RECENT EMPLOYMENT LAW DECISIONS

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1 CALIFORNIA EMPLOYMENT LAWYERS ASSOCIATION BULLETIN Published Monthly EDITOR: CHRISTOPHER BELLO January 2009 Vol. 23, No. 1 RECENT EMPLOYMENT LAW DECISIONS UNITED STATES SUPREME COURT OPPOSITION CLAUSE OF TITLE VII s RETALIATION PROVISION PROTECTS EMPLOYEE WHO SPEAKS OUT ABOUT DISCRIMINATION IN ANSWERING QUESTIONS DURING INTERNAL INVESTIGATION CRAWFORD v METROPOLITAN GOV T OF NASHVILLE COUNTY. Reversing the Sixth Circuit, (211 Fed Appx 373), the United States Supreme Court held in a unanimous opinion by Souter filed on January 26 that the protection of Title VII s anti-retaliation provision extends to an employee who speaks out about discrimination not on his or her own initiative, but in answering questions during an employer s internal investigation. During an internal investigation into rumors of sexual harassment by Gene Hughes, the defendant school district s employee relations director, petitioner Crawford, a 30-year employee, reported that Hughes had sexually harassed her. The employer took no action against Hughes, but soon fired Crawford, alleging embezzlement. Affirming summary judgment on Crawford s retaliation claim, the Sixth Circuit reasoned: (1) that the opposition clause demanded active, consistent activities, whereas Crawford had not initiated any complaint; and (2) the participation clause did not cover the internal investigation because it was not conducted pursuant to a Title VII charge pending with the EEOC. Disagreeing with that reasoning, Souter s opinion reads in part as follows: The statement Crawford says she gave to [the investigator] is... covered by the opposition clause, as an ostensibly disapproving account of sexually obnoxious behavior toward her by a fellow employee... [ ] There is... no reason to doubt that a person can oppose by responding to someone else s question just as surely as by provoking the discussion, and nothing in the statute requires a freakish rule protecting an employee who reports discrimination on her own initiative but not one who reports the same discrimination in the same words when her boss asks her a question. [W]e find it hard to see why the Sixth Circuit s rule would not itself largely undermine the Ellerth-Faragher scheme... The appeals court s rule would... create a real dilemma for any knowledgeable employee in a hostile work environment if the boss took steps to assure a defense under our cases. If the employee reported discrimination in response to the enquiries, the employer might well be free to penalize her for speaking up. But if she kept quiet about the discrimination and later filed a Title VII claim, the employer might well escape liability, arguing that... the plaintiff unreasonably failed to take advantage of preventive or corrective opportunities... Because Crawford s conduct is covered by the opposition clause, we do not reach her argument that the Sixth Circuit misread the participation clause as well. In an opinion concurring in the judgment, joined by Thomas, Alito explained that he wrote separately...to emphasize my understanding that the Court s holding does not and should not extend beyond employees who testify in internal investigations or engage in analogous purposive conduct... [ ] An interpretation of the opposition clause that protects conduct that is not active and purposive would have important practical implications... [A]n employee claiming retaliation [might then] be able to establish causation simply by showing that, within some time period prior to the adverse action, the employer, by some indirect means, became aware of the views that the employee had expressed [informally while chatting with co-workers]. For petitioner: Eric Schnapper, Seattle. For respondent: Francis H. Young. For NELA as amicus: Bruce Elfvin (OH), Gregory A. Gordillo (OH), Christina Royer (OH), Stefano G. Moscato (SF), Catherine Ruckelshaus (NYC). For United States as amicus supporting petitioner: Lisa S. Blatt. USSC, 1/26/09; opinion by Souter; opinion concurring in judgment by Alito joined by Thomas; 2009 DAR 1172, 2009 WL EXISTENCE OF TITLE IX REMEDIES DOES NOT PRECLUDE 1983 SUITS BASED ON EQUAL PROTECTION CLAUSE ALLEGING GENDER DISCRIMINATION IN SCHOOLS FITZGERALD v BARNSTABLE SCHOOL COMMITTEE. The issue in this case of peer-on-peer sexual harassment, Alito wrote in a unanimous January 21 opinion, is whether Title IX of the Education Amendments of 1972, (Cont'd on Page 2, DECISIONS)

