Tuesday, August 14, 2018

Cal. Dept. of Industrial Relations v. AC Transit

(CA1/4 A142799 8/13/18) Non-Air Conditioned Buses.Outdoor Places of Employment

In this appeal, we consider a narrow question of regulatory interpretation:  Can the interior of a non-air-conditioned bus be deemed an “outdoor place of employment” for purposes of the heat illness prevention standards promulgated by the California Occupational Safety and Health Standards Board (Standards Board) as stated in section 3395 of title 8 of the California Code of Regulations (section 3395)?  After the Department of Industrial Relation’s Division of Occupational Safety and Health (Division) cited the Alameda-Contra Costa Transit District (AC Transit) for several violations of section 3395 involving its non-air-conditioned buses, AC Transit sought administrative review, arguing, among other things, that the buses were not “outdoor” places of employment for purposes of the heat illness prevention regulation.  The Occupational Safety and Health Appeals Board (Appeals Board) ultimately agreed, affirming the dismissal of the appealed-from violations by one of its administrative law judges (ALJ).  However, after the Division filed a petition for writ of mandate in the trial court disputing this decision, the trial court determined that the Appeals Board’s definition of “outdoor” was too narrow and issued a peremptory writ of mandate instructing the Appeals Board to reconsider the matter using a broader definition of outdoor that could include non-air-conditioned vehicles.  Both AC Transit and the Appeals Board appealed.  We conclude—based upon our independent analysis of the question—that the trial court’s construction of section 3395 is well supported both by the language of the regulation and by its related regulatory history.  We therefore remand the matter for further proceedings consistent with our analysis.

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Friday, August 10, 2018

Clark v. City of Seattle

A group of drivers did not raise a viable challenge to a city ordinance that establishes a multistep collective-bargaining process between "driver-coordinators" and for-hire drivers under Sec. 8(b)(4) or Sec. 8(e) of the National Labor Relations Act because the disclosure of the drivers' information to a labor union was neither a concrete nor a particularized injury.

Clark v. City of Seattle - filed Aug. 9, 2018
Cite as 2018 S.O.S. 17-35693

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Tuesday, August 7, 2018

NLRB Announces Opportunity for Voluntary Early Retirement and Separation for Select Agency Positions

Today, the National Labor Relations Board (“NLRB” or “the Agency”) announced that it will offer voluntary early retirement and voluntary separation to employees holding eligible positions in designated locations within the Agency.
The Agency requested and obtained both Voluntary Early Retirement Authority (VERA) and Voluntary Separation Incentive Payments (VSIP) authority in order to better manage its caseload and workforce needs. For years, the deficits caused by flat funding of the Agency have been primarily addressed by voluntary personnel attrition. As a result, the NLRB has an imbalance in staffing in both headquarters and the NLRB’s regional offices. To ensure that the Agency is able to carry out its critical mission, the NLRB is utilizing the VERA and VSIP to realign Agency staffing with office caseloads. In addition to addressing the Agency’s current staffing imbalance, utilization of VERA and VSIP will enable the Agency to reallocate its limited resources and to, among other things, provide employees with the tools they need, including training and improvements in technology.
VERA changes the normal retirement eligibility to allow employees to voluntarily retire earlier, with an immediate annuity, with 20 years of service at age 50, or at 25 years of service regardless of age. VSIP provides a financial incentive for employees to voluntarily separate by optional retirement, voluntary early retirement, or resignation. The NLRB is offering both VERA and VSIP opportunities only to employees in targeted job categories. Applying for these opportunities is entirely voluntary and applications from employees in eligible positions will be processed in the order they are received.

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NLRB Administrative Law Judges Validly Appointed

The National Labor Relations Board today rejected a challenge regarding the appointment of its administrative law judges ("ALJs"), concluding that all of the Board’s ALJs have been validly appointed under the Appointments Clause of the United States Constitution.

     On June 21, 2018, the Supreme Court issued its decision in Lucia v. SEC, 585 U.S. ___, 138 S. Ct. 2044 (2018), finding that administrative law judges of the Securities and Exchange Commission (“SEC”) are inferior officers of the United States and thus must be appointed in accordance with the Appointments Clause, i.e., by the President, the courts, or the Head of Department. Id. at 2051. Unlike the SEC’s ALJs, the NLRB’s ALJs are appointed by the full Board as the “Head of Department” and not by other Agency staff members.

     The challenge was raised by WestRock Services, Inc. (“WestRock”) in Case 10-CA-195617 on a motion to dismiss. Chairman John F. Ring was joined by Members Mark Gaston Pearce, Lauren McFerran, Marvin E. Kaplan and William J. Emanuel in the order denying WestRock’s motion.

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Monday, August 6, 2018

Jones v. Sorenson

As used in Business and Professions Code Sec. 7026.1, a nursery person is a licensed professional engaged in cultivating plants, whereas a gardener holds no license and generally tends existing landscaping. A property owner who has hired a gardener to perform work requiring a license can be held liable to the gardener's employee under a respondeat superior theory.

Jones v. Sorenson - filed Aug. 2, 2018, Third District
Cite as 2018 S.O.S. 3823

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Lacagnina v. Comprehend Systems, Inc.

An employee who recovers a judgment against an employer for lost compensation has not suffered a theft of labor for which he is entitled to recover treble damages and attorney fees under Penal Code Sec. 496(c).

Lacagnina v. Comprehend Systems, Inc. - filed Aug. 3, 2018, First District, Div. Four
Cite as 2018 S.O.S. 3817

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Friday, August 3, 2018

Honeycutt v. JPMorgan Chase Bank, N.A.

The Code of Civil Procedure and the Ethics Standards for Neutral Arbitrators in Contractual Arbitration (Ethics Standards) require arbitrators in contractual arbitrations to make various disclosures about themselves, their experience, and their activity as private judges or, as they are sometimes called, “dispute resolution neutrals.”  Failure to make required disclosures may be a ground for disqualifying the arbitrator and, if the arbitrator was actually aware of the ground for disqualification, for vacating an award.

In this case, the arbitrator did not comply with several applicable disclosure requirements, which gave rise to multiple grounds for disqualification.  Because the arbitrator was actually aware of at least one of the grounds for disqualification, the resulting arbitration award was subject to vacatur.  Therefore, we reverse the trial court’s order denying the petition to vacate the award and granting the petition to confirm it.

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Boling v. Public Employment Relations Board

This case arises from unfair practice claims filed by unions after San Diego’s mayor sponsored a citizens’ initiative to eliminate pensions for new municipal employees and rebuffed union demands to meet and confer over the measure.  The Court of Appeal annulled a finding by respondent, the Public Employment Relations Board (PERB), that the failure to meet and confer constituted an unfair labor practice.  We granted review to settle two questions:  (1) When a final decision by PERB under the Meyers-Milias-Brown Act (the MMBA; Gov. Code, § 3500 et seq.) is appealed, what standards of review apply to PERB’s legal interpretations and findings of fact?;  (2) When a public agency itself does not propose a policy change affecting the terms and conditions of employment, but its designated bargaining agent lends official support to a citizens’ initiative to create such a change, is the agency obligated to meet and confer with employee representatives?

These questions are resolved by settled law and the relevant statutory language.  First, we have long held that PERB’s legal findings are entitled to deferential review.  They will not be set aside unless clearly erroneous, though the courts as always retain ultimate authority over questions of statutory interpretation.  The MMBA specifies that PERB’s factual findings are “conclusive” “if supported by substantial evidence.”  (§ 3509.5, subd. (b).)  Second, the duty to meet and confer is a central feature of the MMBA.  Governing bodies “or other representatives as may be properly designated” are required to engage with unions on matters within the scope of representation “prior to arriving at a determination of policy or course of action.”  (§ 3505.)  This broad formulation encompasses more than formal actions taken by the governing body itself.  Under the circumstances here, the MMBA applies to the mayor’s official pursuit of pension reform as a matter of policy.  The Court of Appeal erred, first by reviewing PERB’s interpretation of the governing statutes de novo, and second by taking an unduly constricted view of the duty to meet and confer.

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Wednesday, August 1, 2018

Nishiki v. Danko Meredith, APC

Nishiki v. Danko Meredith, APC (CA1/4 A147733  8/1/18) Wage & Hour/Waiting Time and Attorneys’ Fees

When an employee resigns without notice, California law requires the employer to pay all wages within 72 hours.  (Lab. Code § 202, subd. (a).)  If the employer willfully fails to do so, the employee’s wages continue as a penalty from that due date until the wages are paid, for up to 30 days.  (§ 203.)  This case considers an award of these “waiting time” penalties, as well as an award of attorney fees to the employee for the employer’s unsuccessful appeal.  (§ 98.2.)

Taryn Nishiki, a former employee of defendant Danko Meredith P.C., filed a complaint with the California Labor Commissioner (the commissioner) seeking vacation wages, rest period premiums, and waiting time penalties.  She prevailed on her claim for waiting time penalties, and was awarded $4,250.  Defendant appealed the award to the superior court, which affirmed the commissioner’s award, and awarded Nishiki $86,160 in attorney fees.  On appeal, defendant contends the waiting time penalties are unwarranted and the attorney fee award was excessive.  We shall reduce the waiting time penalties and otherwise affirm the judgment.

