The appellate courts, as with prior years, were faced with a host of issues related to labor and employment cases including whistleblower actions under various federal and state statutes, cost-shifting in FEHA cases, and cases involving union activity. Of particular importance, in a long-awaited opinion, the California Supreme Court held that courts do not have discretion to dismiss PAGA claims simply because they are unmanageable.

California Supreme Court holds that trial courts do not have inherent authority to completely dismiss PAGA claims due to manageability

In Estrada v. Royalty Carpet Mills, Inc. Jorge Luis Estrada and Paulina Medina, former employees of Royalty Carpet Mills (“Royalty”), brought a PAGA claim against the company for alleged violations of Labor Code provisions requiring the provision of meal periods. PAGA permits aggrieved employees to act as private attorneys general to recover civil penalties on behalf of the state for Labor Code violations. In this case, Royalty argued that trial courts should have the power to dismiss PAGA claims if they are deemed unmanageable.

The trial court certified a class action suit and later decertified it. More importantly, the trial court also dismissed the PAGA claim on the grounds that the claim was unmanageable. Plaintiffs appealed the decision to dismiss the PAGA claim. The Court of Appeal reversed the trial court’s decision. Royalty then filed a petition for review with the California Supreme Court.

The Supreme Court of California affirmed the Court of Appeal’s ruling, holding that trial courts do not have the inherent authority to dismiss PAGA claims on manageability grounds. The Court emphasized that trial courts do not generally possess a broad inherent authority to dismiss claims, nor is it appropriate for them to dismiss PAGA claims by using class action manageability requirements.

Specifically, the Supreme Court stated that while trial courts may use various tools to efficiently manage PAGA claims, striking such claims due to manageability concerns is not among these tools. It also noted that while trial courts and the Labor and Workforce Development Agency (“LWDA”) share discretion in assessing a civil penalty, the trial court’s discretion does not extend to determining which cases can be investigated and enforced, a power reserved for the LWDA.

The Supreme Court further rejected the argument that the retrial of the plaintiffs’ representative PAGA claim would violate Royalty’s right to due process. It stated that while defendants have a due process right to present an affirmative defense, this does not include the right to present the testimony of an unlimited number of individual employees. It also concluded that trial courts lack inherent authority to dismiss a PAGA claim on manageability grounds to protect a defendant’s due process rights. However, the court left open the possibility that a defendant could show that a trial court’s use of case management techniques so abridged the defendant's right to present a defense that its right to due process was violated.

For a more detailed analysis, review our April 2024 Ahead of the Curve article.

Court of Appeal holds that a school district met its burden of establishing that it would have terminated employee notwithstanding its improper anti-union motives

In Visalia Unified School Dist. v. Public Employment Relations Bd. the California School Employees Association (“CSEA”) filed a complaint with the Public Employment Relations Board (“Board”) alleging that the Visalia Unified School District (“VUSD”) violated Government Code section 3543.5(a) by terminating an employee in retaliation for her union activities. The employee was a secretary and local union chapter president. The Board found in favor of the employee, concluding that her status as a union officer was protected activity under the Educational Employment Relations Act (“EERA”), and that VUSD had retaliated against her for her union activity. VUSD appealed this decision by filing a petition to set aside the Board’s decision.

The Court of Appeal held that holding a union office is protected activity under the EERA. The Court also concluded that the Board correctly found an inference that VUSD had retaliated against the employee for her union activity. However, the Court disagreed with the Board’s conclusion that VUSD failed to prove its affirmative defense, i.e. that it would have terminated the employee for poor performance regardless of any protected activity. The Court found that the record compelled a finding that VUSD would have justifiably terminated the employee notwithstanding her protected union activity. Therefore, the Court granted VUSD’s petition and set aside the Board’s decision.

United States Supreme Court holds that under the Sarbanes-Oxley Act, a whistleblower is not required to provide evidence of his former securities employer’s retaliatory intent

In Murray v. UBS Securities Murray, a former UBS Securities, LLC (“UBS”) research strategist, filed suit claiming that he was terminated in February 2012 shortly after complaining to his supervisor that he was pressured by the trading desk to alter his research reports. Murray, who had received a generally favorable performance review prior to his discharge, alleged that he had been fired in retaliation for this protected whistleblowing activity, in violation of the Sarbanes-Oxley Act (“SOX”), specifically 18 U.S.C. section 1514A.

The district court applied the “contributing factor” standard, requiring that the jury find only that Murray’s “protected activity was a contributing factor in UBS’s decision to terminate his employment,” not that UBS intended to retaliate against him. The Second Circuit vacated the verdict in 2022, holding that the lower court erred by not instructing the jury to assess retaliatory intent as an element of the claim.

In a unanimous decision authored by Justice Sotomayor, the United States Supreme Court reversed the Second Circuit and held that plaintiffs bringing SOX retaliation claims do not have to prove their employers’ “retaliatory intent,” only that their whistleblowing activity was a “contributing factor” in the adverse employment action. Justice Sotomayor noted that the “contributing factor” burden-shifting framework originated in a civil service law and that several other statutes—governing industries where whistleblowing can play an important role—have similar causation language.

In a FEHA case involving misclassification, Court of Appeal holds the trial court erred in awarding costs based solely on defendant’s cost memorandum without a formal motion to award discretionary costs based on a frivolous action by the employee

In Neeble-Diamond v. Hotel California by the Sea, LLC plaintiff filed a Fair Employment and Housing Act (“FEHA”) action alleging that Hotel California by the Sea (“Hotel”) for whom she provided services inappropriately misclassified her as an independent contractor. The complaint alleged both statutory and nonstatutory causes of action based on Neeble-Diamond’s alleged employment status with Hotel. A jury determined that she was an independent contractor, not a Hotel employee, and therefore entered judgment for Hotel. The trial court awarded costs to the Hotel in an amount exceeding $180,000. Neeble-Diamond appealed.

The issue was whether the trial court had the ability to award costs to the defendant without finding that the plaintiff’s FEHA claims were objectively frivolous. The Court of Appeal agreed with Neeble-Diamond and reversed the order awarding costs to Hotel. The Court highlighted that in FEHA cases, a prevailing defendant has no automatic right to recover costs. Instead, the defendant must move the court to make a discretionary award of such costs, based in part on a specific finding that the action was frivolous. The Court further found that Hotel forfeited any claim to costs by failing to file the necessary motion for costs rendering their cost memorandum ineffective. As a result, Neeble-Diamond had no obligation to respond to the cost memorandum.

Ninth Circuit holds that the whistleblower anti-retaliation provisions in the Sarbanes-Oxley and Dodd-Frank Acts do not apply to employment relationships outside the United States

In Daramola v. Oracle America, Inc. plaintiff Daramola, a Canadian citizen, filed a complaint against Oracle America, Inc. (“Oracle America”) under the Sarbanes-Oxley Act (“SOX”) and Dodd-Frank Act (“DFA”). Daramola was employed by Oracle Canada, a subsidiary of Oracle America, and worked remotely from Canada. He alleged that Oracle America and its employees retaliated against him for reporting suspected fraud related to one of Oracle’s software products. The district court dismissed the complaint on the grounds that neither SOX nor DFA apply to employment outside the United States.

The Ninth Circuit affirmed. The Court applied a “presumption against extraterritoriality” and concluded that the presumption was not overcome because Congress did not affirmatively and unmistakably instruct that the provisions should apply to foreign conduct.

The Court further held that this case did not involve a permissible domestic application of the statutes, given that Daramola was a Canadian working out of Canada for a Canadian subsidiary of a United States parent company. The Court agreed with other circuits that the focus of the SOX anti-retaliation provision is on protecting employees from employment-related retaliation, and the locus of plaintiff employment relationship was in Canada. The Court also concluded that Daramola did not allege sufficient domestic conduct in the United States in connection with his DFA claim. The same reasoning disposed of Daramola’s California state law claims.

Court of Appeal upholds a professor’s dismissal from UC Santa Cruz even though his inappropriate sexual conduct was directed at non-students at off-campus events

In Balarkrishnan v. The Regents of the University of California Dr. Gopal Balakrishnan, a former tenured professor at the University of California, Santa Cruz (“UCSC”), was dismissed and denied emeritus status for sexually abusing a fellow academic at an off-campus academic conference and a UCSC student whom he volunteered to walk home from an off-campus graduation party. Balakrishnan appealed the decision, arguing that the university lacked jurisdiction to discipline him because the victims were not university students, the university misinterpreted and misapplied its own regulations and policies, he did not receive notice of all charges, and the sanctions were excessive.

Balakrishnan filed a petition for a writ of administrative mandate to set aside the findings and decision of the Regents to terminate his employment and deny him emeritus status. The trial court denied his petition, upholding the university’s decision.

The Court of Appeal rejected Balakrishnan’s contentions and affirmed the trial court’s judgment. The Court found that the university had the authority to discipline Balakrishnan for his off-campus behavior based on its internal policies, rules, and regulations. The Court also found that Balakrishnan had received notice of the charges and that the sanctions were not excessive given the severity of his conduct.

Court of Appeal holds that trial court erred in granting interest on attorneys’ fees award from the date of the original judgment, rather than from the date of the new judgment after reversal on appeal

In Vines v. O'Reilly Auto Enterprises Renee Vines sued his former employer, O’Reilly Auto Enterprises, LLC (“O’Reilly”), for violations of the Fair Employment and Housing Act (“FEHA”), alleging causes of action for race- and age-based discrimination, harassment, and retaliation. A jury found in plaintiff’s favor on his causes of action for retaliation and failure to prevent retaliation, but against him on his other causes of action. Vines moved for statutory attorneys’ fees, which the trial court granted but awarded only a portion of the requested amount. The trial court had initially awarded Vines a reduced amount of attorneys’ fees, based on its determination that Vines’s unsuccessful discrimination and harassment causes of action were not closely related to or factually intertwined with his successful retaliation causes of action. Vines appealed.

