ADVOCATE HEALTH CARE NETWORK v. STAPLETON

The Court consolidated three cases:  Advocate Health Care Network v. Stapleton, St. Peter’s Healthcare System v. Kaplan, and Dignity Health v. Rollins to determine whether these employers’ pension plans were “church plans” and thus were exempt from requirements of Employee Retirement Income Security Act (ERISA).

“The Employee Retirement Income Security Act of 1974 (ERISA) generally obligates private employers offering pension plans to adhere to an array of rules designed to ensure plan solvency and protect plan participants. “[C]hurch plan[s],” however, are exempt from those regulations. 29 U.S.C. § 1003(b)(2). From the beginning, ERISA has defined a “church plan” as “a plan established and maintained … for its employees … by a church.” § 1002(33)(A). Congress then amended the statute to expand that definition, adding the provision whose effect is at issue here: “A plan established and maintained for its employees … by a church … includes a plan maintained by an organization … the principal purpose … of which is the administration or funding of [such] plan … for the employees of a church …, if such organization is controlled by or associated with a church.” § 1002(33)(C)(i). (This opinion refers to the organizations described in that provision as “principal-purpose organizations.”)

Petitioners, who identify themselves as three church-affiliated nonprofits that run hospitals and other healthcare facilities (collectively, hospitals), offer their employees defined-benefit pension plans. Those plans were established by the hospitals themselves, and are managed by internal employee-benefits committees. Respondents, current and former hospital employees, filed class actions alleging that the hospitals’ pension plans do not fall within ERISA’s church-plan exemption because they were not established by a church. The District Courts, agreeing with the employees, held that a plan must be established by a church to qualify as a church plan. The Courts of Appeals affirmed.

Held: A plan maintained by a principal-purpose organization qualifies as a “church plan,” regardless of who established it.”

Lisa S. Blatt, Washington, DC, for Petitioners.
James A. Feldman, Washington, DC, for Respondents.
Lisa S. Blatt, Elisabeth S. Theodore, Sally L. Pei, Arnold & Porter Kaye Scholer LLP, Washington, DC, for Petitioners.
Amy L. Blaisdell, Daniel J. Schwartz, Heather M. Mehta, Greensfelder, Hemker & Gale, P.C., St. Louis, MO, for Petitioners in No. 16-74.
Barry S. Landsberg, Harvey L. Rochman, Joanna S. McCallum, Manatt, Phelps & Phillips, LLP, Los Angeles, CA, David L. Shapiro, Cambridge, MA, for Petitioners in No. 16-258.
Jeffrey J. Greenbaum, James M. Hirschhorn, Katherine M. Lieb, Sills Cummis & Gross P.C., Newark, NJ, for Petitioners in No. 16-86.
Lynn Lincoln Sarko, Matthew Gerend, Laura R. Gerber, Keller Rohrback L.L.P., Seattle, WA, Ron Kilgard, Laurie Ashton, Keller Rohrback L.L.P., Phoenix, AZ, James A. Feldman, Washington, DC, Karen L. Handorf, Michelle C. Yau, Julie G. Reiser, Mary J. Bortscheller, Cohen Milstein Sellers & Toll PLLC, Washington, DC, for Respondents.
USSC 6/5/17 opinion by Kagan, joined by Roberts, Kennedy, Thomas, Ginsberg, Breyer and Alito; Sotomayor concurring; no participation by Gorsuch; 137 S.Ct. 1652, 2017-1 USTC P 50,237, 17 Cal. Daily Op. Serv. 5196, 2017 Daily Journal D.A.R. 5290, 26 Fla. L. Weekly Fed. S 619.

Full Decision

PERRY v. MERIT SYSTEMS PROTECTION BOARD

“Anthony Perry received notice that he would be terminated from his employment at the U.S. Census Bureau for spotty attendance. Perry and the Bureau reached a settlement in which Perry agreed to a 30–day suspension and early retirement. The settlement also required Perry to dismiss discrimination claims he had filed separately with the Equal Employment Opportunity Commission (EEOC). After retiring, Perry appealed his suspension and retirement to the MSPB, alleging discrimination based on race, age, and disability, as well as retaliation by the Bureau for his prior discrimination complaints. The settlement, he maintained, did not stand in the way, because the Bureau had coerced him into signing it. But an MSPB administrative law judge (ALJ) determined that Perry had failed to prove that the settlement was coerced. Presuming Perry’s retirement to be voluntary, the ALJ dismissed his case. Because voluntary actions are not appealable to the MSPB, the ALJ observed, the Board lacked jurisdiction to entertain Perry’s claims. The MSPB affirmed, deeming Perry’s separation voluntary and therefore not subject to the Board’s jurisdiction. If dissatisfied with the MSPB’s ruling, the Board stated, Perry could seek judicial review in the Federal Circuit. Perry instead sought review in the D.C. Circuit, which, the parties later agreed, lacked jurisdiction. The D.C. Circuit held that the proper forum was the Federal Circuit and transferred the case there. Kloeckner did not control, the court concluded, because it addressed dismissals on procedural grounds, not jurisdictional grounds.”

The Supreme Court, Justice Ginsburg, held that:

[1] if the MSPB dismisses a mixed case on jurisdictional grounds, the district court, not the Federal Circuit, is the proper forum for judicial review, abrogating Conforto v. Merit Systems Protection Bd., 713 F.3d 1111 and Powell v. Department of Defense, 158 F.3d 597, and disapproving Ballentine v. Merit Systems Protection Bd., 738 F.2d 1244;

[2] employee brought “mixed case”; and

[3] the Federal Circuit is the proper review forum when the MSPB disposes of complaints arising solely under the Civil Service Reform Act (CSRA).

Reversed and remanded.

