Justia Labor & Employment Law Opinion Summaries

The plaintiff, a former employee of California State University, Chico, filed suit against her prior employer and other parties alleging employment discrimination, whistleblower retaliation, and wrongful termination. She initiated the lawsuit on April 19, 2019. Under Code of Civil Procedure section 583.310, as extended by Judicial Council emergency rule 10 due to the COVID-19 pandemic, she was required to bring her case to trial by October 19, 2024. However, at a case management conference in March 2024, the trial court scheduled the trial for February 3, 2025, a date beyond the statutory deadline.After the trial date was set, the defendants moved to dismiss the case for failure to bring it to trial within the statutory period. They argued that no exception to the deadline applied, specifically contesting the existence of any oral agreement to extend the deadline. The plaintiff opposed dismissal, asserting that both parties had verbally agreed in open court to the February 2025 trial date, and that this agreement was recorded in the minute order. However, the minute order only documented the setting of the trial and related conferences, and contained no indication of any oral stipulation or agreement. The Superior Court of Butte County found that the plaintiff had not demonstrated a valid oral agreement to extend the deadline under section 583.330, subdivision (b), and granted the motion to dismiss with prejudice.On appeal, the California Court of Appeal, Third Appellate District, reviewed the trial court’s decision under the abuse of discretion standard, and interpreted the statute de novo. The appellate court held that an oral agreement to extend the statutory trial deadline under section 583.330, subdivision (b), must be reflected in the court’s minutes or a transcript. Because the record did not include any such evidence, the exception did not apply. The court affirmed the judgment of dismissal and awarded costs to the defendants. View "Randolph v. Trustees of the Cal. State University" on Justia Law

Several individuals who were employed by the City and County of San Francisco and were at least 40 years old when hired brought a class action lawsuit alleging that the City’s method for calculating disability retirement benefits under its retirement system discriminated against employees based on age. The system employs two formulas; Formula 1 is used if it yields a benefit exceeding a percentage threshold, while Formula 2 is used if the threshold is not met. Plaintiffs argued that Formula 2, which imputes years of service until age 60, resulted in lower benefits for those who entered the retirement system at age 40 or older, in violation of the California Fair Employment and Housing Act (FEHA).After initial proceedings in the San Francisco City and County Superior Court—including a demurrer sustained on statute of limitations grounds and subsequent reversal by the Court of Appeal—the plaintiffs filed an amended complaint asserting FEHA claims for disparate treatment and disparate impact, as well as claims for declaratory relief, breach of contract, and equal protection violations. The trial court certified a class and denied summary judgment due to triable issues of fact. A bench trial followed, where both parties presented expert testimony on whether Formula 2 disparately impacted older employees.The Court of Appeal of the State of California, First Appellate District, Division Four, reviewed the trial court’s findings. It affirmed the judgment, holding that plaintiffs failed to prove intentional age discrimination or disparate impact under FEHA. The court found that Formula 2 was motivated by pension status and credited years of service, not by age, and that plaintiffs’ evidence was insufficient as it was based on hypothetical calculations rather than actual data. The trial court’s denial of plaintiffs’ request to amend their complaint after trial was also upheld, as any alleged error was not reversible on the record. The judgment in favor of the City was affirmed. View "Carroll v. City and County of San Francisco" on Justia Law

