California Employment Law

ADA Demands Are Greater Than Many Realize

Jeff Polsky — Mon, 30 Aug 2010 09:38:10 -0800

In 2001, UPS hired Mauricio Centeno as a junior accounts payable clerk at its facility in Glendale, CA. Centeno is deaf and has been since birth. His primary language is American Sign Language and he reads and writes at a fourth or fifth grade level. UPS provided him with an interpreter at monthly meetings and with written notes at weekly meetings.

Centeno complained that getting the notes after the meeting deprived him of the opportunity to ask questions. He asked for an interpreter for the weekly meetings or contemporaneous notes. UPS began providing Centeno with contemporaneous notes in 2004, but Centeno complained that the notes weren't sufficiently detailed and repeated his request for an interpreter. In addition, an EEOC investigator (stepping way outside the role of neutral fact-finder) told Centeno not to attend meetings where there wasn't an interpreter. When Centeno stopped attending these mandatory meetings, UPS excused him from doing so.

To many of us, this sounds like an employer going above and beyond to assist a profoundly disabled employee. And the judge who granted UPS's motion for summary judgment agreed. But on Friday, the 9th Circuit Court of Appeals reversed that decision (pdf) holding that there was a triable issue as to whether UPS satisfied its obligations under the ADA to provide reasonable accommodation.

The case illustrates the extent of the demands imposed on employers by the ADA. The obligation to provide reasonable accommodation is a continuing one. It requires employers to accept that accommodating disabled employees can be burdensome, costly, and inefficient. And the larger the employer, the more they're expected to do to enable eligible employees to receive the benefits and privileges of employment.

Setting Trends in California

Jeff Polsky — Wed, 25 Aug 2010 09:16:25 -0800

Even after all these years, I'm still shocked when I read about employment cases in other jurisdictions and realize how different the result would be if the case had been in California. The latest example is Nyrop v. Independent School Dist. No. 11, a decision issued earlier this month by the Eighth Circuit Court of Appeal (and accessible here). Nyrop affirmed a determination by the district court that a Minnesota teacher's multiple sclerosis didn't constitute a disability under the Americans with Disabilities Act.

The decision turned on the issue whether Nyrop was substantially limited in a major life activity. Nyrop presented evidence that, because of her MS, she had problems controlling her tongue and larynx which prevented her from speaking clearly and projecting her voice. She also described impairments in terms of feeling and sensation, muscle control, strength, and sensitivity to temperatures above 70 degrees. Despite all this, the court concluded that Nyrop could not pursue a claim under the ADA because she was not substantially limited in any major life activity.

California's Fair Employment and Housing Act defines "limits" and "life activities" more broadly than federal law. As a result, in California, I'm certain that the plaintiff would have been allowed to proceed with her claim. Does this mean that employers should move their operations to Minnesota? No. First, the winters are brutal. Second, this Brett Favre thing got tiresome two retirements ago. Third, federal law is catching up with California. The Nyrop case arose before enactment of amendments to the ADA. Those amendments, which took effect in 2009, broadened the definition of what constitutes a disability. So while California law is definitely more employee-friendly here, Federal law is heading in that direction.

California Supreme Court Creates New Obstacles to Summary Judgment for Employers

Jeff Polsky — Mon, 09 Aug 2010 09:05:48 -0800

On August 5, 2010, the California Supreme Court limited application of the "stray remarks" doctrine. The doctrine deals with potentially discriminatory statements that are unrelated to the decision complained of. For example, if an ageist remark is made by someone who had no involvement in the decision to terminate, is that remark somehow evidence that the decision was discriminatory?

Reid v. Google, Inc. (pdf) involved an age discrimination claim by Brian Reid, a former director of engineering, who worked at Google from 2002 to 2004. Reid was 52 at the time he was hired. He had a Ph.D. in computer science and had taught at Stanford (a private university with a decent reputation, despite having lost in football to the University of California in seven of the last eight years).

A review of Reid's first year's job performance was very positive, but contained the following language:

Adapting to Google culture is the primary task for the first year here. . . . [para.] Right or wrong, Google is simply different: Younger contributors, inexperienced first line managers, and the super fast pace are just a few examples of the environment.

