June 2018 employment law decisions

Wage payments based on rounding off hours worked to the nearest quarter hour approved.

June 25, 2018, Second District Court of Appeal, AHMC Healthcare v. Superior Court: Employees of AHMC Healthcare sued their employer for failure to pay wages and other claims. California law requires employers to pay their employees for all time the employees are at work and subject to the employers’ control. The issue was whether an employer’s use of a payroll system that automatically rounded employee time up or down to the nearest quarter violates the law. The Second District reviewed federal courts interpreting federal law on the issue, which have approved computation of worktime by rounding to the nearest quarter of an hour provided that the rounding system will not result, over a period of time, in failure to compensate employees for all time actually worked. It then noted that California’s wage laws are patterned on federal laws and California courts may look to federal court decisions for guidance. The appellate court pointed to two recent federal decisions where a slight majority of employees losing time over a defined period was not sufficient to invalidate an otherwise neutral rounding practice. The Second District concluded that the payroll system did not violate the law because it was neutral on its face (i.e., applied to all employees) and in practice (at one location, a minority of employees lost time but AHMC compensated employees as a whole for 1,378 hours not worked; at a second location, a slight majority of employees lost time but AHMC compensated employees as a whole for 3,875 hours not worked).

Trial court erred by excluding testimony regarding text messages and “me too” evidence in harassment case.

June 21, 2018, Fourth District Court of Appeal, Natasha Meeks v. Autozone, Inc.: Ms. Meeks sued Autozone and one of its employees for sexual harassment. The case went to trial and the jury found in favor of the defendants. On appeal, Ms. Meeks challenged rulings by the trial court excluding evidence from the trial. One ruling concerned text messages from the alleged harasser sent to Ms. Meeks that were of a sexual nature. Because neither Ms. Meeks nor the alleged harasser had possession of the messages, the trial court excluded testimony at trial regarding the specific content of the messages, including words and pictures. The Fourth District rejected the trial court’s justification for its ruling on grounds of fairness because Ms. Meeks’s memory of the content of the messages was not speculation. Furthermore, the alleged harasser could dispute Ms. Meeks’s testimony regarding the specific content by testifying based on his memory. Finally, evidence of the words and pictures was not subject to the hearsay rule because it would not be offered for the truth of the content, but rather to show that the alleged harasser sent the messages. A second ruling excluded evidence concerning sexual harassment of other employees by the alleged harasser (“me to” evidence). The Fourth District concluded that the trial court’s ruling reflected a misunderstanding of the law which allows for admission of this type of evidence.

Administrative decision to uphold termination precludes civil case for discrimination and harassment.

June 21, 2018, Fourth District Court of Appeal, Carol Wassmann v. South Orange County Community College District: Ms. Wassmann sued the District for discrimination (age and race) and harassment. The trial court dismissed the case (summary judgment) on grounds an administrative proceeding provided by the District that upheld Ms. Wassmann’s termination precluded the civil case. On appeal, the Fourth District agreed that the discrimination and harassment claims were barred by the adverse administrative decision. The proceeding was sufficiently judicial in character (e.g., a hearing before an administrative law judge) and Ms. Wassmann could have objected to her proposed termination on grounds of discrimination. Because Ms. Wassman was unsuccessful in getting the administrative decision reversed (writ proceeding) she could not pursue her claims in court.

Dismissal of discrimination, harassment, and retaliation case upheld.

