Newly-Published Labor and Employment Law Cases

Atkins v. St. Cecilia Catholic School (CA2/8 B314220 4/28/23) Ministerial Exception 

The trial court granted St. Cecilia’s motion for summary judgment on Atkins’ age discrimination claim under the Fair Employment and Housing Act (Gov. Code, § 12900 et seq.) on the ground that Atkins’ suit was barred by the ministerial exception, a constitutional doctrine that precludes certain employment claims brought against a religious institution by its ministers. The appellate court reversed and remanded, finding there were triable issues of material fact as to whether the ministerial exception applies to Atkins’ former position as an office administrator and art teacher.

McCormick v. CalPERS (CA1/1 A164672, filed 4/3/23, pub. ord. 4/25/23) Public Sector Disability Retirement | Attorney Fees

In McCormick v. Public Employees’ Retirement System (2019) 41 Cal.App.5th 428, the court held that CalPERS members are eligible for disability retirement under the Public Employees’ Retirement Law (PERL) (Gov. Code, § 20000 et seq.) when they can no longer perform their usual duties at the location where they are required to work, and also clarified that a CalPERS member need not request an accommodation to become eligible for disability retirement. On remand, the trial court denied McCormick’s motion for attorney fees under Code of Civil Procedure section 1021.5, concluding she did not satisfy the significant benefit requirement. The appellate court reversed and remanded, concluding its prior decision conferred a significant benefit on the public because it addressed a statutory scheme bearing on employment benefits for millions of people and protected the rights of employees who serve the public.

Westmoreland v. Kindercare Education LLC (CA1/2 A164090 4/24/23) Arbitration | PAGA 

The language of the arbitration agreement’s savings clause making the agreement invalid if its waiver of class and collective claims is found unenforceable, i.e., the agreement’s “poison pill” provision, was not ambiguous and thus there was no reason to apply the doctrine of contra proferentem against Kindercare. The poison pill provision also precluded the trial court from sending Westmoreland’s individual PAGA claims to arbitration under Viking River Cruises, Inc. v. Moriana (2022) 142 S.Ct. 1906.

Basith v. Lithia Motors, Inc. (CA2/8 B316098 4/21/23) Arbitration | Unconscionability 

Even when an arbitration agreement has a high level of procedural unconscionability (such as a take-it-or-leave-it form employment agreement), there still must be substantive unconscionability for a court to refuse to enforce the arbitration agreement. Basith failed to establish substantive unconscionability because a layperson could reasonably understand the arbitration agreement’s language waiving certain rights, as well as its carve-out allowing employees to file administrative claims with the Equal Employment Opportunity Commission or Department of Fair Employment and Housing. The trial court thus erroneously denied Lithia Motors’ motion to compel arbitration.

Fuentes v. Empire Nissan, Inc. (CA2/8 B314490 4/21/23) Arbitration | Unconscionability 

Even when an arbitration agreement has a high level of procedural unconscionability (such as a take-it-or-leave-it form employment agreement), there still must be substantive unconscionability for a court to refuse to enforce the arbitration agreement. Small font size is an indicator of procedural, not substantive unconscionability, because substantive unconscionability focuses on the substance of the contract terms, and terms can be fair or unfair in substance, no matter the font size. Because Fuentes failed to show the arbitration agreement was substantively unconscionable, the trial court erroneously denied Empire Nissan’s motion to compel arbitration.

Jackson v. Amazon.com, Inc. (9^th Cir. 21-56107 4/19/23) Arbitration 

The panel affirmed the district court’s order denying Amazon.com, Inc.’s motion to compel arbitration in a putative class action brought by Jackson, seeking to represent a class of Amazon Flex drivers, and claiming damages and injunctive relief for alleged privacy violations in violation of state and federal laws. The complaint alleged that Amazon monitored and wiretapped Amazon Flex drivers’ conversations when they communicated during off hours in closed Facebook groups. The panel held these allegations fell outside the scope of the arbitration clause because the complaint did not allege that any provision of the Flex driver contract was violated and thus violation of the contract would not be an element of any of Jackson’s claims.

