Justia California Court of Appeals Opinion Summaries

Three former or current employees of Cross Country Staffing, Inc. (plaintiffs) filed a lawsuit against their employer, alleging various labor law violations. Upon hiring, each plaintiff signed two agreements: an Arbitration Agreement mandating arbitration for all employment-related claims and an Employment Agreement that included provisions favoring the employer, such as non-compete clauses and the right to seek injunctive relief in court without posting a bond.The Superior Court of Los Angeles County denied Cross Country Staffing's motion to compel arbitration, finding that the Arbitration Agreement, when read together with the Employment Agreement, was unconscionable. The court determined that the agreements were procedurally unconscionable due to their adhesive nature and substantively unconscionable because they unfairly favored the employer by allowing it to litigate its likely claims in court while forcing employees to arbitrate their likely claims. The court also noted the non-mutual attorney fees provisions and the employee's mandated concessions regarding injunctive relief.The California Court of Appeal, Second Appellate District, Division Five, affirmed the trial court's decision. The appellate court agreed that the two agreements should be read together under Civil Code section 1642, as they were part of the same transaction and related to the same subject matter. The court found significant substantive unconscionability in the agreements' imbalance of arbitration obligations and the employer's access to court for its claims. The court also upheld the trial court's refusal to sever the unconscionable provisions, concluding that the agreements' unconscionability permeated the entire arbitration framework and that refusing to enforce the Arbitration Agreement served the interests of justice. View "Silva v. Cross Country Healthcare, Inc." on Justia Law

Deborah Hemstead filed a workers' compensation claim against her employer, United Indian Health Services, Inc. (United Indian). United Indian argued that it was entitled to tribal sovereign immunity and thus not subject to the state workers' compensation system. The administrative law judge (ALJ) rejected this claim, applying the five-factor "arm of the tribe" test from People v. Miami Nation Enterprises, and found that United Indian did not qualify for sovereign immunity. The ALJ's decision was based on factors such as United Indian's creation under state law, lack of explicit tribal intent to share immunity, and the financial relationship between United Indian and the tribes.The Workers' Compensation Appeals Board (Board) denied United Indian's request for reconsideration, adopting the ALJ's findings. The Board found no abuse of discretion in the ALJ's rejection of United Indian's claim of sovereign immunity.The California Court of Appeal, First Appellate District, Division Five, reviewed the case de novo. The court concluded that the Board and ALJ erred in denying sovereign immunity to United Indian. The court found that United Indian's method of creation, purpose, tribal control, and financial relationship with the tribes all weighed in favor of granting sovereign immunity. The court noted that United Indian was created by several tribes to provide healthcare services under the Indian Self-Determination and Education Assistance Act, which promotes tribal self-governance and self-sufficiency. The court held that United Indian is entitled to sovereign immunity and reversed the Board's decision, remanding the matter for further proceedings consistent with this opinion. View "United Indian Health etc. v. Workers' Comp. Appeals Bd." on Justia Law

Monroe Operations, LLC, doing business as Newport Healthcare, hired Karla Velarde as a care coordinator and required her to sign an arbitration agreement as a condition of employment. Velarde was later terminated and filed a lawsuit alleging discrimination, retaliation, and violation of whistleblower protections. Newport Healthcare and its director of residential services, Amanda Seymour, filed a motion to compel arbitration, which the trial court denied. The court found that Velarde was pressured to sign the agreement, which she did not want to do, and that the agreement unlawfully prohibited her from seeking judicial review of an arbitration award.The Superior Court of Orange County ruled that the arbitration agreement was procedurally unconscionable because it was presented as an adhesive contract buried among 31 documents that Velarde had to sign quickly while an HR manager waited. Additionally, Newport Healthcare's HR manager made false representations about the nature and terms of the agreement, which contradicted the written terms, rendering the agreement substantively unconscionable. The court denied the motion to compel arbitration based on these findings.The California Court of Appeal, Fourth Appellate District, Division Three, reviewed the case and affirmed the trial court's decision. The appellate court found ample evidence of procedural unconscionability due to the pressure and misrepresentations made by Newport Healthcare. The court also found substantive unconscionability because the agreement did not conform to Velarde's reasonable expectations and placed her in a disadvantageous position. The appellate court concluded that the arbitration agreement was unenforceable and affirmed the order denying the motion to compel arbitration. View "Velarde v. Monroe Operations, LLC" on Justia Law