Christopher Landau, Washington, DC, for Petitioner.
Brian H. Fletcher for Respondent.
Christopher Landau, P.C., Devin S. Anderson, Kirkland & Ellis LLP, Washington, DC, for Petitioner.
Jeffrey B. Wall, Acting Solicitor General, Chad A. Readler, Acting Assistant Attorney General, Malcolm L. Stewart, Deputy Solicitor General, Eric J. Feigin, Assistant to the Solicitor General, Marleigh D. Dover, Stephanie R. Marcus, Attorneys, Department of Justice, Washington, DC, for Respondent.
Michael Foreman, Joseph V. Kaplan, Andrew J. Perlmutter, Erik D. Snyder, Rosa Koppel, and Alan R. Kabat, for Metropolitan Washington Employment Lawyers Association.
USSC, 6/23/17 opinion by Ginsberg, joined by Roberts, Kennedy, Breyer, Alito, Sotomayor, and Kagan; Gorsuch dissenting, joined by Thomas; ___ S.Ct. ___, 2017 WL 2694702, 17 Cal. Daily Op. Serv. 5993.

Full Decision

BRENNER v. UNIVERSAL HEALTH SERVICES OF RANCHO SPRINGS, INC.

“Plaintiffs Nancy Brenner, individually and in her representative capacity as representative of the estate of Dale Brenner, and Zach Brenner, individually, appeal judgments entered in favor of defendants Universal Health Services of Rancho Springs, Inc., doing business as Southwest Healthcare System—Inland Valley Medical Center (UHS) and Dr. Young H. Lee, M.D. (Dr. Lee or Lee).

Dale Brenner, Nancy’s husband and Zach’s father, was a patient at the Inland Valley Medical Center for approximately 23 days after he suffered a stroke a few hours after arriving at the emergency department of the hospital. He was eventually transferred to another medical facility, where he later died. Approximately a year after Dale Brenner’s death, the plaintiffs sued UHS, Lee, and additional defendants, asserting causes of action for wrongful death based on medical negligence; retaliation, in violation of Health and Safety Code section 1278.5; and elder abuse, in violation of Welfare and Institutions Code sections 15610, et seq. Lee and UHS moved for summary judgment, which the trial court granted. The trial court thereafter entered judgments in favor of UHS and Lee.

On appeal, the plaintiffs contend that the trial court erroneously granted summary judgment in favor of UHS and Lee. We affirm the court’s judgments.”

Section 1278.5 provides in relevant part:

(a) The Legislature finds and declares that it is the public policy of the State of California to encourage patients, nurses, members of the medical staff, and other health care workers to notify government entities of suspected unsafe patient care and conditions. …(emphasis added)

(b)(1) No health facility shall discriminate or retaliate, in any manner, against any patient, employee, member of the medical staff, or any other health care worker of the health facility because that person has done either of the following: (emphasis added)

(A) Presented a grievance, complaint, or report to the facility, to an entity or agency responsible for accrediting or evaluating the facility, or the medical staff of the facility, or to any other governmental entity.
(B) Has initiated, participated, or cooperated in an investigation or administrative proceeding related to, the quality of care, services, or conditions at the facility that is carried out by an entity or agency responsible for accrediting or evaluating the facility or its medical staff, or governmental entity.

(c) Any type of discriminatory treatment of a patient by whom, or upon whose behalf, a grievance or complaint has been submitted, directly or indirectly, to a governmental entity or received by a health facility administrator within 180 days of the filing of the grievance or complaint, shall raise a rebuttable presumption that the action was taken by the health facility in retaliation for the filing of the grievance or complaint. (emphasis added)

 The decision found that because the patient’s wife was not a “patient, employee, member of the medical staff, or other health care worker of the health care facility,” the complaints she made about her husband’s level of care were not protected “whistleblower” complaints under Health and Safety Code section 1278.5.

The decision also rejected the argument that the reference in Subdivision (c) to a complaint made “on behalf of” a patient meant that the wife’s complaints constituted protected whistleblowing activity.

 Bohm Law Group, Lawrance A. Bohm, Sacramento, Bradley J. Mancusco and Maria E. Minney for Plaintiffs and Appellants.
Dummit, Buchholz & Trapp, Scott D. Buchholz and Moira S. Brennan, San Diego, for Defendant and Respondent Universal Health Services of Rancho Springs, Inc.
Schmid & Voiles, Denise H. Greer, Sidney J. Martin, Los Angeles, and Michael C. Ting for Defendant and Respondent Young H. Lee., M.D.
Fourth District, Division 1, 6/7/17 decision by Aaron, Huffman and Haller concurring; ___ Cal.Rptr.3d ___, 2017 WL 2464959, 17 Cal. Daily Op. Serv. 5397, 2017 Daily Journal D.A.R. 5405.

Full Decision

CINEMA WEST, LLC v. BAKER

“This appeal concerns whether the construction of a movie theater built by Cinema West, LLC in Hesperia, California qualifies as a “public work” within the meaning of California’s prevailing wage law (Lab. Code, §§ 1720–18611) (the PWL), which provides that, with certain exceptions, the prevailing wage “shall be paid to all workers employed on public works.” (§ 1771.) In administrative proceedings initiated by a labor union, respondent Christine Baker, Director of the State Department of Industrial Relations (Director), concluded that it did. Cinema West filed a petition for writ of mandate challenging the Director’s decision, which the superior court denied. This appeal followed. Applying substantial evidence review to the superior court’s factual findings and de novo review to its application of the PWL to the facts, we find no error and therefore affirm.”

The decision turned on affirmation of the trial court findings that:  (1) the construction company chose not to submit evidence in the administrative proceeding establishing that its project was a “public work” requiring payment of the prevailing wage, and (2) the company failed to establish an exception to the extra-record evidence bar that would allow admission of the evidence it submitted only to the reviewing trial court.

Peters & Peters, Mark D. Peters for Plaintiff and Appellant.
California Department of Industrial Relations, Christopher G. Jagard, Gary J. O’Mara, Ken Lau for Defendants and Respondents.
Molteni Employment Law, M. Cristina Molteni as Amicus Curiae on behalf of Defendants and Respondents.
First District, Division 2, 6/30/17 decision by Stewart, Kline and Miller concurring; no citations available at this time.

Full Decision

DICARLO v. COUNTY OF MONTEREY

“Defendant County of Monterey entered into a memorandum of understanding (MOU) with the Monterey County Deputy Sheriffs Association (Sheriffs Association). The terms of the MOU included a longevity performance stipend that provided that a member of the Sheriffs Association who achieved 20 years of service with the County of Monterey and a satisfactory or outstanding performance evaluation could receive an additional stipend of up to eight percent. Plaintiffs are members of the Sheriffs Association who either received the longevity performance stipend prior to their retirement, are currently receiving the longevity performance stipend, or anticipate receiving it in the future.

