Newly-Published Labor and Employment Law Cases

Alameda Health System v. Alameda County Employees’ Retirement etc. (CA1/2 A165587 3/27/24) Public Sector Retirement

Alameda Health System is one of seven public entities that contract with the Alameda County Employees Retirement Association to provide retirement benefits to their employees. ACERA uses a “percentage of payroll” method to calculate and amortize unfunded liabilities among participating entities. AHS asked ACERA to instead calculate unfunded liabilities using a “percentage of liability” method, which would result in AHS paying $12 million less per year for its employees’ retirement benefits. ACERA denied AHS’s request. AHS filed a petition for writ of mandate and declaratory relief challenging ACERA’s denial. The appellate court affirmed the trial court’s application of the traditional standard for granting a writ of mandate rather than the standard for a breach of fiduciary duty, and found ACERA did not abuse its discretion in denying AHS’s request. The court also affirmed that ACERA did not breach the duty of good faith and fair dealing because it had no contractual obligation to consider AHS’s request to change the methodology of calculating participating entity contributions.

Williams v. Doctors Medical Center of Modesto (CA5 F084700 3/27/24) Staff Privileges | Anti-SLAPP

Williams filed a lawsuit challenging his loss of hospital privileges that alleged Respondents made various defamatory statements against him. The Respondents filed anti-SLAPP motions claiming the statements were protected because they were made as part of peer review proceedings. Williams dismissed his complaint without prejudice. The trial court awarded attorney fees against Williams, finding most of his claims arose out of protected activity. Williams then filed a second lawsuit, alleging a subset of the claims in his first lawsuit. The trial court granted Respondents’ anti-SLAPP motions, finding Williams’ claims precluded under the primary right theory by the ruling in the first lawsuit. The appellate court found reliance on the primary right theory erroneous in light of Baral v. Schnitt (2016) 1 Cal.5th 376, and held that the step one findings of a prior anti-SLAPP motion will have preclusive effect only as to the specific allegations that were found to be protected activity and to supply an element of a cause of action or claim. Applying this holding, the court found issue preclusion did not apply and that Respondents did not meet their burden of showing any cause of action in the second lawsuit arose from SLAPP protected activity.

Huerta v. CSI Electrical Contractors (SC S275431, filed 3/25/24) “Hours Worked”/“Employer-Mandated Travel”

On certified questions from the United States Court of Appeals for the Ninth Circuit, the California Supreme Court held: (1) an employee’s time spent on an employer’s premises awaiting and undergoing an employer-mandated exit procedure that includes the employer’s visual inspection of the employee’s personal vehicle is compensable as “hours worked”; (2) the time that an employee spends traveling between the Security Gate and the employee parking lots is compensable as “employer-mandated travel” if the Security Gate was the first location where the employee’s presence was required for an employment-related reason other than the practical necessity of accessing the worksite; and (3) when an employee is covered by a collective bargaining agreement that complies with Labor Code section 512, subdivision (e) and Wage Order No. 16, section 10(E), and provides the employee with an “unpaid meal period,” that time is nonetheless compensable under the wage order as “hours worked” if the employer prohibits the employee from leaving the employer’s premises or a designated area during the meal period and if this prohibition prevents the employee from engaging in otherwise feasible personal activities.

Gramajo v. Joe’s Pizza on Sunset (CA2/8 B322697, B323024, filed 3/25/24) Labor Code section 1194 Attorney Fees

At trial, a jury awarded Gramajo $7,659.93 in unpaid minimum and overtime wages. He requested attorney fees of $296,920 under Labor Code section 1194(a), which entitles prevailing employees to recover reasonable litigation costs. The trial court denied the fee request in its entirety, relying on Code of Civil Procedure section 1033(a), which gives a court discretion to deny prevailing plaintiffs litigation costs when they file an unlimited civil case but only recover an amount available in a limited civil case. The appellate court held that employees who prevail in actions to recover unpaid minimum and overtime wages are entitled to their reasonable litigation costs under Labor Code section 1194(a), irrespective of the amount recovered. The court remanded for determination of reasonable attorney fees.

