Goldman, Magdalin & Krikes, LLP

Recent Decisions: Employment Law

Murphy v. Kenneth Cole Productions, Inc., 40 Cal. 4th 1094 (2007)

A former store manager sued Kenneth Cole, a small upscale retail clothing store, claiming violations of wage and hour law and asserting that he was improperly classified as an exempt employee. After leaving his employment, Murphy filed a complaint with the labor commissioner. The labor commissioner awarded Murphy unpaid overtime, interest and a waiting time penalty. The employer appealed. On appeal, Murphy added a claim for unpaid meal and rest periods, pay stub violations and interest and attorney’s fees. The trial court awarded Murphy unpaid overtime, payments for missed meal and rest periods and pay stub violations, waiting time penalties and pre-judgment interest plus attorney’s fees. The court of appeal affirmed the lower court’s judgment that Murphy was a non-exempt employee and thus entitled to overtime. The court of appeal reversed the judgment to the extent the trial court issued an award for missed meal and rest periods for pay stub violations as such claims were not raised before the labor commissioner. In addition the court of appeal held that the additional payment for meal/rest period violations is a penalty not a wage, and therefore is subject to a one year statute of limitations. The California Supreme Court, however reversed and held that the additional hour pay provided for in California Labor Code §226.7 constitutes a wage premium payment, which is subject to a three year statute of limitations, not a penalty.

Affect: Employers now face additional liability when they fail to properly pay employees for not only wages, but for not providing meal and rest periods as required under the wage hour orders. One or two missed meal periods, and/or a missed meal period, provides for each one hour of additional pay.

Davis v. O’Melveny & Meyers, 45 F.3d 1066 (9th Cir. 2007)

O’Melveny & Myers, one of the largest law firms in the world, adopted and distributed a dispute resolution program that required final and binding arbitration for most employment related disputes within the firm. Davis, a former O’Melveny employee, filed a civil complaint under the Fair Labor Standards Act and other state and federal labor laws, alleging failure to pay overtime and denial of rest and meal periods. The district court granted the firm’s motion to dismiss and compel arbitration, and the employee appealed. On appeal, Davis argued that the dispute resolution program was procedurally and substantively unconscionable. The Ninth Circuit agreed and reversed and remanded to the district court.

The Ninth Circuit focused its procedural unconscionability analysis on whether the program was essentially a contract of adhesion that provided no ability to negotiate its terms. The Ninth Circuit substantive unconscionability analysis focused on different factors within the agreement that if found to violate the ability for employees to pursue substantive legal rights.

Affect: While many employers want to have arbitration agreements with regard to resolving any employment related disputes, those agreements must be carefully written in order to avoid these kind of problems. The California Supreme Court in Armindarez v. Foundation Health Psychcare Services, Inc., 24 Cal.4th 83 (2000) laid out in detail the requirements for an enforceable arbitration agreement.

Carter v. Escondido Union High School, 148 Cal. App. 4th 922 (2007)

Carter was a probationary teacher for the school district. He lodged a complaint with school officials, claiming that one of the football coaches improperly recommended to a student that the student use a weight gaining shake powder in order to bulk up. The weight gaining formula was the type that could be purchased at any nutritional supplement store.

At trial, the jury awarded him $1.2 Million on the grounds that (1) the school district failed to follow through on Carter’s complaint regarding the football coach, and (2) the school district declined to renew Carter’s contract for the following school year. The court of appeal, however, reversed concluding that although “(t)here may indeed be sound policy reasons to bar football coaches from recommending weight gaining substances to high school students, [as] there is currently no law that does so, any such prohibition must be enacted explicitly by the legislature, not implicitly by the courts.”

Affect: It appears from this case that someone claiming to be a whistle-blower must claim a violation of law, rather than just believing that a particular action may be improper, with no legal foundation. Employers should note, however, that other courts have held that so long as the employee has a sincere, good faith belief that there was alleged illegality, then any adverse employment action could rise to the level of retaliation of violation of the Whistle-Blower Protection Act, Labor Code §1102.5.

Malais v. Los Angeles City Fire Department, 150 Cal. App. 4350 (2007)

Malais, a captain with the Los Angeles City Fire Department, sued the department for disability discrimination and violation of the California Fair Employment and Housing Act, when the department gave him a special duty assignment following the partial amputation of one of his legs. Captains on special duty assignment receive the same pay and promotional opportunities as those who are on platoon duty, where Malais was before the amputation. The Fire Department refused to assign Malais to platoon duty because it believed there was an unacceptable risk to Malais himself, other firefighters and the public by performing platoon duty with a prosthetic leg. The court of appeal affirmed the Department’s summary judgment motion, concluding that Malais did not suffer from an adverse employment action by being limited to special duty assignments.

