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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Casino Pauma v. NLRB

(9th Cir. 16-70397 4/26/18) NLRA/Commercial Gaming on Tribal Lands

The panel granted the National Labor Relations Board’s petition for enforcement of its order; denied Casino Pauma’s petition for review; and upheld the Board’s conclusions that it may apply the National Labor Relations Act (“NLRA”) to the relationship between employees working in commercial gaming establishments on tribal lands and the tribal governments that own and manage the establishments, and that Casino Pauma committed unfair labor practices in violation of the NLRA by trying to stop union literature distribution.

The panel held that the Board affirmatively waived any preclusion defense before this court, deciding instead to litigate the question of its ability to regulate tribes under the NLRA on the merits.

The panel held that although the NLRA was ambiguous as to its application to tribal employers, the Board’s determination that such employers were covered by the NLRA was a “reasonably defensible” interpretation of the NLRA. The panel also held that, contrary to Casino Pauma’s contentions, application of federal Indian law did not produce a different result in this case. The panel held that there was no conflict between the NLRA and the Indian Gaming Regulatory Act, and concluded that Casino Pauma’s compact with California did not displace the application of the NLRA to its activities.

The panel held that there was no exhaustion bar to consideration of Casino Pauma’s main argument under Republic Aviation Corp. v. NLRB, 324 U.S. 793 (1945), that it did not violate NLRA section 8(a)(1) when it prevented employees from distributing union literature to customers in front of the casino. The panel concluded that the Board properly interpreted Republic Aviation’s holding concerning NLRA section 7 to reach employees’ customer-directed union literature distribution on non-work time in non-work areas of the employer’s property. The panel further held that the Board reasonably applied to Casino Pauma its literature distribution rules concerning casinos. The panel held that the Board’s conclusion that Casino Pauma violated its employees’ NLRA right to distribute union literature was adequately supported, both by the applicable legal principles and the record.

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Scott v. Gino Morena Enter.

(9th Cir. 16-56200 4/27/18) Title VII Limitations Period/Continuing Violation

The panel affirmed in part and reversed in part the district court’s summary judgment in favor of the defendant on claims under Title VII of the Civil Rights Act of 1964.

The panel held that, under 42 U.S.C. § 2000e-5(f)(1), the 90-day period for filing a civil action, following exhaustion of administrative remedies, begins when the aggrieved person is given notice of the right to sue by the Equal Employment Opportunity Commission, rather than when the person becomes eligible to receive a right-to-sue notice from the EEOC. Accordingly, the plaintiffs’ claims based on her first administrative charge were timely.

The panel held that the plaintiff’s claims based on a second administrative charge were untimely, but she could base her Title VII claims on the defendant’s alleged acts occurring after she filed her first administrative charge to the extent she could show such acts were part of a single hostile work environment claim.

The panel affirmed the district court’s grant of summary judgment only as to claims based on discrete discriminatory or retaliatory acts occurring after the plaintiff filed her first administrative charge. The panel otherwise reversed and remanded.

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Friday, April 27, 2018

Curry v. Equilon Enterprises, LLC

Curry v. Equilon Enterprises, LLC (CA4/2 E065764 4/26/18) Wage and Hour/”Employer”

Plaintiff and appellant Sadie M. Curry brought a class action case against defendant and respondent Equilon Enterprises, LLC, doing business as Shell Oil Products US (Shell).  Curry’s causes of action included (1) failure to pay overtime compensation; (2) failure to pay for missed break periods; and (3) unfair business practices (Bus. & Prof. Code, § 17200).  The trial court found Shell was not Curry’s employer and therefore granted Shell’s motion for summary judgment.  Curry contends the trial court erred in its finding and by granting summary judgment.  We affirm the judgment.

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Monday, April 16, 2018

Powell v. Bear Valley Community Hospital

Powell v. Bear Valley Community Hospital (CA4/1 D072616, field 3/26/18, pub. ord. 4/16/18) Medical Staff Privileges

The Board of Directors (the Board) of Bear Valley Community Hospital (Bear Valley) denied Dr. Robert O. Powell's advancement from provisional to active staff membership and reappointment to Bear Valley's medical staff.  Dr. Powell appeals from the superior court judgment denying his petition for writ of mandate to void the Board's decision and for reinstatement of his medical staff privileges.  We affirm.

