United States: California Employment Law Notes - May 2017

Employee Who Suffered From "Altered Mental State" Need Not Be Allowed To Rescind Her Resignation

Featherstone v. Southern Cal. Permanente Med. Grp., 2017 WL 1399709 (Cal. Ct. App. 2017)

Ruth Featherstone alleged that her former employer (SCPMG) discriminated against her based on a "temporary disability" that was caused by an adverse drug reaction, which resulted in an "altered mental state." During this alleged altered mental state, Featherstone resigned orally from her job in a telephone conversation with her supervisor so that she could "do God's work" and then, a few days later, confirmed her resignation in writing. When Featherstone emerged from the altered mental state (which caused her to take off all of her clothes and walk around naked in front of others, swear at family members and take showers for no reason), she sought to rescind her resignation, which SCPMG declined to permit her to do. Featherstone alleged that SCPMG acted with discriminatory animus by refusing to allow her to rescind her resignation. Although Featherstone was eligible for rehire, she never reapplied for her position. The trial court granted summary judgment in favor of SCPMG, and the Court of Appeal affirmed, holding that the refusal to allow a former employee to rescind a resignation is not an adverse employment action under the Fair Employment and Housing Act. The Court further held that SCPMG was not contractually obligated to permit the rescission of an at-will employee's resignation and affirmed summary adjudication of the remainder of Featherstone's related claims, including failure to prevent discrimination, failure to accommodate a disability, failure to engage in the interactive process and wrongful termination in violation of public policy.

Garbage Truck Employee Who Failed To Provide Proof Of Right To Work Could Proceed With Age Discrimination Claim

Santillan v. USA Waste of Cal., 853 F.3d 1035 (9th Cir. 2017)

Gilberto Santillan, a 53-year-old garbage truck driver in Manhattan Beach, was employed for 32 years before his employment was terminated by a new route manager (Steve Kobzoff) after Santillan had four accidents in a 12-month period. Santillan disputed that he had four accidents and testified that he was one of five older Spanish-speaking employees who were fired or suspended after Kobzoff became the route manager. Following what the court described as a "public outcry" over Santillan's termination (the son of one of the homeowners dressed up as Santillan for Halloween because he considered Santillan to be a "hero"), USA Waste agreed to reinstate Santillan if he passed a drug test and physical examination, a criminal background check and "e-Verify" to prove his right to work in the United States. When Santillan failed to provide sufficient information for the employer to complete an e-Verify check on Santillan, he was fired again because he did not provide "proof of [his] legal right to work in the United States within three days of hire as required by the Immigration Control and Reform Act of 1986." The district court granted summary judgment in favor of the employer, but the United States Court of Appeals for the Ninth Circuit reversed, holding that Santillan had established a prima facie case of age discrimination, which USA Waste had failed to rebut because it did not offer a legitimate reason for firing Santillan. The Court held that Santillan was exempt from the IRCA requirements because he was a "continuing" and not a "new" employee. Moreover, the Court held that California public policy considers immigration status to be irrelevant in the enforcement of state labor, employment, civil rights and employee housing laws, so the agreement to satisfy the e-Verify requirements was void as against public policy. The Court also held that Santillan had engaged in protected activity by using an attorney to represent him in negotiating the original settlement agreement.

Trial Court's Decision Quashing EEOC Subpoena Should Not Be Reversed Absent Abuse Of Discretion

McLane Co. v. EEOC, 581 U.S. ___, 137 S. Ct. 1159 (2017)