Jessica Garcia and other former employees brought a class action against The Merchant of Tennis, Inc., alleging failure to pay wages and other employment violations under California and federal law. In response, Merchant entered into approximately 954 individual settlement agreements (ISAs) with current and former employees, providing cash payments in exchange for waivers of their claims. Garcia, who had not signed an ISA, sought class certification and also moved to invalidate the ISAs, arguing that Merchant had obtained them through fraud and coercion, such as misrepresenting the scope of litigation and the claims being released.The Superior Court of San Bernardino County partially granted Garcia’s motion, finding the ISAs voidable at the election of each settling putative class member. The court ordered that curative notices be sent to those who had signed ISAs, allowing them to revoke their agreements and join the class action. However, the parties could not agree on the notice’s language, specifically whether it should inform class members that they might be required to repay the settlement amount if Merchant prevailed in the action. The trial court ruled that the notice did not need to include such repayment language, reasoning that federal cases suggested repayment was not required before joining the suit and that repayment could be treated as an offset to any judgment.The Court of Appeal of the State of California, Fourth Appellate District, Division Two reviewed the trial court’s order. It held that under California Civil Code sections 1689, 1691, and 1693, class members who rescind their ISAs may be required to repay Merchant the consideration received if Merchant prevails, but such repayment can be delayed until the conclusion of litigation. The trial court retains discretion to adjust equities between the parties at judgment. The writ of mandate was granted, directing the trial court to reconsider the curative notice in accordance with these principles. View "The Merchant of Tennis v. Superior Ct." on Justia Law

The plaintiff was employed by the defendant as a collector and customer service representative in California, and upon being hired, electronically signed an arbitration agreement. The agreement broadly required arbitration for disputes relating to employment or termination, and covered claims based on federal, state, or local laws, including the California Labor Code. It also expressly prohibited class or collective adjudication and stated that it “shall be governed by the Federal Arbitration Act and, to the extent permitted by such Act, the laws of the State of California.” In 2023, the plaintiff sued the defendant, asserting both individual and class claims for alleged violations of labor and business statutes.After the complaint was filed in the Superior Court of Los Angeles County, the defendant moved to compel arbitration of the plaintiff’s individual claims and to dismiss the class claims. The defendant submitted evidence that it is a Delaware corporation, previously had offices in Washington, and sourced materials from outside California. The plaintiff opposed, arguing that the Federal Arbitration Act (FAA) did not apply because her employment was exclusively within California and no evidence showed the agreement involved interstate commerce. The trial court found the arbitration agreement valid, held that the FAA applied based on the agreement’s express terms and supporting evidence, and dismissed the class claims per the agreement’s prohibition.On appeal, the California Court of Appeal, Second Appellate District, Division Eight, considered whether the trial court correctly found the FAA governed the arbitration agreement. The appellate court held that the FAA applies because the parties expressly agreed in the contract to be governed by the Act, regardless of whether the underlying transaction actually involved interstate commerce. The court affirmed the order compelling arbitration of the plaintiff’s individual claims and dismissing the class claims. The defendant was awarded costs on appeal. View "Tuufuli v. West Coast Dental Admin. Services" on Justia Law

Three individuals enrolled in a six-month, residential substance abuse rehabilitation program operated by a nonprofit organization in California. During their participation, they performed full-time work in the organization’s warehouses and thrift stores, which the nonprofit termed “work therapy.” In exchange, they received room, board, limited gratuities, and rehabilitation services, but no formal wages. The organization controlled their work schedules and prohibited outside employment. The participants asserted that they often worked over 40 hours weekly and performed tasks similar to paid employees. They disputed the nonprofit’s claim that work therapy was primarily rehabilitative, alleging instead that the arrangement benefitted the nonprofit by reducing costs and replacing paid staff.The Superior Court of the City and County of San Francisco reviewed cross-motions for summary adjudication focused on whether the plaintiffs were employees entitled to minimum wage and overtime under California law. The trial court ruled that the wage laws did not apply because the participants were volunteers, not employees, emphasizing that a key threshold for employee status was an express or implied agreement for compensation. Because the plaintiffs voluntarily participated without such an agreement, the court granted summary judgment in favor of the nonprofit and entered judgment accordingly.The Court of Appeal of the State of California, First Appellate District, Division Five, reviewed the case de novo. The appellate court held that although volunteers for nonprofit organizations may fall outside wage law coverage, the trial court erred by applying an overly narrow standard focused solely on the existence of an agreement for compensation. Instead, the Court of Appeal established a two-part test: nonprofits must show (1) that individuals freely agreed to volunteer for personal benefit rather than compensation, and (2) that the use of volunteer labor is not a subterfuge to evade wage laws. The appellate court vacated the judgment and remanded for further proceedings under this standard. View "Spilman v. The Salvation Army" on Justia Law

