Source: http://cawageandhourlaw.blogspot.com/2013/08/
Timestamp: 2019-04-19 13:00:52+00:00

Document:
Placement on administrative leave can constitute an adverse employment action.
The Court also held that on remand, the plaintiff could renew his request for leave to amend his complaint to allege more explicitly which acts were protected by the First Amendment and which acts constituted adverse employment actions.
Dahlia v. Rodriguez, __ F.3d ___ (9th Cir. 8/21/13) is available here.
Integrated could not enforce an arbitration policy, including a class action waiver, which it implemented after the action was filed and notice of which it did not give to the plaintiffs. Although an employer may reserve to itself the unilateral right to modify an arbitration agreement, the covenant of good faith and fair dealing requires the employer to exercise that right fairly and in good faith. Slip op. at 10. An employer may not make unilateral changes to an arbitration agreement that apply retroactively to accrued claims because doing so would interfere unreasonably with the employee’s expectations regarding how the agreement applied to those claims. Slip op. at 11. Similarly, the employer must give the employee reasonable notice regarding changes the employer makes so the employee is aware of his or her rights under the agreement. Ibid. The Court declined to enforce the arbitration policy at issue for both of these reasons. Slip op. at 11-13.
Integrated could not compel one plaintiff, Cade, to arbitrate because she did not sign an arbitration agreement, and substantial evidence supported the trial court's finding that she did not have an implied-in-fact agreement to arbitrate. Slip op. at 13-17. An employee must receive notice of any condition that the employer places on the employee’s employment before the employee can impliedly accept that condition by beginning or continuing to work for the employer. Slip op. at 16. Absent such notice, any such condition is not enforceable. Ibid.
Integrated could not compel the remaining plaintiffs to arbitrate because it failed to establish the terms of an enforceable agreement to arbitrate with them. Slip op. at 17-25. Specifically, Integrated "failed to present sufficient evidence establishing [that] the specific [arbitration policy] it presented to the trial court was the [arbitration policy] to which Plaintiffs agreed." Slip op. at 17.
Plaintiff Aaron MacDonald alleged: he worked for the State of California and the California State Assembly at one of their offices; he complained to his supervisors that one of them was smoking illegally at the office; and, less than two weeks later, he was fired. Plaintiff filed suit for retaliatory discharge in violation of Labor Code section 1102.5 and retaliatory and discriminatory discharge in violation of Labor Code section 6310.
The trial court sustained demurrers without leave to amend, holding that plaintiff was required to exhaust the administrative remedy set forth in Labor Code section 98.7 before pursuing his statutory claims in court, and that his causes of action for violations of sections 1102.5 and 6310 must be dismissed for failure to previously file a complaint with the Labor Commissioner.
The rule of exhaustion of administrative remedies is well established in California jurisprudence. “In brief, the rule is that where an administrative remedy is provided by statute, relief must be sought from the administrative body and this remedy exhausted before the courts will act.” [Campbell v. Regents of University of California (2005) 35 Cal.4th 311], 321, quoting [Abelleira v. District Court of Appeal (1941) 17 Cal.2d 280], 292. This is so even where the administrative remedy is couched in permissive, as opposed to mandatory, language. (See Williams v. Housing Authority of Los Angeles (2004) 121 Cal.App.4th 708, 734.) Here, an administrative remedy is provided in section 98.7. Thus, in accordance with Campbell, we conclude that plaintiff was required to exhaust that remedy prior to pursuing the underlying action.
Happy Nails & Spa of Fashion Valley, L.P. v. Su (7/19/13) --- Cal.App.4th ---, presents an interesting collateral estoppel issue in the context of administrative enforcement actions.
In 2004, the Employment Development Department (EDD) issued assessments against a number of salons doing business under the name "Happy Nails," finding that they failed to pay unemployment insurance contributions. After a hearing, an administrative law judge found that cosmetologists working at the salons were independent contractors, rather than employees. The EDD appealed to the California Unemployment Insurance Appeals Board, which affirmed.
In 2008, the Labor Commissioner cited Happy Nails for failure to provide its cosmetologists with itemized wage statements. Happy Nails contested the citations, but a hearing officer at the Division of Labor Standards Enforcement (DLSE) affirmed.
Happy Nails then filed a complaint in Superior Court challenging the DLSE's findings and order. The court found for the Commissioner, rejecting Happy Nails' argument that the Board's findings collaterally estopped the Commissioner from acting.