Vines appealed this decision and, in a separate opinion, the Court of Appeal reversed, holding that the trial court erred in its determination that the causes of action were not closely related or factually intertwined with the successful causes of action. On remand, the trial court awarded Vines a significantly larger amount in fees.

O’Reilly appealed from the order denying its motion to vacate the renewal of judgment, challenging only the amount of interest on the award of attorneys’ fees. O’Reilly argued that, because the appellate court’s decision in the prior appeal was a reversal, not a modification, of the trial court’s initial order, interest on the amount of attorneys’ fees awarded should run from the date of the second order, not the first. The Court of Appeal agreed with O’Reilly, reversed the order denying O’Reilly’s motion to vacate the renewed judgment, and directed the trial court to grant the motion.

In a disability discrimination action, Court of Appeal holds that the trial court’s failure to directly address prevailing plaintiff’s unopposed request for prejudgment interest required remand

In Howell v. State Dept. of State Hospitals Ashley Howell, a temporary pre-licensed psychiatric technician, was employed by the Department of State Hospitals (“DSH”) from January 2, 2020, to January 24, 2020. Howell was terminated after DSH discovered she was on medical leave from her previous job due to a 2017 sexual assault, which she did not disclose during her pre-employment health screening. Howell filed a lawsuit against DSH, claiming mental and physical disability discrimination under the Fair Employment and Housing Act (“FEHA”).

The trial court granted summary judgment in favor of DSH on Howell’s claims for failure to accommodate and failure to engage in the interactive process. Howell then dismissed her claim for failure to prevent discrimination. The jury found in favor of Howell on her mental disability discrimination claim, awarding her $36,751.25 in lost earnings and health insurance benefits but nothing for pain and suffering. The court denied Howell’s motion for a new trial on non-economic damages and granted DSH’s motion for judgment notwithstanding the verdict, striking the award for lost health insurance benefits. Howell was awarded $135,102 in attorney fees and costs but did not receive a ruling on her request for prejudgment interest.

The Court of Appeal affirmed the trial court’s decisions to deny Howell’s motion for a new trial and to grant DSH’s motion for judgment notwithstanding the verdict. The Court found that Howell did not provide evidence of out-of-pocket expenses for lost health insurance benefits. The Court also upheld the trial court’s award of $135,102 in attorney fees and costs, finding Howell’s request for $1.75 million to be unreasonable. However, the Court remanded the case for the trial court to address Howell’s request for prejudgment interest.

Court of Appeal holds that pizza delivery driver was entitled to attorney’s fees and costs pursuant to Labor Code section 1194(a) since the statute was more specific and more recently enacted than Code of Civil Procedure section 1033(a) which governs fees and costs in general

In Gramajo v. Joe's Pizza on Sunset, Inc. Elinton Gramajo was a pizza delivery driver for Joe’s Pizza on Sunset, Inc. and other defendants. Gramajo sued his employers for Labor Code violations regarding unpaid minimum and overtime wages. After several years of litigation, a jury trial awarded Gramajo $7,659.93. Gramajo then requested attorney fees of $296,920 and costs of $26,932.84 under Labor Code section 1194(a), which allows prevailing employees to recover reasonable litigation costs, including attorney fees. The trial court, however, denied these requests, arguing that Gramajo’s counsel had excessively litigated the case, and that the requested fees and costs were disproportionately high compared to Gramajo’s limited trial success. The trial court relied on Code of Civil Procedure section 1033(a) which gives the trial court discretion to award costs in cases where the award is less than $25,000. Gramajo appealed.

The Court of Appeal disagreed with the trial court holding that employees who prevail in actions for unpaid minimum and overtime wages shall be entitled to reasonable litigation costs under Labor Code section 1194(a), regardless of the amount recovered. Such an award is mandatory by section 1194(a). The Court held that the trial court erred in relying on section 1033(a) since section 1194(a) is more specific to the case and more recently enacted than Code of Civil Procedure section 1033(a) which governs fees and costs in general. The Court stressed that Gramajo was entitled to his reasonable fees and costs and remanded the case back to the trial court to determine a reasonable fee and cost award. The Court did not express an opinion on the reasonableness of Gramajo’s requests for litigation costs.

United States Supreme Court holds that Title VII employment discrimination does not require a showing that plaintiff’s injury was “significant.”

In Muldrow v. City of St. Louis Sergeant Jatonya Clayborn Muldrow, a police officer in the St. Louis Police Department, alleged that she was transferred from her position in the Intelligence Division to a uniformed job in another department because of her gender. Despite maintaining her rank and pay, Muldrow’s responsibilities, perks, and schedule were significantly altered. She filed a Title VII suit against the City of St. Louis (“City”), claiming that the transfer constituted sex discrimination with respect to her employment terms and conditions.

The District Court granted the City summary judgment, and the Eighth Circuit affirmed, both holding that Muldrow had to show that the transfer caused her a “materially significant disadvantage.” The courts ruled that since the transfer did not result in a reduction to her title, salary, or benefits and only caused minor changes in working conditions, Muldrow’s lawsuit could not proceed.

The Supreme Court of the United States disagreed with the lower courts’ interpretation of Title VII. The Court held that an employee challenging a job transfer under Title VII must show that the transfer brought about “some harm with respect to an identifiable term or condition of employment,” but that harm need not be significant. The Court rejected the City’s arguments based on statutory text, precedent, and policy, and clarified that Muldrow only needed to show some injury respecting her employment terms or conditions, not that the harm was significant.

Court of Appeal holds that inclusion of fundamentally different claims in a FEHA civil complaint from those contained in administrative complaint concerning alleged employment discrimination meant plaintiff failed to exhaust administrative remedies which is required in order to proceed in civil court

In Kuigoua v. Dept. of Veteran Affairs Arno Kuigoua, a registered nurse who was employed by the California Department of Veterans Affairs (“Department”) at the Knight Veterans Home, was terminated in October 2018 after the Department found him guilty of sexually harassing women and providing substandard care that harmed patients. Kuigoua appealed his termination to the State Personnel Board, but his appeal was rejected. He then filed an administrative charge of employment discrimination with the California Department of Fair Employment and Housing and the federal Equal Employment Opportunity Commission, alleging discrimination based on sex and retaliation.

When his claims were denied, Kuigoua filed a civil complaint alleging various statute statutory claims, including claims under FEHA. His complaint was not limited to discrimination based on sex and retaliation but also included allegations of unlawful gender, sex, and/or sexual orientation discrimination and harassment, unlawful race, color, and/or national origin discrimination and/or harassment, failure to prevent unlawful discrimination and/or harassment based on gender, sex, sexual orientation, race, color, and/or national origin, and retaliation based on gender, sex, sexual orientation, race, color, and/or national origin.

Department filed a motion for summary judgment on the grounds that Kuigoua failed to exhaust his administrative remedies which is a prerequisite to filing the civil action. The trial court granted the motion.

The Court of Appeal affirmed finding that Kuigoua’s claims in court were not like, and were not reasonably related to, those in his administrative complaint which is required to pursue a FEHA action in court. The Court noted: “Kuigoua loses this appeal because he changed horses in the middle of the stream. His agency complaint was one animal. On the far bank, however, his lawsuit emerged from the stream a different creature. Changing the facts denied the agency the opportunity to investigate the supposed wrongs Kuigoua made the focus of his judicial suit. The court rightly ruled Kuigoua failed to exhaust his administrative remedies.”

Court of Appeal holds that an aggrieved employee had standing to bring a representative and individual PAGA claims despite not having filed an individual non-PAGA action against employer

In Balderas v. Fresh Start Harvesting, Inc. Lizbeth Balderas, a former employee of Fresh Start Harvesting, Inc. (“Fresh Start”), filed a complaint for civil penalties under the California Labor Code Private Attorneys General Act of 2004 (“PAGA”) on behalf of herself and 500 other current and former employees. Balderas alleged that Fresh Start violated labor laws by not providing required meal and rest breaks, providing inaccurate wage statements, making untimely wage payments, and failing to pay wages at termination. Balderas did not file an individual claim but proceeded solely under PAGA, representing all aggrieved employees.

On its own motion, the trial court gave notice of its intent to strike Balderas’s complaint. The court reasoned that because she had not filed an individual action seeking PAGA relief for herself, she lacked standing to pursue a “non-individual” or representative PAGA action on behalf of other employees. Balderas filed an opposition, but the trial court still struck the complaint relying on Viking River Cruises v. Moriana a United States Supreme Court decision, which at held that in order to have standing to pursue representative PAGA claims, a plaintiff must also assert individual PAGA claims. Balderas appealed.

The Court of Appeal reversed concluding that Balderas, as an alleged aggrieved employee who was subject to alleged Labor Code violations by Fresh Start, may bring a representative PAGA action on behalf of herself and other Fresh Start employees, even though she did not file an individual cause of action seeking individual relief for herself in this action. The Court held that the trial court erred by relying on Viking River whose “PAGA standing holding” was later reversed by the California Supreme Court in Adolph v. Uber Technologies, Inc. In particular, Adolph held that he the Viking Riverrequirement of having to file an individual PAGA cause of action to have standing to file a representative PAGA suit was incorrect. Rather, there are only two requirements for PAGA standing: “The plaintiff must allege that he or she is (1) someone who was employed by the alleged violator and (2) someone against whom one or more of the alleged violations was committed.”

Ninth Circuit holds that a NASA scientist met pleading standard for hostile-work-environment claim when he stated that harassment began after informing superior of his disability

In Mattioda v. Nelson a scientist with physical disabilities, Dr. Andrew Mattioda, sued his employer, the National Aeronautics and Space Administration (“NASA”), under the Rehabilitation Act of 1973. He alleged that he suffered a hostile work environment after informing his supervisors of his disabilities and requesting upgraded airline tickets for work travel. He also claimed he was discriminated against due to his disability by being passed over for a promotion.

