Source: http://cawageandhourlaw.blogspot.com/2013/11/
Timestamp: 2019-04-19 12:27:53+00:00

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In Happy Nails & Spa of Fashion Valley, L.P. v. Su (7/19/13) --- Cal.App.4th --- (discussed here), the Court of Appeal found that a determination by the Unemployment Insurance Appeals Board that cosmetologists were independent contractors barred the Labor Commissioner from finding that they were employees.
The Labor Commissioner did not seek review, but she did ask the California Supreme Court to depublish the decision, which it did this week.
Visendi v. Bank of America (9th Cir. 10/23/13) ___ F.3d ___, is an interesting case on removal and joinder of mass actions under the Class Action Fairness Act (CAFA).
In 2011, 137 named plaintiffs sued 25 financial institutions in Superior Court. They alleged that the institutions’ deceptive mortgage lending and securitization practices decreased the value of their homes, impaired their credit scores, and compromised their privacy.
One defendant, Bank of America, removed the case to the district court. Relying on CAFA, it argued that the action was a removable “mass action” because it was a “civil action . . . in which monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs’ claims involve common questions of law or fact . . . .” 28 U.S.C. § 1332(d)(11)(B)(i).
The plaintiffs filed a first amended complaint, adding some parties, dismissing others, and changing their theories of liability. Defendants moved to dismiss, asserting misjoinder and failure to state a claim. The district court then remanded, finding that the Defendants conceded that the action was not removable when they argued that it did not present common questions of law or fact under Rule 20(a) and that the court thus lacked jurisdiction under CAFA.
CAFA’s "mass action" provisions apply to civil actions in which "monetary relief claims of 100 or more persons are proposed to be tried jointly." Because the plaintiffs proposed a joint trial in state court, this provision applied, and the defendants properly removed the case.
CAFA's numerosity requirement was satisfied because the original complaint named more than 100 plaintiffs. Slip op. at 9-10.
CAFA's "local controversy" exception is not jurisdictional, and the plaintiffs could not raise it for the first time on appeal. Slip op. at 10-11.
Joinder of the more than 100 plaintiffs was improper because (1) the plaintiffs did not assert a "right to relief arising out of the same transaction and occurrence" and (2) no "question of law or fact common to all the plaintiffs" would arise in the action. Slip op. at 12-14. Although the plaintiffs alleged that the defendants' misconduct was “regular and systematic,” the case involved "over 100 distinct loan transactions with many different lenders," and the factual disparities alleged were too great to support permissive joinder.
The Ninth Circuit remanded to the district court with instructions with instructions to dismiss without prejudice the claims of all plaintiffs but the one first named in the action.
In Williams v. Chino Valley Independent Fire District (7/23/13) --- Cal.App.4th --- (discussed here), the Court of Appeal held that a defendant in a FEHA action need not show that the claim was frivolous, unreasonable, or groundless in order to recover its "ordinary costs" under California Code of Civil Procedure section 1032.
The California Supreme Court granted review on 10/16/13. Williams is Case No. S213100, and the Court's web page for it is here.
The employer could deduct up to eight hours of regularly scheduled "sleep time" when the trailer guards worked 24 hour shifts because the employer and trailer guard employees had entered into an agreement to exclude eight hours of sleep time from the guards' compensable time.
The California Supreme Court granted review on 10/16/13. Mendiola is Case No. S212704, and the Court's web page for it is here.
The Center for Civic Mediation and LA County Bar are presenting a program tonight on the law of arbitration: "Will California Arbitration Law Survive the United States Supreme Court?" The panel includes Judge Daniel Buckley of the LASC, Richard Chernick, and my friend Debbie Saxe. I'm sure it will be entertaining and interesting.
So this seems like an appropriate time to update my list of cases in which the California Supreme Court has either granted or denied review of issues raised in AT&T Mobility LLC v. Concepcion (2011) 563 U.S. ___. Clicking on the case name will bring you to my discussion of it. I have listed the cases in chronological order, with their key rulings. The most recent cases are at the bottom.