June 11, 2018, Ninth District Court of Appeals, Patricia Campbell v. State of Hawaii Department of Education: Ms. Campbell worked as a high school teacher. She sued her employer claiming discriminatory treatment, hostile work environment, and retaliation for complaining of harassment. The trial court dismissed the case (summary judgment). On appeal, the Ninth Circuit affirmed the dismissal of the discrimination claim on grounds there was no evidence that she was subjected to an adverse action. Ms. Campbell pointed to the Department’s loss of a performance evaluation but she did not identify any evidence to show that the loss could have materially affected the terms or conditions of her employment. In addition, the appellate court rejected Ms. Campbell’s assertion that the Department’s decision to investigate her was an adverse action because the Department allowed her to continue to teach without any changes both during and after the investigation despite findings of misconduct. Furthermore, the Ninth Circuit concluded that the Department’s denial of Ms. Campbell’s request to transfer to another school was not an adverse action because the evidence did not support a finding that she had a right to a transfer because she failed to go through the proper procedures. Finally, the court of appeals affirmed the dismissal of the discrimination claim on grounds that Ms. Campbell did not present any evidence to show that similarly-situated employees were treated more favorably. As for the hostile work environment claim, the Ninth Circuit affirmed the dismissal because the evidence showed the Department took prompt corrective measures regarding the alleged student conduct directed at Ms. Campbell by investigating Ms. Campbell’s complaints and disciplining the students it found to have engaged in misconduct. With respect to the retaliation claim, the appellate court concluded that the investigation could be an adverse action under the broader standard for retaliation claims. Nevertheless, it affirmed the dismissal on grounds there was no evidence to show that the Department’s stated reason for the investigation—receipt of multiple allegations of misconduct—was a pretext for retaliation.

Release of worker’s compensation claim did not also release discrimination claims.

June 8, 2018, Fourth District Court of Appeal, Adrian Camacho v. Target Corporation: Mr. Camacho filed a case against his employer for discrimination, harassment, failure to prevent harassment and discrimination, retaliation, and related other claims. Mr. Camacho also filed a claim for worker’s compensation benefits. The trial court dismissed the discrimination case on grounds language in a compromise and release agreement form used to settle the worker’s compensation action constituted a release of the discrimination claims. On appeal, the Fourth District reviewed the established rule that discrimination claims are not subject to the worker’s compensation system and may be pursued as civil actions. Target contended that language in an addendum to the form releasing “any other claims for reimbursement, benefits, damages, or relief of whatever nature” resulted in Mr. Camacho releasing his discrimination claims. The appellate court disagreed. There was no language in the form or addendum referring to claims outside of the worker’s compensation system. When the form and addendum were considered as a whole, the language upon which Target relied did not satisfy the “clear and non-technical language” requirement for releasing claims beyond worker’s compensation.

Posted by deanroyerlaw in Employment

April and May 2018 employment law decisions

Employees may pursue representative claims as long as they are personally affected by at least one of the alleged violations.

May 23, 2018, Sixth District Court of Appeal, Forrest Huff v. Securitas Security Services USA, Inc.: Mr. Huff filed representative claims against his former employer under the Private Attorneys General Act of 2004 (PAGA) alleging violations concerning the pay practices of Securitas. The trial court concluded that Mr. Huff could pursue all of the claims even if he could not prove that he was personally affected by one of the violations. PAGA claims allow private parties to sue for civil penalties that previously were only recoverable by a state agency (Labor Commissioner). When employees bring representative actions under PAGA, they do as a proxy or agent of the agency, not other employees. On appeal, Securitas contended that Mr. Huff could only pursue PAGA claims for violations that personally affected him. The appellate court reviewed the law, which states that an “aggrieved employee” who may file a PAGA claim is “any person who was employed by the alleged violator and against whom one or more of the alleged violations was committed.” (Labor Code section 2699(c).) The Sixth District concluded that this means a PAGA claim may be brought by a person employed by the alleged violator and affected by at least one of the violations alleged in the case.

Representative claims for pay statement violations do not require proof of injury or a knowing and intentional violation.

May 22, 2018, Third District Court of Appeal, Terri Raines v. Coastal Pacific Food Distributors, Inc.: Ms. Rains sued her former employer alleging, among other claims, a representative claim under PAGA concerning pay statement violations. The trial court dismissed the case (summary judgment) after deciding that Ms. Rains had not suffered an injury as required for an individual claim because the missing hourly overtime rate could be determined from the pay statement by simple math. On appeal, the Third District reviewed the pay statement law, which requires a number of items in pay statements including all applicable hourly rates in effect during the pay period. The parties agreed that Ms. Raines’s statements did not show the overtime hourly rate. The appellate court noted that there are three different remedies for a pay statement violation: actual damages or statutory ($50 per pay period) penalties, injunctive relief, and civil penalties ($250 per pay period for an initial violation under PAGA). The Third District determined that a civil penalty was available not just when no pay statement is provided but also when the pay statement violates the law in some way. Previous decisions by federal courts had come to opposing conclusions as to whether a party with a PAGA claim concerning pay statement violations must prove injury. In addition, the First District Court of Appeal had recently decided, in Lopez v. Friant & Associates, LLC (2017) 15 Cal.App.5th 773, that there was no injury or knowing and intentional requirement for a PAGA claim. The Fourth District agreed with the First District.

