Justia California Court of Appeals Opinion Summaries

Plaintiff-respondent Sarah Coughenour worked for defendant-appellant Del Taco, LLC, starting when she was 16 years old. When she was first employed by Del Taco, she signed a “Mutual Agreement to Arbitrate” (Agreement). After Coughenour reached the age of 18, she continued working for Del Taco for four months. Coughenour quit and filed a lawsuit against Del Taco for sexual harassment committed by one of their employees, wage and hour claims brought pursuant to the Labor Code, and other claims under the Fair Housing and Employment Housing Act. Del Taco moved to compel arbitration. The trial court denied the Motion, finding that Coughenour’s filing of the lawsuit was a disaffirmance of the Agreement within the meaning of Family Code section 6710, which allowed a person upon reaching majority age to disaffirm a contract entered into while a minor. Del Taco appealed the denial of its motion, arguing that by working for Del Taco for four months after she reached the age of majority, Coughenour ratified the Agreement, which estopped her power to disaffirm the Agreement. In the alternative, Del Taco argued that Coughenour did not disaffirm the Agreement within a “reasonable time” after reaching the age of 18 as required by Family Code section 6710. The Court of Appeal affirmed denial of Del Taco's motion: [t]he filing of the lawsuit was notice that [Coughenour] disaffirmed the Agreement." The trial court did not abuse its discretion by concluding that Coughenour disaffirmed the Agreement within a reasonable time. View "Coughenour v. Del Taco" on Justia Law

In this case, the real parties in interest and plaintiffs were former store managers for petitioner-defendant Big Lots Inc., who claimed they spent less than 50 percent of their worktime on managerial tasks and, as a result, should have been paid overtime compensation for hours worked in excess of a standard 40-hour week. Big Lots was an Ohio corporation. When this lawsuit was first filed, it retained a California law firm, Haight Brown & Bonesteel LLP (Haight Brown), as counsel of record. Big Lots later sought the superior court’s permission for attorneys from an Ohio law firm, Vorys, Sater, Seymour & Pease LLP (Vorys), to also represent it. The trial judge ultimately granted applications filed by three different attorneys in the Vorys firm. But after later being advised that these Ohio attorneys were attempting to represent various current and former Big Lots managers in depositions noticed by plaintiffs, the court revoked pro hac vice authorization for all three lawyers. Big Lots petitioned for a writ of mandamus to overturn that order. The Court of Appeal agreed with the trial judge that there was a between an attorney’s representation of the defendant corporation in a lawsuit and his or her representation of current or former employee witnesses. "Pro hac vice admission as to one client does not necessarily allow a lawyer to represent a different client even if substantive law does not otherwise prohibit it." The Court nonetheless concluded the total revocation of pro hac vice status for the Vorys attorneys was not supported by the record then before the trial court. The petition to vacated the revocation order was granted, but the matter was returned to the trial court for additional hearings/orders deemed necessary. View "Big Lots Stores v. Super. Ct." on Justia Law

The Court of Appeal held that the Federal Aviation Administration Authorization Act of 1994 (FAAAA) does not preempt application of California's ABC test, originally set forth in Dynamex Operations W. v. Superior Court (2018) 4 Cal.5th 903, and eventually codified by Assembly Bill 2257 (AB 2257), to determine whether a federally licensed interstate motor carrier has correctly classified its truck drivers as independent contractors.The court held that defendants have not demonstrated, as they must under People ex rel. Harris v. Pac Anchor Transportation, Inc. (2014) 59 Cal.4th 772, 785-87, that application of the ABC test prohibits motor carriers from using independent contractors or otherwise directly affects motor carriers' prices, routes, or services. Furthermore, nothing in Pac Anchor nor the FAAAA's legislative history suggests Congress intended to preempt a worker-classification test applicable to all employers in the state. The court granted a peremptory writ of mandate directing respondent court to vacate its order granting in part defendants' motion in limine, and enter a new order denying that motion because the statutory amendments implemented by AB 2257 are not preempted by the FAAAA. View "People v. Superior Court (Cal Cartage Transportation Express, LLC)" on Justia Law

