Labor and Employment Law

Newly-Published Labor and Employment Law Cases

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Nunez v. Cycad Management LLC (CA2/2 B306986, filed 3/18/22, pub. ord. 4/11/22) Arbitration/Procedural and Substantive Unconscionability 
Arbitration agreement was procedurally unconscionable because it was presented to Nunez as a nonnegotiable condition of employment, Nunez cannot read English, and the agreement was not explained to him. Agreement was substantively unconscionable because it allowed the arbitrator to shift attorney fees and costs onto Nunez and drastically limited Nunez’s ability to conduct discovery.

Buchanan v. Watkins & Letofsky (9th Cir. 21-15633 4/7/22) Employment Discrimination & Retaliation/ADA Jurisdiction 
The Americans with Disabilities Act applies only to employers with 15 or more employees. Under the integrated enterprise doctrine, a plaintiff can bring an ADA claim if she can establish that the defendant is so interconnected with another employer that the two form an integrated enterprise, and the integrated enterprise collectively has at least 15 employees. Summary judgment for employer reversed and remanded for determination of whether law firms separately incorporated in Nevada and California were an integrated enterprise and, if so, whether the enterprise employed 15 or more employees.

Mendoza v. ATU (9th Cir. 20-16079 4/7/22) Labor Law Claim-Splitting 
The doctrine of claim-splitting prohibits a plaintiff from maintaining more than one action against the same defendants on the same claims. In a case arising out of a removal of a union local’s executive board and the imposition of a trusteeship by the international union, the plaintiff could not maintain a second lawsuit alleging the same causes of action against the international and certain union officers, even though the second lawsuit named additional plaintiffs and defendants.

Badgerow v. Walters (US 20–1143 3/31/22) Arbitration/FAA Jurisdiction /Look-Through Approach 
Under section 4 of the Federal Arbitration Act, a district court may “look through” to the parties’ underlying substantive dispute to determine whether it has jurisdiction over a petition to compel arbitration. Neither section 9 of the Act allowing a district court to confirm an arbitration award, nor section 10 allowing a district court to vacate an arbitration award, contains language similar to the “look through” language in section 4. Accordingly, when determining its jurisdiction over an application filed under FAA section 9 or 10, a district court must look only at the application itself.

Scheer v. Regents of the Univ. of Cal. (CA2/3 B303379 3/28/22) Whistleblower Retaliation/Lawson Applied 
Summary judgment for defendants on whistleblower claim under Labor Code section 1102.5 reversed in light of holding in Lawson v. PPG Architectural Finishes, Inc. (2022) 12 Cal.5th 703 that McDonnell Douglas burden-shifting standard does not apply to claims under section 1102.5. Lawson also establishes the standard for evaluating whistleblower claims under Government Code section 8547.10, which contains language almost identical to that in Labor Code section 1102.5. Lawson did not alter the legal framework for claims asserting a violation of Health & Safety Code section 1278.5, but the superior court erred in finding no triable issue of material fact on Scheer’s whistleblower claim under this section.

Mejia v. Roussos Construction, Inc. (CA3 C087709 3/25/22) ABC Test 
The ABC test, as articulated in Dynamex Operations W. v. Superior Court (2018) 4 Cal.5th 903, does not include a threshold hiring entity test. Superior court thus committed prejudicial error by instructing jury that before determining whether plaintiffs were employees under the ABC test, it must find that plaintiffs were hired by Roussos or an agent of Roussos. Reversed and remanded for new trial.

Estrada v. Royalty Carpet Mills, Inc. (CA4/3 G058397 3/23/22) Unmanageable PAGA Claims 
Disagreeing with Wesson v. Staples the Office Superstore, LLC (2021) 68 Cal.App.5th 746, the court held that a superior court cannot strike a Private Attorneys General Act claim based on manageability. Courts may still, where appropriate and within reason, limit the amount of evidence PAGA plaintiffs may introduce at trial to prove alleged violations to other unrepresented employees. If plaintiffs are unable to show widespread violations in an efficient and reasonable manner, that will just reduce the amount of penalties awarded rather than lead to dismissal.

