April 2018 employment law decisions

Damages required for federal court jurisdiction is based on the amount claimed at the time the case is removed from state to federal court.

April 20, 2018, Ninth Circuit Court of Appeals, Else Chavez v. JPMorgan Chase & Co: Ms. Chavez sued her employer in California state court. JPMorgan removed the case to federal court and that court dismissed the case (summary judgment). On appeal, Ms. Chavez contended that removal was improper on grounds the federal court lacked (diversity) jurisdiction because the amount in controversy did not exceed $75,000. The Ninth Circuit reviewed the diversity jurisdiction rule, which requires the parties to be residents of different states and the amount in controversy to be more than $75,000. The amount may include damages as well as attorney’s fees awarded under fee shifting laws. The appellate court concluded that Ms. Chavez’s agreement to removal was strong evidence that the amount exceeded $75,000. Alternatively, there was evidence that Ms. Chavez’s yearly salary was more than $39,000 and she intended to work for another nine years. As a result, a jury could have awarded her over $350,000 in lost wages. The Ninth Circuit rejected Ms. Chavez’s assertion that the amount was limited to the time period between her termination and the removal of the case (a little over one year). Instead, the amount is based on the damages that are claimed at the time the case is removed.

Plaintiff may dismiss his case after trial commences but before the case is submitted.

April 17, 2018, Second District Court of Appeal, Achikam Shapira v. Lifetech Resources: Mr. Shapira file a breach of employment contract claim against Lifetech. The case went to a court (bench) trial. Mr. Shapira requested that the court dismiss his case before the trial concluded. The trial court denied the request, entered a judgment in Lifetech’s favor, and awarded Lifetech $137,000 in attorney’s fees as the prevailing party. On appeal, Mr. Shapira contended that the court should have dismissed his case, and, therefore, the attorney’s fees award was erroneous. The appellate court reviewed the law (Code of Civil Procedure section 581) under which Mr. Shapira sought dismissal: a court must dismiss a case after the trial commences if the plaintiff requests it. The Second District assumed, consistent with both parties’ arguments, that the latest the request can be made is before the case is submitted. The appeals court concluded that Mr. Shapira’s case had not been submitted before he requested dismissal because the court had not ordered the matter submitted, closing arguments were not complete, and the date to file the final paper (closing argument briefs) had not passed.

Pay differential between men and women cannot be justified by an employee’s prior salary.

April 9, 2018, Ninth Circuit Court of Appeals, Aileen Rizo v. Jim Yovino: Ms. Rizo was paid by Fresno County Office of Education less than comparable male employees for the same work. The County justified the wage differential on grounds Ms. Rizo’s prior salary—which was the basis for her starting salary—constitutes a “factor other than sex,” which is a legal defense to a claim of pay discrimination. The question before the appeals court was whether this justification is valid under the federal Equal Pay Act. The Ninth Circuit acknowledged the importance of the issue: “Although the Act has prohibited sex-based wage discrimination for more than fifty years, the financial exploitation of working women embodied by the gender pay gap continues to be an embarrassing reality of our economy.” The appellate court concluded (“unhesitatingly”) that the “factor other than sex” defense is limited to legitimate, job-related factors such as a prospective employee’s experience, educational background, ability, or prior job performance. The Ninth Circuit determined that given the Equal Pay Act’s primary purpose is to eliminate long-existing endemic sex-based wage disparities it is inconceivable that Congress would create an exception for basing new hires’ salaries based on those very disparities. The appeals court found support for this determination in the language, legislative history, and purpose of the Act. The Ninth Circuit decided that prior salary, whether considered alone or with other factors, is not job related and does not fall within an exception to the Act that allows employers to pay disparate wages. It overruled its prior decision (Kouba v. Allstate Insurance Co. (9th Cir. 1982) 691 F.2d 873) that the Act does not impose a strict prohibition against the use of prior salary.

Posted by deanroyerlaw in Employment

March 2018 employment law decisions

No meal period liability for staffing agency.

