Labor and Employment Litigation Update

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1 Labor and Employment Litigation Update Friday, May 6, 2011 General Session; 10:45 a.m. 12:00 p.m. John A. Ontiveros, Jackson Lewis League of California Cities City Attorneys Department 2011 Spring Conference Tenaya Lodge at Yosemite, Fish Camp

2 League of California Cities City Attorneys' Department 2011 Spring Conference Tenaya Lodge at Yosemite, Fish Camp

3 Representing Management Exclusively in Workplace Law and Related Litigation Jackson Lewis LLP 199 Fremont Street 10th Floor San Francisco, CA Tel Fax LABOR AND EMPLOYEMENT LAW UPDATE League of California Cities Annual Conference John A. Ontiveros, Esq. Keahn Morris, Esq. s:

4 Page 2 Table of Contents ACCOMMODATION... 3 Sanders v. City of Newport... 3 DISCRIMINTION, HARASSMENT & RETALIATION... 4 Thompson v. North American Stainless, LP (2011) 130 S. Ct Kasten v. Saint-Gobain Performance Plastics Corp. (2011) 130 S. Ct Lopez v. Pacific Maritime Association (9th Cir. 2011) Case No Hall v. Goodwill Industries of California (2011) 193 Cal.App.4th UNIFORMED SERVICES EMPLOYMENT & REEMPLOYMENT RIGHTS ACT... 6 Staub v. Proctor Hospital (2011) 131 S. Ct WAGE AND HOUR... 7 Sheppard v. North Orange County Regional Occupational Program (2010) 191 Cal. App. 4 th LABOR RELATIONS... 8 International Ass n of Fire Fighters, Local 188, AFL-CIO v. Public Employment Relations Bd. (2011) 51 Cal.4th County of Los Angeles v. Los Angeles County Employee Relations Commission (2010) 192 Cal. App. 4 th Los Angeles v. Superior Court of Los Angeles County (2011) Case No. BS Alameda County Management Employees Ass n v. Superior Court (2011) 193 Cal. App. 4 th Paulsen v. Local No. 856 (2011) 193 Cal. App. 4 th Fallbrook Union Elementary School District (2011) PERB Dec. No E EMPLOYEE DISICPLINE/ DUE PROCESS California School Employees Ass n v. East Side Union High School Dist. (2011) 193 Cal.App.4th PEACE OFFICERS PROCEDURAL BILL OF RIGHTS Riverside Sheriffs Association v. County of Riverside (2011) 193 Cal.App.4th FOR WHOM THE BELL TOLLED (UPDATE)... 14

5 Page 3 ACCOMMODATION Sanders v. City of Newport (9th Cir. 2011) Case No Plaintiff, a former City of Newport employee, sued the City under the Family Medical Leave Act ( FMLA ) when it refused to reinstate her after she took an approved medical leave. At trial, the City argued it could not provide a safe workplace for Plaintiff because she suffered from multiple chemical sensitivity. The jury returned a verdict in favor of the City, finding it did not violate Plaintiff s FMLA rights. Plaintiff appealed, arguing the Court improperly instructed the jury on the elements of her FMLA interference claim. The Ninth Circuit agreed. Key Holding: The Ninth Circuit held an employer has the burden of proving it had a legitimate reason for not reinstating an employee to her former position after taking a leave pursuant to the FMLA. The Court explained that while the text of the DOL regulations regarding an employee s right to return to work following FMLA leave is ambiguous with respect to the parties burdens, it is clear the burden rests with the employer to establish whether the employee can perform the essential functions of the job. Accordingly, the Court held that the District Court s FMLA instruction was erroneous because it required Plaintiff to disprove that the City had reasonable cause not to reinstate her after taking FMLA leave.