Plaintiffs brought the instant action against the County of Monterey and its Board of Supervisors (hereafter collectively the County), the County of Monterey Sheriff’s Office (Sheriff’s Department) and individual defendants, and also against defendants California Public Employees Retirement System (CalPERS) and CalPERS’s Board of Administration. Plaintiffs sought peremptory writs of mandamus to compel the County to report the longevity performance stipend to CalPERS as an item of special compensation and to compel CalPERS to include the longevity performance stipend in calculating their retirement benefits. The trial court ruled as a matter of law that the longevity performance stipend was not reportable to CalPERS as an item of special compensation under California Code of Regulations, title 2, section 571, subdivision (a), and granted the County’s motion for summary adjudication of issues and CalPERS’s motion for judgment on the pleadings.

On appeal, plaintiffs contend that the trial court erred because California Code of Regulations, title 2, section 571, subdivision (a) is properly interpreted to include the longevity performance stipend as a reportable item of special compensation. We recognize the importance of this CalPERS retirement benefit issue to the plaintiffs. However, as we will further explain, under the rules governing the interpretation of statutes and regulations we determine that the longevity performance stipend does not qualify as an item of special compensation that must be reported to CalPERS and included in the calculation of plaintiffs’ retirement benefits. Therefore, we will affirm the judgments in favor of the County and CalPERS.”

 Attorneys for Plaintiffs and Appellants: John DiCarlo, James Bass, Michael Shapiro, and Richard Perez, David E. Mastagni, Isaac Sean Stevens, Mastagni Holstedt APC, Sacramento.
Attorneys for Defendants and Respondents: County of Monterey, County of Monterey Sheriff’s Office, Lew Bauman, and Michael Miller, Charles J. McKee, County Counsel, Michael R. Philippi, Deputy County Counsel County of Monterey.
Attorneys for Defendants and Respondents: California Public Employees’ System and CALPERS Board of Administration, Matthew G. Jacobs, General Counsel, Preet Kaur, Senior Staff Attorney CALPERS.
Sixth District, 5/24/17 decision by Bamattre-Manoukian, Elia and Mihara concurring, ordered published 6/5/17; 2017 WL 2417409, 17 Cal. Daily Op. Serv. 5340, 2017 Daily Journal D.A.R. 5319.

Full Decision

HUSMAN v. TOYOTA MOTOR CREDIT CORP.

“Joseph Husman, a 14–year employee of various Toyota divisions at its Torrance campus in southern California, ran the diversity and inclusion program for Toyota Financial Services U.S.A., the brand name for Toyota Motor Credit Corporation (TFS or Toyota). Following his termination in 2011, Husman sued Toyota for discrimination and retaliation in violation of the Fair Employment and Housing Act (FEHA) (Gov. Code, § 12900 et seq.), as well as for wrongful discharge, alleging he had been fired from his executive-level management position because of his sexual orientation and criticisms he made concerning Toyota’s commitment to diversity. The trial granted Toyota’s motion for summary judgment and entered judgment in its favor. Because Husman presented sufficient evidence a substantial motivating factor for his termination was invidious sex or gender stereotyping related to his sexual orientation—the perception he was “too gay”—we reverse the judgment. However, Husman failed to raise a triable issue of material fact to support his FEHA retaliation and related common law tort claim. Accordingly, on remand the trial court is to enter an order granting Toyota’s alternative motion for summary adjudication as to those two causes of action.”

Barrera & Associates and Patricio T.D. Barrera, Manhattan Beach, for Plaintiff and Appellant.
Paul Hastings, James A. Zapp, Felicia A. Davis, Los Angeles, and Paul W. Cane, Jr., San Francisco, for Defendant and Respondent.
Second District, Division 7, 6/21/17 decision by Perluss, Segal and Small concurring; Cal.Rptr.3d —-, 2017 WL 2665191, 17 Cal. Daily Op. Serv. 6061.

Full Decision

JACOBS v. REGENTS OF THE UNIV. OF CALIF.

“The question presented is whether disabled members under the University of California Retirement Plan (UCRP) who receive “Duty Disability Income” (DDI) are considered retired for purposes of entitlement to a retired identification card and concealed weapons endorsement pursuant to the Penal Code. We conclude the answer is no. We therefore affirm the trial court’s denial of the petition for writ of mandate by which appellants sought to compel The Regents of the University of California (Regents) to provide them with such identification cards and endorsements.”

Castillo Harper and Michael A. Morguess for Plaintiffs and Appellants.
Jones & Mayer, Martin J. Mayer, James R. Touchstone and Krista MacNevin Jee for Defendant and Respondent.
Second District, Division 2, 5/30/17 decision by Ashmann–Gerst, Chavez and Guzman concurring, ordered published 6/27/17; 2017 WL 2333995.

Full Decision

KAO v. JOY HOLIDAY

“Plaintiff Ming–Hsiang Kao was employed by defendant Joy Holiday, a travel tour company. He brought an action alleging, among other things, breach of contract and violation of federal and state statutes regulating wages and overtime pay. After a bench trial, the court ruled against Kao on his breach of contract and statutory claims but awarded damages for unpaid labor under the equitable doctrine of quantum meruit. Defendants appeal the quantum meruit finding and Kao cross-appeals the denial of his statutory claims. We conclude that Kao is entitled to compensation under the wage statutes, making an equitable remedy unnecessary. We shall reverse the judgment and remand for a calculation of statutory damages.”

“ … The trial court rejected Kao’s statutory wage claims based on its findings that Kao was not an employee from March 2009 to January 2010 and was an exempt salaried administrative employee from February 2010 to May 2011. Neither finding is supported by the record.”

“ … The trial court appears to have deemed Kao a trainee in the months before his work visa application was approved. … Only a person receiving training but no salary, and whose work serves only his or her own interest, is a non-employee trainee under the FLSA. (Walling v. Portland Terminal Co. (1947) 330 U.S. 148, 150, 67 S.Ct. 639, 91 L.Ed. 809.) … Chen, Joy Holiday’s general manager, conceded that he invited Kao to the United States with the promise of $2,500 monthly and Kao received that same amount both before and after receiving a work visa. … There is also insufficient evidence that Kao’s work at Joy Holiday served only his interest. The tasks Kao performed at Joy Holiday were not “similar to that which would be given in an educational environment” but were commercial tasks benefitting the company. (Glatt v. Fox Searchlight Pictures, Inc. (2d Cir. 2015) 811 F.3d 528, 537.)”

