Source: http://www.californiawagelaw.com/wage_law/2007/04/index.html
Timestamp: 2018-02-24 02:06:48
Document Index: 518286305

Matched Legal Cases: ['§ 1750', '§ 17200', '§ 104', '§ 104', '§ 104', '§ 104', '§ 104', '§ 218', '§ 218', '§ 206', '§ 226', '§ 338', '§ 340']

Wage Law: April 2007
Judge Discipline in the News
Los Angeles Superior Court Judge Ronald M. Sohigian was publicly admonished Thursday for mistreating an attorney and abusing his judicial authority. Sohigian, 69, was disciplined for treating an attorney in a "belittling, rude and sarcastic manner" in 2006, when he ordered the attorney — who did not have a document with him — to go across the street to the law library, research an issue and return in 20 minutes. After the attorney complied, Sohigian said, "I told you to go across the street to the law library. If you didn't do that, if you had someone call you or you called somebody and had someone read something to you, that's obviously not what I ordered or suggested at all."
Judge Sohigian blamed medication for a "spine-related health condition." He says he has already changed his case management style. We've seen some rulings from his department that suggest that there are few, if any, employment class action cases he would consider eligible for certification. According to a 2003 survey, Judge Sohigian was the most frequently challenged judge in Los Angeles County. The least popular judges from January 2001 to June 2003 were, in order, with total peremptory challenges in parentheses:
Two of these judges (Buckner and Wiatt) have since committed suicide. A third (Janavs) was voted off the bench, but promptly re-appointed by the governor.
In Santa Cruz County, the talk this week is of the removal from the bench of [former] Superior Court Judge Jose Velasquez. The California Commission on Judicial Performance determined that Velasquez committed 46 acts of misconduct between January 2004 and May 2005.
"The misconduct is wide ranging in both nature and impact. It was directed toward criminal defendants, attorneys, and even a person who appeared in court as a favor for a friend who was having difficulty making his court appearance," Chairman Frederick Horn, an Orange County Superior Court judge, wrote for the unanimous commission.
While the disciplined judges are undoubtedly unhappy about the Commission's actions, it could be worse for them. They could have been in China. Last week, in the Guangxi Zhuang Autonomous Region in southwestern China, a judge charged with corruption died in his cell from "adult sudden death syndrome." Li Chaoyang, 38, had been uncooperative while in detention, but had not been maltreated, officials claimed. Cuts on his face and other injuries had been caused by a fall during an escape attempt. "Li Chaoyang's sudden death conforms with adult sudden death syndrome," said a lead official, citing a forensic report.
April 30, 2007 in Miscellaneous | Permalink | Comments (0) | TrackBack (0)
Another Companion Case For Gentry
Another grant-and-hold review has been taken by the Supreme Court regarding enforcement of class action prohibitions in employment arbitration agreements. In Firchow v. Citibank (South Dakota), N.A., the court ordered:
Petition for review after the Court of Appeal reversed an order denying a motion to compel arbitration. The court ordered briefing deferred pending decision in Gentry v. Superior Court, S141502 (#06-46), which presents issues regarding the enforceability of an arbitration provision that prohibits employee class actions in litigation concerning alleged violations of California's wage and hour laws.
Gentry is fully briefed, but is still awaiting a hearing date.
April 27, 2007 in Published Opinions | Permalink | Comments (2) | TrackBack (0)
The Last of the Prop 64 Grant and Hold Cases Goes Back to the Court of Appeal
Last month, we noted that it looked like "all of those Proposition 64 cases in which the Supreme Court issued "grant and hold" review orders cases during the consideration of last year's Mervyn's and Downey Savings cases are being sent back to the Courts of Appeal from which they came," but we failed to notice that one of the cases, Benson v. Kwikset Corporation S132443 hadn't been sent back with all the others. It now has been.
Meanwhile, back over in the Californians for Disablitity Rights v. Mervyn's LLC case, on remand, the Court of Appeal issued an unusual unpublished opinion (which you can read here in pdf or Word format) holding that the appeal of the case (the whole Prop 64 issue arose from a dismissal of a pending appeal due to the new rules under Prop 64) could proceed with the original litigant until such time as the case is won or lost on appeal. If the appeal is successful, and the case goes back to Superior Court, then the plaintiff will need to seek leave to substitute a plaintiff who has standing under the Post-Prop 64 standards. In other words, the party without standing is deemed to have standing for the purpose of appellate review only, because it is an aggrieved party affected by the adverse judgment. Thus, for now, neither a dismissal nor an amendment / substitution of parties shall take place. Once the appeal is decided on the merits, the procedural status of the plaintiff will become relevant again. For now, the briefing schedule resumes as if there had never been a trip or two to the Supreme Court.
April 26, 2007 in Published Opinions | Permalink | Comments (0) | TrackBack (0)
More Reinforcement That Class Cert Rulings Are Very Difficult to Reverse
Last month, in an unpublished opinion which has now been order published, Walsh v. IKON Office Solutions, Inc. (no relation to us), the Court of Appeal has upheld a trial court's order granting a motion to decertify a subclass in an overtime misclassification case when the trial court referred to different employment circumstances among the subclass members, stating that “the circumstances of each class member’s employment differs significantly from every other member of the class,” that “individual hearings on both liability and damages are required for each of the 150 or so” members of the subclass, and that “common issues of law and fact do not predominate.”