6 Page 4 DISCRIMINTION, HARASSMENT & RETALIATION Thompson v. North American Stainless, LP (2011) 130 S. Ct Plaintiff and his fiancée were employees of North American Stainless ( NAS ). NAS fired Plaintiff after his fiancée filed a sex discrimination charge against NAS with the EEOC. Plaintiff filed his own charge and a subsequent suit under Title VII of the Civil Rights Act, claiming that NAS fired him to retaliate against his fiancée for filing her charge. The District Court granted NAS summary judgment on the ground that third-party retaliation claims were not permitted by Title VII, which prohibits discrimination against an employee because he has made a [Title VII] charge, and which permits a person claiming to be aggrieved by [an] alleged employment practice to file a civil action. The Court of Appeals affirmed. Plaintiff appealed. Key Holding: The Supreme Court reversed the Court of Appeals decision on the ground that NAS firing of Plaintiff was retaliatory and he could properly sue under Title VII. The Court reasoned the purpose of Title VII s anti-retaliation provision is to prohibit any employer action that might dissuade a reasonable worker from making or supporting a discrimination charge. The Court thought it was clear that a reasonable worker might be dissuaded from filing a complaint against her employer if she knew her fiancée would be discharged. Although the Court declined to identify a fixed class of relationships for which third party reprisals are unlawful, it stated that a close family member who is fired will almost always be able to assert a claim under Title VII. ****** Kasten v. Saint-Gobain Performance Plastics Corp. (2011) 130 S. Ct Plaintiff was a plant worker at Saint-Gobain. When employees arrived at work, they were required to first go to a changing room and put on protective clothing before clocking-in. Plaintiff complained to management the location of the time clocks were illegal and if the company were challenged in court it would lose. Plaintiff further stated to the Employer he was contemplating filing a lawsuit. Saint-Gobain disciplined and terminated him shortly thereafter. Plaintiff alleged he was terminated in retaliation for his complaints regarding compliance with the Fair Labor Standards Act ( FLSA ). Both the lower court and the Seventh Circuit Court of Appeals found Plaintiff s verbal complaints to the Employer were not protected under the FLSA s anti-retaliation provision. The provision states it is a violation for an employer to discharge or in any other manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding (Emphasis added.)

7 Page 5 Key Holding: The U.S. Supreme Court held the phrase filed any complaint under the FLSA is not limited to written claims. The Court explained it could also include oral complaints. However, it clarified the complaint is not protected unless it is sufficiently clear to an employer that the employee is asserting rights under the FLSA. ****** Lopez v. Pacific Maritime Association (9th Cir. 2011) Case No Pacific Maritime Association did not offer Plaintiff, a drug addict, employment after he failed its pre-employment drug test. Plaintiff reapplied with the Employer in 2004 after becoming clean and sober. However, because of Pacific Maritime s one-strike rule, it rejected Plaintiff s application. The Employer was unaware of Plaintiff s earlier addiction. Plaintiff filed suit against Pacific Maritime claiming it violated the Fair Employment and Housing Act ( FEHA ) by discriminating against him for being a rehabilitated drug addict. The District Court granted summary judgment for the Employer. Plaintiff appealed. Key Holding: The Ninth Circuit upheld the District Court finding the Employer s one-strike rule did not discriminate against people who have recovered from a drug addiction, but rather, treats all applicants equally who happen to have used drugs immediately before the preemployment drug test. The Court further held that because the Employer did not learn of Plaintiff s addiction until after denying his 2004 application, there was no evidence its decision was based on the his protected status. ****** Hall v. Goodwill Industries of California (2011) 193 Cal.App.4th 718 As a prerequisite to file a civil lawsuit under the FEHA, a current or former employee must file a charge of discrimination with the DFEH within one year of the alleged adverse act. If the agency chooses not to pursue a claim on behalf of the aggrieved employee or the employee requests to pursue his or her civil remedies without its assistance, the State will issue a right-to-sue notice. Plaintiff filed a charge of discrimination with the DFEH and received an immediate right-to-sue notice. The employee became incapacitated during the period after the DFEH issued the notice, and was unaware the agency sent the letter until almost a year later. He filed a civil complaint one year after the DFEH sent the right-to-sue notice, but less than one year after receipt of it. Key Holding: The California Court of Appeal held that the date of issuance not the date or receipt triggers the running of the statute of limitations to file a civil complaint under Government Code section 12965(b).