The district court granted NASA’s motion to dismiss as to Dr. Mattioda’s hostile-work-environment claim and granted summary judgment in favor of NASA on his disability-discrimination claim. The court concluded that Dr. Mattioda failed to allege a plausible causal nexus between the claimed harassment and his disabilities. It also held that NASA provided a legitimate nondiscriminatory reason for not selecting Dr. Mattioda for an available senior scientist position. Dr. Mattioda appealed.

The Ninth Circuit reversed the district court’s dismissal of Dr. Mattioda’s hostile-work-environment claim, affirming that a disability-based harassment claim is available under the Americans with Disabilities Act of 1990 and the Rehabilitation Act. The Court held that Dr. Mattioda plausibly alleged a hostile-work-environment claim based on his disability. However, the Court affirmed the district court’s order granting summary judgment for NASA on the disability-discrimination claim, agreeing that NASA had provided a legitimate nondiscriminatory reason for not selecting Dr. Mattioda for the senior scientist position.

Court of Appeal holds that because intent to terminate was never issued and employer’s demotion was voluntary, substantial evidence supported that employee was not entitled to a “Skelly” hearing to ensure due process is met

In LaMarr v. The Regents of the University of California June LaMarr, an employee at the University of California Davis Medical Center, was transferred to a different department following performance issues and conflicts with her supervisor. The transfer was initially temporary, but later became permanent, resulting in a decrease in LaMarr’s pay. LaMarr sued the Regents of the University of California (“Regents”) alleging that her due process rights were violated as she was not provided a hearing under Skelly v. State Personnel Bd. before her demotion. Under Skelly, before a public employee may be subject to an adverse employee action, due process requires, at a minimum, “notice of the proposed action, the reasons therefor, a copy of the charges and materials upon which the action is based, and the right to respond, either orally or in writing, to the authority initially imposing discipline.”

The case proceeded to a bench trial in which the Regents prevailed. The court concluded that LaMarr was not deprived of due process when she was offered the option to either transfer to a non-supervisory position with reduced pay or return to her higher paying supervisory position and face possible termination proceedings. The court reasoned that the Regents never issued a notice of intent to dismiss and that LaMarr’s feeling of duress did not trigger due process protections provided by Skelly. LaMarr appealed contending that she was not informed of the adverse consequences of accepting a transfer and that her acceptance of the transfer was not voluntary.

The Court of Appeal affirmed finding substantial evidence that the Regents did not violate LaMarr’s due process rights because she was never notified of an intent to terminate and any demotion was voluntary. The Court also noted that a “difficult choice” is not the same as an “involuntary choice.”

Court of Appeal holds that an employee who was injured while driving into town from a temporary work camp was eligible for workers compensation benefits under the “commercial traveler rule” despite the employer’s expectation that employees avoid driving into town

In 3 Stonedeggs, Inc. v. WCAB an employee, Braden Nanez, was injured in an auto accident while off work and away from his job at a remote fire base camp. His employer, 3 Stonedeggs, Inc., expected employees not to leave the job site and to notify a manager if they did. Nanez did not notify a manager he was leaving camp. The Workers’ Compensation Appeals Board (“Board”) determined that under the commercial traveler rule, workers’ compensation coverage applied to Nanez’s injuries. The Board found that Nanez’s use of his own car while off work to drive approximately 70 miles away from camp purportedly to obtain cellular service was conduct reasonably expected by his employer to be incident to its requirement that Nanez spend time away from home where cellular service was not adequately provided at the camp.

The employer, 3 Stonedeggs, Inc., and its insurer petitioned for a writ of review, arguing that the Board acted in excess of its authority and that substantial evidence did not support the Board’s findings. They argued that Nanez was injured during a material deviation from his employment; he left the camp without employer approval on a personal activity that, under the unique circumstances of working at this remote fire camp, was not contemplated by the employer.

The Court of Appeal denied the petition finding that substantial evidence supported the Board’s findings. The Court concluded that under the circumstances of Nanez’s age, his having his personal vehicle with him, the structure of his shifts, the remoteness of the camp, and his not being prohibited from using his vehicle during his off hours, it was reasonable for the employer to expect that Nanez would leave camp in his car during his off time as incident to being employed away from home.

Court of Appeal holds that there was substantial evidence to support plaintiff’s age discrimination claim because ample evidence demonstrated that one of the employer’s representatives who was present in her termination meeting exhibited discriminatory animus towards her and that reasons for her firing were pretextual

In Hoglund v. Sierra Nevada Memorial-Miners Hospital plaintiff Jessica Hoglund filed a workplace age discrimination lawsuit against defendant Sierra Nevada Memorial-Miners Hospital (“Hospital”). She was initially hired by the company in 2004 as a phlebotomist trainee. She was promoted to laboratory supervisor in 2011. Hoglund argued that a specific employee of the company, Horne, who eventually became her direct supervisor, engaged in a prolonged campaign of age-based discrimination and age-based harassment and made comments like “we need to hire young people” as they “catch on fast.” Hoglund asserted her rights were violated under California’s Fair Employment and Housing Act (“FEHA”) and the case went to a bench trial. The trial court found for Hoglund on those claims and awarded her $1,431,800 in economic and non-economic damages, along with $958,297 in attorney fees and $57,333 in costs.

Defendants appealed on numerous grounds. In particular, Hospital argued that the evidence simply did not warrant the court’s finding of age discrimination. Additionally, Hospital argued that even if age discrimination was found by the court, the amount of damages awarded was wholly unreasonable, given the nature of the allegations.

The Court of Appeal affirmed the trial court’s decision. First, the Court emphasized that the plaintiff brought “substantial evidence” to support her age discrimination complaint. It noted that she presented both direct evidence and circumstantial evidence. Second, as to damages, the Court found that, as a technical matter, it cannot review the employer’s claim since the issue had been waived on appeal. Indeed, the court stated that, “we may not consider the merits of these arguments because defendants did not adequately preserve the issue for appeal.” Relying on California Supreme Court precedent, the Court held that rather than directly appeal the issue of excessive damages, Hospital was required to file a timely motion for a new trial to challenge “alleged” excessive damages, which Hospital did not do.

Ninth Circuit affirms the granting of an employer’s summary judgment motion when overwhelming evidence showed that there was no discriminatory animus in employer’s statements and actions regarding plaintiff’s religion

In Hittle v. City of Stockton plaintiff, Ronald Hittle, was the Fire Chief for the City of Stockton (“City”). alleged that he was terminated from his position due to his religion, specifically his attendance at a religious leadership event. Thereafter, Hittle filed a lawsuit against City, former City Manager Robert Deis, and former Deputy City Manager Laurie Montes alleging discrimination in violate of Title VII of the Civil Rights Act of 1964 (“Title VII”) and California’s Fair Employment and Housing Act (“FEHA”).

During the litigation, City hired an independent investigator, Trudy Largent (“Largent”) to investigate various allegations of misconduct against Hittle. Largent’s report sustained almost all of the allegations, including Hittle’s use of City time and a City vehicle to attend a religious event, his failure to properly report his time off, potential favoritism of certain Fire Department employees based on a financial conflict of interest not disclosed to the City, and endorsement of a private consultant’s business in violation of City policy.

Defendants filed a motion for summary judgment which was granted by the district court. The court found that Hittle failed to present sufficient direct evidence of discriminatory animus in the defendants’ statements and the City’s notice of intent to remove him from City service. The court also found that Hittle failed to present sufficient specific and substantial circumstantial evidence of religious animus by the defendants. Hittle appealed.

The Ninth Circuit affirmed holding that employment discrimination claims under Title VII and FEHA are analyzed under the McDonnell Douglas burden-shifting framework. The Court concluded that Hittle failed to present sufficient direct evidence of discriminatory animus in the defendants’ statements and the City’s notice of intent to remove him from City service. Hittle also failed to present sufficient specific and substantial circumstantial evidence of religious animus by the defendants. The Court found that the district court’s grant of summary judgment in the defendants’ favor was appropriate where the defendants’ legitimate, non-discriminatory reasons for firing Hittle (based on Largent’s investigation) were sufficient to rebut his evidence of discrimination, and he failed to persuasively argue that these non-discriminatory reasons were pretextual.

Court of Appeal holds that “Harris” case law, allowing for some relief for a FEHA plaintiff even after a successful “same decision” defense does not extend to whistleblower retaliation claims

In Ververka v. Department of Veteran's Affairs Donald Ververka, was an administrator for a veteran’s home operated by the California Department of Veterans Affairs (“CalVet”). He was removed from his position after reporting safety and health issues at the home and potential violations of federal law to his superiors and an independent state agency. Ververka sued CalVet, alleging that his termination was in retaliation for his whistleblowing activities, in violation of Labor Code section 1102.5.

The case went to trial, and the jury found that Ververka’s protected disclosures were contributing factors in CalVet’s decision to remove him. However, the jury also found that CalVet was not liable because under Labor Code section 1102.6, it proved it would have made the same decision for non-retaliatory reasons. After the trial court entered judgment for CalVet, Ververka moved to vacate the judgment arguing that he was entitled to declaratory relief and reasonable attorney’s fees and costs. The trial court denied the motion.

Ververka appealed arguing that the trial court erred in denying his motion to vacate the judgment. Relying on the line of cases following Harris v. City of Santa Monica (2013) 56 Cal.4th 203, Ververka contended that an employer’s “same decision” showing under section 1102.6 precludes only an award of damages and backpay and an order of reinstatement, and as a result, he was entitled to declaratory relief and reasonable attorney’s fees and costs. The Court of Appeal disagreed, concluding that the whistleblower statutes (including section 1102.5) are not reasonably susceptible to Ververka’s interpretation and not subject to the alternative relief under Harris.