In addition, according to Reid, a 38-year-old vice president who he sometimes reported to described his opinions as "obsolete" and "too old to matter" and described Reid as "slow," "fuzzy," "sluggish," and "lethargic." Reid also accused the VP of saying that Reid failed to "display a sense of urgency" and "lack[ed] energy." He claimed that other co-workers called him an "old man," "old guy," and "old fuddy-duddy." A co-worker also joked that Reid's office placard, which had a picture of a compact disc, should instead show an LP.

A little over a year into his tenure, Reid was relieved of most of his duties and told to focus on developing in-house graduate degree and college recruitment programs (but without a budget or staff support). A few months later, when senior management was discussing whether to give Reid any bonus for 2003, one of Reid's supervisors expressed the opinion that he should be treated "consistently with all similarly situated performers." That same supervisor suggested that Google should also offer Reid a severance package due to the risk of "a judge concluding that we acted harshly."

A month later, Google terminated Reid. Google said it told Reid that his job was eliminated because the company decided not to pursue the graduate degree program. Reid says he was told only that there was not a "cultural fit." Although he was given permission to pursue other positions in the company, e-mails between department heads indicated that doing so would not be productive. In one e-mail exchange, a department head asked to be prepped for her interview with Reid. She received a response advising her how to respond to particular inquiries and concluding that "[w]e'll all agree on the job elimination angle."

I quote the specific comments at length for two reasons. One, they show how otherwise innocuous comments -- the type made in many workplaces -- can be used to support a discrimination claim. For example, is it really a problem to say that an employee age 40 or over did not "display a sense of urgency"? Second, the "stray remarks" doctrine was never well-defined and is best illustrated by example. Comments dismissed as "stray remarks" in one case have been treated as evidence of discrimination in others.

In Reid, Google argued that application of the stray remarks doctrine is an important tool for trial courts to dispose of unmeritorious cases on summary judgment. But the state supreme court disagreed, stating that deciding what weight to give the remarks was the jury's responsibility. Instead, the court said that summary judgment determinations must be based "on the totality of the evidence, including any relevant discriminatory remarks."

Based on this decision, it will be harder for employers to obtain summary judgment. And, because a totality of the evidence test is really the absence of any test at all, it will be harder to predict how courts will treat particular situations.

Milan v. City of Holtville: The Mandatory Interactive Process is Exactly That.

Alex Hernaez — Mon, 19 Jul 2010 11:50:04 -0800

Employers must provide reasonable accommodation to disabled employees. That’s the law. And the law is neither convenient nor efficient. But employers do not need to provide any requested reasonable accommodation. As a general matter, employers can choose between equally effective accommodations. Moreover, employers may make the determination that no reasonable accommodation is possible. For example, in Milan, the Plaintiff suffered a workplace injury on September 10, 2002. Then, on March 30, 2004, she “received a letter from the city terminating her employment. The letter stated that based on [her doctor’s] evaluation, the city had concluded that Milan could not return to her customary position and there was no job within the city which she could reasonably perform.”

Plaintiff sued alleging the failure to make reasonable accommodation. At trial, the City contended that it met its obligations under the FEHA because “Milan had never sought an accommodation of her disability, and that in any event no accommodation was possible because she could not perform the essential functions of her job.” On appeal, the Court accepted the City’s argument:

Section 12940 [of the FEHA], subdivision (n), does not permit an employee to ignore notice his or her employer believes he or she is not fit to work, be absent from work for more than 18 months, and make no attempt to communicate with the employer about his or her desire to continue working. Milan's apparent response to the workers' compensation administrator or workers' compensation appeals board was not adequate because in the end Milan accepted rehabilitation and retraining benefits offered by the administrator. In this context, good faith required that Milan directly express to the city her interest in retaining her job. Only then would an obligation to engage with her with respect to possible accommodations arise.

The lesson here is simple: both parties must put the “active” in the “interactive process.” And, if an employee unreasonably refuses to communicate, the employer may, under the right circumstances, take unilateral action.

