Newly-Published Labor and Employment Law Cases

Kader v. Southern Cal. Medical Center, Inc. (CA2/5 B326830 1/29/24) Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act

An employee signed an arbitration agreement with his employer in the regular course of his employment, without disclosing that he was being subjected to sexual harassment and assault. Congress subsequently enacted the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (the Act; 9 U.S.C. §§ 401, 402), which invalidates predispute arbitration agreements in certain circumstances. Following the effective date of the Act, the employee sued the employer and other defendants for claims arising from the alleged sexual conduct. The defendants filed a motion to compel arbitration, which the trial court denied based on the Act. The appellate court held that a dispute does not arise merely from the fact of injury; a party must first assert a right, claim, or demand. Because there was no evidence of a disagreement or controversy in this case until after the date of the arbitration agreement and the effective date of the Act, the predispute arbitration agreement was invalid, and the order denying the motion to compel arbitration was affirmed.

Miszkewycz v. County of Placer (CA3 C095426 1/25/24) Whistleblower Retaliation | Anti-SLAPP Motion

In her complaint, Miszkewycz alleged the County demoted her and created a hostile work environment because she cooperated with the Attorney General’s investigation into alleged bribery by a County Supervisor. The County filed an anti-SLAPP motion, which the trial court denied. In the published portion of its opinion, the appellate court held the trial court erred by denying the County’s motion because it failed to comply with California Rule of Court 3.1322, which requires a motion to strike to “quote in full the portions sought to be stricken.” The court held Rule 3.1322 does not apply to anti-SLAPP motions and found the County’s motion adequately informed the trial court of the protected activity it sought to strike and plaintiff’s claims for relief the County believed arose from that protected activity.

Suarez v. Super. Ct. (CA4/1 D082429 1/24/24) Late Arbitration Filing Fee

Code of Civil Procedure section 1281.97 requires an employer to pay arbitration filing fees within 30 days of receiving an invoice from the arbitration provider; failure to pay within the 30-day period allows the employee to opt out of the arbitration process. The employer received JAMS’ e-mailed invoice on December 2 but did not pay its share of the arbitration fee until January 4. The court found CCP section 1010.6 did not extend the 30-day filing deadline because JAMS’ email was not a document served in an action filed with a court. The court also found that Suarez’s failure to pay his share of the arbitration fee was irrelevant, as CCP section 1281.97 speaks only to employers, not employees. Finally, the court ruled the Federal Arbitration Act does not preempt CCP section 1281.97 because it neither prohibits nor discourages the formation of arbitration agreements, but rather encourages drafters of arbitration agreements to engage in arbitration promptly.

Ventura County Employees’ etc. v. Criminal Justice Attys. etc. (CA 2/6 B325277, filed 1/4/24, pub. ord. 1/18/24) Public Sector Retirement | Leave Cashouts 

Following the holding of Alameda County Deputy Sheriff’s Assn. v. Alameda County Employees’ Retirement Assn. (2020) 9 Cal.5th 1032, the court held that Government Code section 31461(b)(2) and (4) requires retirement benefit calculations to exclude compensation for leave cash outs that exceed the amount of leave that was earnable and payable to the member in the final compensation period. This exclusion is consistent with the concept of compensation earnable, which is intended to reflect pay for work ordinarily performed during the course of a year, and necessary to prevent pension spiking by cashing out a large amount of accrued leave during the final compensation period.

Estrada v. Royalty Carpet Mills, Inc. (SC S2743401/18/24) PAGA Manageability 

The California Supreme Court resolved a split among the courts of appeals over whether a trial court has the inherent authority to strike a Private Attorneys General Act claim on manageability grounds. The Court ruled that trial courts lack such authority, and do not generally possess a broad inherent authority to dismiss claims. The Court noted that trial courts still possess a broad array of tools to manage complex cases, including PAGA cases.