Ninth Circuit holds that a California statute providing for differential treatment of worker misclassification in the transportation and delivery services sector relative to other sectors passed rational basis review and is, thus, constitutional

In Olson v. State of California Postmates, Inc., Uber Technologies, Inc., and two individuals filed an action challenging the constitutionality of California Assembly Bill 5, enacted by the California legislature to address a systemic problem of businesses improperly characterizing their workers as independent contractors to avoid fiscal responsibilities owed to employees. AB 5 does not directly classify any particular workers as employees or independent contractors. Rather, under AB 5, arrangements between workers and referral agencies that provide delivery or transportation services are automatically subject to the “ABC test” adopted by the California Supreme Court in Dynamex Operations W., Inc. v. Superior Court (2018) 416 P.3d 1, while arrangements between workers and referral agencies that provide other types of services, such as dog walking or handyman services, are subject to the “multifactor test” set forth in S.G. Borello & Sons, Inc. v. Departmentt of Indus. Rels. (1989) 769 P.2d 399, provided certain statutorily defined criteria are met.

The district court dismissed plaintiffs’ state and federal Equal Protection claims and denied their request for preliminary injunctive relief.

The Ninth Circuit applied the deferential rational basis standard and affirmed the district court’s ruling. The Ninth Circuit concluded that there were plausible reasons for treating transportation and delivery referral companies differently from other types of referral companies, particularly where the Legislature perceived transportation and delivery companies as the most significant perpetrators of the problem it sought to address—worker misclassification. According to the Court that AB 5 may be underinclusive because it does not extend the ABC test to every industry and occupation that has historically contributed to California’s misclassification woes does not render it unconstitutionally irrational.

Court of Appeal holds that defining “aggrieved employees” in a prelitigation notice is not required for a PAGA claim to proceed

In Ibarra v. Chuy & Sons Labor, Inc. Edelmira Ibarra was a nonexempt employee who worked for Chuy & Sons Labor, Inc., Infinite Herbs, LLC, Baby Root Farms, and G.J. Farms, Inc. (collectively “Defendants”) from January to July 2021. Ibarra alleged that the Defendants violated several provisions of the Labor Code, including failing to maintain adequate staffing levels, giving too much work to employees resulting in missed meal and rest periods without premium pay, and failing to reimburse employees for safety gloves and protective masks. Ibarra sent a prelitigation notice to the Defendants and the Labor Workforce and Development Agency (“LWDA”) in September 2021, alleging these violations on behalf of herself and all other current and former non-exempt employees of the Defendants in the State of California during the last four years.

After Defendants rejected the prelitigation notice, Ibarra filed a Private Attorneys General Act (“PAGA”) action against Defendants. The trial court granted the Defendants motion for judgment on the pleadings, dismissing Ibarra’s PAGA action for failure to comply with PAGA's prefiling notice requirements. The court found Ibarra’s prelitigation notice deficient because it did not adequately describe the “aggrieved employees” on whose behalf Ibarra was suing. Ibarra appealed.

The Court of Appeal reversed holding that the PAGA prelitigation notice does not need to further define “aggrieved employees” as long as it includes “the facts and theories” to support the alleged Labor Code violations and nonfrivolous allegations that other aggrieved employees exist. The Court found that Ibarra’s prelitigation notice met these requirements and was therefore sufficient.

Court of Appeal holds that general personal jurisdiction over a non-California employer for a work sexual harassment claim based on conduct in Florida may be established if the discovery shows that the employer had sufficient contacts with the state of California

In Hardell v. Vanzyl Cailin Hardell sued Adrian Vanzyl, Waleed Mohsen, and Blumberg Capital for sexual assault and battery, sexual harassment, and retaliation, among other claims, related to an incident that occurred in Miami, Florida in March 2022. Vanzyl, a non-California resident, moved to quash service of summons of the first amended complaint, arguing that he had insufficient contacts with California for the trial court to exercise either specific or general personal jurisdiction over him. The trial court agreed and also denied Hardell’s request to conduct jurisdictional discovery. The trial court’s decision was based on its finding that Vanzyl was not domiciled or continuously and systematically present in California in March 2022, and that Vanzyl had insufficient suit-related contacts with California.

Hardell appealed this decision, arguing that the trial court erred in its findings and that it should have granted her request for jurisdictional discovery.

The Court of Appeal agreed that Hardell’s claims against Vanzyl and his contacts with California were too attenuated to support specific jurisdiction. However, the Court found that the trial court erred in failing to consider whether it could exercise general jurisdiction over Vanzyl notwithstanding its finding that he was not domiciled in California in March 2022. The Court also held that the trial court abused its discretion in denying Hardell’s request for jurisdictional discovery. The case was remanded, with Hardell being allowed to conduct limited discovery addressing whether the trial court may exercise general jurisdiction over Vanzyl.

Court of Appeal holds that an employee’s refusal to take and provide the results of a COVID-19 test to his employer was not a refusal to sign an authorization under the Confidentiality of Medical Information Act

In Frayo v. Martin Ryan Owen Frayo, a former employee of A&A Organic Farms Corporation (“A&A”), was terminated for refusing to take a COVID-19 test. Frayo sued A&A and its owners, Andrew D. Martin and Aimee M. Raphael-Martin, alleging they violated the Confidentiality of Medical Information Act (“CMIA”). Frayo claimed that his termination was a result of his refusal to provide a COVID-19 test result, which he argued was equivalent to refusing to sign an authorization for the release of his medical information under the CMIA. He also claimed that A&A used his description of his symptoms, which he considered as medical information, to terminate his employment.

A&A filed a demurrer to the complaint which was sustained (granted) by the trial court. The court found that Frayo failed to state a claim under the CMIA. Specifically, the court concluded that Frayo failed to state a claim under section 56.20(b) of the CMIA because the statute prohibits employer discrimination based on an employee’s refusal to sign an authorization to release his medical information, not refusal to take a COVID-19 test. The court also sustained the demurrer to Frayo’s second cause of action under section 56.20(c) because Frayo failed to allege A&A had possession of his medical information, as defined by the statute. Frayo appealed.

The Court of Appeal affirmed holding that Frayo did not state a cognizable CMIA claim under either section 56.20(b) or (c). The Court found that Frayo’s refusal to take and provide the results of a COVID-19 test was not equivalent to an “employee’s refusal to sign an authorization” under the CMIA. Furthermore, the Court concluded that Frayo failed to allege that A&A was in possession of his medical information as defined under the CMIA.

Court of Appeal holds that “egg retrieval and freezing procedures” do not qualify as a pregnancy-related condition or disability protected by FEHA

In Paleny v. Fireplace Products U.S., Inc. Erika Paleny sued her employer, Fireplace Products U.S., Inc. (“Fireplace”), and her manager, Sabah Salah, alleging harassment, discrimination, and retaliation after she informed them of her plans to undergo oocyte (egg) retrieval procedures for donation and future personal use. Paleny claimed that Salah disapproved of the procedures and subsequently harassed her for needing time off for the procedures, which eventually led to her termination.

The trial court granted the defendants’ motion for summary judgment finding that the egg retrieval and freezing procedures did not qualify as a pregnancy-related medical condition or disability and were therefore not protected by the California Fair Employment and Housing Act (“FEHA”). Paleny appealed this decision, arguing that the trial court’s ruling erroneously interpreted the relevant statutes and denied her protection under FEHA.

The Court of Appeal affirmed finding that Paleny was not pregnant nor disabled by pregnancy during her employment, and thus could not claim entitlement to the protections afforded under FEHA, specifically Government Code section 12940 et seq. The Court also found that Paleny was not suffering from a medical condition related to pregnancy. The Court concluded that the egg retrieval procedure did not constitute a medical condition related to pregnancy under FEHA, as Paleny was undergoing an elective medical procedure without an underlying medical condition related to pregnancy. Therefore, Paleny did not have a protected characteristic under FEHA.

Ninth Circuit holds that 42 U.S.C. section 1981 protects United States citizens from discrimination in hiring

In Rajaram v. Meta Platforms, Inc. Purushothaman Rajaram, a naturalized United States citizen applied unsuccessfully to work for Meta Platforms, Inc. (“Meta”) several times. He alleged that Meta refused to hire him because it prefers to hire noncitizens holding H1B visas to whom it can pay lower wages. Plaintiff filed a civil rights, class action lawsuit against Meta based on 42 USC section 1981 which provides: “All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts, to sue, be parties, give evidence, and to the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens, and shall be subject to like punishment, pains, penalties, taxes, licenses, and exactions of every kind, and to no other.” In essence, plaintiff claimed that Meta violated section 1981 by discriminating against United States citizens in hiring.

The district court dismissed the complaint holding that section 1981 “does not bar discrimination based on U.S. citizenship.” Plaintiff appealed.

The Ninth Circuit reversed holding that section 1981 prohibits employers from discriminating against United States citizens because an employer that does so gives one class of people—noncitizens, or perhaps some subset of noncitizens—a greater right to make contracts than “white citizens.” If some noncitizens have a greater right to make contracts than “white citizens,” then it is not true that “[a]ll persons” have the “same right” to make contracts as “white citizens.”

Ninth Circuit holds that the Family and Medical Leave Act does not require an employer to present contrary medical evidence before contesting a doctor’s certification of a serious health condition

In Perez v. Barrick Goldstrike Mines, Inc. Tomas Perez, an underground haul truck driver, sued his former employer, Barrick Goldstrike Mines, Inc. (“Barrick”), alleging that the company wrongfully interfered with his rights under the Family and Medical Leave Act (“FMLA”) when it terminated his employment. Perez claimed that he had suffered a serious health condition that prevented him from performing his job, and that Barrick terminated his employment because he sought protected leave. Barrick, however, argued that Perez had faked his injury and violated company policy.

