August 2020 employment law decisions

Wrongful termination verdict upheld but punitive damages reduced.

August 24, 2020, Third District Court of Appeal, Timothy King v. U.S. Bank National Association: A jury found in favor of Mr. King for defamation, wrongful termination in violation of public policy, and breach of the implied covenant of good faith and fair dealing, and awarded almost $24.3 million in compensatory and punitive damages. The Third District affirmed the verdict but determined that the punitive damages award had to be reduced to a one-to-one ratio with the compensatory damages amount because U.S. Bank’s conduct was at the low end of the reprehensibility spectrum.

Physician’s independent contractor status precludes discrimination and retaliation case.

August 14, 2020, Ninth Circuit Court of Appeals, David E. Henry, M.D. v Adventist Health Castle Medical Center: Dr. Henry sued a medical center for discrimination and retaliation under federal law (Title VII) arising from the center’s suspension of his clinical privileges. The trial court dismissed the case (summary judgment) on grounds Dr. Henry was an independent contractor, and, therefore, not covered by Title VII. On appeal, the Ninth Circuit reviewed the center’s right to control the manner and means by which the work was accomplished (common law test). The appellate court affirmed the trial court’s dismissal after determining that a number of factors indicated an independent contractor relationship: (1) Dr. Henry was paid (per shift or emergency intervention), taxed (1099 forms), and received benefits (none) like an independent contractor; (2) Dr. Henry’s obligations to the center were limited providing him the freedom to run his own private practice; and (3) contracts between the center and Dr. Henry described him as an independent contractor.

Employee does not have enough evidence of age discrimination.

August 12, 2020, Third District Court of Appeal, Virginia M. Arnold v. Dignity Health: Ms. Arnold filed a case for employment discrimination, harassment, and retaliation against Dignity Health. The trial court dismissed the case (summary judgment). The Third District affirmed the dismissal of the age discrimination claim. Ms. Arnold’s evidence of age-related comments were not made by individuals involved in her termination, and the appellate court concluded the statements were benign in nature.

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June and July 2020 employment law decisions

Receipt of government funds conditioned on compliance with the law does not make a private employer a state actor for purposes of constitutional claims.

July 20, 2020, Ninth Circuit Court of Appeals, John M. Heineke v. Santa Clara University: Mr. Heineke sued Santa Clara University for violations of the Fourteenth Amendment due process and equal protection rights after it terminated him for sexually harassing a former student. The Ninth Circuit affirmed the trial court’s dismissal of the constitutional claims on grounds the university is not a state actor: the university’s receipt of government funds conditioned on compliance with generally applicable laws was insufficient to transform a private university into a state actor.

Business is subject to liability for wage and hour violations despite lending its signatory status in a work contract to a third party.

July 14, 2020, Second District Court of Appeal, Alyosha Mattei v. Corporate Management Solutions, Inc.: Mr. Mattei and three co-workers sued Corporate Management Solutions, Inc. (CMS) for wage and hour violations while working on a television commercial. The trial court dismissed the case on grounds CMS was not the employer of the four plaintiffs. The appellate court reversed. It pointed to the fact that CMS was a signatory to a Commercial Production Agreement that governed the television commercial, the language of which did not show that CMS’s lending of its signatory status to a third party relieved CMS of its liability for wage and hour violations. In addition, CMS’s contract with the third party provided that CMS was obligated to ensure timely payment of wages.

Individual sentenced to perform work duties without pay in lieu of incarceration cannot sue the county for employment discrimination.

July 10, 2020, Fifth District Court of Appeal, Ronald Talley v. County of Fresno: Mr. Talley served a criminal sentence by participation in an Adult Offender Work Program. After getting injured while working in this program, Mr. Talley sued Fresno County for, among other things, disability-related claims under California’s Fair Employment and Housing Act (FEHA). The trial court dismissed the case (summary judgment) after finding that Mr. Talley could not be an employee under the FEHA. The court of appeal reviewed federal and state court precedent and concluded that compensation is a threshold test for determining whether an employment relationship exists. It concluded that the benefit Mr. Talley received for participating in the program, staying out of jail, did not constitute compensation to him an employee because it was not financially significant or quantifiable.

Catholic school teachers cannot sue for employment discrimination.

July 8, 2020, U.S. Supreme Court, Our Lady of Guadalupe School v. Morrissey-Berru: Two elementary school teachers at Catholic schools brought discrimination claims against their employer. The Supreme Court concluded that the claims were barred by the “ministerial exception” to federal laws governing the employment relationship between a religious institution and certain employees. The court pointed to the teachers’ performance of vital religious duties including educating students in the Catholic faith and participating in religious activities with students. Justices Sotomayor and Ginsburg dissented on grounds that the teachers taught primarily secular subjects, lacked substantial religious titles and training, and were not required to be Catholic.