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Peredia v. HR Mobile Services, Inc

A safety consultant is liable to an employee of the firm that hired the safety consultant when the employee establishes the elements of a negligent undertaking claim. To establish a negligent undertaking claim, a plaintiff must establish that the consultant undertook to render services to the employer, the services rendered were of a kind the consultant should have recognized as necessary for the protection of the employees of the employer, the consultant to exercise reasonable care in the performance of its undertaking, the failure to exercise reasonable care resulted in physical harm to an employee, and the consultant's carelessness either increased the risk of such harm, or the undertaking was to perform a duty owed by the employer to the employees, or the harm was suffered because of the reliance of the employer the employees upon the undertaking. Acts are "wrongful in their nature" for purposes of Civil Code Sec. 2343 when they constitute an independent tort, such as the tort of negligent undertaking.

Peredia v. HR Mobile Services, Inc - filed July 30, 2018, Fifth District
Cite as 2018 S.O.S. 3736

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Tuesday, July 31, 2018

Estill v. County of Shasta

Estill v. County of Shasta (CA3 C077513 7/31/18) Government Claim/Internal Investigation

Renee Estill submitted a government claim against the County of Shasta and others, specifically representing that she first became aware of the alleged incident [an internal affairs investigation by her employer] on September 9, 2011.  The County accepted Estill’s representation and denied her claim on the merits.  Because it accepted the claim as timely, the County did not warn Estill to seek leave to present a late claim.  This lawsuit followed.
During Estill’s deposition, however, defendants learned she was aware of the alleged wrongdoing as early as 2009.  The trial court granted defendant’s motion for summary judgment primarily on the ground that Estill’s government claim was untimely, but later granted her motion for a new trial, ruling there are triable issues of fact as to whether defendants waived their defense of untimeliness because the County did not warn Estill that she should seek leave to present a late claim pursuant to Government Code section 911.3, subdivision (b).  Defendants appeal from the order granting Estill a new trial, and Estill cross-appeals from the judgment in favor of defendants.
After oral argument in this case, we asked the parties for supplemental briefing on the application of equitable estoppel in this context.  We conclude that a claimant may be estopped from invoking the section 911.3 waiver provision where a public entity’s failure to notify the claimant that a claim is untimely is induced by the claimant’s representation on the government claim form.  And in this case, based on the entire appellate record, including the supplemental briefs, we conclude Estill is estopped from asserting that defendants waived their defense of untimeliness.  She represented in her government claim that the incident of wrongdoing occurred in September 2009, but that she “first became aware” of the incident on September 9, 2011.  She included an attachment to her government claim in which she could have explained what she had learned in 2009 and 2010 about the alleged misconduct, but she did not mention her prior knowledge.  Thus, the record indicates she intended for the County to rely on her representation in the government claim, and the County did in fact rely on the representation.  Accordingly, we will reverse the trial court’s order granting Estill’s motion for a new trial and affirm the judgment entered in favor of defendants.

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Friday, July 27, 2018

Troester v. Starbucks Corporation

Troester v. Starbucks Corporation (SC S234969 7/26/18) FLSA/De Minimis Doctrine

Upon a request by the United States Court of Appeals for the Ninth Circuit (Cal. Rules of Court, rule 8.548), we agreed to answer the following question:  Does the federal Fair Labor Standards Act’s de minimis doctrine, as stated in Anderson v. Mt. Clemens Pottery Co. (1946) 328 U.S. 680, 692, and Lindow v. United States (9th Cir. 1984) 738 F.2d 1057, 1063, apply to claims for unpaid wages under California Labor Code sections 510, 1194, and 1197?

The de minimis doctrine is an application of the maxim de minimis non curat lex, which means “[t]he law does not concern itself with trifles.”  (Black’s Law Dict. (10th ed. 2014) p. 524.)  Federal courts have applied the doctrine in some circumstances to excuse the payment of wages for small amounts of otherwise compensable time upon a showing that the bits of time are administratively difficult to record.
We approach the question presented in two parts:  First, have California’s wage and hour statutes or regulations adopted the de minimis doctrine found in the federal Fair Labor Standards Act (FLSA)?  We conclude they have not.  There is no indication in the text or history of the relevant statutes and Industrial Welfare Commission (IWC) wage orders of such adoption.

Second, does the de minimis principle, which has operated in California in various contexts, apply to wage and hour claims?  In other words, although California has not adopted the federal de minimis doctrine, does some version of the doctrine nonetheless apply to wage and hour claims as a matter of state law?  We hold that the relevant wage order and statutes do not permit application of the de minimis rule on the facts given to us by the Ninth Circuit, where the employer required the employee to work “off the clock” several minutes per shift.  We do not decide whether there are circumstances where compensable time is so minute or irregular that it is unreasonable to expect the time to be recorded.

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Thursday, July 26, 2018

Windsor Redding Care Center, LLC

Windsor Redding Care Center, LLC  (20-CA-070465, et al.; 366 NLRB No. 127)  Redding CA, July 27, 2018.
The Board adopted the Administrative Law Judge’s conclusion that the Respondent did not unlawfully refuse to engage in predisciplinary or postdisciplinary bargaining with the Union.  A Board majority (Members Kaplan and Emanuel; Member McFerran, dissenting) further agreed with the judge that the Respondent did not unlawfully terminate a housekeeping employee; Member McFerran would have found that the Respondent failed to establish that it would have taken the same action absent the employee’s union activity.  Contrary to the judge, the Board unanimously found that the Respondent unlawfully changed its practice of granting merit raises.  A Board majority (Members McFerran and Kaplan; Member Emanuel, dissenting) additionally found that the Respondent unlawfully terminated a restorative nursing assistant; Member Emanuel would have found that the Respondent established that it would have discharged the employee even absent the employee’s union activity.
Charges filed by SEIU United Service Workers-West.  Administrative Law Judge Gregory Z. Meyerson issued his decision on December 31, 2012.  Members McFerran, Kaplan, and Emanuel participated.

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Tuesday, July 24, 2018

Golden v. CEP

Golden v. CEP (9th Cir. 16-17354 7/24/18) Employment Settlement/“Restraint of a Substantial Character”

We are now called on to answer the question that we left open when this case was last before us: whether a provision of a settlement agreement between Dr. Donald Golden and his former employer, the California Emergency Physicians Medical Group (“CEP”), places a “restraint of a substantial character” on Dr. Golden’s medical practice. See Golden v. Cal. Emergency Physicians Med. Grp., 782 F.3d 1083, 1093 (9th Cir. 2015) (“Golden I”). We conclude that it does, and that it therefore runs afoul of California law. See Cal. Bus. & Prof. Code § 16600.

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Friday, July 20, 2018

Rodriguez v. Taco Bell

Rodriguez v. Taco Bell (9th Cir. 16-15465 7/18/18) Wage & Hour/Meal Breaks

The panel affirmed the district court’s judgment in favor of Taco Bell Corp. in a putative class action concerning employee meal breaks.

After the district court granted summary judgment to Taco Bell on most of plaintiff’s claims, the court granted plaintiff’s request that the district court dismiss the remaining pending claim. As a threshold jurisdictional issue, the panel held that the dismissal with prejudice created a valid final judgment for purposes of 28 U.S.C. § 1291.

California Wage Order 5-2001 requires employees be relieved of all duty during a requisite meal period. During plaintiff’s period of employment, Taco Bell offered thirty-minute meal breaks that were fully compliant with California’s requirements, but with a special offer that employees could purchase a meal from the restaurant at a discount, provided they ate the meal in the restaurant.

The panel held that California law was not violated because Taco Bell relieved their employees of all duties during the meal break period and exercised no control over their activities, where employees were free to use the thirty minutes in any way they wished, subject only to the restriction that if they purchased a discounted meal, they had to eat in the restaurant. The panel rejected plaintiff’s contention that employees were under sufficient employer control to render the time compensable. The panel also rejected plaintiff’s assertion that the value of the discounted meals be added to the regular rate of pay for overtime purposes.

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Glazing Health & Welfare Fund v. Lamek

Under the Employee Retirement Income Security Act, employers are not fiduciaries as to unpaid contributions to ERISA benefit plans. Parties to an ERISA plan cannot designate unpaid contributions as plan assets.

Glazing Health & Welfare Fund v. Lamek - filed July 19, 2018
Cite as 2018 S.O.S. 16-16155

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Monday, July 16, 2018

Coffman v. Queen of the Valley Medical Center

An employer cannot begin unconditional bargaining and later withdraw recognition and refusing to bargain. The regional director of the National Labor Relations Board demonstrated a sufficient likelihood of success in establishing a withdrawal of recognition and refusal to bargain unconditionally, as well as a continuing threat of irreparable harm to the union's collective bargaining rights, to support the extraordinary remedy of injunctive relief, where the director could show that an employer had considerable dealings with the union following the union's certification, including discussions that resulted in agreements over some hours and working conditions, and that these negotiations took place before the employer made any official challenge to the certification.