Affect: This can limit the scope of liability for an employer’s decision to move an employee into another position on the basis of disability, provided there are no economic losses and, presumably, loss of promotional opportunities.

Murphy v. Kenneth Cole Productions, Inc., 40 Cal. 4th 1094 (2007)

Davis v. O’Melveny & Meyers, 45 F.3d 1066 (9th Cir. 2007)

Anderson v. Workers’ Compensation Appeals Board, 149 Cal. App. 4th 1369 (2007)

Anderson worked for the City of Santa Barbara and sustained work-related injuries, and filed a workers’ compensation claim. The City allowed employees with non industrial injuries to use sick leave instead of vacation benefits to attend medical appointments. In Anderson’s case, however, the City required him to use his accrued vacation benefits rather than sick leave when missing work for treatment. He claimed discrimination and violation of Labor Code §132(a). The WCAB’s decision that ruled for the City was reversed by the appellate court. The appellate court, instead, found that the City discriminated against the employee in violation of Labor Code §132a.

Affect: The message here is simple: Employers must make sure that they enforce rules on a consistent basis or they can face a variety of potential discrimination claims.

Carter v. Escondido Union High School, 148 Cal. App. 4th 922 (2007)

Malais v. Los Angeles City Fire Department, 150 Cal. App. 4350 (2007)

Mark Baker v. Navfam Inc. dba Grease Monkey, William J. Navigato III (RIC446242)

Hon. Dallas S. Holmes

Riverside Superior

TOPIC: Employment Law

SUB TOPIC: FEHA

FURTHER DESCRIPTION: Negligence

SUMMARY JUDGMENT: Defense

ATTORNEY:

Plaintiff - Geoffrey H. Hopper, Charles P. Boylston (Geoffrey H. Hopper & Associates Inc., Redlands).

Defendant - Robert W. Conti, Lester F. Aponte (Goldman, Magdalin & Krikes, LLP, North Hollywood).

FACTS: Plaintiff Mark Baker, age 18 at the time, sued his former employer, Navfam Inc. dba Grease Monkey, William Navigato, the company's president, and several co-employees, based on two incidents of assault and battery that occurred on what would have been his next-to-last day of work before leaving to a new job. Grease Monkey is a franchise specializing in quick auto lubrication services.

On Jan. 29, 2006, a co-employee asked the plaintiff to come down into the lube pit. The co-employees stripped the plaintiff down to his boxers, tossing his clothes into his nearby truck. The plaintiff had to run out in his boxers to retrieve his clothes.

The second incident involved the co-employees dragging him, again, into the lube pit, putting plaintiff into a neck hold, and then stripping him of his clothing save his underwear, which was pulled down to his knees. The co-employees sprayed him with water, and taped his ankles and wrists together. Plaintiff contended that the second incident lasted about 20 minutes, the defendants contended it lasted a much shorter time. Eventually, he was cut free.

The plaintiff's mother learned about these two incidents, and she and her son filed a police report the next day. In addition, the plaintiff's mother contacted the employer and advised the manager as to what had happened the day before. Defendant alleged the co-employees were all fired within a few days after the management learned of what had happened.

PLAINTIFF'S CONTENTIONS: The plaintiff contended that the co-employees were liable for sexual harassment and discrimination in violation of the Fair Employment and Housing Act, intentional assault and battery, intentional and negligent infliction of emotional distress, negligent hiring and supervision, false imprisonment, violation of privacy rights pursuant to Article I, Section 1 of the California Constitution, constructive wrongful termination in violation of public policy, alter ego liability and punitive damages.

DEFENDANTS' CONTENTIONS: Defendants Navfam and Navigato contended that the male-on-male horseplay that occurred did not constitute sexual harassment or discrimination, that all of plaintiff's common law tort claims were preempted by the Workers' Compensation Act's exclusive remedy provisions; that plaintiff could not prove the element of employer knowledge or permission of intolerable working conditions required for a constructive termination claim; that the doctrine of respondeat superior did not apply because the co-employees were neither supervisors or managers and that they acted outside the scope of their employment; and that the employer could not be held liable for punitive damages because none of the employees were officers, directors or managing agents, as required by statute.

The defendants also contended that the false imprisonment claim was barred by the one-year statute of limitations.