Pacifica Firefighters Assn. v. City of Pacifica (CA1/2 A161575 3/24/22) City Measure/Fire Captain Salaries 
A city ordinance adopted by the voters provided that in the event of a collective bargaining impasse, the top step of fire captain salaries were to be set at an amount not less than the average for top step salaries of fire captains in five neighboring cities. The ordinance was an unlawful delegation of the city council’s authority under Government Code section 36506 to set city employee compensation. The ordinance also violated the Meyers-Milias-Brown Act because it precluded the city council from exercising its right under Government Code section 3505.7 to impose its last, best, and final offer in the event of an impasse in negotiations.

Michaels v. State Personnel Bd. (CA3 C090196 3/21/22) State Employment/”Within One Year after Appointment” Defined
Government Code section 19257.5 allows the State Personnel Board to direct a state employer to void a civil service appointment if the SPB determines that the employee lacks the minimum qualifications for the position and does so “within one year after the appointment.” Government Code section 18525 defines “appointment” as the offer and acceptance of a state civil service position. The one-year period under section 19257.5 thus begins on the date the employee accepts the employer’s offer, not the day the employee actually begins work. Because Michaels’ appointment was voided more than one year after she accepted the position, the action was untimely.

Moreno v. Utiliquest (9th Cir. 21-55313 3/18/22) NLRA Preemption 
Utiliquest management asked Moreno to collect signatures from employees to “release their union rights” in exchange for a 10% raise. Moreno did so and received the raise, but other employees who released their rights did not receive the raise. When Moreno complained to management about this, he was terminated. Because Utiliquest’s conduct arguably violated the National Labor Relations Act, federal law preempted Moreno’s state law termination-related causes of action.

Jauregui v. Roadrunner Transp. Serv. (9th Cir. 22-55058 3/17/22) Wage & Hour/CAFA 
Removal of a class action lawsuit to federal court under the Class Action Fairness Act requires an amount in controversy of at least $5 million. Because CAFA expresses a strong preference that interstate class actions be heard in federal court, the district court erred by imposing a presumption against removal. The district court also erred by assigning a $0 value to claims when the court disagreed with the removing party’s assumptions because it found alternative assumptions more reasonable. In such circumstances, the court should consider the claim under the better assumption, not zero-out the claim. Reversed and remanded to determine whether the $5 million threshold is met by applying the alternative assumptions.

Khoiny v. Dignity Health (CA2/8 B301486 3/16/22) Sex Discrimination & Retaliation/Academic Deference 
Because the predominant relationship between a medical resident and a hospital residency program is an employee-employer relationship, the concept of academic deference does not apply to a jury’s determination whether the resident was terminated for discriminatory or retaliatory reasons. Rather, in cases where a medical resident claims to have suffered discrimination or retaliation in violation of the Fair Employment and Housing Act, the court is to apply the same three-part McDonnell Douglas burden-shifting standard as applied to employees in non-academic settings. The superior court’s jury instruction that academic deference applied to the medical center’s decision to terminate Khoiny was prejudicial error; verdict reversed and remanded for new trial.

Depuy Synthes Sales v. Howmedica Osteonics (9th Cir. 21-55126 3/14/22) Employment Contract/Forum-Section, Non-Compete & Non-Solicitation Clauses  
California Labor Code section 925 provides that employers cannot force an employee who resides and works primarily in California to agree, as a condition of employment, to: (1) litigate a claim arising in California in a forum outside of California; or (2) waive the employee’s right to the substantive protection of California law with respect to a controversy arising in California. Because these conditions were met, the employee validly voided the forum-selection clause in his employment contract. Because the forum-selection clause was invalid, the district court properly applied California choice-of-law rules to deny Howmedica’s motion to transfer under 28 U.S.C. § 1404(a).

Meinhardt v. City of Sunnyvale (CA4/1 D079451 3/9/22) Writ of Administrative Mandate/Police Officer Suspension 
A superior court order denying a petition for writ of administrative mandate under Code of Civil Procedure section 1094.5 was an appealable final judgment because it disposed of all issues between the parties and did not contemplate further action such as preparation of another order or judgment. Thus, the 60-day period for filing a notice of appeal under California Rule of Court 8.104(a) began on the date of the order, not on the date the superior court subsequently issued a judgment confirming the order.

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