What's Next From The California Supreme Court For California Employers?

The California Supreme Court's recent and eagerly awaited decision in Brinker Restaurant Corp. v. Superior Court we summarized here has received a great deal of deserved attention, but there are a number of other cases pending before the court of significance to California employers in a variety of industries. Those pending cases include the following:

Whether The Mixed-Motive Defense Applies To Employment Discrimination Claims Under The California Fair Employment And Housing Act.

In Harris v. City of Santa Monica, the California Court of Appeal held it was error for the trial court to refuse to instruct the jury regarding the city's mixed-motive defense to the plaintiff's claim she was terminated from her probationary position as a bus driver because she became pregnant. The city identified the following reasons unrelated to the plaintiff's pregnancy for  its decision to terminate her employment: "two preventable accidents, two-miss-outs, and a performance evaluation warning 'further development needed," each of which the city identified before the city learned plaintiff was pregnant. The trial court refused the following proposed jury instruction, and the jury returned a verdict in favor of the plaintiff:

If you find that the employer's action, which is the subject of plaintiff's claim, was actually motivated by both discriminatory and non-discriminatory reasons, the employer is not liable if it can establish by a preponderance of the evidence that its legitimate reason, standing alone, would have induced it to make the decision. An employer may not, however, prevail in a mixed-motives case by offering a legitimate and sufficient reason for its decision if that reason did not motivate it at the time of the decision. Neither may an employer meet its burden by merely showing that at the time of the decision it was motivated only in part by a legitimate reason. The essential premise of this defense is that a legitimate reason was present, and standing alone, would have induced the employer to make the same decision.

The California Supreme Court granted on April 22, 2010, the plaintiff's petition for review, and will decide the following issue: "Does the 'mixed-motive' defense apply to employment discrimination claims under the California Fair Employment and Housing Act (Government Code section 12900, et seq.)?" We think the court's decision on this issue has the potential to significantly affect the defensibility of claims of alleged employment discrimination under the Fair Employment and Housing Act. The case has been fully briefed, but it has not yet been scheduled for oral argument.

Whether The Prevailing Party Can Recover Attorney's Fees Incurred To Prosecute Or To Defend Against Alleged Meal And Rest Period Violations.

In Kirby v. Immoos Fire Protection, Inc., the plaintiff alleged a variety of wage and hour violations against his employer and sought to litigate his claims as a class action. After the trial court denied the plaintiff's motion for class certification, the plaintiff, perhaps tellingly, dismissed the action, and the trial court awarded to Immoos attorney's fees under Labor Code section 218.5 based on its determination that Immoos was the prevailing party as to, among other claims, plaintiff's claim that Immoos failed to authorize and permit required rest periods. On appeal, the Court of Appeal affirmed the award of attorney's fees as to plaintiff's rest period claim.

The California Supreme Court granted on November 17, 2010, plaintiff's petition for review and will decide the following issues: "(1) Does Labor Code section 1194 apply to a cause of action alleging meal and rest period violations (Labor Code section 226.7) or may attorney's fees be awarded under labor Code section 218.5 [to the prevailing party on a claim for alleged meal and/or rest period violations]?  (2) Is [the court's] analysis affected by whether the claims for meal and rest periods are brought alone or are accompanied by claims for minimum wage and overtime?"  In other words, the court will decide the important issue of whether the prevailing party on a claim for alleged rest period and/or meal period violations can recover attorney's fees. Oral argument was conducted on March 6, 2012, and the court's decision is currently due on or before May 4, 2012.  

Whether The Federal Aviation Administration Authorization Act Preempts Certain California Wage And Hour Laws When Applied To Certain Truck Drivers.

In People ex rel. Harris v. Pac Anchor Transportation, the State of California filed a lawsuit alleging a litany of alleged violations of California law including numerous alleged wage and hour violations based on the employer's alleged misclassification of drivers as independent contractors. The trial court granted the defendants' motion for judgment on the pleadings based on the trial court's determination that the State's lawsuit was preempted and barred by the Federal Aviation Administration Authorization Act ("FAAAA"). Generally speaking, the FAAAA preempts state and local regulations relating to the prices, the routes, or the services of motor carriers transporting property. However, the Court of Appeal reversed the trial court's decision.