In the district court, the jury found in favor of Barrick concluding that Perez failed to show by a preponderance of the evidence that he suffered a serious health condition preventing him from performing his job or that Barrick terminated his employment because he sought protected leave. Perez appealed the decision, arguing that the district court erred by not instructing the jury that only contrary medical evidence could defeat his doctor’s certification of a serious health condition.

The Ninth Circuit affirmed the jury verdict. The Court held that the FMLA does not require an employer to present contrary medical evidence before contesting a doctor’s certification of a serious health condition. Therefore, the district court did not err by failing to instruct the jury that only contrary medical evidence could defeat Perez’s doctor’s certification. The jury was allowed to properly consider the non-medical evidence that Barrick offered at trial in support of its argument that Perez did not have a serious health condition within the meaning of the FMLA.

Ninth Circuit holds that a retired railroad worker was without fault for overpayments made by Railroad Retirement Board (“Board”) after the Board sent him a letter stating that it had adjusted his annuity based on additional wages

In Musquiz v. US Railroad Retirement Board Domingo Musquiz worked in the rail industry for approximately 28 years. Musquiz’s last day of rail industry employment was February 1, 2006. On April 4, 2010, Musquiz started work at Santa Barbara Cottage Hospital (“SBCH”), a non-rail industry employer. After learning he may be fired by SBCH, Musquiz applied by telephone to the Railroad Retirement Board (“RRB”) for a reduced-age annuity. SBCH let Musquiz go on June 30, 2012 but rehired him in July 2012. Musquiz did not tell the RRB that he had been rehired by SBCH or that his expected 2012 earnings had increased. The RRB started to disburse Musquiz’s annuity on August 1, 2012. The RRB computed the annuity without any reduction for outside earnings. In June of 2013, the RRB learned of Musquiz’s continued employment and advised him that his annuity would be reduced and that a penalty would be imposed. Under the Railroad Retirement Act (“RRA”), the RRB shall not recover from an individual who is without fault and when recovery would be contrary to the purpose of the RRA or would be against equity or good conscience. 20 C.F.R. § 255.10.

Musquiz then applied to the RRB for a waiver of the repayment. His request was denied and he appealed to the RRB appellate department. The appeal was also denied on the grounds that Musquiz was “not without fault” for the overpayment. Musquiz filed a petition in the Ninth Circuit for review pursuant to 45 U.S.C. sections 355(f), 231g, which gives the Ninth Circuit jurisdiction to review the RRB’s final decision.

The Ninth Circuit determined that Musquiz was not without fault as to the initial overpayment but with fault as to the overpayments that occurred after the RRB advised him of the overpayment. The Court remanded the matter to the RRB with an order that the RRB should develop a factual record and make this determination in the first instance.

Ninth Circuit holds that the “de minimis doctrine” is applicable to workers’ claims for overtime wages under section 207 of the Fair Labor Standards Act

In Cadena v. Customer Connexx LLC Plaintiffs, a certified collective of call-center workers, filed a lawsuit against their employer, defendant Customer Connexx LLC (“Connexx”), alleging that the employer violated the Fair Labor Standards Act (“FLSA”) by failing to pay overtime wages for time spent booting up and shutting down their computers each day. The district court granted summary judgment to Connexx, holding the time not compensable under longstanding precedents establishing that the FLSA does not require an employer to pay wages for work performed before or after scheduled work hours where the amount of time in question is “de minimis.” Plaintiffs appealed contending that the de minimis doctrine is no longer good law after the United States Supreme Court decision in Sandifer v. U.S. Steel Corp.(2014) 571 U.S. 220.

The Ninth Circuit disagreed with plaintiffs holding that the de minimis doctrine remains applicable to workers’ claims for overtime wages under section 207 of the FLSA. The Court noted that there is “no bright line rule that a particular amount of time is de minimis, although ‘[m]ost courts have found daily periods of approximately 10 minutes de minimis.’ ” In this case, some plaintiffs admitted that the daily period of time spent shutting down their computers was a few seconds. Others claimed it was ten minutes. Based on this record, the Court held that triable issues of material fact remain as to whether the time involved was de minimis. Thus, the Court reversed the district court’s order granting summary judgment.

Ninth Circuit holds that an apprentice’s ADA claims against Zen Center were properly dismissed under the First Amendment’s “ministerial exception.”

In Behrend v. San Francisco Zen Center, Inc. Alexander Behrend, a Work Practice Apprentice (“WPA”) at the San Francisco Zen Center (“Center”), filed an employment discrimination lawsuit under the Americans with Disabilities Act (“ADA”). Behrend, who lived and worked at the Center, performed various tasks including meditation, cleaning, cooking, and maintenance. He argued that his role was not ministerial because it involved mostly menial work and did not include teaching or leading the faith.

The district court granted summary judgment in favor of the Center finding that Behrend’s role fell within the First Amendment’s ministerial exception, which exempts religious organizations from certain employment laws in relation to their ministers. The court determined that Behrend’s duties, although menial, were integral to the Center’s religious mission and practice. Behrend appealed.

The Ninth Circuit affirmed holding that ministerial exception applied to Behrend’s role as a WPA. The Court emphasized that the exception is broad and includes roles that are essential to carrying out a religious organization’s mission, even if they do not involve teaching or leadership. The Court concluded that Behrend’s work was a vital part of Zen training and practice, thus fitting within the ministerial exception. The Court rejected Behrend’s argument that only those with key roles in preaching and transmitting the faith qualify for the exception, noting that precedent supports a broader application.

Ninth Circuit holds that “temporal proximity” alone was insufficient to demonstrate employer’s stated reason for firing employee was pretextual where, during same period, employee failed to cooperate with a separate investigation

In Kama v. Mayorkas a former transportation security officer with the Transportation Security Administration (“TSA”) filed a complaint against the Secretary of Homeland Security (“Secretary”) alleging that he was terminated due to retaliation under Title VII of the Civil Rights Act. The TSA claimed it terminated plaintiff’s employment for failing to cooperate in an investigation into whether he received illegal compensation for serving as a personal representative during internal agency investigations. The plaintiff argued that this reason was a pretext for retaliation due to his prior complaints to the TSA’s Equal Employment Office (“EEO”) about a hostile work environment and denial of Family Medical Leave Act (“FMLA”) leave.

The district court granted summary judgment in favor of the Secretary finding that the plaintiff had not provided sufficient evidence to show that the TSA’s stated reason for his termination was pretextual. The court noted that the temporal proximity between the plaintiff’s last EEO complaint and his termination (56 days) was not enough to establish pretext, especially given the concurrent timing of the plaintiff’s noncooperation with the investigation.

The Ninth Circuit affirmed holding that the 56-day gap between the plaintiff’s final EEO complaint and his termination was insufficient by itself to show pretext. The Court also noted that the timing of the plaintiff’s noncooperation with the investigation supported the TSA’s stated reason for termination. Additionally, the Court found that other circumstantial evidence presented by the plaintiff did not create a genuine issue of material fact regarding pretext. The court concluded that the TSA had a legitimate, non-retaliatory reason for terminating the plaintiff’s employment and affirmed the summary judgment.

California Supreme Court holds that a section of Proposition 22 (classifying app-based drivers as independent contractors) does not conflict with Article XIV, Section 4 of the California Constitution

Castellanos v. State of California involved Business and Professions Code section 7451, enacted through Proposition 22, which classifies app-based drivers for companies like Uber, Lyft, and DoorDash as independent contractors rather than employees, provided certain conditions are met. This classification exempts these drivers from California workers’ compensation laws, which typically apply to employees. Plaintiffs, including several individuals and unions filed a lawsuit against the State contending that section 7451 conflicts with article XIV, section 4 of the California Constitution, which grants the Legislature plenary power to create and enforce a complete system of workers’ compensation.

The trial court found Proposition 22 unconstitutional, reasoning that it improperly limited the Legislature’s power to govern workers’ compensation, a power deemed “unlimited” by the state Constitution. The court held that the people must amend the Constitution through an initiative constitutional amendment, not an initiative statute, to impose such limitations. Consequently, the court invalidated Proposition 22 in its entirety.

The Court of Appeal reversed holding that article XIV, section 4 does not preclude the electorate from using its initiative power to legislate on workers’ compensation matters. The court reasoned that the Legislature’s power under article XIV, section 4 is not exclusive and that Proposition 22 does not conflict with this constitutional provision.

The California Supreme Court affirmed the Court of Appeal’s judgment, agreeing that section 7451 does not conflict with article XIV, section 4. The Court held that the Legislature’s plenary power under article XIV, section 4 is not exclusive and does not preclude the electorate from enacting legislation through the initiative process. The Court did not address whether other provisions of Proposition 22 improperly constrain the Legislature’s authority, as those issues were not presented in this case.

For a more detailed discussion of this opinion, please review our article dated August 22, 2024 which can be found here /news/2024/08/22/proposition-22.

Ninth Circuit holds that offensive content in a worker’s social media page could form the basis for a hostile work environment claim under Title VII brought by a co-worker

In Okonowsky v. Garland a staff psychologist at a federal prison discovered that a corrections lieutenant operated an Instagram account with sexually offensive content, some of which targeted her. When she reported this to prison leadership, her complaints were dismissed, and the lieutenant’s posts became more aggressive. Despite her repeated complaints, the prison’s response was slow and ineffective, leading her to feel unsafe and eventually leave her job. Plaintiff filed a complaint against Merrick Garland, the Attorney General of the United States (“Garland), for sex discrimination under Title VII of the Civil Rights Act of 1964.