Judicial One-Liners:

Alex Hernaez — Fri, 16 Jul 2010 14:10:37 -0800

“Judges are not like pigs, hunting for truffles buried in briefs." United States v. Dunkel, 927 F.2d 955, 956 (7th Cir.1991).

Ongoing Battles Regarding the Reach of California's Prohibition of Covenants Not to Compete

Jeff Polsky — Fri, 16 Jul 2010 13:21:18 -0800

It is fairly well known by now that covenants not to compete are not enforceable in California. Business and Professions Code §16600 is said to contain a “strong public policy” in favor of allowing employees to depart and work for anyone else, including direct competitors of the original employer, even if the employee agreed in advance not to do so. Non-competition agreements are enforceable in many other states.

In an effort to hire out-of-state employees, some California companies have recently attempted to use B&P Code §16600 to nullify non-competition agreements between such employees and companies in states where those agreements are legal and enforceable. The companies attempting to nullify the out-of-state agreements are claiming standing to sue in their own right for “unfair competition” under B&P Code §17200. The case typically takes the form of an action in Superior Court for “declaratory relief.” The plaintiff company and the bolting employee ask the California court to declare the covenant between the employee and the original out-of-state employer “void” under California law. The out-of-state employer will likely counter with the argument that the suit seeks an unconstitutional, extraterritorial application of §16600 to citizens of other states, employees and companies alike. What’s a court to do? It depends.

The result will likely turn on the interpretation of Application Group, Inc. v. Hunter Group, Inc., 61 Cal.App.4^th 881 (1998), a case that lay rather dormant for over 10 years. Hunter Group was a Maryland corporation that provided computer consulting services for businesses, including customers in California. Hunter competed with Application Group, a California corporation, for projects. Hunter’s employees who resided outside of California, including employee Dianne Pike, had non-competition clauses in their employment agreements. Pike, a resident of Maryland, resigned from Hunter and went to work for its competitor, Application Group. Hunter filed a lawsuit in Maryland alleging that Pike had breached the covenant not to compete in her employment agreement, and further alleging that Application Group had interfered with its contractual relationship with Pike. While that suit was pending, Application Group and Pike sued Hunter in California seeking a declaratory judgment that California law (B&P Code §16600), and not Maryland law, applied to Pike’s covenant not to compete. Hunter filed a motion to stay the California action based on inconvenient forum grounds. The California court granted Hunter’s motion, and stayed the California action pending resolution of the Maryland litigation. The Maryland court subsequently granted Application Group’s motion for summary judgment because Hunter had failed to present evidence of damage.

Application Group then filed an amended complaint in California seeking a declaratory judgment that: (i) B&P Code Sections 16600 and 17200, and not Maryland law, applied to Pike’s covenant not to compete; (ii) by including a non-competition provision in its employees’ contracts in Maryland, Hunter was engaging in “unfair competition” within the meaning of §17200; (iii) pursuant to Sections 16600 and 17200, Hunter was precluded from enforcing in California any out-of-state judgment or injunction it “might obtain” upholding the validity of its covenant not to compete; and (iv) Sections16600 and 17200 provided Application Group with a “privilege” to contact and recruit Hunter’s employees in Maryland regardless of the covenant not to compete in their employment agreements.

The California trial court ruled that Sections 16600 and 17200 applied, and that the covenant not to compete was unenforceable and a “contract to restrain trade,” which constituted “unfair competition.”

Hunter appealed, arguing that the trial court was wrong in its application of conflict of laws principles. The appellate court concluded that the trial court did not err in applying California law (Sections 16600 and 17200), reasoning that California had a “greater interest” in application of its law to the dispute, and that California's interests would be seriously impaired if its policy were subordinated to that of Maryland. Exactly why Maryland had a “lesser” interest in the matter was not fully explained.

