Justia California Court of Appeals Opinion Summaries

Articles Posted in Labor & Employment Law
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The state brought a civil enforcement action against Uber and Lyft, alleging that the companies improperly misclassify drivers using their ride-hailing platforms as independent contractors rather than employees, depriving them of benefits to which employees are entitled. This misclassification, the state alleged, also gives the defendants an unfair advantage against competitors, while costing the public significant sums in lost tax revenues and increased social-safety-net expenditures.The court of appeal affirmed the entry of a preliminary injunction that restrains the companies from classifying their drivers as independent contractors. Based on the breadth of the term “hiring entity” and the absence of an exemption for ride-sharing companies in Labor Code section 2775, there is little doubt the Legislature contemplated that rideshare drivers would be treated as employees. While the defendants’ business models are different from traditional employment, particularly with regard to drivers’ freedom to work as many hours as they wish, when and where they choose, and their ability to work on multiple apps at the same time, the mode in which the drivers are used met the elements of employment. The companies solicit riders, screen drivers, set standards for drivers' vehicles, track information on drivers using the apps, and may use negative ratings to deactivate drivers. Riders request rides and pay for them through defendants’ apps. The remuneration may be seen as flowing from riders to the defendants, then from defendants to drivers, less any fee associated with the ride. View "People v. Uber Technologies, Inc." on Justia Law

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Plaintiff Michelle Kramer filed a wage and hour lawsuit against her employer, defendants Traditional Escrow, Inc. (Traditional), and its alleged alter ego, Annette Scherrer-Cosner. A few months after defendants answered the initial complaint, their counsel withdrew, and defendants subsequently chose not to participate in this case. Plaintiff continued to serve defendants with all case documents, including an amended complaint, at their address of record. But, in violation of the California Rules of Court, defendants changed their mailing address without giving notice to plaintiff or the trial court. As a result, they did not receive any of the documents that plaintiff served on them after their counsel withdrew. Eventually, default and default judgment were entered against them due to their failure to answer the amended complaint. Defendants moved to set aside the default and vacate the judgment, arguing they were entitled to equitable relief because they had been prevented from responding to the amended complaint due to extrinsic fraud and extrinsic mistake. The trial court granted the motion, finding that defendants were unaware the complaint had been amended. It also found that after filing the amended complaint, plaintiff’s counsel misrepresented to Cosner’s divorce attorney, who was unaffiliated with this matter, that defendants were in default and could not file an answer. Plaintiff appealed the trial court’s ruling, arguing equitable relief was unwarranted. To this, the Court of Appeal agreed: "Defendants cannot deliberately neglect this lawsuit and go off-grid, so to speak, and then complain that they lacked notice of the proceedings." The trial court's order was reversed and the matter remanded for further proceedings. View "Kramer v. Traditional Escrow" on Justia Law

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Labor Code section 432.7 prohibits an employer from asking a job applicant to disclose any conviction that has been judicially dismissed and bars an employer from using any record of a dismissed conviction as a factor in the termination of employment. Molina was hired by Premier in 2010; she did not disclose a dismissed 2010 conviction for misdemeanor grand theft on her job application. She passed Premier’s criminal background check and had been working for four weeks when the DMV mistakenly reported that Molina had an active criminal conviction. Rather than investigate the discrepancy, Premier terminated Molina for “falsification of job application,” although she explained that her conviction had been dismissed. The DMV issued a corrected notice three weeks later. Molina was not rehired and filed a retaliation complaint with the Labor Commissioner, which determined that Molina had been unlawfully discharged and ordered her reinstatement with back pay. Premier’s administrative appeal was denied. When Premier did not comply, the Commissioner filed an enforcement action.The court of appeal reversed the dismissal of the suit. Premier was not entitled to judgment as a matter of law. The Commissioner presented sufficient evidence that Premier was aware or had reason to believe that Molina’s criminal conviction had been dismissed and to allow a jury to infer that Premier retaliated against Molina for failing to disclose her dismissed conviction and that Premier used the dismissed conviction as an impermissible factor in her termination. View "Garcia-Brower v. Premier Automotive Imports of California, LLC" on Justia Law