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Riske v. Superior Court

Riske v. Superior Court (CA2/7 B283035 4/16/18) Retaliation/Peace Officer Personnel Records

Robert Riske, a retired Los Angeles police officer, sued the City of Los Angeles alleging the Los Angeles Police Department had retaliated against him for protected whistleblower activity by failing to assign or promote him to several positions and selecting instead less qualified candidates.  Riske filed a discovery motion pursuant to Evidence Code sections 1043 and 1045 to obtain certain summary personnel records relied on by the City in making assignment and promotion decisions.  After the superior court erroneously ruled those records were not subject to discovery because the officers selected for the positions Riske sought were innocent third parties who had not witnessed or caused Riske’s injury, we issued a writ of mandate directing the superior court to vacate its order denying Riske’s discovery motion and to enter a new order directing the City to produce those records for an in camera inspection in accordance with section 1045.  (See Riske v. Superior Court (2016) 6 Cal.App.5th 647, 664-665 (Riske I).)

The superior court conducted the in camera hearing and ordered the requested personnel records to be produced in accordance with the parties’ protective order.  However, pursuant to section 1045, subdivision (b)(1), which excludes from disclosure “[i]nformation consisting of complaints concerning conduct occurring more than five years before the event or transaction that is the subject of the litigation” in which discovery or disclosure is sought, the court ordered redaction of all items in those reports concerning conduct that had occurred more than five years before Riske filed his complaint.

Riske again petitioned this court for a writ of mandate directing the superior court to order the City to produce those records without redaction.  In response to our inquiry, both Riske and the City agree that, if section 1045, subdivision (b)’s five-year disclosure bar applies at all, it is measured from the date each officer was promoted instead of Riske—the alleged adverse employment action at issue in the litigation—and not the date Riske filed his complaint, as the superior court ruled.  However, Riske also argues more broadly that section 1045, subdivision (b), which prohibits disclosure of stale complaints against police officers, has no application to the personnel reports sought in this case.  We agree and grant the petition.

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The Police Retirement System of St. Louis v. Page

The Police Retirement System of St. Louis v. Page (CA6 H043220 4/16/18) Antitrust Action on Employee Recruitment/Shareholders’ Derivative Action Statute of Limitations

In this derivative action, shareholders of Google, Inc. allege the corporation was harmed by executives who agreed to refrain from actively recruiting employees working for competitors.  The trial court granted the defendants’ summary judgment motion, finding the action barred by the applicable statute of limitations.  We will affirm.

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Tanguilig v. Neiman Marcus Group, Inc.

Appellant Bernadette Tanguilig brought suit against her former employer, Neiman Marcus Group, Inc. (NMG), alleging a combination of individual and class claims for wrongful termination in violation of public policy and multiple violations of the California Labor Code.  Early in the trial court proceedings, NMG successfully demurred to Tanguilig’s wrongful termination and related claims, and several years later, moved to dismiss the remaining claims pursuant to California’s five-year dismissal statute, Code of Civil Procedure section 583.310. The trial court granted the motion and dismissed the suit.  On appeal, Tanguilig urges us to overturn the five-year dismissal order, arguing primarily that the trial court erred in failing to toll the five-year clock under section 583.340, subdivision (c), for the period during which an order compelling co-plaintiff Juan Carlos Pinela to arbitration was in effect.  Tanguilig also appeals an order sustaining NMG’s demurrer and an award of prevailing-party costs to NMG.
          
Finding no merit to any of the assigned errors, we affirm.

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Castillo v. Glenair, Inc.

Castillo v. Glenair, Inc. (CA2/2 B278239 4/16/18) Joint Employer Settlement/Res Judicata

In a joint employer arrangement, can a class of workers bring a lawsuit against a staffing company, settle that lawsuit, and then bring identical claims against the company where they had been placed to work.  We answer no.

