Newly-Published Labor and Employment Law Cases

September 2023

Barrera v. Apple American Group LLC (CA1/2 A165445 8/31/23) Post-Adolph PAGA Arbitration 

The court reversed in part and affirmed in part the trial court’s order denying defendants’ motion to compel arbitration of claims under the Private Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.) Based on Viking River Cruises, Inc. v. Moriana (2022) 596 U.S. ___, and the Federal Arbitration Act (FAA) (9 U.S.C. § 1 et seq.), the parties’ agreements require arbitration of plaintiffs’ PAGA claims that seek to recover civil penalties for Labor Code violations committed against plaintiffs. Under Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, plaintiffs’ PAGA claims that seek to recover civil penalties for Labor Code violations committed against employees other than plaintiffs may be pursued by plaintiffs in the trial court.

Krug v. Board of Trustees of the Cal. State Univ. (CA2/1 B320588 8/29/23) CSU Employee Reimbursement Policies 

Provisions of the Labor Code apply only to private employees unless the provision is specifically made applicable to public employees. Labor Code section 2802, which requires an employer to reimburse an employee for reasonable expenses incurred in performing their job duties, by its terms does not apply to counties, cities, or the state. Examining whether applying section 2802 to the California State University would infringe on the University’s “sovereign powers,” the court concluded the University was exempt from section 2802 in this case because the Education Code specifically grants the University authority to set rules for employee equipment allowances and the purchase of materials, supplies, and equipment.

Accurso v. In-N-Out Burgers (CA1/4 A165320 8/29/23) PAGA 

Appellants, plaintiffs in PAGA actions against In-N-Out in Los Angeles and Orange counties, were denied intervention in a similar action in Sonoma County in which settlement negotiations were under way. The court affirmed the denial of mandatory intervention, but reversed and remanded regarding permissive intervention because the trial court failed to analyze whether appellants would add anything of importance to the case which would outweigh any objections the parties may have to intervention.

LaCour v. Marshalls of California (CA1/4 A163920 8/29/23) PAGA 

Although LaCour’s notice of appeal specifically mentioned only the order granting Marshalls’ motion for judgment on the pleadings, the notice of appeal was sufficient to support an appeal of the adverse judgment against him together with all preliminary orders that preceded it. Because the Governor’s emergency order extending statutes of limitation in civil cases during the COVID-19 pandemic was constitutional, the trial court correctly ruled that LaCour’s PAGA complaint was timely filed. The trial court erred in giving claim preclusive effect to a federal court judgment in a prior PAGA case because the plaintiff in the prior case did not plead and could not have plead the same claims LaCour was pursuing, and she was not in privity with LaCour at the time of the settlement. The court vacated the judgment and remanded for further proceedings.  

Tecnocap LLP (NLRB 07-CA-273203 8/26/23) NLRA | Unilateral Change/Management Rights Clause

In Raytheon Network Centric Systems (2017) 365 NLRB No. 161, the National Labor Relations Board held that an employer may make discretionary changes during the term of a collective bargaining agreement based on a management rights clause in an expired agreement. The Board overruled Raytheon as inconsistent with long-established past practice jurisprudence flowing from NLRB v. Katz (1962) 369 U.S. 736. As a result, an employer may not defend a unilateral change in terms and condition of employment by relying on the management rights clause of an expired collective bargaining agreement.

Wendt Corporation (NLRB 07-CA-273203 8/26/23) NLRA | Unilateral Change/Past Practice

In Raytheon Network Centric Systems (2017) 365 NLRB No. 161, the National Labor Relations Board held that an employer may make discretionary changes during the term of a collective bargaining agreement provided the changes are similar in kind and degree to changes previously made by the employer. The Board overruled Raytheon as inconsistent with long-established past practice jurisprudence flowing from NLRB v. Katz (1962) 369 U.S. 736. As a result, an employer may not defend a unilateral change in terms and condition of employment by citing a past practice of such changes before its employees were represented by a union and thus before the employer had a statutory duty to bargain with the union.

