Claim preclusion

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

October 2017 employment law decisions

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.

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.

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.

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.

Posted by deanroyerlaw in Employment