March 21, 2018, First District Court of Appeal, Norma Serrano v. Aerotek, Inc.: Ms. Serrano sued Aerotek, Inc. and Bay Bread, LLC based on their alleged failure to provide meal periods. Aerotek is a staffing agency that placed Ms. Serrano as a temporary employee with its client, Bay Bread. The trial court dismissed the case against Aerotek (summary judgment) after determining that Aerotek satisfied its own duty to provide meal periods. On appeal, Ms. Serrano contended that Aerotek’s own meal period policy is irrelevant because Bay Bread was not aware of it and did not enforce it. The court of appeal found that this contention was at odds with the leading case on meal periods (Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004), which held that an employer is not required to police the taking of meal breaks and that mere knowledge they are not being taken does not establish liability. The appellate court acknowledged that what will suffice to satisfy an employer’s duty to provide meal periods may vary from industry to industry, and that a temporary staffing agency does not meet its duty by merely establishing a compliant meal period policy without regard to a client’s implementation of it. But in this case, the undisputed evidence showed that Aerotek did do more than that: the contract it had with Bay Bread required the client to comply with applicable laws, Aerotek provided its meal period policy to temporary employees and trained them on it during orientation, and the policy required them to notify Aerotek if they believed they were being prevented from taking meal breaks. The First District concluded that Ms. Serrano failed to convince it that anything more is required of staffing agencies when they provide temporary employees to other companies.

Jury instruction for Fire Chief position not required.

March 15, 2018, Fourth District Court of Appeal, George Corley v. San Bernardino County Fire Protection District: Mr. Corley filed a case against his former employer for age discrimination. A jury found in favor of Mr. Corley. On appeal, the District asserted that the trial court erred in denying its request to instruct the jury based on a section of the Firefighters’ Procedural Bill of Rights (Government Code section 3254(c).) The District claimed the instruction was proper because Mr. Corley was provided all of the rights described in the section: written notice with reason(s), including incompatibility of management style or change in administration, for removal from employment and an opportunity for administrative appeal. On appeal, the Fourth District reviewed the legislative history of the Firefighters’ Bill of Rights and found that it was modeled after the Public Safety Officers Procedural Bill of Rights Act. The court of appeal determined that the legislative history of the equivalent section of the Officers Bill of Rights (Government Code section 3304(c)) demonstrates that it was enacted to apply solely to a jurisdiction’s “Chief of Police.” Turning back to the Firefighters’ Bill of Rights, the appellate court noted that the section refers to “a fire chief” without referring to “deputy chiefs,” “assistant chiefs,” “division chiefs” or the like. Also, it provides no definition of the term “fire chief,” as one might expect if the section were meant to apply to any position with the word “chief” in it. The final sentence of the section strongly suggests that the term “fire chief” refers to a single position, namely the “job of fire chief” of a jurisdiction. The Fourth District concluded that interpreting the section of the Firefighters’ Bill of Rights as pertaining solely to a jurisdiction’s “fire chief” harmonizes the meaning of the two closely related statutes. Because it was undisputed that Mr. Corley never held the position of fire chief, the trial court did not err by not giving the requested instruction.

How to calculate the value of a bonus for purposes of overtime pay.

