Labor and Employment Litigation Update

Transcription

1 Labor and Employment Litigation Update Friday, May 4, 2012 General Session; 9:00 10:45 a.m. John A. Ontiveros, Jackson Lewis League of California Cities 2012 Spring Conference Renaissance Hollywood Hotel, Hollywood

2 League of California Cities 2012 Spring Conference Renaissance Hollywood Hotel, Hollywood

3 jackson lewis Attorneys at Law Representing Management Exclusively in Workplace Law and Related Litigation Jackson Lewis LLP 225 Broadway Ste. 200 San Diego, CA Tel Fax LABOR AND EMPLOYMENT LAW UPDATE League of California Cities Spring Conference Los Angeles, CA May 2012 John A. Ontiveros, Esq. Keahn N. Morris, Esq.

4 Page 2 DISCRIMINATION, HARASSMENT & RETALIATION Joaquin v. City of Los Angeles (2012) 202 Cal.App.4th 1207 Plaintiff police officer sued City, alleging that his termination violated the Fair Employment and Housing Act ( FEHA ), Gov. Code, 12940, because it was in retaliation for having filed a sexual harassment complaint against a sergeant. A jury awarded the officer more than $2 million for lost wages and emotional distress. The City appealed. Key Holding: The Court of Appeal reversed. The Court held that in appropriate circumstances, an employer may discipline or terminate an employee for making false charges, even where the subject matter of those charges is an allegation of sexual harassment. The Court reasoned that the Department's articulated reason for the termination that the officer fabricated the sexual harassment complaint was a legitimate, non-retaliatory reason for the adverse employment action. The Court explained that the officer failed to provide substantial evidence that the termination was otherwise motivated by retaliatory animus. The Court further explained that contrary to the officer's claim than an internal affairs investigation was influenced by the sergeant, the ultimate recommendation to terminate was made by the board of rights, following a de novo hearing, not by internal affairs. Accordingly, the Court found that the jury could not reasonably have concluded that the board itself harbored any retaliatory animus. Fuentes v. AutoZone, Inc. (2011) 200 Cal.App.4 th 1221 Plaintiff worked as a part-time cashier. She testified that during a three-week period in 2003, the assistant store manager, and the parts sales manager sexually harassed her. Plaintiff complained to the District manager, then to the human resources department, and requested a transfer to another store. The employer conducted an investigation and eventually terminated the alleged harassers. Plaintiff was transferred to another store and continued to work for the Company until she resigned in Plaintiff subsequently sued the employer for, among other things, sexual harassment in violation of the FEHA. The case went to trial before a jury. The jury found Plaintiff had been subjected to sexual harassment and awarded her $160,000 in damages. The trial court denied the employer s motion for judgment notwithstanding the verdict. The employer appealed. Key Holding: The Court of Appeal affirmed judgment in favor of plaintiff. The Court held that minor inconsistencies in witness testimony need not render a plaintiff-employee s account of sexual harassment so inherently improbable as to require reversal of the jury s verdict. The Court reasoned that factual matters, together with questions of credibility, must be resolved by the trier of fact, which the jury did in favor of the plaintiff. [T]he testimony of a witness offered