“ … The record also fails to support the trial court’s finding that Kao was an exempt employee from February 2010 to May 2011. … The exemption is clearly inapplicable to Kao’s employment from January to May 2011 following his demotion to “non-manager status.” … The exemption is also inapplicable to Kao’s employment as office manager from February to December 2010 because he did not receive the minimum salary required for exempt status. … The highest monetary amount Kao received as an office manager was $1,900 monthly, which is below both federal and state standards. The trial court erroneously disregarded the monetary amount in favor of an accountant’s calculation of the total value of Kao’s “compensation package,” including rent, use of a vehicle, a cell phone and meals. The accountant testified that the monthly value of this compensation package was not less than $2,858.67. … The trial court erred by including these nonmonetary benefits in its calculation of Kao’s salary. Under the FLSA, an exempt employee’s salary rate is determined “exclusive of board, lodging or other facilities.” (29 C.F.R. § 541.200(a)(1) (2017).)”

“ … Kao is entitled to wages and overtime pay for employment from March 2009 to May 2011. (29 U.S.C. § 207; Lab. Code, §§ 510, subd. (a), 1194, subd. (a).) This determination negates the basis for the court’s award of quantum meruit, and that award therefore must be vacated.”

“ … “An employee is deemed to suffer injury” when the employer fails to provide a wage statement or provides an incomplete wage statement from which “the employee cannot promptly and easily determine” the required information. (Lab. Code, § 226, subd. (e)(2); Lubin v. Wackenhut Corp. (2016) 5 Cal.App.5th 926, 958–959, 210 Cal.Rptr.3d 215.) Kao suffered injury from Joy Holiday’s failure to provide any wage statement from March 2009 through January 2010. … The record also establishes that Joy Holiday’s failure to comply with wage statement requirements was “knowing and intentional.” (Lab. Code, § 226, subd. (e).)”

“ … Kao alleges he is owed waiting time penalties for defendants’ willful failure to pay all wages due upon discharge. (Lab. Code, § 203). Kao did not receive his final paycheck upon his termination but five days later, when it was issued along with other employees’ paychecks “on the regular pay schedule.” The trial court found the delay for “this short time period” permissible. The trial court erred. … Contrary to the trial court’s ruling, an employer may not delay payment for several days until the next regular pay period. Unpaid wages are due immediately upon discharge. (Lab. Code, § 201, subd. (a).) This requirement is strictly applied and may not be “undercut” by company payroll practices or “any industry habit or custom to the contrary.” (Zaremba v. Miller (1980) 113 Cal.App.3d Supp. 1, 6, 169 Cal.Rptr. 688.)”

The decision concluded, “The judgment is reversed. The matter is remanded to the trial court for entry of judgment in favor of Kao on his statutory wage claims, consistent with the views expressed in this opinion. On remand, the court shall assess unpaid wages and overtime pay, damages for failing to provide itemized wage statements, waiting time penalties, prejudgment interest, costs of suit and reasonable attorney fees. (Lab. Code, §§ 203, subd. (a), 226, subd. (e), 1194, subd. (a).) Appellant Kao shall recover costs incurred on appeal upon timely application in the trial court. (Cal. Rules of Court, rule 8.278.)”

Lohr Ripamonti & Segarich LLP, Roberto Ripamonti, Alec Segarich, San Francisco, for plaintiff and appellant.
Law Office of Brian E. Soriano, Brian E. Soriano, San Francisco, for defendants and appellants.
First District, Division 3, 6/15/17 decision by Pollack, McGuiness and Jenkins concurring; ___ Cal.Rptr.3d ___, 2017 WL 2590653, 17 Cal. Daily Op. Serv. 5726.

Full Decision

MORGADO v. CITY AND COUNTY OF SAN FRANCISCO

“Government Code section 3304, subdivision (b), which is part of the Public Safety Officers Procedural Bill of Rights Act (PSOPBRA) (§ 3300 et seq.), provides that “[n]o punitive action … shall be undertaken by any public agency against any public safety officer … without providing the public safety officer with an opportunity for administrative appeal.”

In this appeal, the City and County of San Francisco (City) seeks review of the trial court’s order granting injunctive relief to Paulo Morgado (Morgado), a non-probationary City police officer whose employment was terminated following misconduct findings. The City argues the court erred in finding the City’s procedure for disciplining police officers violates section 3304, subdivision (b).

We disagree and will affirm.”

The decision reasoned that “although we agree with the City that an action portending future discipline may constitute a punitive action triggering an officer’s appeal rights, we do not agree with its conclusion that therefore an officer need not be given an opportunity to administratively appeal a subsequent decision to impose discipline (reached here by the Commission). Even if the Chief’s complaint constituted a “punitive action,” Morgado’s termination was itself a “punitive action” under the statute, from which he has the right to “an opportunity for administrative appeal. … Here, Morgado had no opportunity to attempt to convince the City to reverse its decision to terminate him, because no further administrative proceedings occurred after the Commission made that decision. … Where the Commission proceeding used in Morgado’s case fell short, in our view, is that it did not provide an opportunity for the officer to convince the City to “reverse” its decision to terminate him, because the proceedings ended as soon as that decision was made. To satisfy the “opportunity for administrative appeal” requirement, the City must incorporate this element into its disciplinary procedure. Since no such procedure is before us in this appeal, we cannot and do not address whether any specific procedure complies with the statute.”

Counsel: Dennis J. Herrera, City Attorney, Elizabeth Salveson, Chief Labor Attorney, Rafal Ofierski, Deputy City Attorney, for Defendant and Appellant.
Murphy, Pearson, Bradley & Feeny, James A. Lassart and Adrian G. Driscoll for Plaintiff and Respondent.
First District, Division 4, 6/27/17 decision by Streeter, Ruvelo and Rivera concurring; ___ Cal.Rptr.3d ___, 2017 WL 2791413.

