Justia California Court of Appeals Opinion Summaries

Articles Posted in Labor & Employment Law
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U.S. Continental Marketing Inc. (USCM), a manufacturing company that made shoe care products, relied on temporary employees for much of its workforce and contracts for employees' services with Ameritemps, Inc. Elvia Velasco Jimenez worked for USCM as either a direct or temporary employee for five years before her employment was terminated. At that point, she was performing a supervisory role as a line lead in USCM's production department, overseeing as many as thirty colleagues, including both temporary and direct employees of USCM. Jimenez's supervisor was a direct USCM employee. Jimenez asserted claims under the Fair Employment and Housing Act (FEHA) against USCM. Jimenez's claims required a threshold showing that USCM was her employer. Disputing that assertion at trial, USCM framed the inquiry as a contest of relative influence between the direct and contracting employers, asking the jury during closing arguments, "Did [USCM] have control over plaintiff more than the temp agency?" The jury agreed with USCM and returned a special verdict finding that USCM was not Jimenez's employer. Jimenez moved for a new trial, unsuccessfully, and judgment was entered in favor of USCM. On appeal, Jimenez argued there was insufficient evidence to support the special verdict finding and asked the Court of Appeal to reverse the judgment. The Court determined the undisputed evidence demonstrated USCM exercised considerable direction and control over Jimenez under the terms, conditions, and privileges of her employment. And although the parties contested the characterization of Jimenez's termination, the appropriate inquiry in the temporary-staffing context was whether the contracting employer terminated the employee's services for the contracting employer (which USCM did), not whether the contracting employer terminated her employment with her direct employer (which USCM did not do). Accordingly, without expressing any opinion as to the ultimate merit of Jimenez's claims, the Court reversed judgment as to three claims and. The matter was remanded for a new trial at which the jury should be instructed that USCM was Jimenez's employer. View "Jimenez v. U.S. Continental Marketing, Inc." on Justia Law

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Ron Koenig was the superintendent and principal of the Warner Unified School District (the district). He and the district entered an agreement to terminate his employment one year before his employment agreement was due to expire. Under the termination agreement, Koenig agreed to release any potential claims against the district in exchange for a lump sum payment equivalent to the amount due during the balance of the term of his employment agreement, consistent with Government Code section 53260. The district also agreed to continue to pay health benefits for Koenig and his spouse "until Koenig reaches age 65 or until Medicare or similar government provided insurance coverage takes effect, whichever occurs first." The district stopped paying Koenig's health benefits 22 months later. Koenig then sued to rescind the termination agreement and sought declaratory relief he was entitled to continued benefits pursuant to his underlying employment agreement, which provided that Koenig and his spouse would continue receiving health benefits, even after the term of the agreement expired. After a bench trial, the trial court determined the district's promise in the termination agreement to pay health benefits until Koenig turned 65 violated section 53261, was unenforceable, and rendered the termination agreement void for lack of consideration. Both Koenig and the district appealed the judgment entered after trial. Koenig contended the trial court properly determined the termination agreement was void but should have concluded he was entitled to continued health benefits until the age of 65. The district contended the trial court erred when it concluded the termination agreement was void; rather, the trial court should have severed the termination agreement's unenforceable promise to continue paying benefits, enforced the remainder of the termination agreement, and required Koenig to pay restitution for benefits paid beyond the term of the original agreement. The Court of Appeal concluded the termination agreement's unlawful promise to pay health benefits in excess of the statutory maximum should have been severed to comply with sections 53260 and 53261, Koenig did not establish he was entitled to rescind the termination agreement, and the district was entitled to restitution for health benefits paid beyond the statutory maximum. Judgment was reversed and the trial court directed to enter judgment in favor of the district for $16,607. View "Koenig v. Warner Unified School District" on Justia Law

