Justia Labor & Employment Law Opinion Summaries

O’Grady, a banquet server and bartender at Defendant’s San Francisco ballroom, brought a putative class action, challenging Defendant’s practice of automatically imposing a 21 percent “service charge” to every food and beverage banquet bill. Plaintiff claims part of the money collected as service charges is kept by Defendant, with the rest distributed to “managers and other non-service employees.” Plaintiff alleged that the service charge constituted a gratuity and that Defendant “failed to distribute the total proceeds of [these] gratuities to non-managerial banquet service employees” as required by Labor Code section 351, enforceable under the California Unfair Competition Law, Cal. Bus. & Prof. Code 17200. Plaintiff argued that It is typical in the hospitality industry that establishments impose gratuity charges in the range of 18- 22% of the food and beverage bill, so customers paying these charges reasonably believed they were gratuities to be paid to the service staff. The complaint also alleged “Intentional Interference with Advantageous Relations” and breach of implied contract. The court of appeal reversed the dismissal of the complaint. There is no categorical prohibition why what is called a service charge cannot also meet the statutory definition of a gratuity. Labor Code provisions concerning compensation and working conditions are to be liberally construed in favor of employees. View "O'Grady v. Merchant Exchange Productions, Inc." on Justia Law

The Supreme Judicial Court affirmed the decision of the Civil Service Commission concluding that the Boston police department had not demonstrated reasonable justification for bypassing Michael Gannon for employment in 2013 because his hair sample tested positive for cocaine use in 2010, holding that that the Commission's decision was supported by substantial evidence and contained no error of law. Specifically, the Commission determined that the department had not demonstrated by a preponderance of the evidence that Gannon in fact had used illegal narcotics. The department sought review of the Commission's decision, and the superior court judge overturned the decision and entered judgment for the department. The Supreme Judicial Court reversed the judge's order allowing the department's motion for judgment on the pleadings, holding that the Commission employed the correct standard and its decision contained no error of law and was supported by substantial evidence. View "Boston Police Department v. Civil Service Commission" on Justia Law

The Fifth Circuit affirmed the district court's grant of summary judgment to the school district in an action brought by plaintiff, alleging claims under Title VII and the Age Discrimination in Employment Act (ADEA) for discrimination on the basis of her national origin, sex, and age. Plaintiff alleged that the school district discriminated against her and retaliated against her when she complained of said discrimination. The court held that plaintiff's employment discrimination claim failed, because plaintiff failed to prove that the district court imposed an adverse employment action where she never received a reprimand from the school district. Rather, plaintiff was placed in a growth plan that sought to improve upon her weaknesses. The court also held that plaintiff's unsupported speculation, that the principal's failure to provide plaintiff with a recommendation letter constituted an adverse employment action, did not create a genuine issue of material fact. Finally, the court held that, at best, plaintiff's humiliation as a result of another teacher's comment was an unpleasant workplace experience, not an adverse employment action. The court also held that plaintiff's retaliation claim and constructive discharge claim failed as a matter of law. View "Welsh v. Fort Bend Independent School District" on Justia Law

TWC operated a Walnut Creek Toyota dealership. The Davises sought employment at TWC, to run its special finance department. The Davises are African-American, and Donald Davis is over the age of 40. The Davises were required to sign agreements providing that the Davises agreed to arbitration. The three agreements are all different. After the Davises became employed, TWC hired a new General Manager, Colon. The Davises claim that Colon “began to systematically undermine [the Davises’s] programs,” an effort “punctuated by shockingly inappropriate ageist and racist comments to and about them.” The Davises eventually resigned, filed complaints with the Department of Fair Employment and Housing, and obtained right to sue letters. The defendants filed an unsuccessful petition to compel arbitration. The court found there was an agreement to arbitrate, but found both procedural and substantive unconscionability. The court of appeal affirmed, noting TWC’s “lack of candor” concerning the agreements. The court noted the “take it or leave it” pressure under which the agreements were signed, the inconsistency between the agreements, how hard it would be for a layman to read the agreements, and the inclusion of broad provisions in violation of public policy. View "Davis v. TWC Dealer Group, Inc." on Justia Law

The Supreme Court reversed the decision of the court of appeals reversing the judgment of the district court dismissing Plaintiff's claims that Defendant, his employer, fired him in violation of the implied covenant of good faith and fair dealing in his compensation agreement with Defendant, holding that the court of appeals' application of the covenant was improper. In his complaint, Plaintiff claimed that Defendant fired him in an effort to avoid payment of commissions and that, even though he was an at-will employee, his termination violated the implied covenant of good faith and fair dealing. In dismissing the claims, the district court concluded that the covenant could did not apply in this context. The court of appeals reversed, concluding that the covenant can be invoked to prevent employers form using at-will termination to avoid obligations under the compensation agreement. The Supreme Court reversed, holding (1) the covenant of good faith and fair dealing may not be applied to contradict express contractual terms; and (2) the court of appeals' application was inconsistent with the express terms of the compensation agreement and with the parties' course of dealings. View "Vander Veur v. Groove Entertainment Technologies" on Justia Law

