Source: http://cawageandhourlaw.blogspot.com/2016/01/
Timestamp: 2019-04-19 12:16:02+00:00

Document:
Defendant and appellant Floyd Case [a union employee] voluntarily enrolled in a three-year, employer-sponsored educational program [that was the subject of an MOU between the employer and the union]. He agreed in writing that if he quit his job within 30 months of completing the program, he would reimburse his employer, USS-POSCO Industries (UPI), a prorated portion of program costs. Two months after completing the program, Case went to work for another employer. When he refused to reimburse UPI, the company sued for breach of contract and unjust enrichment. Case cross-complained, asserting the reimbursement agreement was unenforceable and UPI had violated the Labor Code and other statutory provisions in seeking reimbursement.
We affirm the summary judgment, but reverse and remand the attorney fees award. Under California Supreme Court precedent, statutory provisions that alter the recovery of attorney fees are deemed procedural in nature and apply to pending litigation.
The employer's voluntary, optional training program did not implicate Labor Code section 2802, which requires employers to indemnify employees for necessary expenditures or losses, or 450, which prohibits employers from requiring employees to patronize them. Case did not have to take the course, and UPI did not force him to do so. The Court distinguished In re Acknowledgment Cases (Cal.App. 8/12/15) (discussed here), in which the Court refused to allow the City of Los Angeles to recoup certain employer-mandated training expenses. Nor did the program implicate Labor Code sections 401 et seq., which prohibit the taking of certain bonds from employees.
The program did not violate Business and Professions Code 16600, which voids "every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind." Case volunteered for the program and agreed to repay the training costs if he left UPI. The agreement did not prohibit or even limit him from working elsewhere, which he in fact did. It only required him to re-pay a prorated part of the training costs.
The agreement did not violate agreement did not violate sections 158(a)(5) and 159(a) of the National Labor Relations Act (NLRA), which prohibit employers from refusing to bargain collectively with employee representatives and provide that such representatives are the employees' sole bargaining agents. "An employee’s separate individual contract that is consistent with [a] collective bargaining agreement may be enforced." Case's MOU expressly authorized the reimbursement agreement, so the agreement was consistent with the MOU.
The agreement did not lack consideration. UPI continued to pay Case his wages while enrolled in the program. In addition, Case received the training and, in consideration, agreed to repay a portion of the costs if he left. "That either Case or UPI could have terminated the agreement by ending the employment relationship at some point during the educational program does not render illusory the parties’ bargained-for exchange...."
The agreement was not procedurally unconscionable. It was negotiated between UPI and the union, parties with equivalent bargaining power. The reimbursement provision was not a surprise, and Case could have obtained the training elsewhere if he so chose.
Even if the agreement had been procedurally unconscionable, it was not substantively unconscionable. There was no evidence that the union colluded with UPI to overstate the training cost, and the agreement required Case to repay only a portion of it.
Finally, the agreement did not violate Labor Code sections 221 to 223, which prohibit employers from recouping, withholding, or secretly paying less than agreed wages.
UPI could not recover its attorney fees and costs from Case under the version of Labor Code section 218.5, which governs attorney fee awards in actions for the nonpayment of wages. Effective January 1, 2014, section 218.5 allows employers to collect such fees " only if the court finds that the employee brought the court action in bad faith." Although nothing in the legislative history indicated an intent to apply the amendment retroactively, under California law, "a new statute authorizing an award of attorney fees" or a statute "increasing or decreasing litigation costs, including attorneys’ fees" applies to actions pending at the time of enactment. This case was pending when the legislature amended section 218.5, and in fact the amendment went into effect before the trial court awarded UPI its fees. The court erred in not applying it. On remand, UPI would have to show bad faith to recover its fees.
The Supreme Court of the United States yesterday announced its decision in Campbell-Ewald Co. v. Gomez (SCOTUS 1/21/16), which considers whether an unaccepted offer to satisfy the named plaintiff ’s individual claim renders a putative class action moot.
In an opinion written by Justice Ginsburg, the majority held that it does not. This issue has been brewing for a number of years, and many (including yours truly) expected the Court to hold that no case or controversy exists after such an offer, causing the district court to lose subject matter jurisdiction under Article III of the Constitution.
The United States Navy contracted with petitioner Campbell-Ewald Company (Campbell) to develop a multimedia recruiting campaign that included the sending of text messages to young adults, but only if those individuals had “opted in” to receipt of marketing solicitations on topics that included Navy service. Campbell’s subcontractor Mindmatics LLC generated a list of cellular phone numbers for consenting 18- to 24-year-old users and then transmitted the Navy’s message to over 100,000 recipients, including respondent Jose Gomez, who alleges that he did not consent to receive text messages and, at age 40, was not in the Navy’s targeted age group. Gomez filed a nationwide class action, alleging that Campbell violated the Telephone Consumer Protection Act (TCPA), 47 U. S. C. §227(b)(1)(A)(iii), which prohibits “using any automatic dialing system” to send a text message to a cellular telephone, absent the recipient’s prior express consent. He sought treble statutory damages for a willful and knowing TCPA violation and an injunction against Campbell’s involvement in unsolicited messaging.