8 Page 6 UNIFORMED SERVICES EMPLOYMENT & REEMPLOYMENT RIGHTS ACT Staub v. Proctor Hospital (2011) 131 S. Ct While employed by Proctor Hospital, Plaintiff employee was also a member of the United States Army Reserve. Both his immediate supervisor and manager expressed hostility regarding his military obligations. Plaintiff s supervisor gave him a disciplinary warning. The employer discharged him for violating the corrective action shortly thereafter. Plaintiff sued Proctor under the Uniformed Services Employment and Reemployment Rights Act of 1994 ( USERRA ), which forbids an employer to deny employment, reemployment, retention in employment, promotion, or any benefit of employment based on a person s membership in or obligation to perform service in a uniformed service, and provides that liability is established if the person s membership is a motivating factor in the employer s action. A jury found Proctor liable, but the Seventh Circuit reversed. Plaintiff appealed. Key Holding: The Supreme Court held that if a supervisor performs an act motivated by antimilitary animus that is intended by the supervisor to cause an adverse employment action, and if that act is a proximate cause of the ultimate employment action, the employer is liable under USERRA. The Court specifically rejected a bright-line rule that an independent investigation by an unbiased decision maker protects an employer from liability. Instead, it concluded that if the employer s investigation results in an adverse action for reasons unrelated to the supervisor s original biased action...the employer will not be liable.

9 Page 7 WAGE AND HOUR Sheppard v. North Orange County Regional Occupational Program (2010) 191 Cal. App. 4 th 289 Plaintiff was a part-time instructor for the North Orange County Regional Occupational Program. During his employment, Plaintiff was required to spend 20 minutes of unpaid time preparing for every hour he spent teaching. He sued the Employer alleging it was required to comply with the Industrial Welfare Commission s Wage Order No and pay him for his preparation time. The Employer bought a demurrer to Plaintiff s complaint, claiming that the Wage Order did not apply to public employees. The trial court sustained the demurrer. The California Court of Appeal reversed and remanded. Key Holding: The California Court of Appeal held that the minimum wage provision in the Wage Order applied to Plaintiff s employment with the Employer. It reasoned that the California legislature has plenary authority over public school districts and the power to impose the minimum wage law provision contained in the Wage Order to public school employees. The Court explained the legislature gave the Industrial Welfare Commission broad powers to set and regulate the minimum wage of all California state employees.

10 Page 8 LABOR RELATIONS International Ass n of Fire Fighters, Local 188, AFL-CIO v. Public Employment Relations Bd. (2011) 51 Cal.4th 259. The City of Richmond unilaterally laid off 18 of its 90 firefighters without bargaining with the Union. After the City sent out the layoff notices, it met with the Union on three occasions to discuss the effects of its decision. The Union filed an unfair practice charge with the Public Employees Relations Board ( PERB ) alleging the City violated the Meyers-Milias-Brown-Act ( MMBA ) by failing to negotiate over the layoff decision. PERB s Regional Attorney refused to issue a complaint, explaining that a decision to lay off employees is not subject to collective bargaining. The Board issued a decision affirming the Regional Attorney s ruling. The Superior Court denied the union s petition for writ of mandate. The Court of Appeal affirmed the trial court s judgment. The California Supreme Court upheld the Court of Appeal s decision. Key Holding: The California Supreme Court held that under the MMBA, a local public entity faced with a decline in revenues or other financial adversity may unilaterally decide to lay off employees to reduce its labor costs. The Court explained that although a public employer must bargain with its employees about the timing of layoffs, and the number and identity of the employees affected, it need not bargain over the layoff decision itself. ****** County of Los Angeles v. Los Angeles County Employee Relations Commission (2010) 192 Cal. App. 4 th 1409 The Union was the exclusive representative of over 14,000 Los Angeles County employees of which approximately 11,000 were dues paying non-members pursuant to the parties memorandum of understanding ( MOU ). During negotiations, the Union proposed a change to the MOU requesting that the County furnish it with the names and home addresses of the bargaining unit. The Union further proposed that it would send employees notices informing them of their membership options. The County rejected the Union s demand. The Union then filed an unfair practice charge with the County s Employee Relations Commission. The Commission ordered production of the personal information of non-member County employees. The County filed a writ of mandate seeking relief from the Commission s decision on the grounds that disclosure of non-members personal information violated their right to privacy under the California Constitution. The trial court denied the writ. The County appealed.