Damiana Ochoa filed a charge with the EEOC alleging sex discrimination (based on pregnancy) in violation of Title VII, when, after s­­he tried to return to her job following maternity leave, her employer (McLane Co.) informed her that she could not come back to the position she had held for eight years as a cigarette selector unless she passed a physical strength test. Ochoa took the test three times but failed to pass and, as a result, her employment was terminated. McLane disclosed that it administers the test to all new applicants and to employees returning from a leave that lasts longer than 30 days. Although McLane voluntarily provided general information about the test and the individuals who had been required to take it (gender, job class, reason for taking the test and the score received), it refused to disclose "pedigree information" for each test taker (name, social security number, last known address, telephone number and the reasons why particular employees were terminated after taking the test). In this EEOC subpoena enforcement action, the district court refused to compel production of the pedigree information, but the United States Court of Appeals for the Ninth Circuit reversed that order following a de novo review of the lower court's order. In this opinion, the United States Supreme Court vacated and remanded the judgment of the Ninth Circuit, holding that the district court's decision to quash or enforce an EEOC subpoena should be reviewed under the more deferential abuse of discretion standard.

Anti-Retaliation Provisions of Sarbanes-Oxley Act Apply Even If No Disclosure To SEC

Somers v. Digital Realty Trust, Inc., 850 F.3d 1045 (9th Cir. 2017)

Paul Somers, who was formerly employed as a vice president of Digital Realty, alleged that he was fired after he made several reports to senior management regarding possible securities law violations. Somers did not report his concerns to the SEC. Somers sued Digital Realty for violation of Section 21F of the Securities and Exchange Act, which includes anti-retaliation protections created by the Dodd-Frank Act. The district court followed precedent from the United States Court of Appeals for the Second Circuit and held that the applicable SEC regulation extends anti-retaliation protection to all those who make disclosure of suspected violations, regardless of whether the disclosure is made to SEC or just internally. The United States Court of Appeals for the Ninth Circuit agreed and affirmed denial of the employer's motion to dismiss. Cf. United States ex rel. Kelly v. Serco, Inc., 846 F.3d 325 (9th Cir. 2017) (False Claims Act lawsuit was properly dismissed on summary judgment where plaintiff failed to satisfy the applicable materiality standard); see also Shaw v. Superior Court, 2017 WL 1315681 (Cal. S. Ct. 2017) (former hospital employee is not entitled to jury trial in retaliatory termination action arising under Cal. Health & Safety Code § 1278.5(g) itself, though such a right exists for trial of common law claim based on statute).

Employer That Paid Females Less Than Males Based On Prior Salaries May Avoid Liability Under Equal Pay Act

Rizo v. Yovino, 2017 WL 1505068 (9th Cir. 2017)

Aileen Rizo, who is an employee of the public schools in Fresno County, sued for violation of the federal Equal Pay Act ("EPA") after she learned that her male counterparts were being paid more for performing the same work. In its summary judgment motion, the county argued that it paid males more than females based upon a factor other than sex, namely the higher salaries that male employees earned before being employed by the county. The district court rejected that argument and held that when an employer bases a pay structure "exclusively on prior wages," any resulting pay differential between men and women is not based on a factor other than sex. However, the United States Court of Appeals for the Ninth Circuit vacated and remanded the judgment, holding that if the employer is able to show that prior salary "effectuates some business policy" and the employer uses prior salary "reasonably in light of its stated purpose," prior salary can be a factor other than sex, resulting in no liability under the EPA. Compare Cal. Lab. Code § 1197.5(b)(3) (prohibiting reliance on prior salary by itself to justify any disparity in compensation).

Employer Failed To Show That Former Employee Violated Nondisclosure Agreement

Glassdoor, Inc. v. Superior Court, 9 Cal. App. 5th 623 (2017)

Machine Zone, Inc. ("MZ"), a software developer, brought suit against an anonymous former employee ("John Doe") who allegedly violated a nondisclosure agreement ("NDA") by posting a review on Glassdoor (a website where workers can post "reviews" of their employers) that allegedly disclosed confidential information concerning MZ and its technology. When Glassdoor refused to identify Doe, MZ moved for an order compelling it to do so. The trial court granted the motion, but in this writ proceeding, the Court of Appeal concluded that MZ had failed to make a prima facie showing that Doe's statements disclosed confidential information in violation of the NDA. The Court first concluded that Glassdoor has standing to assert Doe's interest in maintaining his anonymity. The Court further held that the information Doe had posted on the Glassdoor website regarding MZ's platform team and alleged statements from MZ's CEO did not violate the NDA: "The question thus remains: Insofar as an employee's statement about an employer's internal activities is untrue, can it ever violate a nondisclosure agreement? We think the answer is obviously negative."