Supervisors looking at a clock during meal or rest breaks not sufficient to show a violation of break laws.

June 30, 2020, First District Court of Appeal, Joana David v. Queen of the Valley Medical Center: Ms. David filed an action against her employer contending she was denied meal and rest periods. The appellate court affirmed the trial court’s dismissal of those claims (summary judgment). Ms. David’s evidence that her supervisors looked at the clock while she was on breaks did not create a dispute of fact: there is a lack of precedent that this constitutes coercion or pressure to undermine a formal policy of providing breaks; and Ms. David testified in deposition that she did not recall missing a meal period, a supervisor interrupting a meal period with work-related questions, or being told to end meal or rest breaks early.

Posted by deanroyerlaw in Employment

June 2020 employment law decisions

Airline workers are protected by California’s wage and hour laws only if the base of work operations is in California.

June 29, 2020, California Supreme Court, Charles E. Ward v. United Airlines, Inc. and Felicia Vidrio v. United Airlines Inc.; Dev Anand Oman v. Delta Airlines, Inc.: Pilots (Ward and Vidrio case) and flight attendants (Oman case) sued their airline employers for violations of California’s minimum wage (Oman case) and wage statement (both cases) laws. The California Supreme Court decided that the laws apply only to those pilots or attendants who have their base of work operations (principal place of work) in California, regardless of their place or residence or whether a collective bargaining agreement governs their pay.

Federal law prohibiting discrimination in the workplace includes discrimination based on sexual orientation and gender identity.

June 15, 2020, U.S. Supreme Court, Bostock v. Clayton County, Georgia: The Civil Rights Act of 1964 (Title VII) prohibits discrimination in the workplace based on sex. The question for the U.S. Supreme Court was whether the prohibition applies when an employer terminates an employee based on their sexual orientation or gender identity. The high court concluded that “[t]he answer is clear” because an employer who fires and individual for being homosexual or transgender does so for traits or actions it would not have questioned in members of a different sex. The Supreme Court acknowledged that those who adopted the Act might not have anticipated this result, but the express terms of the law provided the court with its answer.

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April and May 2020 employment law decisions

No attorney’s fees available for meal and rest break cases.

May 21, 2020, Second District Court of Appeal, Raquel Betancourt v. OS Restaurant Services, LLC: The trial court awarded Ms. Betancourt over $280,000 in attorney fees for meal and rest break violations. The court of appeal reviewed the attorney’s fees statute for actions based on nonpayment of wages and prior decisions that meal and rest break violations are not actions for nonpayment of wages. The appellate court rejected Ms. Betancourt’s contention that the case was based on a failure to pay earned wages because the claims asserted were the meal and rest violations and wage statement and waiting time penalties.

Time to present a claim under the Government Claims Act is not subject to equitable tolling or continuing violation doctrine.

May 12, 2020, Fourth District Court of Appeal, James Willis v. City of Carlsbad: The trial court struck certain actions taken by the City of Carlsbad from Mr. Willis’s complaint on grounds they were outside of the six-month period prior to Mr. Willis presenting a claim under the Government Claims Act. Mr. Willis contended that the actions should have remained in his case. The court of appeal rejected Mr. Willis’s “equitable tolling” argument because the time to file a Government Claims Act is not a statute of limitations subject to equitable tolling. The appellate court also determined that the continuing violation doctrine did not apply because Mr. Willis was on notice more than six months before he presented his Government Claims Act claim that any further efforts to end the alleged unlawful conduct would be futile in light of the City of Carlsbad’s denials of transfer and promotion.

Wrongful termination claim arising from termination for refusing an extortion attempt based on fraud.

May 6, 2020, First District Court of Appeal, John Galeotti v. International Union of Operating Engineers Local No. 3: The trial court dismissed Mr. Galeotti’s wrongful termination claim (demurrer). The court of appeal reversed after deciding that Mr. Galeotti’s allegations that his employer fired him for not succumbing to an extortion attempt (threat of termination if he did not make a $1,000 contribution to a political campaign) sufficiently describes an alleged violation of public policy (extortion laws). The appellate court also determined that Mr. Galeotti’s allegations that his employer terminated him after mispresenting that the contribution would be used for an election campaign (when it was used for personal use) implicates the public policy against defrauding a person of money.

Punitive damages award affirmed but reduced.

