California Courts of Appeal
GARCIA-BOWER v. PREMIERE AUTOMOTIVE IMPORTS OF CA., LLC
EMPLOYEE MOLINA DID NOT DISCLOSE A DISMISSED CONVICTION ON HER JOB APPLICATION. THE CONVICTION WAS ERRONEOUSLY REPORTED BY THE DMV.
Plaintiff Tracey Molina applied for a job with Defendant Premiere Automotive Imports of Ca. On her job application, she truthfully answered “no” to a question asking about criminal convictions, and allowing her to exclude dismissed convictions. Molina had pled guilty and been convicted of misdemeanor grand theft, but had the conviction dismissed 4 years prior.
Premiere employed a private background check company to perform a check on Molina. The report correctly returned with no reportable criminal convictions.
As part of her job, Molina needed access to DMV files. Consequently, the DMV conducted its own background check through the Department of Justice. A DOJ attorney later testified that dismissals sometimes lag in the system, despite the law that they be reported within 30 days. Because Molina’s dismissal had not been entered in the DOJ system, the DOJ reported back incorrectly that she had an active conviction. The DMV therefore refused her access, and reported the reason to Premiere.
PREMIERE FIRED MOLINA WITHOUT ANY INVESTIGATION AT ALL
Premiere fired Molina the business day after receiving the DMV report. It conducted no investigation into the reason for the discrepancy between the private background check and the DOJ’s findings. It did not notify Molina of the issue prior to firing her, and it gave her no opportunity to respond to the issue.
During the termination meeting, Molina explained repeatedly that her conviction had been dismissed. When the company fired her anyway, Molina apologized, and a company official responded, “You should have told me.” Premiere stated on the termination paperwork that the reason for firing was falsification of the employment application.
THE LABOR COMMISSIONER FILED ON BEHALF OF MOLINA, BUT WAS NONSUITED AT TRIAL
Molina filed a complaint with the Labor Commissioner, claiming violation of Labor Code §98.6 (retaliation for exercising rights under the Labor Code) and 432.7 (using a dismissed conviction as a reason for an adverse employment action). The Labor Commissioner found in Molina’s favor, and the Director upheld the decision on appeal.
Premiere nonetheless refused to follow the Labor Commissioner’s order. The Labor Commissioner therefore filed a complaint on Molina’s behalf with the Superior Court.
After the Labor Commissioner’s case in chief, the trial court granted nonsuit, determining that there was no evidence that Premiere knew of Molina’s protected act prior to firing her. The Labor Commissioner appealed.
THE LACK OF ANY INVESTIGATION AND POST TERMINATION EVIDENCE CONSTITUTED EVIDENCE OF AN ILLEGAL MOTIVE
The appellate court reversed. It found that Premiere’s rush to judgment could cause a reasonable jury to find that it had an illegal motive in firing Molina.
Specifically, the difference between the private background check company’s report and that of the DOJ should have caused Premiere to question the latter’s accuracy. In fact, at trial Premiere’s witnesses admitted that they did have concerns about the discrepancy, but did nothing at all to understand it. The court cited to Cotran v. Rollins Hudig Hall International, Inc., 17 Cal.4th 93 (1998) that an adequate investigation includes, at a minimum, notice to the employee of the concern being investigated and a chance for the employee to respond.
Furthermore, Molina told Premiere in the termination meeting that the conviction had been dismissed. This was relevant given the totality of the facts in this case, even though Premiere had already made its termination decision.
Premiere argued that its decision was based not on the failure to disclose a dismissed conviction – which right Molina was guaranteed under Labor Code §432.7 – but rather on the fact that the DMV had stated that she could not have access to its files, and therefore she could not do her job. But this claim was refuted by the reason Premiere wrote in its own termination paperwork – that the firing was for falsification – as well as its employees statement to Molina in the termination meeting that “You should have told me.”