Before the deadline for Gomez to file a motion for class certification, Campbell proposed to settle Gomez’s individual claim and filed an offer of judgment pursuant to Federal Rule of Civil Procedure 68. Gomez did not accept the offer and allowed the Rule 68 submission to lapse on expiration of the time (14 days) specified in the Rule. Campbell then moved to dismiss the case pursuant to Rule 12(b)(1) for lack of subject-matter jurisdiction. Campbell argued first that its offer mooted Gomez’s individual claim by providing him with complete relief. Next, Campbell urged that Gomez’s failure to move for class certification before his individual claim became moot caused the putative class claims to become moot as well. The District Court denied the motion. After limited discovery, the District Court granted Campbell’s motion for summary judgment. Relying on Yearsley v. W. A. Ross Constr. Co., 309 U. S. 18, the court held that Campbell, as a contractor acting on the Navy’s behalf, acquired the Navy’s sovereign immunity from suit under the TCPA. The Ninth Circuit reversed. It agreed that Gomez’s case remained live but concluded that Campbell was not entitled to “derivative sovereign immunity” under Yearsley or on any other basis.
1. An unaccepted settlement offer or offer of judgment does not moot a plaintiff’s case, so the District Court retained jurisdiction to adjudicate Gomez’s complaint.
Article III’s “cases” and “controversies” limitation requires that “an actual controversy . . . be extant at all stages of review, not merely at the time the complaint is filed,” Arizonans for Official English v. Arizona, 520 U. S. 43, 67 (internal quotation marks omitted), but a case does not become moot as “long as the parties have a concrete interest, however small,” in the litigation’s outcome, Chafin v. Chafin, 568 U. S. ___, ___ (internal quotation marks omitted).
Gomez’s complaint was not effaced by Campbell’s unaccepted offer to satisfy his individual claim. Under basic principles of contract law, Campbell’s settlement bid and Rule 68 offer of judgment, once rejected, had no continuing efficacy. With no settlement offer operative, the parties remained adverse; both retained the same stake in the litigation they had at the outset. Neither Rule 68 nor the 19th century railroad tax cases California v. San Pablo & Tulare R. Co., 149 U. S. 308, Little v. Bowers, 134 U. S. 547, and San Mateo County v. Southern Pacific R. Co., 116 U. S. 138, support the argument that an unaccepted settlement offer can moot a complaint. Pp. 6–12.
2. Campbell’s status as a federal contractor does not entitle it to immunity from suit for its violation of the TCPA. Unlike the United States and its agencies, federal contractors do not enjoy absolute immunity. A federal contractor who simply performs as directed by the Government may be shielded from liability for injuries caused by its conduct. See Yearsley, 309 U. S., at 20–21. But no “derivative immunity” exists when the contractor has “exceeded [its] authority” or its authority “was not validly conferred.” Id., at 21. The summary judgment record includes evidence that the Navy authorized Campbell to send text messages only to individuals who had “opted in” to receive solicitations, as required by the TCPA. When a contractor violates both federal law and the Government’s explicit instructions, as alleged here, no immunity shields the contractor from suit. Pp. 12– 14.
We need not, and do not, now decide whether the result would be different if a defendant deposits the full amount of the plaintiff’s individual claim in an account payable to the plaintiff, and the court then enters judgment for the plaintiff in that amount. That question is appropriately reserved for a case in which it is not hypothetical.
Justice Ginsburg wrote the opinion, joined by Justices Kennedy, Breyer, Sotomayor, and Kagan. Justice Thomas concurred in the result. Chief Justice Roberts wrote a dissent, joined by Justices Scalia and Alito. Alito also wrote a separate dissent.
The opinion is available here. The SCOTUSblog page for the case is here.
In Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal. 4th 348 (2014) (discussed here), the California Supreme Court held that an arbitration agreement "requiring an employee as a condition of employment to give up the right to bring representative PAGA actions in any forum is contrary to public policy" and unenforceable. In Fowler v. CarMax (Cal.App. unpub. 1/25/15), the California Court of Appeal affirmed in part a trial court order enforcing a class action waiver and compelling arbitration of individual wage and hour claims, but followed Iskanian in holding that the trial court erred in compelling arbitration of PAGA claims.
On December 14, 2015, the Supreme Court of the United States denied certiorari of the decision in Fowler, sub nom. CarMax Auto Superstores California, LLC v. Areso. The SCOTUS web page for CarMax is here, and the SCOTUSblog page for it is here.
Whether a dismissal of a Title VII case, based on the Equal Employment Opportunity Commission’s total failure to satisfy its pre-suit investigation, reasonable cause, and conciliation obligations, can form the basis of an attorney’s fee award to the defendant under 42 U.S.C. § 2000e-5(k).