A former hourly, nonexempt employee of a large lumber manufacturer filed a class action in October 2018 alleging wage and hour violations on behalf of eight classes of present and former employees. Many employees had signed arbitration agreements that precluded class actions and required arbitration of employment-related disputes, but neither the named plaintiff nor other named plaintiffs were signatories. Throughout several years of litigation, the employer did not identify signatory employees or produce the signed arbitration agreements, despite being ordered to do so. The employer participated in extensive discovery and litigation regarding all putative class members, including those who had signed the agreements.The Superior Court of Shasta County reviewed the case and, after extensive discovery disputes, granted class certification for eight classes in November 2022. Following class certification, the employer produced over 3,000 signed arbitration agreements and promptly moved to compel arbitration for class members who had signed the agreements. The plaintiffs opposed this, arguing the employer had waived its right to compel arbitration due to its prior litigation conduct, including failure to produce agreements and treating signatory employees as class members throughout discovery. The trial court denied the employer’s motion to compel arbitration, finding waiver under the St. Agnes test, and granted sanctions precluding the employer from presenting evidence of the arbitration agreements or arguing that class members had signed them.Upon appeal, the Court of Appeal of the State of California, Third Appellate District, affirmed the order denying the motion to compel arbitration and dismissed the appeal from the sanctions order. The main holding was that the employer had waived its contractual right to compel arbitration by conduct that was inconsistent with an intent to arbitrate, including withholding the agreements and treating signatory employees as class members, as established by clear and convincing evidence. The court dismissed the appeal regarding sanctions for lack of appellate jurisdiction. View "Sierra Pacific Industries Wage and Hour Cases" on Justia Law

A former employee worked for a retail company and, during his employment, signed an arbitration agreement that included a waiver of class, collective, and Private Attorneys General Act (PAGA) representative actions. This agreement stated that any dispute must be brought in arbitration on an individual basis and not as a representative action. The agreement also included a severability clause, specifying that if any part of the waiver was found invalid, a private attorney general claim would have to be litigated in court.After his employment ended, the employee filed a lawsuit against the company under PAGA, alleging wage-and-hour violations on behalf of himself, other employees, and the State of California. The claims and requested relief were pleaded in the aggregate, and the complaint did not separately seek penalties for violations suffered by the plaintiff alone.The employer moved to compel arbitration, arguing that the Supreme Court’s decision in Viking River Cruises, Inc. v. Moriana allowed for arbitration of the “individual” component of a PAGA claim even if representative claims could not be arbitrated. The Alameda County Superior Court denied the motion, reasoning that there is no such thing as an “individual PAGA claim” under California law.On appeal, the Court of Appeal of the State of California, First Appellate District, Division Four, affirmed the trial court’s decision. The appellate court held that, based on the language of the arbitration agreement, the parties did not agree to arbitrate individual PAGA claims. The court reasoned that as of the time the agreement was drafted, there was no clear distinction in California law between “individual” and “non-individual” PAGA claims. Therefore, the court declined to compel arbitration of the PAGA claim and affirmed the lower court’s order. Costs on appeal were awarded to the employee. View "LaCour v. Marshalls of California" on Justia Law