Plaintiff Richard Brown appealed a judgment confirming an arbitration award in favor of defendant TGS Management Company (TGS) in an employment contract dispute. The specific statutory right at issue in the underlying dispute was Brown’s right to work in his chosen field free of contractual restraints on competition. The Legislature expressed that right in the simple but sweeping language of Business and Professions Code section 16600: “Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade or business of any kind is to that extent void.” Brown worked for TGS for over 10 years. During that time, a substantial portion of Brown’s compensation was a yearly bonus which rewarded Brown’s performance over the previous year with a sizable cash award to be paid over the next two years. In February 2016, TGS terminated Brown’s employment without cause effective March 2016. Over the next month, Brown and TGS attempted to negotiate a confidential separation agreement. TGS prepared a settlement offer in the form of a draft separation and general release agreement (the Draft Separation Agreement), but Brown rejected the offer. TGS terminated Brown as planned, making the termination “without cause” so Brown could keep two bonuses he had earned but not yet received (the deferred bonuses), given the two-year bonus structure in place. In October 2016, Brown filed a complaint against TGS stating claims for declaratory relief, injunctive relief, and reformation of the arbitrator-selection process in the Employment Agreement. The declaratory relief claim sought a declaration Brown could compete with TGS without risking a damages claim for breaching the Employment Agreement or jeopardizing his two deferred bonuses. Brown also sought an injunction against enforcement of the covenant not to compete. Ten days after filing the complaint, Brown filed a petition to compel arbitration. TGS consented, and answered, stating it would not seek to enforce the no-compete clause in Brown's contract, but that he forfeited the two bonuses at issue when he filed a copy of the Draft Separation Agreement, which disclosed the identity of TGS' clients and its bonus formula for computing employee bonuses. The arbitrator granted TGS' motion for summary judgment. On appeal, Brown contended the Court of Appeal had to vacate the judgment because the arbitration award exceeded the arbitrator's powers, “and the award cannot be corrected without affecting the merits of the decision[.]” The Court concluded the arbitrator exceeded his power in issuing an award enforcing provisions of an employment agreement which illegally restricted Brown’s right to work. Consequently, judgment was reversed and the matter remanded for further proceedings. View "Brown v. TGS Management Co., LLC" on Justia Law

Defendants Fusion Buffet, Inc., Xiao Yan Chen, and Zhao Jia Lin appealed postjudgment orders of the trial court regarding attorney fees and costs. Cruz was employed as a server at the Great Plaza Buffet restaurant, which was operated by Fusion Buffet, from approximately February 2014 to late January 2016. Chen and Lin served as officers and owners of Fusion Buffet and managed the Great Plaza Buffet restaurant. In her complaint, Cruz alleged defendants: (1) failed to pay minimum wage; (2) failed to pay overtime; (3) failed to pay meal period compensation; (4) failed to pay rest period compensation; (5) failed to furnish timely and accurate wage and hour statements; (6) converted earned gratuities; (7) took unlawful deductions from wages; (8) failed to indemnify for all necessary expenditures or losses; and other causes of action stemming from her work at Fusion Buffet. In the complaint, Cruz sought to impose liability against Chen and Lin under an alter ego theory, alleging, among other things, that Chen and Lin commingled their assets with those of Fusion Buffet and that they failed to maintain corporate formalities. After a three-day bench trial, the court found in Cruz's favor on seven out of ten causes of action, and in favor of Fusion Buffet on the remaining three. The trial court determined Cruz was the prevailing party and found she was entitled to recover fees and costs incurred. The Court of Appeal determined defendants failed to demonstrate reversible error in the trial court's determinations with respect to the postjudgment orders and affirmed them all. View "Cruz v. Fusion Buffet, Inc." on Justia Law

