California Supreme Court Takes Up Important Rest Period Case:

I posted about Augustus v. ABM here.  The California Supreme Court has granted review of the case. That means this published decision no longer is citable, unfortunately.   It also means that the Supreme Court will decide what a "rest period" means.  Must the employer relieve the employee of all duty, as the plaintiff argued?  Or is it enough to be refraining from work, but subject to be called back to work if needed?   Or something else?  We will keep you posted.

This could be the "Brinker" of rest period cases.  Here's hoping we don't have to wait as long as we did for Brinker!

U.S. Supreme Court: Courts Have the Power to Review EEOC's Conciliation Efforts

The Supreme Court unanimously held that the Equal Employment Opportunity Commission's duty to "conciliate" after finding reasonable cause is reviewable in court.

The EEOC typically investigates "charges," administrative complaints filed by individuals alleging discrimination or harassment or retaliation.  If EEOC decides there is no "reasonable cause" to find a violation of Title VII, the ADA, etc., it issues a "no cause" finding and a "right to sue" letter.

But when the agency decides there IS reasonable cause to believe a violation has occurred, then it proceeds with an effort to remedy the situation. That can be via "conciliation" - e.g., a settlement proposal, mediation, etc. If that fails the EEOC can sue or issue a eight-to-sue letter.

The conciliation process is required by law.  But what happens if the employer believes the EEOC has not attempted to do so?  That's what the supreme Court considered in  Mach Mining, LLC v. EEOC.  Justice Kagan, writing for the unanimous court, explained:

This case began when a woman filed a charge with the EEOC claiming that petitioner Mach Mining, LLC, had refused to hire her as a coal miner because of her sex. The Commission investigated the allegation and found reasonable cause to believe that Mach Mining had discriminated against the complainant, along with a class of women who had similarly applied for mining jobs. See App. 15. In a letter announcing that determination, the EEOC invited both the company and the complainant to participate in “informal methods” of dispute resolution, promising that a Commission representative would soon “contact [them] to begin the conciliation process.” Id., at 16. The record does not disclose what happened next. But about a year later, the Commission sent Mach Mining a second letter, stating that “such conciliation efforts as are required by law have occurred and have been unsuccessful” and that any further efforts would be “futile.” Id., at 18–19.

The EEOC then sued Mach Mining in federal district court alleging sex discrimination in hiring. The Commission’s complaint maintained that “[a]ll conditions precedent to the institution of this lawsuit”—including an attempt to end the challenged practice through conciliation—“ha[d] been fulfilled.” Id., at 22. In its answer, Mach Mining contested that statement, asserting that the EEOC had failed to “conciliat[e] in good faith” prior to filing suit. Id., at 30.

So, the EEOC moved for summary judgment against Mach Mining on the conciliation issue, arguing that the quality of its efforts are not reviewable by a court.  The district court disagreed; the Seventh Circuit ruled in favor of the EEOC.

The Supreme Court held as follows:

1.  Courts indeed have the power to review the EEOC's efforts to conciliate. Therefore, the court rejected the EEOC's argument that it had unreviewable discretion to determine what is adequate.

2.  EEOC's letter showing that it found reasonable cause and planned to conciliate, and a later letter stating conciliation has failed is insufficient evidence of conciliation.  EEOC must provide notice to the employer of what the violation is claimed to be, and must provide a court with an affidavit that it attempted conciliation. If the employer offers credible evidence contradicting EEOC's claim, the court may do fact-finding into that limited issue.

3.  If the district court finds in favor of the employer - that the EEOC did not conciliate adequately - then it is to stay the action and order the EEOC to conciliate.

So, thanks for reading this far.  As you probably figured out, this case will have little impact on employers and employment litigation.  First, the EEOC finds reasonable cause in few cases.  Second, the failure to conciliate at best is remedied with an order to conciliate, not dismissal of the lawsuit. And third, EEOC rarely sues employers, filing lawsuits in just a small percentage of cases in which it finds cause.  Fourth, this case has no bearing on state agencies and their charges, such as the Department of Fair Employment and Housing in California.