2 (From Page 1) 86 Stat. 373, 20 U.S.C. 1681(a), precludes an action under Rev. Stat. 1979, 42 U.S.C. 1983, alleging unconstitutional gender discrimination. The Court of Appeals for the First Circuit held that it does. 504 F.3d 165 (2007). We reverse. The Court of Appeals decision deepened a conflict among the Circuits regarding whether Title IX precludes use of 1983 to redress unconstitutional gender discrimination in schools. [cites omitted from Second, Third, and Seventh Circuits holding Title IX remedies exclusive, and from Sixth, Eighth, and Tenth Circuits holding contra.] In light of the divergent coverage of Title IX and the Equal Protection Clause, as well as the absence of a comprehensive remedial scheme..., we conclude that Title IX was not meant to be an exclusive mechanism for addressing gender discrimination in schools, or a substitute for 1983 suits as a means of enforcing constitutional rights. Accordingly, we hold that 1983 suits based on the Equal Protection Clause remain available to plaintiffs alleging unconstitutional gender discrimination in schools. USSC, 1/21/09; unanimous opinion by Alito; 2009 DAR 913, 2009 WL FIRST AMENDMENT PERMITS LOCAL UNION TO CHARGE NON- MEMBERS FOR NATIONAL LITIGATION EXPENSES THAT ARE COLLECTIVE-BARGAINING RELATED LOCKE v KARASS. Affirming a First Circuit decision, (498 F3d 49), the United States Supreme Court held in an opinion filed on January 21 that the First Amendment permits a local union to charge non-members for national litigation expenses as long as they meet the criteria established in Lehnert v Ferris Faculty Assn.(1991) 500 US 507 relative to local litigation expenses: (1) the subject matter of the litigation must be appropriately related to collective bargaining rather than political activities, and (2) the charge must be reciprocal in nature, i.e., the contributing local reasonably expects other locals to contribute similarly to the national s resources used for costs of similar litigation on behalf of the contributing local if and when it takes place. USSC, 1/21/09; opinion by Breyer with concurring opinion by Alito joined by Roberts and Scalia; 2009 DAR 907, 2009 WL CALIFORNIA SUPREME COURT MFAA S RIGHT TO TRIAL DE NOVO DOES NOT OVERRIDE CONTRACTUAL OBLIGATION TO ARBITRATE DISPUTES PURSUANT TO CAA SCHATZ v ALLEN MATKINS LECK GAMBLE & MALLORY. Under the mandatory fee arbitration act (MFAA, Bus. & Prof. Code 6200 et seq)," Moreno wrote in a unanimous January 26 opinion, when there is a fee dispute between an attorney and a client, the client may choose to submit the matter to arbitration by a local bar association. If the client elects such arbitration, the attorney must agree to arbitrate. The arbitration will be binding, however, only if the attorney and client so agree in writing after the dispute has arisen. Otherwise, either party may request a trial de novo after the arbitration has concluded. We consider in this case the relationship between arbitration under the MFAA... and a predispute contractual arbitration agreement... pursuant to the California Arbitration Act (CAA, Code Civ. Proc., 1280 et seq.). In Aguilar v. Lerner (2004) 32 Cal.4th we determined that a client who had not chosen MFAA arbitration could not oppose a motion to compel arbitration under the CAA by invoking the MFAA s right to a trial de novo... We left undecided the issue of whether a client who does choose MFAA arbitration may (Cont'd on Page 3, DECISIONS) -2- CALIFORNIA EMPLOYMENT LAWYERS ASSOCIATION The CELA Bulletin is published monthly for CELA members. Send membership inquiries and changes of address to office of Executive Board Chair: David J. Duchrow W. Olympic Blvd. Suite 305 Los Angeles, CA Tel: (310) FAX: (310) For help with the CELA List, the CELA Website, and other administrative matters, contact CELA's Administrative Director: Christina Krasomil Ventura Blvd., Suite 625 Encino, CA Tel: (818) FAX: (818) EXECUTIVE BOARD J. Bernard Alexander III (Los Angeles) David DeRubertis (Woodland Hills) Kathy Dickson (Oakland) David Duchrow (Los Angeles) Wilmer Harris (Pasadena) Phil Horowitz (San Francisco) Jean K. Hyams (Oakland) Toni Jaramilla (Los Angeles) Virginia Keeny (Pasadena) Bulletin Editor Dolores Leal (Los Angeles) Steven Pingel (Long Beach) Michelle A. Reinglass (Laguna Hills) Cynthia Rice (San Francisco) Mika Spencer (San Diego) James P. Stoneman (Claremont) Christopher Whelan (Gold River) Jeffrey Winikow (Los Angeles) Christopher Bello Reith-Larson Lane Astoria, OR Ph: (503)