Defendant Wedbush Securities, Inc. (Wedbush) was a securities broker-dealer firm that provided financial planning and investment products through its financial advisors. It classified its California financial advisors as exempt under the administrative exemption to California wage-and-hour law; the administrative exemption only applied if an employee earned a monthly “salary” equivalent to at least twice the state minimum wage. Wedbush pays its financial advisors on a commission-only basis. It uses a computer program to track the trades they make in a given month and then calculates the compensation owed based on what commission tier the employee met that month. The higher the employee’s total monthly gross product sales, the higher the percentage used to calculate the employee’s monthly commission payment. The central issue in this case is whether the Wedbush compensation model meets that administrative exemption requirement. The Court of Appeal determined the compensation plan based solely on commissions, with recoverable advances on future commissions, did not qualify as a “salary” for purposes of this exemption. Since the trial court found the employees in question were exempt and entered judgment for the employer, the Court reversed and remanded this matter for further proceedings. View "Semprini v. Wedbush Securities, Inc." on Justia Law

The Court of Appeal affirmed the trial court's denial of a writ of mandate to compel the Civil Service Commission to complete a deputy sheriff's administrative appeal. The court held that a deputy sheriff who has obtained and continues to receive service-connected disability retirement benefits is no longer an employee of the county, and thus his appeal to the Civil Service Commission of his discharge by the Los Angeles Sheriff's Department, filed before his disability retirement, is no longer viable. The court held that the Commission has no authority to order reinstatement or any other relief to a retired person whose future status as an employee is not at issue. View "Deiro v. L.A. County Civil Service Commission" on Justia Law

Olson is a driver for Lyft, whose terms of service include an agreement he could not bring a Private Attorney General Act (PAGA), Labor Code 2698, claim in court, and that disputes with Lyft must be resolved by individual arbitration. Olson sued Lyft alleging six PAGA claims. Lyft petitioned to compel to arbitration. The petition acknowledged that a 2014 precedent (Iskanian) precluded enforcement of PAGA waivers, but asserted that Iskanian was wrongly decided and was no longer good law in light of the U.S. Supreme Court’s 2018 decision, Epic Systems. The trial court rejected Lyft’s arguments.The court of appeal affirmed. Epic Systems addressed the question of whether the NLRA renders unenforceable arbitration agreements containing class action waivers that interfere with workers’ right to engage in “concerted activities.” It did not address private attorney general laws like PAGA or qui tam suit. View "Olson v. Lyft, Inc." on Justia Law

Finch began his employment with Midwest in 2014. His employment agreement stated: “This Agreement shall be construed in accordance with Ohio Law" and that any litigation "must be venued in Franklin County, Ohio.” In 2016, Midwest promoted Finch. The exhibits to the 2014 employment agreement were revised. In 2017 and 2018, Midwest provided Finch with Compensation and Annual Plan letters, revising Finch’s compensation. In 2019, Finch filed this lawsuit in Contra Costa County, alleging violations of the Labor Code for failure to pay his final wages on time and failure to reimburse him for business expenses; violation of Business and Professions Code section 17200; and a cause of action under the Private Attorneys General Act.The court concluded that the 2017 and 2018 Compensation letters modified the 2014 employment agreement. Because these modifications occurred after January 1, 2017, the court concluded they triggered Finch’s Labor Code section 925 right. Section 925 renders a forum selection clause in an employment contract voidable by an employee if the contract containing the clause was “entered into, modified, or extended on or after January 1, 2017.” The court of appeal denied Midwest’s writ petition. Section 925 is triggered by any modification to a contract occurring on or after January 1, 2017. View "Midwest Motor Supply Co. v. Superior Court" on Justia Law

Plaintiffs, wastewater collection workers employed by the city to clean its sewers, filed suit alleging that they worked in the transportation industry and the city denied them meal and rest breaks mandated by Industrial Welfare Commission Wage Order No. 9. Wage Order No. 9 obligates the City of Los Angeles to provide meal and rest breaks to persons it employs in the transportation industry.The Court of Appeal affirmed the trial court's grant of summary judgment for the city. The court held that, for purposes of Industrial Welfare Commission wage orders, a sanitation worker does not become part of the transportation industry simply because the waste collected must be transported to collection sites. Therefore, Wage Order No. 9 does not apply in this case. The court also held that the district court did not abuse its discretion in denying leave to amend. View "Miles v. City of Los Angeles" on Justia Law