UC whistleblowers may file suit after adverse administrative decisions.

May 14, 2018, Fourth District Court of Appeal, Carl Taswell v. The Regents of the University of California: Dr. Taswell sued the Regents alleging he was retaliated against for whistleblowing activities regarding patient safety during his employment by UC Irvine. The trial court dismissed the case (summary judgment) after deciding that Dr. Taswell’s claims were barred by a University decision denying his grievance challenging his termination and his failure to overturn that decision (by writ of mandamus) before filing suit. The Fourth District reviewed the general principle that an administrative decision that is of sufficient judicial character is binding and precludes a subsequently filed lawsuit unless it is reversed by writ. It also reviewed two prior California Supreme Court decisions that established the rule that civil servants and California State University employees could file whistleblower retaliation claims in court after receiving adverse administrative decisions concerning the same claims. The appellate court then turned to the section of the whistleblower retaliation law that applies to UC employees (Government Code section 8547.10), which has the same language that applies to CSU employees (authorizing a civil suit if the employer has not satisfactorily addressed the administrative complaint). The Fourth District concluded that the same interpretation applies to UC employees: a court action is permitted if the employer does not address the complaint to the employee’s satisfaction, e.g., finding against him. The court of appeal also reviewed Dr. Taswell’s claims under separate whistleblower laws (Labor Code section 1102.5 and Government Code section 12653). It determined that although Dr. Taswell was required to “exhaust administrative remedies” (by filing the grievance) the language of the laws clearly reflected a legislative intent to permit a court action. As a result, Dr. Taswell could pursue his claims under those laws as well without overturning the adverse grievance decision.

No failure to engage in interactive process claim under federal law.

May 11, 2018, Ninth Circuit Court of Appeals, Danny Snap v. Burlington Northern Santa Fe Railway Company: Mr. Snapp sued his former employer alleging a failure to accommodate under the federal Americans with Disabilities Act. The jury found in favor of Burlington. Mr. Snapp appealed. One issue was whether the trial court improperly rejected a proposed jury instruction that would have imposed liability on Burlington for failing to engage in the interactive process regardless of the availability of a reasonable accommodation. The Ninth Circuit reviewed its prior decision, Barnett v. U.S. Air, Inc. (9th Cir. 2000) 228 F.3d 1105, in which it decided that if an employer receives notice of an employee’s need for an accommodation and fails to engage in the interactive process (employer and employee come to understand the employee’s abilities and limitations, the employer’s needs for various positions, and a possible middle ground for accommodating the employee), the employer is liable if a reasonable accommodation would have been possible. The appellate court explained this means there is no separate claim for failing to engage in the interactive process (unlike under California law); rather, the claim is for discrimination in denying an available and reasonable accommodation. Previous decisions established that at the summary judgment stage the employer has the burden to prove the unavailability of a reasonable accommodation. The Ninth Circuit rejected Mr. Snapp’s contention that the summary judgment standard applied at trial.

No due process claim for probationary employee.

May 10, 2018, Ninth Circuit Court of Appeals, Richard A. Palm v. Los Angeles Department of Water and Power: Mr. Palm filed suit alleging his employer terminated his employment in a probationary position without due process of law in violation of the Fourteenth Amendment. The trial court dismissed his case (motion to dismiss) without leave to amend on grounds Mr. Palm could not state a due process claim because he lacked a property interest in his position. On appeal, the Ninth Circuit recited the standard that Mr. Palm had to demonstrate a constitutionally protected property interest in his position to pursue a due process claim. The appellate court reviewed the Los Angeles Charter and Civil Service Rules. During probation Los Angeles could terminate Mr. Palm based on a subjective finding that he had demonstrated unsatisfactory performance. In a previous decision, the Ninth Circuit concluded that an employer’s ability to determine on a purely subjective basis whether a probationary employee had performed satisfactorily undercuts any expectation of continued employment. Also, during probation Mr. Palm had no right of appeal of a termination to a Board of Civil Service Commissioners. The Ninth Circuit decided that probationary positions held by city employees are not vested with a protected property interest.