This language is highly deferential, and could be quite useful for any respondent, whether plaintiff or defendant, seeking to defeat an appeal of any order granting or denying certification. It further reinforces our belief that the certification battle will nearly always be won or lost in Superior Court, and that a reversal by the Court of Appeal will rarely be obtained by either side.
The facts of the case are mildly interesting, in that the class originally was certified with five subclasses (the fourth of which was later decertified, triggering the appeal), and the five subclasses included a broad variety of types of employees: (1) California employees paid overtime wages, hourly rate pay, and other compensation in a single pay period; (2) California employees for whom a “DSO” adjustment reduced commission wages; (3) California employees subject to business expense reimbursement limits and business expense deductions from payroll checks; (4) IKON LDS Account Managers employed in California between March 8, 2000, to the present; and (5) IKON sales representatives who procured equipment service agreements in effect upon termination of IKON’s copy management program (CMP) on or about 1998 which remained in effect after March 8, 2000.
You can download the full text of Walsh here in pdf or Word format.
April 25, 2007 in Class Actions, Published Opinions | Permalink | Comments (0) | TrackBack (0)
Arbitration Denied Where Class Members Signed Arbitration Agreement, But Plaintiff Did Not
When a plaintiff files a class action, and the defendant moves to compel arbitration based upon the fact that other members of the putative class signed arbitration agreements, can the trial court compel arbitration of the entire class action? In Lee v. Southern California University for Professional Studies, the 4th District Court of Appeal said "no." Patricia Lee sued the Southern California University for Professional Studies for violation of the Consumer Legal Remedies Act (Civil Code § 1750 et seq.) and Business and Professions Code § 17200. Because some of the potential class members — not including Lee — signed a contract including an arbitration clause, the defendant filed a motion to compel arbitration, which the trial court denied.
On appeal, the trial court's order was affirmed. The Court of Appeal found that no grounds exist for compelling arbitration when the only plaintiff currently before the court never agreed to arbitrate her claims. However, the obvious next question — whether she is an adequate class representative for those who did — remains to be decided by the trial court at such time when Lee moves to certify the class. Thus, the more interesting opinion is yet to come.
A petition to decertify the case was recently filed. For now, you can download Lee here in pdf or Word format.
April 24, 2007 in Class Actions, Published Opinions | Permalink | Comments (0) | TrackBack (0)
Survey of Corporate Lawyers Says Lawsuits Are Terrible
The U.S. Chamber of Commerce study we mentioned briefly in a since-revised post is out. It supposedly ranks the best and worst state legal systems in America, but it only measures how corporate lawyers from the very largest companies perceive the civil justice system, ignoring the views of ordinary folks and small businesses, and it only measures perception, not statistics or other hard data. The study is based on a survey of corporate lawyers from $100 million dollar corporations who spend their day trying to keep their companies out of trouble. When they do not succeed in that quest, they tend to view the civil justice system the same way the people in the law library at San Quentin view the criminal justice system. Here are some facts that they fail to mention in their survey. Once we find out where this list came from, we'll pass along the credit.
THE CHAMBER’S “STUDY” IS MISLEADING
• The Chamber’s “Study” Is Actually a Survey of Corporate Lawyers Working for Multi-Million Dollar Corporations. Instead of attempting to measure the effectiveness of the civil justice systems in each state, the Chamber instead commissioned a poll of corporate lawyers at companies with $100 million or more in annual revenues. These are the very same lawyers who work every day protecting and defending large corporations when they are sued by consumers or employees who have been injured or abused by the corporation.
• The Chamber’s Own Pollster Admitted that There is No Way to Measure the Fairness of a State’s Legal System. Humphrey Taylor of Harris Interactive, the polling firm that conducted the survey for the Chamber, admitted that there is no way to measure fairness of the legal system in each state. According to the Copley News Service, “Humphrey Taylor of Harris Interactive said the survey is based on the individual responses of the [corporate] lawyers because there is no hard data that can be used to measure the perceived fairness of a state's legal system.” Nevertheless, the Chamber has mischaracterized the “study” as “rank[ing] the best to worst legal systems in America.”
• After Ranking West Virginia as Having One of the “Worst” Liability Systems, the Chamber’s CEO and Pollster Were Forced to Admit that Only of a Fraction of Those Surveyed Actually Knew Anything About the State’s Court System. When questioned about the methodology of previous versions of the “study” that ranked West Virginia as 49th in the list of state legal systems, the Chamber’s CEO, Thomas Donohue, and the pollster that conducted the survey, Humphrey Taylor of Harris Interactive, were forced to admit that only a fraction of the corporate lawyers surveyed actually knew anything about West Virginia’s courts. According to the Charleston Gazette, “Taylor and Donahue [sic] acknowledged not all of the 1,437 lawyers surveyed knew anything about West Virginia's courts. Taylor said ‘around 107’ said they had direct knowledge of the state. ‘You could argue that's a small sample, but what they keep saying is ‘49th, 49th, 49th,’ he said.”
• Florida Newspaper Criticized Chamber for Mischaracterizing the “Study” in a Television Ad. According to the Tallahassee Democrat, the Chamber’s Institute for Legal Reform sponsored a television ad in Florida that mischaracterized the results of their “study” of state legal systems. The Chamber’s ad included the line, “[a] recent Harris poll ranked the best to worst legal systems in America.” However, the
Democrat reported that this claim was “wrong,” noting that the “ad did not mention the Harris poll was conducted among corporate lawyers who have to defend their clients against civil suits.”
