Newly-Published Labor and Employment Law Cases

Hohenshelt v. Super. Ct. (CA2/8 B327524 2/27/24) Arbitration

Code of Civil Procedure §1281.98 provides that if arbitration fees or costs “are not paid within 30 days after the due date, the drafting party is in material breach of the arbitration agreement, is in default of the arbitration, and waives its right to compel the employee or consumer to proceed with that arbitration as a result of the material breach.” Effective January 1, 2022, the Legislature amended §1281.98 to include a new sentence in subdivision (a)(2): “Any extension of time for the due date shall be agreed upon by all parties.” Hohenshelt’s former employer, Golden State Foods, failed to pay arbitration fees within the initial 30-day period ending September 30, 2022. On that date, JAMS sent Golden State a letter saying all fees must be paid by October 28, 2022, to avoid hearing cancellation. Golden State paid the fees before October 28, 2022. The trial court held this was a valid extension of the due date, and thus Golden State was not in breach of the arbitration agreement. The appellate court reversed, holding that because the extension was not mutually agreed upon by the parties, Golden State’s payments were late, and it had materially breached the arbitration agreement. The court also found CCP §1281.98 is not pre-empted by the Federal Arbitration Act; in dissent, one justice disagreed on the pre-emption issue.

Valley Hosp. Med. Ctr. v. NLRB (9^th Cir. 22-1804 2/20/24) NLRA

In a prior decision, the court had remanded this matter back to the National Labor Relations Board to better explain its decision that an employer may cease union dues checkoff after the expiration of a collective bargaining agreement (CBA). On remand, the Board reversed its position and held that an employer must continue union dues checkoff after CBA expiration. The court held its remand order did not foreclose the Board’s reconsideration of the underlying rule, and the Board therefore was not bound by the court’s prior decision. The court further held that the Board followed a proper decisionmaking process on remand by providing a reasoned explanation for overruling its prior decision, and applied a permissible interpretation of the National Labor Relations Act.

NLRB v. Valley Health System, LLC (9^th Cir. 23-137 2/20/24) NLRA

The Taft-Hartley amendments to the National Labor Relations Act prohibit employers from paying unions, but section 29 U.S.C. §302(c)(4) creates an exception permitting dues checkoff with the conditions that participating employees must authorize dues checkoff in a written assignment and must be given an opportunity to revoke that assignment at least once a year and upon expiration of the applicable collective bargaining agreement (CBA). After its CBAs with the unions expired, Valley Health ceased deducting union dues from employees’ paychecks, asserting employees’ assignments did not comply with the NLRA because they contained no language about revocation upon CBA expiration. The court affirmed the National Labor Relations Board’s ruling that because 29 U.S.C. §302(c)(4) does not require specific language in employees’ written assignments, Valley Health was required to continue deducting dues after the CBAs expired and its failure to do so was an unfair labor practice.

Johnson v. Lowe’s Home Centers, LLC (9^th Cir. 22-16486 2/12/24) PAGA | Arbitration

The trial court granted Lowe’s motion to compel arbitration of Johnson’s individual Private Attorneys General Act claims. Relying on the U.S. Supreme Court’s interpretation of PAGA in Viking River Cruises, Inc. v. Moriana, 596 U.S. 639 (2022), the trial court dismissed Johnson’s nonindividual PAGA claims. The appellate court affirmed the portion of the order compelling arbitration of Johnson’s individual claims, but reversed and remanded the portion of the order dismissing Johnson’s nonindividual claims so the trial court could apply California law as interpreted in Adolph v. Uber Technologies, Inc., 14 Cal. 5th 1104 (2023).

Jackson v. Bd. of Civil Service Comrs. of the City of Los Angeles (CA2/7 B328414 2/8/24) Public Sector Employee Suspension | Appealable Final Judgment

On a petition for writ of administrative mandate challenging his 10-day suspension, the trial court found three of four counts against Jackson were supported by the evidence, but remanded for the Civil Service Commission to reconsider the fourth count and the appropriate penalty. Jackson appealed, asserting substantial evidence did not support the findings on any of the counts and that he was entitled to backpay as a matter of law. The appellate court dismissed the appeal, finding that because the trial court remanded for reconsideration and Jackson would have the opportunity to challenge any ultimate adverse action, the trial court’s order was not an appealable final judgment.

Murray v. UBS Securities, LLC (US 22-660 2/8/24) Sarbanes-Oxley Act | Whistleblower Retaliation

The Sarbanes-Oxley Act, at 18 U.S.C. §1514A(a), provides that publicly traded companies may not “discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee in the terms and conditions of employment because of” protected whistleblowing activity, including reporting what they reasonably believe to be instances of criminal fraud or securities law violations. A whistleblower who invokes §1514A need only prove that his protected activity was a contributing factor in the employer’s unfavorable personnel action, but need not prove that his employer acted with “retaliatory intent.”

Daramola v. Oracle America, Inc. (9^th Cir. 22-15959 2/6/24) Sarbanes-Oxley and Dodd-Frank Acts | Foreign Conduct

The appellate court affirmed the trial court’s dismissal of a whistleblower-retaliation action brought under the Sarbanes-Oxley and Dodd-Frank Acts by a Canadian citizen who worked in Canada for a Canadian subsidiary of a U.S. company. Applying a presumption against extraterritoriality, the court agreed with other circuits that the presumption was not overcome because Congress did not affirmatively and unmistakably instruct that the provisions should apply to foreign conduct. The court also agreed with other circuits that employment by a subsidiary of a U.S. company was not sufficient domestic conduct to allow domestic application of the statutes.

Neeble-Diamond v. Hotel Calif. By the Sea, LLC (CA4/3 G061425, filed 1/11/24, pub. ord. 2/5/24) FEHA Prevailing Defendant | Discretionary Costs

The trial court awarded over $180,000 in costs to Hotel California by the Sea as the prevailing defendant in Neeble-Diamond’s Fair Employment and Housing Act claims. The appellate court reversed, holding that, just as with attorney fees, an award of costs to a prevailing defendant in a FEHA action is discretionary and therefore the defendant must file a noticed motion seeking costs. Because Hotel California filed a cost memorandum, not a noticed motion, the trial court improperly awarded costs to Hotel California.

Balakrishnan v. The Regents of the University of Cal. (CA1/5 A164480 2/1/24) Professor-Student Off-Campus Sexual Abuse

The University terminated Balakrishnan’s employment and denied him emeritus professor status based on findings that he sexually abused two women, one a fellow academic and one a recently-graduated student. On appeal, Balakrishnan did not contest the University’s findings that he sexually abused the two women. As to the first woman, the appellate court affirmed the trial court’s ruling that the University’s Faculty Code of Conduct permitted discipline for off-campus, off-duty conduct, and that Balakrishnan had fair notice he could be disciplined for such conduct. As to the second woman, the appellate court affirmed the trial court’s ruling that the victim was covered by the University’s sexual harassment policy despite having graduated two days before the abuse, and that Balakrishnan received fair notice that his conduct with the second woman could subject him to discipline under the Faculty Code of Conduct.