5 Page 3 in support of a judgment, the Court explained, may not be rejected on appeal unless it is physically impossible or inherently improbable and such inherent improbability plainly appears. Here, the Court noted that the evidence presented a common situation where there are inconsistencies and contradictions in trial testimony. However, the Court concluded that the evidence showed Plaintiff was subjected to an ongoing pattern of sexually offensive and derogatory conduct during a three-week period and made the object of sexual humiliation for the entertainment of managers, employees and customers. Accordingly, the Court found substantial evidence to support the jury s verdict. Brennan v. Townsend & O'Leary Enterprises, Inc. (2011) 199 Cal.App.4 th 1336 Plaintiff began working for an advertising agency in 1991 as an assistant media planner. By the time she resigned from the company in 2005, Brennan was an account supervisor and vicepresident. In August 2004, a co-worker forwarded an to Plaintiff that referred to an unnamed employee as the big-titted, mindless one. Plaintiff believed the was referring to her. She complained to her supervisor that she found the offensive. She then went on a previously scheduled vacation. Upon her return, Plaintiff met with her supervisor and the company s owner. The Company s owner apologized to Plaintiff about the and showed her a letter of reprimand signed by the s sender, which warned against violating the company s sexual harassment policy. Plaintiff resigned in January 2005 and sued the Company for sexual harassment in violation of the FEHA, among other things. Plaintiff testified at trial that during her employment, she had heard of, but did not witness, alleged derogatory comments directed toward female clients. She also testified that she was not personally subjected to sexual harassment during her employment. The jury returned special verdicts in favor of Plaintiff, found she was subjected to sexual harassment, and awarded her $250,000 in damages. The Employer moved for judgment notwithstanding the verdict, which the trial court granted. Key Holding: The California Court of Appeal affirmed judgment notwithstanding the verdict in favor of the employer. The Court explained that Plaintiff was never subjected to unwelcome physical contact, propositioned, or had explicit language or verbal abuse or harassment directed at her. While Plaintiff had said the Company s owner questioned her about her personal and sex life, she presented no evidence that she was offended by the conduct, or found it unwelcomed. The Court further explained that the August was the only incident of alleged harassment directed toward Plaintiff. Although the was rude, insulting, and unprofessional, the Court noted that it was an isolated event and there was no evidence that any other employee made any derogatory comments about Plaintiff. Based on the evidence presented at trial, the Court concluded that the trial court properly granted judgment notwithstanding the verdict in favor of the employer.

6 Page 4 AB 887 and SB 559, effective January 1, 2012 AB 887 amends FEHA to specifically include gender identity and gender expression as part of the term sex. Gender identity refers to a person s deeply felt internal sense of being male or female. Gender expression refers to one s behavior, mannerisms, appearance and other characteristics that are perceived to be masculine or feminine. SB 559 adds the same protection to FEHA and other California laws. Employers are now prohibited from discriminating against a job applicant or employee based on the individual s genetic tests, genetic tests of the individual s family members, or the manifestation of a disease or disorder in the individual s family members.

7 Page 5 NEGLIGENT SUPERVISION C.A. v. William Hart Union High Sch. Dist., No. S (Cal. S.C. Mar. 8, 2012). While attending a public high school, a student ( C.A. ) claimed the head guidance counselor repeatedly sexually molested and harassed him. C.A. sued the school District and others for vicarious liability and for negligent supervision, negligent hiring and retention, and negligent failure to warn, train or educate. C.A. alleged the District knew the guidance counselor had engaged in unlawful sexually-related conduct with minors in the past and continued to engage in such conduct, but failed to take reasonable steps to prevent her from doing so. The school District asked the trial court to dismiss C.A. s claims because, it argued, there was no statutory authority for holding a public entity liable for negligent supervision, hiring or retention of its employees. The trial court agreed and dismissed the complaint without leave to amend. C.A. appealed, and the Court of Appeal affirmed. The California Supreme Court granted C.A. s petition for review. Key Holding: Reversing dismissal, the California Supreme Court held that a public school District could be held vicariously liable for the negligence of supervisory or administrative personnel who allegedly knew or should have known of a school guidance counselor s propensity toward sexual molestation, but hired, retained and inadequately supervised her. The Supreme Court first noted that California law imposes on school authorities a duty to supervise at all times the conduct of students on the school grounds and to enforce such rules and regulations as are necessary for their protection. The Court further observed that a total lack of supervision or ineffective supervision could constitute a lack of ordinary care on the part of those responsible for student supervision. Therefore, under Section 815.2, a school District could be held vicariously liable for injuries proximately caused by such negligence. The Court then found that a school District and its employees have a special relationship with the District s students, arising out of the mandatory character of school attendance and the comprehensive control over students exercised by school personnel. Therefore, the duty of care owed by school personnel includes the duty to use reasonable measures to protect students from foreseeable injury at the hands of third parties, including injury to a student resulting from a teacher s sexual assault.

