Employment Law Case Notes

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Employment Law Case Notes

By Anthony J. Oncidi

Anthony J. Oncidi is a partner in and the Chair of the Labor and Employment Department of Proskauer Rose LLP in Los Angeles, where he exclusively represents employers and management in all areas of employment and labor law. His telephone number is (310) 284-5690 and his email address is aoncidi® proskauer.com. (Tony has authored this column without interruption for every issue of this publication since 1990.)

Eddie Money Beats Discrimination Lawsuit Based on Free Speech Right

Symmonds v. Mahoney, 31 Cal. App. 5th 1096 (2019)

After 41 years, singer/songwriter Edward Joseph Mahoney (a.k.a. "Eddie Money") terminated the employment of Glenn Symmonds (the band’s drummer). Symmonds filed a lawsuit alleging discrimination based on age, disability, and medical condition in violation of the California Fair Employment and Housing Act (FEHA). Mahoney filed an anti-SLAPP motion to dismiss the FEHA claim on the ground that Symmonds’ claim arose in connection with an issue of public interest, given the media’s and the public’s interest in Mahoney and his music. The trial court denied Mahoney’s motion to dismiss, but the court of appeal reversed, holding that "a singer’s selection of the musicians that play with him both advances and assists the performance of the music, and therefore is an act in furtherance of his exercise of the right to free speech." See also Rall v. Tribune 365 LLC, 31 Cal. App. 5th 479 (2019) (Los Angeles Times’ anti-SLAPP motion was properly granted, dismissing former blogger’s defamation and wrongful termination claims based on the Times’ "constitutionally protected editorial decision to stop publishing [the blogger’s] work"); Laker v. Board of Trustees, 32 Cal. App. 5th 745 (2019) (university’s anti-SLAPP motion should have been granted, dismissing professor’s defamation claim arising from several internal investigations).

Former Accountant Could Proceed With Whistleblower Lawsuit

Siri v. Sutter Home Winery, Inc., 31 Cal. App. 5th 598 (2019)

Says Siri alleged that Sutter Home Winery terminated her employment as its general ledger staff accountant in retaliation for Siri having reported Sutter to the state Board of Equalization and writing to Sutter’s general counsel. Siri had notified the Board that Sutter was out of compliance with California sales and use tax law. Sutter successfully moved for summary judgment of Siri’s lawsuit on the ground that Siri could not establish the elements of her claim without relying on Sutter’s tax returns, which were privileged and unavailable to her in connection with the prosecution of her lawsuit. The court of appeal reversed, holding that Sutter had not established that Siri could not prove her case without Sutter’s tax returnsā€”"Plaintiff’s right to recover turns only on whether she was discharged for communicating her reasonable belief that [Sutter] was not properly reporting its use tax obligation." See also Wadler v. Bio-Rad Labs., Inc., 916 F.3d 1176 (9th Cir. 2019) (portion of $11 million whistleblower verdict in favor of former general counsel vacated based on erroneous jury instructions regarding Sarbanes-Oxley Act violation, but punitive damages awarded under state common law theory upheld).

Employer Violated FCRA by Providing Improper Background Check Notice

Gilberg v. California Check Cashing Stores, LLC, 913 F.3d 1169 (9th Cir. 2019)

While applying for employment with CheckSmart Financial, LLC, Desiree Gilberg signed a "Disclosure Regarding Background Investigation," which resulted in Gilberg’s filing of a putative class action, claiming CheckSmart violated the federal Fair Credit Reporting Act (FCRA) and the California Investigative Consumer Reporting Agencies Act (ICRAA). The district court granted CheckSmart’s summary judgment motion, but the Ninth Circuit reversed, holding that CheckSmart’s disclosure form: (1) violates FCRA’s "standalone document requirement" (because it contained "surplus language" involving applicants’ rights under the state law of various jurisdictions); and (2) was not "clear" (because the language was not understandable to a reasonable person) as required by the applicable statutes. The Ninth Circuit concluded that although the language in question was not "clear," it was sufficiently "conspicuous."

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Fruit Growers May Have Been Joint Employers of Thai Workers for Purposes of Title VII

EEOC v. Global Horizons, Inc., 915 F.3d 631 (9th Cir. 2019)

The Washington state fruit growers in this case experienced labor shortages and, as a result, entered into agreements with Global Horizons (a labor contractor) to obtain temporary workers from Thailand to work in their orchards under the H-2A guest worker program. After two of the Thai workers filed discrimination charges with the EEOC, the agency initiated this litigation, claiming the growers and Global Horizons subjected the Thai workers to poor working conditions, substandard living conditions, and unsafe transportation based on their race and national origin. After Global Horizons became financially insolvent, the following legal question remained: To what extent were the growers joint employers of the Thai workers for purposes of Title VII liability? The district court dismissed all Title VII charges against the growers that did not involve "orchard-related matters." The Ninth Circuit reversed the dismissal of claims regarding "non-orchard-related matters" and held the district court should have applied the "common-law agency test" for determining joint employer status under Title VII. The Ninth Circuit further held that at least one of the growers allegedly knew or should have known about the discrimination and had "ultimate control over [even non-orchard-related matters], and thus could have taken corrective action to stop the discrimination."

