May 2019 Update
In Rojas v HSBC Card Servs., Inc. (2018) 20 CA5th 427, the court found that the defendant employer HSBC had violated California’s Invasion of Privacy Act (Pen C §§630–638) when it recorded over 300 phone calls between one of its employees and her mother. See §3.32.
There is a limited exemption from Title VII’s prohibition against religious discrimination for religious corporations and associations. In Biel v St. James School (9th Cir 2018) 911 F3d 603, however, the Ninth Circuit held that a Catholic school teacher did not qualify as a “minister” for purposes of the exception. See §4.2.
In Abed v Western Dental Servs., Inc. (2018) 23 CA5th 726, the court of appeal held that a potential employer could be held liable under the state Fair Employment and Housing Act (FEHA) for thwarting a pregnant woman from applying for a job by falsely telling her that no position was available. See §4.47.
Effective January 1, 2019, employers who have a workforce of at least five employees are required to provide sexual harassment training to all of their employees by January 1, 2020. Nonsupervisory employees will need 1 hour of training, supervisory employees will need 2 hours of training, and all new employees must receive this training within 6 months of hiring. Training must be provided every 2 years thereafter. Govt C §12950.1. See §§4.55, 4.61E.
A prevailing plaintiff in a civil action under FEHA may be awarded reasonable attorney fees and costs, including expert witness fees. Govt C §12965(b). A prevailing defendant, on the other hand, may be awarded attorney fees only if the plaintiff’s claims are found to be frivolous, unreasonable, or groundless when brought, or the plaintiff continued to litigate after it clearly became so. Govt C §12965(b), as amended by SB 1300. See §4.60.
New Govt C §12923 sets out legislative declarations in connection with how harassment cases are to be litigated in California courts. In a series of findings, the California Legislature:
Affirmed its approval of the standard set out in Justice Ruth Bader Ginsburg’s concurrence in Harris v Forklift Sys. (1993) 510 US 17, 25, 114 S Ct 367 that a plaintiff need only show that the sexual harassment “so altered the working conditions as to make it more difficult to do the job,” rather than being required to show that her productivity has declined as a result of the harassment;
Rejected the Ninth Circuit’s decision in Brooks v City of San Mateo (9th Cir 2000) 229 F3d 917, and declared that a single incident of sexual harassment may be sufficient for a hostile work environment case if it has unreasonably interfered with the plaintiff’s work performance or created an intimidating, hostile, or offensive working environment;
Affirmed the California Supreme Court’s decision in Reid v Google, Inc. (2010) 50 C4th 512, 538, in which the court rejected the “stray remarks doctrine” developed under federal law (i.e., a discriminatory remark, even if not made directly in the context of an employment decision or uttered by a nondecision maker, may be relevant and circumstantial evidence of discrimination);
Declared that the standard for sexual harassment should not vary by the type of workplace, and disapproved of the holding in Kelly v Conco Cos. (2011) 196 CA4th 191; and
Declared its disapproval of the idea that harassment cases are appropriate for summary judgment and affirmed the decision in Nazir v United Airlines, Inc. (2009) 178 CA4th 243, which held that hostile work environment cases involve issues “not determinable on paper.” See §4.61A.
The scope of personal liability for harassment has been expanded. See §4.61B.
The Legislature has amended Govt C §12940(n) to clarify that an employer or other covered entity must engage in an interactive process with a disabled employee or applicant regarding effective reasonable accommodations in a manner that is both timely and in good faith. See §4.61C.
A new section has been added discussing “Expanded Sexual Harassment Liability in Business, Service, or Professional Relationships.” See §4.61D.
Under new Govt C §12950.2, employers are authorized to provide bystander intervention training to their employees in addition to the required harassment prevention training. This training would include information and guidance on how to enable bystanders to recognize potentially problematic behaviors and motivate bystanders to take action when they observe such problematic behaviors. See §4.61F.