Coffman v. Queen of the Valley Medical Center - filed July 16, 2018
Cite as 2018 S.O.S. 17-17413

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Dutta v. State Farm Mutual Automobile Insurance Co.

A plaintiff lacked standing to bring a suit based on a prospective employer's violation of the Fair Credit Reporting Act in failing to provide him with a copy of his consumer credit report and an opportunity to correct any inaccuracies where the plaintiff did not allege any actual harm or a substantial risk of such harm resulting from the violation.

Dutta v. State Farm Mutual Automobile Insurance Co. - filed July 13, 2018
Cite as 2018 S.O.S. 16-17216

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Monday, July 9, 2018

Caldera v. Dept. of Corrections & Rehabilitation

Caldera v. Dept. of Corrections & Rehabilitation (CA4/3 G053168 7/9/18) FEHA Harassment/Severe or Pervasive

Under the Fair Employment and Housing Act (FEHA), an employee with a disability can sue his or her employer and supervisors for disability harassment.  (Gov. Code, § 12940, subd. (j)(1).)  The employee must prove the harassment was either severe or pervasive.  (Miller v. Department of Corrections (2005) 36 Cal.4th 446, 466.)

Augustine Caldera is a correctional officer at a state prison.  Officer Caldera stutters when he speaks.  The prison’s employees mocked or mimicked Caldera’s stutter at least a dozen times over a period of about two years.  Sergeant James Grove, a supervisor, participated in the mocking and mimicking of Caldera’s stutter.  Such conduct reflected the prison’s culture, according to a senior prison official.

Caldera sued the California Department of Corrections and Rehabilitation (CDCR) and Grove (collectively defendants) for disability harassment, failure to prevent the harassment, and related claims.  A jury found the harassment to be both severe and pervasive and awarded Caldera $500,000 in noneconomic damages.  The trial court found the damage award to be excessive and granted defendants’ motion for a new trial solely as to that issue.  Defendants appeal and Caldera cross-appeals.

Defendants claim there is insufficient evidence the harassment was either severe or pervasive.  We disagree.  There is substantial evidence to support the jury’s factual findings.  Defendants also claim the trial court committed two instructional and one evidentiary error.  We find no prejudicial instructional errors and the claimed evidentiary error has been forfeited.

Caldera claims the trial court failed to file a timely statement of reasons after granting defendants’ motion for a new trial.  We agree.  The court’s new trial order as to the damage award is reversed.  In all other respects, the judgment is affirmed.

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Friday, July 6, 2018

Juarez v. Wash Depot Holdings

An employee's right to bring a claim under the California Private Attorneys General Act cannot be waived. A trial court did not abuse its discretion by declining to sever a PAGA waiver and enforce the remaining arbitration agreement which was printed in both English and Spanish and only the English-language version of the agreement contained a severability clause.

Juarez v. Wash Depot Holdings - filed July 3, 2018, Second District, Div. Six
Cite as 2018 S.O.S. 3389

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Thursday, June 28, 2018

Daugherty v. City & Co. of SF

Daugherty v. City & Co. of SF (CA1/3 A145863, filed 5/30/18, pub. ord. 6/22/18) the Public Safety Officers Procedural Bill of Rights Act

Under the Public Safety Officers Procedural Bill of Rights Act (POBRA) (Gov. Code, § 3300 et seq.), no punitive action may be taken against a public safety officer for any alleged act, omission, or other misconduct unless the investigation is completed within one year of “the public agency’s discovery by a person authorized to initiate an investigation of the allegation of an act, omission, or other misconduct,” subject to certain statutory exceptions.  (§ 3304, subd. (d)(1).)  One such exception provides that the one-year time period is tolled while the act, omission, or other alleged misconduct is also the “subject” of a pending criminal investigation or prosecution.  (Id., subd. (d)(2)(A).)

This case arises out of a criminal corruption investigation of officers in the San Francisco Police Department (SFPD).  The investigation began in 2011 and was led by the United States Attorney’s Office (USAO), with the assistance of select members of the criminal unit of SFPD’s Internal Affairs Division (IAD-Crim).  During the course of the investigation, search warrants of the cellphone records of former SFPD Sergeant Ian Furminger—the central figure in the corruption scheme—led to the discovery in about December 2012 of racist, sexist, homophobic, and anti-Semitic text messages between Furminger and nine SFPD officers.

The criminal case proceeded to trial and resulted in a verdict against Furminger and a codefendant for conspiracy to commit theft, conspiracy against civil rights and wire fraud.  Three days after the verdict, on December 8, 2014, the text messages were released by the USAO to the administrative unit of SFPD’s Internal Affairs Division (IAD-Admin).  After IAD-Admin completed its investigation of the text messages, the chief of police issued disciplinary charges against respondents in April 2015.

While the disciplinary proceedings were pending, respondent Rain O. Daugherty went to court and filed a petition for writ of mandate and complaint for extraordinary relief, seeking to rescind the disciplinary charges on the grounds that they were untimely.  The remaining respondents joined in Daugherty’s petition.  The trial court granted the writ petition and complaint, finding the one-year statute of limitations began to accrue in December 2012 when the misconduct was discovered, and thus, the investigation of respondents’ misconduct was not completed in a timely manner.

For the reasons discussed below, we conclude the one-year statute of limitations did not begin to run until the text messages were released by the USAO to IAD-Admin, because before then, the alleged misconduct was not and could not be discovered by the “person[s] authorized to initiate an investigation” for purposes of section 3304, subdivision (d)(1).  We alternatively conclude the one-year statute of limitations was tolled until the verdict in the criminal corruption case because the text messages were the “subject” of the criminal investigation within the meaning of section 3304, subdivision (d)(2)(A).  Thus, the April 2015 notices of discipline were timely.  Because the trial court’s contrary conclusions were based on errors of law or were not supported by substantial evidence, we reverse.

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AHMC Healthcare, Inc. v. Superior Court

AHMC Healthcare, Inc. v. Superior Court (CA2/4 B285655 6/25/18) Wage & Hour/Rounding Time

State law requires employers to pay their employees for all time the employees are at work and subject to the employers’ control.  (Mendiola v. CPS Security Solutions, Inc. (2015) 60 Cal.4th 833, 839.)  The issue in this case is whether an employer’s use of a payroll system that automatically rounds employee time up or down to the nearest quarter hour, and thus provides a less than exact measure of employee work time, violates California law.  In the underlying matter, both employers and employees moved for summary adjudication on the issue, and the trial court denied both motions.  Petitioners AHMC Healthcare, Inc., AHMC, Inc., AHMC Anaheim Regional Medical Center, L.P. (Anaheim), and AHMC San Gabriel Valley Medical Center, L.P. (San Gabriel) sought a writ of mandate directing the trial court to grant its motion, contending they had established as a matter of undisputed fact that their system was neutral on its face and as applied.  We agree the undisputed facts established that petitioners’ system was in compliance with California law.  Accordingly, we grant the writ.

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Wednesday, June 27, 2018

Janus v. AFSCME

Janus v. AFSCME (US 16–1466 6/27/18) Public Sector Employee Agency Fees/First Amendment

Illinois law permits public employees to unionize. If a majority of the employees in a bargaining unit vote to be represented by a union, that union is designated as the exclusive representative of all the employees, even those who do not join. Only the union may engage in collective bargaining; individual employees may not be represented by another agent or negotiate directly with their employer. Nonmembers are required to pay what is generally called an “agency fee,” i.e., a percentage of the full union dues. Under Abood v. Detroit Bd. of Ed., 431 U. S. 209, 235–236, this fee may cover union expenditures attributable to those activities “germane” to the union’s collective bargaining activities (chargeable expenditures), but may not cover the union’s political and ideological projects (nonchargeable expenditures). The union sets the agency fee annually and then sends nonmembers a notice explaining the basis for the fee and the breakdown of expenditures. Here it was 78.06% of full union dues. Petitioner Mark Janus is a state employee whose unit is represented by a public-sector union (Union), one of the respondents. He refused to join the Union because he opposes many of its positions, including those taken in collective bargaining. Illinois’ Governor, similarly opposed to many of these positions, filed suit challenging the constitutionality of the state law authorizing agency fees. The state attorney general, another respondent, intervened to defend the law, while Janus moved to intervene on the Governor’s side. The District Court dismissed the Governor’s challenge for lack of standing, but it simultaneously allowed Janus to file his own complaint challenging the constitutionality of agency fees.

The District Court granted respondents’ motion to dismiss on the ground that the claim was foreclosed by Abood. The Seventh Circuit affirmed.


1. The District Court had jurisdiction over petitioner’s suit. Petitioner was undisputedly injured in fact by Illinois’ agency-fee scheme and his injuries can be redressed by a favorable court decision. For jurisdictional purposes, the court permissibly treated his amended complaint in intervention as the operative complaint in a new lawsuit. United States ex rel. Texas Portland Cement Co. v. McCord, 233 U. S. 157, distinguished. Pp. 6–7.