3 (From Page 2) request a trial de novo after that arbitration has concluded, when to do so would defeat the attorney s motion to compel arbitration under the CAA. The [Fourth District] in the present case... held that the MFAA s right to a trial de novo after statutory arbitration defeats any contractual obligation to arbitrate attorney-client fee disputes... [53 CR3d 173] [ ] We conclude that the Court of Appeal is incorrect. Although the language of the statute is not entirely free from ambiguity, construing the statute in light of the presumption against implied repeal leads to the conclusion that the MFAA does not limit the ability of attorneys and clients to enter into binding contractual arbitration. We reverse the judgment of the Court of Appeal. For plaintiff: Joseph L. Schatz. For defendant: Howard Rice Nemerovski Canady Falk & Rabkin, Pamela Phillips, Ethan P. Schulman, Sean M. SeLegue, Jonas M. Nahoum; Rogers Joseph O Donnell & Phillips and Zachary M. Radford. Cal SC, 1/26/09; unanimous opinion by Moreno; 2009 WL SUPREME COURT WILL REVIEW SECOND DISTRICT DECISION THAT HELD THAT EMPLOYERS MUST ONLY MAKE BREAKS AVAILABLE; ACTION IS DEFERRED PENDING REVIEW IN BRINKER BRINKLEY v PUBLIC STORAGE. On January 14, the Supreme Court announced that it will review the October 28 decision in which the Second District, Division Three, held that employers must only make meal and rest breaks available, not ensure that they re taken. The Supreme Court deferred further action pending consideration and disposition of a related issue in Brinker Restaurant Corp. v Superior Court (Hohnbaum) 80 CR3d 781, in which review was granted on October 22. (The Second District s opinion in Brinkley was summarized in CELA Bulletin, Nov 08, p.5. The Fourth District s decision in Brinker was summarized in an addendum to the CELA Bulletin for July of 2008.) For plaintiff: Joseph Antonelli and Janelle C. Carney; Kevin T. Barnes and Gregg Lander. For defendant: Freeman, Freeman & Smiley, Bradley D. Ross and Azadeh Allayee. Cal SC, 1/14/09; 2009 DAR 721 (granting review). CALIFORNIA COURTS OF APPEAL SECOND DISTRICT UPHOLDS DISCOVERY ORDER REQUIRING PRODUCTION OF NAMES AND CONTACT INFORMATION OF CLASS MEMBERS WITHOUT EITHER OPT-IN OR OPT-OUT PROCEDURE CRAB ADDISON, INC. v SUPERIOR COURT (MARTINEZ). In a class action alleging the misclassification of employees for purposes of overtime entitlement, and the failure to provide meal and rest breaks, the Second District, Division Seven, in a December 30 opinion, denied the employer s petition for a writ of mandate directing the trial court to vacate two orders granting discovery to real party in interest Roberto Martinez. The Court of Appeal wrote in part: About December 14, 2007, Martinez served CAI with its first set of special interrogatories. At issue here are three of these... Interrogatory No. 33 asks CAI to IDENTIFY each CLASS MEM- BER. Class member is defined as any person who was and/or is employed in any restaurants owned, operated, and/or acquired by [CAI] in the State of California in a salaried restaurant position between September 7, 2003, and the present date. Identification of the class members includes providing their names, addresses and telephone numbers. -3- Interrogatory No. 34 asks that if CAI contend[s] that this action is not appropriate for class certification then please state all facts that support [CAI s] contention. Interrogatory No. 36 asks CAI to IDENTIFY EACH PERSON who has knowledge of the facts set forth in response to interrogatory Number 34. CAI filed its answer to Martinez s complaint about Fedruary 28, In addition to denying the allegations of the complaint, CAI set forth a number of affirmative defenses. Among these were allegations that the case was not appropriate for class certification. Thereafter..., CAI objected to all three interrogatories on numerous grounds. One ground was that the interrogatories sought confidential and private information. Martinez filed a motion to compel further responses to his special interrogatories about March 25, This motion was based on CAI s refusal to disclose the identities of witnesses, including the names and contact information of the putative class members. Martinez argued that this information was necessary to meeting his burden of proving class certification was appropriate, he