Rossi v. Sequoia Union Elementary School (CA5 F085416 8/25/23) COVID-19 | Confidentiality of Medical Information Act 

Sequoia Union Elementary School placed Rossi on unpaid leave and ultimately terminated her for failing to provide her COVID vaccination status or undergo weekly COVID testing, as required by the State Public Health Officer’s August 12, 2021 Order. Rossi filed suit under the Confidentiality of Medical Information Act (Civil Code, § 56 et seq.) alleging discrimination due to her refusal to provide her COVID vaccination status, and unauthorized use of her medical information. The court affirmed the trial court’s granting of defendants’ demurrer, finding that the school did not violate the CMIA by complying with the State Public Health Officer’s August 12, 2021 Order.

Miller Plastic Products, Inc. (NLRB 06-CA-2662343 8/25/23) NLRA | Protected Concerted Activity

The National Labor Relations Board overruled Alstate Maintenance, LLC (2019) 367 NLRB No. 68, and returned to the standard under Meyers Industries (1986) 281 NLRB 882, for determining when an employee’s complaints are protected concerted activity under the National Labor Relations Act. Under this standard, the Board will look at the totality of the circumstances surrounding the employee’s complaint rather than the factors articulated in Alstate Maintenance, which the Board majority said unduly limited the scope of protected concerted activity under the NLRA.

Intertape Polymer Corp. (NLRB 07-CA-273203 8/25/23) NLRA | Retaliation Burden of Proof

Under the framework established in Wright Line (1980) 251 NLRB 1083 for deciding whether an employee suffered adverse employment action because of their NLRA-protected activity, the National Labor Relations Board’s General Counsel must make a prima facie case that the employee’s protected conduct was a motivating factor in the employer’s decision. The Board clarified that its decision in Tschiggfrie Properties, Ltd. (2019) 368 NLRB No. 120, did not alter the General Counsel’s burden under the Wright Line framework. The Board also clarified that Wright Line does not require the General Counsel to show particularized motivating animus towards an employee’s own protected activity.

CEMEX Construction Materials Pacific LLC (NLRB 28-CA-230115 8/25/23) NLRA | Bargaining Orders

Section 9(a) of the National Labor Relations Act provides that “[r]epresentatives designated or selected for the purposes of collective bargaining by the majority of the employees in a unit appropriate for such purposes, shall be the exclusive representative of all the employees in such unit for the purposes of collective bargaining.” When a labor union presents an employer with proof of majority support in an appropriate bargaining unit, the employer must either (1) recognize and bargain with the union or (2) file a petition with the National Labor Relations Board for an election to test the union’s majority status. If the employer petitions for an election but commits unfair labor practices in the period leading up to the election that may have an effect on employees’ ability to exercise free choice in the election, the NLRB will set aside election results unfavorable to the union and order the employer to recognize and bargain with the union.

Wit v. United Behavioral Health (9^th Cir. 20-17363 8/22/23) ERISA 

The court held that plaintiffs had Article III standing to bring their claims because they sufficiently alleged a concrete and particularized injury that materially affected each plaintiff and that was “fairly traceable” to UBH’s conduct. The court affirmed certification of three classes to pursue the fiduciary duty claim, but reversed certification of the denial of benefits classes because they were not sufficiently limited to those with claims arising under specific provisions of the plan guidelines. The court reversed the district court’s ruling that ERISA plans required the guidelines to be coextensive with generally accepted standards of care, and remanded for determination of whether the fiduciary duty claim was subject to the plans’ administrative exhaustion requirement and, if so, whether the requirement was satisfied by unnamed class members or should otherwise be excused.

Raines v. U.S. Healthworks Medical Group (SC S273630 8/21/23) FEHA Employer | Agent 

Subject to specified exceptions, section 12940 of the Fair Employment and Housing Act makes it an “unlawful employment practice” for “any employer” “to make any medical or psychological inquiry of an applicant” (§ 12940, subd. (e)(1).) Section 12926, subdivision (d) states that, for purposes of the FEHA, the term “ ‘[e]mployer’ includes any person regularly employing five or more persons, or any person acting as an agent of an employer, directly or indirectly . . . .” The court held that, under the language of section 12926, subdivision (d), an employer’s business entity agents can be held directly liable under the FEHA for employment discrimination in appropriate circumstances when the business-entity agent has at least five employees and carries out FEHA-regulated activities on behalf of an employer. 

