Newly-Published Labor and Employment Law Cases

Snoeck v. ExakTime Innovations (CA2/3 B321566, filed 10/2/23, ord. pub. 10/25/23) FEHA | Reduction in Attorneys’ Fees 

In awarding attorney fees, a court may apply, in its discretion, a positive or negative multiplier to adjust the lodestar calculation—a reasonable rate times a reasonable number of hours—to account for various factors, including attorney skill. A trial court may consider an attorney’s pervasive incivility in determining the reasonableness of the requested fees. The trial court did not abuse its discretion by applying a .4 negative multiplier “to account for [p]laintiff’s counsel’s . . . lack of civility throughout the entire course of this litigation.”

DeFirore v. SOC LLC (9^th Cir. 21-15261 10/25/23) Federal Officer Removal Statute 

The federal officer removal statute, 28 U.S.C. § 1442(a)(1), permits removal to federal court of a civil action against “any officer (or any person acting under that officer) of the United States or of any agency thereof . . . for or relating to any act under color of such office.” To satisfy this requirement, a removing private entity must show that (a) it is a “person” within the meaning of the statute; (b) there is a causal nexus between its actions, taken pursuant to a federal officer’s directions, and the plaintiff’s claims; and (c) it can assert a colorable federal defense. The court found all three requirements satisfied by private contractors providing war-zone security services to the Department of Defense (DOD) in a suit brought by guards they employed who alleged their working conditions violated the terms of their employment contracts and the contractors’ DOD contracts.

Su v. Bowers (9^th Cir. 22-15378 10/25/23) Equal Access to Justice Act 

In a suit by the Department of Labor under the Employee Retirement Income Security Act claiming defendants sold their company to an employee stock ownership plan at an inflated value, the district court rejected the opinion of the Department’s single valuation expert, causing the Department to lose the suit. The district court denied the defendants’ request for attorney fees and costs under the Equal Access to Justice Act (EAJA), finding the Department’s litigation position was “substantially justified” and not taken in bad faith. The appellate court affirmed under an abuse of discretion standard, finding the Department did not know prior to trial that the district court would reject the expert’s entire opinion as unreliable.

Arce v. The Ensign Group, Inc. (CA2/5 B317161 9/19/23) PAGA | Standing 

To have standing to bring a Labor Code Private Attorneys General Act claim as an “aggrieved employee,” an employee must allege they were employed by the alleged violator and suffered at least one Labor Code violation on which the claim is based. An aggrieved employee must submit a notice of their PAGA claim to the Labor and Workforce Development Agency within one year of the last violation. Arce’s last day of employment with Ensign was November 8, 2018, and her last wage statement was November 21, 2018. She filed her PAGA notice with LWDA on November 15, 2019. The trial court found Arce lacked standing because she could not have been denied a meal or rest break in the one year before she filed her PAGA notice. The appellate court reversed, finding that any premium penalties for missed meal or rest breaks were due on Arce’s final, November 21, 2018 wage statement. Because Ensign’s failure to pay those premiums fell within the one-year statute of limitations, Arce had standing to file her PAGA claim.

Kava Holdings, LLP v. NLRB (9^th Cir. 21-70225 10/18/23) NLRA Unfair Labor Practice 

Upon reopening the Hotel BelAir after closure for extensive renovations, Kava refused to rehire 152 qualified employees and refused to recognize the union that had represented the employees before the closure. The court found substantial evidence supported the NLRB’s finding that Kava committed an unfair labor practice by refusing to rehire union-affiliated former employees so Kava could avoid its statutory duty to bargain with the union. Substantial evidence also supported the NLRB’s finding that Kava unilaterally changed the bargaining unit’s established, pre-closure terms and conditions of employment.

FCM Investments v. Grove Pham, LLC (CA4/1 D080801 10/17/23) Arbitrator Impartiality

Under Code of Civil Procedure section 1286.2, subdivision (a)(3), an arbitration award may be vacated when the arbitrator engages in misconduct that substantially prejudices the rights of a party. In a case that turned largely on witness credibility, the arbitrator found the defendant lacked credibility because she used an interpreter during her testimony despite having been in the United States for decades during which she engaged in sophisticated business transactions. Because the arbitrator’s credibility finding rested on unacceptable misconceptions about English proficiency and language acquisition, it gave rise to a reasonable impression of possible bias that required vacating the arbitration award.

Granite Construction Co. v. CalOSHA (CA3 C096704, filed 9/25/23, ord. pub. 10/16/23) Workplace Safety 

The Division of Occupational Safety and Health (CalOSHA) cited Granite Construction Company for two violations: (1) requiring employees to wear masks without first providing a medical evaluation to determine their fitness to wear masks, and (2) exposing employees to dust containing a harmful fungus that causes Valley fever. An administrative law judge found no violations, but the Appeals Board reversed in favor of CalOSHA. The trial court denied Granite’s petition for writ of administrative mandate to set aside the Board’s decision. The appellate court reversed in part, finding insufficient evidence to support the violation based on dust exposure but sufficient evidence to support the violation based on required masking.