LAWSUITS ARE NOT A MAJOR CONCERN FOR BUSINESSES
• A Recent Survey Published by the National Association of Manufacturers Found that American Manufacturing Companies Ranked the “Fear of Litigation” at the Bottom of Their Concerns. The National Association of Manufacturers recently released a survey of manufacturers in the United States showing that the “fear of litigation” ranked at the bottom of their list of concerns:
“Please rate the following factors in terms of their negative impact on your company's operations (with 1 representing the greatest negative impact and 10 the least).”
2.9 Cost of non-wage compensation
3.5 Cost of materials used in production
4.0 Inability to raise prices
4.1 Energy prices
5.0 Foreign competition
6.3 Cost of wages
6.4 Shortage of qualified workers
7.4 Regulations/corporate governance rules (Sarbanes-Oxley)
7.8 Fear of litigation
• Survey by Business Week Magazine Found that the Threat of Lawsuits is Not a Major Concern of Small Business Owners. According to a survey published in Business Week magazine, owners of small and medium sized businesses story are generally not concerned about the threat of lawsuits: “One of the survey's more surprising results revealed that tort reform -- particularly limiting class-action lawsuits -- is not a major priority.” The survey found that the biggest threats to their businesses are: (1) Rising inflation, 44 percent; (2) The trade deficit and a weak dollar, 40 percent; (3) Energy shortages, 40 percent; (4) Excessive household and/or corporate debt, 29 percent; (5) The growing federal deficit, 28 percent; (6) Poorly prepared labor force/Shortage of skilled labor, 27 percent.
THE NUMBER OF STATE AND FEDERAL TORT TRIALS IS DECLINING
• Bush Administration Statistics Show that the Number of Federal Tort Trials is Down Nearly 80 Percent Since 1985. The most recent data from the Bush administration’s Justice Department reported that the number of tort (personal injury) cases resolved in U.S. District Courts fell by 79 percent between 1985 and 2003. In 1985, 3,600 tort trials were decided by a judge or jury in U.S. District Courts. By 2003, that number had dropped to less than 800.
• The Number of State Tort Trials is Decreasing. According to the most recent statistics from the Bush administration’s Justice Department, the number of tort trials at the state level has decreased. These statistics were compiled as part of the Bureau’s survey of state civil justice systems in the nation’s largest 75 counties. Among these counties, the number of tort trials decreased 31.8% between 1992 and 2001.
• “Overwhelming Majority” of Federal Judges Don’t See “Frivolous Lawsuits” as Major Problem. According to survey by the Federal Judicial Center – the research and education agency of the federal court system – the overwhelming majority of Federal judges do not view “frivolous lawsuits” as a problem. Seventy percent of the respondents called groundless litigation either a ‘small problem’ or a ‘very small problem,’ and 15% said it was no problem at all. Only 1% called it a ‘very large problem,’ 2% called it a ‘large problem’ and the rest rated it as a ‘moderate problem’ in their courts. In addition, 91% of the judges surveyed opposed provisions in the Lawsuit Abuse Reduction Act, which won House approval in the last Congress.”
Tort reformers claim that the threat of costly litigation "forces businesses to settle frivolous claims that could potentially put them out of business.” (Dan Danner, Executive Vice President—Public Policy for the National Federation of Independent Business). However, in September 2005, NFIB’s Research Foundation released a report based on a survey of their more than 600,000 members, revealing that the median total cost to settle a legal dispute is about $5,000. In a society where answering nine questions is enough to justify giving someone a million dollars, resolving legal differences for $5,000 seems fairly inexpensive, particularly when fewer than one in fifty legal disputes result in a claim or lawsuit being filed.
April 24, 2007 in Miscellaneous | Permalink | Comments (0) | TrackBack (0)
We drift off topic a bit today, but the case warrants a mention on any employment related legal blog, so off topic we go. Ask any employment lawyer outside California about "the Murphy case" and they won't think about employee breaks and hours of pay, they think about taxation. The case even has its own wikipedia entry. On August 22, 2006, the United States Court of Appeals for the District of Columbia Circuit published an opinion in Murphy v. Internal Revenue Service (No. 05-5139, DC Cir. 08/22/2006), ruling that the taxation of non-economic damages for emotional distress and loss of reputation is unconstitutional because such a tax violates the Sixteenth Amendment of the U.S. Constitution. In December, the Circuit vacated that opinion and ordered a rehearing on the matter. That hearing will take place today.
In the original opinion, written by Chief Judge Douglas H. Ginsburg (former Reagan appointee to the SCOTUS whose nomination was derailed by dope-smoking admissions), and joined by Judges Judith W. Rogers and (former California Supreme Court Justice) Janice Rogers Brown, the court held:
Marrita Murphy brought this suit to recover income taxes she paid on the compensatory damages for emotional distress and loss of reputation she was awarded in an administrative action she brought against her former employer. Murphy contends that under § 104(a)(2) of the Internal Revenue Code (IRC), 26 U.S.C. § 104(a)(2), her award should have been excluded from her gross income because it was compensation received "on account of personal physical injuries or physical sickness." In the alternative, she maintains § 104(a)(2) is unconstitutional insofar as it fails to exclude from gross income revenue that is not "income" within the meaning of the Sixteenth Amendment to the Constitution of the United States. We hold, first, that Murphy's compensation was not "received ... on account of personal physical injuries" excludable from gross income under § 104(a)(2). We agree with the taxpayer, however, that § 104(a)(2) is unconstitutional as applied to her award because compensation for a non-physical personal injury is not income under the Sixteenth Amendment if, as here, it is unrelated to lost wages or earnings.