The California Supreme Court granted on August 10, 2011, the defendants' petition for review and will decide the following issue: "Is an action under the Unfair Competition Law (Business and Professions Code section 17200, et seq.) that is based on a trucking company's alleged violation of state labor and insurance laws 'related to the price, route, or service' of the company and, therefore, preempted by the Federal Aviation Administration Authorization Act of 1994 (49 U.S.C. section 14501)?" The case was deemed fully briefed on March 26, 2012, but on April 11, 2012, the  Los Angeles Alliance for a New Economy and the International Brotherhood of Teamsters filed a request for permission to file an amicus curiae brief in support of the plaintiff and appellant. The court has not yet decided that request, and the case has not yet been scheduled for oral argument.  

Whether After-Acquired Evidence Of Employment Application Fraud Bars Certain Claims Under The Fair Employment And Housing Act.

In Salas v. Sierra Chemical Co., the California Court of Appeal held that evidence of employee or job applicant wrongdoing discovered after an allegedly discriminatory termination or refusal to hire that would have caused the employer to terminate the employee or to refuse to hire the employee can be a complete defense to claims for alleged wrongful termination, to claims for alleged discriminatory refusal to hire, and to claims for alleged failure to reasonably accommodate an alleged disability.

The California Supreme Court granted on November 16, 2011, the plaintiff's petition for review of the Court of Appeal's decision and will decide the following issues:  "Did the trial court err in dismissing plaintiff's claims under the Fair Employment and Housing Act (Gov. Code section 12900, et seq.) on the grounds of after-acquired evidence and unclean hands, based on plaintiff's use of false documentation to obtain employment in the first instance?  Did Senate Bill No. 1818 (2001-2002 Reg. Session) preclude application of those doctrines in this case?  (See Civil Code section 3339; Government Code section 7285; Health & Safety code section 24000; Labor Code section 1171.5)." In other words, the court will decide whether someone who obtained employment under false pretenses who was never entitled to be employed to begin with can nevertheless still sue his or her employer for alleged wrongful termination and for similar claims. The case is not yet fully briefed, and the case has not yet been scheduled for oral argument.

Applicability of California's Prevailing Wage Law To Charter Cities Using Municipal Funds For Public Works Projects.

In State Building & Construction Trades Council of California v. City of Vista, the plaintiff labor organization, State Building & Construction Trades Council of California, filed suit against the City of Vista seeking a peremptory writ of mandate requiring the City of Vista pay "prevailing wages" on public works projects funded by municipal funds despite the city's status as a charter city. The trial court denied the petition, and the Court of Appeal affirmed, holding that the prevailing wage law  "does not address matters of statewide concern and therefore Vista, as a charter city, is not required to comply with the [prevailing wage law] with respect to public works contracts which are financed solely from city revenues. Rather, such contracts are municipal affairs over which Vista has paramount power under article XI, section 5, subdivision (a) of the California Constitution."

The California Supreme Court granted on August 19, 2009, the labor organization's petition for review and will decide the following issue: Does California's prevailing wage law (Labor Code section 1720, et seq.) apply to a charter city when it contracts to construct public works projects with municipal funds? Oral argument was conducted on April 4, 2012, and the court's decision is currently due on or before July 3, 2012.

Enforceability of Employer-Employee Arbitration Agreement.

In Wisdom v. Accentcare, Inc., the plaintiffs filed suit alleging a variety of alleged wage and hour violations, and the defendants moved to compel the plaintiffs to arbitrate their claims pursuant to an arbitration agreement and acknowledgment form included as part of the employment application the plaintiffs each initialed and signed. The trial court denied the motion to compel arbitration based on its determination that the arbitration agreement was both procedurally and substantively unconscionable, and the Court of Appeal affirmed.

The California Supreme Court granted on March 28, 2012, the defendants' petition for review and will decide the following issue: "Is an arbitration clause in an employment application that provides 'I agree to submit to binding arbitration all disputes and claims arising out of the submission of this application' unenforceable as substantively unconscionable for lack of mutuality, or does the language create a mutual agreement to arbitrate all such disputes? (See Roman v. Superior Court (2009) 172 Cal.App.4th 1462.)"  The case is not yet fully briefed, and the court has not yet scheduled oral argument.

We are monitoring each of the above cases, and we will report here any significant developments in those cases.

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