Wage and hour class action and PAGA representative action.
Did not decide whether Concepcion overrules Gentry v. Superior Court (2007) 42 Cal.4th 443.
Concepcion does not apply in cases brought under the Labor Code Private Attorneys General Act (PAGA).
Putative consumer class action under the Consumers Legal Remedies Act (CLRA), the Unfair Competition Law (UCL), and other California statutes.
Concepcion does not prevent courts from applying unconscionability analysis.
The arbitration agreement at issue was unconscionable and unenforceable.
Did not address enforceability of class action waiver.
Multi-plaintiff wage and hour case (not class or representative PAGA action).
Without addressing Concepcion, held that arbitration agreement at issue was unconscionable and unenforceable.
Review apparently limited to issue of whether certain language is unconscionably unilateral or creates a mutual obligation to arbitrate.
Individual consumer action under the Unfair Competition Law (UCL), and other California statutes and common law theories.
Individual action under the California Fair Employment and Housing Act (FEHA).
Putative wage and hour class action.
The Court did not decide whether Concepcion overrules Gentry.
Assuming that Gentry is still good law, the plaintiff did not meet her burden of proving the Gentry factors.
Class arbitration was not authorized, citing Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. ___ (2010), so the class claims should have been dismissed.
Defendant waived right to arbitrate by delaying motion.
Defendant failed to show that the contract at issue involved interstate commerce, the FAA did not apply, Labor Code section 229 was not preempted, and the defendant could not compel arbitration.
Claims for public injunctive relief are not subject to arbitration.
The NLRB incorrectly decided D.R. Horton.
Concepcion applies to PAGA actions.
Contrary to Reyes v. Macy’s Inc. (2011) 202 Cal.App.4th 1119, the plaintiff could pursue individual PAGA claims in arbitration.
Assuming (without deciding) that Gentry is still good law, the plaintiff did not make the factual showing required by Gentry.
The NLRB incorrectly decided D.R. Horton, and in any case the NLRB likely did not apply to the plaintiff, who was an apartment manager.
The FAA preempts the CLRA's prohibition of class action waivers.
Truly Nolen of America v. Superior Court (Miranda) (8/9/12) 208 Cal.App.4th 487, no petition for review filed.
Concepcion "implicitly disapproved the reasoning of the Gentry," but lower courts should adhere to Gentry until the Supreme Court rules on the issue.
Even if Gentry still is good law, the plaintiffs failed to establish the Gentry factors.
Remanded to the trial court to determine whether the parties had an implied agreement to engage in class arbitration.
Declined to follow D.R. Horton.
The plaintiffs waived their argument that the arbitrator, rather than the trial court, should determine whether the matter could proceed as a class arbitration.
Consumer class action under the Consumers Legal Remedies Act (CLRA), the Unfair Competition Law (UCL), and other California statutes.
Did not address presence or enforceability of class action waiver.
Putative wage and hour class action and PAGA representative action.
Given the possibility that California law prior to Concepcion barred enforcement of the arbitration agreement, the defendant did not waive its right to arbitration by not making its motion sooner.
The NLRA does not prohibit enforcement of arbitration agreements that do not provide for class arbitration.
Trial court did not abuse discretion in allowing defendant to renew petition to compel arbitration after Concepcion.
The trial court correctly determined that the arbitrator should decide whether the contract as a whole, rather than just its class action waiver clause, was unconscionable and unenforceable.
Putative wage and hour class action alleging misclassification of independent contractors.
Alleged misclassification of petitioners as independent contractors did not fall within relatively narrow scope of arbitration agreement.
Gentry remains good law after Concepcion and invalidated the class action waiver.
Because the class action waiver was invalid, Stolt-Nielsen required that the action remain in court, where plaintiff could pursue class certification.
Putative consumer class action under the Consumers Legal Remedies Act (CLRA), Automobile Sales Finance Act (ASFA), and Unfair Competition Law (UCL).