The Labor Commissioner did argue that an employer’s knowledge should not be an element when the claim involves an applicant or employee’s exercise of the right not to disclose a fact. The court explicitly did not reach that issue here.
The appellate court reversed and remanded for trial.
CONCLUSION
Employers should remember that the purpose of a workplace investigation is not to appear fair, but actually to be fair. Those who do no investigation, or even an inadequate one, open themselves up to liability.
Congratulations to our colleagues with the Labor Commissioner for continuing to protect California workers.
COA, 1st Dist., Div. 1, Filed 10/15/20. Opinion by Justice Sanchez.
MIDWEST MOTOR SUPPLY v. SUPERIOR COURT (FINCH)
PLAINTIFF FINCH SUED FOR WAGE AND HOUR VIOLATIONS
Plaintiff Finch was a sales manager with Defendant Midwest Motor Supply. He sued for failure to pay wages, and also asserted a claim under California’s Private Attorneys General Act.
THE TRIAL COURT DENIED DEFENDANT’S FORUM NON CONVENIENS MOTION
Defendant Midwest Motor Supply moved to stay proceedings on the ground of forum non conveniens. It alleged that Plaintiff Finch’s employment contract contained a forum selection clause such that the case was properly venued in Ohio.
The trial court denied the motion. It ruled that California Labor Code §925 allowed Plaintiff Finch to void the forum selection clause under the terms of Ca. Lab. Code §925 because the contract had been modified after January 1, 2017. Defendant Midwest Motor Supply petitioned for a writ, and the appellate court issued an alternative writ and order to show cause.
THE STATUTE ALLOWS FORUM SELECTION CLAUSES TO BE VOIDED UPON ANY CONTRACT MODIFICATION
In front of the appellate court, Defendant/Petitioner Midwest Motor Supply argued that the terms of §925 allowed a forum selection clause only to be voidable if the clause itself had been modified. Here, it asserted, only Plaintiff/Respondent Finch’s compensation had been modified, and therefore the provision making the forum selection clause voidable was not activated.
The appellate court disagreed. It looked to the plain language of the statute, and found nothing limiting its provisions to occur only when the forum selection clause itself – as opposed to any other contractual provision – were modified. Nor were the terms “modified” or “extended” redundant, as Midwest Motor Supply claimed. “Modified” means to change the terms or conditions, whereas “extended” means to continue unaltered. The court found that the Legislature intended either of those occurrences to make a forum selection clause voidable.
The court also disagreed with Midwest Motor Supply’s constitutional challenges to the statute. It was not, as argued, an ex post facto law applying to contracts because it did not modify any previous obligation.
CONCLUSION
A contract modified in any of its terms after January 1, 2017, will cause its forum selection clause to be voidable.
CELA INVOLVEMENT
Congratulations to CELA Member Jonathan Lebe of Lebe Law and Ian Silvers of Bisnar Chase for their victory in a matter of first impression before California courts.
COA, 1st Dist., Div. 4. Filed 10/28/20. Opinion by Justice Brown.
PROVOST v. YOURMECHANIC, INC.
PLAINTIFF SUED YOURMECHANIC UNDER PAGA FOR LABOR CODE VIOLATIONS, INCLUDING CLAIMS OF INTENTIONAL MISCLASSIFICATION
Plaintiff Provost sued YourMechanic, Inc., for various Labor Code violations, using the Private Attorneys General Act (“PAGA”) to do so. Included among his allegations was a claim that YourMechanic intentionally misclassified its workers as independent contractors, in violation of Ca. Labor Code §226.8(a)(1).
THE TRIAL COURT DENIED THE PETITION TO COMPEL ARBITRATION, BUT GRANTED ALTERNATIVE RELIEF
YourMechanic petitioned the trial court to compel arbitration. The trial court, in following Iskanian v. CLS Transportation Los Angeles, 59 Cal.4th 348 (2014), found that the PAGA claims were not arbitrable, and denied the petition.