March 5, 2018, California Supreme Court, Hector Alvarado v. Dart Container Corporation of California: Mr. Alvardo alleged that Dart Container Corporation had not properly computed his overtime pay under California law by not including shift differential premiums and bonuses in calculating overtime wages. The trial court dismissed the overtime claim (summary judgment), concluding that there was no valid California law or regulation explaining how to factor a flat sum bonus into an employee’s regular rate of pay for purposes of calculating overtime compensation. The Court of Appeal affirmed. The California Supreme Court granted review to decide how a flat sum bonus earned during a single pay period should be factored into an employee’s regular rate of pay for purposes of calculating the overtime pay. The high court reviewed California’s Wage Orders (found in the Code of Regulations) and Labor Code section 510, which require overtime pay (1.5 or 2 times the employee’s “regular rate of pay”) for work in excess of eight hours in a day, 40 hours in a week, or for any work on a seventh consecutive day. Regular rate of pay includes adjustments to the straight time rate, including shift differentials and the per-hour value of any non-hourly compensation the employee has earned. In this case, Dart paid an attendance bonus for weekend work as incentive pay for completing a full work shift on a day that is unpopular for working (Saturday or Sunday). The high court stated that its task was to decide whether, in calculating the per-hour value of the bonus, the amount of the bonus is divided by (1) the number of hours the employee actually worked during the pay period, including overtime hours; (2) the number of non-overtime hours the employee worked during the pay period; or (3) the number of non-overtime hours that exist in the pay period, regardless of the number of hours the employee actually worked. The Division of Labor Standards Enforcement, California’s agency that administratively enforces overtime and other wage and hour laws, had answered the question in its Manual with option two: “the regular bonus rate is determined by dividing the bonus by the maximum legal regular hours worked during the period to which the bonus applies.” The California Supreme Court found that this determination was void (though not necessarily incorrect); therefore, it was required to independently interpret the law. The high court noted that it was obligated to prefer an interpretation that discourages employers from imposing overtime work and that favors the protection of the employee’s interests. The California Supreme Court found it significant that the bonus was payable even if the employee worked no overtime at all during the relevant pay period. Consequently, it determined that the bonus is properly treated as if it were fully earned by only the non-overtime hours in the pay period, and only non-overtime hours should be considered when calculating the bonus’s per-hour value. The high court rejected calculating the per-hour value of the bonus as if a part-time employee were actually working a full-time schedule, which would dramatically reduce the overtime pay rates and contradict the principle that California’s labor laws must be liberally construed in favor of worker protection. The California Supreme Court concluded—consistent with DLSE’s policy on point—that the divisor for purposes of calculating the per-hour value of Dart’s attendance bonus should be the number of non-overtime hours actually worked in the relevant pay period, not the number of non-overtime hours that exist in the pay period.

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February 2018 employment law decisions

Disclosure of personal information and infliction of emotional distress verdict upheld.

February 21, 2018, Fourth District Court of Appeal, Delane Hurley v. California Department of Parks and Recreation: A jury found in favor of the Department for Ms. Hurley’s employment discrimination, retaliation, and harassment claims; and in favor of Ms. Hurley for a disclosure of personal information claim (Information Practices Act) and infliction of emotional distress claims. On appeal, Ms. Hurley asserted that the trial court excluded evidence relevant to her discrimination/ retaliation/ harassment claims. The Fourth District found that Ms. Hurley failed to show, beyond conclusory argument, that the excluded evidence would have affected the jury’s verdict. As a result, she waived the issue or failed to demonstrate the required prejudice caused by the exclusion. The Department contended that there was insufficient evidence to support the verdict regarding the personal information claim. The appellate court disagreed because there was evidence that the Department maintained a “supervisory drop file” that a reasonable jury could decide contained Ms. Hurley’s name, corrective or disciplinary actions taken again her, her application to add her domestic partner as a health insurance beneficiary, a note from her psychologist placing her on leave for one month, and information that Ms. Hurley failed her probation at a prior job. This type of information qualifies as “personal” under the Information Practices Act. The Fourth District concluded that there was sufficient evidence that the Department improperly (not in the ordinary course of official duties) disclosed this personal information because Ms. Hurley’s supervisor gave it to a nonsupervisory employee with lesser rank than Ms. Hurley and the supervisor received the drop file while she was on administrative leave. Finally, the court of appeal concluded there was sufficient evidence to support the emotional distress claims based on the disclosure of the drop file, the supervisor discussing Ms. Hurley’s personal information with another employee in Ms. Hurley’s presence, and the supervisor’s acts and comments about Ms. Hurley’s sexual orientation.

Administrative filing requirement for civil servants with whistle-blower claims.