This wage and hour putative class action involves the relationship between a temporary staffing company (GCA Services Group, Inc. (GCA)), its employees (appellants Andrew and David Castillo), and its client company (respondent Glenair, Inc.).  The Castillos were employed and paid by GCA to perform work on site at Glenair.  Glenair was authorized to and did record, review, and report the Castillos’ time records to GCA so that the Castillos could be paid.  The Castillos characterize GCA and Glenair as joint employers.  As explained below, the undisputed facts of this case demonstrate both that Glenair and GCA are in privity with one another for purposes of the Castillos’ wage and hour claims, and that Glenair is an agent of GCA with respect to GCA’s payment of wages to its employees who performed services at Glenair.
These findings of privity and agency are significant.  While this case was pending, a separate class action brought against, among others, GCA resulted in a final, court-approved settlement agreement.  (Gomez v. GCA Production Services, Inc. (Super. Ct. San Bernardino County, 2014, No. CIVRS1205657 (Gomez).)  The Gomez settlement agreement contains a broad release barring settlement class members from asserting wage and hour claims such as those alleged here against GCA and its agents.  The Castillos are members of the Gomez settlement class and did not opt out of that settlement.
The Castillos present claims against Glenair involve the same wage and hour claims, for the same work done, covering the same time period as the claims asserted in Gomez.  Thus, because Glenair is in privity with GCA (a defendant in Gomez) and is an agent of GCA, the Gomez settlement bars the Castillos’ claims against Glenair as a matter of law.

The Castillos appeal the trial court’s grant of summary judgment.  As discussed below, however, we conclude summary judgment was proper.







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Tuesday, April 10, 2018

Encino Motorcars, LLC v. Navarro et al.

Encino Motorcars, LLC v. Navarro et al. (US 16–1362 4/2/18) FLSA Overtime Exemption

Respondents, current and former service advisors for petitioner Encino Motorcars, LLC, sued petitioner for backpay, alleging that petitioner violated the Fair Labor Standards Act (FLSA) by failing to pay them overtime. Petitioner moved to dismiss, arguing that service advisors are exempt from the FLSA’s overtime-pay requirement under 29 U. S. C. §213(b)(10)(A), which applies to “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks, or farm implements.” The District Court agreed and dismissed the suit. The Court of Appeals for the Ninth Circuit reversed. It found the statute ambiguous and the legislative history inconclusive, and it deferred to a 2011 Department of Labor rule that interpreted “salesman” to exclude service advisors. This Court vacated the Ninth Circuit’s judgment, holding that courts could not defer to the procedurally defective 2011 rule, Encino Motorcars, LLC v. Navarro, 579 U. S. ___, ___–___ (Encino I), but not deciding whether the exemption covers service advisors, id., at ___. On remand, the Ninth Circuit again held that the exemption does not include service advisors.

Held: Because service advisors are “salesm[e]n . . . primarily engaged in . . . servicing automobiles,” they are exempt from the FLSA’s overtime-pay requirement. Pp. 5–11.

(a) A service advisor is obviously a “salesman.” The ordinary meaning of “salesman” is someone who sells goods or services, and service advisors “sell [customers] services for their vehicles,” Encino I, supra, at ___. P. 6.

(b) Service advisors are also “primarily engaged in . . . servicing automobiles.” “Servicing” can mean either “the action of maintaining or repairing a motor vehicle” or “[t]he action of providing a service.” Oxford English Dictionary 39. Service advisors satisfy both definitions because they are integral to the servicing process. They “mee[t] customers; liste[n] to their concerns about their cars; sugges[t] repair and maintenance services; sel[l] new accessories or replacement parts; recor[d] service orders; follo[w] up with customers as the services are performed (for instance, if new problems are discovered); and explai[n] the repair and maintenance work when customers return for their vehicles.” Encino I, supra, at ___. While service advisors do not spend most of their time physically repairing automobiles, neither do partsmen, who the parties agree are “primarily engaged in . . . servicing automobiles.” Pp. 6–7.

(c) The Ninth Circuit invoked the distributive canon—matching “salesman” with “selling” and “partsman [and] mechanic” with “[servicing]”—to conclude that the exemption simply does not apply to “salesm[e]n . . . primarily engaged in . . . servicing automobiles.” But the word “or,” which connects all of the exemption’s nouns and gerunds, is “almost always disjunctive.” United States v. Woods, 571 U. S. 31, 45. Using “or” to join “selling” and “servicing” thus suggests that the exemption covers a salesman primarily engaged in either activity.

Statutory context supports this reading. First, the distributive canon has the most force when one-to-one matching is present, but here, the statute would require matching some of three nouns with one of two gerunds. Second, the distributive canon has the most force when an ordinary, disjunctive reading is linguistically impossible. But here, “salesman . . . primarily engaged in . . . servicing automobiles” is an apt description of a service advisor. Third, a narrow distributive phrasing is an unnatural fit here because the entire exemption bespeaks breadth, starting with “any” and using the disjunctive “or” three times. Pp. 7–9.