Full Decision

SHAMES v. UTILITY CONSUMERS’ ACTION NETWORK

“Plaintiff Michael Shames appeals from a postjudgment order regarding attorney fees. Shames filed this lawsuit against Defendant Utility Consumers’ Action Network (UCAN) and two individual plaintiffs, alleging multiple causes of action, after UCAN terminated his employment. The case proceeded to trial, and Shames prevailed on three causes of action, including one in which he sought unpaid wages in the form of bonus payments that were due to him pursuant to an incentive program. After judgment was entered, Shames sought to recover the attorney fees that he incurred in litigating his claims. Shames relied on two statutes for his request for attorney fees, but only one of those statutes is at issue in this appeal. Specifically, Shames sought attorney fees pursuant to Labor Code section 218.5,1 which provides in full:

“(a) In any action brought for the nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions, the court shall award reasonable attorney’s fees and costs to the prevailing party if any party to the action requests attorney’s fees and costs upon the initiation of the action. However, if the prevailing party in the court action is not an employee, attorney’s fees and costs shall be awarded pursuant to this section only if the court finds that the employee brought the court action in bad faith. This section shall not apply to an action brought by the Labor Commissioner. This section shall not apply to a surety issuing a bond pursuant to Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code or to an action to enforce a mechanics lien brought under Chapter 4 (commencing with Section 8400) of Title 2 of Part 6 of Division 4 of the Civil Code.

“(b) This section does not apply to any cause of action for which attorney’s fees are recoverable under Section 1194.” (Italics added.)

The trial court denied Shames’s request for attorney fees under section 218.5, concluding that he had failed to request attorney fees “upon the initiation of the action” because he did not request attorney fees in his initial complaint. The court also concluded, in the alternative, that Shames’s request for attorney fees in his amended complaint was not sufficient to permit him to recover attorney fees as costs pursuant to section 218.5.

On appeal, Shames challenges both of the trial court’s conclusions regarding his failure to meet the requirements of section 218.5. We conclude that we need not decide whether the trial court correctly determined that a request for attorney fees under section 218.5 must be included in the initial pleading, as opposed to an amended pleading, because even if it would be sufficient under the statute to include a request for attorney fees under section 218.5 in an amended pleading, Shames’s amended pleading did not request attorney fees generally, nor did it request attorney fees under section 218.5 with respect to the cause of action in which Shames alleged that UCAN had failed to pay him his full wages. Rather, the amended pleading included a reference to section 218.5 only as to a cause of action that was not brought on account of the nonpayment of wages, and one on which UCAN, not Shames, prevailed. We therefore affirm the order of the trial court.”

 McDougal, Love, Eckis, Boehmer & Foley, McDougal, Love, Boehmer, Foley, Lyon & Canlas, Steven E. Boehmer and M. Anne Gregory for Plaintiff and Appellant.
James D. Crosby for Defendant and Respondent.
Fourth District, Division 1, 6/29/17 decision by Aaron, Haller and Dato concurring; ___ Cal.Rptr.3d ___, 2017 WL 2807920.

Full Decision

ARIAS v. RAIMONDO

Arias alleged that his employer, Angelo Dairy, the owners, the Angelos, and the employer’s attorney, Anthony Raimondo, had violated the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq.  In addition to the wage and hour claims against the employer and owners, Arias alleged that Raimondo “concocted and executed a plan to have Arias taken into custody by U.S. Immigration and Customs Enforcement (ICE) to derail his state court wage claims against employer.” The employer and owners settled early, and the lawsuit proceeded against Raimondo.

“ … Arias’s theory of his case is that Raimondo, acting as the Angelos’ agent, retaliated against him in violation of section 215(a)(3) for filing his original case against Raimondo’s clients in state court. Raimondo’s sole legal defense is that because he was never Arias’s actual employer, he cannot be held liable under the FLSA for retaliation against someone who was never his employee.”

“ … Section 215(a)(3), an anti-retaliation provision, makes it unlawful “for any person … to discharge or in any other manner discriminate against any employee because such employee has filed any complaint … under or related to this chapter.” The FLSA defines the term “person” to include a “legal representative.” Id. § 203(a). Section 216(b) in turn creates a private right of action against any “employer” who violates section 215(a)(3); and the FLSA defines “employer” to include “any person acting directly or indirectly in the interest of an employer in relation to an employee.” Id. §§ 203(d), 216(b).” The decision found that Raimondo, as the employer’s “legal representative”, was covered by the FLSA retaliation provision.

Relying on Burlington Northern & Santa Fe Railway Co. v. White, 548 U.S. 53, 126 S.Ct. 2405, 165 L.Ed.2d 345 (2006), the decision found that the actions and harms forbidden by the FLSA anti-retaliation provisions, like those of the TVII anti-retaliation provisions, are not confined to those that are related to employment or occur at the workplace.

In sum, “The FLSA is “remedial and humanitarian in purpose. We are not here dealing with mere chattels or articles of trade but with the rights of those who toil, of those who sacrifice a full measure of their freedom and talents to the use and profit of others…. Such a statute must not be interpreted or applied in a narrow, grudging manner.” Tenn. Coal, Iron & R.R. Co. v. Muscoda Local No. 123, 321 U.S. 590, 597, 64 S.Ct. 698, 88 L.Ed. 949 (1944).

Accordingly, we conclude that Arias may proceed with this retaliation action against Raimondo under FLSA sections 215(a)(3) and 216(b). Raimondo’s behavior as alleged in Arias’s complaint manifestly falls within the purview, the purpose, and the plain language of FLSA sections 203(a), 203(d), and 215(a)(3).

Our interpretation of these provisions is limited to retaliation claims. It does not make non-actual employers like Raimondo liable in the first instance for any of the substantive wage and hour economic provisions listed in the FLSA. As illustrated by the Court’s opinion in Burlington, the substantive provisions of statutes like Title VII and the FLSA, and their respective anti-retaliation provisions, stand on distinctive grounds and shall be treated differently in interpretation and application. Ultimately a retaliator like Raimondo may become secondarily liable pursuant to section 216(b) for economic reparations, but only as a measure of penalties for his transgressions.

REVERSED and REMANDED for further proceedings.”