Respondent George Zeber filed a workers' compensation claim for cumulative injury sustained during his employment with the New York Yankees from 1968 to 1978. The Workers’ Compensation Appeals Board (WCAB) found Zeber had a compensable injury but deferred any award pending further proceedings, including mandatory arbitration of the insurance coverage dispute. Travelers Indemnity Company (Travelers) disputed the applicability of mandatory arbitration, arguing it only applies to injuries occurring on or after January 1, 1994, while Zeber's injury occurred no later than 1978.The Workers’ Compensation Judge (WCJ) found Zeber sustained an injury during his employment but deferred findings on permanent disability and other issues. The WCJ also found the statute of limitations did not bar Zeber’s claim, as he only became aware of his right to file a claim in 2017 or 2018. The WCJ determined the New York Yankees had insurance coverage provided by Travelers and noted that disputes involving the right of contribution must be sent to arbitration. Travelers filed for reconsideration, which the WCAB partially granted, amending the WCJ’s decision to defer the insurance coverage issue to mandatory arbitration.The California Court of Appeal, Fourth Appellate District, reviewed the case. The court concluded that section 5275, subdivision (a)(1) applies only to injuries occurring on or after January 1, 1990. The WCJ had not made a finding on the date of injury for purposes of section 5275. The court annulled the WCAB’s decision and remanded the case for further proceedings, including a determination of the date of injury for the purposes of mandatory arbitration. The court emphasized that the "date of injury" for cumulative injuries should be determined under section 5412, which considers when the employee first suffered disability and knew or should have known it was work-related. View "Travelers Indemnity Co. v. Workers' Compensation Appeals Bd." on Justia Law

Edgar Osuna sued Spectrum Security Services, Inc., alleging violations of the California Labor Code. He brought five individual and class claims, and a sixth representative claim under the Labor Code Private Attorneys General Act of 2004 (PAGA). The trial court dismissed Osuna’s class claims, sent his individual claims to arbitration, and sustained Spectrum’s demurrer to his PAGA claim without leave to amend. The court concluded that Osuna lacked standing to bring the PAGA claim because he did not suffer a Labor Code violation within the one-year statute of limitations for recovering civil penalties.The trial court’s decision was based on the interpretation that Osuna needed to have suffered a violation within the one-year period before filing his PAGA notice. Osuna appealed, arguing that he is an aggrieved employee with standing to assert a representative PAGA claim because he suffered Labor Code violations during his employment with Spectrum.The California Court of Appeal, Second Appellate District, Division Six, reviewed the case. The court concluded that the trial court erred in its interpretation of the standing requirements under PAGA. The appellate court held that to have standing under PAGA, an employee must have been employed by the alleged violator and suffered at least one Labor Code violation, regardless of whether the violation occurred within the one-year statute of limitations for recovering civil penalties. The court emphasized that the statute of limitations is an affirmative defense and does not affect standing.The appellate court reversed the portion of the trial court’s order sustaining Spectrum’s demurrer to Osuna’s representative PAGA claim and remanded the case for further proceedings consistent with its opinion. View "Osuna v. Spectrum Security Services, Inc." on Justia Law

Plaintiffs, former employees of Vicar Operating, Inc., filed a class action lawsuit alleging that Vicar failed to provide required meal periods as mandated by California Labor Code section 512 and IWC Wage Orders Nos. 4 and 5. Plaintiffs had signed written agreements waiving their right to a meal period for shifts between five and six hours, which they could revoke at any time. They argued that these prospective waivers allowed Vicar to circumvent statutory meal break requirements.The Superior Court of Los Angeles County granted summary adjudication in favor of Vicar, determining that the prospective meal period waivers were valid under section 512 and the wage orders. The court found that the waivers were enforceable as they were revocable and there was no evidence of coercion or unconscionability. Plaintiffs appealed the decision.The California Court of Appeal, Second Appellate District, Division Seven, reviewed the case. The court examined the text of section 512 and the wage orders, as well as their legislative and administrative history. It concluded that the Legislature and IWC did not intend to prohibit prospective written waivers of meal periods for shifts between five and six hours. The court noted that the IWC had historically viewed prospective written waivers as protective for both employees and employers. The court also found that the case of Brinker Restaurant Corp. v. Superior Court did not support Plaintiffs' arguments, as it did not address the timing or circumstances under which a meal period can be waived.The Court of Appeal affirmed the trial court's judgment, holding that the prospective written waivers signed by Plaintiffs were valid and enforceable under section 512 and the applicable wage orders. View "Bradsbery v. Vicar Operating" on Justia Law

The plaintiffs, La Kimba Bradsbery and Cheri Brakensiek, sued their former employer, Vicar Operating, Inc., alleging that Vicar failed to provide the required meal periods as mandated by California Labor Code section 512 and IWC Wage Orders Nos. 4 and 5. The plaintiffs had signed a written agreement waiving their right to a meal period for shifts between five and six hours, which they could revoke at any time. They argued that these prospective waivers allowed Vicar to circumvent statutory meal break requirements.The Superior Court of Los Angeles County granted summary adjudication in favor of Vicar, determining that the prospective meal period waivers were valid under section 512 and the wage orders. The court found that the waivers were enforceable as they were revocable and there was no evidence of coercion or unconscionability. The plaintiffs appealed the decision.The California Court of Appeal, Second Appellate District, reviewed the case and affirmed the lower court's decision. The appellate court held that the prospective written waivers of meal periods for shifts between five and six hours were consistent with the text and purpose of section 512 and Wage Orders Nos. 4 and 5. The court found that the legislative and administrative history supported the validity of such waivers, noting that the IWC had long viewed prospective written waivers as protective of both employees and employers. The court also concluded that the case of Brinker Restaurant Corp. v. Superior Court did not require a contrary result, as it did not address the timing or form of meal period waivers. View "Bradsbery v. Vicar Operating, Inc." on Justia Law