February 16, 2018, Second District Court of Appeal, Shawn Terris v. County of Santa Barbara: Ms. Terris received a layoff notice and then filed a complaint with the County’s Civil Service Commission alleging discrimination for exercising her right to file a claim against the County. The Commission ruled that it could not decide the discrimination claim because Ms. Terris had not filed a complaint with the County’s Equal Employment Opportunity Office (EEO). Ms. Terris then filed a case against her employer for whistle-blower retaliation. The trial court dismissed her case (summary judgment) on grounds that she did not comply with administrative filing requirements. On appeal, the Second District found that the EEO complaint was available and required, after which an appeal to the Commission was possible. Ms. Terris did not file with the EEO and went directly to the Commission. The appellate court rejected Ms. Terris’s contention that she was excused from filing with the EEO. The Second District concluded that a decision (Satyadi v. West Contra Costa Healthcare Dist. (2014) 232 Cal.App.4th 1022) and a Labor Code provision (section 244) provide that an employee need not file with the California Labor Commissioner before suing her employer, but do not address any required civil service claims.

No adverse employment action based on an employee’s private sexual conduct.

February 9, 2018, Ninth Circuit Court of Appeals, Janelle Perez v. City of Roseville: Ms. Perez was a police officer for the Roseville Police Department. The Department terminated her after an internal affairs investigation into her extramarital romantic relationship with another police officer. She sued her employer for an alleged violation of her right to privacy and intimate association under the U.S. Constitution. The trial court dismissed the claim (summary judgment). On appeal, the Ninth Circuit determined whether there was a factual dispute and whether the constitutional right was clearly established. The appellate court concluded that there was a factual dispute as to whether the City of Roseville terminated Ms. Perez at least in part on the basis of her extramarital affair: the Police Chief gave testimony that the investigation played a role in the termination decision; a Captain testified that the affair was significant to him and issued written reprimands to Ms. Perez and recommended termination based on the investigation; two individuals involved in the termination expressed moral disapproval of Ms. Perez’s conduct; and issues with Ms. Perez’s job performance were “discovered” immediately after the investigation revealed the affair. The Ninth Circuit also found that Ms. Perez’s constitutional right was clearly established by its 1983 decision that prohibited government employers from taking adverse action on the basis of private sexual conduct unless such conduct negatively affects on-the-job performance or violates a constitutionally permissible, narrowly tailored regulation. The Ninth Circuit rejected decisions by the Fifth and Tenth Circuits that did not recognize the constitutional right.

Posted by deanroyerlaw in Employment

December 2017 and January 2018 employment law decisions and laws

Representation action requires notice of other employees affected by the employer’s conduct.

January 22, 2018, Second District Court of Appeal, Hamid Khan v. Dunn-Edwards Corporation: Mr. Khan had a dispute with his employer regarding his final paycheck with respect to its timing and the statement that came with it. He filed a case on behalf of himself and other employees who had been similarly treated. While the lawsuit was pending, Mr. Khan gave written notice to Dunn-Edwards Corporation and the California Labor and Workforce Development Agency regarding “my claims against my former employer….” The notice did not reference any other employee. Mr. Khan filed an amended complaint to add a claim under the Labor Code Private Attorneys General Act of 2004 (PAGA). The trial court dismissed Mr. Khan’s case for, among other reasons, failing to give proper notice of the PAGA claim. The Second District concluded that the notice was deficient because it was limited to Mr. Khan’s individual claims, and, therefore, failed to give the Labor and Workforce Development Agency adequate opportunity to decide whether to investigate a representative action.

No violation of constitutional rights based on conditional language about an employee.