2. The State’s extraction of agency fees from nonconsenting public sector employees violates the First Amendment. Abood erred in concluding otherwise, and stare decisis cannot support it. Abood is therefore overruled. Pp. 7–47.

(a) Abood’s holding is inconsistent with standard First Amendment principles. Pp. 7–18.

(1) Forcing free and independent individuals to endorse ideas they find objectionable raises serious First Amendment concerns. E.g., West Virginia Bd. of Ed. v. Barnette, 319 U. S. 624, 633. That includes compelling a person to subsidize the speech of other private speakers. E.g., Knox v. Service Employees, 567 U. S. 298, 309. In Knox and Harris v. Quinn, 573 U. S. ___, the Court applied an “exacting” scrutiny standard in judging the constitutionality of agency fees rather than the more traditional strict scrutiny. Even under the more permissive standard, Illinois’ scheme cannot survive. Pp. 7–11.

(2) Neither of Abood’s two justifications for agency fees passes muster under this standard. First, agency fees cannot be upheld on the ground that they promote an interest in “labor peace.” The Abood Court’s fears of conflict and disruption if employees were represented by more than one union have proved to be unfounded: Exclusive representation of all the employees in a unit and the exaction of agency fees are not inextricably linked. To the contrary, in the Federal Government and the 28 States with laws prohibiting agency fees, millions of public employees are represented by unions that effectively serve as the exclusive representatives of all the employees. Whatever may have been the case 41 years ago when Abood was decided, it is thus now undeniable that “labor peace” can readily be achieved through less restrictive means than the assessment of agency fees.

Second, avoiding “the risk of ‘free riders,’ ” Abood, supra, at 224, is not a compelling state interest. Free-rider “arguments . . . are generally insufficient to overcome First Amendment objections,” Knox, supra, at 311, and the statutory requirement that unions represent members and nonmembers alike does not justify different treatment. As is evident in non-agency-fee jurisdictions, unions are quite willing to represent nonmembers in the absence of agency fees. And their duty of fair representation is a necessary concomitant of the authority that a union seeks when it chooses to be the exclusive representative. In any event, States can avoid free riders through less restrictive means than the imposition of agency fees. Pp. 11–18.

(b) Respondents’ alternative justifications for Abood are similarly unavailing. Pp. 18–26.

(1) The Union claims that Abood is supported by the First Amendment’s original meaning. But neither founding-era evidence nor dictum in Connick v. Myers, 461 U. S. 138, 143, supports the view that the First Amendment was originally understood to allow States to force public employees to subsidize a private third party. If anything, the opposite is true. Pp. 18–22.

(2) Nor does Pickering v. Board of Ed. of Township High School Dist. 205, Will Cty., 391 U. S. 563, provide a basis for Abood. Abood was not based on Pickering, and for good reasons. First, Pickering’s framework was developed for use in cases involving “one employee’s speech and its impact on that employee’s public responsibilities,” United States v. Treasury Employees, 513 U. S. 454, 467, while Abood and other agency-fee cases involve a blanket requirement that all employees subsidize private speech with which they may not agree. Second, Pickering’s framework was designed to determine whether a public employee’s speech interferes with the effective operation of a government office, not what happens when the government compels speech or speech subsidies in support of third parties. Third, the categorization schemes of Pickering and Abood do not line up. For example, under Abood, nonmembers cannot be charged for speech that concerns political or ideological issues; but under Pickering, an employee’s free speech interests on such issues could be overcome if outweighed by the employer’s interests. Pp. 22–26.

(c) Even under some form of Pickering, Illinois’ agency-fee arrangement would not survive. Pp. 26–33.

(1) Respondents compare union speech in collective bargaining and grievance proceedings to speech “pursuant to [an employee’s] official duties,” Garcetti v. Ceballos, 547 U. S. 410, 421, which the State may require of its employees. But in those situations, the employee’s words are really the words of the employer, whereas here the union is speaking on behalf of the employees. Garcetti therefore does not apply. Pp. 26–27.

(2) Nor does the union speech at issue cover only matters of private concern, which the State may also generally regulate under Pickering. To the contrary, union speech covers critically important and public matters such as the State’s budget crisis, taxes, and collective bargaining issues related to education, child welfare, healthcare, and minority rights. Pp. 27–31.

(3) The government’s proffered interests must therefore justify the heavy burden of agency fees on nonmembers’ First Amendment interests. They do not. The state interests asserted in Abood— promoting “labor peace” and avoiding free riders—clearly do not, as explained earlier. And the new interests asserted in Harris and here—bargaining with an adequately funded agent and improving the efficiency of the work force—do not suffice either. Experience shows that unions can be effective even without agency fees. Pp. 31– 33.

(d) Stare decisis does not require retention of Abood. An analysis of several important factors that should be taken into account in deciding whether to overrule a past decision supports this conclusion. Pp. 33–47.

(1) Abood was poorly reasoned, and those arguing for retaining it have recast its reasoning, which further undermines its stare decisis effect, e.g., Citizens United v. Federal Election Comm’n, 558 U. S. 310, 363. Abood relied on Railway Employes v. Hanson, 351 U. S. 225, and Machinists v. Street, 367 U. S. 740, both of which involved private-sector collective-bargaining agreements where the government merely authorized agency fees. Abood did not appreciate the very different First Amendment question that arises when a State requires its employees to pay agency fees. Abood also judged the constitutionality of public-sector agency fees using Hanson’s deferential standard, which is inappropriate in deciding free speech issues. Nor did Abood take into account the difference between the effects of agency fees in public- and private-sector collective bargaining, anticipate administrative problems with classifying union expenses as chargeable or nonchargeable, foresee practical problems faced by nonmembers wishing to challenge those decisions, or understand the inherently political nature of public-sector bargaining. Pp. 35–38.

(2) Abood’s lack of workability also weighs against it. Its line between chargeable and nonchargeable expenditures has proved to be impossible to draw with precision, as even respondents recognize. See, e.g., Lehnert v. Ferris Faculty Assn., 500 U. S. 507, 519. What is more, a nonmember objecting to union chargeability determinations will have much trouble determining the accuracy of the union’s reported expenditures, which are often expressed in extremely broad and vague terms. Pp. 38–41.

(3) Developments since Abood, both factual and legal, have “eroded” the decision’s “underpinnings” and left it an outlier among the Court’s First Amendment cases. United States v. Gaudin, 515 U. S. 506, 521. Abood relied on an assumption that “the principle of exclusive representation in the public sector is dependent on a union or agency shop,” Harris, 573 U. S., at ___–___, but experience has shown otherwise. It was also decided when public-sector unionism was a relatively new phenomenon. Today, however, public-sector union membership has surpassed that in the private sector, and that ascendency corresponds with a parallel increase in public spending. Abood is also an anomaly in the Court’s First Amendment jurisprudence, where exacting scrutiny, if not a more demanding standard, generally applies. Overruling Abood will also end the oddity of allowing public employers to compel union support (which is not supported by any tradition) but not to compel party support (which is supported by tradition), see, e.g., Elrod v. Burns, 427 U. S. 347. Pp. 42–44.

(4) Reliance on Abood does not carry decisive weight. The uncertain status of Abood, known to unions for years; the lack of clarity it provides; the short-term nature of collective-bargaining agreements; and the ability of unions to protect themselves if an agency-fee provision was crucial to its bargain undermine the force of reliance. Pp. 44–47.

3. For these reasons, States and public-sector unions may no longer extract agency fees from nonconsenting employees. The First Amendment is violated when money is taken from nonconsenting employees for a public-sector union; employees must choose to support the union before anything is taken from them. Accordingly, neither an agency fee nor any other form of payment to a public-sector union may be deducted from an employee, nor may any other attempt be made to collect such a payment, unless the employee affirmatively consents to pay. Pp. 48–49.

851 F. 3d 746, reversed and remanded.

ALITO, J., delivered the opinion of the Court, in which ROBERTS, C. J., and KENNEDY, THOMAS, and, GORSUCH, JJ., joined. SOTOMAYOR, J., filed a dissenting opinion. KAGAN, J., filed a dissenting opinion, in which GINSBURG, BREYER, and SOTOMAYOR, JJ., joined.

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Thursday, June 21, 2018

Wisconsin Central Ltd. v. United States

Wisconsin Central Ltd. v. United States (US 17-530 6/21/18) Employee stock options not taxable “compensation” under Railroad Retirement Tax Act

As the Great Depression took its toll, struggling railroad pension funds reached the brink of insolvency. During that time before the rise of the modern interstate highway system, privately owned railroads employed large numbers of Americans and provided services vital to the nation’s commerce. To address the emergency, Congress adopted the Railroad Retirement Tax Act of 1937. That legislation federalized private railroad pension plans and it remains in force even today. Under the law’s terms, private railroads and their employees pay a tax based on employees’ incomes. In return, the federal government provides employees a pension often more generous than the social security system supplies employees in other industries.