FAA preempts the CLRA's prohibition on class action waivers.
Arbitration agreement was somewhat procedurally unconscionable, but not substantively unconscionable.
Concepcion does not invalidate unconscionability analysis.
The arbitration agreement was procedurally and substantively unconscionable.
Agreement was unenforceable as procedurally and substantively unconscionable.
Arbitration agreement was enforceable. It was procedurally unconscionable because presented on a take-it-or-leave-it basis, but it was not so substantively unconscionable as to "shock the conscience."
Under Concepcion, FAA preempts arguments that class action waiver and required arbitration of "public" claims were substantively unconscionable.
As in Sanchez, arbitration provision in standard automobile retail installment sale contract was unconscionable and unenforceable.
Individual action for sexual harassment, retaliation, and wrongful termination.
Defendant did not present evidence that any relevant transaction "involved interstate commerce," and the Federal Arbitration Act (FAA) did not apply.
Arbitration agreement was substantively unconscionable, but not substantively unconscionable.
Representative PAGA wage and hour action.
Defendant did not waive its right to compel arbitration by litigating in court before Concepcion.
All PAGA actions are representative actions.
FAA does not preempt California law prohibiting waiver of an employee's right to bring a PAGA representative action.
Trial court should have compelled individual arbitration of non-PAGA claims.
Continue to stay tuned. I will continue to update this list every couple of months as new cases come down. And if you know of any cases that I've missed, feel free to drop me a line.
Last week I mentioned Volpei v. County of Ventura (11/7/13) --- Cal.App.4th --- (discussed here), which affirmed a trial court order denying a petition to compel arbitration of statutory discrimination claims on grounds that the collective bargaining agreement did not "clearly and unmistakably" waive the employee's right to pursue those claims in court.
Under Wright [v. Universal Maritime Service Corp. (1998) 525 U.S. 70], 14 Penn Plaza LLC [v. Pyett (2009) 556 U.S. 247], and Vasquez [v. Superior Court (2000) 80 Cal.App.4th 430], the collective bargaining agreement in this case does not contain a clear and unmistakable agreement to arbitrate statutory discrimination claims. The arbitration provision in the collective bargaining agreement between Mid-Wilshire and the union contains very general language regarding grievances. It does not mention FEHA, it does not explicitly incorporate by reference any statutory anti-discrimination laws, and it does not contain an explicit waiver of the right to seek judicial redress for statutory discrimination causes of action. Nothing in the agreement makes noncompliance with FEHA subject to the arbitration provision.
Slip op. at 11. The Court rejected the argument that AT&T Mobility LLC v. Concepcion (2011) 563 U.S. ___ (discussed here) has changed this legal landscape. Slip op. at 14-15.
For the time being, arbitration agreements in collective bargaining agreements appear to represent an eddy in the post-Concepcion river of mandatory arbitration jurisprudence. It will be interesting to see whether the California Supreme Court addresses this by granting review in Volpei or Mendez.
In the mean time, Mendez v. Mid-Wilshire Health Care Center is available here.
In Chavarria v. Ralphs Grocery Company, ___ F.3d ___(9th Cir. 10/28/13), the plaintiff filed a putative meal and rest period class action under the Unfair Competition Law (UCL), and Ralphs moved to compel arbitration of her individual claims. The district court denied the motion, holding that Ralphs’ arbitration policy was unconscionable under California law and therefore unenforceable. Ralphs appealed, and the Ninth Circuit affirmed.
The Court found the policy procedurally unconscionable for the following reasons: acceptance of the policy was a condition of applying for employment; it was presented on a “take it or leave it” basis with no opportunity for negotiation; Ralphs did not provide the terms of the policy to Chavarria until three weeks after she had agreed to be bound by it; and the policy bound Chavarria, whether she signed it or not. Slip op. at 10-13.