was entitled to the information, and production of the information would not violate the witnesses right to privacy. CAI filed opposition [arguing]... that its employees had a heightened expectation of privacy as to their contact information based on forms they signed regarding release of their contact information. Based on this heightened expectation of privacy, CAI claimed, if the court were to consider disclosure of the employees contact information, it should do so subject to an opt-in notice requirement... [ ] According to the declaration of... CAI s Director of Human Resources, most of the salaried employees in California either did not want their contact information disclosed or wanted to consider disclosure on a caseby-case basis. Only a few said that CAI could release their contact information. In response, Martinez argued that an opt-out procedure should be used. In (Cont'd on Page 4, DECISIONS)

4 (From Page 3) order to prevent abuse of the employee information, Martinez stated that he was willing to enter into a protective order. Prior to the April 30, 2008 hearing, the trial court issued its tentative ruling. It stated that...[t]his court has weighed the privacy interests of potential class members against the compelling need for discovery of their names and contact information, and finds that plaintiffs are entitled to the requested information subject to an opt-out notice... Following the May 19, 2008 hearing..., the trial court adopted its tentative as the final ruling on the motion. [Editor s note: although the opinion is unclear on this point, counsel for the plaintiffs has confirmed that the trial court omitted the requirement of any opt-out notice from its final order, as approved by the Court of Appeal. The defendant has filed a petition for rehearing, which could produce some changes in the opinion, though not in the judgment.] There are two significant differences between Puerto [v Superior Court (Wild Oats Markets, Inc.) (2008) 158 CA4th 1242, 70 CR3d 701; summarized in CELA Bulletin, Jan 08, p.3] and the instant case. First, in Puerto, the employer voluntarily disclosed the identities of the witnesses but sought to protect addresses and telephone numbers. Here, CAI seeks to protect identities as well... Second, in Puerto there was no release form like the one utilized by CAI. We attach no great significance to the fact that CAI did not voluntarily disclose the identities of the witnesses... Therefore, we can find no rationale for refusing to apply our holding in Puerto to the instant case... [ ] Indeed, since our decision in Puerto, we have upheld the right of an employee to obtain contact information in order to indentify potential class members. [Lee v Dynamex, Inc. (2008) 166 CA4th 1325, 83 CR3d 241; summarized in CELA Bulletin, Sep 08, p.11.] This brings us to the key question in this case: the effect of the release forms. CAI argues that these forms give their employees a heightened expectation of privacy in their contact information, requiring that the contact information be given greater protection and making an opt in notice procedure proper. We are unconvinced by this argument. We first address the question whether, as a matter of public policy, we should enforce a release form that may have the effect of waiving an employee s right to notice of a pending class action concerning the employer s alleged violation of overtime and wage statutes. While not determinative, the Supreme Court s recent opinion in Gentry v. Superior Court (2007) 42 Cal.4th is instructive... [ ] Gentry highlights the importance placed on the rights of employees to bring class action lawsuits to enforce their statutory rights to overtime pay... [ ] Gentry also highlights the dangers of placing in the employer s hands the responsibility for notifying employees of the pending litigation and requiring employees to opt in to the litigation... The language of the release forms [in the present case] was not sufficient to apprise employees that by checking the no box they were declining to have their contact information released to plaintiffs seeking relief for violations of employment laws in the workplace that they shared. (Puerto, 158 Cal.App.4th at p.1253) We conclude that the release forms utilized by CAI do not compel a different result than in Puerto for two reasons. First, public policy concerns weigh in favor of enforcing unwaivable statutory wage and overtime rights