School bus driver Colleen Knowles sought workers' compensation from her employer, Mountain Empire Unified School District (the District). The District was a self-insured employer under the workers' compensation scheme, and its workers' compensation claims were administered through the San Diego County Schools Risk Management Joint Powers Authority (JPA). JPA purchased excess workers' compensation insurance to cover claims exceeding a set retention. The District was an additional insured under those policies. When a dispute over compensation arose, Knowles and the District petitioned the Workers' Compensation Appeals Board (WCAB). An administrative law judge ultimately approved their stipulation that Knowles suffered a "specific" injury in 2003. The distinction between a "cumulative" and a "specific" injury was pertinent for determining which of JPA's excess insurance policies was triggered. As JPA's excess insurer during the stipulated injury date, Kemper Insurance Company (Kemper) indemnified JPA until it went insolvent. JPA then approached California Insurance Guarantee Association (CIGA), a statutorily created insolvency insurer of last resort, to make up what Kemper had failed to pay. CIGA was only obligated to pay "covered claims," defined to exclude claims for which other insurance was available. On this basis CIGA denied coverage, claiming Knowles suffered a cumulative injury, which meant that JPA might recover from a different excess insurer (other than Kemper). CIGA sued JPA and the District (collectively, defendants) for declaratory relief, asserting that because Knowles suffered a cumulative injury, JPA's claim was not a "covered claim." In their cross-complaint, defendants sought reimbursement from CIGA of benefit payments made to Knowles after Kemper went insolvent. The Court of Appeal concluded that based on the purpose of excess insurance, the superior court had jurisdiction to characterize Knowles's injury in this action differently than was reflected in the WCAB stipulation. The Court reversed the judgment and directed the trial court to enter a new order denying defendants' JPA and the District's motions for summary judgment. View "Cal. Ins. Guarantee Assn. v. San Diego County Schools etc." on Justia Law

Neither the Worker's Compensation exclusion or the Employee Indemnification and Employer's Liability exclusion in a standard commercial automobile insurance policy barred coverage for the liability of a third-party permissive user of an insured vehicle who caused personal injuries to an employee of a named insured. While employees of Milton Hardware were performing construction work at the home of Rodney Perry, Milton Hardware's owner authorized Perry to move one of Milton Hardware's trucks. In doing so, Perry accidentally struck a Milton Hardware employee, Greg Ball, and caused him serious injuries. Ball requested indemnification from Milton Hardware's insurer, United Financial, but United Financial denied coverage. The district court granted a declaratory judgment in favor of United Financial, holding that the policy it issued to Milton Hardware did not cover Perry's liability for Ball's injuries. The Fourth Circuit vacated and held that, because Ball's negligence claim against Perry was a claim against a third party, rather than a claim against his employer for workers' compensation, the Worker's Compensation exclusion did not apply. The court also held that the policy's broader exclusion for Employee Indemnification and Employer's Liability, which on its face would apply to exclude coverage for Perry's liability to Ball, was inoperable because its limitation of coverage contravened West Virginia Code 33-6-31. Therefore, the court remanded for further proceedings. View "United Financial Casualty Co. v. Ball" on Justia Law

In this case brought under the Federal Employers' Liability Act (FELA), 45 U.S.C. 51-60, the Supreme Court reversed the decision of the court of appeals affirming the district court's use of the federal post judgment interest rate of .058 percent per year after the district court awarded Employee damages, holding that the state post judgment interest rate applies. In his complaint against his employer, BNSF Railway Company, Employee claimed that he suffered cumulative trauma to his back resulting from his twenty years of employment as a conductor and engineer. The jury decided in favor of Employee. The district court awarded damages and postjudgment interest, applying the federal postjudgment interest rate. The Supreme Court reversed and remanded the case to the district court to apply the ten percent postjudgment interest rate set forth in Minn. Stat. 549.09, subd. 1 (c)(2), holding that postjudgment interest in an action brought under FELA in Minnesota courts is calculated in accordance with Minn. Stat. 549.09, subd. 1(c). View "Alby v. BNSF Railway Co." on Justia Law

In this appeal concerning whether the district court properly determined that the City of Billings (City) did not owe unpaid longevity or other unpaid wages to its police officers (Officers) the Supreme Court affirmed the court's longevity determination and remanded for consideration of the non-longevity claims applying the appropriate limitations and look-back periods. The Officers sued the City to recover unpaid wages, including longevity pay and other employment benefits, under the Wage Protection Act, Mont. Code Ann. 39-3-206. In a prior appeal, the Supreme Court remanded for a determination of whether the City owed the Officers unpaid longevity and other wages, penalties, costs and attorney fees. The district court granted summary judgment to the City, finding the longevity issue dispositive. The Supreme Court affirmed in part and reversed and remanded in part, holding that the district court (1) correctly concluded that the City did not owe the Officers unpaid longevity; but (2) erred in dismissing without consideration the Officers' claims for non-longevity wage items and in declining to address the applicable statute of limitations, look-back period, and potential award of penalties, attorney fees and costs for those claims. View "Watters v. City of Billings" on Justia Law

Shell began working at Chicago’s Corwith Rail Yard in 1977. By 2010, BSNF owned Corwith Yard; Shell worked for BNSF's contractor. BNSF assumed the railyard’s operations itself, terminating the employment of those who worked for the contractor. BNSF invited those employees to apply for new positions. Shell applied to work as an intermodal equipment operator, a “safety-sensitive” position, which required the employee to climb on railcars to insert and remove locking devices, drive trucks that move trailers, and operate cranes to load and unload containers. BNSF extended a conditional offer of employment, requiring that Shell pass a medical evaluation. Shell had a body-mass index of 47.5. BNSF does not hire applicants for safety-sensitive positions if their BMI is 40 or greater (class III obesity). BNSF believes that someone with class III obesity could unexpectedly experience a debilitating health episode and lose consciousness while operating dangerous equipment. BNSF informed Shell of his disqualification but told him that his application could be reconsidered if he lost at least 10% of his weight and maintained the weight loss for at least six months. Shell sued under the Americans with Disabilities Act. The district court denied BNSF’s motion for summary judgment. The Seventh Circuit reversed. With only proof that BNSF refused to hire him because of a fear that he would develop an impairment, Shell has not established that BNSF regarded him as having a disability or that he is otherwise disabled. View "Shell v. Burlington Northern Santa Fe Railway Co." on Justia Law