The Court found the policy substantively unconscionable for the following reasons: Ralphs would always be the party to select the arbitrator in employee-initiated arbitrations; the policy precluded institutional arbitration administrators which have "established rules and procedures to select a neutral arbitrator;" and the policy forced the employee to pay one half of the arbitration fees, "unless a decision of the U.S. Supreme Court directly addressing the issue requires that they be apportioned differently." Slip op. at 14-19.
Ralphs has tilted the scale so far in its favor, both in the circumstances of entering the agreement and its substantive terms, that it "shocks the conscience." Accordingly, Ralphs’ arbitration policy cannot be enforced against Chavarria under California law.
Perhaps more interesting is the Court's conclusion that the FAA does not preempt this unconscionability analysis. Slip op. at 20-22. The Court rejected the argument that the Supreme Court's recent decision in American Express Corp. v. Italian Colors Restaurant, ___ U.S. ___, 133 S. Ct. 2304 (2013) (discussed here) precluded it from considering the provision requiring employees to pay half the cost of arbitration. The Court reasoned that imposing arbitration costs on employees would not just make it infeasible to prove the violations at issue, as in Italian Colors, but would "make access to the forum impracticable." The Court held that Ralphs could not do so, even in the context of the FAA.
It will be very interesting to see whether the Ninth Circuit decides to review this decision en banc or whether the United States Supreme Court takes action on it.
A quick word on Volpei v. County of Ventura (11/7/13) --- Cal.App.4th ---.
Mark Volpei worked as an investigator for the Ventura County District Attorney's office (County). Volpei was a member of the Ventura County Deputy Sheriffs' Association (Association), which had a memorandum of agreement (MOA) with the County.
In 2011, Volpei sued the County for retaliation, harassment, disability discrimination, and other claims under the Fair Employment and Housing Act (FEHA). In 2012, the County petitioned to compel arbitration under the MOA, which provided that a grievance, including a claim of disability discrimination, "may be submitted to arbitration by the Association...."
We conclude that the provision that an unresolved grievance "may be submitted to arbitration by the Association" is not a clear and unmistakable agreement to arbitrate Volpei's statutory claims against the County.
When he was hired in September 2010, plaintiff Scott Rope informed his employer, defendant Auto-Chlor System of Washington, Inc. (Auto-Chlor) he planned in February 2011 to donate a kidney to his physically disabled sister, and requested that he be given leave to do so. Rope later requested that the leave be extended and paid under the then-newly enacted Michelle Maykin Memorial Donation Protection Act (DPA), Labor Code sections 1508–1513, which would become effective January 1, 2011. Rope was fired two days before the DPA became effective. He sued his former employer for violation of the DPA and other provisions of the Labor Code, violation of the Fair Employment and Housing Act, Government Code section 12940 et seq. (FEHA), and wrongful termination in violation of public policy.
The trial court sustained Auto-Chlor's demurrers without leave, Rope appealed, and the Court of Appeal affirmed in part and reversed in part.
Rope did not state a cause of action for violation of the DPA, retaliation for requesting leave under the DPA, or retaliation for complaining about refusal to grant DPA leave. Slip op. at 5-9. Auto-Chlor terminated Rope before the DPA became effective, and the DPA was not retroactive.
Rope did not state a cause of action under any other provision of the Labor Code. Slip op. at 9-12. He could not allege violation of Labor Code section 1102.5 because he did not claim either that he reported his suspicions of unlawful activity to any governmental agency or that he refused to violate the law. He did not allege any other Labor Code violation, and his causes of action under Labor Code sections 98.6 and the Private Attorneys General Act (Cal. Lab. Code 2698 et seq.) also failed.
Rope did not state a cause of action for retaliation because he did not allege that he had opposed any conduct forbidden by or filed a complaint under the FEHA. Slip op. at 12-16. Merely requesting leave under the DPA did not constitute protected activity for FEHA purposes.
Rope stated a cause of action for associational discrimination under the FEHA. Slip op. at 18-22. "The reasonable inference is that Auto-Chlor acted preemptively to avoid an expense stemming from Rope's association with his physically disabled sister," and this was sufficient to allege associational discrimination. Slip op. at 22.