through class action litigation over a right to privacy in relatively nonsensitive [contact] information. (Puerto, 158 Cal.App.4th at p.1259). Second, to the extent the right to privacy is based on the release forms, there are strong reasons for not giving effect to those forms Under Puerto, the procedure chosen by the trial court was appropriate. The violation of the employees right to privacy did not outweigh Martinez s right to discovery. For employees: Matthew Righetti and John Glugoski; Ellen Lake. For employer: Epstein Becker & Green, Michael S. Kun and Ted A. Gehring. Second Dist Div Seven, 12/30/08; opinion by Jackson with Perluss and Zelon concurring; 2008 DAR 18908, 2008 WL FEHA CLAIMS BY CIVIL SERVICE EMPLOYEE WERE BARRED BECAUSE HE DID NOT CHALLENGE BOARD S ADVERSE FINDINGS BY MANDAMUS ACTION MILLER v CITY OF LOS ANGELES. In an opinion filed on December 22 and certified for publication on January 7, the Second District, Division Seven, affirmed the dismissal of a former city Construction and Maintenance Supervisor s FEHA claims for racial discrimination, harassment, and retaliation, agreeing with the trial court that the complaint was barred because the plaintiff had failed to timely file a petition for administrative mandamus after an adverse decision by the Board of Civil Service Commissioners. After summarizing the conclusions of the hearing officer appointed by the Board who had found credible evidence that the plaintiff had been fired for misconduct, and after noting that after the transmission of the hearing examiner s report the plaintiff had filed a Notice of Withdrawal and/or Dismissal of Appeal from Discharge, the Court of Appeal wrote in part: In a letter dated June 22, counsel for Miller (David Peter Cwiklo) stated that the hearing examiner had a conflict of interest, Miller had been deprived of due process in star chamber proceedings and fabricated evidence had been used as a ruse to mask the longstanding custom, practice and policy of LADWP Caucasian management discriminating against Owens Valley Native Americans. He said the Board had taken (Cont'd on Page 5, DECISIONS)

5 (From Page 4) action on a matter that simply did not exist in an effort to stack the predetermined results of the kangaroo court down his throat. According to Miller, his complaint was not barred because the Commission had no jurisdiction to decide a dismissed action until City set aside his dismissal of his appeal. Rather, he says, he had an absolute right to choose his FEHA remedies and was not required to exhaust the City internal remedies. We disagree. In Johnson v. City of Loma Linda (2000) 24 Cal.4th 61, our Supreme Court determined: [U]nless a party to a quasijudicial proceeding challenges the agency s adverse findings made in that proceeding, by means of a mandate action in superior court, those findings are binding in later civil actions. Later, in Schifando v. City of Los Angeles (2003) 31 Cal.4th , the Court rejected a rule requiring city employees to exhaust administrative remedies before filing a discrimination claim under FEHA... [ ] [But] [t]he Schifando court clarified that its holding did not disturb the principles set forth in Johnson... [ ] Though a public employee may choose to bypass the administrative process, if he pursues it through evidentiary hearings to a proposed decision, then he has the burden to exhaust administrative and judicial remedies... Page [v Los Angeles County Probation Department (2004) 123 CA4th 1135] at pp italics added). Miller s reliance on his notice of withdrawal/dismissal misses the mark. By the time he submitted this document he... had participated in multiple hearings, cross-examined witnesses, presented evidence and received the lengthy report and recommendation of the hearing examiner. Under these circumstances, just as in Page, Miller was obligated to exhaust his judicial remedies, yet failed to do so... Under the applicable case law, the trial court properly sustained the City s demurrer to the entirety of his complaint without leave to amend. For plaintiff: David Peter Cwiklo. For defendant: Rockard J. Delgadillo, City Attorney, Richard M. Brown, General Counsel, Water and Power, and Cecil W. Marr, Senior Assistant City Attorney. Second Dist Div Seven, 12/22/08, cert d for pub 1/7/09; opinion by Woods with Perluss and Zelon concurring; 2009 DAR 277, 2009 WL IN DENYING CLASS CERTIFICATION, TRIAL COURT ERRONEOUSLY TREATED CLASS