Ms. Murphy was a whistleblower who alleged that she was blacklisted for complaining about violations of environmental statutes. Her case included a significant claim for emotional distress and loss of reputation. She paid taxes upon her recovery, then sued for a refund, arguing that In victory, her attorney David K. Colapinto remarked: “The government had the audacity to argue that compensatory damages for emotional distress and loss of reputation are not ‘make whole’ damages and can be taxed as income because the economic value of human life is ‘zero.’ Hopefully, today’s ruling marks the beginning of the end of this arcane and regressive policy of taxing non-physical compensatory damage awards.” Now that the briefs are in, the IRS position looks better than average for a losing party seeking reconsideration. The TaxProfBlog has had a lot to say about it, as has The Volokh Conspiracy and the National Employment Lawyer's Association. Murphy's brief can be read here.
April 23, 2007 in Published Opinions | Permalink | Comments (0) | TrackBack (0)
Further Thoughts on Fireside Bank
We've also found two or three important implications that we may have overlooked in our initial reading of Fireside Bank.
In addition to the holding refusing to find an exception to the one-way intervention rule, and upholding class certification nonetheless, and in addition to some favorable language which could be useful to anyone moving for certification, if the facts fit, there are two other very interesting implications that could broadly affect standing requirements under the UCL, and the scope of discovery in any class action.
With respect to the UCL angle, the Supreme Court appears to have endorsed an aggrieved party's right to seek injunctive relief even if they suffered no loss of money or property, even after Proposition 64. The court wrote that the named class representative would have standing to seek injunctive relief under the unfair competition law even if she was not entitled to restitution. The court wrote that if the plaintiff could show that she was deprived of a fair opportunity to redeem the financed vehicle, "followed by an unlawful demand for payment" she would be able to proceed under the unfair competition law. We do not see a loss of money or property under those facts unless the plaintiff paid money in response to the demand. Perhaps showing a wrongful demand for money or property, or a threatened loss of money or property is enough.
Second, near the end of the opinion's discussion of the typicality analysis for class certification, the court writes:
Fireside Bank objects to inquiry into the substance of these defenses by noting our conclusion in Linder that a court, in determining class certification, should not consider the merits. (Linder v. Thrifty Oil Co., supra, 23 Cal.4th at pp. 439-443.) But there, we said only that a plaintiff need not establish a likelihood of success on the merits in order to obtain class certification. It does not follow that, in determining whether the criteria of Code of Civil Procedure section 382 are met, a trial or appellate court is precluded from considering how various claims and defenses relate and may affect the course of the litigation, considerations that may overlap the case’s merits. (See Hanon v. Dataproducts Corp., supra, 976 F.2d at p. 509 [court may consider “evidence which goes to the requirements of [Fed. Rules Civ.Proc.,] Rule 23 even though the evidence may also relate to the underlying merits of the case”].) Indeed, in Linder we expressly recognized that “whether the claims or defenses of the representative plaintiffs are typical of class claims or defenses” was an issue that might necessarily be intertwined with the merits of the case, but which a court considering certification necessarily could and should consider. (Linder, at p. 443; see Hardy v. City Optical Inc. (7th Cir. 1994) 39 F.3d 765, 770 [rejecting challenge to typicality based on arguable unique defense on basis that defense was not arguable in light of defendants’ factual concessions].)
This is the second opinion in the last year (the first being Dunbar v. Albertson's, Inc.) that appears to chip away at the long-held belief that discovery that gets into the merits of the case are out-of-bounds prior to certification in a class action. For many years, the scope of pre-certification discovery has traditionally been limited to "certification-based" issues and not "merits-based" issues if discovery on liability issues would be expensive and time-consuming. Carabini v. Superior Court (King) (1994) 26 Cal.App.4th 239, 241. However, in Dunbar, the Court of Appeal held that the party seeking class certification "must explain how [a] procedure will effectively manage the issues in question". Imposing that burden necessarily must mean that a plaintiff must have the due process right of inquiring into the facts and evidence that could be used to address that burden. That means at least some meaningful merits-based discovery. Here, the Supreme Court has expressly noted that “whether the claims or defenses of the representative plaintiffs are typical of class claims or defenses” was an issue that might necessarily be intertwined with the merits of the case, but which a court considering certification necessarily could and should consider. If the court can and should consider issues intertwined with the merits at the certification hearing, that means discovery must be permitted into such intertwining issues prior to the certification motion being filed.
Finally, Fireside Bank does away with the argument that a class action might not be superior to the simpler alternative of a non-class action representative action under Business & Professions Code S 17200. After Proposition 64, there is no longer any such beast under California law. [Hat tip to the UCL Practitioner.]
April 20, 2007 in Class Actions, Published Opinions, Tactics | Permalink | Comments (1) | TrackBack (0)
We've come up with at least two or three other significant implications of the Murphy decision which we did not mention in our original post regarding the decision.