The Court of Appeal reversed, holding that collateral estoppel applied. Slip op. at 11-17. The central issue -- whether the cosmetologists are employees or independent contractors -- was identical in the two proceedings; the issue was actually litigated; the issue was necessarily decided; and the decisions were final and on the merits. Finally, the EDD and DLSE, as agencies of the same government sharing the same goals, were in privity.
The Court rejected the DLSE's arguments that: (1) the issues litigated differed because the facts presented in the two administrative hearings involved different salons and time periods and were otherwise not the same; (2) the DLSE sought to litigate Happy Nails' liability for failing to provide itemized wage statements, which differed from the issue of its unemployment tax liability; and (3) the Department and the Division are not in privity because they were established by different statutes, enforce different statutes and regulations, and use different definitions of "employee." Slip op. at 17-29.
3/16/06: Esperanza Acuna files first DFEH complaint against San Diego Gas & Electric (SDG&E), alleging racial discrimination, harassment, and retaliation for having filed a worker's compensation claim.
3/27/06: DFEH issues first right to sue letter (RTS).
2/23/07: Acuna files second DFEH complaint, alleging disability discrimination.
2/19/08: DFEH issues second RTS.
7/11/08: SDG&E terminates Acuna's employment.
10/23/08: Acuna files third DFEH complaint, alleging various wrongful acts, including her alleged retaliatory termination.
11/7/08: DFEH issues third RTS.
Acuna's disability discrimination claim was barred because she did not file suit within one year of receiving her 2008 RTS. Acuna alleged disability discrimination in her second DFEH complaint and received her RTS on that issue more than one year before she filed suit. "By retaining counsel and filing a DFEH complaint, Acuna manifested an understanding that further attempts at informal, rather than formal, resolution of the disability accommodation process would not be successful and were futile." Slip op. at 16.
The continuing violations doctrine did not apply, as, under the facts alleged, "no reasonable employee would have believed that further efforts at informal conciliation would be successful." Slip op. at 17.
The equitable tolling doctrine also did not apply, as Acuna did not allege "any facts showing she was pursuing an alternate remedy that excused her from timely filing her administrative claim and/or from filing her lawsuit." Slip op. at 19.
Acuna's disability discrimination claim was barred because she did not file suit within one year of receiving her 2006 RTS. The alleged racial discrimination took place years before Acuna filed suit, and she did not allege facts giving rise to the continuing violations doctrine or the equitable tolling doctrine. Slip op. at 20-21.
Acuna's retaliation claim was timely. Acuna alleged that SDG&E terminated her on 7/11/08 in retaliation for protected conduct. She filed a timely DFEH complaint 10/23/08, less than one year after her termination. She received her RTS on 11/7/08, and filed suit on 11/5/09, less than one year later. Slip op. at 21-24.
Acuna's claim for wrongful termination in violation of public policy was "tethered to" her FEHA retaliation claim and also was timely. Slip op. at 24-25.
Acuna's claims for breach of contract and breach of the covenant of good faith and fair dealing failed because Acuna did not provide factual information to overcome the presumption of at-will employment. Slip op. at 25-28.
Urbino v. Orkin Services of California, Inc., ___ F.3d ___ (9th Cir. 8/13/13) addresses federal jurisdiction over claims under California's Labor Code Private Attorneys General Act (PAGA).
Urbino filed a PAGA representative action against Orkin for alleged meal period, overtime, and vacation pay violations. Orkin removed, and the district court denied Urbino's motion to remand, holding that the potential penalties could be aggregated to satisfy the $75,000 amount in controversy requirement of diversity jurisdiction. The Ninth Circuit reversed, holding that the penalties cannot be aggregated.
The claims of class members can be aggregated to meet the jurisdictional amount requirement only when they “unite to enforce a single title or right in which they have a common and undivided interest.” Slip op. at 7. Employees' rights under the Labor Code are held individually, and their claims cannot be aggregated: "Each employee suffers a unique injury—an injury that can be redressed without the involvement of other employees." Slip op. at 8.
The Court rejected Orkin's argument that Urbino asserted not his individual interest, but rather the state’s "collective interest" in enforcing its labor laws through PAGA.
To the extent Plaintiff can—and does—assert anything but his individual interest, however, we are unpersuaded that such a suit, the primary benefit of which will inure to the state, satisfies the requirements of federal diversity jurisdiction. The state, as the real party in interest, is not a “citizen” for diversity purposes.
