United States Supreme Court
CHINA AGRITECH, INC. v. RESH
THE PLAINTIFF FILED A SUBSEQUENT CLASS ACTION AFTER THE EXPIRATION OF THE STATUTE OF LIMITATIONS
Plaintiff Resh, a purchaser of Defendant China Agritech’s common stock, filed a class action alleging violations of the Securities Exchange Act. This matter was the third class action filed based on these claims. Resh was not a lead plaintiff in the first two class actions and filed this third class action after the statute of limitations had expired. The District Court dismissed the case as untimely. The Ninth Circuit reversed, holding that American Pipe tolling applied since Resh and the other named plaintiffs were not named plaintiffs in the previous class actions.
AMERICAN PIPE AND LATER CASES ALLOW POTENTIAL CLASS MEMBERS TO INTERVENE OR FILE INDIVIDUAL LAWSUITS AFTER THE DENIAL OF CLASS CERTIFICATION
American Pipe established that the filing of the original class action tolls the statute of limitations for all potential class members who make timely motions to intervene after denial of class certification. Subsequent cases extended this rule to situations in which potential class members filed individual claims after the denial of class certification.
BYE BYE, MISS AMERICAN PIPE
The Supreme Court reversed the Ninth Circuit, agreeing with the District Court. Instead of intervening or filing an individual action, Resh filed a new class action. American Pipe tolling does not apply to subsequent class actions filed after the expiration of the statute of limitations. Otherwise the statute of limitations could be extended almost indefinitely, contrary to Rule 23’s purpose in promoting efficiency and economy of litigation.
U.S. Supreme Court. Decided 6/11/18. 138 S.Ct. 1800. Opinion by Justice Ginsburg, concurrence by Justice Sotomayor.
JANUS v. AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES COUNCIL 31
Overturning 40 years of established Supreme Court precedent, the US Supreme Court decided that Abood v. Detroit Bd. Of Ed., 431 US 209 (1977) was “poorly reasoned,” and “inconsistent with other First Amendment cases . . . ,” and that this singular Court knew better than the 40 years of jurisprudence before it. This decision explicitly overrules Abood. Even Plessy v. Ferguson was never explicitly overruled out of respect for the notion of stare decisis, but this Court was so offended by the notion of organized workers that it thought it important to issue an explicit reversal here.
Janus declares that public workers, not members of a union, cannot be made to pay agency dues to the federally-established unions that bargain on their behalf. Janus is the law of the land until a more reasoned and less results-oriented Supreme Court takes the place of this one.
PLAINTIFF JANUS DID NOT WANT TO CONTRIBUTE TO THE UNION
Plaintiff Janus, a state employee in Illinois, sued because he did not support his union’s political advocacy, and did not want them representing him in workplace matters. Nonetheless, Illinois law required that he pay “agency dues” – an amount reduced substantially from member dues – to the exclusive bargaining unit for his classification. Plaintiff Janus sued on this basis. Recognizing that Abood controlled his case, he argued that Abood should be overturned.
ABOOD STRUCK THE CORRECT BALANCE FOR 40 YEARS, BUT NOT ACCORDING TO THE JANUS COURT
The Supreme Court admitted that it upheld a similar law from Michigan in the Abood case in 1977. It agreed that Abood controlled in this matter, and therefore examined that case.
The Abood court examined the advantages of exclusive representation of workers by a union, which was “a central element” in “industrial relations” since the New Deal. Such advantages included: clarity and ease of negotiation as opposed to having multiple unions with multiple demands, avoiding workplace discord resulting from inter-union rivalries, and “agreements and settlements not subject to attack from rival labor unions.” The arrangement had long worked in the private sector, and the Abood court saw no reason to believe that the public sector would be different.
To bring about these advantages, the union had to be funded. Including agency fees distributed costs fairly among all employees, and reduced the temptation of “free riders” – people who benefited from union activity, but left the costs to others.
Yet the Abood court, recognizing the First Amendment concerns of requiring monetary contributions by non-members, restricted unions from charging non-members for their political and ideological activities. Unions charging such agency fees determine them by reducing member fees through an accounted-for amount of time committed to partisan activity. Moreover, non-members were given the opportunity, through the union and through the courts themselves, to challenge the determination of the amounts ascribed to agency dues.
THE JANUS COURT DISMISSED THE FREE RIDER PROBLEM
Ignoring the Congressional determination that free riders would be problematic to exclusive representation, and furthermore ignoring basic economic theory, the Janus court found agency fees so obnoxious to the First Amendment that the compelling state interest in exclusive bargaining could not overcome it. The Janus court stated – incorrectly, as Justice Kagan’s dissent points out with a quote from Abood – that Abood never mentioned the need for a union to remain well-funded.
Since unions are required by law to represent members and non-members alike, basic economic theory tells us that, without agency dues, everyone has a financial disincentive to join the union. The only incentives to pay union dues would be altruism or loyalty, which require acting against financial self-interest.