There were still a few defense firms raising the "no private right of action" argument or the "exhaustion of PAGA remedies" defense. That issue was a likely one to be addressed, yet again, in the Savaglio v. Wal-Mart case (which is summed up in a cool powerpoint slide we found here). Those issues are now dead. Until Murphy, all of the precedent and authority indicated a private right of action and no need to exhaust administrative remedies: from the plain language of Labor Code § 218, to the October 17, 2003 DLSE opinion letter, to the unpublished decision in Banda v. Richard Bagdasarian, Inc., to the published opinions in Caliber Bodyworks v. Superior Court (2005) 134 Cal.App.4th 365 and Dunlap v. Superior Court (2006) 142 Cal.App.4th 330. However, despite the Supreme Court's decisions not to review any of those decisions, defendants continued to argue the points, in the hope of getting the Supreme Court to rule to the contrary. Unfortunately for those advocates, those arguments were premised upon the determination that the hour of pay was a penalty. If it is a wage, there is no question that an employee is entitled under Labor Code § 218 to sue directly for that compensation, and there is no need to raise a complaint with the DLSE or to invoke PAGA.
Secondly, the characterization of such pay as a wage invokes the potential applicability of Labor Code § 206.5, which provides:
No employer shall require the execution of any release of any claim or right on account of wages due, or to become due, or made as an advance on wages to be earned, unless payment of such wages has been made. Any release required or executed in violation of the provisions of this section shall be null and void as between the employer and the employee and the violation of the provisions of this section shall be a misdemeanor.
Since the hour of pay is a wage, anytime an employer seeks to obtain a waiver and release of liability without actually paying the meal or rest break pay required under section 226.7, section 206.5 might invalidate the releases.
Finally, a few people have wondered whether Murphy now permits employers to force employees to work through meal and rest periods, as long as they pay the extra hour. In Tomlinson v. Indymac Bank, F.S.B. (C.D. Cal. 2005) 359 F.Supp.2d 891, Judge Selna found the hour of pay to be a wage, relying in part upon this comparison to overtime pay:
Just as an understaffed company may make the conscious decision to pay its employees time and a half to work overtime, the same understaffed company also can decide to have its employees forego their meal and rest breaks if it compensates them at a higher rate. In both instances, the employee earns the higher wage by working additional time.
The Court of Appeal decision in Murphy criticized this view:
We disagree with the district court judge's interpretation. While the Labor Code allows employers to require overtime work, albeit at a higher rate of compensation, it does not allow employers to deny meal and rest breaks. [fn.22 "... shall be compensated at the rate of no less than one and one-half times the regular rate of pay ... " with section 512: "An employer may not employ an employee ... without providing the employee with a meal period of not less than 30 minutes ... "]
That criticism (and if we recall correctly, some similar criticism in other opinions superceded by Murphy) is no longer contained in a citeable case. The Supreme Court's opinion in Murphy makes no mention of Tomlinson or anything similar to the views Judge Selna expressed. However, we believe that Section 512's flat prohibition against denying those breaks is not excused by an employer making the payment under Section 226.7, and neither Murphy nor any other California case has hinted, much less held, that an employer can choose to pay the hour and deny their employees breaks without consequence.
April 20, 2007 in Class Actions, Published Opinions | Permalink | Comments (3) | TrackBack (0)
Murphy Decides OT Statutes of Limitation?
The L.A. Times might not be your best source of legal analysis for wage and hour issues. Yesterday, Molly Selvin, a popular staff writer for the Times, wrote a Q&A column about Monday's Murphy v. Kenneth Cole Productions case. It included this quip:
"What did Monday's decision settle?
Monday's ruling settled the question of whether nonexempt employees who claim they were denied overtime or meal and rest breaks may ask for up to three years of back pay or only one. The court said three years."
It did settle that question for meal and rest breaks. The time for filing suit on overtime claims has been well settled for many, many, years, however.
April 19, 2007 in Miscellaneous | Permalink | Comments (0) | TrackBack (0)
Cal Supreme Court Arguments Online
If you didn't get a chance to attend the Murphy v. Kenneth Cole Productions argument, but you still want to see if for yourself, now you can. The California Supreme Court's website, which is getting better all the time, now includes a video of that hearing and several others, on its "Broadcast" page, which can be accessed at http://www.courtinfo.ca.gov/courts/supreme/audio-arch.htm.
The link that launches the Murphy video is located at http://easylink.playstream.com/aocstream/sct_030707_10.wvx.
Fireside Bank: No One-Way Invention in Class Actions
The other big opinion handed down by the Supreme Court on Monday was Fireside Bank v. Superior Court (Gonzalez) .The order granting review framed the issue as follows:
May a trial court ever depart from the preferred practice of deciding whether to certify a class action before adjudicating any class claims on the merits, or is the rule against such “one-way intervention” in class actions a firm prohibition applicable in all circumstances?
The short answer was "no, the rule is always applicable." The long answer, however, was quite interesting. The holding is stated as follows:
A largely settled feature of state and federal procedure is that trial courts in class action proceedings should decide whether a class is proper and, if so, order class notice before ruling on the substantive merits of the action. (See Green v. Obledo (1981) 29 Cal.3d 126, 146 (Green); Fed. Rules Civ.Proc., rule 23(c)(1)(A), 28 U.S.C.; Hickey v. Duffy (7th Cir. 1987) 827 F.2d 234, 237.) The virtue of this sequence is that it promotes judicial efficiency, by postponing merits rulings until such time as all parties may be bound, and fairness, by ensuring that parties bear equally the benefits and burdens of favorable and unfavorable merits rulings. The rule stands as a barrier against the problem of “one-way intervention,” whereby not-yet-bound absent plaintiffs may elect to stay in a class after favorable merits rulings but opt out after unfavorable ones.