Former CEO's Defamation Action Was Properly Dismissed With Anti-SLAPP Motion

Charney v. Standard General, LP, 10 Cal. App. 5th 149 (2017)

Dov Charney, the former president and CEO of American Apparel, Inc., was terminated following an investigation into allegations that he had engaged in various types of misconduct. Following Charney's departure, Standard General effectively took over American Apparel through its control of company stock and the Board. After Charney's employment was terminated, Standard General issued a press release that stated:

As we have stated previously, our objective is to help American Apparel grow and succeed. We supported the independent, third-party and very thorough investigation into the allegations against Mr. Charney, and respect the Board of Directors' decision to terminate him based on the results of that investigation.

Charney sued, asserting that the press release contained false and defamatory information about him. In response to the complaint, Standard General filed an Anti-SLAPP motion, which the trial court granted and the Court of Appeal affirmed, holding that Charney had failed to satisfy his burden of showing minimal merit to his claim that the press release was defamatory: "The statement cannot be proven false as it does not state that Charney engaged in criminal conduct or that his conduct violated certain standards, or even that there existed any particular conduct that caused his termination."

Employee May Have Been On "Business Errand" At Time Of Traffic Collision

Sumrall v. Modern Alloys, Inc., 2017 WL 1365089 (Cal. Ct. App. 2017)

Juan Campos was employed as a cement/mason finisher for Modern Alloys, Inc. when he was involved in a collision that injured Michael Sumrall, who was riding a motorcycle. Before his shift, Campos was required to drive from his home to Modern Alloys' "yard" where he would pick up coworkers and drive a company truck to the jobsite. In response to Sumrall's complaint against Modern Alloys alleging respondeat superior liability for Campos's negligence, Modern Alloys asserted that Campos was not acting with the scope of his employment under the "going and coming"' rule because he was on his way to the yard at the time of the collision. The trial court granted Modern Alloys' motion for summary judgment, but the Court of Appeal reversed, holding that there is a triable issue of fact as to whether Campos was on a business errand for Modern Alloys' benefit while commuting from his home to the yard – and a "business errand" is an exception to the "going and coming" rule.

Safeway/Vons Assistant Managers Were Properly Classified As Exempt From Overtime

Batze v. Safeway, Inc., 10 Cal. App. 5th 440 (2017)

Gary Batze, et al., brought this lawsuit against their employer Safeway/Vons for failure to pay overtime wages. The employees alleged that they worked non-managerial tasks that rendered them non-exempt employees. After weeks of trial testimony, the trial court determined that the employees were engaged for more than 50 percent of their work week in managerial tasks and that they met all the other qualifications to be exempt from overtime. The Court of Appeal affirmed, holding that the employer had a realistic expectation that its store managers would be involved primarily in exempt work and that the work performed by the employees during a strike did not transform them into non-exempt employees. The Court further held that the statute of limitations was not tolled until the trial court's order denying class certification was entered.

Employee Was Properly Awarded $31,000 In Attorney's Fees On $300 Unpaid Wage Claim

Beck v. Stratton, 9 Cal. App. 5th 483 (2017)

Anthony Stratton filed a claim against Thomas Beck with the labor commissioner for unpaid wages in the amount of $303.55. After conducting an administrative hearing, the labor commissioner awarded Stratton $303.50 plus an additional $5,757.46 in liquidated damages, interest and statutory penalties for a total award of $6,060.96. Beck then filed an appeal in the Los Angeles Superior Court, which resulted in an award to Stratton in the amount of $6,778.85, exclusive of attorney's fees and costs. The trial court subsequently awarded Stratton $31,365 in attorney's fees. In this appeal, Beck asserted that the attorney's fees motion, which was filed 58 days after the judgment was entered, was untimely and that the fees sought were unreasonably high. The Court of Appeal rejected both arguments and affirmed the judgment in favor of Stratton. See also Quiles v. Parent, 10 Cal. App. 5th 130 (2017) (award of attorney's fees and costs need not be bonded pending appeal of same).