Significantly, two other issues were not fully litigated in the Application Group case: (1) whether the California company could invoke standing under §16600, and (2) whether the extension of §16600 to out-of-state contracts is constitutional. On the issue of standing, §16600 itself does not on its face appear to confer standing upon a prospective employer. The question is whether §17200 can somehow be invoked to deem a covenant not to compete an act of “unfair competition” toward a prospective employer. On the issue of constitutionality, the U.S. Supreme Court has held that constitutional principles prohibit one state from imposing its laws on other states. Whether the Application Group case violates this doctrine by approving the seemingly “extraterritorial” use of §16600, remains to be seen. Sooner or later, two companies – one in California and one outside the state – will have enough at stake that the validity of Application Group will be tested.

Thanks to Dave Faustman for this entry.

Ninth Circuit Avoids Employer's Choice of Law Provision With Creative Reasoning.

Alex Hernaez — Thu, 15 Jul 2010 13:20:06 -0800

The first sentence of the Ninth Circuit's opinion in Narayan v. EGL., Inc. (filed July 13, 2010) explains what is at stake: “The California Labor Code confers certain benefits on employees that it does not afford independent contractors.” Indeed. At issue in Narayan was whether certain individuals “engaged to provide freight pick-up and delivery services for [Defendant] EGL in California” were classified properly as Independent Contractors. In support of a finding that no employment relationship existed, EGL argued that the issue was controlled by its “Leased Equipment and Independent Contractor Services Agreement,” which provided that the “intention of the parties” is to “create a vendor/vendee relationship” and that that “[n]either Contractor nor any of its employees or agents shall be considered to be employees of” EGL. The parties also designated that Texas law should control.

But these provisions delayed the Court not at all. Rather, the Court limited the choice of law provision to claims that “rise or fall on the interpretation and enforcement of any contractual provision.” Such provisions do not “encompass all disputes between the parties.” And here, says the Court, “[t]he Drivers’ claims involve entitlement to benefits under the California Labor Code. Whether the Drivers are entitled to those benefits depends on whether they are employees of EGL, which in turn depends on the definition that the otherwise governing law—not the parties—gives to the term ‘employee’.” Nice trick!

Using this reasoning, the Court simply ignored Texas law and held that California law applies. But this reasoning seems shallow. Whether an individual is an employee is a question of law. And here the parties agreed to answer that question using Texas law. The Court’s analysis merely assumed what it should have demonstrated--i.e., that the California Labor codes applies in the first instance. Individuals cannot make claims under the Labor Code unless they are employees.

As an added bonus to employees, the Court also emphasized the burdens that exist in litigation under the Labor Code. This topic is not heavily litigated, but can be very effective tool in avoiding summary judgment. Those principles are as follows:

Under California law, once a plaintiff comes forward with evidence that he provided services for an employer, the employee has established a prima facie case that the relationship was one of employer/ employee.

The fact that one is performing work and labor for another is prima facie evidence of employment and such person is presumed to be a servant in the absence of evidence to the contrary.

Once the employee establishes a prima facie case, the burden shifts to the employer, which may prove, if it can, that the presumed employee was an independent contractor.

The ultimate burden of proof is on the party attacking the employment relationship.

Having avoided Texas law and having emphasized the various burdens of persuasion, it is not a surprise that the Court reversed the lower court’s decision to award the employer summary judgment.

Good Faith Defense to Punitive Damage Claims

Jeff Polsky — Wed, 07 Jul 2010 08:27:34 -0800

While some may find this counterintuitive, the defense of an employment discrimination or harassment claim should begin before any alleged wrongful conduct occurs. A Ninth Circuit Court of Appeals decision (Boswell v. Federal Express Corp. (pdf), No. 08-15935 (9th Cir., filed June 16, 2010)) illustrates this point.

Federal Express had asked the trial court for a jury instruction that it would not be liable for punitive damages if the jury found that it engaged in good faith efforts to implement policies prohibiting and addressing discrimination, harassment, and retaliation. As the Supreme Court explained in 1999, "in the punitive damages context, an employer may not be vicariously liable for the discriminatory employment decisions of managerial agents where those decisions are contrary to the employer's good faith efforts to comply with Title VII." This is so, the Ninth Circuit panel noted, even when the punitive damages stem from actions taken by managers, unless the manager is "sufficiently senior" to be treated as "the corporation's proxy." Because the trial court failed to instruct the jury on the good faith defense to a punitive damages claim, the Ninth Circuit overturned the punitive damage award.