This case arises from a peculiar feature of the statute and its history. At the time of the Act’s adoption, railroads compensated employees not just with money but also with food, lodging, railroad tickets, and the like. Because railroads typically didn’t count these in-kind benefits when calculating an employee’s pension on retirement, neither did Congress in its new statutory pension scheme. Nor did Congress seek to tax these in-kind benefits. Instead, it limited its levies to employee “compensation,” and defined that term to capture only “any form of money remuneration.”

It’s this limitation that poses today’s question. To encourage employee performance and to align employee and corporate goals, some railroads have (like employers in many fields) adopted employee stock option plans. The government argues that these stock options qualify as a form of “compensation” subject to taxation under the Act. In its view, stock options can easily be converted into money and so qualify as “money remuneration.” The railroads and their employees reply that stock options aren’t “money remuneration” and remind the Court that when Congress passed the Act it sought to mimic existing industry pension practices that generally took no notice of in-kind benefits. Who has the better of it?

Held: Employee stock options are not taxable “compensation” under the Railroad Retirement Tax Act because they are not “money remuneration.”

When Congress adopted the Act in 1937, “money” was understood as currency “issued by [a] recognized authority as a medium of exchange.” Pretty obviously, stock options do not fall within that definition. While stock can be bought or sold for money, it isn’t usually considered a medium of exchange. Few people value goods and services in terms of stock, or buy groceries and pay rent with stock. Adding the word “remuneration” also does not alter the meaning of the phrase. When the statute speaks of taxing “any form of money remuneration,” it indicates Congress wanted to tax monetary compensation in any of the many forms an employer might choose. It does not prove that Congress wanted to tax things, like stock, that are not money at all.

The broader statutory context points to this conclusion. For example, the 1939 Internal Revenue Code, adopted just two years later, also treated “money” and “stock” as different things. See, e.g., §27(d). And a companion statute enacted by the same Congress, the Federal Insurance Contributions Act, taxes “all remuneration,” including benefits “paid in any medium other than cash.” §3121(a). The Congress that enacted both of these pension schemes knew well the difference between “money” and “all” forms of remuneration and its choice to use the narrower term in the context of railroad pensions alone requires respect, not disregard.

Even the IRS (then the Bureau of Internal Revenue) seems to have understood all this back in 1938. Shortly after the Railroad Retirement Tax Act’s enactment, the IRS issued a regulation explaining that the Act taxes “all remuneration in money, or in something which may be used in lieu of money (scrip and merchandise orders, for example).” The regulation said the Act covered things like “[s]alaries, wages, commissions, fees, [and] bonuses.” But the regulation nowhere suggested that stock was taxable.

In light of these textual and structural clues and others, the Court thinks it’s clear enough that the term “money” unambiguously excludes “stock.”

Pp. 2–8. 856 F. 3d 490, reversed and remanded.

GORSUCH, J., delivered the opinion of the Court, in which ROBERTS, C. J., and KENNEDY, THOMAS, and ALITO, JJ., joined. BREYER, J., filed a dissenting opinion, in which GINSBURG, SOTOMAYOR, and KAGAN, JJ., joined.

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Wednesday, June 20, 2018

Hipsher v. Los Angeles County Employees etc.

Hipsher v. Los Angeles County Employees etc. (CA2/4 B276486 6/19/18) Public Pension forfeiture/Due Process

The Public Employees’ Pension Reform Act of 2013 (Gov. Code, § 7522 et seq. [PEPRA] was enacted, in part, to curb abuses in public pensions systems throughout the state.  (Alameda County Deputy Sheriff’s Assn. v. Alameda County Employees’ Retirement Assn. (2018) 19 Cal.App.5th 61, 75 (Alameda), review granted Mar. 28, 2018, S247095.)  Section 7522.72 provides a mechanism whereby a public pensioner forfeits a portion of his or her retirement benefits following a conviction of a felony offense that occurred in the performance of his or her official duties.

Shortly after appellant Tod Hipsher retired from the Los Angeles County Fire Department, he was convicted of a federal felony for directing an offshore gambling operation (18 U.S.C. § 1955). Respondent, the Los Angeles County Employees Retirement Association (LACERA), subsequently reduced Hipsher’s vested retirement benefits based on the determination by the County of Los Angeles (County) that his gambling conduct was committed in the scope of his official duties (§ 7522.72).  Hipsher challenged LACERA’s forfeiture determination by a petition for writ of mandate and a complaint seeking declaratory relief.  The trial court entered a mixed judgment.  It issued a peremptory writ of mandate directing the County to afford adequate due process protections before reducing Hipsher’s retirement benefits, while finding in favor of the defendants with respect to Hipsher’s cause of action for declaratory relief.

Hipsher contends section 7522.72 is unconstitutional as applied to him because it impaired his contractual right to his vested pension, and is an unlawful ex post facto law.  The County disagrees and contends it owes Hipsher no additional due process and is not bound by the trial court judgment because it was not named as a respondent in the peremptory writ. 
We conclude section 7522.72 is constitutionally sound, but that LACERA, not the County, bears the burden to afford Hipsher the requisite due process protections in determining whether his conviction falls within the scope of the statute.  Accordingly, we modify the judgment to require the County to provide the requisite due process, while affirming the remainder of the judgment.

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Tuesday, June 19, 2018

ASARCO v. United Steel

ASARCO v. United Steel (9th Cir. 16-16363 6/19/18) Arbitration/Reform of Collective Bargaining Agreement

The panel affirmed the district court’s order affirming an arbitration award in favor of a union, which sought relief concerning a pension provision in the parties’ collective bargaining agreement.

The employer asserted that the arbitrator reformed the collective bargaining agreement in contravention of a no-add provision in the agreement. The district court held that the arbitrator was authorized to reform the agreement, despite the no-add provision, based on a finding of mutual mistake.

The panel held that the employer did not properly preserve its objection to the arbitrator’s jurisdiction because the employer conceded that the union’s grievance was arbitrable and failed to expressly preserve the right to contest jurisdiction in a judicial proceeding. The panel further held that the arbitration award drew its essence from the collective bargaining agreement, and the arbitrator did not exceed his authority in reforming the agreement. In addition, the arbitrator’s award did not violate public policy.

Dissenting, Judge Ikuta wrote that, in light of the no-add provision, the arbitrator exceeded his authority under the collective bargaining agreement.

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Monday, June 18, 2018

Newland v. County of Los Angeles

Newland v. County of Los Angeles (CA2/5 B277638 6/18/18) Respondeat Superior/vehicle Use Exception

An employee driving home from work on a day that he did not have any job duties outside of the office injured a third party.  After a jury trial, the trial court imposed liability on the employer based on evidence that the employee regularly used his personal vehicle for work on other days.  The employer contends there was no substantial evidence to support finding that the employee was driving in the course and scope of his employment at the time of the accident, because he was not required to use a personal vehicle that day.
We agree that an employee must be driving a personal vehicle in the course and scope of his employment at the time of the accident to extend vicarious liability to an employer.  Liability may be imposed on an employer for an employee’s tortious conduct while driving to or from work, if at the time of the accident, the employee’s use of a personal vehicle was required by the employer or otherwise provided a benefit to the employer.  The evidence showed that the employee in this case was driving a routine commute to and from work on the day of the accident.  He was not required to use his personal vehicle for work purposes that day, and his employer did not otherwise benefit from his use of a personal vehicle that day.  The employer is entitled to judgment as a matter of law.  We reverse the judgment with directions.

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Thursday, May 24, 2018

Huff v. Securitas Security Services USA, Inc.

Huff v. Securitas Security Services USA, Inc. (CA6  H042852 5/23/18) PAGA/Pursuit of Representative and Individual Penalties

This case presents the question of whether a plaintiff who brings a representative action under the Private Attorneys General Act of 2004 (PAGA; Lab. Code, § 2698, et seq.) may seek penalties not only for the Labor Code violation that affected him or her, but also for different violations that affected other employees.  The trial court granted plaintiff Forrest Huff a new trial, reasoning that Huff’s failure to prove he was personally affected by one of the multiple Labor Code violations alleged in his complaint did not preclude his action under PAGA.  As we will explain, we conclude that PAGA allows an “aggrieved employee” ––a person affected by at least one Labor Code violation committed by an employer––to pursue penalties for all the Labor Code violations committed by that employer.  We will therefore affirm the order granting a new trial.

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Tuesday, May 22, 2018

Epic Systems Corp. v. Lewis

Epic Systems Corp. v. Lewis (US 16-285 5/21/18) Arbitration

In each of these cases, an employer and employee entered into a contract providing for individualized arbitration proceedings to resolve employment disputes between the parties. Each employee nonetheless sought to litigate Fair Labor Standards Act and related state law claims through class or collective actions in federal court. Although the Federal Arbitration Act generally requires courts to enforce arbitration agreements as written, the employees argued that its “saving clause” removes this obligation if an arbitration agreement violates some other federal law and that, by requiring individualized proceedings, the agreements here violated the National Labor Relations Act. The employers countered that the Arbitration Act protects agreements requiring arbitration from judicial interference and that neither the saving clause nor the NLRA demands a different conclusion. Until recently, courts as well as the National Labor Relations Board’s general counsel agreed that such arbitration agreements are enforceable. In 2012, however, the Board ruled that the NLRA effectively nullifies the Arbitration Act in cases like these, and since then other courts have either agreed with or deferred to the Board’s position.