(d) The Ninth Circuit also invoked the principle that exemptions to the FLSA should be construed narrowly. But the Court rejects this principle as a guide to interpreting the FLSA. Because the FLSA gives no textual indication that its exemptions should be construed narrowly, they should be given a fair reading. P. 9.

(e) Finally, the Ninth Circuit’s reliance on two extraneous sources to support its interpretation—the 1966–1967 Occupational Outlook Handbook and the FLSA’s legislative history—is unavailing. Pp. 9– 11.

845 F. 3d 925, reversed and remanded.

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

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Monday, April 9, 2018

Rizo v. Yovino

An employee's prior salary does not constitute a "factor other than sex" upon which a wage differential may be based under the statutory "catchall" exception set forth in 29 U.S.C. Sec. 206(d)(1). For purposes of that statute, "any other factor other than sex" is limited to legitimate, job-related factors such as a prospective employee's experience, educational background, ability, or prior job performance.

Rizo v. Yovino - filed April 9, 2018
Cite as 2018 S.O.S. 16-15372

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Friday, April 6, 2018

Jones v. Royal Admin. Svcs.

Jones v. Royal Admin. Svcs. (9th Cir. 15-17328 4/4/18) Vicarious Liability/Telemarketers/Telephone Consumer Protection Act

The panel filed (1) an order amending its opinion and (2) an amended opinion affirming the district court’s grant of summary judgment in favor of the defendant in an action under the Telephone Consumer Protection Act.

The panel held that Royal Administration Services, Inc., could not be held liable under the TCPA for several phone calls made by telemarketers employed by All American Auto Protection, Inc., because the telemarketers did not have actual authority to place the unlawful calls, and Royal exercised insufficient control over the manner and means of the work to establish vicarious liability.

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Friday, March 30, 2018

Guarino v. County of Siskiyou

Guarino v. County of Siskiyou (CA3 C076629, filed 3/1/18, pub. ord. 3/29/18) Anti-SLAPP/ Breach of Employment Contract

Appellant Thomas P. Guarino (Guarino) appeals from an order of the superior court granting an “anti-SLAPP” (Strategic Lawsuits Against Public Participation) motion to strike his First Amended Complaint pursuant to Code of Civil Procedure section 425.16, undesignated section references are to the Code of Civil Procedure.  The motion was filed by defendants County of Siskiyou (County), individual members of the Board of Supervisors Marcia Armstrong, Grace Bennett, Michael Kobseff, Ed Valenzuela, and Jim Cook (the Board), as well as County Administrator, Tom Odom (collectively, defendants).  Guarino also appeals the trial court’s order sustaining demurrers without leave to amend that were filed on behalf of the County, the Board, and Odom.
          
Because we affirm the order granting the Code of Civil Procedure section 425.16 motion, we need not decide whether the trial court erred in sustaining defendants’ demurrers.

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Wednesday, March 28, 2018

Lawson v. ZB, N.A.

Lawson v. ZB, N.A. (2017) 227 Cal.Rptr.3d 613 (SC S246711/ D071376 review granted 3/21/18) PAGA/FAA Preemption

Petition for review after the Court of Appeal granted a petition for peremptory writ of mandate. This case presents the following issue: Does a representative action under the Private Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.) seeking recovery of individualized lost wages as civil penalties under Labor Code section 558 fall within the preemptive scope of the Federal Arbitration Act (9 U.S.C. § 1 et seq.)? Votes: Cantil-Sakauye, C.J., Chin, Corrigan, Liu, CuĂ©llar and Kruger, JJ.

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Thursday, March 22, 2018

McGlynn v. State of Calif.

In this mandamus proceeding, six judges who were elected to the superior court in mid-term elections in 2012, but who did not take office until January 7, 2013, maintain they are entitled to benefits under the Judges’ Retirement System II (JRS II) as in effect at the time they were elected, rather than at the time they assumed office. This is a matter of considerable importance to these judges because, on January 1, 2013, JRS II became subject to the provisions of the California Public Employees’ Pension Reform Act of 2013 (PEPRA), which amended virtually all state employee retirement systems to begin addressing the state’s enormous unfunded pension liability and returning these systems to actuarially sound footing. Among other things, PEPRA increases employee contributions, provides for fluctuating contribution rates based on market performance and actuarial projections, and bases the amount of monthly pension payments on an employee’s final three years of compensation, rather than on only the final year.