8 Page 6 ARBITRATION Ajamian v. CantorCO2e, L.P. (2012) 203 Cal.App.4th 771 When Plaintiff was hired as an office manager, she signed an acknowledgement that she had read the employer s policies and procedures manual. The 65-page manual included an employee handbook with an arbitration policy. Under the policy, disputes are to be submitted before an American Arbitration Association panel of arbitrators under the AAA s national rules for resolution. In addition, the policy stated that if the employer and the employee had entered into an employment agreement containing an arbitration agreement, the employment agreement would control. One year after she was hired, the employer promoted Plaintiff to a broker position and asked her to sign an employment agreement containing an arbitration provision. Under the employment agreement, arbitration was the exclusive means for determining all disputed issues regarding the agreement. The arbitration provision required arbitration of any disputes before an arbitration panel in New York. The provision also stated that New York law and the arbitration rules from an alternative dispute resolution organization selected by the employer, such as AAA or the National Association of Securities Dealers, would control. It barred the arbitrators from awarding special, exemplary, punitive or multiple damages to the employee, but authorized a liquidated damages award to the employer. The employment agreement further provided that Plaintiff could be liable for the employer s attorneys fees if she challenged the agreement and the agreement was upheld. The employment agreement included a severability provision permitting a court to limit an overbroad provision to make it enforceable. According to Plaintiff, she had asked that the arbitration provision be deleted, but the employer refused and told her she had to sign the agreement to receive her bonus. Plaintiff signed the employment agreement. Thereafter, the employer terminated Plaintiff s employment, and she sued the company for sexual discrimination, sexual harassment, and wage-related claims. The employer asked the trial court to order arbitration based on the employment agreement or the handbook s arbitration policy. It argued that the question of enforceability should be decided by the arbitrator, that the agreement was not procedurally unconscionable, and that any provisions found to be substantively unconscionable could be severed. The trial court denied the employer s request, and the employer appealed. Key Holding: Denying the employer s request to arbitrate Plaintiff s discrimination, harassment, and wage-related claims, the California Court of Appeal held that courts, not arbitrators, had the power to decide whether an arbitration agreement was unconscionable. The Court explained that this is even so where an agreement is so broadly worded as to suggest that an arbitrator might have such authority. The Court went on to find the arbitration agreement in question was unconscionable and unenforceable. It also ruled the trial court did not abuse its discretion in declining to sever the offending terms from the agreement.

9 Page 7 PRIVACY Marken v. Santa Monica Unified School District (2012) 202 Cal.App.4 th 1250 After an investigation of a student s complaint, Plaintiff teacher received a written reprimand from the school District for violating the school District s policy prohibiting sexual harassment of students. Plaintiff was placed on administrative leave during the month-long investigation, but returned to his classroom following the reprimand. Two years later, a school District parent, requested disclosure under the California Public Records Act (CPRA). Plaintiff filed a verified complaint for injunctive and decleartory relief, alleging disclosure of his personnel records was not authorized under the CPRA and would violate his constitutional and statutory rights of privacy. The trial court denied the teacher's request. Key Holding: The Court of Appeal affirmed the order denying the preliminary injunction. The Court noted that a writ of mandate is the appropriate procedure to present to the court an action of a third party seeking to challenge an agency's decision to disclose documents, or reverse- CPRA action. However, the Court explained that the teacher's request for the preliminary injunction was properly denied because the public's right to know outweighed the teacher's privacy interest in shielding the information from disclosure. The Court reasoned that the exemption from mandatory disclosure under Government Code Section 6254(c) was inapplicable in light of an investigator's factual finding that a number of specifically described acts or comments more likely than not did occur and the school District's conclusion that the teacher's conduct violated its policy prohibiting the sexual harassment of students. AB 22, effective January 1, 2012 AB 22 enacts new Labor Code section , which states that public and private sector employers, other than certain financial institutions, may only use consumer credit reports in connection with employment decisions if the job in question is: a managerial position (defined here as an employee who qualifies for the executive exemption from overtime pay under Industrial Welfare Commission Order 4); a position in the State Department of Justice; a sworn peace officer or law enforcement position; a position for which the employer is legally required to consider credit history;

10 Page 8 a position that affords regular access (besides routine processing and solicitation of credit card information in retail establishments) to all the following information of others: bank or credit card account information, Social Security number, date of birth; a position in which the person is a named signatory on the bank or credit card information of the employer, is authorized to transfer funds on behalf of the employer, or is authorized to enter financial contracts on behalf of the employer; a position that affords access to proprietary or confidential information; a position that involves regular access to cash totaling more than $10,000 of the employer, a customer or client during the workday.