Rope did not state causes of action for discrimination based on an actual or perceived disability because he did not allege "an impairment that constitutes a physical disability" or that Auto-Chlor perceived him as having such an impairment. Slip op. at 22-23.
For the same reasons stated with regard to his claim for associational discrimination, Rope stated causes of action for wrongful termination in violation of public policy and for failure to maintain an environment free from discrimination. Slip op. at 23-24.
Cornejo v. Lightbourne (10/22/13) --- Cal.App.4th ---, addresses a number of issues arising under the California Whistleblower Protection Act (WPA). Cal. Gov. Code § 8547 et seq.
The Government Claims Act (Cal. Gov. Code § 900 et seq.) ordinarily requires a plaintiff to present a claim to a public entity before suing the entity in court, but WPA actions are not subject to this requirement. Slip op. at 5-10. State Personnel Board (Board) proceedings under the WPA fulfill every function of the Claims Act's presentation procedure, eliminating the need for the presentation procedure. Slip op. at 9.
Because the presentation procedure does not apply in WPA cases, the Claims Act's six-month limitations period also does not apply. Slip op. at 11-12.
A WPA plaintiff may initiate an independent judicial action after the Board's executive officer issues initial findings on a submitted administrative complaint without needing to appeal the initial findings to the Board, and such findings have no preclusive effect on any such judicial action. Slip op. at 12-13.
In Benton v. Telecom Network Specialists, Inc. (10/16/13) --- Cal.App.4th ---, the Court of Appeal reversed a trial court order denying certification of an action alleging failure to provide meal and rest periods and failure to pay overtime compensation.
The proposed class consisted of approximately 750 cell-phone tower technicians, most of whom were hired and paid by staffing companies that contracted with the defendant, TNS. The remainder of the putative class members were hired and paid by TNS directly. The plaintiffs alleged that TNS was a joint employer of all of the technicians and that TNS failed to adopt policies to pay overtime compensation or to provide meal or rest periods.
The trial court denied the motion to certify, holding that, even if the court assumed that TNS jointly employed all of the putative class members, the class was too diverse to certify because: (1) some of the staffing companies who were joint employers had adopted a variety of different meal and rest period policies; and (2) the physical locations at which the technicians worked differed, and some of the putative class members were free to take meal and rest periods if they wished. Slip op. at 12-14.
The Court of Appeal reversed. After reviewing class certification principals and the holdings in Brinker v. Superior Court (4/12/12) 53 Cal.4th 1004 (discussed here), Bradley v. Networkers Internat., LLC (2012) 211 Cal.App.4th 1129 (discussed here), and Faulkinbury v. Boyd & Associates (2013) 216 Cal.App.4th 220 (discussed here), the Court held that the trial court erred in denying certification.
As in Faulkinbury, the plaintiffs' "theory of legal liability" -- that TNS violated the law by failing to adopt compliant meal and rest period policies -- was susceptible to class treatment. Slip op. at 25-32. Neither evidence that some putative class members worked under conditions that permitted them to take meal and rest periods, nor evidence that the staffing companies had diverse meal and rest period policies constituted a sufficient basis on which to deny certification.
The trial court did not identify a proper basis on which to deny certification of the plaintiffs' overtime claims, but assuming that it applied the same reasoning above, it erred in doing so. Slip op. at 32-34.
Abdullah v. U.S. Security Associates, Inc., ___ F.3d ___ (9th Cir. 9/27/13), is the first Ninth Circuit case that I'm aware of dealing with certification of meal or rest period claims in the wake of Brinker v. Superior Court.
The putative class members in Abdullah were security guards, the vast majority of whom worked alone, with no other guards on duty at the same time. The employer, USAA, required them to sign "on duty" meal period agreements as a condition of employment. Slip op. at 4-6. The district court certified a meal period class, USAA appealed, and the Ninth Circuit affirmed.