11 Page 9 Key Holding: The California Court of Appeal reversed, finding the non-member employees had a protected privacy interest under the California Constitution and must be provided notice and an opportunity to object prior to disclosure of their names, addresses, and telephone numbers. The Court held that if the Union sought to challenge the objection, it may do so before the Commission. The Court rejected the Union s contention based upon Golden Empire Transit, PERB Decision No M, which held a union was entitled to a bargaining unit member s personal information notwithstanding their objection. The Court noted that the PERB Decision was inconsistent with California law. ***** Los Angeles v. Superior Court of Los Angeles County (2011) Case No. BS The City of Los Angeles imposed furloughs on Union employees during a fiscal emergency declared in May More than 400 City employees filed individual grievances over the furloughs, all of which were denied on the ground that the issue was not grievable. The City refused to arbitrate, and the Union filed a petition in April 2010 seeking to compel arbitration. The Superior Court granted the petition finding the furloughs fell under the broad definition of grievance contained in the MOU. The City appealed. Key Holding: The California Court of Appeal overturned the lower court and held that even if the MOU between the City and the Union allowed the arbitration of furloughs, permitting arbitration would be an improper delegation of discretionary authority. The Court explained that [a]s a general rule, powers conferred upon public agencies and officers which involve the exercise of judgment or discretion are in the nature of public trusts and cannot be surrendered or delegated to subordinates in the absence of statutory authorization. The Court reasoned that the decision to impose mandatory furloughs due to a fiscal emergency is an exercise of the City Council s discretionary salary setting and budget making authority outlined in the City Charter. Thus, these powers could not be delegated to an arbitrator. ****** Alameda County Management Employees Ass n v. Superior Court (2011) 193 Cal. App. 4 th 368 Facing a multi-million dollar budget reduction for the fiscal year, the Superior Court of Alameda County laid off 28 bargaining unit employees. After being notified of the layoffs, the employees requested that they be transferred to lower paying jobs. The Superior Court denied their request. The employees requested due process hearings in front of a hearing officer. The Superior Court also denied those requests.

12 Page 10 The trial court rejected the Union s arguments that the Superior Court violated the Trial Court Employment Protection and Governance Act ( TCEPGA ). The Union appealed. Key Holding: The California Court of Appeal reversed. The Court of Appeal held that under the TCEPGA the Superior Court had a duty to meet and confer with the Union over terms and conditions of employment, which include seniority rights. It also reasoned that if the Superior Court wanted to apply an MOU provision from another unit, it should have provided the Union notice and an opportunity to bargain over the language. Finally, the Court of Appeal found that pre-layoff hearings are not required in the absence of discriminatory intent when the layoff is due to budgetary constraints. ****** Paulsen v. Local No. 856 (2011) 193 Cal. App. 4 th 823 Deputy Probation Officers employed by the County of Marin brought a wage and hour lawsuit against the County and their Union. Plaintiffs alleged the parties inappropriately entered into a deal to designate Plaintiffs as exempt employees under the FLSA. The trial court sustained the Union s demurrer to the first cause of action on the ground that PERB has exclusive jurisdiction over an alleged breach of the duty of fair representation. The California Court of Appeal affirmed. Key Holding: The California Court of Appeal held that a claim for breach of the duty of fair representation is an unfair labor practice under the MMBA and subject to PERB s exclusive jurisdiction. The Court further held that MMBA section 3511 only exempts from PERB s exclusive jurisdiction peace officers designated under California Penal Code Section 830.1, a definition that does not include deputy probation officers. ****** Fallbrook Union Elementary School District (2011) PERB Dec. No E The District employed a temporary teacher and gave her satisfactory evaluations for the first two years of her employment. However, the District did not recommend her for re-hire after the third year. Plaintiff teacher alleged the Principal failed to follow the MOU by requiring a conference after classroom observation. Plaintiff also alleged the Principal told her, I believe that your Union activities have gotten in the way of your teaching objectives this year.

