2018 Employment Law Update | Part Two

CASE LAW UPDATE

WAGE AND HOUR

Mendoza v. Nordstrom, Inc. 865 F.3d 1261 (9th Cir. 2017)

In response to three questions asked of it by the United States Court of Appeals for the Ninth Circuit, the California Supreme Court opined as follows:

1. A day of rest is guaranteed for each workweek. Periods of more than six consecutive days of work that stretch across more than one workweek are not per se prohibited.

2. The exemption for employees working shifts of six hours or less applies only to those who never exceed six hours of work on any day of the workweek. If on any one day an employee works more than six hours, a day of rest must be provided during that workweek, subject to whatever other exceptions might apply.

3. An employer causes its employee to go without a day of rest when it induces the employee to forgo rest to which he or she is entitled. An employer is not, however, forbidden from permitting or allowing an employee, fully apprised of the entitlement to rest, independently to choose not to take a day of rest.

With these principles in mind, the Ninth Circuit held that the two employees in this case who sought to lead the PAGA action did not work more than six consecutive days in any one Nordstrom workweek, so their individual claims under California Labor Code §§ 551 and 552 were properly dismissed. In response, the two plaintiffs (or, more accurately, their lawyers) argued that the case should be remanded to the district court in order to permit a new PAGA representative who did suffer violations under the statute to “step forward” and continue litigating the case. The Ninth Circuit disagreed and affirmed dismissal of the case by the district court.

Marsh v. J. Alexander’s LLC, 869 F.3d 1108 (9th Cir. 2017)

Alec Marsh, who worked as a server for J. Alexander’s, alleged violation of the Fair Labor Standards Act (“FLSA”) based upon the employer’s failure to pay him the federal minimum wage of $7.25 per hour. Marsh further alleged that he received more than $30 per month in tips and that J. Alexander’s took a tip credit (a credit against the minimum wage amount), which was illegal because Marsh spent time at work on a range of duties other than serving customers. Because Marsh failed to allege that his average hourly wage (including tips) across any given workweek was below the federal minimum wage, the district court dismissed Marsh’s claim and denied him leave to amend his complaint. The United States Court of Appeals for the Ninth Circuit reversed, holding that while the district court was correct in refusing to defer to the Department of Labor’s interpretation of the operative regulation, the lower court should have granted plaintiff leave to amend his complaint.

Vaquero v. Stonehedge Furniture, LLC., 2017 WL 776635 (Cal. Ct. App. 2017)

Ricardo Bermudez Vaquero and Robert Schaefer, who were employed as sales associates for Stoneledge Furniture, filed a class action, alleging that Stoneledge’s commission pay plan violated California law because it did not provide separate compensation to employees for any non-selling time such as time spent in meetings, attending certain types of training sessions and during rest periods. The trial court granted summary judgment in favor of Stoneledge, but the Court of Appeal reversed, holding that the applicable Wage Order requires employers to separately compensate covered employees for rest periods if the compensation plan does not already include a minimum hourly wage for such time.

Lopez v. Friant & Associates, LLC, 15 Cal. App. 5th 773 (2017)

In Lopez v. Friant & Associates, LLC, the Court of Appeals made a clear distinction between claims brought under the Labor Code’s Private Attorney’s General Act of 2004 (PAGA; Labor Code § 2698 et seq.) and Labor Code § 226(a) or 226(e). In this case, the plaintiff filed an action to recover civil penalties under the Labor Code’s Private Attorney’s General Act of 2004 for his employer’s failure to include the last four digits of its employees’ Social Security numbers on itemized wage statements in violation of Labor Code §226(a)(7). The employer claimed that they were unaware of the omission. On that basis, they argued that the court should not award penalties for its inadvertent wage statement error. The trial court agreed with the employer, but the Court of Appeals reversed. In doing so, the appellate court pointed to the fact that the complaint only sought civil penalties. Labor Code §226(e), which provides for individual damages, not a civil penalties, is what requires “knowing and intentional” behavior. Contrarily, PAGA does not require such a showing.

DISCRIMINATION

Rizo v. Yovino, 2017 WL 1505068 (9th Cir. 2017)

Upon discovering that she was being paid less than her male counterparts for the same work, plaintiff, Aileen Rizzo brought suit for violations of the Equal Pay Act, Title VII of the Civil Rights Act of 1964, and the California Fair Employment and Housing Act. The defendant in this action, Fresno County, conceded to the wage differential, but argued that it was based on a factor other than sex. To support their argument, the County demonstrated that its pay structure was based on employees’ prior salaries. The Ninth Circuit agreed with the County, but limited how the argument can be applied in future cases. The Ninth Circuit held that prior salary can be used a defense if it is proved to be reasonable and effectuated a business policy. The case was remanded for the lower court to determine whether the County used prior salary reasonably.