Held: Congress has instructed in the Arbitration Act that arbitration agreements providing for individualized proceedings must be enforced, and neither the Arbitration Act’s saving clause nor the NLRA suggests otherwise. Pp. 5–25.

(a) The Arbitration Act requires courts to enforce agreements to arbitrate, including the terms of arbitration the parties select. See 9 U. S. C. §§2, 3, 4. These emphatic directions would seem to resolve any argument here. The Act’s saving clause—which allows courts to refuse to enforce arbitration agreements “upon such grounds as exist at law or in equity for the revocation of any contract,” §2—recognizes only “ ‘generally applicable contract defenses, such as fraud, duress, or unconscionability,’ ” AT&T Mobility LLC v. Concepcion, 563 U. S. 333, 339, not defenses targeting arbitration either by name or by more subtle methods, such as by “interfer[ing] with fundamental attributes of arbitration,” id., at 344. By challenging the agreements precisely because they require individualized arbitration instead of class or collective proceedings, the employees seek to interfere with one of these fundamental attributes. Pp. 5–9. (b)

(b) The employees also mistakenly claim that, even if the Arbitration Act normally requires enforcement of arbitration agreements like theirs, the NLRA overrides that guidance and renders their agreements unlawful yet. When confronted with two Acts allegedly touching on the same topic, this Court must strive “to give effect to both.” Morton v. Mancari, 417 U. S. 535, 551. To prevail, the employees must show a “ ‘clear and manifest’ ” congressional intention to displace one Act with another. Ibid. There is a “stron[g] presum[ption]” that disfavors repeals by implication and that “Congress will specifically address” preexisting law before suspending the law’s normal operations in a later statute. United States v. Fausto, 484 U. S. 439, 452, 453.

The employees ask the Court to infer that class and collective actions are “concerted activities” protected by §7 of the NLRA, which guarantees employees “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively . . . , and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection,” 29 U. S. C. §157. But §7 focuses on the right to organize unions and bargain collectively. It does not mention class or collective action procedures or even hint at a clear and manifest wish to displace the Arbitration Act. It is unlikely that Congress wished to confer a right to class or collective actions in §7, since those procedures were hardly known when the NLRA was adopted in 1935. Because the catchall term “other concerted activities for the purpose of . . . other mutual aid or protection” appears at the end of a detailed list of activities, it should be understood to protect the same kind of things, i.e., things employees do for themselves in the course of exercising their right to free association in the workplace.

The NLRA’s structure points to the same conclusion. After speaking of various “concerted activities” in §7, the statute establishes a detailed regulatory regime applicable to each item on the list, but gives no hint about what rules should govern the adjudication of class or collective actions in court or arbitration. Nor is it at all obvious what rules should govern on such essential issues as opt-out and opt-in procedures, notice to class members, and class certification standards. Telling too is the fact that Congress has shown that it knows exactly how to specify certain dispute resolution procedures, cf., e.g., 29 U. S. C. §§216(b), 626, or to override the Arbitration Act, see, e.g., 15 U. S. C. §1226(a)(2), but Congress has done nothing like that in the NLRA.

The employees suggest that the NLRA does not discuss class and collective action procedures because it means to confer a right to use existing procedures provided by statute or rule, but the NLRA does not say even that much. And if employees do take existing rules as they find them, they must take them subject to those rules’ inherent limitations, including the principle that parties may depart from them in favor of individualized arbitration.

In another contextual clue, the employees’ underlying causes of action arise not under the NLRA but under the Fair Labor Standards Act, which permits the sort of collective action the employees wish to pursue here. Yet they do not suggest that the FLSA displaces the Arbitration Act, presumably because the Court has held that an identical collective action scheme does not prohibit individualized arbitration proceedings, see Gilmer v. Interstate/Johnson Lane Corp., 500 U. S. 20, 32. The employees’ theory also runs afoul of the rule that Congress “does not alter the fundamental details of a regulatory scheme in vague terms or ancillary provisions,” Whitman v. American Trucking Assns., Inc., 531 U. S. 457, 468, as it would allow a catchall term in the NLRA to dictate the particulars of dispute resolution procedures in Article III courts or arbitration proceedings—matters that are usually left to, e.g., the Federal Rules of Civil Procedure, the Arbitration Act, and the FLSA. Nor does the employees’ invocation of the Norris-LaGuardia Act, a predecessor of the NLRA, help their argument. That statute declares unenforceable contracts in conflict with its policy of protecting workers’ “concerted activities for the purpose of collective bargaining or other mutual aid or protection,” 29 U. S. C. §102, and just as under the NLRA, that policy does not conflict with Congress’s directions favoring arbitration.

Precedent confirms the Court’s reading. The Court has rejected many efforts to manufacture conflicts between the Arbitration Act and other federal statutes, see, e.g. American Express Co. v. Italian Colors Restaurant, 570 U. S. 228; and its §7 cases have generally involved efforts related to organizing and collective bargaining in the workplace, not the treatment of class or collective action procedures in court or arbitration, see, e.g., NLRB v. Washington Aluminum Co., 370 U. S. 9.

Finally, the employees cannot expect deference under Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, because Chevron’s essential premises are missing. The Board sought not to interpret just the NLRA, “which it administers,” id., at 842, but to interpret that statute in a way that limits the work of the Arbitration Act, which the agency does not administer. The Board and the Solicitor General also dispute the NLRA’s meaning, articulating no single position on which the Executive Branch might be held “accountable to the people.” Id., at 865. And after “employing traditional tools of statutory construction,” id., at 843, n. 9, including the canon against reading conflicts into statutes, there is no unresolved ambiguity for the Board to address. Pp. 9–21.

No. 16–285, 823 F. 3d 1147, and No. 16–300, 834 F. 3d 975, reversed and remanded; No. 16–307, 808 F. 3d 1013, affirmed.

GORSUCH, J., delivered the opinion of the Court, in which ROBERTS, C. J., and KENNEDY, THOMAS, and ALITO, JJ., joined. THOMAS, J., filed a concurring opinion. GINSBURG, J., filed a dissenting opinion, in which BREYER, SOTOMAYOR, and KAGAN, JJ., joined.

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Friday, May 18, 2018

Benaroya v. Willis

Benaroya v. Willis (CA2/4 B281761 5/17/18) Arbitration Ruling/Nonsignatory to Agreement

Benaroya Pictures (Benaroya) contracted with Westside Corporation (Westside) to pay the well-known actor Bruce Willis, the president of Westside, to perform in a movie to be produced by Benaroya.  After a dispute arose regarding Willis’ payment, Willis and Westside (collectively respondents) commenced arbitration proceedings against Benaroya, pursuant to the arbitration clause in the agreement.  While in arbitration, respondents moved to amend their arbitration demand to name appellant Michael Benaroya individually, even though he was not a party to the agreement, on the ground that he was the alter ego of Benaroya.  The arbitrator granted the request, found appellant to be Benaroya’s alter ego, and awarded damages to respondents for which both Benaroya and appellant, as Benaroya’s alter ego, were liable.  The trial court denied appellant and Benaroya’s petition to vacate the award as to appellant, and granted respondents’ petition to confirm the award.  In this appeal from the confirmation of the award, appellant contends the trial court erred because he was a nonsignatory to the arbitration agreement, and only the court, not the arbitrator, had authority to determine whether he was compelled to arbitrate as the alter ego of Benaroya.  We agree and therefore reverse the judgment.  We remand the case to the trial court with directions to:  (1) set aside its rulings denying appellant and Benaroya’s petition to vacate the award and granting respondent’s petition to confirm; and (2) enter new orders granting appellant and Benaroya’s petition to vacate the award as to appellant, and granting respondents’ petition to confirm the award only as to Benaroya.

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Monday, May 14, 2018

Snapp v. BNSF Railway Company

A plaintiff asserting a claim against his employer for a failure to accommodate him in accordance with the Americans with Disabilities Act has the burden of proving that his employer could have made a reasonable accommodation that would have enabled him to perform the essential functions of his job. The deposition testimony of a corporate designee is an evidentiary admission, but it is not a binding judicial admission. The jury is still allowed to consider other evidence to correct, supplement or explain that testimony.

Snapp v. BNSF Railway Company - filed May 11, 2018
Cite as 2018 S.O.S. 15-35410

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Thursday, May 10, 2018

Maldonado v. Epsilon Plastics, Inc.

When an employer is accused of having improperly implemented an alternative work schedule, the employer bears the burden of proving compliance with the procedural requirements to adopt that schedule. Workers who receive an award of damages for overtime that was unpaid because of an employer's improper adoption of an alternative work schedule have the burden of proving the number of hours they worked, which required them to prove whether they had worked through scheduled meal breaks. An employer's subjective good faith belief that wages were not due is insufficient to show the employer did not willfully fail to pay wages to an employee within the meaning of Labor Code Sec. 203. Evidence an employer made no inquiry into whether its successor had properly adopted an alternative work schedule is sufficient to defeat the employer's claim of good faith. Inaccurate wage statements alone do not justify penalties. Wage statements should include the hours worked at each rate and the wages earned, but when there is a wage and hour violation, the hours worked will differ from what was truly earned. Only the absence of the hours worked will give rise to an inference of injury, since the absence of accurate wages earned will be remedied by the violated wage and hour law itself.