Mone Yvette Sanders filed a class and representative action against her former employer, Edward D. Jones & Co., L.P., alleging wage and hour claims under the Labor Code and a cause of action under the Private Attorneys General Act of 2004 (PAGA). The trial court granted Edward Jones’s motions to compel arbitration of Sanders’s individual Labor Code and PAGA claims and stayed the representative PAGA cause of action pending arbitration. Sanders initiated arbitration, but Edward Jones failed to pay $54,000 in fees within 30 days as required by Code of Civil Procedure section 1281.98. Sanders then moved to vacate the order compelling arbitration and proceed in court.The trial court initially granted Sanders’s motion, finding section 1281.98 was not preempted by the Federal Arbitration Act (FAA). However, after Edward Jones submitted new authority, the court reconsidered and denied Sanders’s motion, concluding section 1281.98 was preempted by the FAA. Sanders filed a petition for writ of mandate.The California Court of Appeal, Second Appellate District, Division Seven, reviewed the case. The court held that section 1281.98, which allows an employee to withdraw from arbitration if the employer fails to pay fees within 30 days, is not preempted by the FAA. The court found that section 1281.98 furthers the FAA’s goal of expeditious arbitration and does not undermine the FAA’s objectives. The court also determined that the trial court, not the arbitrator, should decide whether there has been a default under section 1281.98.The Court of Appeal granted Sanders’s petition for writ of mandate, directing the trial court to vacate its order denying Sanders’s motion to withdraw from arbitration and allowing her to pursue her claims in court. The trial court was also instructed to consider Sanders’s motion for sanctions under section 1281.99. View "Sanders v. Superior Court" on Justia Law

Kelly Rose, a former cashier at Hobby Lobby Stores, Inc., sued her employer under the Labor Code Private Attorneys General Act of 2004 (PAGA), alleging violations of the “suitable seating” provisions of the Industrial Welfare Commission Wage Order. After a nine-day bench trial, the court ruled in favor of Hobby Lobby, and judgment was entered accordingly. Rose appealed, but the judgment was affirmed. Subsequently, Hobby Lobby sought nearly $125,000 in litigation costs as the prevailing party, which the trial court ordered the California Labor and Workforce Development Agency (LWDA) to pay, despite the LWDA not participating in the litigation.The LWDA appealed the cost order, raising the issue of whether it could be held liable for litigation costs in a PAGA action where it did not participate. The Court of Appeal of the State of California, First Appellate District, Division Two, reviewed the case. The court concluded that even if a prevailing defendant in a PAGA action is entitled to recover costs under the general cost recovery rule, those costs are not recoverable against the LWDA if it did not participate in the litigation. The court emphasized that the LWDA was not a party to the lawsuit and did not take any action until after the judgment was entered.The Court of Appeal reversed the trial court's order requiring the LWDA to pay Hobby Lobby's litigation costs. The court held that the LWDA, as the real party in interest in a PAGA action, is not liable for costs if it did not intervene or participate in the litigation. The decision clarified that the LWDA's role in PAGA actions does not automatically make it liable for litigation costs incurred by a prevailing defendant. View "Rose v. Hobby Lobby Stores" on Justia Law

Mone Yvette Sanders filed a class and representative action against her former employer, Edward D. Jones & Co., L.P., alleging wage and hour claims under the Labor Code and a cause of action under the Private Attorneys General Act (PAGA). The trial court granted Edward Jones's motions to compel arbitration of Sanders's individual claims and stayed the representative PAGA cause of action. Sanders initiated arbitration, but Edward Jones failed to pay $54,000 in fees within 30 days as required by California Code of Civil Procedure section 1281.98. Sanders then moved to vacate the order compelling arbitration and proceed in court.The trial court denied Sanders's motion, finding section 1281.98 preempted by the Federal Arbitration Act (FAA). Sanders filed a petition for writ of mandate, and the Court of Appeal issued an order to show cause.The California Court of Appeal, Second Appellate District, Division Seven, reviewed the case. The court held that section 1281.98 is not preempted by the FAA, as it furthers the goal of expeditious arbitration. The court also rejected Edward Jones's contention that the arbitration agreement required the arbitrator to decide whether Edward Jones was in default. The court found that section 1281.98 vests the employee with the unilateral right to withdraw from arbitration and proceed in court upon the drafting party's failure to timely pay fees. The court concluded that the trial court erred in denying Sanders's motion to vacate the order compelling arbitration and granted the petition for writ of mandate. The case was remanded for further proceedings consistent with this opinion, including consideration of Sanders's request for monetary sanctions. View "Sanders v. Superior Court" on Justia Law