SUITABILITY AS DEPENDENT ON DETERMINATION OF MERITS GHAZARYAN v DIVA LIMOUSINE, LTD. In an opinion filed on December 22 and certified for publication on January 12, the Second District, Division Seven, reversed the superior court s denial of a motion to certify a class of limousine drivers allegedly under-compensated by Diva in violation of California s wage and hour laws. Ghazaryan s lawsuit contests Diva s policy of paying its drivers an hourly rate for assigned trips but failing to pay for on-call time between assignments, the Court of Appeal explained. Because the trial court incorrectly focused on the potential difficulty of assessing the validity of Diva s compensation policy in light of variations in how drivers spend their gap time, we reverse the court s denial of the motion and remand with directions to certify Ghazaryan s two proposed subclasses. The court continued in part as follows: Ghazaryan filed his lawsuit in May 2006 alleging Diva by its practice of paying drivers by the job, not by the hour, had failed to pay earned wages and overtime or to provide required rest breaks and meal periods in violation of multiple provisions of the Labor Code and implementing administrative regulations. He also alleged Diva had engaged in unlawful business practices under Business and Professions Code section et seq... [H]is motion sought to certify... two overlapping subclasses: (1) based on Diva s alleged failure to pay earned overtime and straight time, All current and former employees who worked as Limousine Drivers during the period of May 10, 2002 to the present ; and (2) targeting Diva s failure to provide mandatory rest breaks, All current and former employees of Defendant who worked as Limousine Drivers at any time during the period of May 10, 2002 to the present, worked one or more four-hour increments of time without being given a rest break for each such increment and who were not properly compensated therefor[ ]. Diva opposed class certification principally because of the purported difficulties in identifying eligible members of the class and assessing the validity of Diva s compensation policy as applied to different drivers who may or may not have used their gap time for personal pursuits... [ ] The trial court... denied the motion on the ground certification would raise too many individualized issues... [T]he trial court fundamentally misconceived the import of the rule against evaluating the merits of the plaintiff s claims in deciding whether class treatment is appropriate. Rather than denying certification because it cannot reach the merits, as the court did here, the trial court must evaluate whether the theory of recovery advanced by the plaintiff is likely to prove amenable to class treatment... Having begun its analysis of Ghazaryan s motion from the improper assumption the class could not be certified if the underlying conduct had not yet been shown to be illegal, the trial court offered, in concluding the class proposed by Ghazaryan was not properly ascertainable, the legally correct but factually inapposite statement, It is error to certify a class if that class is defined in terms of ultimate liability questions. As this court explained in Hicks v. Kaufman & Broad Home Corp (2001) 89 Cal.App.4th 908, a class is properly defined in terms of objective characteristics and common transactional facts, not by identifying the ultimate facts that will establish liability. (Cont'd on Page 6, DECISIONS) -5-

6 (From Page 5) (Id. at p. 915.) This is precisely what Ghazaryan has done. Diva also argues the proposed class is not ascertainable because determination of the legality of Diva s policy, as well as damages flowing from any illegality, would require highly individualized assessments resulting from variations in the amount of each drivers accumulated gap time and his or her use of that time. But this objection is simply not relevant to the question of the ascertainability of the proposed class. Diva contended, and the trial court agreed, Ghazaryan did not satisfy the community of interest requirement because of the inherent differences among employees in the amount of gap time accumulated and how that time was spent... [ ] Determining whether a sufficient community of interest exists to warrant class certification, however, depends not on the differences among individual drivers use of their gap time but on the reasonableness of Diva s policies as applied to its