Nonetheless, the Janus court ruled, First Amendment concerns trumped the government interest in maintaining a stable workforce with sufficient bargaining strength to address the unequal power resting in the government employer. The right to a stable job was outweighed by the right not to pay for it.
CONCLUSION
Janus is a poorly reasoned decision which caps, as the dissent points out, a six year campaign of the High Court to overturn Abood.
US Supreme Court, Filed 6/27/18, Opinion by Justice Alito
California Supreme Court
TROESTER v. STARBUCKS CORP.
THE CASE WAS TAKEN ON CERTIFICATION FROM THE 9TH CIRCUIT
The California Supreme Court accepted certification of a question from the 9th Circuit: Does California recognize the de minimis doctrine applied by the federal courts to the Fair Labor Standards Act? Under that doctrine, employers are not required to pay employees for small periods of time that may be, because they are irregular or simply too short, too difficult administratively to record.
PLAINTIFF PERFORMED UNCOMPENSATED DUTIES WHEN CLOSING THE STORE
Plaintiff Troester alleged that he and a class of plaintiffs who worked for Starbucks were owed for uncompensated work time. He alleged that he was required to clock out, and then perform a number of tasks necessary to close the store.
THE TRIAL COURT GRANTED SUMMARY JUDGMENT
Applying the federal de minimis doctrine, the trial court granted summary judgment to the defendant. It found that, over a 17 month period, Plaintiff Troester had been unpaid for about $102.67, that even though the tasks were performed regularly they were nonetheless difficult to capture administratively.
On appeal, the 9th Circuit certified the question to the California Supreme Court.
THE DE MINIMIS DOCTRINE DOES NOT APPLY IN CALIFORNIA WAGE & HOUR LAW
Our Supreme Court examined first whether the Wage Orders or statutory scheme contemplated including the de minimis doctrine.
It first traced the doctrine from its roots in US Supreme Court precedent to its codification in the federal regulations. Subsequent case law interpreted it to mean that three considerations must be included: (1) practical administrative difficulty of recording the time, (2) the aggregate amount of time worked, and (3) the work’s regularity.
The California Supreme Court noted there was nothing in the IWC Wage Orders or the Labor Code that even impliedly adopted the de minimis standard. Pointing out that the IWC Wage Orders “are to be accorded the same dignity as statutes,” and that they “take precedence over the common law to the extent they conflict,” the court found that California law frequently, as here, provides greater protection to its workers than federal law. The court disregarded contrary interpretations in the DLSE Enforcement Manual and opinions, which, while persuasive, were not controlling, as were the IWC Wage Orders.
Although declining to say that the de minimis doctrine would never apply, the court held that it did not apply in the facts of this case, and that California’s wage and hour law “is indeed concerned with ‘small things.’”
CONCLUSION
The California Supreme Court has again confirmed its commitment to protecting the wages of California workers. That those wages are “too small” or de minimis is not a defense to the requirement that workers must be paid for their work.
CELA’S INVOLVEMENT
Many CELA members worked hard to gain this positive outcome for California’s workers. Congratulations to Shaun Setareh, as well as David Spivak, and Louis Benowitz. Ari Stiller of Kingsley & Kingsley submitted an amicus brief on CELA’s behalf.
We wish also to thank our partners in workers’ rights for their amicus briefs: Anna Kirsch and Hina Shah for Women’s Employment Rights Clinic of Golden Gate University School of Law, Bet Tzedek, Centro Legal de la Raza, National Employment Law Project and Legal Aid at Work. This success shows again how we work together to impact people’s lives.
Cal. Supreme Court, 4th Dist., Filed 7/26/18, Opinion by Justice Liu
California Courts of Appeal
AHMC HEALTHCARE, INC., v. SUPERIOR COURT
DEFENDANTS ROUNDED EMPLOYEES’ TIME TO THE NEAREST QUARTER HOUR
Defendants ran medical centers at which plaintiffs were employed. Plaintiffs alleged various wage and hour violations as a class action, and as a complaint under California’s Private Attorneys General Act (“PAGA”).
The gravamen of plaintiffs’ complaints was that defendant rounded employees’ time records, up or down, to the nearest quarter hour, rather than using the exact times. Both defendants and plaintiffs moved for summary judgment at the trial court level, and both motions were denied. Defendants petitioned for a writ on the matter.
EMPLOYERS MAY ROUND TIME RECORDS TO THE NEAREST QUARTER HOUR
The court examined 29 CFR §785.48(b), which provides that an employer may round employee worktime “to the nearest 5 minutes, or to the nearest one-tenth or quarter of an hour,” provided that the rounding system adopted by the employer “is used in such a manner that it will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked.”
“[M]inor discrepancies,” said the court, will not constitute a violation of the law. This will be so when the discrepancies favor neither overpayment nor underpayment.
Here, the parties stipulated to the accuracy of an economic analysis showing only a slight underpayment of employees over time. This will be lawful if the policy is a facially neutral with respect to rounding up or down.