Assn. for L.A. Deputy Sheriffs v. County of L.A. (CA2/1 B316067 filed 7/27/23, pub. ord. 8/21/23) Civil Services Commission | Settlement Agreements  

Three former sheriff’s deputies and their labor union filed suit seeking to enforce settlement agreements with sheriff’s department personnel that purportedly reinstated the officers’ employment. The court ruled that the county charter did not give the county counsel exclusive authority to settle discipline appeals but that the trial court nonetheless properly sustained the defendants’ demurrer because plaintiffs did not allege a basis to find that the individuals who executed the settlements were authorized to do so. The court also found the trial court erred in denying leave to amend, and remanded for further proceedings.

Cal. Dept. Corrections & Rehabilitation v. Workers’ Comp. App. Bd. (CA4/2 E079076 8/14/23) Industrial Disability Leave and Workers’ Compensation 

In workers’ compensation law, if a worker is injured because of the employer’s serious and willful misconduct, the “compensation” the worker is entitled to increases by one half. The statute defining “compensation” limits the term to benefits or payments provided by Division 4 of the Labor Code. The court found that “compensation” does not include industrial disability leave, which is provided by the Government Code, and therefore cannot be increased by one half in cases of serious and willful employer misconduct. 

Hittle v. City of Stockton (9^th Cir. 22-15485 8/4/23) Religious Discrimination 

The court affirmed summary judgment in favor of the defendants on Hittle’s religious discrimination claims under Title VII and the California Fair Employment and Housing Act. The court found that under the McDonnell Douglas burden-shifting framework, Hittle failed to present sufficient evidence that the defendants harbored discriminatory animus against him because of his religion, that defendants’ legitimate, non-discriminatory reasons for firing Hittle were sufficient to rebut his evidence of discrimination, and that he failed to persuade that these non-discriminatory reasons were pretextual.

Bugielski v. AT&T Services, Inc. (9^th Cir. 21-56196 8/4/23) ERISA

Former AT&T employees who contributed to its retirement plan brought a class action alleging that AT&T failed to investigate and evaluate all the compensation the plan’s recordkeeper, Fidelity Workplace Services, received from mutual funds through BrokerageLink, Fidelity’s brokerage account platform, and from Financial Engines Advisors. The court reversed summary judgment on the prohibited-transaction claim and remanded for the district court to determine whether AT&T met the requirements for an exemption from the prohibited-transaction bar because the contract was “reasonable,” the services were “necessary,” and no more than “reasonable compensation” was paid for the services. The court also reversed and remanded the duty-of-prudence claim, finding that, as a fiduciary, AT&T was required to monitor the compensation that Fidelity received through Brokerage Link and Financial Engines. On the reporting claim, the court affirmed as to the compensation from BrokerageLink and reversed as to the compensation from Financial Engines. The court concluded that AT&T adequately reported the compensation from Financial Engines on its Form 5500s with the Department of Labor, but it did not adequately report the compensation from Financial Engines because an alternative reporting method for “eligible indirect compensation” was not available. 

Stericycle, Inc. (NLRB 04-CA-137660 8/2/23) NLRA | Work Rules

The National Labor Relations Board overruled Boeing Co. (2017) 365 NLRB No. 154 and LA Specialty Produce Co. (2019) 368 NLRB No. 93, and adopted a modified version of the test under Lutheran Heritage Village-Livonia (2004) 343 NLRB 646, for determining when an employer’s work rule interferes with NLRA-protected rights. Under this modified standard, the General Counsel must prove that a challenged rule has a reasonable tendency to chill employees from exercising their NLRA rights. If the General Counsel meets that burden, the rule is presumptively unlawful but the employer may rebut the presumption by proving that the rule advances a legitimate and substantial business interest and that the employer is unable to advance that interest with a more narrowly tailored rule.

Persian Broad. Serv. Global, Inc. v. Walsh (9^th Cir. 22-55254 8/1/23) Wages | Labor Condition Applications 

A Labor Condition Application (LCA) for an E-3 visa-holder through the U.S. Department of Labor binds an employer to pay the required wages for the period of authorized employment, and only two exemptions can eliminate an employer’s legal obligations: when an employee is nonproductive for personal reasons or there has been a bona fide termination of the employment relationship. The court found Majid Varess’ claim for unpaid wages was timely because by failing to pay Varess the wages required under the LCA, Persian Broadcast violated the wage requirement until the LCA period ended. The court found that neither of the exceptions to payment applied, and that the Administrative Review Board did not abuse its discretion by awarding backpay plus pre- and post-judgment interest.