drivers as a whole... The record before the trial court... established, as Diva asserts, that individual drivers accumulate gap time at varying rates and utilize that time in different ways. But the record also reveals that Diva dictates to a large extent how drivers use their on-call time... [T]he common legal question remains the overall impact of Diva s policies on its drivers, not whether any one driver, through the incidental convenience of having a home or gym nearby to spend his or her gap time, successfully finds a way to utilize that time for his or her own purposes... There is no question class treatment constitutes the superior mode of resolving Ghazaryan s claims in this action. Based on the evidence submitted by Diva in opposition to the motion, its compensation policy has been carefully drafted; and Diva very well may find its policy upheld as reasonable under the existed DLSE standard. We see no advantage to either party to resolution of this question on a piecemeal basis and agree with Ghazaryan such a prospect would jeopardize the ability of employees to find competent representation if restricted to their own individual claims. For plaintiff: Arias, Ozzello & Gignac, H. Scott Leviant, Mike Arias, Mark A. Ozzello, Mikael Stahle, and Jason E. Barsanti. For defendant: David W. Affeld. Second Dist Div Seven, 12/22/08; cert d for pub 1/12/09; opinion by Perluss with Zelon and Jackson concurring; 2009 DAR 443, 2008 WL CLASS CLAIMS FOR VIOLATION OF LABOR CODE S PROHIBITION AGAINST ASKING APPLICANTS ABOUT OLD DRUG CONVICTIONS WERE ABATED BY FEDERAL STATUTE PERMITTING SUCH QUESTIONS BY RETAIL PHARMACIES RANKIN v LONGS DRUG STORES CALIFORNIA, INC. In an opinion filed on January 6, the Fourth District, Division One, affirmed the dismissal of claims by a class of job applicants who alleged that the defendant had violated Labor Code 432.7, as amplified by 432.8, because its employment application form contained a question asking whether the applicant had been convicted of a crime involving the use or possession of illegal drugs during the preceding seven years. (Those Labor Code sections prohibit an employer from asking about convictions for certain drug offenses more than two years old.) The trial court had invited the parties to address whether enactment of the federal Combat Methamphetamine Epidemic Act of 2005 should operate to abate any action against Longs alleging violation of (The CMA, as amended by Congress in March of 2006, contained a provision permitting retail pharmacies to ask applicants drug conviction questions notwithstanding state law. ) The trial court found the enactment of the CMA did so operate and dismissed the action. After extensive analysis, the Fourth District agreed, writing in conclusion in part as follows: In the present case, Congress has replaced California s prohibition against asking about a certain class of prior convictions with an express right to ask about those convictions, thereby effecting a partial repeal of the remedial statute that forms the basis of this action, and did so without any express saving clause... We conclude... that Rankin s pending action to enforce the repealed statutory remedy is abated... For plaintiffs: Terry J. Chapko; Goldstein, Demchak, Baller, Borgen & Dardarian, David Borgen, Laura L. Ho, Heather Mills; A. Eric Aguilera. For defendant: Orrick, Herrington & Sutcliffe, Timothy J. Long, Michael D. Weil, and Mary K. DuBose. Fourth Dist Div One, 1/6/09; opinion by McDonald with Benke and Irion concurring; 2009 DAR 232, 2009 WL IN TIP POOLING CASE, SECOND DISTRICT REJECTS EXISTENCE OF PRIVATE RIGHT OF ACTION UNDER LAB CODE 351, BUT HOLDS THAT STATUTE MAY SERVE AS PREDICATE FOR SUIT UNDER UCL LU v HAWAIIAN GARDENS CASINO, INC. Reversing summary judgment in part in a tip pooling case brought by casino dealers, the Second District, Division Three wrote in part as follows in an opinion filed on January 22: In Leighton v. Old Heidelberg, Ltd. (1990) 219 Cal.App.3d 1062, this District Court of Appeal held that tip pooling in restaurants is not prohibited by Labor Code section 351, a statute precluding employers from obtaining access to employees tips and gratuities. Plaintiff, a former casino dealer on behalf of a class of dealers, challenges the legality of a casino s policy requiring dealers to contribute part of the gratuities they (Cont'd on Page 7, DECISIONS) -6-

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