CONCLUSION
The law requires precision, but not exactness, when rounding time up or down. Facially neutral policies, even if they slightly underpay employees, will be found lawful.
CELA INVOLVEMENT
CELA members Kevin T. Barnes, Gregg Lander, and Emil Davtyan participated in this case.
Ca. Ct. App., 2nd Dist., Filed 6/25/18, Opinion by Judge Manella, Div. 4.
CALDERA v. DEPARTMENT OF CORRECTIONS AND REHABILITATION
PLAINTIFF CALDERA PREVAILED AT TRIAL AFTER ENDURING YEARS OF HARASSMENT BECAUSE OF HIS STUTTER.
Plaintiff Augustine Caldera was a correctional officer at a state prison. He speaks with a stutter. Other prison employees, and at least one supervisor, mocked and mimicked his stutter at least a dozen times over a two-year period. Caldera sued for disability harassment and related claims. He prevailed at trial, and the jury awarded $500,000 in noneconomic damages. The trial court found the award excessive and granted the Department’s motion for new trial on that issue alone but did not issue a statement of reasons until after the deadline. The Department appealed the verdict for Caldera, and Caldera appealed the grant of new trial on damages.
A DOZEN INCIDENTS OF HARASSMENT OVER TWO YEARS MAY BE BOTH SEVERE AND PERVASIVE.
Harassment must be severe or pervasive to be actionable. The jury found the harassment of Caldera was both severe and pervasive. Harassing conduct over a short period of time may be severe or pervasive. Much of the harassment of Caldera occurred in front of other employees, and Caldera found it demeaning, embarrassing, and hurtful. A psychological expert testified that the harassment caused Caldera to experience psychological disorders. Based on a totality of the circumstances, a jury could reasonable find that the harassing conduct was severe. The harassment occurred over a lengthy two-year period, on five to fifteen occasions, and was part of the culture of the prison. One harasser mocked Caldera in front of a group of supervisors with no fear of reprisal. A jury could reasonably find the harassing conduct was pervasive.
PROMPT CORRECTIVE ACTION IS A FAILURE TO PREVENT HARASSMENT IF THE PROMPT ACTION FAILS TO CORRECT.
Caldera made an EEOC complaint regarding a harassing supervisor, and the Department sent the supervisor a cease and desist letter on the same day. However, because that supervisor continued to harass Caldera, the jury reasonably determined that the Department failed to prevent harassment.
A GRANT OF NEW TRIAL IS DEFECTIVE IF THERE IS NO TIMELY STATEMENT OF DECISION.
Because the trial court did not file a timely statement of decision in support of its grant of new trial, the new trial order was defective. Code of Civil Procedure section 657 requires the court to specify the grounds upon which new trial is granted and the court’s reasons for granting new trial upon each ground. If the order granting new trial does not contain a specification of reasons, the court must file a specification of reasons within ten days of the new trial order. A late specification of reasons or no specification of reasons requires reversal of the new trial order.
CELA INVOLVEMENT
Congratulations to CELA members Todd Nevell and Norm Pine!
Ca. Ct. App., 4th Dist., Div. 3. Filed 7/9/18. 25 Cal.App.5th 31. Opinion by Justice Moore.
CAMACHO v. TARGET CORPORATION
CAMACHO SETTLED HIS WORKERS’ COMPENSATION CLAIMS AND THEN FILED A CIVIL SUIT FOR FEHA VIOLATIONS.
Plaintiff Adrian Camacho repeatedly complained of sexual orientation harassment while working for Defendant Target Corporation. Target ignored his complaints and retaliated against him. Camacho filed a workers’ compensation claim for physical and psychological injuries caused by the harassment. Before the workers’ compensation claim resolved, Camacho resigned from Target, claiming constructive discharge. A few months later, he settled his workers’ compensation claim and executed the mandatory preprinted Compromise and Release (“C&R”) form as well as an Addendum A with additional terms. Camacho then filed a civil suit against Target for FEHA sexual harassment discrimination, harassment, retaliation, and other claims. Target moved for summary judgment, and the trial court granted the motion, finding that the workers’ compensation settlement Addendum A constituted a general release of all civil claims. Notably, the parties agreed that the C&R alone was not a release Camacho’s civil claims.
THE C&R AND ADDENDUM DID NOT RELEASE CAMACHO’S CIVIL CLAIMS BECAUSE THE DOCUMENTS MADE NO MENTION OF CIVIL CLAIMS.
Neither the C&R nor the Addendum contain references to any claims outside of the workers’ compensation system. To constitute a release, there must be “clear and nontechnical language” to that effect. There was no clear and nontechnical language stating that Camacho released claims outside of workers’ compensation. Further, Addendum A did not include language from Civil Code section 1542 or language releasing claims against Target employees, and there was no mention of civil claims or tort injuries. Camacho’s workers’ compensation settlement therefore did not release his civil claims.
