Newly-Published Labor and Employment Law Cases

Nazaryan v. Femtometrix (CA4/3 G061412 part. pub. 4/23/25) Settlement Stock | 1099 Miscellaneous Income

In settlement of a prior action, the parties agreed that stock issued to plaintiff in settlement was not compensation for services but instead compensation for his “capital/equitable contributions.” Defendants then issued IRS 1099 forms characterizing the settlement stock as non-employee compensation. The trial court held some (but not all) defendants breached the settlement agreement and issued fraudulent forms under Internal Revenue Code section 7434. The appellate court rejected all parties’ argument on appeal and affirmed the judgment.

Williams v. Alacrity Solutions Grp. (CA2/5 B335445 4/22/25) Suing for PAGA Civil Penalties | Individual Claim and SOL Requirements

The Private Attorneys General Act (PAGA) (Lab. Code, § 2698 et seq.) authorizes an “aggrieved employee” to step into the shoes of the State of California and sue for civil penalties premised on certain violations of the Labor Code “on behalf of himself or herself and other current or former employees.” Under PAGA as it existed prior to the amendments effective July 1, 2024, to be an “aggrieved employee” an individual must seek to recover civil penalties on their own behalf for the alleged violation and this individual claim must be timely as to at least one Labor Code violation. Because the statute of limitations barred Williams from bringing an individual PAGA claim, the trial court correctly sustained Alacrity’s demurrer to the PAGA action.

Bradsbery v. Vicar Operating, Inc. (B322799 CA2/7 4/21/25) Meal Period Waivers

Labor Code section 512 guarantees a 30-minute, off-duty meal period for employees after five work hours and a second meal period after 10 work hours. Section 512 also provides that, for shifts between five and six hours, the first meal period “may be waived by mutual consent of both the employer and employee.” Plaintiffs sued Vicar for failure to provide meal periods as required by Labor Code section 512. Vicar countered that plaintiffs signed a valid written agreement prospectively waiving all waivable meal periods. The appellate court affirmed the trial court’s grant of summary judgment for Vicar. The court held the waivers were “enforceable in the absence of any evidence the waivers are unconscionable or unduly coercive.”

Cunningham v. Cornell Univ. (US 23-1007 per curium 4/17/25) ERISA

The Employee Retirement Income Security Act of 1974 (ERISA) prohibits plan fiduciaries from causing a plan to engage in certain transactions with parties in interest. 29 U. S. C. §1106. A separate provision, §1108(b)(2)(A), exempts from these prohibitions any transaction that involves “[c]ontracting or making reasonable arrangements with a party in interest for office space, or legal, accounting, or other services necessary for the establishment or operation of the plan, if no more than reasonable compensation is paid therefor.” To state a claim under §1106(a)(1)(C), a plaintiff need only plausibly allege the elements contained in that provision itself, without addressing potential §1108 exemptions.

Tesla Motors, Inc. v. Balan (9th Cir. 22-16623 4/14/25) Arbitration | Subject Matter Jurisdiction | Defamation of Former Employee

Telsa prevailed in arbitration of a former employee’s defamation claim. The district court granted Tesla’s petition to confirm the arbitration award. The appellate court reversed. Under Badgerow v. Walters, 596 U.S. 1 (2022), a court may not look past the face of a petition under 9 U.S.C. § 9 to establish jurisdiction. Because Tesla’s petition to confirm a zero-dollar arbitration award did not on its face establish that the amount in controversy exceeded $75,000, as required for diversity jurisdiction, the district court lacked jurisdiction to confirm the award.

Ford v. The Silver F (CA3 C099113, filed 3/25/25, pub. 4/8/25) PAGA | Arbitration

Upon employment, Ford signed an arbitration agreement that required him to arbitrate any employment-related disputes with Silver F. The agreement specifically excluded from arbitration “representative claims under the Private Attorneys General Act [PAGA].” In response to Ford’s PAGA lawsuit, Silver F moved to compel arbitration. The appellate court affirmed the trial court’s order denying arbitration. The court held that the relevant language of the arbitration agreement excluded from arbitration both Ford’s individual PAGA claims and those asserted on behalf of other current and former employees because at the time the agreement was signed, i.e., before Viking River Cruises, Inc. v. Moriana (2022) 596 U.S. 639, California law did not allow PAGA claims to be split into arbitrable individual claims and nonarbitrable representative claims.

Odom v. L.A. Community College Dist. (CA2/8 B327997 4/7/25) Judge’s Arbitrary and Prejudicial Evidentiary Rulings

A jury awarded plaintiff $10 million for sexual harassment, retaliation, and related claims. The trial court denied defendant’s motions for a new trial and for judgment notwithstanding the verdict. The appellate court reversed, finding the trial court made prejudicially erroneous evidentiary rulings during the trial, rulings that “were motivated by personal opinions untethered to the rules of evidence.” Specifically, the court erroneously admitted irrelevant and damaging “me too” evidence from a witness who was not similarly situated to plaintiff, and prejudicial 20-year old newspaper articles and other evidence of the alleged harasser’s misdemeanor convictions.