The district court granted summary judgment in favor of Garland concluding that the psychologist had not shown an objectively hostile work environment and that the prison had taken reasonable remedial actions. The court limited its consideration to five specific posts and determined that these did not occur within the physical workplace. Plaintiff appealed.

The Ninth Circuit reversed the district court’s decision holding that the district court erred by not considering the totality of the circumstances, including the broader context of the harassment and the prison’s inadequate response. The Ninth Circuit reaffirmed that evidence of sexually harassing conduct, even if not expressly targeting the plaintiff, and non-sexual conduct that could be seen as retaliatory or intimidating, should be considered. The Court also rejected the notion that only conduct occurring inside the physical workplace is actionable, especially given the prevalence of social media. The Court found that the plaintiff had raised triable issues of fact regarding the hostile work environment and the prison’s failure to take prompt and effective remedial measures.

California Supreme Court holds that a city could be held liable for racial harassment and retaliation under FEHA where a human resource manager obstructed and threatened a reporting employee if she persisted in bringing a complaint

Bailey v. San Francisco Dist. Attorney's Office Twanda Bailey, an African-American employee, sued the San Francisco District Attorney’s Office, former District Attorney George Gascon, and the City and County of San Francisco (collectively “City”) for racial harassment and retaliation under the California Fair Employment and Housing Act (“FEHA”). Bailey alleged that a coworker with whom she shared an office and job duties called her the N-word, and after reporting the incident, the human resources manager obstructed her complaint, engaged in intimidating conduct, and threatened her.

The trial court granted summary judgment for the City, finding that Bailey failed to make a prima facie case for her FEHA claims. The trial court concluded that a single racial slur by a coworker did not constitute severe or pervasive harassment and that Bailey did not suffer an adverse employment action. The Court of Appeal affirmed the trial court’s decision.

The Supreme Court of California reversed holding that an isolated act of harassment, such as the use of an unambiguous racial epithet like the N-word, can be actionable if it is sufficiently severe under the totality of the circumstances. The Court emphasized that the severity of harassment should be judged from the perspective of a reasonable person in the plaintiff’s position. The Court also held that a course of conduct that effectively withdraws an employee’s means of reporting and addressing racial harassment can constitute an adverse employment action. The Court found that there were triable issues of fact regarding both Bailey’s harassment and retaliation claims and reversed the judgment of the Court of Appeal.

California Supreme Court holds that an aggrieved employee asserting claims under PAGA has no personal representative right to intervene in another aggrieved employee’s action asserting overlapping claims

In Turrieta v. Lyft, Inc. three Lyft drivers, Tina Turrieta, Brandon Olson, and Million Seifu each filed separate lawsuits under the California Labor Code Private Attorneys General Act of 2004 (“PAGA”) against Lyft, Inc. for alleged labor violations. Turrieta settled her case with Lyft, but before the settlement was approved, Olson and Seifu sought to intervene and object to the settlement, arguing it was unfair and that they had overlapping claims. The trial court denied their motions to intervene, approved the settlement, and later denied their motions to vacate the judgment.

Olson and Seifu appealed the trial court’s decisions. The Court of Appeal affirmed the trial court’s rulings, holding that Olson and Seifu lacked standing to intervene or to challenge the settlement because they were not aggrieved by the judgment. The Court reasoned that PAGA actions are representative actions on behalf of the State, and thus, Olson and Seifu did not have a personal interest in the settlement of Turrieta’s PAGA claim.

The California Supreme Court affirmed holding that PAGA does not authorize one aggrieved employee to intervene in another employee’s PAGA action asserting overlapping claims. The Court reasoned that allowing such intervention would be inconsistent with the statutory scheme of PAGA, which provides for oversight of settlements by the Labor and Workforce Development Agency (“LWDA”) and the courts but does not mention intervention by other PAGA plaintiffs. The Court emphasized that the statutory language and legislative history indicate that the Legislature intended for the LWDA and the courts to ensure the fairness of PAGA settlements, not other PAGA plaintiffs.

Ninth Circuit holds that corporate pilots were exempt from the overtime requirements of the Fair Labor Standards Act because they qualified as highly compensated, non-manual employees under the Act’s definition

In Kennedy v. Las Vegas Sands Corporation five corporate jet pilots worked for Sands Aviation, LLC and Las Vegas Sands Corp. (collectively “Sands”), earning between $125,000 and $160,000 annually. Their primary duties included ensuring the safety of passengers, crew, and aircraft, which involved complex decision-making and discretionary actions. The pilots were required to be on call for pop-up flights, typically scheduled 24 hours in advance, and had to respond to flight notifications within 30 minutes. Despite being on call, they engaged in various personal activities and secondary employment. The pilots sued their employers under the Fair Labor Standards Act (“FLSA”) seeking overtime pay for the time they spent on call between flight assignments, claiming that Sands misclassified them as exempt employees. The pilots sought between $1,000,000 and $1,500,000 in overtime pay over a three-year period, nearly 10 times their annual salaries, plus liquidated damages.

The district court held a bench trial and ruled in favor of Sands. The court found that the pilots were highly compensated employees performing primarily non-manual labor and making significant discretionary decisions, thus exempting them from the FLSA overtime requirements. Additionally, the court determined that the pilots’ on-call time did not constitute work requiring overtime pay because they could freely engage in personal activities during this time.

The Ninth Circuit affirmed agreeing that the pilots were exempt from the FLSA’s overtime requirements as highly compensated employees performing non-manual labor and making significant discretionary decisions. The Court also held that the pilots’ on-call time did not count as work for overtime purposes, as they were free to engage in personal activities and there was no agreement suggesting that on-call time was compensable. Thus, the pilots did not meet the 40-hour workweek threshold for overtime pay.

California Supreme Court holds that a hospital authority was a public employer the Legislature intended to be exempt from Labor Code statutes regarding meal and rest breaks and timely payment of wages

In Stone v. Alameda Health System plaintiffs, employees of a hospital operated by Alameda Health System (“AHS”), filed a Labor Code Private Attorneys General Act of 2004 (“PAGA”) lawsuit against AHS for alleged violation of California labor laws by denying meal and rest breaks, failing to keep accurate payroll records, and not paying full wages. Plaintiffs sought civil penalties under the (PAGA).

The trial court sustained AHS’s demurrer without leave to amend, concluding that AHS, as a public entity, was not subject to the Labor Code provisions cited by plaintiffs. The court also dismissed the PAGA claim, reasoning that public entities are not “persons” subject to PAGA penalties. Plaintiffs appealed.

The Court of Appeal reversed in part, holding that AHS was not exempt from the meal and rest break requirements or the wage payment statutes. It distinguished AHS from state agencies, noting that the enabling statute indicated AHS was not an agency, division, or department of the county. However, the court agreed that AHS was exempt from the wage statement requirements and that it was not a “person” subject to default PAGA penalties.

The California Supreme Court reversed the Court of Appeal’s judgment holding that the Legislature intended to exempt public employers, including hospital authorities like AHS, from the Labor Code provisions governing meal and rest breaks and related wage payment statutes. The Court also concluded that public entities are not “persons” who are subject to PAGA penalties for the violations alleged.

Ninth Circuit holds that personal text messages from a public employee regarding a racist image did not constitute a matter of legitimate public concern and therefore were not protected by the First Amendment justifying denial of employee’s First Amendment claim against her employer

In Adams v. County of Sacramento Kate Adams began working for the Sacramento County Sheriff’s Office (“Department”) in 1994. She became Chief of Police for the City of Rancho Cordova in March 2020. In 2021, she was forced to resign from that post over allegations that she sent racist messages. Adams filed suit against the County of Sacramento, the Sheriff, and several Does asserting several causes of action including deprivation of the right to free speech under the First Amendment and First Amendment conspiracy.

The district court dismissed the First Amendment causes of action holding that “sen[ding] racist images, along with [Adams’s] disapproval of the images”— as Adams described it—was not speech on a matter of public concern because Adams “ma[de] no allegations that her speech concerned either racism in her community or racism in the police department.” The court recognized that Adams’s speech was not on a matter of public concern “because the speech was intended to be private and [did] not relate to the personnel or functioning of the Department.” Adams appealed to the Ninth Circuit.

The Ninth Circuit affirmed. After examining the plain language, form, and context of Adams’s two text messages, the Court held that under the circumstances presented by this case, sending private text messages to two friends during “a friendly, casual text message conversation,” forwarding offensive racist spam images, and complaining about the images does not constitute “a matter of legitimate public concern” within the meaning of Pickering v. Board of Education (1968) 391 U.S. 563. Thus, Adams’s speech was one of personal interest, not public interest requiring dismissal of her First Amendment causes of action.

Ninth Circuit holds that summary judgment on overtime claim was improper where material questions of fact existed as to whether City of San Francisco’s published salary ordinance was actually used in practice

In Silloway v. City and County of San Francisco staff nurses employed by the City and County of San Francisco (“City”) filed a complaint against the City alleging that it violated the Fair Labor Standards Act (“FLSA”) by not paying them time-and-a-half for overtime work. The City argued that the nurses were exempt from this requirement under the FLSA’s professional-capacity exemption, claiming that the nurses were paid on a salary basis. The nurses contended that they were paid on an hourly basis, as their annual compensation was divided into hourly rates and they were paid only for hours worked.

The district court granted summary judgment in favor of the City, concluding that the annual pay figures published in the salary ordinance provided definitive evidence that the nurses were compensated on a salary basis. The court found the nurses’ hourly pay rates to be an administrative tool and dismissed the nurses’ claims of improper pay deductions. Plaintiffs appealed.

The Ninth Circuit reversed holding that the district court erred by relying on the published salary ordinance and not examining how the nurses were actually paid. The proper focus for the salary basis test is whether an employee receives a predetermined amount of compensation on a weekly or less frequent basis. The Court found that material factual questions remained regarding whether the City satisfied the salary basis test in practice. Specifically, the Court noted discrepancies in the payroll data that suggested the nurses might not have received their predetermined compensation in certain pay periods. The Court also found that the City did not provide evidence of reimbursing the nurses for any improper deductions, which precluded the use of the “window of correction” defense.