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Defendant YourMechanic, Inc. sought to compel plaintiff Jonathan Provost to arbitrate whether he was an “aggrieved employee” within the meaning of the California Labor Code before he could proceed under the Private Attorneys General Act of 2004 (PAGA) with his single-count representative action alleging various Labor Code violations against company. The Court of Appeal determined that requiring Provost to arbitrate whether he was an “aggrieved employee” with standing to bring a representative PAGA action would have required splitting that single action into two components: an arbitrable “individual” claim and a nonarbitrable representative claim. The Court concluded that a PAGA-only representative action was not an individual action at all, but instead was one that was indivisible and belonged solely to the state. Therefore, YourMechanic could not require Provost to submit by contract any part of his representative PAGA action to arbitration. The trial court therefore properly denied YourMechanic's motion. View "Provost v. YourMechanic, Inc." on Justia Law

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Hooked developed an app for mobile devices. Hooked’s CEO and investors later wanted to sell the business. Apple showed interest. After two meetings, it was clear that Apple was not interested in buying Hooked for its technology or market share but might want to acquire Hooked so certain engineers would become Apple employees. Hooked declined but, short on cash, suggested to Apple that it “sell” three engineers to Apple and continue operating the less technical advertising aspect of its business, and provided the engineers’ resumes. Apple responded that it might consider paying a “finder’s fee” but instead contacted the engineers directly and hired them. Hooked demanded that its chief technical officer (CTO) return all Hooked confidential technical information. Hooked emailed Apple’s general counsel. Apple responded that it had no desire to use another company’s trade secrets and would facilitate the return of all confidential information.Hooked sued, alleging fraud, misappropriation of trade secrets, interference with contract and prospective economic advantage, aiding and abetting breach of fiduciary duty, unfair business practices, and unjust enrichment. The court of appeal affirmed summary judgment for Apple. No legal wrong is committed when a company solicits and hires away its competitor’s employees; absent some independent illegal act, the interests of the employee in his own mobility and betterment are paramount to the competitive business interests of the employers. Hooked cannot show Apple did something that transformed ordinary free-market competition into an actionable legal wrong. View "Hooked Media Group, Inc. v. Apple Inc." on Justia Law

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Appellant Marivel Santos was employed by respondent Crenshaw Manufacturing, Inc. (Crenshaw) in January 2017 as a machine operator on the production floor. Santos alleged that sometime in the second week of January 2017, she was instructed by her supervisor, Jose Flores, to operate a material-forming machine utilizing a die without any protective guards or cages. Ordinarily, Santos would have had to use both hands to operate the machine. This time, however, Flores instructed her to operate it “from the side using a bypass button.” Using the machine in this manner allowed Santos to operate the machine with her right hand, leaving her left hand free to reach into the machine to “press down the part” being cut. On January 12, 2017, Santos was operating the machine in this fashion when her left hand was crushed underneath the die, mutilating and severely injuring it. She filed a workers’ compensation claim against Crenshaw, and the Occupational Health & Safety Administration (OSHA) investigated. In the 1980s, the California Legislature passed Labor Code section 4558's “power press exception” to the principle of workers’ compensation exclusivity, giving a right of action to employees injured by their employer’s knowing removal of or failure to install a point of operation guard on a power press when required by the manufacturer. In this case, the issue presented for the Court of Appeal's review centered on whether the power press exception applied when the manufacturer, 45 years prior to passage of the law, conveyed a more general requirement for guards which went completely unheeded by the present user. Under these unique circumstances, the Court concluded there were triable issues of material fact as to whether the employer violated the statute and reversed the trial court’s grant of summary judgment in the employer’s favor. View "Santos v. Crenshaw Manufacturing, Inc." on Justia Law

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The California Department of Forestry and Fire Protection (CAL FIRE) disciplined three of its firefighters for cheating on a promotional exam. One of the men appealed his discipline to the California State Personnel Board (Board). The other two did not. While the appeal was pending, CAL FIRE substituted new disciplinary notices against all three men, seeking to impose harsher penalties. Over the men’s objections, the Board allowed CAL FIRE to proceed. The firefighters filed a petition for a writ of mandate in the trial court, which the court denied.The court of appeal affirmed in part. CAL FIRE permissibly substituted its disciplinary notice against the firefighter whose appeal was pending before the Board, but not against the other two, because by statute their discipline became final 30 days after they did not appeal, (Gov. Code, 19575). View "Chaplin v. State Personnel Board" on Justia Law