PAGA Penalties Must Be Shared With All Aggrieved Employees

Moorer v. Noble L.A. Events, Inc., 32 Cal. App. 5th 736 (2019)

David Moorer, who worked as a full-time security guard and "lobby ambassador" for Noble, filed a complaint as an individual and on behalf of all aggrieved employees against Noble and others under the Private Attorneys General Act (PAGA). After Noble failed to respond to outstanding discovery requests and its lawyer withdrew, Moorer submitted a request for entry of a default judgment against Noble in the amount of $679,374.52, including $594,550 in PAGA penalties. Moorer calculated the civil penalties under PAGA based on wage violations for 23 aggrieved employees. However, the trial court denied a request by Moorer to enter the default judgment because the proposed judgment failed to account for the distribution requirements for PAGA penaltiesā€”specifically, Moorer’s proposed judgment sought to allocate all penalties to Moorer himself and made no reference to the 75 percent of PAGA penalties owed to the state or the share of penalties to be distributed to other aggrieved employees. Although Moorer subsequently conceded that the state was entitled to 75 percent of the PAGA penalties, he continued to seek to allocate the remaining 25 percent to himself alone rather than to distribute it among the aggrieved employees. The trial court dismissed the case, and the court of appeal affirmed, holding that allocation of 25 percent of the penalties to all aggrieved employees is consistent with the statutory scheme under which the judgment binds all aggrieved employees, including nonparties. See also Correia v. NB Baker Elec., Inc., 32 Cal. App. 5th 602 (2019) (PAGA representative-action waiver remains unenforceable under California law; PAGA representative action may not be compelled to arbitration without the state’s consent).

Court Should Not Have Denied Certification of Class of Drivers Seeking Wage and Hour Remedies

Jimenez-Sanchez v. Dark Horse Express, Inc., 32 Cal. App. 5th 224 (2019)

The trial court denied plaintiffs’ motion for class certification of a putative class consisting of employees who worked as drivers transporting milk within California. The plaintiffs alleged failure to compensate for all hours worked; failure to schedule meal periods; failure to provide uninterrupted duty-free meal periods of at least 30 minutes; failure to pay premiums when rest or meal breaks were not provided; and recordkeeping violations, among others. Dark Horse independently secured settlement agreements and releases from 54 of the 76 putative class members and argued that there was insufficient numerosity for the case to proceed as a class action. Dark Horse also argued that the class representatives were not typical, since they had not signed the release agreements. The court of appeal reversed the trial court’s order denying certification on the ground that the trial court used improper criteria or erroneous legal assumptions of whether plaintiffs’ claims and one of defendant’s defenses presented predominantly common issues suitable for determination on a class basis. Specifically, the court held that the trial court based its decision on the certification motion in part on an erroneous legal assumptionā€”that the law applicable to compensation for rest periods is the same as that applicable to compensation for nonproductive time. The court further held that the claimed unconscionability issues (related to the release agreements) were predominantly individual and not subject to class treatment.

Statute of Limitations May Bar Successive Class Action

Fierro v. Landry’s Rest. Inc., 32 Cal. App. 5th 276 (2019)

Jorge Fierro filed this class action, claiming that he and the other members of the putative class were misclassified as exempt employees and that they were non-exempt, non-managerial employees who are owed unpaid overtime wages and penalties. Landry’s responded by filing a demurrer, asserting that the applicable statute of limitations barred the claims. Although Landry’s conceded that the filing of an earlier class action for these claims tolled the statute of limitations applicable to Fierro’s individual claims, it argued that the statute was not tolled for the class claims that Fierro asserted. Landry’s also contended that because the trial court had dismissed the earlier class action for failure to bring the action to trial within five years, the class claims could not be resurrected in the new action filed by Fierro. The trial court sustained the demurrer to the class claims due to the earlier dismissal based upon the five-year rule. The court of appeal reversed and remanded the action to the trial court, holding that on the present record, the court could not determine whether all of the class’ claims were untimely. The court further determined that upon denial of class certification in an action, a putative class member may not commence the same class claim in a new action beyond the time allowed by the limitations period applicable to the class claim, citing China Agritech, Inc. v. Resh, 584 U.S.___, 138 S. Ct. 1800 (2018) (successive class action may not be filed under federal law after the original statute of limitations period has expired).

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Damages May Not Be Denied to Employee Based on His "Imprecise Testimony"

Furry v. East Bay Publ’g, LLC, 30 Cal. App. 5th 1072 (2019)

Terry Furry worked as a sales and marketing director for the East Bay Express (a weekly newspaper based in Oakland) and alleged that East Bay failed to pay minimum and overtime wages, provide meal and rest breaks, provide properly itemized wage statements, and other claims. Following a bench trial, the court determined that East Bay failed to meet its burden of proving that Furry was exempt from overtime and related wage and hour requirements. However, because Furry "failed to present sufficient evidence regarding the amount and extent of his [overtime] work" and because his testimony was "uncertain, speculative, vague and unclear," the court declined to award recovery for uncompensated overtime hours because "even a rough approximation of said hours would be pure guess work and unreasonable speculation on the court’s part." As for meal and rest breaks, the trial court determined that East Bay provided Furry with uninterrupted meal and rest breaks. The court of appeal reversed the judgment as to the overtime claims because East Bay failed to keep proper records, so "the imprecise nature of Furry’s testimony was not a bar to relief." The court affirmed the judgment as to the meal and rest breaks because Furry failed to prove that East Bay knew or should have known he was working through authorized meal breaks.

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