Park v. NMSI, Inc. (CA2/7 B323063 10/12/23) Breach of Contract 

The appellate court affirmed the trial court’s issuance of prejudgment right to attach orders on behalf of plaintiffs in a breach of contract action against their former employer, NMSI. Under the substantial evidence standard, the court affirmed findings that the revenue-sharing agreements allegedly breached by NMSI were not modified by plaintiffs’ subsequent emails and conduct. The court also found the amount of plaintiffs’ claims was “fixed or readily ascertainable” under the agreements’ terms, and thus the attachment orders were properly issued.

In re Uber Technologies Wage and Hour Cases (CA1/4 A166355 9/28/23) State & DLSE Not Parties to Arbitration Agreements

Uber and Lyft sought to compel arbitration of claims brought against them in civil enforcement actions by the People of the State of California (the People) and by the Labor Commissioner through the Division of Labor Standards Enforcement (DLSE). The court found no basis to compel arbitration because neither the People nor DLSE were parties to the arbitration agreements between Uber and Lyft and their drivers, and the agencies’ exercise of their statutory prosecutorial authority did not make them proxies for the drivers in their wage and hour claims.

Hartstein v. Hyatt Corp. (9^th Cir. 22-55276 9/22/23) Layoff | Prompt Payment of Accrued Vacation Time

The district court had granted summary judgment in favor of Hyatt Corporation in a class action brought by former California employees of Hyatt who were laid off during the COVID-19 pandemic, alleging that Hyatt violated California law by failing to pay them immediately for their accrued vacation time and by failing to compensate them for the value of the free hotel rooms employees received each year. The court held that a temporary layoff without a specific return date within the normal pay period is a discharge that triggers the prompt payment provisions of Labor Code § 201. Hyatt thus should have paid the plaintiffs accrued vacation pay at the initial layoff in March 2020 because the temporary layoff was longer than the normal pay period and there was no specific return date. The panel reversed the district court’s grant of summary judgment to Hyatt as to the vacation pay claim and remanded for the district court to consider whether Hyatt acted willfully in failing to comply with the prompt payment provisions. The panel held that the complimentary hotel rooms Hyatt provided to employees were excludable from the calculation of employees’ regular rate of pay under the federal Fair Labor Standards Act because they were excludable as “other similar payments” under 29 C.F.R. § 778.224. The panel therefore affirmed the grant of summary judgment as to the complimentary hotel room claim.

Estrada v. Public Employees’ Retirement System (CA2/8 B317848 9/21/23) CalPERS Pension Forfeiture upon Felony Conviction

Government Code section 7522.72 provides that if a public employee is convicted of a felony for conduct arising out of or in the performance of his or her official duties, the employee forfeits certain accrued retirement benefits, which “shall remain forfeited notwithstanding any reduction in sentence or expungement of the conviction.” Appellant Elaine Estrada, a former employee of the City of La Habra Heights, pled no contest to a felony that arose out of the performance of her official duties. Under the terms of Estrada’s plea agreement, the conviction was later reduced to a misdemeanor under Penal Code section 17 and then dismissed under Penal Code section 1203.4. After the California Public Employees’ Retirement System determined that Estrada forfeited a portion of her retirement benefits as a result of her felony conviction, she filed a petition for writ of administrative mandate. The appellate court concluded the trial court did not err in denying the petition because, consistent with the language and purpose of section 7522.72, Estrada’s retirement benefits were subject to forfeiture upon her no contest plea to a job-related felony, notwithstanding the subsequent reduction to a misdemeanor and dismissal of the charge.

Cruz v. City of Merced (CA5 F083402, filed 8/23/23, pub. 9/12/23) Police Officer Termination

Former police officer Jose Cruz was terminated by the Merced City Police Department based on allegations he conducted an illegal search, submitted a false police report, and committed perjury at a court hearing. The city personnel board rejected most of the charges against Cruz, but sustained portions of the charges about his untruthfulness; the board recommended demotion without backpay. The city manager rejected the personnel board’s decision and upheld Cruz’s termination. The trial court affirmed. The appellate court held the allegations that Cruz conducted an illegal search and falsified the resulting report were not supported by substantial evidence in the record, but affirmed the finding that Cruz was untruthful at the suppression hearing. The court remanded for the trial court to determine whether the surviving charges were sufficient to support Cruz’s termination.

Doe v. Super. Court (CA 1/3 A167105 9/8/23) Failure to Timely Pay Arbitration Fees

September 1, 2022, was the “due date” for real parties to pay certain arbitration fees and costs to the arbitrator. Under Code of Civil Procedure section 1281.98(a)(1), these fees and costs had to be “paid within 30 days after the due date” – or by October 3 – to avoid breaching the arbitration agreement. Real parties opted to mail a check on Friday, September 30, for the full amount due on Monday, October 3, even though payment could be submitted by credit card, electronic check, or wire transfer. The arbitrator received the payment on October 5, two days after the statutory 30-day grace period expired. Strictly enforcing the 30-day grace period, the court concluded that fees and costs owed for a pending proceeding must be received by the arbitrator within 30 days after the due date. The payment here was untimely because the arbitrator received it after the due date; mailing the payment before the due date did not constitute timely payment.