CELA INVOLVEMENT
Congratulations to CELA member Richard Apodaca.
Ca. Ct. App. 4th Dist., Div. 1. Filed 6/8/18. 24 Cal.App.5th 291. Opinion by Justice Aaron
JUAREZ v. WASH DEPOT HOLDINGS, INC.
LOST IN TRANSLATION.
Defendant Wash Depot Holdings provided employees with a handbook written in both English and Spanish. The handbook contained an arbitration provision and a denial of each employee’s right to bring a Private Attorneys General Act action. The English version stated that the PAGA denial was severable if found unenforceable; the Spanish version stated that the PAGA denial was not severable. Plaintiff Carlos Juarez filed a wage and hour lawsuit with PAGA claim, and Wash Depot moved to compel arbitration. The trial court denied the motion, and Wash Depot appealed.
PAGA WAIVERS ARE UNENFORCEABLE, AND CONTRACT AMBIGUITIES ARE CONSTRUED AGAINST THE DRAFTING EMPLOYER.
The handbook’s PAGA waiver is unenforceable as against public policy. An employee may not waive the right to bring a PAGA action. The trial court did not abuse its discretion in declining to sever the PAGA waiver and enforce the rest of the arbitration agreement. The difference between the English and Spanish handbooks is at best negligent and at worst deceptive. Therefore, the ambiguous language is construed against the interest of the party that drafted it. Where the employer drafted the agreement, any ambiguities must be construed against the employer and in favor of the employee.
CELA INVOLVEMENT
Congratulations to CELA member Jack Bazerkanian!
Ca .Ct. App., 2nd Dist., Div. 6. Filed 7/3/18. 24 Cal.App.5th 1197. Opinion by Justice Gilbert.
MEEKS v. AUTOZONE, INC.
PLAINTIFF MEEKS ALLEGED VARIOUS ACTS OF SEXUAL HARASSMENT
Plaintiff Meeks worked at Defendant Autozone as a store manager. She alleged that Defendant Juan Fajardo, a store manager in a different store, sexually harassed her, both verbally and physically. The verbal harassment allegedly included requests for dates, requests for sex, and sexually explicit texts which sometimes included images and video. The physical harassment allegedly included three attempts to forcibly kiss her, including one instance of mouth-to-mouth contact despite her efforts to push him away.
Meeks alleged that she reported the conduct to her supervisor, who threatened to fire her if she continued to pursue the matter.
DEFENDANT FAJARDO WAS FIRED FOR ACTIVITY SIMILAR TO THAT ALLEGED BY MEEKS
About a year after Meeks first complained of him, Fajardo was fired for sending a text with sexual content to another employee.
THE JURY RETURNED A DEFENSE VERDICT
Plaintiff Meeks asserted claims of sexual harassment, retaliation, failure to take reasonable steps to prevent these violations, and sexual battery. The trial court granted summary adjudication as to the retaliation claim, Plaintiff Meeks withdrew the battery claim during trial, and the jury returned a defense verdict on the remaining claims.
THE EVIDENTIARY RULINGS REQUIRED REVERSAL
The trial court made a number of evidentiary rulings that constituted reversible error. They were found to be so prejudicial that the court could not say that, had those rulings been correctly made, a different result would not have occurred.
The text messages should have been admitted
Plaintiff Meeks first challenged the trial court’s ruling with respect to the texts she allegedly received from Fajardo. These allegedly included graphic images and video of sexual acts, with the text message, “We should try this.” Meeks could not produce them because she claimed to have deleted them, and Fajardo did not produce them either. The trial court declined to find spoliation, but nonetheless excluded Meeks from testifying about the specific content of the texts, allowing her only to testify that they were sexual in nature and about the effect she claimed them to have had on her. The trial court did this based upon Ca. Evid. Code §1251, called the “secondary evidence rule.”
At trial, Fajardo admitted that he sent sexual text messages to Meeks, but claimed that she sent him some as well.
The appellate court found that, since there was no spoliation and no finding of fraudulent intent in the deletion of the texts, §1251 did not apply to exclude testimony of the content of the text messages. Nor did the trial court’s concern about avoiding “pure speculation about what’s in the text messages, because we don’t have them before us” constitute unfairness sufficient to exclude them. The whole point of §1251 was to allow oral testimony in such circumstances.
The Meeks court went to lengths to point out that a witness’ testimony is evidence, and does not equate to speculation.
It is not apparent, moreover, why Meeks’s specific recollections about the contents of Fajardo’s text messages should be equated with “pure speculation.” Her memories of electronic communications from Fajardo are no more speculation than her memories of things Fajardo said to her, or his physical actions towards her. The trial court apparently assumed that Meeks could not remember the exact wording of the text messages. This is a questionable assumption, but even if presumed true, it would be no bar to the admission of Meeks’s testimony, if she remembered their substance.
Nor would the admission of the testimony have been unfair to defendants. Fajardo could have been allowed to testify to his own recollection of the content of the texts.