INJURIES: The plaintiff alleged suffering bruises, raspberries and a sore esophagus, as well as severe emotional distress. The plaintiff was never treated by any medical professional with regard to either his alleged physical or emotional damages.

SETTLEMENT DISCUSSIONS: A mediation was held before Patricia Barrett, Esq. of IVAMS. The plaintiff demanded $1.7 million; the employer defendants offered $5,000.

RESULT: The court granted the employer defendants' summary judgment in its entirety.

OTHER INFORMATION: The plaintiff dismissed all but one of the individual co-employees. That remaining employee through his counsel filed for summary judgment as well. The court granted summary adjudication as to the FEHA violations, as well as the negligence claims. The court denied the employee's motion with regard to the assault and battery claims, intentional infliction of emotional distress claim and the privacy claim. The plaintiff also filed a motion for summary adjudication as to certain causes of action. That motion was summarily denied as plaintiff failed to provide any evidence of damages, an essential element as to each of his causes of action.

Dianne Benson v. The Permanente Medical Group, PSI; Athens Administrators OAK 297895; OAK 326228 (WCAB En Banc 12/13/07)

Wilkinson who? In a watershed decision, the WCAB has decided that the principle of awarding a combined permanent disability based upon two successive industrial injuries becoming permanent and stationary at the same time, is no longer the standard.

Dianne Benson was found to have a 62% permanent disability based upon the combined effects of a specific injury and a cumulative trauma injury. The total award was 62%. The AME in the case, apportioned 50% of the overall permanent disability to a specific injury, and 50% to a cumulative trauma.

The En Banc opinion gives great deference to the adoption of Labor Code Section 4663 and the repeal of Section 4750. This, according to the court, was a major shift in the rules of apportionment. A new “causation regime” was created which requires all potential causes of permanent disability to be separately addressed and considered when apportioning disability pursuant to Labor Code Section 4663. Thus, separate permanent disability awards are to be granted in the case of successive industrial injuries.

The court held that each separate injury requires a separate discussion by the medical expert in order to determine the causative sources of disability. There will be instances where an expert cannot parcel out with reasonable medical probability the approximate percentages to which each successive industrial injury contributes to the overall permanent disability.

In Ms. Benson’s case, her award of 62% permanent disability was worth $67,016.25. After reconsideration, she was awarded two separate awards of 31%, each worth $24,605.00, for a total award of $49,210.00. This represents a roughly 23% reduction in the value of her award.

We believe this decision will have a chilling effect on the filing of cumulative trauma claims be applicants. However, for the aggressive defendant, it will provide legal basis for filing a cumulative trauma claim where reasonable medical basis exists.

Runyon v. Board of Trustees of the California State University

A tenured university professor claimed he was removed as chair of a department in the College of Business Administration at Cal State Long Beach, by the College’s dean, in retaliation for whistleblowing activities. The University investigated his complaint pursuant to an internal process, and found the professor’s claim of retaliation to be without merit. The professor filed a civil action against the under California Govt. Code Sec. 8547.12, which is part of the California Whistleblower Protection Act. That particular statute applies solely to CSU employees. The University and the Dean, represented by Robert Conti, who is now the partner in charge of GMK’s employment and civil litigation department, filed a motion for summary judgment which the Superior Court judge granted.

The professor appealed. The California Court of Appeal, Second District, affirmed the trial court’s ruling. The appellate court ruled that the only way the professor could challenge the administrative decision by filing, and winning, a writ of mandate.

Scotch v. Art Institute of Cal-OC

FEHA DISABILITY DISCRIMINATION STANDARD

The Fourth District Court of Appeals just issued an employer-favorable decision with regard to the burdens of evidence imposed on a plaintiff suing under the Fair Employment and Housing Act to avoid summary judgment. This decision gives guidance regarding a split of authority concerning an employer’s obligation to engage in the interactive, reasonable accommodation process.

Carmine Scotch worked as an instructor for the Art Institute of California Orange County, Inc. He claimed the Institute violated the FEHA’s prohibition on disability discrimination (he was HIV-positive) because, among other reasons, it reduced his working hours to part time, it failed to engage in the interactive process and failed to provide a reasonable accommodation.