January 3, 2018, Ninth Circuit Court of Appeals, Ronald Kramer v. Mary Cullinan: Mr. Kramer sued the former President of Southern Oregon University alleging violations of his federal constitutional rights based on information released in connection with his termination. The trial court denied Dr. Cullinan’s request to dismiss the case. On appeal, the Ninth Circuit address the questions of whether Dr. Cullinan violated a constitutional right and whether that right was clearly established at the time of the alleged misconduct (qualified immunity defense). The Fourteenth Amendment protects liberty interests, including the right to a name-clearing hearing when the government publicly discloses stigmatizing information in the course of terminating a person’s employment. The appeals court concluded that a letter stating that insurance coverage would not be available if Mr. Kramer had engaged in bad faith or willful misconduct was not stigmatizing. The language was conditional and did not accuse him of actually engaging in misconduct.

January 1, 2018: San Francisco’s Lactation in the Workplace Ordinance became effective. It requires employers to provide employees breaks and a location for lactation and to have a policy regarding lactation in the workplace that specifies a process by which an employee will make a request for accommodation.

January 1, 2018: As of this date, covered employers with 20 or more employees are required to comply with San Francisco’s Paid Parental Leave Ordinance. This ordinance requires employers to provide supplemental compensation to employees receiving California Paid Family Leave to bond with a new child.

Verdict in favor of employee in disability discrimination and reasonable accommodation case upheld.

December 28, 2017, Ninth Circuit Court of Appeals, Tracy Dunlap v. Liberty Natural Products, Inc.: Ms. Dunlap alleged that her employer failed to accommodate her disability and engaged in disability discrimination. A jury found in favor of Ms. Dunlap for some of her claims. The trial court denied Liberty Natural Products’ request for a judgment in its favor. On appeal, Liberty Natural Products contended that the trial court gave erroneous jury instructions for the failure to accommodate claim by including elements from the discrimination claim. The Ninth Circuit decided that the trial court should have given separate instructions for each claim, but that this error was not enough to reverse the jury’s verdict. The undisputed evidence showed that Liberty Natural Products’ duty to engage in the interactive process regarding an accommodation was triggered.

Enough evidence for disability discrimination based on obesity.

December 21, 2017, First District Court of Appeal, Ketryn Cornell v. Berkeley Tennis Club: Ms. Cornell sued her employer for disability discrimination and other claims. The trial court dismissed her case before trial (summary judgment). On appeal, the First District determined that Berkeley Tennis Club failed to demonstrate that Ms. Cornell could not establish that her obesity is a disability under California law, which requires a showing of a physiological cause. The appeals court reversed the dismissal of the discrimination claim because there was evidence upon which a jury could decide the Club’s non-discriminatory explanation for the termination was false and a participant in the decision to terminate Ms. Cornell made comments suggesting discriminatory animus.

No attorney fees despite finding of disability discrimination.

December 19, 2017, Fourth District Court of Appeal, William Bustos v. Global P.E.T., Inc.: Mr. Bustos brought a disability discrimination action against his employers. A jury found that Mr. Bustos’s (perceived) physical condition was a substantial motivating reason for his termination but returned verdicts in favor of the employers. Mr. Bustos sought an award of attorney fees, which was denied. On appeal, the Fourth District reviewed the rule that a court has discretion to award attorney fees to an employee where a jury decides there was discrimination but that the employer would have taken the same adverse employment action absent discrimination or the discrimination did not result in any compensable injury. The appellate court concluded that the trial court reasonably decided that because Mr. Bustos did not recover any relief he was not a prevailing party eligible for attorney fees.

Posted by deanroyerlaw in Employment

October and November 2017 employment law decisions

No attorney’s fees for a prevailing individual defendant.

November 29, 2017, Second Appellate District, Elisa Lopez v. Gregory Routt: Ms. Lopez sued her employer and her supervisor for harassment in violation of the California Fair Employment and Housing Act (FEHA). A jury found in favor of the City and Mr. Routt on the harassment claim, and Mr. Routt moved for prevailing party attorney fees. The trial court denied Mr. Routt’s motion, concluding he had failed to establish Ms. Lopez’s claim was frivolous, as is required for a prevailing defendant to obtain an attorney fee award under FEHA. On appeal, Mr. Routt argued the frivolousness standard should not apply to a fee request by a supervising employee who has been sued as an individual defendant. Based on California Supreme Court precedent and the relevant legislative history, the Second District concluded the same standard applies to an individual defendant’s request for attorney fees under FEHA as applies to an employer defendant, and thus a fee award is only available in the discretion of a trial court when the court finds that the plaintiff’s claim was frivolous.