Excluding evidence of Fajardo’s sexual harassment of other employees was error
The trial court granted a motion in limine excluding evidence of Fajardo’s sexual harassment of other employees.
The Meeks court reviewed precedents of so-called “me too” evidence: evidence of other employees experiencing conduct similar to that alleged by the plaintiff. Finding that such evidence is fact based and thus never subject to per se exclusion, the court found that it may be admissible to prove motive or intent, even when committed outside of the plaintiff’s presence or even after the plaintiff was no longer employed. It is, the court emphasized, “a fact-intensive, context-specific inquiry.”
Intent, the court said, is an element of discriminatory hiring and firing claims, as well as harassment claims. Although the latter argument is questionable, since intent is never an element of harassment – unintentional bigotry is still bigotry — it is at least admissible to demonstrate the meaning and intent of harassing statements for the purpose of showing mental state for the purposes of Ca. Evid. Code §1101. Moreover, Meeks should have had the opportunity with this evidence to rebut Fajardo’s testimony during trial that his texts were just a joke and horseplay.
CONCLUSION
Appellate courts have repeatedly affirmed, in Johnson, Pantoja, and now Meeks, the admissibility of a harasser’s conduct toward employees other than the plaintiff, even if the plaintiff is unaware of it, and even if it occurs before or after the plaintiff’s employment. Failure to admit this evidence will result in a reversal of judgment.
CELA INVOLVEMENT
Congratulations to Matthew Matern for his successful work on this case.
Ca. Ct. App., 4th Dist., Filed 6/21/18, Opinion by Judge Codrington, Div. 2
MORALES v. 22ND DISTRICT AGRICULTURAL ASSOCIATION
UNDER STATE LAW, OVERTIME COMPENSATION IS NOT REQUIRED FOR PUBLIC EMPLOYEES IN THE AMUSEMENT AND RECREATION INDUSTRY.
Plaintiff Morales and others filed a wage and hour class action against Defendant 22nd District Agricultural Association of the State of California (“the DAA”), alleging failure to pay overtime compensation. In a previous decision, the Court of Appeal found that public employees in the amusement and recreation industry are exempt from state overtime requirements (Labor Code sections 510, 1194, etc.). However, the plaintiffs were jointly employed by the DAA and a private entity, so the Court remanded the case for further proceedings on the joint employer theory. The plaintiffs amended their complaint to allege that the DAA loaned them out and leased them to outside promoters, who then jointly employed the plaintiffs and should have paid overtime. The trial court sustained the DAA’s demurrer, and plaintiffs appealed again.
A PUBLIC ENTITY EXEMPT FROM STATE OVERTIME REQUIREMENTS IS STILL EXEMPT AS A JOINT EMPLOYER.
Since the DAA was not required by state law to pay plaintiffs overtime as a sole employer, it is still not required to pay overtime as a joint employer. No authority states that employees must solely perform work that furthers the sovereign purposes of the state in order to be exempt from overtime requirements.
Ca. Ct. App. 4th Dist., Div. 1. Filed 7/10/18. 25 Cal.App.5th 85. Opinion by Aaron.
PADDA v. SUPERIOR COURT (GI EXCELLENCE, INC.)
PADDA’S KEY EXPERT SUFFERED A MEDICAL EMERGENCY TWO WEEKS BEFORE TRIAL.
Padda and other physicians employed by Defendant GI Excellence resigned due to issues with working conditions and compensation. GI Excellence sued them for breach of contract, and Padda and the other physicians cross-complained for breach of contract, fraud, violation of Labor Code section 970, and other claims. Because the case involved the intricacies of gastroenterology medical and business practices, each side designed gastroenterology experts. Trial was continued at least four times. Two weeks before the current trial date, Padda’s expert Dr. Corlin developed a sudden medical issue that required a six-week recovery. His doctor informed him and the court that he should not testify at trial or be deposed. His deposition was scheduled to occur the week before trial. Padda requested a trial continuance, which the trial court denied. Padda immediately filed a petition for writ of mandate and requested a stay of trial.
THE ABSENCE OF A PROPERLY CALLED AND SUBPOENAED MATERIAL WITNESS GENERALLY REQUIRES A TRIAL CONTINUANCE.
Postponement of trial due to absence of evidence requires an affidavit showing the materiality of the evidence and that due diligence was used to procure it. Where the absent evidence is a material witness, the court may require the moving party to state the evidence expected to be given. However, the affidavit requirement is not jurisdictional and may be excused. Here, Padda submitted ex parte papers with declarations describing the nature and importance of Dr. Corlin’s testimony. Generally, it is an abuse of discretion to deny a continuance requested due to the absence of a properly called and subpoenaed witness. Denial of the continuance was an abuse of discretion, as “the eve of trial impact on petitioners’ ability to present their case is an untenable burden and a distraction during a high-tempo proceeding.”