 Christopher Ho (argued) and Stacy Villalobos, The Legal Aid Society—Employment Law Center, San Francisco, California; Esmeralda Zendejas and Blanca A. Bañuelos, California Rural Legal Assistance, Inc., Stockton, California; Michael L. Meuter, California Rural Legal Assistance, Inc., Salinas, California; for Plaintiff-Appellant. Scott P. Dixler (argued) and Peder K. Batalden, Horvitz & Levy LLP, Burbank, California, for Defendant-Appellee.
Ninth Circuit, 6/22/17 decision by Trott, Wardlaw and Gould concurring; ___ F.3d ___, 2017 WL 2676771, 17 Cal. Daily Op. Serv. 6014.

Full Decision

BAYER v. NEIMAN MARCUS GROUP, INC.

“The panel reversed the district court’s order granting summary judgment on mootness grounds to the defendant in a suit alleging interference with the plaintiff’s exercise of his rights under the Americans with Disabilities Act in violation of 42 U.S.C. § 12203(b).

The panel concluded that the district court had the power to award the plaintiff only equitable remedies under § 12203(b).

The plaintiff sought an injunction prohibiting the defendant, his former employer, from attempting to coerce, intimidate, or threaten employees into waiving their rights under the Americans with Disabilities Act by consenting to be bound to an arbitration agreement. In another case, the court had held that the arbitration agreement was not binding on the plaintiff. The panel held that the claim for injunctive relief was moot because the plaintiff had neither shown that he was reasonably likely to be subjected once again to the conduct alleged as the basis for his claim nor shown that he could reasonably be expected to benefit from the injunctive relief he sought.

The panel held that the plaintiff’s claims for equitable monetary relief and for a declaration that the arbitration agreement was unlawful, invalid, and unenforceable also were moot.

The panel reversed the district court’s ruling that nominal damages were not available to the plaintiff because they were only a legal remedy. The panel held that nominal damages may be awarded as an equitable remedy under § 12203. The panel therefore reversed the district court order finding the case moot and granting summary judgment to the defendant, and remanded for further proceedings.”

Cliff Palefsky (argued) and Keith Ehrman, McGuinn Hillsman & Palefsky, San Francisco, California; Michael Rubin, Altshuler Berzon LLP, San Francisco, California; for Plaintiff-Appellant.
Dylan B. Carp (argued), Conor Dale, and Mitchell Boomer, Jackson Lewis, San Francisco, California; Katrin U. Schatz, Jackson Lewis, Dallas, Texas; for Defendant-Appellee.
Ninth Circuit, 6/26/17 decision by Pratt, Fletcher and Rawlinson concurring; ___ F.3d ___, 2017 WL 2723943, 17 Cal. Daily Op. Serv. 6180.

Full Decision

GUIDO v. MOUNT LEMMON FIRE DISTRICT

“John Guido and Dennis Rankin were both hired in 2000 by Mount Lemmon Fire District, a political subdivision of the State of Arizona. Guido and Rankin served as full-time firefighter Captains. They were the two oldest full-time employees at the Fire District when they were terminated on June 15, 2009, Guido at forty-six years of age and Rankin at fifty-four.

Guido and Rankin subsequently filed charges of age discrimination against the Fire District with the Equal Employment Opportunity Commission (“EEOC”), which issued separate favorable rulings for each, finding reasonable cause to believe the Fire District violated the Age Discrimination in Employment Act, 29 U.S.C. §§ 621–34 (“ADEA”). They then filed this suit for age discrimination against the Fire District in April 2013.

The district court granted the Fire District’s motion for summary judgment, concluding that it was not an “employer” within the meaning of the ADEA.

Guido and Rankin timely appealed.”  The panel reversed and remanded.

“The ADEA applies only to an “employer.” Under 29 U.S.C. § 630(b):

The term “employer” means a person engaged in an industry affecting commerce who has twenty or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year. … The term also means (1) any agent of such a person, and (2) a State or political subdivision of a State and any agency or instrumentality of a State or a political subdivision of a State, and any interstate agency, but such term does not include the United States, or a corporation wholly owned by the Government of the United States.

Under § 630(a):

The term “person” means one or more individuals, partnerships, associations, labor organizations, corporations, business trusts, legal representatives, or any organized groups of persons.

The parties agree that the twenty-employee minimum applies to “a person engaged in an industry affecting commerce” and that the term “person” does not include a political subdivision of a State. However, they dispute whether the twenty-employee minimum also applies to a “political subdivision of a State.” § 630(b).”

“ … Guido and Rankin contend that § 630(b) is not ambiguous and applies to the Fire District. They assert that its plain meaning creates distinct categories of “employers” and that the Fire District fits within one of them. … They argue that the ordinary meaning of “also” supports the notion that there are three distinct categories. … The EEOC, as amicus curiae, expressing its views in support of Guido and Rankin, contends that the English language provided Congress many ways to apply clarifying language across multiple definitions of a term, had it wanted to. … We are persuaded that the meaning of § 630(b) is not ambiguous. The twenty-employee minimum does not apply to definitions in the second sentence and there is no reason to depart from the statute’s plain meaning.”

“ … Even if we agreed with the Fire District and concluded that the statute is ambiguous—which we do not—the outcome would not change. The best reading of the statute would be that the twenty-employee minimum does not apply to a political subdivision of a State. We reject the Fire District’s contention that considering the legislative history Kelly [v. Wauconda Park Dist., 801 F.2d 269, 270 (7th Cir. 1986)] reviewed should lead us to an alternative interpretation.

“ … The district court erred in concluding that the twenty-employee minimum applies to political subdivisions; it does not. Therefore, the order granting summary judgment is reversed and the case is remanded for further proceedings consistent with this opinion.”

Shannon Giles (argued) and Don Awerkamp, Awerkamp & Bonilla P.L.C., Tucson, Arizona, for Plaintiffs-Appellants.
Jeffrey C. Matura (argued) and Amanda J. Taylor, Graif Barrett & Matura P.C., Phoenix, Arizona, for Defendant-Appellee.
Ninth Circuit, 6/19/17 decision by O’Scannlain, Gould and Milan Smith, Jr. concurring; ___ F.3d ___, 2017 WL 2622775, 17 Cal. Daily Op. Serv. 5807.

Full Decision

HARDIE v. NATIONAL COLLEGIATE ATHLETIC ASSOC.