Union grievance does not satisfy the Government Claims Act.

November 29, 2017, Second Appellate District, Cassidy Olson v. Manhattan Beach Unified School District: The trial court dismissed Mr. Olson’s case after deciding that his complaint failed to allege that he satisfied the claim filing requirements of the Government Claims Act. On appeal, Mr. Olson contended that his filing of a grievance substantially complied with the claim filing requirements. Substantial compliance is normally raised where a timely but deficient claim has been presented to the public entity, but where there is a complete failure to serve any responsible officer of the entity, the doctrine does not apply. Because Mr. Olson’s complaint did not allege that he served or attempted to serve a claim on any responsible officer of the school district, the doctrine of substantial compliance did not apply. Mr. Olson also contended that his grievance was a “claim as presented.” This applies to a claim that fails to comply substantially with Government Code sections 910 and 910.2, but nonetheless puts the public entity on notice that the claimant is attempting to file a valid claim and that litigation will result if it is not paid or otherwise resolved. But Mr. Olson’s grievance did not disclose the existence of a claim against the school district, which if not satisfactorily resolved, would result in litigation. Finally, Mr. Olson argued that he was excused from filing a government claim because it would have been futile. The Second District disagreed because Mr. Olson did not identify any case applying the futility exception to the claim filing requirement, the Government Code does not provide for futility as an exception from the claim filing requirements, and application of the futility doctrine would contravene the purposes of the claim filing requirement because even a “futile” claim would provide a public entity with notice of a potential claim enabling adequate investigation and fiscal planning.

Tax consequence adjustment is a remedy under federal employment discrimination law.

November 3, 2017, Ninth Circuit Court of Appeals, Arthur Clemens, Jr. v. Qwest Corporation: Arthur Clemens, Jr., sued his employer Qwest Corporation (“Qwest”) for race discrimination and retaliation under Title VII. A jury awarded $457,000 in damages for back pay, emotional distress, and punitive damages. But the trial court denied Mr. Clemens’s request for a “tax consequence adjustment” or “gross up” to compensate for increased income-tax liability resulting from his receipt of his back-pay award in one lump sum. On appeal, the Ninth Circuit noted that back pay is taxable and that a lump-sum back pay award will sometimes push a plaintiff into a higher tax bracket than he would have occupied had he received his pay incrementally over several years. The Ninth Circuit decided to join the Third, Seventh, and Tenth Circuits, and reject the D.C. Circuit, in concluding that a tax consequence adjustment is available as part of the district court’s equitable relief powers.

Employee who went on military service leave can recover for denial of bonus.

November 2, 2017, Ninth Circuit Court of Appeals, Dale Huhmann v. Federal Express Corporation: Mr. Huhmann was hired by FedEx in 2001 to pilot a “narrow-body” aircraft. Mr. Huhmann was later selected for training to be a first officer on a “wide-body” aircraft that would qualify him for a higher pay grade. Before the training could begin, Mr. Huhmann was mobilized for active Air Force duty. While on duty, FedEx and Mr. Huhmann’s labor union negotiated a signing bonus for pilots employed (including those on military leave) on the day a collective bargaining agreement was signed. The amount of the bonus would be determined by the highest crew status the pilot held. After completing his military service, Mr. Huhmann returned to active pay status and received a signing bonus based on his status as a narrow body crew member. Mr. Huhmann sued Fedex alleging a violation of the Uniformed Services Employment and Reemployment Rights Act by failing to pay him the signing bonus based on a wide-body crew member status. The trial court found in favor of Mr. Huhmann after deciding that it was reasonably certain that Mr. Huhmann would have become a wide-body crew member prior to the date the collective bargaining agreement was signed if he had not gone on military leave. On appeal, the Ninth Circuit concluded that the trial court properly analyzed whether Mr. Huhmann’s military status was a substantial or motiving factor for an adverse employment action based on him receiving the smaller bonus after concluding that he was entitled to the higher bonus based on the “reasonably certain” test. This test applies to any denial of “reemployment” or “benefit of employment,” which includes a bonus.