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The defendants require their employees to comply with various confidentiality policies. Current and former employees sued under the Labor Code Private Attorneys General Act of 2004 (PAGA) (Lab. Code, 2698), alleging the employers’ confidentiality policies restricted their employees’ speech in violation of California law. The claims fall into three subcategories; restraints of competition, whistleblowing, and freedom of speech. The trial court dismissed, concluding the claims were preempted by the National Labor Relations Act, 29 U.S.C. 151. In a settlement in a separate NLRB proceeding, defendant Google agreed to post a notice informing employees that they had the right “to discuss wages, hours, and working conditions,” and that “Google would “NOT prohibit [employees] from discussing or sharing information relating to [their] performance, salaries, benefits, discipline, training, or any other terms and conditions of employment.”The court of appeal reversed. Although many of the’ claims relate to conduct that is arguably within the scope of the NLRA, the claims fall within the local interest exception to preemption. The complaint does not mention union organizing or other concerted activity; it alleges violations of state law that can be proven without considering whether the actions violated the NLRA. The statutes protecting competition, whistleblowing, and free speech fit comfortably within California’s historic police powers and address conduct affecting individual employees, as distinct from the NLRA’s focus on concerted activity. This state-court action poses no threat to the NLRA’s exercise of its own jurisdiction. View "Doe v. Google, Inc." on Justia Law

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Five laborers filed suit against their former employer, Miguel Martinez, alleging violations of various labor laws. The Court of Appeal previously heard plaintiffs' claims; in its initial review, the Court considered plaintiffs’ appeal of a judgment that rejected all their claims against Martinez. Although the judgment was affirmed for the most part, the Court reversed to allow plaintiffs to proceed on two of their claims, one of which concerned Martinez’s failure to pay plaintiffs for rest periods, and another of which was derivative of their rest-period claim. As was explained, Martinez was obligated to pay his employees for the time they spent on authorized rest periods. However, the Court found nothing in the evidence to show he had ever paid his employees for this time. The case was thus remanded to allow the trial court to determine appropriate damages and penalties based on this failure. Following the remand, the parties raised various challenges to the trial court’s calculation of damages and penalties. Plaintiffs contended the trial court undervalued their damages and wrongly rejected several of their claims for penalties. Martinez, in turn, claimed that insufficient evidence supported the trial court’s calculation of damages and penalties. Because the Court of Appeal find none of the parties’ several claims warranted reversal, it affirmed the trial court’s decision. View "Sanchez v. Martinez" on Justia Law

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For more than 10 years, Land worked as a field service specialist for DISH Network. After a customer complaint in 2015, Land’s supervisor filled out an “Employee Consultation” form that stated it was a “Final written notice” issued “due to policy violation: Falsification of Company records.” On the day before Land signed the consultation form, Dish received another customer complaint. Land admitted, “going to the customer’s home off the clock and taking his daughters.” The second consultation form indicated that it was a termination notice. Land applied for unemployment benefitsAn ALJ determined Land was ineligible for benefits because he had been discharged for breaking “a reasonable employer rule.” Land maintained he was unaware of any Dish policy forbidding employees from giving out their personal contact information to customers and from performing work during off-hours. He claimed he had gone back to the customer’s house to prevent a trouble call and to save the company money. The Appeals Board adopted the ALJ’s findings.The court of appeal reversed the denial of Land’s petition for a writ of administrative mandamus. The Appeals Board prejudicially abused its discretion in refusing to consider additional evidence proffered by Land. While the Board has considerable discretion in allowing or refusing to consider new evidence, the evidence was a customer’s declaration that would have “effectively refuted” the chronology of events set forth by the ALJ and adopted by the Board. View "Land v. California Unemployment Insurance Appeals Board" on Justia Law