April 29, 2020, Fourth District Court of Appeal, Stephen Colucci v. T-Mobile USA, Inc.: A jury awarded Mr. Colucci $5 million in damages in this workplace retaliation case, including $4 million for punitive damages. The court of appeal determined that there was evidence supporting the jury’s finding that a managing agent of T-Mobile—meaning someone who exercised substantial discretionary authority over decisions that determine corporate policy—engaged in oppression or malice. The appellate court pointed to a district manager responsible for managing nine retail stores and 100 employees who had independent authority to hire or fire employees and over daily store operations. The Fourth District determined that the jury could reasonably infer from the evidence that the district manager became angered by Mr. Colucci’s complaints and decided to concoct a reason for termination knowing that Mr. Colucci was in a weak physical and mental state. Finally, the court of appeal determined that T-Mobile’s conduct warranted imposition of punitive damages but the reprehensibility of conduct was in the low to moderate range of wrongdoing. Therefore, it decided that a punitive damages award equal to 1.5 times that of the compensatory damages aware of $1,020,042 was appropriate.

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April 2020 employment law decisions

Gender discrimination verdict reversed based on trial court’s series of errors.

April 23, 2020, Second District Court of Appeal, Lauren Pinter-Brown v. The Regents of the University of California: Dr. Pinter-Brown sued The Regents for gender discrimination and a jury found in her favor and awarded $13 million in damages. The appellate court reversed because the trial court committed a series of errors that prejudiced The Regents’ right to a fair trial by an impartial judge: (1) the court delivered a presentation to the jury highlighting major figures in the civil rights movement and told the jury it was their duty to stand in the shoes of Dr. Martin Luther King; (2) the court allowed the jury to hear about and view a long list of discrimination complaints from across the entire UC system that were not connected to Dr. Pinter-Brown’s circumstances or theory of the case; (3) the court allowed the jury to learn the contents and conclusion of a report documenting racial discrimination occurring throughout the entire UCLA campus; and (4) the court allowed Dr. Pinter-Brown to resurrect a retaliation claim after the close of evidence despite having dismissed that claim prior to trial.

After-acquired evidence may be used in federal disability discrimination cases for the issue of whether the employee was qualified for their position.

April 17, 2020, Ninth Circuit Court of Appeal, Sunny Anthony v. TRAX International Corporation: Ms. Anthony sued TRAX for disability discrimination. During the course of the case, TRAX discovered that Ms. Anthony lacked a required degree for the position she held. The Ninth Circuit concluded that this “after-acquired evidence” could be used by TRAX to show that Ms. Anthony was not qualified for her position, and, therefore, not protected under the federal disability discrimination law.

Staffing agencies uninvolved in promotion decisions cannot be held liable for a failure to promote claim.

April 7, 2020, Second District Court of Appeal, Bonnie Ducksworth v. Tri-Modal Distribution Services et al.: Ms. Ducksworth and another employee, Pamela Pollock, sued Tri-Modal and two staffing agencies that supplied them to Tri-Modal for race discrimination in promotion decisions. The appellate court affirmed the dismissal of the case against the staffing agencies because they were uninvolved in Tri-Modal’s decisionmaking about whom to promote. Ms. Pollack also had a harassment claim against Tri-Modal’s executive vice president arising from promotion decisions. The Second District also affirmed the dismissal of Ms. Pollack’s case against the executive vice president because it was filed too late (statute of limitations). It determined that the statute of limitations began running when Tri-Modal told employees they have been given a promotion (and not when the promoted worker started the new work).

Federal sector employees may prove age discrimination without showing their age was the but-for cause for an adverse employment action.

April 6, 2020, U.S. Supreme Court, Babb v. Wilkie, Secretary of Veterans Affairs: The high court decided that the age discrimination law for federal-sector employees does not require a showing that age was a but-for cause of an adverse employment action. The law’s language that “all personnel actions affecting employees or applicants for employment who are at least 40 years of age…shall be made free from any discrimination based on age” creates a more protective standard as compared to the law covering state and private sector employees. At the same time, in order to recover reinstatement, backpay, and compensatory (non-economic) damages, federal employees must satisfy the but-for cause standard.

Payment of accrued vacation time required even when there is no specific time off limit.

April 1, 2020, Second District Court of Appeal, Teresa McPherson v. EF Intercultural Foundation, Inc.: California’s Labor Code requires an employer to pay all unused, vested (accrued or earned) vacation time when an employee separates. The court of appeal decided that under the circumstances of this particular case, this requirement applied to the employer’s paid time off policy in which it did not promise its employees a specific amount of paid vacation that they would accrue or expressly tell them the paid time off was unlimited (and a limit was implied). But the Second District also stated that the requirement to pay vested vacation time does not apply to all unlimited paid time off policies.

Posted by deanroyerlaw in Employment