The Boswell decision is unpublished and, perhaps because of that, did not go into detail in defining and elaborating on some of these terms. But it provides a valuable reminder that the defense of a claim for discrimination, harassment, and retaliation begins with policies, practices, and training that are implemented long before any complaint is filed.

Must Employers Who Receive Federal Funds Accommodate Disabled Independent Contractors?

Jeff Polsky — Tue, 29 Jun 2010 09:21:07 -0800

Last week, the Supreme Court turned down the opportunity to review the Ninth Circuit Court of Appeals decision in Yuma Anesthesia Med. Servs. LLC v. Fleming. In that case, a physician working at a hospital alleged that he was discriminated against because he had sickle-cell anemia. There was no dispute that the physician was an independent contractor, not an employee. And the Americans With Disabilities Act (like California's Fair Employment and Housing Act) deals exclusively with the employment relationship. But the physician argued that the Rehabilitation Act of 1973, which applies to employers who receive federal funds, extends its protections to independent contractors.

Federal appeals courts addressing this issue are split. The Ninth and Tenth Circuits say independent contractors are covered. The Sixth and Eighth Circuits disagree. That would seem to make this an ideal opportunity for the Supreme Court to provide clarity. Still, the Court, with no elaboration or explanation, declined to do so. Therefore, until the split between the Circuits gets resolved, employers in California who receive federal funds must not only reasonably accommodate disabled employees, they must also accommodate disabled independent contractors.

Sometimes When You Win, You Really Lose -- Rent-a-Center v. Jackson

Jeff Polsky — Tue, 22 Jun 2010 09:45:27 -0800

Yesterday, the U.S. Supreme Court issued its decision in Rent-a-Center v. Jackson. The justices split 5-4 (with Scalia, Roberts, Kennedy, Thomas, and Alito in the majority). The opinion reversed a Ninth Circuit decision that issues regarding the unconscionability of arbitration agreements must be decided by the courts, even if the agreement specifically delegates those decisions to the arbitrator. In doing so, the Court distinguishes between challenges to the validity of the agreement as a whole and challenges to the validity of the arbitration provision. The distinction goes back to the Court’s 1967 decision in Prima Paint v. Flood & Conklin Mfg. Co. In yesterday’s decision, the Court ruled that arbitrators decide challenges to the validity of the agreement as a whole, but courts decide challenges to the validity of the arbitration provision.

This distinction may be easier to articulate than to apply. In Rent-a-Center, for example, the agreement at issue was an agreement to arbitrate. Where that occurs, how do you distinguish between attacks on the agreement as a whole and attacks on the arbitration provision? According to the majority opinion, the focus is on the provision delegating to the arbitrator exclusive authority to resolve disputes relating to the agreement's enforceability. It is challenges to this “delegation provision” that are the exclusive purview of the courts. Challenges to the entire agreement or to other provisions can be decided by the arbitrator where the agreement so provides.

Justice Stevens wrote a dissent, joined by Justices Ginsburg, Breyer, and Sotomayor. The dissent argues that questions regarding the validity of arbitration agreements are decided by the courts unless (1) the parties have clearly and unmistakably demonstrated their intent that the arbitrator decide such issues; or (2) the validity of the arbitration provision depends entirely on the validity of the contract as a whole. Applying the first of these exceptions, Stevens argues that a claim that the arbitration agreement is unconscionable precludes any determination that there was a clear, unmistakable agreement to submit such issues to the arbitrator.

The dissent also accuses the majority of adopting a rule that is not supported by precedent, was not argued by either of the litigants, and is unworkable. According to Justice Stevens, “a general revocation challenge to a standalone arbitration agreement is, invariably, a challenge to the ‘making’ of the arbitration agreement itself . . . and therefore, under Prima Paint, must be decided by the court.” Instead, he argues, the Court "adds a new layer of severability – something akin to Russian nesting dolls – into the mix: Courts may now pluck from a potentially invalid arbitration agreement even narrower provisions that refer particular arbitrability disputes to an arbitrator.”