The trial court granted alternative relief to YourMechanic, however. It ruled that whether Plaintiff Provost was an “aggrieved employee,” as required by PAGA, should be arbitrated. The trial court reasoned that Plaintiff Provost had no standing to bring a PAGA claim if he was an independent contractor, and that this threshold, individualized issue had to be decided under contractual arbitration.
YourMechanic appealed the order.
NOTHING ABOUT PAGA CLAIMS CONSTITUTES AN INDIVIDUALIZED ACTION
The appellate court reversed. Iskanian found that PAGA claims are not subject to contractual arbitration because the claims do not belong to the individual. Rather, the individual plaintiff is deputized to act on behalf of the State. Because the State realizes the benefit of the claim, it is the real party, and its rights to access to the courts cannot be contracted away by an individual.
The Court of Appeal reaffirmed that Iskanian is still good law, and was not overturned by the US Supreme Court in Epic Systems Corp. v. Lewis, 138 S.Ct. 1612 (2018). It reached the same conclusion in Correia v. NB Baker Electric, Inc., 32 Cal.App.5th 602 (2019), and gained support for that conclusion from our high court’s citing to Iskanian with approval in ZB, N.A. v. Superior Court, 8 Cal.5th 175 (2019).
Subsequent appellate courts have analyzed Iskanian to determine that PAGA claims cannot be split into individualized and representative claims, such as in Williams v. Superior Court, 237 Cal.App.4th 642 (2015). Williams has been followed extensively by other courts, and was cited with approval by our Supreme Court in Kim v. Reins International California, Inc., 9 Cal.5th 73 (2020).
CONCLUSION
Not only are PAGA claims not subject to contractual arbitration without State approval, but no part of the claim may be split off and argued to be an individual inquiry subject to arbitration.
CELA INVOLVEMENT
Congratulations to Norman Blumenthal and Kyle Nordrehaug of Nordrehaug Bhowmik DeBlouw for this excellent result.
COA, 4th Dist. Div. 1, filed 10/15/20. Opinion by Justice Benke.
REALES INVESTMENT, LLC v. JOHNSON
REALES IGNORED MANDATORY PRE-TRIAL DISCLOSURES AND FILINGS AND THEN ASKED FOR A CONTINUANCE ON THE FIRST DAY OF TRIAL
Cross-complainant Reales Investment’s attorney withdrew from the case two months before trial. Reales retained new counsel a few days before trial. Reales did not participate in any mandated pretrial proceedings. On the first day of trial, Reales’ new attorney orally requested a trial continuance. The trial court denied the request and excluded all documents and witnesses that Reales did not disclose during the required pretrial exchanges. Since Reales did not make any pretrial disclosures or exchanges, it was precluded from offering any evidence or testimony at trial. The court then granted nonsuit for cross-defendant Johnson. Reales appealed, and the Court of Appeal affirmed.
TRIAL CONTINUANCES MUST BE REQUESTED IN WRITING, WITH SUPPORTING DOCUMENTATION
Rule of Court 3.1332(b) requires a party requesting a trial continuance to do so by noticed motion or ex parte application. It also requires supporting declarations and a description of the good cause necessitating the continuance. Since Reales’ attorney requested a continuance orally and without supporting documentation, the trial court did not abuse its discretion in denying the continuance. Riverside’s Rule 3401 required the parties to exchange certain documents at least fourteen days before trial, including witness lists, exhibit lists, etc. That Rule also provided that any party failing to comply is subject to sanctions, including evidentiary sanctions. Because the trial court based the exclusion on Reales’ failure to comply with Rule 3401 and Reales’ previous discovery conduct, there was no abuse of discretion. A trial court’s inherent power to curb abuses extends to the preclusion of evidence at trial. The trial court was not required to find Reales’ conduct willful before excluding evidence.
COA 4th Dist. Filed 10/5/20. 55 Cal.App.5th 463. Opinion by Justice Codrington.