The Court's web page for the case is here, and the SCOTUSblog page for it is here. FYI, SCOTUSblog is the world's best resource for all things SCOTUS.
DIRECTV, Inc. v. Imburgia: SCOTUS Rules on Concepcion and the "Law of Your State"
A quick word on DIRECTV, Inc. v. Imburgia (SCOTUS 12/14/15), in which the Supreme Court held that a California Court of Appeal erred in refusing to enforce a class action waiver in a somewhat unique arbitration clause. The clause provided that the entire arbitration provision was unenforceable if the “law of your state” made class-arbitration waivers unenforceable, but also declared that the arbitration clause was governed by the Federal Arbitration Act (FAA).
The Court held that the FAA preempted the Court of Appeal's decision. As explained in this article by Ronald Mann on SCOTUSblog, the opinion rests on three basic premises: "First, the Court concludes that the contract unambiguously refers to valid state law, not to the doctrine preempted by the Court’s decision in Concepcion." Second, "references to the 'law' of a state refer to 'valid law,' rather than 'the law as it would be in the absence of federal preemption.'" Third, the Court of Appeal relied on the fact that the language at issue was in an arbitration clause and failed to provide "any real non-arbitration justification for the ruling...."
The opinion is available here, and the SCOTUSblog page on the opinion is here.
In Park v. Board of Trustees of the California State University (Cal.App. 8/27/15) (discussed here), the plaintiff alleged that the Board of Trustees of the California State University (CSU) discriminated against him based on his national origin when it denied his application for a tenured faculty position and consequently terminated him. The trial court denied CSU's motion to strike the complaint under CCP 425.16, the anti-SLAPP statute. The Court of Appeal reversed, holding that the plaintiff's allegations arose from the reviews and evaluations given to him in CSU's retention, tenure, or promotion (RTP) proceedings, and that those communications were protected.
Does Code of Civil Procedure section 425.16 authorize a court to strike a cause of action in which the plaintiff challenges only the validity of an action taken by a public entity in an "official proceeding authorized by law" (subd. (e) ) but does not seek relief against any participant in that proceeding based on his or her protected communications?
Park is case number S229728, and the Court's web page for it is here. As always, you can request electronic updates on the Court's web site.
In Cardenas v. M. Fanaian, D.D.S., Inc. (Cal.App. 10/1/15) (discussed here), the Court of Appeal held as follows: a retaliation action under Labor Code section 1102.5 exists independently of, and does not depend upon, an action for wrongful termination in violation of public policy; section 1102.5 does not require the employee to show that the allegedly illegal activity violates a policy that "inures to the benefit of the public at large rather than to a particular employer or employee;" and section 1102.5 also does not require the employee to show that the alleged illegal activity involved wrongdoing by the employer.
The California Supreme Court granted review on December 16. The Court's web page for Cardenas is here. It is case number S230533. As always, you can request email notifications of the proceedings on the Court's web site.
The plaintiffs failed to demonstrate that a class of FLC workers was ascertainable. The grower did not maintain records identifying all of the FLC workers, and efforts to obtain the information from the FLCs did not appear to be effective. Thus, "there was ample evidence supporting a determination that the FLC worker portion of the class was not ascertainable because the members could not be readily identified without unreasonable expense or time."
The plaintiffs argued that the grower was the FLC workers' joint employer, that it had the legal obligation to maintain this information, and that it could not use its failure to meet this obligation to defeat certification. The plaintiffs "essentially conceded the issue of joint employment was enmeshed with the issue of ascertainability," and the trial court did not err in holding that the plaintiffs had to demonstrate joint employment at the certification stage. The plaintiffs failed to do so, and the trial court did not err in denying certification.
As to the putative class of the grower's direct employees, common issues did not predominate. The question of joint employment did not apply to the direct employees and could not satisfy the predominance requirement. The plaintiffs did not show that the grower maintained unlawful written policies during the relevant time periods. "Plaintiffs presented no evidence that defendant had a uniform policy or practice that violated the law and that affected employees anywhere other than Kern County, or working with any crop other than grapes."
As to that limited group of employees, "the evidence was conflicting regarding whether defendant had any uniform policy or practice that violated the law and that could be proven by common evidence." The trial court properly considered all of the evidence before it, and did not abuse its discretion in finding that the plaintiffs failed to demonstrate predominance.
In Oyama v. University of Hawaii (9th Cir. 12/29/15), a secondary education candidate applied to become a student teacher, a prerequisite for recommendation to the State of Hawaii’s teacher certification board. The University denied his application because he expressed opinions, among others, that "online child predation should be legal" and that "it would be fine" for a 12-year-old student to have a “consensual” relationship with a teacher.
The University did not violate the plaintiff’s First Amendment rights "because its decision related directly to defined and established professional standards, was narrowly tailored to serve the University’s core mission of evaluating Oyama’s suitability for teaching, and reflected reasonable professional judgment."

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