Bareno v. San Diego Community College Dist., 7 Cal. App. 5th 546 (2017)

Leticia Bareno, who worked as an assistant at San Diego Miramar College, was terminated after she failed to return from a medical leave of absence that she took pursuant to the California Family Rights Act (“CFRA”). During the course of Bareno’s employment, she received several disciplinary warnings for, among other things, excessive absences, workplace disagreements, incompetence, inefficiency and neglect of duty. On February 19, 2013, the college disciplined Bareno with a three-day unpaid suspension for additional performance issues; the suspension ran from February 20 through February 22 (a Friday). At 4:30 a.m. on Monday, February 25, Bareno called her supervisor and claimed to be “sick, depressed, stressed” and said she needed to go to the hospital. She subsequently provided a “work status report” from Kaiser indicating that she needed to take a medical leave from February 25 through March 1. Bareno emailed a second “work status report,” placing her “off work” through March 8, which her supervisor denied receiving. Bareno failed to show up for work on Monday, March 4, and on Friday, March 8, the college sent her a letter indicating that her unauthorized absences constituted a voluntary resignation. Although the trial court granted summary judgment to the employer, the Court of Appeal reversed, holding that an employer is obligated to “inquire further” about an employee’s need for CFRA leave before terminating employment and citing the CFRA regulations that give an employee up to 15 days to provide necessary certification of the need for a medical leave. The Court further held that Bareno had submitted sufficient medical certification to support her need for medical leave.

Nakai v. Friendship House Ass’n of Am. Indians, Inc., 15 Cal. App. 5th 32 (2017)

Orlando Nakai was employed for over 20 years by Friendship House, a drug and alcohol rehabilitation program providing treatment services to Native Americans. His employment was terminated by the program’s CEO (who also happened to be his mother-in-law) after his wife informed the CEO that Nakai had a gun and was angry at Friendship House employees and that she had obtained a restraining order against him. The trial court granted summary judgment in favor of Friendship House, and the Court of Appeal affirmed, holding that Nakai was “treated differently not because he was married, but because he happened to be married to the CEO’s daughter – a political problem, not a marital discrimination problem. Further, Nakai failed to show that the employer’s stated reasons for the termination – the gun and the TRO, etc. – were pretext for marital status discrimination. Finally, the Court held that Friendship House was not contractually or statutorily required to conduct an investigation prior to terminating Nakai’s employment, which was terminable at will.

Aviles-Rodriguez v. Los Angeles Cmty. Coll. Dist., 2017 WL 3712199 (Cal. Ct. App. 2017)

Guillermo Aviles-Rodriguez was employed as a professor for the Los Angeles Community College District (“LACCD”). Although Aviles-Rodriguez was notified on March 5, 2014 that his tenure had been denied by the Board of Trustees of the LACCD, his employment did not end until June 30, 2014, which was the last day of the academic year. Aviles-Rodriguez filed his complaint with the DFEH on June 29, 2015, alleging racial discrimination. The LACCD demurred to the complaint that was later filed in court on the ground that Aviles-Rodriguez had failed to file his DFEH complaint within one year “from the date upon which the alleged unlawful practice… occurred.” The trial court agreed and dismissed the lawsuit, but the Court of Appeal reversed, holding that the one-year statute of limitations for filing a complaint with the DFEH began to run on the last day of his employment and not on the earlier date on which he learned of the denial of tenure.

Cortez v. Doty Bros. Equipment Co.,

In Cortez v. Doty Bros. Equipment Co., the plaintiff brought claims under IWC wage order 16, Labor Code § 203, and Business and Professions Code §1700 (unfair competition). The parties previously entered into a collective bargaining agreement that called for arbitration any claim arising from IWC Wage Order 16. Pursuant to that agreement, defendant employer moved for the entire suit to be arbitrated. Given that the plaintiff brought various wage order and labor code claims, not just Wage Order 16, he argued that the CBA did not apply to his suit. The appellate court disagreed, and concluded that the Labor Code claims arising from Wage Order 16 were subject to arbitration. However, the other claims that are based on a statute, “not informed by, referenced in, or even relevant to, the wage order disputes they clearly and unmistakably agreed to arbitrate” were appropriately filed in the court.