11 Page 9 RETIREMENT AB 1028, effective January 1, 2012 The Assembly Bill amended provisions of the Public Employees Retirement Law ( PERL ), relating to the limits on post-retirement employment. On January 26, 2012, the California Public Employees Retirement System ( CalPERS ) issued Circular Letter , clarifying certain provisions of AB The letter states that AB 1028 amended Government Code sections and to include the word temporary to clarify that these sections apply to retirees employed as temporary extra help appointments during an emergency to prevent stoppage of business or to perform work of limited duration The letter states that extra help appointments are elimination of backlog, special projects, work in excess of what permanent employees can do, etc. The letter emphasizes that retirees should not be appointed to vacant permanent part-time, permanent intermittent, or permanent full-time positions, even if the hours worked will not exceed 960 hours per fiscal year. The letter also states that retirees are not limited to working during only one fiscal year. In addition, the letter clarifies that retirees hired as temporary extra help under section and must have specialized skills required to perform the job.

12 Page 10 LABOR RELATIONS Office & Professional Employees International Union, Local 29, AFL-CIO & CLC (2012) PERB Decision No M (2/07/2012) Employee filed an unfair practice charge with PERB alleging the Union failed to inform her that she had the option of paying agency fees in lieu of becoming a member of the Union. The employee alleged that the initial materials from the Union contained a membership application but never mentioned the possibility of paying agency fees in lieu of becoming a member. The PERB agent dismissed the unfair practice charge and the employee appealed. Key Holding: PERB held that the employee stated a prima facie case sufficient for the issuance of a complaint. PERB reasoned that a union shop requirement is expressly prohibited by the Meyers-Milias-Brown Act ( MMBA ). Citing National Labor Relations Board ( NLRB ) precedent, PERB explained that before a union may seek to obligate newly hired nonmember employees to pay dues and fees under a union security clause, it must inform them of their right to be or remain nonmembers, that nonmembers have the right to object to paying for union activities unrelated to the unions duties as the bargaining representative and to obtain a reduction in dues and fees for such activities, and that the notice must be reasonably calculated to apprise nonmembers of their rights. County of Riverside (2012) PERB Decision No M (1/13/2012) ALJ considered unfair practice charges cross-filed by the County against Service Employees International Union, Local 721 ( SEIU ) and by SEIU against the County. The central issue in both charges was the nature and extent of SEIU s access to the County s Regional Medical Center ( RCRMC ). SEIU alleged that the County prohibited SEIU from access to the union s designated bulletin boards and to non-work areas to confer with employees, and that the County s prohibitions were imposed unilaterally without notice or an opportunity to meet and confer. The County alleged that SEIU violated the bulletin board and access provisions of its Employee Relations Resolution ( ERR ). The ALJ determined that both parties committed unfair practices and proposed appropriate relief. Only the County filed exceptions, which SEIU opposed. Key Holding: PERB rejected the District s argument that PERB should follow the NLRB and allow employer restrictions on non-employee access absent proof by the union that alternative communication channels are insufficient or that the employer s restrictions discriminate against the union. Instead, PERB held that there is a presumptive right of access to California s public facilities by union agents, subject to reasonable regulation upon the employer s showing that a