Ca. Ct. App. 4th Dist., Div. 2. Filed 6/11/18, publication ordered 7/6/18. Opinion by Justice Ramirez.
TRIPPLETT v. WORKERS’ COMPENSATION APPEALS BOARD, et al.
PLAINTIFF TRIPPLETT WAS INJURED IN THE COURSE AND SCOPE OF HIS EMPLOYMENT
Plaintiff Larry Tripplett was a defensive end for three different major league football teams, including the Indianapolis Colts, the Buffalo Bills, and briefly for the Seattle Seahawks. Over the course of his 100 game career, he suffered various injuries for which he sought workers compensation benefits.
PLAINTIFF TRIPPLETT CLAIMED CALIFORNIA HAD JURISDICTION TO AWARD HIM WORKERS COMPENSATION BENEFITS
With an agent in California, having negotiated and signed the agreement in California, and having played two games in California, Plaintiff Tripplett argued that the broad statutory construction of “has been hired” in Ca. Lab. Code §3600.5 meant that California should have jurisdiction over his workers compensation claim.
THE COURT FOUND THAT THE LOCATION WHERE THE PARTIES SIGNED THE AGREEMENT WAS DISPOSITIVE
The court disagreed. It looked to the contractual language which stated that the agreement was not effective until signed. It relied on cases interpreting contractual principles, holding that an agreement is effective where it is signed. The logic doesn’t seem to hold in light of the statute not addressing contractual issues, but instead using the language of “has been hired.” It seems the court would have been more correct to use statutory construction principles rather than common law principles, but it was not swayed by this argument.
CONCLUSION
The Tripplett court found the location of signatures to be dispositive, using contractual principles instead of the more convincing statutory construction principles. This decision is probably an outlier among various decisions considering jurisdiction issues.
Ca.Ct. App., 4th Dist., Filed 6/28/18, Opinion by Judge Aronson, Div. 3
Ninth Circuit
ASARCO, LLC, v. UNITED STEEL, PAPER AND FORESTRY, RUBBER, MANUFACTURING
BOTH PARTIES MISUNDERSTOOD THE IMPACT OF AN AMENDMENT TO THE LABOR AGREEMENT
ASARCO, a copper mining, smelting and refining company, had a Basic Labor Agreement (“BLA”) with its employee union. That agreement included a bonus based on the price of copper, and was available to those employees who participated in the company’s pension plan. This bonus was significant, according to the court, sometimes as much as $8000 in a year.
In 2011, the BLA was modified such that any employees hired on or after July 1, 2011 were ineligible for the pension plan. The union stated that it was unaware, at the time it agreed to the modification, that this meant that those employees would also be ineligible for the bonus. After the union filed a grievance, the matter was arbitrated.
The union asserted its mistaken understanding of the modification, and alleged that both parties intended all union members to participate in the bonus. ASARCO did not dispute this issue in arbitration.
ASARCO RELIED ON A “NO-ADD” PROVISION
Instead, ASARCO relied solely on a “no-add” provision in the BLA, which stated: “The arbitrator shall not have jurisdiction or authority to add to, detract from or alter in any way the provisions of this Agreement.” This, ASARCO argued, meant that the arbitrator had no jurisdiction to reform the BLA.
THE ARBITRATOR REFORMED THE CONTRACT
The arbitrator disagreed, found that the parties were mutually mistaken with respect to the modification, and ordered that all new hires would be eligible for the bonus.
THE DISTRICT COURT CORRECTLY AFFIRMED THE REFORMATION OF THE CONTRACT
The District Court affirmed the arbitrator. In review, the Ninth Circuit found first that ASARCO had waived its right to challenge the arbitrator’s jurisdiction by failing to waive it before the arbitrator, arguing the merits, and submitting the matter for the arbitrator’s jurisdiction.
Turning to the merits, the Ninth Circuit discussed precedents declaring the three, limited grounds on which an arbitration award based on a labor agreement can be overturned: “(1) when the arbitrator’s award does not draw its essence from the collective bargaining agreement and the arbitrator is dispensing his own brand of industrial justice; (2) when the arbitrator exceeds the boundaries of the issues submitted to him; and (3) when the award is contrary to public policy.”
Here, none of these considerations were apparent. Review of the first two grounds ends “if the arbitrator made any interpretation or application of the agreement at all.” In this case, the arbitrator understood that he could not find for the union based on the language of the BLA, but found further that arbitrators can reform a contract upon a finding of mutual mistake. Given six days of testimony, and no dispute about the mistake involved, the court found that the arbitrator sufficiently interpreted the agreement such that the award could not be overturned.
Nor was the award against public policy; it did not distort the BLA, but rather reformed it to conform to the initial understanding of the parties.
CONCLUSION
This case reiterates the deference with which courts treat an arbitrator’s ruling, especially in the context of labor agreements.
9th Cir., Filed 6/19/18. Opinion by Judge Gettleman, District Judge, sitting by designation
CAMPBELL v. STATE OF HAWAII DEPARTMENT OF EDUCATION, et al.