Hasty v. American Automobile Assn. of Northern Cal., Nev. & Utah (CA3 C097674, filed 12/21/23, pub. ord. 1/27/24) Arbitration | Unconscionability 

The court affirmed denial of a petition to compel arbitration, finding the arbitration agreement both procedurally and substantively unconscionable. The agreement was procedurally unconscionable because it was imposed as a condition of employment, written in small, dense text, and required the applicant to click to another screen to access it. The agreement was substantively unconscionable because it waived the right to remedies or relief from government administrative agency proceedings, the link to the JAMS rules did not work, the confidentiality provision benefited only the employer, and the arbitration agreement prohibited class, representative, or private attorney general proceedings.

Visalia Unified School Dist. v. Pub. Employment Relations Bd. (CA5 F084032 1/9/24) PERB | Anti-Union Retaliation and Defense 

The court vacated a decision of the Public Employment Relations Board. The court affirmed PERB’s findings that the employee, Ramirez, engaged in protected activity by serving as a union officer and that the evidence raised an inference that she was terminated in retaliation for her protected activity. The court found that because Education Code section 45113 vests a school board with the authority to conclusively determine cause for discipline, PERB was bound by the school board’s determination that sufficient cause existed for Ramirez’s termination. The court further concluded that the record compelled a finding that the school district would have terminated Ramirez for her longstanding performance issues even if she had not engaged in protected activity.

Miles v. Kirkland’s Stores (9^th Cir. 22-55522 1/8/24) Class Certification | Rest Break and Bag Check Claims 

Plaintiffs sought class certification of two claims. The rest break claim challenged Kirkland’s policy requiring employees to take rest breaks on store property, and the bag check claim challenged Kirkland’s policy requiring employees to surrender to bag checks when they ended their shift. The appellate court reversed the district court’s denial of class certification of the rest break claim, finding the record evidence showed that the company consistently enforced its policy across all employees. The court affirmed the denial of class certification of the bag check claim because the evidence suggested that Kirkland’s enforced the bag check policy sporadically and in different ways.

Su v. Bowers (9^th Cir. 22-15378 1/8/23) Equal Access to Justice Act 

In an action brought under the Employee Retirement Income Security Act, the Department of Labor’s case hinged on a single valuation expert, who opined that the employee stock ownership plan overpaid for appellants’ company. The district court rejected the expert’s opinion, causing the government to lose the bench trial. The district court denied appellants’ request for attorney fees and nontaxable costs under the Equal Access to Justice Act, finding the Department’s position was “substantially justified” and that it did not act in bad faith. The appellate court concluded the district court did not abuse its discretion in finding the Department’s litigation position was justified, but that it did abuse its discretion in reducing the award of taxable costs because it relied on a clearly erroneous finding of fact in doing so.

DeMarinis v. Heritage Bank of Commerce (CA1/3 A167091, filed 12/11/23, ord. pub. 1/8/24) PAGA  

A provision in the parties’ arbitration agreement waiving any right to have a representative claim heard in any forum constituted an unenforceable wholesale waiver of plaintiffs’ Private Attorney General Act claims. Although Viking River Cruises, Inc. v. Moriana (2022) 142 S. Ct. 1906 abrogated the holding in Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, that PAGA claims are indivisible, Viking River did not alter Iskanian’s holding that a wholesale waiver of PAGA claims is unenforceable. In the absence of a severability clause, the court declined to read the waiver provision as only applying to plaintiffs’ individual PAGA claims. The court thus found the entire arbitration agreement unenforceable and affirmed the trial court’s denial of Heritage’s motion to compel arbitration.

K & S Staffing Solutions v. The Western Surety Co. (CA3 1/2/24 C096705) Public Works | Staffing Company | Laborer 

California’s mechanics’ lien law (Civ. Code, §§ 8000-9566) requires certain contractors that are awarded a public works contract involving an expenditure over $25,000 to post a payment bond before work begins. It also authorizes laborers and several others to assert a claim against the payment bond when they have not been paid in full. A subcontractor for two state projects failed to fully pay a staffing company for its services. Affirming the trial court, the appellate court held that the staffing company was not a “laborer” within the meaning of the mechanics’ lien law and that the payment bonds were subject to the mechanics’ lien law’s requirements.