The impact of this decision remains to be seen. There is certainly greater incentive now for employers drafting arbitration provisions to include language that delegates to the arbitrator disputes regarding the validity of the agreement. But is it just a matter of time before Congress “overrules” this decision?

To the extent yesterday’s decision is a victory for employers, it will be short-lived if it leads to greater support for the Arbitration Fairness Act (HR 120, S. 931) which would ban mandatory pre-dispute employment arbitration agreements. That legislation already includes language objecting that "a series of United States Supreme Court decisions have changed the meaning of the [Federal Arbitration] Act so that it now extends to disputes between parties of greatly disparate economic power, such as consumer disputes and employment disputes . . . ." Proponents of this legislation will waste no time in using the Rent-a-Center decision to support their campaign against mandatory pre-dispute arbitration.

Newfangled Technology Confounds Supreme Court in Quon

Jeff Polsky — Fri, 18 Jun 2010 10:16:15 -0800

Our colleague Mark McCreary summarizes the U.S. Supreme Court's decision yesterday in City of Ontario v. Quon (pdf). This is the case that could have been used to explain what privacy protections apply when employers seek to monitor employees' electronic communications. We encourage you to read Mark's discussion here. It contains, in our opinion, the perfect blend of insight and sarcasm.

How hiring older workers can be age discrimination

Jeff Polsky — Wed, 16 Jun 2010 08:29:16 -0800

In 1997, a California appellate court in Hersant v. Department of Social Services stated that, to prove age discrimination, an employee must show that he or she was replaced by someone significantly younger. An unpublished appellate court decision issued May 24, 2010 (Chapman v. Safeway, Inc. (pdf)) rejects that assertion.

According to the appellate court in Chapman, there is no such requirement. In fact, according to Chapman, a plaintiff could proceed with an age discrimination claim even if the replacement was someone older! Citing to an opinion from 2000, Begnal v. Canfield & Associates, Inc., the court in Chapman explained that "a jury could . . . infer that the replacement (an older person) was hired to protect against an anticipated claim of age discrimination."

So in California, you can fire a 40 year-old, hire a 50 year-old replacement, and get sued for age discrimination. Why would any employment lawyer want to practice anywhere else?

AMERICAN APPAREL: Really?

Alex Hernaez — Wed, 09 Jun 2010 13:43:40 -0800

This report claims American Apparel hires based upon look. I don't know where to begin.

Wikipedia: Not so much.

Alex Hernaez — Tue, 08 Jun 2010 07:40:40 -0800

We love to cite to the "internets." It's easy. It's fast. And it saves paper. But be careful. In Crispin v. Christian Audigier, Inc., 2010 U.S. Dist. LEXIS 52832, 28-31 (C.D. Cal. May 26, 2010) the Court was not shy in expressing its disapproval:

It is unfortunate that the parties were unable to provide more authoritative evidence. One court recently noted the danger of relying on Wikipedia: "Wikipedia.com[ is] a website that allows virtually anyone to upload an article into what is essentially a free, online encyclopedia. A review of the Wikipedia website reveals a pervasive and, for our purposes, disturbing series of disclaimers, among them, that: (i) any given Wikipedia article 'may be, at any given moment, in a bad state: for example it could be in the middle of a large edit or it could have been recently vandalized;' (ii) Wikipedia articles are 'also subject to remarkable oversights and omissions;' (iii) 'Wikipedia articles (or series of related articles) are liable to be incomplete in ways that would be less usual in a more tightly controlled reference work;' (iv) '[a]nother problem with a lot of content on Wikipedia is that many contributors do not cite their sources, something that makes it hard for the reader to judge the credibility of what is written;' and (v) 'many articles commence their lives as partisan drafts' and may be 'caught up in a heavily unbalanced viewpoint.'"