Gola v. University of S.F. (CA1/2 A161477 4/13/23) LMRA Preemption

Gola and members of the class she represents were adjunct faculty—part-time university professors engaged to teach on a semester-by-semester basis—at the University of San Francisco. The trial court awarded the class penalties and attorneys’ fees in connection with the University’s failure to issue wage statements compliant with Labor Code section 226, subdivision (a). The appellate court refused to apply newly enacted Labor Code section 515.7—permitting employers to classify certain adjunct faculty as exempt from specified wage statement requirements—to the wage statements at issue, and rejected the University’s arguments that the trial court erred in finding it liable for section 226 violations. The appellate court also affirmed the trial court’s dismissal of the adjuncts’ claims for unpaid wages and waiting-time penalties, agreeing that the claims were preempted by the federal Labor Management Relations Act because those claims could not be resolved without interpreting the collective bargaining agreement between the University and the labor organization representing its adjunct faculty.

Nickson v. Shemran, Inc. (CA4/1 D080914 4/7/23) PAGA | Arbitration 

The trial court denied Shemran, Inc.’s motion to compel arbitration of a Labor Code Private Attorneys General Act of 2004 (PAGA) (Lab. Code, § 2698 et seq.) action brought by a former employee, Nickson, based on Nickson’s agreement to arbitrate all individual claims arising from his employment. Under Viking River Cruises, Inc. v. Moriana (2022) 142 S.Ct. 1906, Nickson’s individual PAGA claims are arbitrable. Pursuant to the agreement’s delegation clause, the arbitrator has exclusive authority to decide whether the agreement is unenforceable because it is unconscionable. Under Kim v. Reins (2020) 9 Cal.5th 73, Nickson’s nonindividual PAGA claims should not be dismissed.

Earnest v. Com. on Teacher Credentialing (CA3 C095602 4/5/23) Commission on Teacher Credentialing | Teacher Discipline 

Education Code section 44242.5, subdivision (b)(3) provides that the Committee of Credentials has jurisdiction to commence a formal review of a credential holder’s fitness to hold a credential upon receipt of a statement from an employer notifying the Commission on Teacher Credentialing that, as a result of an allegation of misconduct, the employer took an enumerated adverse employment action or the employee resigned or otherwise left employment. Because the plain language of section 44242.5, subdivision (b)(3) imposes the onus on the employer to determine whether to provide a notifying statement to the Committee, and thus only the employer may determine whether an enumerated action was the “result of an allegation of misconduct,” the Committee may not interpret an employer’s statements in response to a later inquiry from the Committee to indicate the existence of allegations of misconduct against the employee when an enumerated action was taken, when the employer expressly states no allegation of misconduct existed. Because the Committee lacked jurisdiction to conduct a formal review of Earnest’s fitness to hold a credential, the trial court properly granted his petition for writ of mandate setting aside the Committee’s disciplinary recommendation against him.

Bolden-Hardge v. Cal. State Controller (9^th Cir. 21-15660 4/3/23) Employment Discrimination | Free Exercise 

Bolden-Hardge, a devout Jehovah’s Witness, objected to California’s loyalty oath because she believed it would violate her religious beliefs by requiring her to pledge primary allegiance to the federal and state governments and to affirm her willingness to take up arms to defend them. When she was offered a position at the California Office of the State Controller, she requested an accommodation to sign the oath with an addendum specifying that her allegiance was first and foremost to God and that she would not take up arms. The Controller’s Office rejected this proposal and rescinded the job offer. The panel held that Bolden-Hardge pleaded a prima facie case of failure to accommodate religion under Title VII and FEHA by alleging that she held a bona fide religious belief that conflicted with the “faith and allegiance” component of the loyalty oath, which was an employment requirement. The panel further held that the Controller’s Office could not rebut Bolden-Hardge’s prima facie case by arguing that violating state law would pose an undue hardship as a matter of law, because where the employer is part of the very state government that is responsible for creating and enforcing the law, and there is no indication that violating that law would subject the public employer to an enforcement action by another part of state government, deeming accommodation a presumptive undue hardship at the pleadings stage would permit states to legislate away federal accommodation obligations.

GRFCO, Inc. v. Super. Ct. (CA4/2 E076823, filed 3/10/23, pub. ord. 4/3/23) Public Works/DLSE Debarment Appeal 

After an administrative hearing, the Department of Industrial Relations, Division of Labor Standards Enforcement debarred the appellants from acting as public works contractors. The DLSE found that in six instances the contractors had violated apprenticeship requirements, and in two instances the contractors’ principals had made false certifications under penalty of perjury. The trial court denied the contractors’ petition for administrative mandate. The appellate court affirmed, finding sufficient evidence to support DLSE’s findings and conclusions, no violation of the contractor’s First Amendment rights, and no evidence of DLSE bias against the contractors.