Health Care Employees Can Waive Their Second Meal Period

Gerard v. Orange Coast Mem. Med. Ctr., 9 Cal. App. 5th 1204 (2017)

In this putative class/Private Attorney General Act ("PAGA") action, Jazmina Gerard (and others) challenged a hospital policy that allowed health care employees who worked shifts longer than 10 hours to voluntarily waive one of their two meal periods, even if their shifts lasted longer than 12 hours. Plaintiffs alleged that they all signed second meal period waivers and occasionally worked longer than 12 hours without being provided a second meal period. The trial court granted summary judgment against Gerard and denied class certification to the other plaintiffs. In an earlier opinion, the Court of Appeal reversed, holding that Wage Order No. 5, Section 11(D), is partially invalid to the extent it permits employees in the health care industry to waive their second meal periods for shifts longer than 12 hours. After the California Supreme Court granted the hospital's petition for review, the Supreme Court transferred the case back to the Court of Appeal and ordered the lower court to vacate its earlier decision and to reconsider the case in light of the enactment in 2015 of SB 327 (amending Cal. Labor Code § 516). In this opinion, the Court of Appeal concluded that the Wage Order is valid after all.

Piece-Work-Based Pay Plan Violates FLSA

Brunozzi v. Cable Commc'ns, Inc., 851 F.3d 990 (9th Cir. 2017)

Matteo Brunozzi and Casey McCormick worked as technicians for CCI installing cable television and internet services. They alleged that CCI's compensation plan violates the overtime provisions of the Fair Labor Standards Act ("FLSA") because the "production bonus" paid by CCI is designed to decrease in proportion to an increase in the number of overtime hours the employees work. The United States Court of Appeals for the Ninth Circuit agreed with the employees and held that "the diminishing 'bonus' device in CCI's pay plan causes it to miscalculate the technicians' regular hourly rate during weeks when they work overtime and allows CCI to pay the technicians less during those weeks."

Chapter 11 Automatic Stay Applies To PAGA Claims

Porter v. Nabors Drilling USA, LP, 2017 WL 1404392 (9th Cir. 2017)

Jeremy Porter, a former employee of Nabors Drilling, filed a complaint alleging various claims against Nabors, including a claim arising under the Private Attorney General Act ("PAGA"). After removing the action to federal court, Nabors moved to compel arbitration of all of Porter's claims pursuant to an arbitration agreement. Porter agreed to arbitrate all of his claims except the PAGA claim. Over Porter's objection, the district court granted Nabors' motion to compel arbitration of the PAGA claim, and Porter filed the current appeal. After the appeal was filed, Nabors filed a "Notice of Suggestion of Bankruptcy," which stated that Nabors and its parent companies had filed voluntary petitions seeking bankruptcy protection under Chapter 11. Porter filed a motion for summary disposition, arguing that the automatic bankruptcy stay does not apply to a pending PAGA claim based on an exception to the automatic stay for proceedings brought "by a governmental unit ... to enforce such governmental unit's ... police and regulatory power." The United States Court of Appeals for the Ninth Circuit granted Nabors' motion to stay the appellate proceedings, rejecting Porter's contention that a PAGA claim falls within the governmental unit exception to the automatic stay. Cf. Gateway Community Charters v. Spiess, 9 Cal. App. 5th 499 (2017) (nonprofit public benefit corporation that operates charter schools is not an "other municipal corporation" exempt from liability for waiting time penalties pursuant to Cal. Lab. Code § 220(b)).

California Employment Law Notes - May 2017

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.