A new section has been added, discussing the requirement that hotels and motels provide training regarding human trafficking to each employee who is likely to interact with human trafficking victims. The employees at whom training and education efforts are directed include those who work in the reception area, perform housekeeping duties, help customers in moving their possessions, or drive customers. See §4.61G.
An employer may not, in exchange for a raise or bonus, or as a condition of employment or continued employment require an employee to sign a release of a claim or right or require an employee to sign a nondisparagement agreement. This provision does not apply to a negotiated settlement agreement to resolve a claim filed by the employee in court, before an administrative agency, in an ADR forum or through an employer’s internal complaint process. For these purposes, a “negotiated” agreement means the agreement is voluntary, deliberate, and informed, provides consideration of value to the employee, and that the employee is given notice and an opportunity to retain an attorney or is represented by an attorney. Govt C §12964.5. See §4.61H.
Effective January 1, 2019, CC §1670.11 limits the use of nondisclosure agreements in contracts and settlement agreements that preclude a sexual harassment victim from testifying in an administrative, legislative, or judicial proceeding concerning alleged sexual harassment or alleged criminal conduct on the part of the other party to the contract or settlement agreement. See §4.61I.
Effective January 1, 2019, CCP §1001 prohibits (and makes void and against public policy) terms in settlement agreements that prevent the disclosure of factual information relating to claims of sexual assault, sexual harassment, failure to prevent harassment, harassment in professional relationships, discrimination based on sex, or retaliation that have been filed in a civil or administrative action. See §4.61J.
Effective January 1, 2019, the language required to waive unknown claims under CC §1542 has been changed. See §4.61K.
Civil Code §47(c) was amended effective January 1, 2019 to add three types of communications regarding sexual harassment that are now considered “privileged” communications (i.e., they cannot be used as a basis for a defamation suit unless they are made with “malice”). See §4.61L.
Government Code §12965(b) has been amended to provide that the prevailing party, including the DFEH, may recover reasonable attorney fees and costs (including expert witness fees) “except that, notwithstanding [CCP §998], a prevailing defendant shall not be awarded fees and costs unless the court finds the action was frivolous, unreasonable, or groundless when brought, or the plaintiff continued to litigate after it clearly became so.” See §4.61M.
In Nunies v HIE Holdings (9th Cir 2018) 908 F3d 428, the Ninth Circuit considered for the first time since the adoption of the ADA Amendments Act of 2008 (ADAAA) (Pub L 110–325, 122 Stat 3553) the “regarded-as” definition of disability. See §4.78.
In Alamillo v BNSF Ry. (9th Cir 2018) 869 F3d 916, the court held that an employee who was diagnosed with a sleep disorder failed to establish a prima facie case of disability discrimination because there was no record that the sleep disorder was a substantial motivating factor for his disciplinary proceedings, which were initiated by the employer before it knew of the employee’s medical condition. See §4.78.
Prior salary alone or in combination with other factors cannot justify a wage differential between male and female employees. Rizo v Yovino (9th Cir 2018) 887 F3d 453. See §4.96.
In Digital Realty Trust, Inc. v Somers (2018) 583 US ___, 138 S Ct 767, the Supreme Court resolved a split among the Second, Ninth, and Fifth circuits about whether the antiretaliation protections of Dodd-Frank cover only persons who have reported alleged securities violations to the SEC, or whether they also cover persons who have made internal complaints without making a complaint to the SEC. The Second and Ninth Circuits had held that the antiretaliation protections applied to both categories of persons, while the Fifth Circuit restricted them to persons who filed complaints with the SEC. The Supreme Court agreed with the Fifth Circuit’s reasoning. See §4.127A.
Effective January 1, 2019, the Ralph Civil Rights Act (CC §51.7) may be cited as the Ralph Civil Rights Act of 1976. The Bane Act (CC §52.1) shall be known as the Tom Bane Civil Rights Act. See §§4.128–4.129.