“The panel affirmed the district court’s summary judgment in favor of the National Collegiate Athletic Association (“NCAA”) in an action brought by Dominic Hardie, who is African-American, alleging that the NCAA’s policy of excluding anyone with a felony conviction from coaching at NCAA-certified youth athletic tournaments violated Title II of the Civil Rights Act of 1964.

Title II of the Civil Rights Act of 1964 prohibits racial discrimination in places of public accommodation. The district court granted summary judgment for the NCAA on the ground that disparate-impact claims were not cognizable under Title II.

The panel did not decide whether Title II encompassed disparate-impact claims.

The panel held that even if disparate-impact claims were recognizable under Title II, Hardie had not shown that an equally effective, less discriminatory alternative theory to the NCAA’s felon-exclusion policy existed, as was required under the three-step analysis for disparate-impact claims set forth in Wards Cove Packing Co. v. Atonio, 490 U.S. 642 (1989).”

James Sigel (argued) and Jack W. Londen, Morrison & Foerster LLP, San Francisco, California; Brian R. Matsui, Morrison & Foerster LLP, Washington, D.C.; Jon Greenbaum, Lawyers’ Committee for Civil Rights Under Law, Washington, D.C.; Jeffrey M. David, Call & Jensen, Newport Beach, California; for Plaintiff-Appellant.
Seth P. Waxman (argued), Ari Holtzblatt, David M. Lehn, and Daniel S. Volchok, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, D.C., for Defendant-Appellee.
Ninth Circuit, 6/27/17 decision by Tallman, joined by Friedland, Faber concurring in part and concurring in the judgment; ___ F.3d ___, 2017 WL 2766096, 17 Cal. Daily Op. Serv. 6238.

Full Decision

SATO v. ORANGE COUNTY DEPT. OF EDUCATION

The panel affirmed the district court’s dismissal of a lawsuit brought pursuant to 42 U.S.C. § 1983 and state law by a former employee of the Orange County Department of Education who alleged that his termination violated his Fourteenth Amendment substantive and procedural due process rights and constituted a breach of contract.

The district court found that the Orange County Department of Education, as an arm of the state, was immune from suit under the Eleventh Amendment. In affirming the district court, the panel rejected plaintiff’s contention that California Assembly Bill 97, which streamlined public education financing and decentralized education governance, abrogated the holding in Belanger v. Madera Unified School District, 963 F.2d 248 (9th Cir. 1992), that California school districts are entitled to sovereign immunity.

Applying the factors set forth in Mitchell v. Los Angeles Community College District, 861 F.2d 198 (9th Cir. 1988), the panel held that California school districts and County Offices of Education remain arms of the state and continue to enjoy Eleventh Amendment immunity. The panel held that AB 97 reformed the financing and governance of California public schools in important ways, but it did not so fundamentally alter the relationship between Offices of Education and the state as to abrogate this court’s decision in Belanger.

Douglas A. Ames (argued), Ames Law Office, Fountain Valley, California, for Plaintiff-Appellant.
Jeffrey P. Thompson (argued) and Gregory A. Wille, Declues Burkett & Thompson APC, Huntington Beach, California, for Defendant-Appellee.
Ninth Circuit, 6/28/17 decision by Tallman, N. Randy Smith and Murphy concurring; ___ F.3d ___, 2017 WL 2784962.

Full Decision

MICROSOFT CORP. v. BAKER

The opinion held that (1) consumers’ voluntary dismissal did not result in a final decision allowing for immediate appellate review of district court’s order striking class allegations, and (2) plaintiffs cannot transform a tentative interlocutory order denying class certification into a final judgment subject to immediate review by dismissing their claims with prejudice, abrogating Berger v. Home Depot USA, Inc., 741 F.3d 1061, Gary Plastic Packaging Corp. v. Merrill Lynch, 903 F.2d 176.

Jeffrey L. Fisher, Stanford, CA, for Petitioner.
Peter K. Stris, Los Angeles, CA, for Respondents.
Bradford L. Smith, David M. Howard, Timothy G. Fielden, Microsoft Corporation, Redmond, WA, Charles B. Casper, Montgomery, McCracken, Walker & Rhoads, LLP, Philadelphia, PA, Jeffrey L. Fisher, Stanford, CA, Stephen M. Rummage, Fred B. Burnside, Davis Wright Tremaine LLP, Seattle, WA, for Petitioner.
Brendan S. Maher, Daniel L. Geyser, Douglas D. Geyser, Stris & Maher LLP, Dallas, TX, Darren T. Kaplan, Stueve Siegel Hanson LLP, New York, NY, Peter K. Stris, Radha A. Pathak, Dana Berkowitz, Victor O’Connell, Thomas E. Logan, Stris & Maher LLP, Los Angeles, CA, Mark A. Griffin, Amy Williams–Derry, Benjamin Gould, Keller Rohrback LLP, Seattle, WA, Shaun P. Martin, University of San Diego, School of Law, San Diego, CA, Robert L. Esensten, Esensten Law, Los Angeles, CA, Jeffrey M. Ostrow, Jonathan M. Streisfeld, Kopelowitz Ostrow Ferguson, Weiselberg Gilbert P.A., Fort Lauderdale, FL, Paul L. Stritmatter, Bradley J. Moore, Stritmatter Kessler Whellan, Koehler Moore Kahler, Seattle, WA, for Respondents.
USSC, 6/12/17 opinion by Ginsberg, joined by Kennedy, Breyer, Sotomayor, and Kagan; Thomas concurring, joined by Roberts and Alito; Gorsuch did not participate; 137 S.Ct. 1702, 17 Cal. Daily Op. Serv. 5484.

Full Decision

PEOPLE v. SUPERIOR COURT

“Government Code section 1090 prohibits public officers and employees from making contracts in which they have a financial interest when they act in their official capacities. Knowing and willful self-dealing can result in criminal liability. In this case, the District Attorney of Riverside County seeks to prosecute Dr. Hossain Sahlolbei under section 1090 for allegedly influencing the public hospital where he worked to hire another doctor and then profiting from that doctor’s contract. The Court of Appeal held that because Sahlolbei was an independent contractor and not an employee of the hospital, section 1090 does not apply to Sahlolbei. We conclude that independent contractors are not categorically excluded from section 1090. Liability under the statute can extend to independent contractors who have duties to engage in or advise on public contracting. Because Sahlolbei’s duties brought him within the scope of the statute, we reverse.”