PLAINTIFF AND HER STUDENTS COMPLAINED ABOUT EACH OTHER.
Plaintiff Patricia Campbell worked as a teacher at a high school run by Defendant Hawaii Department of Education (“DOE”). During her employment, students harassed her based on her race and sex, using offensive and degrading language. Campbell complained, and the DOE investigated and disciplined the students. During this time, the DOE also investigated student complaints against Campbell. Students alleged that Campbell was discriminatory and physically and verbally abusive. The investigation concluded the Campbell had grabbed and abused students, discriminated against students, and failed to properly supervise students. Despite these findings, the DOE did not discipline Campbell. Campbell repeatedly requested a transfer, but all of her requests were denied. Campbell then took two years of unpaid stress leave. When she sought to return, the DOE stated that there were not enough students to fill all of her music classes, so she must also teach remedial math. Campbell failed to report to work. When the DOE told her she must return to work or be fired, she resigned.
PLAINTIFF SUFFERED NO ADVERSE ACTIONS.
Campbell sued for various Title VII and Title IX violations. The District Court granted judgment on the pleadings as to some of her claims, and later granted summary judgment as to the remaining claims. The Ninth Circuit found that Campbell was not subject to any adverse actions for purposes of her disparate treatment claim. The loss of her 2006 performance evaluation was not an adverse action because it did not affect the terms or conditions of her employment. The investigation of Campbell was also not an adverse action because she was allowed to work as normal during its pendency, and she was not disciplined even though the investigator found she had committed misconduct. The fact of an investigation, with no resulting change to the conditions of employment, is not an adverse action. Denial of transfer was not an adverse action because Campbell failed to use proper procedures to request the transfer and would have received special treatment had transfer been granted. Teaching remedial math was not an adverse action because the record was clear that there were not enough music classes to fill Campbell’s schedule, so the DOE needed to assign her a second subject. Such an assignment was not unusual and did not alter the terms or conditions of Campbell’s employment. The DOE’s response to Campbell’s complaints about students was not an adverse action because the DOE took prompt action to end the harassment. These actions could be adverse if other employees were treated differently, but there was no such evidence in the record.
A BROAD RANGE OF CONDUCT IS UNLAWFUL UNDER TITLE VII RETALIATION, EVEN WITHOUT AN ADVERSE ACTION.
Title VII retaliation encompasses a much broader range of conduct than Title VII discrimination. Retaliatory conduct under Title VII need only be something that might dissuade a reasonable employee from making or supporting a discrimination claim. It need not affect the terms, conditions, or privileges of employment. However, even under the broader retaliation standard, the adverse actions here are insufficient.
THE DOE WAS RESPONSIBLE FOR STUDENTS’ HARASSING CONDUCT ONLY IF IT FAILED TO ACT REASONABLY TO STOP THE CONDUCT.
The DOE was not liable for the students’ harassing conduct because it responded reasonably to stop the conduct. A school is responsible for students’ harassing conduct only if it fails to reasonably respond or ratifies or acquiesces to the conduct.
GOLDEN v. CALIFORNIA EMERGENCY PHYSICIANS MEDICAL GROUP
PLAINTIFF GOLDEN REFUSED TO SIGN A SETTLEMENT AGREEMENT THAT RESTRICTED WHERE HE COULD WORK
Plaintiff Golden, a medical doctor, alleged that he was fired from Defendant California Emergency Physicians Medical Group (“CEP”) because of his race. The parties agreed to resolve the matter.
When the settlement agreement was reduced to writing, it contained terms that Plaintiff Golden found objectionable. In particular, it prohibited him from working not just for CEP, but for any emergency room in which CEP might acquire an interest, or with which it might contract.
Plaintiff Golden refused to sign. His attorney withdrew, and intervened in the subsequent motion to require Plaintiff Golden’s signature. In Golden I, the 9th Circuit reversed the district court’s order to Plaintiff Golden to sign the settlement agreement. The 9th Circuit stated that the trial judge’s conclusion that the agreement was not anti-competitive did not resolve the issue, and remanded the matter on an underdeveloped record to determine if it substantially restrained Dr. Golden is his profession.
On remand, the district court again ordered Dr. Golden to sign the agreement, ruling that it did not impose a substantial restriction on his profession. Dr. Golden again appealed.
SECTION 16600 PROHIBITS SUBSTANTIAL RESTRICTIONS ON A PERSON’S TRADE
California B&P Code has long stood against noncompetition agreements and anti-solicitation agreements, with few exceptions. That is not, however, all that it prohibits. In fact, the cases have determined the statute to proscribe any term that constitutes a “substantial restriction” on trade or on a person’s profession.
Reviewing California precedent, the 9th Circuit found this to mean that the provision need not completely prohibit a person from engaging in a profession, nor does it need to be sufficient to dissuade a person from that activity. It need only be significant enough to implicate §16600’s open competition and employee mobility policies. “We stress, however, that it will be the rare contractual restraint whose effect is so insubstantial that it escapes scrutiny under section 16600.”