Maldonado v. Epsilon Plastics, Inc. - filed April 18, 2018, publication ordered May 8, 2018, Second District, Div. Eight
Cite as 2018 S.O.S. 2210

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Wednesday, May 9, 2018

Contractors' State License Bd. v. Superior Court

Contractors' State License Bd. v. Superior Court (CA1/1 A153684, filed 4/26/18, pub. ord. 5/9/18) Licensing Board Disciplinary Proceeding/Apex Deposition

The Contractors’ State License Board (the Board) seeks a writ of mandate and a stay to prevent the “apex deposition” of David R. Fogt.  Fogt is the Board’s Registrar of Contractors, a position which makes him the Board’s secretary and chief executive officer. After real party in interest, Black Diamond Electric, Inc. (BDE), noticed Fogt’s deposition in a declaratory judgment action BDE had brought against the Board, Fogt sought a protective order to prevent the deposition.  Respondent court denied the motion for a protective order, and the Board now seeks writ review.

We conclude that under well-established California law, the head of a government agency, such as Fogt, generally is not subject to deposition.  “An exception to the rule exists only when the official has direct personal factual information pertaining to material issues in the action and the deposing party shows the information to be gained from the deposition is not available through any other source.”  (Westly v. Superior Court (2004) 125 Cal.App.4th 907, 911 (Westly).)  We hold that this exception does not apply in this case.  We therefore grant the Board’s petition and issue a peremptory writ in the first instance, as we previously informed the parties was possible.  (See Palma v. U.S. Industrial Fasteners, Inc. (1984) 36 Cal.3d 171, 177–180 (Palma).)

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Monday, May 7, 2018

Arnaudo Brothers v. ALRB

Arnaudo Brothers v. ALRB (CA5 F072420B 5/4/18) Agricultural Labor Relations Board/Unfair Labor Practice

This writ proceeding addresses decisions by the Agricultural Labor Relations Board (Board) that an agricultural employer committed unfair labor practices by refusing to bargain with, and provide information to, the United Farm Workers of America (Union).  The employer’s defense was that in the early 1980’s, the Union expressly disclaimed any interest in representing the bargaining unit—a disclaimer reinforced by the Union’s 30 years of inactivity.  The Board rejected the employer’s disclaimer defense to the failure to bargain charge, finding the purported disclaimer was not clear and unequivocal.  The Board awarded make whole-relief based on the determination that the employer’s litigation of the disclaimer issue did not further the policies and purpose of the Agricultural Labor Relations Act of 1975 (Lab. Code, §§ 1140-1166.3).[1]  The employer contends the Board erred in rejecting its disclaimer defense and in awarding make-whole relief.

In August 2017, we issued a decision concluding the Board properly rejected the employer’s disclaimer defense to the charge that employer failed to bargain with the Union, but erred in determining make-whole relief was “appropriate” for purposes of section 1160.3.  The California Supreme Court granted review pending its decisions in Gerawan Farming, Inc. v. Agricultural Labor Relations Bd. (2017) 3 Cal.5th 1118 (Gerawan) and Tri-Fanucchi Farms v. Agricultural Labor Relations Bd. (2017) 3 Cal.5th 1161 (Tri-Fanucchi).  In March 2018, the Supreme Court directed us to vacate our decision and reconsider the matter in light of Tri-Fanucchi, which reinstated an award of make-whole relief that this court had vacated.

Having received supplemental briefs and replies to the supplemental briefs, we conclude the Board did not err when it (1) identified and applied the rules that define when a certified union has made a disclaimer of interest in representing the bargaining unit; (2) determined the statement by the Union representative that “we’re through with you” (if made) was not a clear and unequivocal disclaimer of interest; and (3) concluded the Union’s subsequent conduct consistent with a disclaimer could not render the equivocal disclaimer effective.  On the question of make-whole relief, the principles set forth in Tri-Fanucchi compel the conclusion that the Board properly exercised its broad discretionary authority when it awarded make-whole relief in this case.

We therefore affirm the Board’s decisions.

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Davis v. County of Fresno

Davis v. County of Fresno (CA5 F073151 5/3/18) Public Safety Officers Procedural Bill of Rights

Plaintiff James Davis was dismissed from his employment as a supervising juvenile correctional officer based on findings of insubordination, discourteous treatment of a subordinate, wrongfully assuming supervisorial duties over his wife despite several admonitions to the contrary, exaggerating the hours he worked on multiple time cards, and other misconduct.  Davis’s administrative appeal of his dismissal was denied by the Civil Service Commission (Commission) of the County of Fresno (County).  Davis filed a petition for a writ of administrative mandamus requesting the superior court to set aside the Commission’s decision.  The superior court denied the petition.

On appeal, Davis contends County violated his constitutional due process rights by failing to provide him a copy of all materials upon which the disciplinary action was based prior to his Skelly hearing.  Davis also contends County’s failure to produce complete copies of reports and witness interviews conducted during the internal affairs investigation into his alleged misconduct violated the Public Safety Officers Procedural Bill of Rights Act, Government Code section 3300 et seq. (POBRA).

We conclude the materials delivered prior to Davis’s Skelly hearing satisfied the requirements of due process applicable before disciplinary action is imposed.  In contrast, we conclude County violated Davis’s right under POBRA to receive “any reports or complaints made by investigators or other persons.”  (§ 3303, subd. (g).)  We interpret the term “any reports” to include the incident reports and interview transcripts attached to a September 2012 memorandum prepared by a special probation investigator who looked into a retaliation complaint made by another officer against Davis.  Davis’s alleged discourteous treatment of this officer was one of the grounds for his dismissal.

The issue of the appropriate remedy for a violation of POBRA is committed to the broad discretion of the superior court.  Here, the record does not compel this court, as a matter of law, to reinstate Davis with backpay.  Furthermore, there exists a wide range of remedies and we make no comment as to the merits of any of the possible remedies the trial court might select.  Therefore, we remand this matter to the superior court and direct it to decide in the first instance the appropriate remedy.
We therefore reverse the judgment.

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Hernandez v. Rancho Santiago Community College Dist.

Hernandez v. Rancho Santiago Community College Dist. (CA4/3 G054563 5/3/18) FEHA Interactive Process/Reasonable Accommodation 

Plaintiff Marisa Hernandez worked for defendant Rancho Santiago Community College District on and off for a number of years without any complaints about her performance.  In 2013, she was hired as an administrative assistant.  During her one-year probationary period, her performance was to be evaluated at three months, seven months, and 11 months.  At the completion of 12 months of probation, she would be considered a permanent employee.  Eight months into her probationary period and with the district’s consent, she went on a temporary disability leave to have surgery to replace a knuckle on a finger she injured while working for the district prior to her most recent hiring.  She was scheduled to return to work on, or shortly after, the anniversary of her hiring date.  The district, however, terminated her while she was on the approved leave, because her performance had not been reviewed.
Hernandez sued the district under the California Fair Employment and Housing Act (the FEHA) (Gov. Code, § 12940, subds. (m), (n)), contending it failed to make reasonable accommodation for her medical condition and failed to engage in an interactive process.  At the conclusion of the court trial, the court found in Hernandez’s favor and awarded her $723,746 in damages.  The trial court found the district could have accommodated her by extending her probationary period, by deducting the four months she was on disability leave from her probationary period, or by adding the time away from work to the probationary period, and, contrary to the district’s position, the district would not have been required to make Hernandez a permanent employee on the anniversary of her hiring.  The district appeals, contending it had to terminate Hernandez’s probation and employment because if it did not, she would have become a permanent employee without having had her performance evaluated.  We affirm the judgment.

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Sali v. Corona Regional Med. Ctr.

Sali v. Corona Regional Med. Ctr. (9th Cir. 15-56460 5/3/18) Wage and Hour/Class Certification

The panel reversed the district court’s denial of class certification in a putative class action alleging employment claims against Corona Medical Center and UHS of Delaware, Inc; and remanded.

Plaintiffs Marlyn Sali and Deborah Spriggs moved for certification of seven classes of Registered Nurses, alleging they were underpaid by Corona as a result of certain employment policies and practices. The district court denied certification under Fed. R. Civ. P. 23 of each of the proposed classes on multiple grounds. The panel held that the district court’s determination, that plaintiffs failed to demonstrate their injuries were typical of the proposed classes, was premised on an error of law.

The panel held that the district court erred by striking a declaration at this preliminary stage, and the district court may not decline to consider evidence solely on the basis that the evidence is inadmissible at trial. The panel agreed with the district court’s conclusion that plaintiff Spriggs was not an adequate class representative because she was not a member of any class she sought to represent.