Here, over class defendant Fireside Bank’s objections and to class representative Sandra Gonzalez’s surprise, the trial court ruled on the substantive merits concurrent with deciding that a class could be certified and before class notice had gone out. The Court of Appeal denied writ relief, concluding the rule we endorsed in Green governing the order of operations in class action proceedings was largely a matter of discretion and was not violated by the trial court, and also rejecting Fireside Bank’s substantive challenges to class certification.
We reverse. While the Green rule is subject to exceptions, leaving trial courts vested with a certain degree of discretion in its application, no such exception is applicable here and thus the trial court abused its discretion in acting as it did. On the merits, however, its class certification order was correct. Accordingly, we leave in place the trial court’s class certification order, direct that the trial court’s entry of judgment on the pleadings in favor of Gonzalez be vacated, and remand for further proceedings.
In class action litigation, any significant ruling on the merits should be deferred, absent a request for a ruling by the defendant (which, oddly enough, we see quite frequently in our own practice), until after certification, notice to the class and expiration of the opt-out period. Here, the class action came on a cross-complaint, and there was a motion for judgment on the pleadings regarding the complaint filed by the plaintiff, which was also the cross-defendant in the class action cross-complaint. The ruling would significantly affect the liability on the class action cross-complaint. Over the objection of the defense -- with the plaintiff's counsel in agreement with the defense -- the trial court promised not to rule on the motion for judgment on the pleadings until after certification notices were given and the time to opt-out had expired. Nonetheless, when the order was issued, it included a ruling on the motion for judgment on the pleadings. The defense appealed, and one of the remedies that they sought was a vacation of the certification order and a bar of any further class proceedings. The Supreme Court found that to be too harsh.
Here, although Gonzalez moved for judgment on the pleadings before seeking class certification, this order of filing was justified by changed circumstances. Moreover, Gonzalez thereafter agreed to have all class issues resolved before any ruling on the merits. Given the trial court’s express acknowledgment that class issues should be resolved first and its indication it would do so, Gonzalez had no reason to withdraw her motion for judgment on the pleadings. She bears no responsibility for the trial court’s subsequent error.
On these facts, to bar Gonzalez from pursuing a class action in response to the trial court’s error would be inequitable. Instead, vacating the trial court’s premature merits ruling and ordering the trial court to disregard it and decide any future motion de novo will reduce the risk of one-way intervention for Fireside Bank without unduly punishing plaintiffs.
Thus, the judgment on the pleadings shall be relitigated after the class is notified of the certification. Presumably, the defense will have the opportunity to file a peremptory challenge and obtain a new judge. You can read the full text of Fireside Bank here in pdf or Word format.
April 18, 2007 in Class Actions, Published Opinions | Permalink | Comments (0) | TrackBack (1)
April 17, 2007 in Published Opinions | Permalink | Comments (5) | TrackBack (1)
Murphy: It's a Wage
The Supreme Court issued its long-awaited decision in Murphy v. Kennethy Cole Productions this morning, holding that the hour of pay under Labor Code § 226.7 is a wage or premium pay, governed by the longer, three year statute of limitations. We were in the minority of folks asserting that the Supreme Court would eventual hold the pay to be a wage, but although we were not shocked by the result, we were surprised, given some of the questions asked during oral argument, that the opinion was unanimous. The opinion was authored by Justice Moreno. We will post more analysis later today or tomorrow. For now, here is the holding:
We hold that section 226.7’s plain language, the administrative and legislative history, and the compensatory purpose of the remedy compel the conclusion that the “additional hour of pay” is a premium wage, not a penalty. We further hold that the trial court properly exercised its discretion in deciding to consider the additional, but related, wage claims during the de novo trial. The contrary judgment of the Court of Appeal is reversed.
You can read the full text of Murphy here in pdf or Word format.
April 16, 2007 in Published Opinions | Permalink | Comments (1) | TrackBack (0)
Pioneer Electronics Case Applies to Wage and Hour Class Actions
To our surprise, not everyone agreed with us that the Pioneer Electronics case was of interest to wage and hour attorneys. Defense attorneys were quick to point out that Pioneer Electronics was a consumer case, and argued, both in briefs and in a few articles we read, that this distinction was important. It wasn't long before a published opinion addressed the contention.
In Belaire-West Landscaping, Inc. v. Superior Court, plaintiffs Sebastian Rodriguez and Jose Luis Mosqueda filed a putative class action lawsuit against their former employer, alleging wage and hour violations. During precertification discovery, the trial court granted a motion to compel Belaire-West Landscaping to provide the names and contact information of all current and former employees, and approved a proposed notice to those individuals that would have required them to object in writing in order to prevent information about them from being disclosed to the plaintiffs. The employer filed a writ petition, arguing that the Supreme Court's decision should apply only to consumer cases, not employment actions. The court denied the writ petition.
Applying Pioneer Electronics (USA), Inc. v. Superior Court 40 Cal.4th 360 (Pioneer), we conclude that the opt-out notice adequately protects the privacy rights of the current and former employees involved. We deny the writ. ...
While it is unlikely that the employees anticipated broad dissemination of their contact information when they gave it to Belaire-West, that does not mean that they would wish it to be withheld from a class action plaintiff who seeks relief for violations of employment laws. Just as the dissatisfied Pioneer customers could be expected to want their information revealed to a class action plaintiff who might obtain relief for the defective DVD players (Pioneer, supra, 40 Cal.4th at pp. 371-372), so can current and former Belaire-West employees reasonably be expected to want their information disclosed to a class action plaintiff who may ultimately recover for them unpaid wages that they are owed. ...