Krug v. Board of Trustees of the Cal. State Univ. (CA2/1 B320588A 4/1/25) Labor Code section 2802 Employee Reimbursement

When the COVID-19 pandemic struck, the Board of Trustees of the California State University (CSU) directed that instruction be provided remotely. To comply with this directive, Krug, a biology professor at California State University Los Angeles, incurred expenses for a computer and other equipment and necessities which CSU declined to reimburse. Krug sued CSU on behalf of himself and similarly situated faculty, alleging Labor Code section 2802 obligated CSU to reimburse its employees for necessary work-related expenses. CSU demurred, arguing that as a department of the state it enjoyed broad exemption from Labor Code provisions that infringe on its sovereign powers. Krug appealed from a judgment of dismissal entered after the trial court sustained CSU’s demurrer without leave to amend.

On remand from the California Supreme Court following Stone v. Alameda Health System (2024) 16 Cal.5th 1040, the appellate court affirmed the judgment. The court held that, while the text of Labor Code section 2802 is ambiguous as to whether it applies to public employers, “the statutory structure and legislative history provide positive indicia of legislative intent to exclude public employers from the provision’s reimbursement obligations.”

Sexton v. Apple Studios LLC (CA2/8 B333481 3/28/25) COVID-19 Vaccination

During the COVID-19 pandemic, Apple Studios LLC offered Sexton a film role on the condition he get vaccinated. Sexton refused vaccination and sued Apple when it withdrew its offer and cast a different actor. The trial court denied Apple’s anti-SLAPP motion. The appellate court reversed. Apple’s casting was conduct in furtherance of free speech in connection with two public issues: a prominent entertainment company (1) voted with its feet in the vaccination controversy and (2) decided how to portray an enigmatic figure in American history. On the merits, Sexton had no privacy claim because Apple was entitled to rely on authoritative views about sensible ways to protect its workplace, and his discrimination claim failed because he could not satisfy the safety requirements of the job due to being unvaccinated.

Cahill v. Nike, Inc. (9th Cir. 24-2199 3/18/25) Intervenor and Confidential Workplace Documents

Pursuant to a protective order, a collection of internal workplace complaints was produced to the plaintiffs on a confidential basis, and many of the documents were also sealed. The district court granted the motion of three media organizations, including The Oregonian Media Group, to intervene. During a meeting with a reporter from The Oregonian, plaintiffs’ attorney inadvertently sent the reporter confidential documents. The district court declined to order The Oregonian to return or destroy those documents. The appellate court held that the district court had authority to order The Oregonian to return the documents because as an intervenor The Oregonian was subject to the court’s inherent power to oversee discovery. The court further held The Oregonian had no First Amendment right to withhold the documents because pretrial discovery is not a public component of the judicial process, and the court’s exercise of its authority over parties’ access to the fruits of discovery furthers a substantial government interest unrelated to the suppression of expression.

Johnson v. Dept. of Transportation (CA3 C099319 3/17/25) Attorney-Client Privilege

Johnson sued Caltrans for claims arising out of his employment. Caltrans’s attorney emailed Johnson’s supervisor about the litigation. The supervisor shared the email with Johnson, who then shared it with his attorney, Shepardson. Shepardson then shared the email with several retained experts and other individuals. At Caltrans’s request, the trial court entered a protective order on the ground the email was covered by the attorney-client privilege. A few months later, Caltrans moved to enforce the protective order and to disqualify Shepardson and plaintiff’s experts for violating the order. The trial court disqualified Shepardson and the experts.

On appeal, Shepardson argued the email was not protected by the attorney-client privilege. The appellate court affirmed the order, concluding the email was protected by the attorney-client privilege because the Caltrans attorney’s purpose in sending the email was to obtain information from Johnson’s supervisor for the purpose of defending the department in Johnson’s lawsuit. The court concluded that the attorney-client privilege was not waived because Johnson’s supervisor did not have authority to waive the privilege on behalf of Caltrans. The court also concluded that disqualification was appropriate because Shepardson violated his ethical obligations by disseminating the email to others after Caltrans asserted its privileged status, including after the trial court entered its protective order barring such use.

Perez v. Rose Hills Co. (9th Cir. 25-68 3/14/25) CAFA

Perez brought a class action lawsuit against Rose Hills for violations of various California wage and hour laws. Rose Hills removed the case to federal court under the Class Action Fairness Act (CAFA). The district court remanded the case to state court, finding it lacked jurisdiction because defendant did not meet CAFA’s $5 million amount-in-controversy requirement. The appellate court reversed, concluding that a removing defendant is permitted to rely on a chain of reasoning that includes reasonable assumptions to calculate the amount in controversy, provided those assumptions are based on a reasonable interpretation of the complaint. The court remanded for the district court to determine whether Rose Hills’s violation-rate assumption was a reasonable interpretation of the complaint.

Mandell-Brown v. Novo Nordisk Inc. et al. (CA2/5 B326147 3/6/25) FEHA | Summary Judgment

Code of Civil Procedure section 437c(b)(3) requires that opposition to a summary judgment motion include a separate statement of material facts. Subdivision (b)(3) further states that failure to file a separate statement “may constitute a sufficient ground, in the court’s discretion, for granting the motion.” The trial court did not abuse its discretion in granting Novo Nordisk’s summary judgment motion where defendants’ separate statement addressed one or more elements of each of plaintiff’s 16 causes of action and the trial court thus was entitled to an opposing separate statement to aid in its analysis. Further, the trial court had granted plaintiff two continuances to file opposition to the summary judgment motion but she failed to do so.