We conclude, as did the trial court, that the judges did not obtain a vested right in JRS II benefits as judges-elect, but rather obtained a vested right to retirement benefits 1 Government Code section 75500 et seq. 2 Government Code section 7522 et seq. 2 only upon taking office, after PEPRA went into effect. We also conclude PEPRA’s provisions pertaining to fluctuating pension contributions do not violate the nondiminution clause of the California Constitution (Cal. Const., art. III, § 4), nor do they impermissibly delegate legislative authority over judicial compensation (Cal. Const., art. VI, § 19). We therefore affirm the judgment.

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Wednesday, March 21, 2018

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 March 21, 2018
Cite as 2018 S.O.S. 16-16155

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Sali v. Corona Reg’l Med. Ctrl.

Sali v. Corona Reg’l Med. Ctrl. (9th Cir. 15-56389 3/19/18) Contempt/Wage & Hour Class Action

The panel affirmed the district court’s contempt judgment arising after plaintiffs’ counsel failed to pay sanctions when they did not produce their expert at a deposition as ordered.

The panel held that under Fed. R. Civ. P. 37’s general discovery enforcement provisions, a court can order a party to produce its nonparty expert witness at a deposition, and if the party makes no effort to ensure that its witness attends the deposition, sanction the party’s counsel when the witness fails to appear unless the failure to produce the expert “was substantially justified or other circumstances make an award of expenses unjust.” Fed. Civ. P. 37(b)(2)(C). The panel held that the Rule 37 sanctions were reasonable in this case.

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Thursday, March 15, 2018

Corley v. San Bernardino County Fire Protection Dist.

Corley v. San Bernardino County Fire Protection Dist. (CA4/1 3/15/18 D072852) Age Discrimination/Jury

Instruction Firefighters' Procedural Bill of Rights

George Corley filed this action against his former employer, the San Bernardino County Fire Protection District (the District).[1]  The trial court held a jury trial on a single cause of action for age discrimination under the Fair Employment and Housing Act (Gov. Code, § 12900 et seq.).  The jury rendered a special verdict in which it found that Corley's age was a substantial motivating reason for the District's termination of his employment and awarded damages for lost earnings.  The trial court subsequently entered a judgment in favor of Corley against the District awarding Corley $597,629 in damages, $853,443 in attorney fees, and $40,733 in costs.

On appeal, the District contends that the trial court erred in denying its request to instruct the jury pursuant to a provision in the Firefighters' Procedural Bill of Rights (§ 3254, subd. (c)).  The District also claims that the trial court erred in instructing the jury that "the use of salary as the basis for differentiating between employees when terminating employment may be a factor used to constitute age discrimination" if the employer's termination policy adversely affects older workers.  The District further maintains that there is insufficient evidence to support the jury's award of damages based on its implicit finding that Corley would have been promoted but for the District's discrimination.  Finally, the District claims that the trial court abused its discretion in applying a multiplier in awarding Corley statutory attorney fees.  In the published portion of the discussion, we interpret section 3254, subdivision (c) and conclude that the trial court did not err in refusing to instruct the jury pursuant to this provision.  In unpublished portions of the discussion, we conclude that the District fails to establish any reversible error with respect to its remaining claims.  Accordingly, we affirm the judgment.

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Wednesday, March 14, 2018

Saheli v. White Memorial Medical Center

Saheli v. White Memorial Medical Center (CA2/8 B283217 3/14/18) Arbitration/Ralph and Bane Acts

White Memorial Medical Center (White Memorial) and Juan Barrio, M.D. (together, Defendants) challenge the denial in part of their petition to compel arbitration of claims brought against them by Gezel Saheli, M.D.  Although the trial court ordered Saheli to arbitrate the majority of her claims, it refused to compel arbitration of her claims brought pursuant to Civil Code sections 51.7 (Ralph Act) and 52.1 (Bane Act).  The court reasoned that the parties’ arbitration agreement failed to comply with special requirements for agreements to arbitrate such claims.  Specifically, sections 51.7 and 52.1 prohibit the enforcement of agreements to arbitrate Ralph Act and Bane Act claims that are made as a condition of certain contracts or of providing or receiving goods or services.  They also mandate that the party seeking to enforce an agreement to arbitrate such claims prove the other party knowingly and voluntarily agreed to arbitration.  Defendants contend (1) the trial court erred in its interpretation of the parties’ arbitration agreement and (2) the Ralph Act’s and Bane Act’s special requirements for arbitration agreements are preempted by the Federal Arbitration Act (FAA).  We agree and reverse the trial court’s order denying Defendants’ petition to compel arbitration of Saheli’s Ralph Act and Bane Act claims.