SUBPOENAS TO SOCIAL NETWORKING SITES

Alex Hernaez — Tue, 08 Jun 2010 07:36:11 -0800

People post to social networking sites such as Facebook and MySpace as part of their daily routines. These posts are often forgotten as soon as they are uploaded. But not if I can help it. Increasingly, employment defense lawyers are mining internet posts for use as admissions against their authors. As Yosemite Sam once remarked, “There’s gold in them there hills.” And there is. Really. However, like gold, finding these internet nuggets is not easy. The primary obstacle is the Stored Communications Act, 18 U.S.C. § 2701, et. seq., which generally prohibits production of electronically stored communications. Disclosure in violation of the act can expose the record holder to civil liability. Theofel v Farey-Jones 359 F.3d 1066 (9th Cir. 2004). However, like any complex statute (and this one surely is), the SCA has certain exceptions, including § 2701(c)(2), which allows production when the release is authorized "by a user of that service.” Hence, although you cannot subpoena a provider directly, in California it appears that the required “authorization” can be compelled by a Court. In O'Grady v. Superior Court, 139 Cal. App. 4th 1423, 1446 (2006), for example, the Court of Appeal for the Sixth District held that "[w]here a party to the communication is also a party to the litigation, it would seem within the power of a court to require his consent to disclosure on pain of discovery sanctions."

Stoned Worker Mauled by Grizzly Gets Workers' Comp

Jeff Polsky — Sun, 06 Jun 2010 11:50:54 -0800

Former colleague and renowned pet blogger Helena Sung caught this item about a worker at an adventure park in Montana who was mauled when he entered a grizzly bear's pen to feed it. When he applied for workers' comp benefits, the employer challenged it based on the worker having smoked marijuana earlier. Wrote the judge,

"Hopkins’ use of marijuana to kick off a day of working around grizzly bears was ill-advised to say the least and mind-bogglingly stupid to say the most. However, I have been presented with no evidence by which I can conclude that Hopkins’ marijuana use was the major contributing cause of the grizzly attack.”

The employer didn't come off as a saint in the judge's opinion either. The judge was not impressed with the employer's argument that Hopkins was not an employee, but a volunteer. To explain the fact that he paid Hopkins, the employer claimed that the money he gave him on multiple occasions was an act of charity. Personally, I'd have a hard time making that argument with a straight face.

Supreme Court to Consider Class Action Waiver

Jeff Polsky — Thu, 03 Jun 2010 09:21:29 -0800

Sometimes cases from other areas of law can have a strong impact on employment law in California. For example, Laster v. AT&T Mobility LLC involved class action waivers in consumer contracts. Laster filed a class action complaining about being charged sales tax on phones that AT&T advertised as "free" once you bought the service plan. AT&T sought to enforce an arbitration provision in the sales contract and Laster countered that the provision was unconscionable because it required him to waive his right to proceed as a class action. The 9th Circuit court of appeals held that the class action waiver was unconscionable under California law and that the Federal Arbitration Act (FAA) did not preempt California law regarding unconscionability.

AT&T Mobility asked the Supreme Court to weigh in on the issue. In doing so, it argued that class-wide arbitration is not necessary to protect the consumers' rights. It further argued (pdf) that

Class-wide arbitration affords none of the benefits of traditional, individual arbitration--it is at least as burdensome, expensive, and time-consuming as litigation--while multiplying the risks enormously because judicial review is so limited.

Finally, AT&T Mobility argued that the FAA preempts state law on this issue (including California law regarding unconscionability) as applied to arbitration agreements.

Last week, the Supreme Court agreed to hear the matter (under the title AT&T Mobility v. Concepcion). The decision, which is still many months away (oral argument has yet to be scheduled), could have a significant impact on California unconscionability analysis in the arbitration context.

Outrageous employment law claims

Jeff Polsky — Thu, 27 May 2010 09:37:42 -0800

After doing this for well over 20 years, I'm still impressed at some of the claims that get brought. I was reading this week about a New York firefighter (subscription) who fought his demotion for having an extramarital affair with a subordinate. He argued, unsuccessfully, that the demotion violated his First Amendment right to intimate associations. I’m no strict constructionist when it comes to the Constitution. But I still think it worth noting that the framers probably weren't thinking the Bill of Rights needed to protect the rights of supervisors to have sex with their subordinates.