THE CONTRACTUAL PROVISION VIOLATED §16600
The contractual provision prohibiting Dr. Golden from being reinstated at any then-current CEP worksite was sufficiently minimal that it did not violate §16600. The other provisions, however, did not fare as well.
The settlement agreement would prevent Dr. Golden from working not just at any CEP-acquired facility, but also at any facility with which CEP contracted to do business. That was so sweeping as to create a substantial restraint on Dr. Golden’s ability to ply his trade, and therefore ran afoul of §16600.
CONCLUSION
The 9th Circuit recognizes and upholds California’s strong public interest in employee mobility and in open competition. It provides broad interpretations, as required by California law, to Ca. B&P Code §16600.
9th Cir., Filed 7/24/18, Opinion by Judge Bates, Sr. US Dist. Court Judge for D.C., sitting by designation.
NATIONAL LABOR RELATIONS BOARD v. QUEEN OF THE VALLEY MEDICAL CENTER
THE NLRB CERTIFIED THE UNION
Certain employees of Queen of the Valley Medical Center (“QVMC”) voted in favor of establishing a union in November 2016. Although QVMC challenged the election, the NLRB’s Regional Director overruled the objections and certified the union in December 2016.
QVMC CONTINUED TO OBJECT TO THE UNION
QVMC’S subsequent request to the NLRB to review the union’s certification in January 2017 was denied. QVMC then sent the union a letter in March 2017, stating that it would neither recognize nor bargain with the union if the union did not hold a new, in-person election.
QVMC HAD ALREADY NEGOTIATED WITH THE UNION
Prior to its letter, however, QVMC had already engaged in negotiations with the union. Before even requesting NLRB review of the certification, it met with the union to negotiate scheduling and job assignment of an employee. QVMC did not indicate that the negotiating was conditional pending its objection to the union’s certification. It negotiated other employee issues as well, attended a union investigatory meeting, and otherwise engaged with the union on employee issues.
UNION SUPPORT DROPPED
The delay in QVMC’s objection to the certification caused it to lose support from its members. Fewer people attended the bargaining team meetings. Those who did attend expressed frustration with the union’s ineffectiveness.
AN INJUNCTION WAS WARRANTED
The court reviewed the injunction issued by the Regional Director, requiring QVMC to bargain unconditionally with the union. Such an injunction would be upheld if the Regional Director could show a likelihood of success on the merits, meaning a probability that the Board would issue an order determining that the unfair labor practices occurred, and the appellate court would grant a petition enforcing the order.
Here, although QVMC objected to the certification, it engaged in multiple behaviors demonstrating its recognition of the union without characterizing those behaviors as conditional. It could not thereafter withdraw its recognition and refuse to bargain, especially given the demonstrable harm shown by the loss of support to the union’s rights to act as exclusive representative.
CONCLUSION
An employer that objects to a union certification must act consistently with that objection. It cannot engage in negotiations, and then withdraw the implied recognition of that union if it doesn’t like how negotiations are going.
9th Cir., Filed 7/16/18. Opinion by Judge Schroeder
RODRIGUEZ v. TACO BELL CORP.
TACO BELL CORP. OFFERED ITS EMPLOYEES REDUCED PRICE MEALS, TO BE EATEN AT THE WORKPLACE
To offer a benefit to its workers, Taco Bell Corp. provided discounted meals that its employees could purchase voluntarily, to be eaten during their 30 minute meal break. The discounted meals came with the condition that they be eaten in the restaurant. Taco Bell management testified that this condition existed to insure that the food was eaten by the employee, and not given to friends and family.
Purchase of the discounted meal was voluntary. There was no evidence of requirement to purchase or of any coercion to do so.
THE REQUIREMENT TO BE ON PREMISES DID NOT MAKE THE MEAL PERIOD ON DUTY
The voluntary nature of the discounted purpose was dispositive for the court. Of course, California law makes it illegal to require employees to purchase anything of value. Here, that was not the case, and employees could purchase a full price meal and eat it anywhere if they chose to do so. This was a voluntary benefit with a single condition.
Moreover, employees were required to eat their meal away from the cash registers and food production areas, reinforcing the off-duty nature of the meal.
This was not like Morillion v. Royal Packing Co., 22 Cal.4th 575 (2000), in which travel time was compensable because employees were required to take transportation provided by the employer. Indeed, the Morillion court itself stated that employers “may provide optional free transportation to employees without having to pay them for their travel time, as long as employers do not require employees to use this transportation.” The court found this statement to be on all fours with the instant case.
CONCLUSION
The offering of an additional, voluntary benefit will not render a meal period on-duty, at least if the only condition is that the employee remain on premises.
CELA INVOLVEMENT
CELA Member Shaun Setareh litigated this matter.
9th Cir., Filed 7/18/18, Opinion by Judge Schroeder