The Institute presented evidence that it put Scotch on part-time status for legitimate business reasons (he had not obtained the necessary degrees required to work in a full-time position). Scotch failed, however, to show that the explanation offered by the Institute was, in fact, pretextual and therefore his discrimination claim failed. Scotch offered, as a form of reasonable accommodation, that he be given priority in class assignments and a greater number of classes. This “accommodation,” in fact, was designed to allow him to maintain full-time status, rather than actually accommodate a disability so he could perform the job’s essential functions. Finally, Scotch’s claim for failure to engage in the interactive process failed because he could not show that any reasonable accommodations existed. If no reasonable accommodations existed, then there was no employer duty to engage in the interactive process.

Notably, the court in coming to this conclusion chose the employer-friendly route, as opposed to the employee-friendly route. Earlier cases, decided after the passage of AB 2222 (Kuehl) which codified in the FEHA the obligation to undergo the interactive process, ruled that the failure to undergo the process itself, regardless of whether a reasonable accommodation actually existed, would create independent liability for a FEHA violation. Later cases, which the Scotch court found to be persuasive held that they duty to undergo the reasonable accommodation process existed only when there were recognized accommodations that could be considered during the process.

Scotch does not, however, resolve the conflict, and there is no cases currently pending review by the California Supreme Court where this question is an issue. However, more and more courts are adopting the employer-friendly approach, including one that recently granted a GMK client’s summary judgment motion based on this premise. In that case, a janitor for a convalescent center suffered a work related injury that prevented him from using the cleaning machinery necessary to perform his job. At his deposition, he admitted that he could not use the machinery, that the machinery was necessary to perform his job’s essential functions, and that there was nothing the employer could have done that would have allowed him to use the machinery. Accordingly, we argued on our client’s behalf that the employee was not a “qualified individual” entitled to FEHA protection because he could not perform his job’s essential functions, and there was no reasonable accommodation that would allow him to do those tasks.

The trial court tentative ruling, made prior to oral argument, was against the employer. After oral argument the court agreed to take the matter back under submission and later reversed itself, and granted our client’s motion.

Discrimination: Inconsistent Actions Can Show Pretext
Earl v. Nielsen Media Research, Inc., 2011 U.S. App. LEXIS 19616 (9th Cir., September 26, 2011)

The Ninth Circuit reversed summary judgment where the plaintiff showed that other similarly situated employees who were younger were treated differently. This constituted specific evidence for a showing of pretext by the employer. The employer had not implemented its own internal policies on a consistent basis. [See November 22, 2011 GMK Alert.]

Independent Contractors: Liability for Injury of Employee of Independent Contractor
Seabright Insurance Company v. U.S. Airways, Inc. /Lujan, 2011 Cal. LEXIS 9351 (Cal., Aug. 22, 2011)

An employee of an independent contractor hired by U.S. Airways to maintain and repair a conveyor system was injured when his arm was caught in moving parts. The conveyor did not have safety guards required by Cal/OSHA regulations. The California Supreme Court determined that U.S. Airways had a tort law duty to ensure the safety of the contractor’s employees but had delegated that duty, including any duty to comply with Cal/OSHA safety requirements, to the contractor. Therefore, the airline was not liable for the injuries. The Court stated that it would be unfair to allow the employee of the contractor to obtain tort damages against the hirer of the contractor because he happened to have been working for a hired contractor since tort damages would not otherwise have been available to him for a workers’ compensation injury, particularly in this case where the contractor had sole control over the means of performing the work.

California Family Rights Act: Interference/Retaliation
Rogers v. County of Los Angeles, 198 Cal. App. 4th 480 (Cal. App. 2d Dist., August 2011)

The California Court of Appeal found that the employer had not “interfered” with Rogers’ rights under the California Family Rights Act (CFRA) when she was transferred to another position when she returned from leave because she was not entitled to reinstatement when she failed to return to work at the end of her 12-week protected CFRA leave. Additionally, the court held that the employer had not “retaliated” against Rogers for exercising her right to take CFRA leave because there was insufficient evidence to show that having taken the leave was the reason for an adverse employment action. The employer gave a legitimate, non-discriminatory reason for the decision to transfer her to another position and Rogers did not present any evidence to the contrary.

Harassment: Evidence of Harassment of Other Employees
Pantoja v. Anton, 198 Cal. App. 4th 87 (Cal. App. 5th Dist., August 2011)

Evidence of harassment of others is not admissible to show that the alleged harasser had a propensity to harass; and can only be used to prove plaintiff’s case if the plaintiff witnessed the harassment or was otherwise aware of it, and it contributed to an abusive working environment for plaintiff. However, such evidence can be introduced for the purpose of showing intent; impeaching the alleged harasser’s credibility; or to rebut factual issues.