Roberts v. Packard, Packard & Johnson (7/3/13) --- Cal.App.4th --- addresses an interesting corollary issue in the Arbitration Wars: may a defendant who succeeds in compelling arbitration recover its attorney fees from the party who filed the action in court?The answer, according to the Second District Court of Appeal, is no.
We conclude that because only one side—plaintiffs or their former attorneys—can prevail in enforcing the contingency fee agreement, the determination of the prevailing parties must await the resolution of the underlying claims by an arbitrator. Attorney fees can be awarded only to the parties that prevail in the "action." (See Civ. Code, § 1717, subds. (a), (b)(1).) It follows that the trial court erred in awarding interim attorney fees to the former attorneys for filing a successful petition to compel arbitration.
Betty Dukes and others sued Wal-Mart in 2001, alleging that it discriminated against its female retail store employees in promotion and pay decisions, in violation of Title VII. In 2004, District Judge Martin Jenkins certified a nation-wide class of all women employed by Wal-Mart in its retail stores who were or may have been subjected to the alleged discriminatory pay and management track promotions policies and practices. Dukes v. Wal-Mart Stores, Inc., 222 F.R.D. 137 (N.D.Cal.2004) slip op. at 84 (available here).
After the Ninth Circuit largely affirmed, Dukes v. Wal-Mart Stores, Inc., 603 F.3d 571 (2010), the Supreme Court reversed, Wal-Mart Stores, Inc. v. Dukes, 564 U.S. ___ (2011) (discussed here), holding, inter alia, that the plaintiffs failed to identify a common question, the resolution of which would help resolve their discrimination claims.
On remand, the plaintiffs have sought certification of a number of smaller-scale class actions across the country. In the Northern District of California, where the court originally certified the nation-wide class, the plaintiffs asked the court to certify a class covering approximately 250 stores and 150,000 female employees in the "California regions."
First, though they have cut down the raw number of proposed class members significantly, Plaintiffs continue to challenge four different kinds of decisions across hundreds of decision makers, inviting failures of proof at multiple points in each region. Second, though Plaintiffs insist that they have presented an entirely different case from the one the Supreme Court rejected, in fact it is essentially a scaled-down version of the same case with new labels on old arguments.
On the disparate treatment claim, the court held that the plaintiffs failed to introduce "significant proof that Wal-Mart operated under a general policy of discrimination," as required by the Supreme Court. While the plaintiffs' statistical evidence constituted "some evidence in support of their claim," they failed to identify "statistically significant disparities in even a majority of the relevant decision units in any region across the challenged pay and promotion decisions." Slip op. at 6-7. Evidence that Wal-Mart's CEO made gender-biased statements in 2004 was ambiguous and did little to meet the required showing. Slip op. at 8-9. Though the plaintiffs "succeeded in illustrating attitudes of gender bias held by managers at Wal-Mart," this evidence also failed to meet the test announced by the Supreme Court. Slip op. at 9-11. Finally, anecdotal evidence from 86 people in a putative class of 150,000 did not "meaningfully improve" the plaintiffs' showing. Slip op. at 11-12.
On the disparate impact claim, the court held that each of the "specific employment practices" identified by the plaintiffs as "guiding local managers' discretion" and being "responsible for the promotion and pay disparities" either: (1) "did not actually apply across the proposed class for the proposed class period," or (2) boiled down to "delegating discretion, which the Supreme Court held could not provide the commonality necessary to certify a class." Slip op. at 12-16. The court held that the plaintiffs failed to demonstrate class-wide practices of: requiring candidates for promotion to relocate; failing to post job openings; or promoting from within. Slip op. at 13-14. Finally, the court held that evidence that Wal-Mart used common subjective criteria to select candidates for promotion and enumerated criteria that managers were to consider in making pay decisions simply challenged "Wal-Mart’s practice of delegating discretion to local managers, which the Supreme Court specifically held was not a specific employment practice supplying a common question sufficient to certify a class." Slip op. at 14-16.
The court ended by stating that the plaintiffs would have been better off identifying an employment practice and building a class around it, rather than continuing "to challenge the discretionary decisions of hundreds of decision makers, while arbitrarily confining their proposed class to corporate regions that include stores in California, among other states." Slip op. at 17.

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