As the Pioneer court pointed out, the identity of potential members of a class is usually discoverable, and the disclosure of this contact information is neither unduly personal nor overly intrusive. (Pioneer, supra, 40 Cal.4th at p. 373.) Here, as in Pioneer, the court’s order imposed vital limits, requiring written notice of the proposed disclosure to all current and former employees and providing them with the opportunity to object to the release of their contact information to plaintiffs. Just as in Pioneer, the court’s order here involved no serious invasion of privacy. ...
Petitioners express concern that an employee might “dispose[] of the notice in the trash without opening it, or ignore[] the notice because of lack of recognition or interest,” but the likelihood that the notice would be overlooked or mistakenly discarded as junk mail appears smaller here than in Pioneer, supra, 40 Cal.4th 360: A communication from a current or former employer is more likely to command a recipient’s attention than a mailing from an electronics manufacturer, and it is doubtful that it would be mistaken for advertising or junk mail. The balance of opposing interests here tilts even more in favor of the court’s disclosure order than it did in Pioneer, because at stake here is the fundamental public policy underlying California’s employment laws. “‘[T]he prompt payment of wages due an employee is a fundamental policy of this state.’
You can download the full text of Belaire-West Landscaping here in pdf or Word format.
April 15, 2007 in Class Actions, Published Opinions | Permalink | Comments (0) | TrackBack (0)
Fireside Bank and Murphy Due Out Monday at 10:00 a.m.
The Supreme Court is about to issue two opinion tomorrow of great interest to wage and hour attorneys and any attorneys who handle class actions. The first case mentioned on the court's Notice of Forthcoming Filing is Fireside Bank v. Superior Court (Gonzalez) S139171 (H027976 – Santa Clara County Superior Court – (CV817959) The matter was argued on January 29, 2007, in Sacramento. The order granting review framed the issue as follows:
The second, which is probably the most eagerly anticipated wage and hour opinion in more than a year, is Murphy v. Kennethy Cole Productions S140308 (A107219/A108346 – San Francisco County Superior Court – (CGC-03-423260). The matter was argued on March 7, 2007, in San Francisco. The order granting review framed the issue as follows:
This case presents the following issues: (1) Is a claim under Labor Code section 226.7 for the required payment of “one additional hour of pay at the employee’s regular rate of compensation” for each day that an employer fails to provide mandatory meal or rest periods to an employee governed by the three-year statute of limitations for a claim for compensation (Code Civ. Proc., § 338) or the one-year statute of limitations for a claim for payment of a penalty (Code Civ. Proc., § 340)? (2) When an employee obtains an award on such a wage claim in administrative proceedings and the employer seeks de novo review in superior court, can the employee pursue additional wage claims not presented in the administrative proceedings?
We've discussed both cases in prior posts. Our discussions of Murphy are too numerous to list, but the most recent one can be reviewed here. Later this week, we'll be getting caught up on some other recently published opinions of interest to wage and hour practitioners. There have been several, but a trip to sunny and warm Ireland prevented us from finishing our analysis.
April 13, 2007 in Published Opinions | Permalink | Comments (0) | TrackBack (0)
CELA Seminar: Getting Through a Class Action Trial
The California Employment Lawyer's Association will present an advanced seminar on Getting to and Through a Class Action Trial on May 11, 2007, at the Hacienda Hotel in El Segundo. Seasoned veterans will discuss strategies and share their experiences presenting trial plans and class proof including surveys, sampling, statistical analysis, and expert testimony, to help plaintiffs' attorneys create and execute effective and manageable class action trial plans. The panel of speakers will include Judge J. Stephen Czuleger from Los Angeles Superior Court and Judge Ronald Sabraw (Ret.), former Alameda County Superior Court Complex Litigation Department.
You can download a brochure about the event here, and download the registration forms here. The price goes up after April 20, 2007, and seating will be limited.
April 11, 2007 in Miscellaneous | Permalink | Comments (0) | TrackBack (0)
NY Wage and Hour Seminar
If you do wage and hour litigation, class action or otherwise, and you want to see what the rest of the country is doing, and/or you'd like a tax-deductible trip to New York City later this month, check out The American Conference Institute's seminar on Wage & Hour Claims and Class Actions, which will be held in the Flatotel Hotel, New York, NY.
We've been to one of ACI's seminars before and thought it was worth the high price ($1,995 after February). We have been sent a priority code for us "and our colleagues" to use which gets you $200 off. You can check out a brochure here.
April 10, 2007 in Miscellaneous | Permalink | Comments (0) | TrackBack (0)
The History of California Minimum Wage
old mimimum
percentage of increase over previous wage
January 1, 2008 $8.00 $7.50 $0.50 6.7 percent
January 1, 2007 $7.50 $6.75 $0.75 11.1 percent
January 1, 2002 $6.75 $6.25 $0.50 8.00 percent
January 1, 2001 $6.25 $5.75 $0.50 8.70 percent
March 1, 1998 $5.75 $5.15 $0.60 11.65 percent
September 1, 1997 $5.15 $5.00 $0.15 3.00 percent
March 1, 1997 $5.00 $4.75 $0.25 5.26 percent
October 1, 1996 $4.75 $4.25 $0.50 11.76 percent
July 1, 1988 $4.25 $3.35 $0.90 26.87 percent
January 1, 1981 $3.35 $3.10 $0.25 8.06 percent
January 1, 1980 $3.10 $2.90 $0.20 6.90 percent
January 1, 1979 $2.90 $2.65 $0.25 9.43 percent
April 1, 1978 $2.65 $2.50 $0.15 6.00 percent
October 18, 1976 $2.50 $2.00 $0.50 25.00 percent
March 4, 1974 $2.00 $1.65 $0.35 21.21 percent
February 1, 1968 $1.65 $1.30 $0.35 26.92 percent
August 30, 1964 $1.30 $1.25 $0.05 4.00 percent
August 30, 1963 $1.25 $1.00 $0.25 25.00 percent
November 15, 1957 $1.00 $0.75 $0.25 33.33 percent
August 1, 1952 $0.75 $0.65 $0.10 15.38 percent
June 1, 1947 $0.65 $0.45 $0.20 44.44 percent
February 8, 1943 $0.45 $0.33 $0.12 36.36 percent
1920 $0.33 $0.28 $0.05 17.86 percent
1919 $0.28 $0.21 $0.07 33.33 percent
1918 $0.21 $0.16 $0.05 31.25 percent
1916 $0.16 - - -
Source: California DLSE.