A former employee brought a single-count action under the Private Attorneys General Act of 2004 (PAGA) against his previous employer, alleging violations of various wage-and-hour provisions of the California Labor Code. The employee had previously signed an arbitration agreement that included waivers of class action, collective action, and representative PAGA claims, with a severability clause stating that any invalidation of the PAGA waiver would require such claims to be litigated in court, not arbitrated. The complaint sought civil penalties on behalf of the employee, other current and former employees, and the State of California, but did not separately seek penalties for violations suffered by the employee personally.The employer moved to compel arbitration, arguing that recent federal and state precedent required arbitration of the "individual component" of the PAGA claim, relying on Viking River Cruises, Inc. v. Moriana and subsequent California cases. The Superior Court of Alameda County denied the motion, reasoning that under California law there was no such thing as an "individual PAGA claim" and, therefore, the claim could not be compelled to arbitration.Reviewing the denial, the Court of Appeal of the State of California, First Appellate District, Division Four, considered the parties’ arguments regarding the interpretation of the arbitration agreement and relevant case law. The court held that, based on the language of the agreement and the intent of the parties at the time it was signed, there was no clear agreement to arbitrate individual PAGA claims if the PAGA waiver was invalidated. The court reasoned that, although recent decisions allow splitting PAGA actions into individual and non-individual claims, the agreement in this case did not provide for such arbitration. Accordingly, the court affirmed the order denying the motion to compel arbitration. View "LaCour v. Marshalls of California" on Justia Law

The plaintiff performed maintenance and handyman work for a property owned by a corporation, with the arrangement that he would receive free rent in exchange for keeping the water system operational and doing various tasks. He worked for the corporation between 2009 and 2016, receiving instructions and approvals from the company’s officer who managed the property. After the arrangement ended, it was undisputed that the plaintiff had not been paid wages apart from free rent. He filed a wage claim with the Division of Labor Standards Enforcement, seeking unpaid wages, liquidated damages, waiting time penalties, and other remedies.After a favorable administrative decision by the Labor Commissioner, finding the plaintiff to be an employee entitled to recover unpaid wages and imposing personal liability on the company officer, the defendants appealed to the Superior Court of Humboldt County. Following a bench trial, the court awarded the plaintiff some unpaid wages and penalties, but calculated the statute of limitations from a later date, declined to impose personal liability on the officer, denied liquidated damages and administrative penalties, and rejected claims under the Unfair Competition Law.The California Court of Appeal, First Appellate District, Division One, reviewing the case after remand from the California Supreme Court, held that the trial court erred in several respects. The appellate court found the statute of limitations should have been calculated from the date the initial wage claim form was filed, not a later complaint. It held that the officer could be held personally liable under Labor Code section 558.1, and that the trial court lacked discretion to deny individual liability when the statutory criteria were met. The court also concluded liquidated damages under section 1194.2 and administrative penalties under section 248.5 should have been awarded, and waiting time penalties should have incorporated the rental value provided as compensation. The judgment was reversed in these respects and remanded for recalculation, while affirmed in other areas. View "Iloff v. LaPaille" on Justia Law

Plaintiff was employed by defendant and, as a condition of employment, electronically signed both an offer letter containing an arbitration provision and a separate nondisclosure agreement (NDIAA) on the same day. The offer letter required arbitration for most employment-related disputes, while the NDIAA included terms such as a waiver of bond for injunctive relief and a heightened burden of proof for public domain information. Plaintiff’s employment ended in March 2023, after which she sued defendant in Alameda County Superior Court for disability discrimination, retaliation, and related claims under California’s Fair Employment and Housing Act, as well as wrongful termination. None of her claims involved confidential information or sought injunctive relief.Defendant moved to compel arbitration, asserting the Federal Arbitration Act (FAA) governed and that plaintiff’s claims fell within the arbitration agreement’s scope. The trial court found the arbitration agreement and NDIAA should be read together under California Civil Code section 1642, determined that certain NDIAA provisions were unconscionable, and concluded that unconscionability permeated the arbitration agreement. The court declined to sever the NDIAA’s unconscionable provisions and denied the motion to compel arbitration.On appeal, the California Court of Appeal, First Appellate District, Division Five, disagreed with the trial court’s refusal to sever. The appellate court held that the FAA does not preempt section 1642, and even assuming the NDIAA’s challenged provisions were unconscionable and properly considered alongside the arbitration agreement, those provisions were collateral to the arbitration agreement’s central purpose and did not affect the claims at issue. Applying Ramirez v. Charter Communications, Inc., the appellate court determined that the unconscionable terms should have been severed and the arbitration agreement enforced. Consequently, the order denying arbitration was reversed. View "Wise v. Tesla Motors, Inc." on Justia Law