October 2017 employment law decisions

Independent contractor versus employee

October 5, 2017, First District Court of Appeal, Darnice Linton v. DeSoto Cab Company, Inc.:  Mr. Linton alleged DeSoto Cab Company violated certain wage and hour laws by requiring him to pay a set fee (“gate fee”) in exchange for obtaining a taxicab to drive for each of his shifts. The Labor Commissioner found in his favor. DeSoto appealed to the California Superior Court. After a bench trial, the court concluded Mr. Linton was not entitled to recover the gate fees because he was an independent contractor and not an employee of DeSoto. The trial court reasoned that decisions setting forth the test for independent contractor versus employee—S.G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341, Yellow Cab Cooperative, Inc. v. Workers’ Comp. Appeals Bd. (1991) 226 Cal.App.3d 1288, and Santa Cruz Transportation, Inc. v. Unemployment Ins. Appeals Bd. (1991) 235 Cal.App.3d 1363—are not controlling because they were decided in workers’ compensation or unemployment insurance benefits cases. The First District determined that in cases involving workers’ compensation and other protective, remedial legislation, courts have applied a control of work details factor with deference to the purposes of the protective legislation. The appellate court concluded that the goal of both workers’ compensation law and the Labor Code’s wage and hour provisions is to protect a class of workers who otherwise would not enjoy statutory protections. Therefore, the Borello case applied. The First District also found that the trial court misconstrued the decision in Ayala v. Antelope Valley Newspapers, Inc. (2014) 59 Cal.4th 522—another case concerning the test for independent contractor versus employee—as disavowing Borello. The appellate court concluded that there can be no doubt that Borello sets forth the common law test now applicable in the courts, and that the test involves a multipurpose inquiry that looks not only at the right to control work details, but also at additional secondary factors. The First District observed that multiple appellate decisions have applied Borello to wage and hour cases and the Borello decision itself indicates that its test applies in those cases. Finally, the appellate court concluded that the trial court failed to apply the presumption of employment and did not shift the burden of proof on DeSoto to dispute that relationship.

Retaliation claim affirmed on appeal

October 11, 2017, Ninth Circuit Court of Appeals, Jose Flores v. City of Westminster: Three Latino police officers sued their employer and won at trial. The jury awarded a total of $3,341,000 in general and punitive damages, and the court awarded $3,285,673 in attorney fees, $40,028.49 in expert fees, and $18,684.12 in costs.  The officers alleged that the City of Westminster and current and former Police Chiefs discriminated and retaliated against them. On appeal, the City challenged the verdict in favor of Officer Flores for his retaliation claim under California law (Fair Employment and Housing Act). The Ninth Circuit concluded that the jury reasonably found adverse employment action taken against Officer Flores because after he filed a discrimination complaint he suffered actions that would impair a reasonable employee’s job performance or prospects for advancement: removal from a list of officers chosen to mentor and train new recruits, negative Supervisor’s Log entries, and his first written reprimand. The appellate court also determined there was evidence that the discrimination complaint substantially motivated the adverse action because the City offered no evidence to show the removal from the list was justified, workplace policies were inconsistently applied to Officer Flores, and there were multiple actions taken against him.

Workers’ compensation decision bars court case based on the same claim

October 12, 2017, Fifth District Court of Appeal, Va Ly v. County of Fresno: Three Laotian correctional officers filed suit against the County for racial and national origin discrimination, harassment, and retaliation while simultaneously pursuing workers’ compensation remedies. In the workers’ compensation proceedings, the administrative law judges denied the officers’ claims after finding the County’s actions were non-discriminatory, good faith personnel decisions. The trial court then dismissed the court case on grounds it was barred by the decision in the workers’ compensation case. On appeal, the Fifth District noted that workers’ compensation is ordinarily the exclusive remedy of an employee who is injured while performing services growing out of and incidental to her employment; racial or national origin discrimination and harassment is not a normal incident of employment; and, therefore, a claim for damages under California employment discrimination law is not barred by the workers’ compensation act. Nevertheless, California law allows an injured employee to choose to recover for psychiatric injury caused by racial or national origin discrimination or harassment by means of a workers’ compensation claim. (Lab. Code, § 3208.3(b)(1).) In such cases, an employer may assert as a defense that the psychiatric injury “was substantially caused by a lawful, nondiscriminatory, good faith personnel action.” The officers contended that they could pursue their claims in both venues because they involved different “causes of action.” The appellate court reviewed the doctrine of “claim preclusion,” under which a party’s cause of action is comprised of a “primary right.” The Fifth District concluded that the officers’ causes of action in both the workers’ compensation proceeding and in court was the primary right to work in an environment free of discrimination, harassment, and retaliation. Therefore, the decision in the workers’ compensation case barred a “second bite of the apple” in court.

Union arbitration versus Labor Code claim in court

October 17, 2017, First District Court of Appeal, George Melendez v. San Francisco Baseball Associates LLC: Mr. Melendez contended that he and other security guards were employed “intermittingly” for specific job assignments (baseball games or other events) and were entitled to but did not receive immediate payment of their final wages upon the end of each assignment. The Giants asserted that payment immediately after each event was not required because a collective bargaining agreement between the Giants and the security guards defines the guards as “year-round employees who remain employed with the Giants until they resign or are terminated pursuant to the CBA.” The Giants moved to compel arbitration or to dismiss the action under the arbitration provision of the collective bargaining agreement. The First District decided that the final wages claim did not come within the collective bargaining agreement because the agreement defines a grievance as a dispute regarding the interpretation, application, or alleged violation of any of the terms of the agreement. Mr. Melendez’s case did not allege a violation of the agreement, but, rather, the Labor Code. Nevertheless, arbitration was required. The underlying issue was whether the guards were “discharged” within the meaning of Labor Code section 201. In order to determine whether the conclusion of a baseball game or season or other event constituted a discharge, it was necessary to first determine the terms of employment. The appellate court found that although no provision of the collective bargaining agreement provided an explicit answer, the duration of the employment relationship must be derived from what is implicit in the agreement. Because interpretation of the collective bargaining agreement was required an arbitration was the exclusive remedy.

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