The underlying facts are, “Sahlolbei was a surgeon at Palo Verde Hospital (the Hospital) in Blythe, Riverside County. The Hospital is a public entity under California law. It is undisputed that Sahlolbei was an independent contractor and never an employee of the Hospital. In addition to providing medical services as the Hospital’s codirector of surgery, Sahlolbei served on the Hospital’s medical executive committee (the Committee). The Committee, comprised of members of the medical staff, is independent of the Hospital and advises the board of governors of the Hospital (the Board) on the Hospital’s operations, including physician hiring. Sahlolbei was at times the chief of staff or the vice-chief of staff of the Committee, and he is alleged to have had considerable influence over the Board’s decisions in those roles.

The prosecution alleges that Sahlolbei in 2009 recruited an anesthesiologist, Dr. Brad Barth, to work at the Hospital. Sahlolbei negotiated a contract with Barth under which Barth would receive $36,000 a month with a one-time relocation fee of $10,000. But Sahlolbei pressured the Board into hiring Barth for $48,000 a month with a one-time relocation fee of $40,000 as well as a directorship position of $3,000 a month. Sahlolbei allegedly threatened to have the medical staff stop admitting patients to the Hospital if the Board did not agree to his terms. Sahlolbei instructed Barth to have Barth’s paychecks deposited directly into Sahlolbei’s account, out of which Sahlolbei remitted to Barth the $36,000 a month on which they had agreed. The Board was not aware that Sahlolbei was profiting from Barth’s contract. When this was brought to the Board’s attention, the Hospital renegotiated Barth’s contract to pay Barth directly. …”

Paul E. Zellerbach and Michael A. Hestrin, District Attorneys, Elaina Gambera Bentley, Assistant District Attorney, Kelli M. Catlett and Emily R. Hanks, Deputy District Attorneys, for Petitioner.
No appearance for Respondent.
Brown White & Newhouse, Brown White & Osborn and Kenneth P. White, Los Angeles, for Real Party in Interest.
Cal., 6/26/2017 unanimous opinion by Lui; ___ P.3d ___, 2017 WL 2729540, 17 Cal. Daily Op. Serv. 6139.

Full Decision

PONCE v. AGRO-JAL FARMING ENTERPRISES

“Defendants request that the Court stay this action pending the California Supreme Court’s decision in Williams v. Superior Court, Case No. S227228, which Defendants anticipate will be published in early August 2017. Plaintiffs oppose the motion.

The Belaire notice procedure has now been completed and Plaintiffs have served requests for production of documents and noticed PMK depositions. However, because Plaintiffs are seeking discovery related to the personal information of 1400 current and former employees, Defendants seek this stay as they believe the discovery is overly broad and impermissible. Even so, Defendants have not sought any protective order despite their assertion that the pending discovery is unduly burdensome, costly, and time consuming.

In Williams v. Superior Court (2015) 236 Cal.App.4th 1151, an individual employee brought a PAGA action against a Marshalls department store in Costa Mesa. The plaintiff sought the names and contact information of all of Marshalls’ employees in California. The trial court compelled the production of the information as to only the employees at the Costa Mesa store. The appellate court denied plaintiff’s petition finding that “bare allegations unsupported by any reason to believe a defendant’s conduct extends statewide furnishes no good cause for statewide discovery.” (Id. at 326) Likewise, the appellate court held the employees’ privacy rights outweighed the plaintiff’s need at that time for the information. (Id.)

Here, Defendants argue the California Supreme Court’s review of Williams “will significantly and directly impact the present case” such that a stay is appropriate. Defendants believe the decision will affect whether a plaintiff in a representative action must prove the case has factual merit before being allowed to conduct broader discovery and whether the employees’ privacy rights will outweigh the discovery of their identity. Defendants conclude that the “legal standard” that a plaintiff must meet to compel discovery “awaits resolution by the California Supreme Court.”

In opposition, Plaintiffs point out that the facts of Williams are distinguishable from the case at hand. Williams involves a PAGA only claim with a single employee representative from one store. Also, the plaintiff was seeking statewide discovery before offering any proof of improper statewide practices. Here, this case is a class action with more than one representative plaintiff, and is not limited to PAGA claims. The privacy issues have been addressed through the Belair notice procedure and Plaintiffs’ depositions have been completed such that there is some evidentiary foundation related to Defendant’s alleged employment practices and policies.

Even though the Court has inherent power to stay proceedings, the cases cited by Defendants appear to be inapposite as they involve pending actions between the same parties and same subject matter. (See Farmland Irrigation Co. v. Dopplmaier (1957) 48 Cal.2d 208 and Simmons v. Los Angeles County Superior Court (1950) 96 Cal.App.2d 119) Also, there is no authority cited in which a trial court stayed discovery based on a higher court’s pending review of an unrelated action.

More importantly, Plaintiffs correctly emphasize that they are entitled to conduct precertification discovery. (Carabini v. Superior Court (1994) 26 Cal.App.4th 239, 244) This pre-certification discovery is most appropriate in this case because of Defendants’ continued assertion that there are significant distinctions between putative class members which weigh against class certification. Also, contrary to Defendants’ assertions, there is no identified authority that would require Plaintiffs to make a showing of “common evidence” or establish that their claims have merit in order to proceed with discovery. (W. Pico Furniture Co. of Los Angeles v. Superior Court (1961) 56 Cal.2d 407, 419, fn. 4) The motion to stay is denied as there is no showing of good cause to delay discovery based on the pending review of an unrelated case before the California Supreme Court that is distinguishable from the case at hand, and may have no impact on this action. As stated by Plaintiffs, even if Williams is upheld the discovery limits are not applicable here and if Williams is reversed the employees’ discovery rights with be broadened.”

James Cordes, Santa Barbara and Allen Hutkin, San Luis Obispo, for Plaintiffs.
Eulalio Garcia, Gordon and Rees, San Diego, for Defendant.
San Luis Obispo Superior Court, J. LaBarbera’s 6/26/17 Order Denying Stay in Cipriano Ponce, et al. v. Agro-Jal Farming Enterprises, Inc., et al., 15CV-0373

Full Decision