The Federal Arbitration Act preempts the special arbitration provisions in the Ralph Civil Rights Act and the Bane Act. Saheli v White Mem. Med. Ctr. (2018) 21 CA5th 308. See §4.128.
A new section has been added, discussing the “Legislative Employee Whistleblower Protection Act.” See §4.139A.
A new section has been added, discussing the “Legislative Discriminatory Harassment Retaliation Prevention Act.” See §4.139B.
California WARN notice requirements apply to temporary layoffs. International Bhd. of Boilermakers v NASSCO Holdings, Inc. (2017) 17 CA5th 1105. See §4.145.
Effective January 1, 2019, all publicly held corporations with executive offices in California must have at least one female member of the board of directors by the end of 2019. See §4.146I.
A claim under the Private Attorneys General Act of 2004 (PAGA) (Lab C §§2698–2699.5) for failure to provide or maintain accurate wage statements does not require proof of injury. Raines v Coastal Pac. Food Distribs., Inc. (2018) 23 CA5th 667. See §§7.5, 7.14, 10.89.
The California Supreme Court has granted review of Kim v Reins Int’l Cal., Inc. to consider the following issue: Does an employee bringing an action under PAGA lose standing to pursue representative claims as an “aggrieved employee” by dismissing his or her individual claims against the employer? Kim v Reins Int’l Cal., Inc. (review granted Mar. 28, 2018, S246911; superseded opinion at 18 CA5th 1052). See §7.12.
In Huff v Securitas Sec. Servs. USA, Inc. (2018) 23 CA5th 745, 754, relying on the definition of “aggrieved employee,” the court held that an employee aggrieved by one violation has standing to sue on a representative basis on behalf of employees who suffered additional violations by the same employer. See also Carrington v Starbucks Corp. (2018) 30 CA5th 504. See §7.16.
In Canela v Costco Wholesale Corp. (ND Cal, June 15, 2018, No. 13-cv-03598-BLF) 2018 US Dist Lexis 100891, the court granted a certificate of interlocutory appeal as to two issues: (1) whether, absent class certification, a PAGA plaintiff in federal court has Article III standing to represent absent aggrieved employees; and (2) whether a PAGA plaintiff in federal court can represent absent aggrieved employees without qualifying for class certification under Fed R Civ P 23. The Ninth Circuit has accepted Canela for interlocutory appeal. See §§7.17–7.18.
Courts are increasingly focusing on manageability in PAGA actions. See, e.g., Amiri v Cox Communications Cal., LLC (CD Cal 2017) 272 F Supp 3d 1187, 1194 (finding plaintiff’s PAGA claim unmanageable because numerous individualized determinations would be required to try PAGA representative claim). See §7.17.
California state courts have generally held that a PAGA claim can proceed only on a representative basis. See Khan v Dunn-Edwards Corp. (2018) 19 CA5th 804, 810 n1 (holding that individual employee could not pursue PAGA claims individually). See §7.21.
To satisfy PAGA exhaustion requirements, notice to the Labor and Workforce Development Agency (LWDA) must identify the specific Labor Code violations alleged and the facts and theories supporting the claim. The notice to the LWDA must also indicate that it is being submitted in a representative capacity. In Khan v Dunn-Edwards Corp. (2018) 19 CA5th 804, 809, the court granted summary judgment to the employer because the plaintiff’s notice referred only to his claims against his former employer and did not make any reference to other current or former employees. The court found that this failed to give fair notice to the employer, and therefore failed to comply with the administrative requirements of PAGA. See §7.33.
In Brown v Ralphs Grocery Co. (2018) 28 CA5th 824, 837, the court found that the plaintiff’s initial PAGA notice was not adequate with regard to his claims for missed meal and rest periods, or with regard to his claim for failure to pay all wages due, because the notice was “a string of legal conclusions that parroted the allegedly violated Labor Code provisions.” The court noted that it did not state facts and theories supporting the alleged violations. Conversely, the court found that the plaintiff had adequately alleged violations of Lab C §226(a) by stating that the employer failed to include the name and address of the employer on its wage statements. The court also found that an employee wishing to assert a PAGA claim under Lab C §558 need not specify that section in a PAGA notice because §558 merely sets forth a remedy. See §7.33.