In FEHA case, Court of Appeal affirms summary judgment for employer on grounds that plaintiff was unable to perform the essential functions of her job as a result of her mental disability

In Miller v. California Dept. of Corrections and Rehabilitation Maria Miller, a correctional officer with the California Department of Corrections and Rehabilitation (“CDCR”), was injured in 2016 while on a temporary assignment. After her worker’s compensation benefits were exhausted in 2018, CDCR placed her on unpaid leave. CDCR later offered her a medical demotion to an alternative position, which she did not accept, citing a newly disclosed mental disability. Miller remained on unpaid leave. In 2020, she sued CDCR under the Fair Employment and Housing Act (“FEHA”) for disability discrimination, failure to accommodate, failure to engage in the interactive process, failure to prevent discrimination, and retaliation.

The trial court granted summary judgment in favor of CDCR finding that Miller could not perform the essential functions of her job as a correctional officer due to her disabilities and that CDCR had offered reasonable accommodations, which she neither accepted nor refused. Miller appealed.

The Court of Appeal affirmed holding that CDCR had met its burden by showing that Miller could not perform the essential duties of her job and that reasonable accommodations were offered. The Court also found that Miller failed to produce evidence of a material dispute of fact regarding her ability to perform her job or the reasonableness of the accommodations offered. The Court concluded that CDCR was not liable for disability discrimination, failure to accommodate, failure to engage in the interactive process, failure to prevent discrimination, or retaliation.

Ninth Circuit reverses summary judgment for employer where employee made prima facie showing of retaliation under False Claims Act and genuine issues of fact existed regarding whether proffered explanation for his termination was pretextual

In Mooney v. Fife Thomas Mooney was employed as the Chief Operating Officer (“COO”) for Dr. Douglas Fife, Heather Fife, and Fife Dermatology, PC, doing business as Vivida Dermatology (“Vivida”). Mooney raised concerns about improper billing practices at Vivida. After Mooney allegedly discussed the issues with Dr. Ken Landow, a dermatologist from another practice, Vivida terminated Mooney’s employment, citing unauthorized disclosure of confidential information in violation of his employment agreement. Mooney filed a complaint against Vivida for retaliation under False Claims Act (“FCA”) breach of contract, and breach of the implied covenant of good faith and fair dealing.

The district court granted Vivida’s motion for summary judgment concluding that Mooney’s reporting of billing irregularities did not put Vivida on notice of potentially protected conduct under the FCA. It also found that Mooney had violated the confidentiality provision of his employment agreement and that his claim for breach of the implied covenant of good faith and fair dealing failed because he did not argue that Vivida literally complied with the contract.

The Ninth Circuit reversed holding that the district court erred in applying the relevant substantive law for Mooney’s FCA retaliation claim and failed to view the evidence in the light most favorable to Mooney for his breach of contract and breach of the covenant of good faith and fair dealing claims. The Ninth Circuit clarified that the McDonnell Douglasburden-shifting framework applies to FCA retaliation claims and that the Moore test for protected conduct continues to apply following the 2009 amendment to the FCA. The Court concluded that Mooney engaged in protected conduct, satisfied the notice requirement, and established genuine issues of material fact regarding whether Vivida’s reasons for his termination were pretextual.

Court of Appeal holds that trial court erred in granting summary adjudication of UC Berkeley assistant professor’s invasion of privacy claim since there were triable issues of fact regarding whether the Regents violated the Information Practices Act by leaking a letter about student complaints and disclosing information about Wentworth’s disability accommodation

In Wentworth v. Regents of the University of California Blake Wentworth, a former professor at the University of California, Berkeley, sued the Regents of the University of California (“Regents”), alleging violations of the Fair Employment and Housing Act (“FEHA”) and the Information Practices Act (“IPA”). Wentworth claimed a mental disability and that the Regents failed to engage in the interactive process, provide reasonable accommodations, and invaded his privacy by leaking information about student complaints and his disability to the media. The trial court granted summary adjudication in favor of the Regents on three of Wentworth’s causes of action under FEHA and IPA. Plaintiff appealed.

The Court of Appeal affirmed the summary adjudication on the claims for failure to engage in the interactive process and provide reasonable accommodations, finding that the Regents had offered reasonable accommodations and engaged in the interactive process in good faith. However, the Court reversed the summary adjudication of the invasion of privacy cause of action, finding that there were triable issues of fact regarding whether the Regents violated the IPA by leaking a letter about student complaints and disclosing information about Wentworth’s disability accommodation.

Court of Appeal holds that state employees’ contract claim against the State survived demurrer because the right to receive compensation for completed work ripened into Constitutionally-protected contractual rights

In Bath v. State of California the plaintiffs, employees of the State of California (“State”) providing dental care to inmates, filed a lawsuit against the State seeking compensation for time spent on pre- and post-shift safety and security activities. These activities included going through security and handling alarm devices. The complaint asserted several causes of action including breach of contract. The State filed a demurrer, arguing that these activities were not compensable under the Portal-to-Portal Act of the Fair Labor Standards Act (“FLSA”). The defendants also argued that the plaintiffs’ claims were precluded by the Memorandum of Understanding (“MOU”) governing their employment, that the relevant statutes did not apply to government employers, that the plaintiffs failed to exhaust contractual remedies, and that the claims were time-barred. The trial court sustained the demurrer without leave to amend finding that the activities in question were not integral and indispensable to the plaintiffs’ principal work of providing dental care, thus not compensable under the FLSA. Plaintiffs appealed.

The Court of Appeal affirmed and reversed, in part. The Court concluded that the trial court erred in not accepting the plaintiffs’ allegations as true for the purposes of the demurrer. Furthermore, the Court found that the plaintiffs had stated a claim for breach of contract and that the defendants’ affirmative defense of failure to exhaust contractual remedies could not be resolved at the demurrer stage. The Court also determined that the plaintiffs’ contract claim was not time-barred.

Based on the doctrine of issue preclusion, Court of Appeal holds that a former employee lacked standing to continue his PAGA claim after he failed to prove his individual wage-and-hour Labor Code claims in arbitration

In Rodriguez v. Lawrence Equipment, Inc. Julian Rodriguez, a former employee of Lawrence Equipment, Inc. (“Lawrence”), filed a lawsuit alleging various wage-and-hour violations under the Labor Code. Rodriguez claimed that Lawrence failed to pay for all hours worked, including overtime, did not provide adequate meal and rest breaks, issued inaccurate wage statements, and did not pay all due wages upon termination. He also sought civil penalties under the Private Attorneys General Act (“PAGA”). Rodriguez had signed an arbitration agreement with Lawrence, which led to the arbitration of his non-PAGA claims, and a stay of his PAGA claims.

The arbitrator ruled in favor of Lawrence on Rodriguez’s individual claims finding that Rodriguez failed to prove any of the alleged Labor Code violations. The trial court confirmed the arbitration award and entered judgment for Lawrence. Subsequently, Lawrence moved for judgment on the pleadings as to the PAGA claim, arguing that the arbitration award precluded Rodriguez from pursuing his PAGA claim due to lack of standing as an aggrieved employee. The trial court granted this motion and dismissed the PAGA claim. Rodriguez appealed.

The Court of Appeal affirmed holding that the arbitration award, which found no Labor Code violations, precluded Rodriguez from establishing standing under PAGA. The Court applied the doctrine of issue preclusion determining that the issues litigated in arbitration were identical to those required to establish PAGA standing. Since Rodriguez could not prove any Labor Code violations, he lacked standing to pursue the PAGA claim since he was not an “aggrieved employee.”

Court of Appeal holds that trial court’s affirmance of city employee’s termination due to refusal to be vaccinated was supported by substantial evidence

In Bedard v. City of Los Angeles Jeannine Bedard, a Los Angeles Police Department (“LAPD”) officer, refused to comply with the City of Los Angeles’s (“City”) COVID-19 vaccination mandate and did not sign a notice enforcing the mandate. Consequently, the Chief of Police sought to terminate her employment. The LAPD Board of Rights (“Board”) reviewed the proposed discipline, found Bedard guilty of failing to comply with conditions of employment, and upheld her discharge. However, the Board also found that the City violated Bedard’s due process rights by not providing sufficient time to respond to the charges and awarded her back pay, which the City did not pay.

Bedard filed a petition for a writ of mandate in the trial court arguing that the disciplinary action was procedurally and legally invalid and seeking reinstatement and back pay. The trial court found the termination justified but agreed that the City violated Bedard’s due process rights by giving her insufficient time to respond. The court awarded her back pay. Bedard appealed.

On appeal, Bedard argued that her termination was improper because it was based on her refusal to sign an allegedly illegal contract, was too harsh a penalty, and violated her due process rights under Skelly v. State Personnel Board. The Court of Appeal disagreed and affirmed the trial court’s decision, holding that Bedard’s refusal to comply with the vaccination mandate justified her termination. The Court found substantial evidence supporting the trial court’s conclusion that Bedard’s termination was not solely based on her refusal to sign the notice but also on her refusal to comply with the vaccination requirement. The Court also held that the appropriate remedy for the due process violation was back pay, not reinstatement.

Court of Appeal reverses summary judgment in favor of employer on female employee’s gender discrimination claim based on her social media posts when it rejected a “comparator evidence” of male usage of social media accounts

In Wawrzenski v. United Airlines plaintiff Alexa Wawrzenski was a flight attendant employed by United Airlines, Inc. (“United”). United found that plaintiff had a social media account with OnlyFans, a platform that often features explicit material, featuring pictures of herself in uniform and wearing a bikini, with a link to a subscription-based account advertised as providing “[e]xclusive private content you won’t see anywh[ere else].” United demanded that the photos be removed. After United discovered that plaintiff failed to remove all such photos, she was terminated.