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AB 110

AB 110 by the Committee on Budget – In-home supportive services provider wages: emergency caregiver payments for foster care: civil immigration detainees: recording fees.

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Ponce v. Wells Fargo Bank

A nonfrivolous claim cannot be asserted for an improper purpose, as a matter of law.

Ponce v. Wells Fargo Bank - filed March 13, 2018, Third District
Cite as 2018 S.O.S. 1209

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AO Alpha-Bank v. Yakovlev

Due process does not require actual notice of a legal proceeding--it requires only a method of service "reasonably calculated" to impart actual notice under the circumstances of the case. Mail service of the summons letter and attached statement of claim to an address that the defendant provided as his residence was "reasonably calculated" to impart actual notice.

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Tuesday, March 13, 2018

MMM Holdings, Inc. v. Reich

Plaintiffs, MMM Holdings, Inc. (MMM), and MSO of Puerto Rico, Inc. (MSO), sued defendant Marc Reich, the attorney who represented their adversary in a whistleblower qui tam action filed against plaintiffs in the United States District Court.  Alleging causes of action for claim and delivery, conversion, civil theft, unjust enrichment, and unfair competition, plaintiffs contend Reich received, wrongfully possessed, and refused to turn over, some 26,000 electronically stored documents his client, Jose “Josh” Valdez, took with him in 2010 when he was terminated by MSO for his allegedly “vocal opposition to what he perceived as Plaintiffs’ fraudulent practices.”

Reich filed a special motion to strike the complaint under Code of Civil Procedure section 425.16, the anti-SLAPP (strategic lawsuit against public participation) statute.  The court granted the motion, concluding the claims asserted by plaintiffs against Reich involved Reich’s petitioning activity protected by the anti-SLAPP statute, and that plaintiffs had not shown, and could not show, a probability they would prevail on any of their claims.  We conclude the court did not err and affirm the order.

MMM Holdings, Inc. v. Reich (CA4/3 G053739 3/12/18) Retaliation/Qui Tam/Anti-SLAPP

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Friday, March 9, 2018

Dean v. Friends of Pine Meadow

Speech and petitioning activity by individuals who formed a community group in order to oppose an amendment to a city's general plan engaged in political speech, not commercial speech. Commercial speech is not categorically excluded from the protection of the anti-SLAPP law.

Dean v. Friends of Pine Meadow - filed Feb. 8, 2018, publication ordered March 8, 2018, First District, Div. Four
Cite as 2018 S.O.S. 1149

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Thursday, March 8, 2018

In re Zappos.com, Inc.

A group of plaintiffs sufficiently alleged standing based on the risk of identity theft after hackers breached the servers of an online retailer and accessed their personal information, but did not use that information to conduct subsequent financial transactions.

In re Zappos.com, Inc. - filed March 8, 2018
Cite as 2018 S.O.S. 16-16860

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Wednesday, March 7, 2018

County of San Diego v. WCAB (Pike)


Labor Code §4656(b) precludes the Workers' Compensation Appeals Board from awarding an injured worker temporary disability payments for periods of disability occurring more than five years after the date of the underlying injury.

County of San Diego v. WCAB (Pike) - filed March 6, 2018, Fourth District, Div. One
Cite as 2018 S.O.S. 1130

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Monday, March 5, 2018

Alvarado v. Dart Container Corp. of California

In this case, we decide how an employee’s overtime pay rate should be calculated when the employee has earned a flat sum bonus during a single pay period.  Specifically, we consider whether the divisor for purposes of calculating the per-hour value of the bonus should be (1) the number of hours the employee actually worked during the pay period, including overtime hours; (2) the number of nonovertime hours the employee worked during the pay period; or (3) the number of nonovertime hours that exist in the pay period, regardless of the number of hours the employee actually worked.  We conclude that the divisor should be the second of these options.  We reverse the judgment of the Court of Appeal.