The panel held, however, that plaintiff Sali was an adequate class representative, and Spriggs’s inadequacy was not a valid basis to deny class certification. The panel held that the district court abused its discretion by concluding that attorneys from the law firm Bisnar Chase could not serve as adequate class counsel. The panel also held that at this early stage of the litigation, the district court’s decision on this issue was premature, but the district court was not precluded from considering counsel’s prior sanctions as evidence of inadequacy if they continue to neglect their duties.

The panel held that the district court erred by denying certification of the proposed rounding-time and wage statement classes on the basis that they failed Rule 23(b)(3)’s predominance requirement. First, the panel held that the district court’s determination that individual questions predominated in the claims of the proposed rounding-time class was based on an error of law. Under California law, the district court erred by interpreting time “actually worked” to mean only time spent engaged in work-related activities because time is compensable when an employee is working or under the control of his or her employer. Second, the panel held that the district court’s determination - that individual questions predominate in the claims of the proposed wage-statement class - was premised on legal error. The district court erred by concluding that damages for members of the wage statement class would require an individualized determination because California Labor Code specifies that a violation of § 226 is a per se injury.

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Monday, April 30, 2018

Dynamex Operations West, Inc. v. Superior Court

Under both California and federal law, the question whether an individual worker should properly be classified as an employee or, instead, as an independent contractor has considerable significance for workers, businesses, and the public generally. On the one hand, if a worker should properly be classified as an employee, the hiring business bears the responsibility of paying federal Social Security and payroll taxes, unemployment insurance taxes and state employment taxes, providing worker’s compensation insurance, and, most relevant for the present case, complying with numerous state and federal statutes and regulations governing the wages, hours, and working conditions of employees.  The worker then obtains the protection of the applicable labor laws and regulations.  On the other hand, if a worker should properly be classified as an independent contractor, the business does not bear any of those costs or responsibilities, the worker obtains none of the numerous labor law benefits, and the public may be required under applicable laws to assume additional financial burdens with respect to such workers and their families.

Although in some circumstances classification as an independent contractor may be advantageous to workers as well as to businesses, the risk that workers who should be treated as employees may be improperly misclassified as independent contractors is significant in light of the potentially substantial economic incentives that a business may have in mischaracterizing some workers as independent contractors.  Such incentives include the unfair competitive advantage the business may obtain over competitors that properly classify similar workers as employees and that thereby assume the fiscal and other responsibilities and burdens that an employer owes to its employees.  In recent years, the relevant regulatory agencies of both the federal and state governments have declared that the misclassification of workers as independent contractors rather than employees is a very serious problem, depriving federal and state governments of billions of dollars in tax revenue and millions of workers of the labor law protections to which they are entitled.

The issue in this case relates to the resolution of the employee or independent contractor question in one specific context.  Here we must decide what standard applies, under California law, in determining whether workers should be classified as employees or as independent contractors for purposes of California wage orders, which impose obligations relating to the minimum wages, maximum hours, and a limited number of very basic working conditions (such as minimally required meal and rest breaks) of California employees.

In the underlying lawsuit in this matter, two individual delivery drivers, suing on their own behalf and on behalf of a class of allegedly similarly situated drivers, filed a complaint against Dynamex Operations West, Inc. (Dynamex), a nationwide package and document delivery company, alleging that Dynamex had misclassified its delivery drivers as independent contractors rather than employees.  The drivers claimed that Dynamex’s alleged misclassification of its drivers as independent contractors led to Dynamex’s violation of the provisions of Industrial Welfare Commission wage order No. 9, the applicable state wage order governing the transportation industry, as well as various sections of the Labor Code, and, as a result, that Dynamex had engaged in unfair and unlawful business practices under Business and Professions Code section 17200.

Prior to 2004, Dynamex classified as employees drivers who allegedly performed similar pickup and delivery work as the current drivers perform.  In 2004, however, Dynamex adopted a new policy and contractual arrangement under which all drivers are considered independent contractors rather than employees.  Dynamex maintains that, in light of the current contractual arrangement, the drivers are properly classified as independent contractors.

After an earlier round of litigation in which the trial court’s initial order denying class certification was reversed by the Court of Appeal (Lee v. Dynamex, Inc. (2008) 166 Cal.App.4th 1325), the trial court ultimately certified a class action embodying a class of Dynamex drivers who, during a pay period, did not themselves employ other drivers and did not do delivery work for other delivery businesses or for the drivers’ own personal customers.  In finding that the relevant common legal and factual issues relating to the proper classification of the drivers as employees or as independent contractors predominated over potential individual issues, the trial court’s certification order relied upon the three alternative definitions of “employ” and “employer” set forth in the applicable wage order as discussed in this court’s then-recently decided opinion in Martinez v. Combs (2010) 49 Cal.4th 35, 64 (Martinez).  As described more fully below, Martinez held that “[t]o employ . . . under the [wage order], has three alternative definitions.  It means: (a) to exercise control over the wages, hours, or working conditions, or (b) to suffer or permit to work, or (c) to engage, thereby creating a common law employment relationship.”  (49 Cal.4th at p. 64.)  The trial court rejected Dynamex’s contention that in the wage order context, as in most other contexts, the multifactor standard set forth in this court’s seminal decision in S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341 (Borello) is the only appropriate standard under California law for distinguishing employees and independent contractors.

In response to the trial court’s denial of Dynamex’s subsequent motion to decertify the class, Dynamex filed the current writ proceeding in the Court of Appeal, maintaining that two of the alternative wage order definitions of “employ” relied upon by the trial court do not apply to the employee or independent contractor issue.  Dynamex contended, instead, that those wage order definitions are relevant only to the distinct joint employer question that was directly presented in this court’s decision in Martinez — namely whether, when a worker is an admitted employee of a primary employer, another business or entity that has some relationship with the primary employer should properly be considered a joint employer of the worker and therefore also responsible, along with the primary employer, for the obligations imposed by the wage order.

The Court of Appeal rejected Dynamex’s contention, concluding that neither the provisions of the wage order itself nor this court’s decision in Martinez supported the argument that the wage order’s definitions of “employ” and “employer” are limited to the joint employer context and are not applicable in determining whether a worker is a covered employee, rather than an excluded independent contractor, for purposes of the obligations imposed by the wage order.  The Court of Appeal concluded that the wage order definitions discussed in Martinez are applicable to the employee or independent contractor question with respect to obligations arising out of the wage order.  The Court of Appeal upheld the trial court’s class certification order with respect to all of plaintiffs’ claims that are based on alleged violations of the wage order.
At the same time, the Court of Appeal concluded that insofar as the causes of action in the complaint seek reimbursement for business expenses such as fuel and tolls that are not governed by the wage order and are obtainable only under section 2802 of the Labor Code, the Borello standard is the applicable standard for determining whether a worker is properly considered an employee or an independent contractor.  With respect to plaintiffs’ non-wage-order claim under section 2802, the Court of Appeal remanded the matter to the trial court to reconsider its class certification of that claim pursuant to a proper application of the Borello standard as further explicated in this court’s decision in Ayala v. Antelope Valley Newspapers, Inc. (2014) 59 Cal.4th 522 (Ayala).

Dynamex filed a petition for review in this court, challenging only the Court of Appeal’s conclusion that the wage order definitions of “employ” and “employer” discussed in Martinez are applicable to the question whether a worker is properly considered an employee or an independent contractor for purposes of the obligations imposed by an applicable wage order.  We granted review to consider that issue.

For the reasons discussed below, we agree with the Court of Appeal that the trial court did not err in concluding that the “suffer or permit to work” definition of “employ” contained in the wage order may be relied upon in evaluating whether a worker is an employee or, instead, an independent contractor for purposes of the obligations imposed by the wage order.  As explained, in light of its history and purpose, we conclude that the wage order’s suffer or permit to work definition must be interpreted broadly to treat as “employees,” and thereby provide the wage order’s protection to, all workers who would ordinarily be viewed as working in the hiring business.  At the same time, we conclude that the suffer or permit to work definition is a term of art that cannot be interpreted literally in a manner that would encompass within the employee category the type of individual workers, like independent plumbers or electricians, who have traditionally been viewed as genuine independent contractors who are working only in their own independent business.

For the reasons explained hereafter, we conclude that in determining whether, under the suffer or permit to work definition, a worker is properly considered the type of independent contractor to whom the wage order does not apply, it is appropriate to look to a standard, commonly referred to as the “ABC” test, that is utilized in other jurisdictions in a variety of contexts to distinguish employees from independent contractors.  Under this test, a worker is properly considered an independent contractor to whom a wage order does not apply only if the hiring entity establishes:  (A) that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact; (B) that the worker performs work that is outside the usual course of the hiring entity’s business; and (C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.

Although, as we shall see, it appears from the class certification order that the trial court may have interpreted the wage order’s suffer or permit to work standard too literally, we conclude that on the facts disclosed by the record, the trial court’s certification order is nonetheless correct as a matter of law under a proper understanding of the suffer or permit to work standard and should be upheld.

Accordingly, we conclude that the judgment of the Court of Appeal should be affirmed.

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