Wawrzenski sued United, alleging that she endured years of gender discrimination and harassment, that United retaliated against her for complaining about the discrimination and harassment by terminating her employment, that United’s investigation into her social media and her termination discriminated against her as a woman, that United failed to prevent its employees’ misconduct, and that United intentionally caused Wawrzenski emotional distress.

United moved for summary judgment which was granted by the trial court largely on evidence that United’s decision to terminate her was based on legitimate business reasons, and that Wawrzenski failed to present evidence sufficient to establish a triable issue of sexual harassment. Plaintiff appealed.

The Court of Appeal reversed holding that Wawrzenski raised triable issues of fact with respect to the following: (1) whether United treated male employees with similar social media activities more favorably, which could suggest discriminatory intent, (2) whether coworker and supervisor comments about Wawrzenski’s body, including discussions about her compliance with the company dress code, created a hostile work environment, (3) whether United retaliated against Wawrzenski for her complaints about discrimination and harassment, and (4) whether United may not have taken adequate steps to prevent discrimination and harassment.

Court of Appeal holds that trial court did not err in applying “McDonnell Douglas” burden shifting test when plaintiff’s case did not involve racial discrimination

In Quesada v. County of Los Angeles Marlon Quesada, a deputy sheriff with the Los Angeles County Sheriff’s Department (“Department”), was not promoted to sergeant despite taking the sergeant’s examination in 2017 and 2019, scoring in band two and band one, respectively. Quesada had a mixed employment record, including two suspensions for misconduct and a 2015 investigation that was terminated due to a statute of limitations. Quesada claimed the Department improperly considered this time-barred investigation during the promotion process, which he argued was illegal. He filed a petition for a writ of mandate seeking to compel the Department to promote him and provide back pay and other damages.

At trial, Quesada argued his claim should be subject to the McDonnell Douglas burden shifting approach taken in racial discrimination cases. The trial court rejected Quesada’s argument found that Quesada did not establish that the Department’s decision was illegal. Quesada appealed.

The Court of Appeal affirmed holding that the McDonnell-Douglas burden-shifting approach did not apply. Rather, “standard approach” to civil litigation applies, where the plaintiff bears the burden of proving the elements of their claim by a preponderance of the evidence. The Court declined to adopt McDonnell-Douglas since Quesada’s case did not involve discrimination based on race or membership in a historically oppressed group. The court also found substantial evidence supporting the Department’s decision, including Quesada’s mediocre performance evaluations and past misconduct.

Ninth Circuit holds that a collective bargaining agreement that conditioned scheduled-bidding privileges on payment of union dues or agency fees did not violate the Railway Labor Act

In Bahreman v. Allegiant Air, LLC Ali Bahreman, a flight attendant for Allegiant Air, brought a lawsuit challenging the Collective Bargaining Agreement (“CBA”) between Allegiant and the Transport Workers Union (“Union”). The CBA required employees to either pay union dues or agency fees to maintain seniority-based bidding privileges for work schedules. Bahreman chose not to pay any fees and subsequently lost his bidding privileges. He argued that this arrangement violated the Railway Labor Act (“RLA”) by coercing employees to join the Union, deviating from the employment-termination remedy, and breaching the Union’s duty of fair representation.

The district court granted summary judgment in favor of Allegiant and the Union. The court found that the CBA did not violate the RLA’s anti-coercion provision, as it did not induce employees to join the Union. The court also held that the RLA does not prohibit collective bargaining agreements with terms other than those explicitly permitted by the RLA. Additionally, the court determined that the Union did not breach its duty of fair representation, as it enforced the CBA equally among all members of the bargaining unit.

The Ninth Circuit affirmed holding that the RLA does not prohibit a collective bargaining agreement that conditions seniority-based bidding privileges on the payment of union dues or agency fees. The Court found that the CBA did not induce union membership, as it treated union members and nonmembers alike regarding payment requirements. The Court also concluded that the CBA’s terms were permissible under the RLA and that the Union did not act arbitrarily, discriminatorily, or in bad faith in enforcing the agreement.

Court of Appeal holds that provisions of the Labor Code superseded Code of Civil Procedure section 998 and prohibited cost-shifting in a wage claim lawsuit where the employee was the prevailing party

In Chavez v. California Collision Plaintiffs Jorge Chavez, Aldo Isas and Samuel Zarate sued California Collision and its owner, George Osorio, for various wage and hour claims. The Complaint asserted no less than eleven causes of action: (1) misclassification as independent contractors rather than employees; (2) failure to pay minimum wages; (3) failure to pay overtime wages; (4) failure to pay wages earned; (5) failure to give meal breaks; (6) failure to give rest breaks; (7) waiting time penalties; (8) failure to provide accurate, itemized wage statements; (9) failure to reimburse for business expenses; (10) unfair business practices under the Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.); and (11) as to Chavez and Isas, violations of Labor Code section 1198.5 for failure to timely allow them to inspect or receive copies of their personnel records.

Before trial, defendants made statutory offers to settle pursuant to Code of Civil Procedure section 998 to each plaintiff. Chavez accepted his offer of $53,750 plus reasonable attorney fees and costs. Similarly, Isas accepted his 998 offer of $75,000 plus reasonable attorney fees and costs incurred as of the offer date. Zarate did not respond to his offer of $38,750 plus reasonable attorney fees and costs. Thus, only Zarate’s claims proceeded to trial.

At trial, Zarate prevailed on two causes of action at trial, failure to pay overtime wages and failure to provide paid rest breaks. The jury found for the defendant on the other nine causes of action. The jury awarded Zarate damages ($21,061 plus $5,743.91 in restitution under the Unfair Competition Law based on the parties’ stipulation, for a total of $26,804.91) which was lower than the defendants’ section 998 offer ($38,750). Because section 998 offers shift certain costs to the party failing to achieve a more favorable result than the settlement offer, the trial court awarded costs to the defendants and against Zarate under section 998 in the amount of $54,473. While awarding Zarate attorneys’ fees and costs (limited to those incurred before the date of the first section 998 offer by operation of that statute), the trial court slashed Zarate’s requested amount significantly due to unsatisfactory proof of reasonable hours worked. Zarate appealed.

The Court of Appeal reversed holding that the provision of awarding costs under section 998 is only applicable in the absence of a specific Labor Code provision governing the awards of costs. The Court found that two specific Labor Code provisions govern the award of costs. First, Labor Code section 1194 allows a prevailing employee in an unpaid minimum wage and overtime suit to recover costs but makes no mention of an employer being able to recover costs. Second, Labor Code section 218.5 permits a prevailing employer to recover costs in suits for unpaid wages only if the court finds the employee brought the action in bad faith. There was no finding of bad faith in this case.

For a more detailed discussion of the Chavez opinion, please review our article published on January 16, 2025

Court of Appeal holds that trial court erred in denying successful whistleblower retaliation litigant’s Labor Code section 1102.5(j) attorney fees’ request since relevant, amended provision could be applied retroactively

In Winston v. County of Los Angeles Harold Winston, an African-American male with over 30 years of service, sued his employer, the County of Los Angeles (“County”), alleging race-based discrimination, retaliation, and failure to maintain a discrimination-free environment under the Fair Employment and Housing Act (“FEHA”) and whistleblower retaliation in violation of Labor Code section 1102.5. While the case was pending, section 1102.5 was amended to allow courts to award reasonable attorney fees to prevailing whistleblower plaintiffs. After the jury found in Winston’s favor on his retaliation claim under section 1102.5, he filed a motion for attorney fees based on the new provision.

The trial court denied Winston’s motion for attorney fees, ruling that the fee provision in section 1102.5 did not apply retroactively to his case, which was filed in 2019 before the amendment took effect. The court found no legislative intent supporting retroactive application and noted that Winston did not prevail on his FEHA claims, which could have provided a basis for attorney fees.

The Court of Appeal reversed holding that a new statute authorizing an award of attorney fees applies to actions pending on the statute’s effective date. The Court cited case precedent establishing that newly enacted attorney fee provisions are “procedural” and apply to pending litigation.

Ninth Circuit holds that a “mashgiach” was considered a “minister” within the Union of Orthodox Jewish Organization of America and, therefore, could not bring employment claims against the Organization

In Markel v. Union of Orthodox Jewish Congregations of America Yaakov Markel, an Orthodox Jewish man, worked as a “mashgiach” for the Union of Orthodox Jewish Congregations of America (“OU”) from 2011 to 2018. His role involved supervising food preparation to ensure kosher compliance, particularly for grape products. Markel claimed that his supervisor, Rabbi Nachum Rabinowitz, promised him a promotion and a raise, which he did not receive, and that OU withheld certain overtime compensation. Markel resigned and filed suit, alleging wage and hour and fraud and misrepresentation claims against OU and Rabbi Rabinowitz.

Defendants filed a motion for summary judgment which was granted by the district court on the grounds that the First Amendment’s “ministerial exception” barred Markel’s employment-related claims. The court determined that OU is a religious organization and that a “mashgiach” is considered a minister within Orthodox Judaism, thus invoking the ministerial exception. Plaintiff appealed.

The Ninth Circuit affirmed holding that the ministerial exception categorically barred Markel’s claims because OU is a religious organization and a “mashgiach” is a minister. The Court emphasized that the acceptance of revenue does not deprive an organization with a religious mission of First Amendment protections. The Court also rejected Markel’s argument that the ministerial exception was inapplicable because his dispute involved only secular issues, noting that a religious institution’s decisions, even if facially secular, are often intertwined with religious doctrine. The Court further held that the ministerial exception protects both religious organizations and their leaders from claims brought by ministerial employees.