since the Burakoff court held that subclass A had insufficient commonality for class certification, Burakoff could not have adequately represented Williams’ interests. Preclusion requires a properly certified class. The decisions in Burakoff can therefore have no preclusive effect on the absent members of subclass A. An order decertifying a class has no preclusive effect on absent class members.
COA 1st Dist, Div. 4. Filed 6/8/20. 50 Cal.App.5th 111. Opinion by Justice Tucher.
WITTENBERG v. BORNSTEIN
AN ATTORNEY REPRESENTED HERTZEL ENTERPRISES AND LATER REPRESENTED HERTZEL OWNER DANIEL BORNSTEIN IN ACTIONS ADVERSE TO HERTZEL
Amy Wittenberg and Daniel Bornstein owned Hertzel Enterprises. In 2012, Hertzel hired attorney Yosef Peretz to handle a property dispute, which was resolved in 2013. In 2016, Daniel moved to dissolve his law firm of Bornstein & Bornstein, which he had formed with his brother Jonathan. The dissolution of the law firm led to many related actions, including this one. Jonathan and Wittenberg filed the case at issue, asserting multiple causes of action on Hertzel’s behalf for breaches of real property management, brokerage agreements, and multiple torts. In a first amended complaint, they added attorney Yosef Peretz as a defendant. The FAC accused Peretz of engaging in a conspiracy with Daniel to purchase property for Daniel’s wife with Hertzel’s money and breaching his duty to Hertzel. Peretz was accused of breaching fiduciary duties, representing clients with conflicting interests without obtaining a conflict waiver, using Hertzel’s confidential business information to represent Daniel and his wife against Hertzel, and conspiring with Daniel to dismiss Hertzel’s cross-complaint without Hertzel’s permission. Peretz filed an anti-SLAPP motion, arguing that his conduct was protected activity because it arose from litigation. The trial court granted the motion in part and denied it in part, declining to strike the breach of fiduciary duty and conspiracy claims. Peretz appealed.
REPRESENTING CLIENTS WITH ADVERSE INTERESTS AND IMPROPERLY USING A FORMER CLIENTS CONFIDENTIAL INFORMATION ARE NOT PROTECTED ACTIVITY UNDER ANTI-SLAPP
The first step of the anti-SLAPP analysis is whether the claim arises from protected activity. A claim arises from protected activity when the protected activity underlies or forms the basis for the claim. Peretz represented Daniel even though Daniel had interests adverse to Hertzel, in connection with subject matter related to Peretz’s earlier representation of Hertzel. Peretz then used Hertzel’s confidential business information to assist Daniel in his claims against Hertzel. Filing a lawsuit is an exercise of the Constitutional right of petition, and statements made in connection with or in preparation for litigation are subject to anti-SLAPP. However, a client’s action against his or her attorney, on any theory of recovery, is not subject to the anti-SLAPP statute merely because some of the allegations refer to the attorney’s actions in court. When allegations referring to litigation activity are only incidental to the cause of action based essentially on unprotected activity, collateral references to protected activity should not subject the cause of action to anti-SLAPP. Peretz’s acts of representing clients with interests adverse to a former client and using a former client’s confidential information do not constitute protected activity under anti-SLAPP law. The claims arise from Peretz’s breach of fiduciary and professional obligations, not from litigation conduct. Conversely, Peretz’s actions in dismissing Hertzel’s cross-complaint against Daniel are protected litigation conduct.
COA 1st Dist, Div. 3. Filed 5/19/20, publication ordered 6/11/20. 50 Cal.App.5th 303. Opinion by Justice Fujisaki.
Ninth Circuit
BRADY v. AUTOZONE STORES, INC.
PLAINTIFF BRADY SETTLED HIS INDIVIDUAL CLAIMS AND THEN APPEALED DENIAL OF CLASS CERTIFICATION
Plaintiff Michael Brady sued Defendant Autozone Stores for meal break violations on behalf of himself and others. After the district court denied Brady’s motion for class certification, Brady settled his individual claims. The settlement agreement resolved all of Brady’s individual claims but stated that it was not intended to settle Brady’s class claims. However, the agreement did not provide that Brady would be entitled to any additional financial compensation for the class claims. The district court entered judgment pursuant to the parties’ stipulation, and Brady appealed the denial of class certification
TO AVOID MOOTNESS, A CLASS REPRESENTATIVE MUST RETAIN A FINANCIAL STAKE IN THE OUTCOME OF THE CLASS CLAIMS
An action is moot when the issues presented are no longer live or when the parties lack a legally cognizable interest in the outcome. When a class representative voluntarily settles his individual claims, the test for mootness is whether he retains a personal stake in the case. The personal stake must be concrete and financial and turns on the language of the settlement agreement. Since Brady’s settlement agreement did not indicate that he would receive additional compensation for the class claims and settled all attorney fee claims, he did not retain a financial stake in the case. Because he had no financial stake in the appeal, the action was moot. To avoid mootness, a class representative must retain, as evidenced by an agreement, a financial stake in the outcome of the class claims.
9th Circuit. Filed 6/3/20. 960 F.3d 1172. Opinion by Judge Nelson.