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Plaintiff, on behalf of herself and three alleged classes of hourly Loews employees, filed suit alleging that Loews improperly calculated her premium payment when Loews failed to provide her with statutorily required meal and/or rest breaks, in violation of Labor Code section 226.7, and Loews underpaid her by unlawfully shaving or rounding time from the hours she worked. The Court of Appeal held that the statute's plain language, statutory history, and federal case precedent differentiates "regular rate of compensation" from "regular rate of pay." The court also held that Loew's facially neutral rounding policy did not systematically undercompensate its employees over time. Therefore, there was no triable issue of material fact and Loews was entitled to judgment as a matter of law. View "Ferra v. Loews Hollywood Hotel, LLC" on Justia Law

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Plaintiff filed a putative class action against SGT, alleging that SGT violated various provisions of the Labor Code and Industrial Welfare Commission's (IWC) wage orders by misclassifying drivers as independent contractors. While this appeal was pending, the California Supreme Court decided Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal.5th 903, in which it adopted the "ABC test" used in other jurisdictions to streamline and provide consistency in analyzing the distinction between employees and independent contractors for purposes of wage order claims. The Court of Appeal held that the the ABC test adopted in Dynamex is retroactively applicable to pending litigation on wage and hour claims; the ABC test applies with equal force to Labor Code claims that seek to enforce the fundamental protections afforded by wage order provisions; and statutory claims alleging misclassification not directly premised on wage order protections, and which do not fall within the generic category of "wage and hour laws," are appropriately analyzed under what has commonly been known as the Borello test. Accordingly, the court reversed and remanded. View "Gonzales v. San Gabriel Transit" on Justia Law

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Danville, a third-party service station operator, fired Henderson following an accusation of sexual harassment. Henderson managed several of Danville’s Shell-branded gas stations but was never directly employed by Shell. Shell supplied the stations with fuel products and set fuel prices. Danville facilitated the collection of customer payments. Shell compensated Danville for this service and reimbursed Danville for certain expenses. Danville agreed to abide by certain standards to protect the Shell brand. Danville alone made decisions with respect to recruiting, interviewing, hiring, disciplining, promoting and terminating its employees; had sole control over employee payroll functions; and had its own employee handbook. Shell retained the right to ask Danville to “remove” an employee from a Shell-owned station “for good cause shown.” Henderson was instructed to contact Danville for any questions about operating his stations. Shell was not involved in the decision to terminate Henderson’s employment. After his termination, Henderson sued for unpaid wages, statutory wage and record-keeping penalties and interest, plus restitution, injunctive, and declaratory relief under Business and Professions Code section 17200, alleging that Shell was liable as his “joint employer.” The court of appeal affirmed judgment in favor of Shell. Henderson did not present any triable issues of fact demonstrating the existence of a joint employment relationship under the three alternative definitions of employment set forth in Industrial Welfare Commission Wage Order No. 7. View "Henderson v. Equilon Enterprises, LLC" on Justia Law

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An employer can sue for declaratory relief to enforce a superior court judgment unfavorable to the Labor Commissioner without violating the anti-SLAPP statute where, as here, the lawsuit does not arise out of activity protected by the statute. In this case, Supershuttle filed an action for declaratory and injunctive relief against the the Labor defendants, seeking a declaration that the doctrine of collateral estoppel precludes the Labor Commissioner from considering wage claims filed by drivers of Supershuttle vans because the Sacramento Superior Court previously found the drivers were independent contractors, not employees. The court found that the gravamen of Supershuttle's complaint was the harm it will suffer from the intended decision of the Labor defendants to deny collateral estoppel effect to a final decision of the Sacramento Superior Court, not from the Labor defendants' writing or statements preceding or communicating that decision; the Labor defendants have not identified speech or writings made in connection with a public issue or issue of public importance from which the causes of action arise; and the trial court did not conclude that the Labor defendants acted illegally as a matter of law within the meaning of the anti-SLAPP law. The court held that, most importantly, the trial court did not rely on any illegality to deny the Labor defendants' motion to strike, and the court did not rely on any illegality to affirm the trial court's order. View "Supershuttle International, Inc. v. Labor & Workforce Development Agency" on Justia Law