But the prize, in my opinion, goes to a New York (notice a pattern?) sludge boat captain fired (subscription) for refusing to take a drug test. He claimed that the employer unlawfully refused to accommodate his disability. What disability? Shy bladder syndrome. We have a winner!

The meek shall inherit their own protected category

Jeff Polsky — Wed, 26 May 2010 13:35:24 -0800

I've posted before about how, in the employment context, harassment is only unlawful when it has a discriminatory motive or effect. In other words, as the Supreme Court has observed, the anti-discrimination laws weren't intended and shouldn't be used as a "general civility code."

All that would change with the adoption of laws purporting to address workplace bullying. Such legislation was recently passed by the New York State Senate and similar legislation has been considered in California and elsewhere (although nothing seems to be on the legislative docket here now).

No one is suggesting that abusive behavior should be tolerated at work or anywhere else. If employers are aware of such behavior, they have a right, a duty, and a business justification to stop it. But as long as people are working together there will be conflicts. And you don't need too many conflicts before one or more of the parties involved starts portraying themselves as a victim. I don't think anyone would question that workplace bullying laws will lead to more litigation. Yet there's plenty of room to dispute whether it will result in any actual change in workplace behavior.

[As a postscript, no blog post on this topic would be complete without acknowledging Michael Fox, who has been blogging about this issue since before most of us knew what a blog was.]

Since my employer didn't pay me, can I sue you instead?

Jeff Polsky — Wed, 26 May 2010 11:44:19 -0800

One of the trickier issues in employment law is defining who is an employer. The definitions tend to be vague at best, and circular at worst (such as defining an employer as someone who employs employees). There was not even agreement as to which definitions applied in California wage and hour cases until last week when the California Supreme Court took a tentative step towards clarifying this issue.

In Martinez v. Combs, the plaintiffs were strawberry pickers whose ostensible employer, Munoz and Sons, went bankrupt without paying them their wages. The plaintiffs sued several related entities and individuals to try to collect their money. These included the produce merchants who sold Munoz's strawberries and several of their principals and representatives. Munoz retained the rights to hire, fire, train, assign, and set the wages for the employees. But the merchants had representatives in the fields determining the quality of the produce and instructing as to how it should be packed.

After acknowledging that only employers were liable for unpaid wages, the Court set out to decide who were the employers here. This involved selecting from a variety of possible definitions, including a definition used by the Industrial Welfare Commission, one used in the federal Fair Labor Standards Act, and those used in case law.

In making its selection, the Court analyzed 98 years worth of legislative history. I will not attempt to summarize that discussion, except to provide this random historical tidbit: The legislation creating the IWC in 1913 was motivated largely by the desire to provide minimum wages for women, 40% of whom were earning less than $9 per week, which "was having a most disastrous effect on the health and morals of the women workers."

Ultimately, the Court defined employer as follows:

To employ, then, under the IWC’s definition, has three alternative definitions. It means: (a) to exercise control over the wages, hours or working conditions, or (b) to suffer or permit to work, or (c) to engage, thereby creating a common law employment relationship.

The broadest part of this definition is the "suffer or permit" language. It extends, for example to the proprietor of a business who knows (or perhaps has reason to know) that wage violations are occurring on its premises even if it does not directly employ the individuals involved. The plaintiffs in Martinez argued that this extended to the produce merchants because they benefited from the work in the fields. But by that line of reasoning, the grocery stores that sold the produce could also be deemed employers. The court explained that, to qualify as an employer based on the "suffer or permit to work" language, the defendant must have the ability to prevent the individuals from working. Here that was absent.

There will continue to be litigation over who is or is not an "employer." To minimize the chance of getting dragged into those disputes, companies should insist on contract language that:

Specifies that the other party is solely responsible for selecting, hiring, firing, supervising, training, assigning, and setting the wages, hours, and working conditions of its workers;
Requires the other party to represent that it will comply with all laws applicable to its operations, including wage and hour laws; and
Requires the other party to provide indemnity for employment-related claims by its workers.

No matter how the legal definition of employer continues to evolve, it is likely to be significantly broader than the term is generally understood in the business community.