April 09, 2007 in Statutes | Permalink | Comments (4) | TrackBack (0)
An underused tactic that often benefits employees with good wage and hour claims is the reference check. At the onset of a dispute, getting a paid reference check can often be quite valuable. There are a few companies who provide this service for a small fee, and the results can be quite valuable.
Many wage and hour plaintiffs first seek an attorney when they are terminated, and often, an experienced employment attorney can explain why the employee might not have a meritorious wrongful termination claim, but offer the good news that, although there is no claim for wrongful termination, there is a substantial wage claim against the former employer. These employees are often still in the job search stage, and knowing what their former employer is saying about them can aid them in interviewing and resume writing.
Every once in a while, the admissions made by the employer during the reference check can be crucial to a case. We've had several instances in which the former supervisor said that, for all their faults, the plaintiffs were hard working, and willing to put in long hours. When the contention invariably arrived from the employer declaring that the plaintiff rarely if ever worked past 5:00 p.m., the reference check was worth its weight in gold. Two service providers we are familiar with are Allison Taylor, and Documented Reference Check. If you know of any others, or have good or bad experiences (for employees or employers) with any of these service providers, drop us an email or leave a comment.
April 06, 2007 in Tactics | Permalink | Comments (0) | TrackBack (0)
Where To File Your Wage Claim With The Labor Commissioner
We get a lot of emails from people wondering where they can go to file their wage claims with the Labor Commissioner. Here, per the DLSE website, is a list of locations and contact numbers. The numbers listed in red below are lines that contain general information on wage and hour issues. If the information you need is not provided in the general information, or if you have a question regarding a claim already filed, please call the general office number listed below in black.
28 Civic Center Plaza, Room 625
619 Second Street, Room 109
(707) 445-6613
(707) 441-4604
770 E. Shaw Avenue, Room 315
San Francisco--Headquarters
April 05, 2007 in Do I Have A Case? | Permalink | Comments (1) | TrackBack (0)
Hernandez v. Hillsides to be Reviewed
One case that was granted review a few weeks ago, which we didn't mention at first because it was slightly off topic, Hernandez v. Hillsides, Inc. (2006) 142 Cal.App.4th 1377, S147552, B183713. The case presents the following issue:
May employees assert a cause of action for invasion of privacy when their employer installed a hidden surveillance camera in the office to investigate whether someone was using an office computer for improper purposes, only operated the camera after normal working hours, and did not actually capture any video of the employees who worked in the office?
Every so often, our wage cases have side issues involving employee privacy. Hernandez certainly presents interesting issues involving employee privacy, and we'll keep our eyes on it, even though it lacks any specific wage and hour law implications.
April 04, 2007 in Miscellaneous | Permalink | Comments (0) | TrackBack (0)
Employee Class Action Websites
We recently removed most of the links to employee class action websites that were not ours. It wasn't because the blog is on our dime, it's because most of the links were dead, or only went to generic law firm websites. We aren't here to promote other firms, but we are here, in part, to help employees find out about class actions from which they might benefit. If you represent a class or putative class of California employees, and you have a website specifically devoted to that case, let us know, and we'll add you to the rolls. Email us at CaliforniaWageLaw.
April 03, 2007 in Class Actions | Permalink | Comments (0) | TrackBack (0)
Plaintiffs Bear Burden of Proving Home-State Controversy On Application For Remand Under CAFA
Under CAFA (the Class Action Fairness Act), federal courts have subject matter jurisdiction over class actions if the putative class size is at least 100 members, the aggregate amount in controversy exceeds $5,000,000 for the putative class as a whole, and any class member is a citizen of a different state from any defendant. Among the most likely exceptions to this jurisdiction is the so-called "home-state controversy" exception, which arises when at least two-thirds of the class and the primary defendants are citizens of the state where the action was filed. If the exception applies, upon a motion to remand, the federal court must decline jurisdiction. But who bears the burden of proving whether the primary defendant(s) and two-thirds of the class members are citizens of the state where the action was filed?
The 9th Circuit Court of Appeals recently joined the 5th, 7th and 11th Circuits in holding that the party seeking remand of a case removed under CAFA bears the burden of proving the "home-state controversy" exception to CAFA jurisdiction. Serrano v. 180 Connect, Inc. (9th Cir. 2007) __ F.3d __. For the most part, the opinion gets no more interesting than it does in the holding, but if you want, you can download a full text pdf of Serrano here.
April 02, 2007 in Class Actions, Published Opinions | Permalink | Comments (0) | TrackBack (0)