Employee fails to show an implied contract to not terminate without good cause.

November 1, 2017, First Appellate District, Steve Jameson v. Pacific Gas and Electric Company: Mr. Jameson sued his employer, alleging PG&E fired him in violation of an implied-in-fact employment contract not to terminate his employment without good cause. The trial court dismissed the case (summary judgment) on the basis that Mr. Jameson did not have evidence to show an implied employment contract. Mr. Jameson’s claims were premised on his position that PG&E’s progressive discipline guidelines and code of conduct, his reliance on those policies, and his prior tenure with PG&E created an implied contract not to terminate his employment without just cause. On appeal, the First District decided it need not address this premise because, even if true, Mr. Jameson has not shown facts to show he was terminated without just cause. The appellate court determine that the issue was whether PG&E’s decision to terminate was reached honestly, after an appropriate investigation and for reasons that were not arbitrary or pretextual. The First District concluded that PG&E had evidence that it acted with good faith in making the decision to terminate, following an investigation that was appropriate under the circumstances, which gave it reasonable grounds for believing Mr. Jameson had engaged in misconduct. The court of appeal rejected Mr. Jameson’s expert who opined that the investigation was flawed. An employer need not undertake a precise type of investigation as long as the process was fair.

Continuance to oppose summary judgment justified.

October 30, 2017, First District Court of Appeal, Richard Denton v. City and County of San Francisco: Mr. Denton filed a lawsuit against his employer, San Francisco, and his supervisor. Defendants sought dismissal of the case (motion for summary judgment), and in the weeks leading up to the hearing on the motion the parties engaged in settlement discussions. That led to a settlement and Mr. Denton’s then-counsel filed a notice of conditional settlement. A week later, after Mr. Denton had discharged his attorney, defendants’ counsel successfully persuaded the trial court to have the settlement set aside, even though Mr. Denton twice assured defendants’ counsel that he was not backing out of the settlement. Four days later, the motion was heard at which Mr. Denton, representing himself, insisted the parties had a settlement and requested a continuance so he could oppose the motion. The trial court denied the request. On appeal, the First District found that the trial court acted arbitrarily or capriciously. It also concluded that Mr. Denton had good cause for a continuance of the motion because San Francisco refused to recognize a settlement it had previously asserted to exist, and from which Mr. Denton had not withdrawn, and Mr. Denton was justifiably surprised that the motion was being heard and needed additional time to seek new counsel to help oppose the motion if he could not settle.

Unenforceable arbitration agreement.

October 26, 2016, First District Court of Appeal, Maya Baxter v. Genworth North America Corporation: Ms. Baxter sued her former employer for wrongful termination. Genworth moved to compel arbitration of the dispute. The trial court concluded that the parties’ arbitration agreement was unenforceable on grounds of unconscionability. On appeal, the First District agreed with the trial court that the agreement was procedurally unconscionable because Ms. Baxter had to accept it as a condition of continued employment (contract of adhesion). The appellate court also found the agreement to be substantively unconscionable. There was a one-sided limitation on employees obtaining information outside the formal discovery process, and default limitations on discovery could only be exceeded for “good and sufficient cause” (a higher standard than “showing of need”). The limits were low: for example, only two depositions, and Ms. Baxter demonstrated that she would need six to ten depositions. In addition, the statute of limitations to commence arbitration was one year as compared to up to three years in court after considering the administrative requirement to file with the Department of Fair Employment and Housing and a potential investigation by that agency. Finally, the arbitration claim process with its short deadlines had the practical effect of limiting an employee’s right to seek remedies with the DFEH.

Posted by deanroyerlaw in Employment