Alamillo v. BNSF Ry. Co., 2017 WL 3648514 (9th Cir. 2017)

Antonio Alamillo, who worked as a locomotive engineer for BNSF, missed several calls and was suspended on at least two occasions before being terminated. Around the same time, Alamillo began to suspect he was experiencing a medical problem and was soon diagnosed with obstructive sleep apnea (“OSA”) for which he was prescribed a CPAP machine. Alamillo sued for disability discrimination. The district court granted summary judgment to BNSF, and the United States Court of Appeals for the Ninth Circuit affirmed, holding that Alamillo had failed to establish a prima facie case of disability discrimination. There was no evidence that his OSA was a substantial motivating reason for the decision to terminate his employment because BNSF did not know that Alamillo was allegedly disabled when it made the decision to initiate disciplinary proceedings against him. Further, even if Alamillo had established a prima facie case of discrimination, BNSF’s asserted reason for terminating Alamillo was his recurrent absenteeism, and there was no evidence that that reason was pretext for discrimination. The Court also affirmed dismissal of Alamillo’s claims for failure to reasonably accommodate his alleged disability (BNSF was not required to offer “leniency” as an accommodation) and failure to engage in the interactive process because no reasonable accommodation could have cured his prior absenteeism.

Merrick v. Hilton Worldwide, Inc., 2017 WL 3496030 (9th Cir. 2017)

Sixty-year-old Charles Merrick was terminated from his job as Director of Property Operations at the Hilton La Jolla Torrey Pines Hotel as part of a reduction in force. Merrick sued for age discrimination under the Fair Employment and Housing Act, among other things. The district court granted summary judgment in favor of Hilton, and the United States Court of Appeals for the Ninth Circuit affirmed, holding that under the three-part McDonnell Douglas test Merrick had succeeded in establishing a prima facie case of age discrimination and Hilton had established a legitimate, nondiscriminatory reason for the termination (having provided an individualized reason for terminating Merrick). The burden then shifted to Merrick to establish that the reasons Hilton had articulated were pretext for age discrimination, and Merrick failed to do that.

Featherstone v. Southern Cal. Permanente Med. Grp., 2017 WL 1399709 (Cal. Ct. App. 2017)

Ruth Featherstone alleged that her former employer (SCPMG) discriminated against her based on a “temporary disability” that was caused by an adverse drug reaction, which resulted in an “altered mental state.” During this alleged altered mental state, Featherstone resigned orally from her job in a telephone conversation with her supervisor so that she could “do God’s work” and then, a few days later, confirmed her resignation in writing. When Featherstone emerged from the altered mental state (which caused her to take off all of her clothes and walk around naked in front of others, swear at family members and take showers for no reason), she sought to rescind her resignation, which SCPMG declined to permit her to do. Featherstone alleged that SCPMG acted with discriminatory animus by refusing to allow her to rescind her resignation. Although Featherstone was eligible for rehire, she never reapplied for her position. The trial court granted summary judgment in favor of SCPMG, and the Court of Appeal affirmed, holding that the refusal to allow a former employee to rescind a resignation is not an adverse employment action under the Fair Employment and Housing Act. The Court further held that SCPMG was not contractually obligated to permit the rescission of an at-will employee’s resignation and affirmed summary adjudication of the remainder of Featherstone’s related claims, including failure to prevent discrimination, failure to accommodate a disability, failure to engage in the interactive process and wrongful termination in violation of public policy.

Santillan v. USA Waste of Cal., 853 F.3d 1035 (9th Cir. 2017)

Gilberto Santillan, a 53-year-old garbage truck driver in Manhattan Beach, was employed for 32 years before his employment was terminated by a new route manager (Steve Kobzoff) after Santillan had four accidents in a 12-month period. Santillan disputed that he had four accidents and testified that he was one of five older Spanish-speaking employees who were fired or suspended after Kobzoff became the route manager. Following what the court described as a “public outcry” over Santillan’s termination (the son of one of the homeowners dressed up as Santillan for Halloween because he considered Santillan to be a “hero”), USA Waste agreed to reinstate Santillan if he passed a drug test and physical examination, a criminal background check and “e-Verify” to prove his right to work in the United States. When Santillan failed to provide sufficient information for the employer to complete an e-Verify check on Santillan, he was fired again because he did not provide “proof of [his] legal right to work in the United States within three days of hire as required by the Immigration Control and Reform Act of 1986.” The district court granted summary judgment in favor of the employer, but the United States Court of Appeals for the Ninth Circuit reversed, holding that Santillan had established a prima facie case of age discrimination, which USA Waste had failed to rebut because it did not offer a legitimate reason for firing Santillan. The Court held that Santillan was exempt from the IRCA requirements because he was a “continuing” and not a “new” employee. Moreover, the Court held that California public policy considers immigration status to be irrelevant in the enforcement of state labor, employment, civil rights and employee housing laws, so the agreement to satisfy the e-Verify requirements was void as against public policy. The Court also held that Santillan had engaged in protected activity by using an attorney to represent him in negotiating the original settlement agreement.

It is important to note that every employment law situation is unique and this Employment Law Update is not a replacement for legal counsel. If you have further questions or would like additional information, please contact Jerry Pearson at jpearson@youngwooldridge.com.

To read about the case law that impacted Harassment, Missclassification, Retalation and Whistleblowing, and Confidentiality legislation in 2017, read part three of our Employment Law Update.

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