Asiryan v. Med. Staff of Glendale Adventist Med. Center (CA2/1 B316313, filed 2/29/24, pub. 3/19/24) Peer Review

The Business and Professions Code sections setting out due process requirements for hospital peer review (Bus. & Prof. Code, 809 et seq.) are the sole source of procedural protections for hospital peer review, and the common law doctrine of fair procedure does not supplant those protections with additional guarantees. The trial court therefore correctly granted nonsuit of Asiryan’s common law claims and correctly rejected her proposed jury instructions on those claims. The trial court erred, however, by awarding attorney fees to the Medical Staff because a reasonable attorney could have deemed Asiryan’s claims against the Staff tenable and reasonably decided to take them to trial.

Kern County Hospital Authority v. Public Employment Relations Bd. (CA5 F085586, filed 2/26/24, pub. 3/18/24) PERB

Applying a deferential standard of review, the court affirmed the Public Employment Relations Board’s conclusion that the Authority violated the Meyers-Milias-Brown Act (Gov. Code, § 3500 et seq.) when it refused to process group, class, or consolidated grievances filed by Service Employees International Union Local 521. The court also affirmed PERB’s conclusion that SEIU had not waived its right to bargain over changes to the grievance procedure nor waived its right to adjudicate collective grievances.

Ortiz v. Randstad Inhouse Services (9^th Cir. 23-55147, 23-55149 3/12/24) Arbitration | Transportation Worker Exemption

Section 1 of the Federal Arbitration Act (FAA) (9 U.S.C. § 1) exempts from the FAA’s scope “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” Ortiz worked in a warehouse that received merchandise from out of state for local distribution. Applying Saxon v. Southwest Airlines Co., 596 U.S. 450 (2022), the court held that Ortiz fell under the section 1 transportation worker exemption because he belonged to a class of workers who played a direct and necessary role in the free flow of goods across borders and actively engaged in the transportation of such goods. The court also held that an employee need not be employed by an employer in the transportation industry to qualify for the FAA’s transportation worker exemption. The court therefore affirmed the district court’s denial of the employer’s motion to compel arbitration.

Applied Medical Distribution Corp. v. Jarrells (CA4/3 G062056 3/8/24) Trade Secrets

Applied sued its former employee, Jarrells, and his new employer, Bruin Biometrics, for misappropriation of trade secrets and other claims. The trial court properly entered a permanent injunction against Jarrells to recover Applied’s trade secrets and prevent further misappropriation. Under the parties’ proprietary information agreement, Applied was entitled to an award of reasonable attorney fees, costs, and expenses incurred to obtain the injunction. The trial court committed three reversible errors. First, in awarding attorney fees and costs, it failed to address the extent to which the facts underlying the claims on which Applied did not prevail were inextricably intertwined with or dependent upon the allegations underlying the successful claim. Second, it improperly excluded from the damages calculation presented to the jury the expert fees Applied incurred to investigate the suspected misappropriation. Third, it improperly granted a nonsuit where there was evidence from which a reasonable jury could find that Jarrells’ misappropriation was willful and malicious.

Jones v. Riot Hospitality Group LLC (9^th Cir. 22-16465 3/5/24) Intentional Spoliation of Electronically Stored Information | Terminating Sanction

The district court dismissed an employment discrimination action under Federal Rule of Civil Procedure 37(e)(2) because of plaintiff’s intentional spoliation of electronically stored information. The appellate court held the district court did not abuse its discretion by imposing a terminating sanction because ample circumstantial evidence showed plaintiff acted willfully. The district court also properly relied on an inference that plaintiff’s deletion of text message with co-workers and her coordination with witnesses to delete messages was prejudicial to the defendant.