13 Page 11 particular regulation is: (1) necessary to the efficient operation of the employer s business and/or the safety of its employees and others; and (2) narrowly drawn to avoid overbroad, unnecessary interference with the exercise of statutory rights. PERB reasoned that by expressly placing in the MMBA the provision for organizational access, the Legislature intended to and did assure employees the right to confer with non-employee organizational representatives at their work locations, subject only to reasonable regulation. PERB explained that [h]ad the Legislature intended to rely solely on the implied and limited right of access found by the NLRB in the NLRA, it could have omitted (or removed) any express access provision from the MMBA. Chula Vista Elementary School District (2011) PERB Decision No E (11/23/2011) The District filed exceptions to the ALJ s proposed decision arising out of an unfair practice charge filed by an employee. The charge and complaint alleged that the District retaliated against the employee in violation of the Educational Employment Relations Act ( EERA ). The ALJ concluded that the District retaliated against the employee when it denied her reapplication to be a support provider ( SP ) for the school year. Key Holding: PERB affirmed the ALJ s proposed decision and ordered the District to pay the teacher back-pay not only for the school year, but also for the , , and school years. PERB expressly rejected the District s argument that the teacher had no expectation of employment beyond one year since SP s must reapply every year. Given the teacher s long tenure, PERB reasoned that absent the unlawful retaliation she would have continued to be re-hired every year. PERB also explained that the remedy reflected, in part, the length of time the case was pending before the ALJ and on appeal to PERB prior to issuance of PERB s decision. PERB reasoned that [i]n cases such as this, in which a respondent invokes the Board s processes by electing to go to hearing following issuance of a complaint by the General Counsel and files exceptions to the AL s proposed decision, it runs the risk that exhaustion of the Board s administrative procedures will increase its liability in the event its appeal is unsuccessful. Palomar Community College District (2011) PERB Decision No E (10/27/2011) The Union filed a charge alleging the District violated the Educational Employment Relations Act ( EERA ) when it unilaterally changed its discipline policy without providing the Union with prior notice or opportunity to bargain. The issue in the case was whether the District committed an unlawful unilateral change when it issued a letter of reprimand in May 2008 pursuant to a side letter of agreement negotiated between the parties on November 18, 2005.

14 Page 12 According to the Union, the side letter expired in February 2006 when the parties collective bargaining agreement was last modified and, therefore, was not in effect when the reprimand was issued. The ALJ found, however, that the side letter was in effect when the letter of reprimand was issued and dismissed the complaint. Key Holding: PERB affirmed the ALJ s dismissal of the complaint. PERB reasoned that absent a provision in an MOU or an agreement between the parties, the side letter did not automatically expire upon the ratification of a subsequently negotiated MOU. PERB explained that the duration of a side letter is dictated by the provisions of the side letter itself (either express or implied) or by the subsequent conduct of the parties. United Teachers of Los Angeles (2011) PERB Decision No E (9/27/2011) An employee filed an unfair practice charge against the union. The PERB agent found that the employee failed to state a prima facie case and denied the employee s request that the Board agent disqualify himself. On appeal, the employee challenged the dismissal and argued anew that the PERB agent was biased and should have disqualified himself. Key Holding: PERB rejected the employee s request. PERB explained that under PERB regulation 32155, a fixed anticipatory prejudgment against a party must be shown to establish prejudice sufficient for Board agent disqualification. PERB reasoned that [s]uch prejudgment is established through statements or conduct by the Board agent indicating a clear predisposition against a party. PERB reasoned that [a]dverse rulings by a Board agent against a party in a previous case, or erroneous legal or factual rulings, do not in themselves indicate prejudice. AB 646, effective January 1, 2012 On October 9, 2011, Governor Brown signed AB 646, amending the MMBA to require factfinding as a means of resolving an impasse in labor negotiations. AB 646 repealed Government Code Section , which permitted unilateral implementation of an agency s last, best and final offer following exhaustion of applicable impasse procedures. Section now requires fact-finding if a mediator is unable to effect a settlement within 30 days of his or her appointment and the union requests fact-finding. In addition, AB 646 adds Government Code Section which requires that after any applicable mediation and fact-finding procedures have been exhausted... a public agency that is not required to proceed to interest arbitration may, after holding a public hearing regarding the impasse, implement its last, best, and final offer...

15 Page 13 AGENCY EXECUTIVE COMPENSATION AB 1344, effective January 1, 2012 AB 1344 prohibits an employment contract between a local agency and chief executive officer or a department head of a local agency from providing an automatic contract renewal that includes automatic compensation increase greater than a cost of living adjustment. AB 1344 also requires an officer or employee of local agencies who are convicted of crimes involving abuse of office or position to reimburse the local agency fully for payments made by that local agency to the officer or employee. AB 1344 further requires local agencies to post agendas of their legislative bodies on the agency s website and prohibits them from holding special meetings regarding salaries, salary schedules, and other forms of compensation for local agency executives.