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After the county petitioned the superior court for a writ vacating the Commission's decision and upholding LA County Sheriff's Deputy Mark Montez's discharge, the trial court found that the Commission's decision was unsupported by its own findings and issued a writ ordering the Commission to set aside its decision and reconsider the matters. The Court of Appeal affirmed the trial court's order and held that Montez's misconduct was an inexcusable neglect of duty that harmed the Sheriff's Department by compromising the public's ability to trust it, and the Commission abused its discretion by reducing Montez's punishment. The court held that reasonable minds could not differ with regard to the appropriate disciplinary action in Montez's case, and the Commission's conclusion that the misconduct was unlikely to recur was unwarranted. View "County of Los Angeles v. Civil Service Commission of the County of Los Angeles" on Justia Law

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The Court of Appeal annulled the decision of the appeals board and remanded with directions to find that the special employer had a valid endorsement in its workers' compensation insurance policy excluding coverage for special employees. The court held that while the appeals board was correct that the limiting endorsement had not been signed by the special employer, the written affirmation required by the regulation then in effect is not limited to a signature. Taking into account the circumstances of the entire transaction and its history, the court held that there was substantial compliance with the requirement of a written affirmation. Therefore, the court held that CIGNA was liable for the claim as a covered claim within the meaning of Insurance Code section 1063.1. View "Travelers Property Casualty Co. v. Workers' Compensation Appeals Board" on Justia Law

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In order to prevail on a claim under Labor Code section 1102.5, subdivision (c), the plaintiff must identify both the specific activity and the specific statute, rule, or regulation at issue; the court must then determine the legal question whether the identified activity would result in a violation or noncompliance with the identified statute, rule, or regulation, and, if so, the jury must determine the factual issue whether the plaintiff was retaliated against for refusing to participate in the identified activity. The County appealed a jury verdict in favor of plaintiff in an action alleging retaliation in violation of section 1102.5, subdivision (c), and retaliation in violation of the Fair Employment and Housing Act (FEHA). The Court of Appeal reversed the district court's jdugment and held that the County was entitled to judgment on the section 1102.4(c) retaliation claim, because the trial court declined to make the initial legal determination and plaintiff failed to present sufficient evidence at trial to establish that any acts he was asked to perform would result in a violation of or noncompliance with any identified state, federal, or local statute, rule, or regulation. In regard to the FEHA retaliation claim, the court held that the jury instruction erroneously allowed the jury to find in favor of plaintiff even if no violation of FEHA was committed. Rather, the court found in favor of the County because plaintiff failed to present evidence from which a reasonable jury could conclude that any adverse employment action he suffered was motivated by retaliation for complaints he made regarding discrimination or other activity protected by FEHA. View "Nejadian v. County of Los Angeles" on Justia Law

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The Teamsters Union represents skilled crafts employees at UCLA and UCSD and was campaigning to unionize University of California Davis (UCD) employees. Teamsters distributed a flyer making statements about the impact that unionizing had upon the skilled crafts employees at UCLA and UCSD. In response, Regents distributed an “HR Bulletin,” stating: “the University is neutral on the issue of unionization” and that UCLA and UCSD employees had been in extensive contract negotiations, which had the effect of freezing salaries for several years. The flier included favorable statements about UCD salaries, benefits, and grievance procedures. Teamsters filed suit, citing Government Code 16645.6, which prohibits a public employer from using state funds to “assist, promote, or deter union organizing.” Regents filed an "anti-SLAPP" special motion to strike (Code of Civil Procedure 425.16) arguing that the complaint arose from protected conduct: a statement made in a place open to the public in connection with an issue of public interest; that Teamsters could not demonstrate a probability of prevailing on its claim because the action was preempted by the exclusive jurisdiction of the Public Employment Relations’ Board (PERB); and that nothing in section 11645.6 prohibited noncoercive speech. The court of appeal affirmed the denial of the anti-SLAPP motion. PERB had exclusive jurisdiction over unfair labor practices. The bulletin was not alleged to be an unfair labor practice. The bulletin could be construed as an attempt to influence the employees, so Teamsters had a reasonable probability of prevailing on its section 16645.6 claim. View "Teamsters Local 2010 v. Regents of the University of California" on Justia Law