In Atempa v Pedrazzani (2019) 27 CA5th 809, 820, the court of appeal affirmed that a party “other than the employer” who is responsible for a violation of Lab C §§558 or 1197.1 is liable for civil penalties “regardless of the identity or business structure of the employer.” See §7.38.
Any arbitration agreement that compels the waiver of representative claims under the PAGA is contrary to public policy and unenforceable as a matter of state law. See, e.g., Juarez v Wash Depot Holdings, Inc. (2018) 24 CA5th 1197 (PAGA waiver unenforceable, and lack of severability clause in Spanish version made entire agreement unenforceable). See §7.50.
Courts have split on whether recovery of wages as civil penalties under Lab C §558 are arbitrable. In Esparza v KS Indus., L.P. (2017) 13 CA5th 1228, 1245, the court of appeal held that the recovery of unpaid wages under Lab C §558, even if recovered pursuant to PAGA, is a “private dispute” subject to arbitration. Another court has disagreed with Esparza, holding that claims under Lab C §558, including for wages, “are indivisible claims for civil penalties,” and are therefore subject to the rule that predispute arbitration agreements are unenforceable. Lawson v ZB, N.A. (2017) 18 CA5th 705, 725. The California Supreme Court has granted a petition for review in Lawson. Lawson v ZB, N.A. (review granted Mar. 21, 2018, No. S246711; superseded opinion at 18 CA5th 705). See §7.50B.
A new section has been added discussing the impact of the Supreme Court’s decision in Epic Sys. Corp. v Lewis (2018) 584 US ___, 138 S Ct 1612. See §7.50C.
An employee aggrieved as to one Labor Code violation can bring PAGA claims on a representative basis for other alleged violations, even if the plaintiff employee was not personally subject to those violations. Huff v Securitas Sec. Servs. USA, Inc. (2018) 23 CA5th 745, 754; Carrington v Starbucks Corp. (2018) 30 CA5th 504, 519. See §7.57.
California courts must apply federal precedents when interpreting a federal fee-shifting statute to determine entitlement to fees and costs and what types of costs are recoverable. Quiles v Parent (2018) 28 CA5th 1000, 1010. See §8.2.
A procedural victory by a party that does not end the dispute does not make the party a prevailing party. See, e.g., DisputeSuite.com, LLC v Scoreinc.com (2017) 2 C5th 968 (dismissal on forum selection grounds did not make winner of motion prevailing party when loser refiled case in appropriate forum). See §8.36B.
When a court awards complete relief on one claim, rendering it unnecessary to reach alternative claims, the alternative claims cannot be deemed unsuccessful for purposes of calculating a fee award. Ibrahim v U.S. Dep’t of Homeland Sec. (9th Cir 2019) 912 F3d 1147. See §8.50.
Effective January 1, 2019, FEHA has been amended so that a prevailing defendant in a FEHA action cannot recover any attorney fees or costs—even if the plaintiff fails to recover more than a rejected §998 offer—unless the court finds the action was frivolous, unreasonable, or groundless when brought, or the plaintiff continued to litigate after it clearly became so. See §8.67.
Under CCP §998, an offer of compromise that is silent on whether it includes fees and costs must be interpreted as not including fees and costs, such that in determining whether the offeree’s recovery exceeded the offer, a court must compare the damages plus pre-offer fees and costs to the offer plus pre-offer fees and costs. See Martinez v Eatlite One, Inc. (2018) 27 CA5th 1181, 1185. See §8.68.
On May 10, 2018, the California Supreme Court issued an order approving new Rules of Professional Conduct for attorneys, which went into effect November 1, 2018. All references to the former Rules in the text have been updated.