So, that's Mach Mining, LLC v. EEOC. The opinion is here. 

Court of Appeal: Exhaust Administrative Remedies Before Filing Suit Under Former Labor Code Section 1102.5

Labor Code Section 1102.5 is California's general "whistle blower" law. Here is the current version, in pertinent part.

(b) An employer, or any person acting on behalf of the employer,
shall not retaliate against an employee for disclosing information,
or because the employer believes that the employee disclosed or may
disclose information, to a government or law enforcement agency, to a
person with authority over the employee or another employee who has
the authority to investigate, discover, or correct the violation or
noncompliance, or for providing information to, or testifying before,
any public body conducting an investigation, hearing, or inquiry, if
the employee has reasonable cause to believe that the information
discloses a violation of state or federal statute, or a violation of
or noncompliance with a local, state, or federal rule or regulation,
regardless of whether disclosing the information is part of the
employee's job duties.

(c) An employer, or any person acting on behalf of the employer,shall not retaliate against an employee for refusing to participate in an activity that would result in a violation of state or federal statute, or a violation of or noncompliance with a local, state, or federal rule or regulation.

As per the Court of Appeal in Gallup v. Superior Court of Nevada County,

Section 1102.5 is silent regarding administrative remedies, but another section of the Labor Code, section 98.7, subdivision (a), provides in part: “Any person who believes that he or she has been discharged or otherwise discriminated against in violation of any law under the jurisdiction of the Labor Commissioner may file a complaint with the division within six months after the occurrence of the violation.”

Some courts had decided that before proceeding under section 1102.5, a plaintiff had to file a claim with the Labor Commissioner, exhausting these administrative remedies before proceeding under the statute. In a new statute, effective January 1, 2014, the Legislature clarified that one does not have to do so.

But what about pre-1/1/2014?  That's what the Court of Appeal addressed in this Gallup case.  The plaintiff was a court employee, who served as a family law mediator. She claims retaliation after she raised some concerns with family law court procedures.

After Gallup filed suit, the defendant court demurred to her complaint, arguing she did not exhaust administrative remedies before the Labor Commissioner per Labor Code section 98.7, quoted above. The trial court overruled the demurer, relying on Lloyd v. County of Los Angeles (2009) 172 Cal.App.4th 320, a court of appeal decision that held exhaustion was not required.  Gallup then took her case to trial and won.

On appeal, the employer argued that the trial court erred by failing to sustain the demurrer because Gallup did not exhaust her administrative remedies. The Court of Appeal agreed, rejecting the Lloyd court's holding.

The Court held that the 1/1/14 amendments were not retroactive.  The Court also decided that Lloyd was wrongly decided in light of the California Supreme Court's holding in Campbell v. Regents of University of California (2005) 35 Cal.4th 311.  In Campbell, the California Supreme Court held that exhaustion of the UC's internal remedies were required before proceeding under section 1102.5 .

The Court here also noted that its decision here conflicts with Satyadi v. West Contra Cost Healthcare Dist. (2014) 232 Cal.App.4th 1022, which held that exhaustion was not required and that the Legislature's recent statute is merely "clarification" of existing law and retroactive.  But the Gallup Court disagreed with Satyadi. 

Bottom line is that Gallup won her jury trial, but then lost her case because she was not entitled to that trial in the first place.  It may be that the Supreme Court must decide whether Satyadi or Gallup is correct.  Or the Court may decide that these cases have limited shelf-life, because cases filed after 1/1/2014 are clearly subject to the new statute.

What's the point of all this, you ask? If you have a pending lawsuit that includes a section 1102.5 claim, which was filed before January 1, 2014, you may wish to test whether the 1/1/2014 revision to the statute applies to your case. If it does not, the employee plaintiff may be out of court if he or she did not timely exhaust with the Labor Commissioner.  You're welcome!  However, those cases filed after 1/1/2014 are out of luck on the exhaustion argument.

This case is Gallup v. Superior Court of Nevada County and the opinion is here.