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Ly v. County of Fresno

A decision from the Workers Compensation Appeals Board can preclude a subsequent claim under the Fair Employment and Housing Act (FEHA).

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Friday, March 2, 2018

Herterich v. Peltner

The litigation privilege extends to fraudulent statements, even when made to a court, if they were made in furtherance of litigation.

Herterich v. Peltner - filed March 1, 2018, First District, Div. One
Cite as 2018 S.O.S. 1025

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Wednesday, February 28, 2018

Brown v. Cal. Unemployment Ins. Appeals Bd.

The question in this case is a narrow one, involving the correct rate of interest to be applied after a court determines that unemployment benefits have been wrongfully withheld by the Employment Development Department (EDD) and the California Unemployment Insurance Appeals Board (Board).  Appellant Mark Brown (Brown) argues that interest should be charged at the contract rate of 10 percent from the date that each benefit payment was due, in accordance with Civil Code section 3289, subdivision (b).  EDD, in contrast, asserts that the trial court correctly determined that any such interest should be calculated at the rate of 7 percent, as authorized by article XV, section 1, of the California Constitution and Government Code section 965.5, subdivisions (a) and (d).  We conclude that the trial court applied the incorrect interest rate to the wrongfully withheld benefits at issue.  Accordingly, we reverse for recalculation of interest, but affirm in all other respects.

Brown v. Cal. Unemployment Ins. Appeals Bd. (CA1/4 A145487 2/28/18) Unemployment Benefits Rate of Interest

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City of South San Francisco v. Workers' Compensation Appeals Board

An employer is not liable for a cumulative injury under Labor Code Sec. 5500.5(a) absent evidence that exposure during that employment was injurious. Labor Code Sec. 3212.1's presumption of industrial causation serves to protect an injured worker, not to allow for an allocation of liability between employers.

City of South San Francisco v. Workers' Compensation Appeals Board - filed Feb. 26, 2018, First District, Div. Five
Cite as 2018 S.O.S. 963

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Tuesday, February 27, 2018

Victaulic Company v. American Home Assurance Company

A defendant's responses to requests for admission denying an allegation is not admissible as evidence regardless of whether the denial is consistent or inconsistent with the testimony of a defense witness at trial. RFA responses represent legal strategy, not statements of fact. While a trial court has the power to examine witnesses, it cannot act as a cross-examiner. A trial judge committed reversible misconduct by grilling a witness, and openly mocking her. The Fifth Amendment privilege must be asserted with specific reference to particular questions asked or other evidence sought. A blanket refusal to testify is unacceptable. It is improper for a court to require a witness to invoke her Fifth Amendment privilege in front of a jury.

Victaulic Company v. American Home Assurance Company -
filed Feb. 26, 2018, First District, Div. Two
Cite as 2018 S.O.S. 927

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Local Joint Executive Board of Las Vegas v. NLRB (Archon Corp.)

The National Labor Relations Board abused its discretion in declining to award a union make-whole relief, which is the standard remedy when an employer unlawfully ceases a union's dues-checkoff, without providing a valid explanation for its decision. The board's decision to deviate from its standard remedy in light of the employer's reliance on board precedent was improper because that precedent had never been applied in a reasoned manner in the absence of a union security clause.

Local Joint Executive Board of Las Vegas v. NLRB (Archon Corp.) - filed Feb. 27, 2018
Cite as 2018 S.O.S. 15-72878

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Bel Air Internet, LLC v. Morales

This appeal requires us to consider the role of the pleadings and supporting declarations in deciding a motion to strike under the anti-SLAPP statute (Code Civ. Proc., § 425.16).  Section 425.16 protects the exercise of certain constitutional rights by permitting a motion to strike when a complaint targets specified conduct that involves the right to freedom of speech or the right to petition the government.  When a plaintiff’s complaint shows that a claim arises from communications that are protected under the statute, must the defendant support a motion to strike with declarations confirming that his or her actions fall within one of the categories of protected conduct?