Failure to accommodate and engage in interactive process where the employer terminated the probationary employee while on leave on grounds the employee’s performance had not been reviewed.

May 3, 2018, Fourth District Court of Appeal, Marisa Hernandez v. Rancho Santiago Community College District: Ms. Hernandez sued the District under California law for failure to make reasonable accommodation for her medical condition and failure to engage in an interactive process. Ms. Hernandez was hired in 2013 with a one-year probationary period and performance reviews due at three, seven, and 11 months; after 12 months she would become a permanent employee. Her performance was not evaluated after three or seven months. Eight months into the probationary period, Ms. Hernandez went on temporary disability leave to have surgery for an injured suffered during a previous employment with the District. She was scheduled to return to work around the 12-month anniversary of her hiring date. The District terminated her while she was on leave because her performance had not been reviewed. The case went to trial where the court found in Ms. Hernandez’s favor and awarded her $723,746 in damages. On appeal, the District asserted that it had to terminate Ms. Hernandez’s employment during her probationary period because if it had not she would have become a permanent employee without having had her performance evaluated. The Fourth District agreed that the District accommodated Ms. Hernandez by giving her time off for the surgery but it was not reasonable when it included the consequence that she would lose if her job if she took leave. The appellate court rejected the District’s use of the one-year probationary period as justification for the termination. The District could have deducted the leave time from Ms. Hernandez’s probationary period so that she received a full 12-month period of time in which the District could have evaluated her performance. The Fourth District also affirmed the trial court’s finding of a violation of the good faith interactive process requirement because Ms. Hernandez was told she could not be fired for taking leave but was fired when she took the leave.

Broad employee standard established for wage order violations.

April 30, 2018, Supreme Court of California, Dynamex Operations West, Inc. v. Charles Lee: Two delivery drivers sued Dynamex on their own behalf and on behalf of a class of similarly situated drivers alleging misclassification as independent contractors rather than employees, which led to a violation of a California wage order (which imposes obligations relating to the minimum wages, maximum hours, and basic working conditions such as minimally required meal and rest breaks). The issue was which standard applies, under California law, in determining whether workers should be classified as employees or as independent contractors for purposes of California wage orders: the multifactor standard set forth in S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341, or the “to suffer or permit to work” standard described in Martinez v. Combs (2010) 49 Cal.4th 35. The California Supreme Court concluded that the latter was the standard and that the suffer or permit to work definition must be interpreted broadly to treat as employees all workers who would ordinarily be viewed as working in the hiring business. In determining whether a worker is properly considered the type of independent contractor to whom the wage order does not apply, it is appropriate to look to the “ABC” test. Under this test, a worker is properly considered an independent contractor to whom a wage order does not apply only if the hiring entity establishes: (A) that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact; (B) that the worker performs work that is outside the usual course of the hiring entity’s business; and (C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.

Time to file federal discrimination claims starts when the administrative agency actually provides the right-to-sue notice.

April 27, 2018, Ninth Circuit Court of Appeals, Taylor Scott v. Gino Morena Enterprises, LLC: Ms. Scott sued her former employer alleging sexual harassment and retaliation. The trial court dismissed the case (summary judgment) after deciding that Ms. Scott’s claims were time-barred. Ms. Scott had to file a charge with a state or federal agency (or both) before filing suit. Ms. Scott filed a charge with California Department of Fair Employment and Housing (DFEH) on November 13, 2013, received a right to sue from the DFEH on November 25, 2013, and filed suit on November 20, 2014 under California law. The DFEH “dual-filed” the charge with the federal Equal Employment Opportunity Commission (EEOC) on November 13, 2013 and the EEOC did not issue its right-to-sue notice until June 3, 2015. On June 17, 2015, the trial court allowed Ms. Scott to amend her complaint to assert federal claims. The issue was whether the 90-day period to file a case begins when Ms. Scott received the right-to-sue notice from the EEOC or 180 days after the charge was filed with the EEOC regardless of when the EEOC issued the notice. The appellate court determined that while the law governing the issue contemplates that the EEOC gives notice sometime after 180 days after the charge is filed, the 90-day period begins when the EEOC actually gives the notice.

Posted by deanroyerlaw in Employment

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