First, the Court found that there was a common legal question, the resolution of which was "apt to drive the resolution of the litigation." Slip op. at 9, citing Wal-Mart Stores, Inc. v. Dukes, 564 U.S. ___ (2011). The Court described this issue as whether USAA's "single guard post staffing model" satisfied the requirement found in Wage Order No. 4-2001 that an "on duty" meal period is permitted "only when the nature of the work prevents an employee from being relieved of all duty..."
After reviewing DLSE opinion letters regarding on-duty meal periods and the holdings in Brinker v. Superior Court (2012) 53 Cal.4th 1004 (discussed here), and Faulkinbury v. Boyd & Associates, Inc. (2013) --- Cal. App. 4th --- (discussed here), the Court concluded that USAA had not demonstrated that some class members would qualify for on duty meal periods, while others would not. Slip op. at 21-22.
[W]e conclude that the merits inquiry will turn on whether USSA is permitted to adopt a single-guard staffing model that does not allow for off-duty meal periods— namely, whether it can invoke a "nature of the work" defense on a class-wide basis, where the need for on-duty meal periods results from its own staffing decisions. Such an inquiry is permissible under Brinker and Faulkinbury; the latter clarified that an employer may be held liable under state law "upon a determination that [its] uniform on-duty meal break policy [is] unlawful," with the "nature of the work" defense being relevant only to damages. Thus, the legality of USSA's policy is a "significant question of law," that is "apt to drive the resolution of the litigation" in this case. We therefore hold that the district court did not abuse its discretion in concluding that Rule 23(a)(2) was satisfied.
Second, the Court held that this common question predominated over any questions affecting only individual class members, satisfying Federal Rule of Civil Procedure 23(b)(3). Slip op. at 23-30. USAA's "nature of the work" defense would be a common inquiry, "focused on the legality of a single-guard staffing model, 'rather than a site-by-site' inquiry," and the district court did not abuse its discretion by finding that common issues of law or fact would predominate. Slip op. at 24-30.
In State of Arizona v. ASARCO LLC (9th Cir. 10/24/13), the Ninth Circuit considered whether a $300,000 punitive damage award in a Title VII sexual harassment suit violated constitutional limits where the jury awarded no compensatory damages and only one dollar in nominal damages.
Angela Aguilar worked for ASARCO at a copper mining and refining facility in Arizona. She alleged that two supervisors harassed her, and management failed to remedy the situation. At trial, the jury awarded her no compensatory damages, one dollar in nominal damages, and $868,750 in punitive damages. The district court reduced the punitive damages to $300,000, the statutory maximum under Title VII for an employer of ASARCO’s size. 42 U.S.C. § 1981a(b)(3)(D).
The Court of Appeal reversed after examining the "guideposts" for determining excessiveness of a punitive damage award: (1) “the degree of reprehensibility of the defendant’s conduct”; (2) “[the] ratio to the actual harm inflicted on the plaintiff”; and (3) “civil or criminal penalties that could be imposed for comparable misconduct.” BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996).
First, the Court held that the district court did not err in finding that ASARCO's conduct was reprehensible and would support "a very large punitive award." Slip op. at 9-13.
Second, the Court considered whether the punitive damage award bore "a reasonable relationship to compensatory damages." Slip op. at 13-16. The Court found that this requirement "suggested" that the damages should be reduced. Slip op. at 16.
Third, the Court held that Title VII's $300,000 punitive damage cap is a "civil penalty" that gives defendants "fair notice . . . of the severity of the penalty that a State may impose" and supports a $300,000 punitive damage award. Slip op. at 16-17.
The Court concluded that the Constitution did not bar the imposition of a "substantial punitive award," but that the 300,000 to one ratio was excessive. Slip op. at 18-20. Finding no discrimination case upholding a ratio greater than 125,000 to one, the Court held that $125,000 was the highest award that would maintain a "reasonable relationship" between compensatory and punitive damages. Slip op. at 20.
The Court remanded and ordered that the district court could order a new trial unless the plaintiff accepts a remittitur to this level.

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