We conclude that, when the complaint itself alleges protected activity, a moving party may rely on the plaintiff’s allegations alone in arguing that the plaintiff’s claims arise from an act “in furtherance of the person’s right of petition or free speech.”  (§ 425.16, subd. (b)(1).)  While section 425.16 requires a court to consider both the “pleadings” and the “supporting and opposing affidavits stating the facts upon which the liability or defense is based” (§ 425.16, subd. (b)(2)), it does not require a moving party to submit declarations confirming the factual basis for the plaintiff’s claims.  Otherwise, a defendant who disputes the plaintiff’s allegations (as appellants do here) might be precluded from bringing an anti-SLAPP motion.  That would have the perverse effect of making anti-SLAPP relief unavailable when a plaintiff alleges a baseless claim, which is precisely the kind of claim that section 425.16 was intended to address.  (See Baral v. Schnitt (2016) 1 Cal.5th 376, 384 (Baral) [the anti-SLAPP statute “provides a procedure for weeding out, at an early stage, meritless claims arising from protected activity”].)

Here, plaintiff and respondent Bel Air Internet, LLC (Bel Air) alleges that defendants and appellants Albert Morales and Flavio Delabra (collectively, Appellants) encouraged fellow employees of Bel Air to quit and sue the company for alleged employment violations rather than sign a release of such claims that Bel Air requested.  Consistent with several decisions by our Supreme Court, we conclude that such prelitigation conduct encouraging third parties to sue is protected petitioning activity under section 425.16, subdivision (e).  In bringing a motion to strike under that section, Appellants could rely on Bel Air’s allegations that they urged other employees to quit and sue, even though Appellants denied engaging in this conduct. We therefore reverse the trial court’s order denying Appellants’ motion to strike.

Bel Air Internet, LLC v. Morales (CA2/2 B270268 2/26/18) Anti-SLAPP

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Cal Fire Local 2881 v. Public Employment Relations Bd.

This appeal has consumed nearly seven years of administrative and judicial resources in the pursuit of an untenable litigation position.  Plaintiff Cal Fire Local 2881 (plaintiff) is an employee association that acts as the exclusive representative of a bargaining unit of personnel in various classifications in the civil service who work throughout the state for appointing power Cal Fire (which is not a party to this case).  Plaintiff appeals from the denial of its petition for a writ of mandate directing defendant Public Employment Relations Board (the PERB) to issue a complaint on the unfair labor practice charge that plaintiff filed with it against real party in interest State Personnel Board for failure to meet and confer with plaintiff over the changes the State Personnel Board effected in the regulations governing its procedures for adjudicating disciplinary hearings and appeals, which apply uniformly to all employees in the civil service.

Both the PERB and the trial court have provided cogent decisions explaining why this challenge to the PERB’s dismissal of the charge is without any basis in law.  Plaintiff nonetheless persists.  Fortunately for plaintiff, neither the PERB (which appears in this court to defend the judgment) nor the State Personnel Board request imposition of sanctions for a frivolous appeal.  We accordingly affirm the judgment.

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Johnen v. MSPB

Johnen v. MSPB (9th Cir. 16-73427 2/16/18) Merit System Protection Board

The panel dismissed a petition for review as to the United States Merit Systems Protection Board; and denied in part, granted in part, and remanded the petition for review as to the United States Department of the Army in a case brought by a former civilian employee at Fort Hunter Liggett, a military base in California alleging that the Army terminated him and excluded him from his work site because he had made complaints that were protected by the Whistleblower Protection Act of 1989.

The Board affirmed the administrative law judge’s finding that the petitioner failed to make a prima facie case that his complaint to the Department of Defense Inspector General was a contributing factor in the Army’s decision to terminate him and exclude him from a work site.

The panel held that the Army was the only proper respondent in this case where petitioner brought a “mixed case” by challenging both jurisdictional or procedural matters and the merits of an adverse personnel action. The panel further held that because petitioner was seeking review of the Board’s decision on the merits of his termination and exclusion, the Board was not the proper respondent; and only the agency that took the action – the Army – was properly “the” respondent.

The panel also held that the petitioner received due process. The panel rejected petitioner’s argument that the Board violated his due process rights by deciding his appeal when only two Board members, instead of the usual three, held office.

Finally, the panel held that the Board’s decision on the merits was supported by substantial evidence and was procedurally proper.

In a separate memorandum disposition, the panel granted the petition in part and remanded the case for consideration of an additional issue.

Johnen v. MSPB (9th Cir. 16-73427 2/16/18) Merit System Protection Board

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