16 Page 14 POLICE OFFICER S BILL OF RIGHTS Lanigan v. City of Los Angeles (2011) 199 Cal.App.4 th 1020 Plaintiff entered into a settlement agreement with City of pending disciplinary charges, pursuant to which he agreed to resign if similar misconduct charges were upheld in the future. The trial court held that the settlement of pending disciplinary charges by City against Plaintiff was an impermissible waiver of his rights under the Police Officer s Bill of Rights Act ( POBRA ). Key Holding: The Court of Appeal reversed the judgment. The Court held that the waiver was permissible in the context of a settlement of a pending disciplinary action. The Court reasoned that Plaintiff was not faced with a pre-employment, blanket waiver of POBRA. The Court explained that Plaintiff s waiver signed at the time of his employment was knowingly made with sufficient knowledge of the relevant circumstances and likely consequences. The Court further explained that while Plaintiff contended he signed the agreement under fear of losing his career and livelihood, Plaintiff could have exercised his right to appear before a board of rights. Neves v. California Department of Corrections and Rehabilitation (2012) 203 Cal.App.4 th 61 Correctional officer filed a petition for writ of mandate in the superior court. He contended the Department violated Government Code Section 3304 because he did not receive notice of the adverse action within 30 days. The trial court granted the petition for writ of mandate and directed the Department to vacate its adverse action against the officer and reinstate him. Key Holding: The Court of Appeal reversed the trial court s order. The Court held that the officer presented no evidence that the Department notified him of its decision to dismiss him more than 30 days after the final decision was made. The Court explained that under Section 3304, the public agency has to notify the public safety officer in writing of its decision to impose discipline within 30 days of its decision to impose discipline. However, the Court reasoned that the officer failed to demonstrate any violation of Section 3304 because the 30 day notification period was triggered by the date of the Department s final decision to impose discipline not its earlier Sulier notice. The Court noted the Department s Sulier notice stated that the decision to dismiss had not yet been made, but was merely recommended. Robinson v. City of Chowchilla (2011) 202 Cal.App.4 th 382

17 Page 15 Plaintiff police chief alleged the City violated his rights under POBRA and wrongfully terminated his employment in violation of public policy. The trial court ruled the City violated Plaintiff s right to notice, a statement of reasons, and an opportunity for an administrative appeal prior to removal under Government Code Section However, the trial court denied his motion for attorney s fees under Code Civil Procedure Section Key Holding: The Court of Appeal reversed trial court s denial of the motion for attorney s fees. The Court held that plaintiff was the successful party in the litigation even though he did not obtain all the relief he sought in his original pleadings. The Court further held that in light of the legislature s findings and declarations contained in Government Code Section 3301 and case law interpreting the same, the litigation enforced an important right affecting the public interest and conferred significant benefit on the general public and a large class of persons. Accordingly, the Court found that even if the primary effect of the lawsuit was to advance the police chief s personal economic interests, a fee award was still permissible. Jaramillo v. County of Orange (2011) 200 Cal.App.4 th 811 Upon his appointment, Plaintiff assistant sheriff signed a waiver of POBRA, which described him as an at-will employee. The assistant sheriff was then terminated after complaining to the sheriff that he believed certain acts committed by the sheriff were illegal. Plaintiff subsequently challenged his termination and the trial court awarded backpay, private attorney s fees, and costs to the assistant sheriff. Key Holding: The Court of Appeal affirmed. The Court held the waiver was unenforceable because it was a prospective blanket waiver. The Court expressly rejected the County s argument that the waiver would not undermine POBRA under County of Riverside v. Superior Court (2002) 27 Cal.4th 793. The Court explained that the waivers were in substance blanket waivers, waiving important rights (notice and administrative hearing in particular) under POBRA. The Court also explained that unlike the waiver upheld in County of Riverside, the waivers were entirely prospective. Finally and most importantly, the Court explained that the waivers, if enforced, would undermine POBRA because the protections afforded high-ranking peace officers could be easily circumvented.

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