13 Page 11 The ALJ found the District violated the Educational Employment Relations Act ( EERA ) by deciding not to reemploy the teacher in retaliation for her protected activity as a site representative. The Board reversed. Key Holding: The Board held that the Union failed to establish the required nexus between the adverse action and the protected activity. The Board stated that when an employer fails to comply with an MOU provision both before the employee engaged in protected conduct and after the employee engaged in such conduct, the later failure to comply with the MOU is not a reliable predicator of discriminatory intent. It further explained the Principal had failed to follow the MOU in prior years when he gave the teacher a favorable rating. As far as the alleged statement by the Principal, the Board held that, by itself, it was a relatively benign statement that does not convey union animosity.

14 Page 12 EMPLOYEE DISICPLINE/ DUE PROCESS California School Employees Ass n v. East Side Union High School Dist. (2011) 193 Cal.App.4th 540 School District laid off Plaintiff teacher due to lack of funds. The District rehired Plaintiff to a lower position and forced her to serve a probationary period. Before the end of the probation, the District released Plaintiff. The Union filed a petition seeking reinstatement on the ground that Plaintiff s permanent status did not end when she was laid off and, therefore, she was not subject to probation. The trial court denied the Union s petition. The California Court of Appeal affirmed. Key Holding: The California Court of Appeal held that an employee s permanent status is restricted to the position or class in which it was attained and is not kept when the employee is reemployed in a different job. Accordingly, the Court concluded that Plaintiff was a probationary employee with no right to notice or a hearing before the termination of her employment.

15 Page 13 PEACE OFFICERS PROCEDURAL BILL OF RIGHTS Riverside Sheriffs Association v. County of Riverside (2011) 193 Cal.App.4th 20 The County of Riverside terminated Plaintiff corrections officer because it determined she had a medical condition that prevented her from performing the essential functions of her position. The County denied her request for an administrative appeal of her termination pursuant to the terms of the MOU and the Public Safety Officers Procedural Bill of Rights Act ( POBRA ). The County subsequently rescinded Plaintiff s termination, placed her on administrative leave, and requested disability retirement benefits on her behalf. Plaintiff petitioned the trial court for a writ of mandate directing the County to process her request for an administrative appeal of her termination. The County opposed the petition on the grounds it had rescinded Plaintiff s termination and the exclusive remedy was to appeal her disability retirement. The trial court granted the petition on the ground Plaintiff was denied wages and benefits of her employment. The Court of Appeal affirmed. Key Holding: The Court of Appeal held Plaintiff was entitled to appeal her termination, even though the Employer subsequently withdrew the discipline, because substantial evidence showed Plaintiff was denied wages and other benefits. The Court explained that placing Plaintiff on unpaid status due to her medical condition constituted disciplinary action within the meaning of the MOU. The Court further found that the County s actions constituted punitive action within the meaning of POBRA thereby also triggering her right to an administrative appeal by statute. The Court noted that while the County may not have necessarily returned Plaintiff to working status, the County failed to explain why it did not place Plaintiff on paid administrative leave.

16 Page 14 FOR WHOM THE BELL TOLLED (UPDATE) In response to the City of Bell salary scandal, the California legislature was considering a six-bill package of legislation, including AB 192, Public Employees Retirement Bill; AB 194, Retirement Bill; AB 827, Local Public Employees Bill; AB 1955, City Officials Compensation; AB 2064, State and Local Government: Salary Disclosure; and SB 501, Local Government Compensation Disclosure. Of the six proposed bills, only two made it out of the senate: AB 194, Retirement Bill; and AB 827, Local Public Employees Bill. Governor Schwarzenegger vetoed both bills on September 30, 2010.

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