California Court of Appeal Invalidates Anti-Injunction Law

I am still a bit behind on blogging because of last month's trial. Here's one that came down in the middle of the trial.

As the courts in this case noted, California law ma[d]e it nearly impossible to get an injunction against a union picketing in front of a private business. Labor Code Section 1138.1 and Code of Civil Procedure Section 527.3 impose significant procedural hurdles and substantive limitations on courts to issue injunctions against "peaceful picketing." These protections were extended to private property, such as outside the front entrance of retail stores.

The court first held that the entrance of a FoodsCo, including the sidewalk and "apron" were private property, not a public forum. The court distinguished cases that held enclosed shopping malls were public areas. Because the FoodsCo entrance and surrounds were private, the court noted, the company could prohibit speech without violating the picketers' First Amendment or California constitutional rights.

The court then examined whether the anti-injunction laws violated FoodsCo's rights. FoodsCo sought an injunction againt a union's trespass. The union had picketed from the opening of the store until the present, five days per week, 8 hours per day. The complaint was that FoodsCo was operating non-union.

The trial court denied the injunction because FoodsCo had not adequately proved its entitlement to an injunction under the Labor Code's special provision, Section 11381.1. The business owner must prove, among other things, that the police are unwilling or unable to provide assistance, and other grounds that do not apply to the issuance of trespass injunctions generally.
Here is the money quote:

Accordingly, as applied in this case, the Moscone Act violates the First and Fourteenth Amendments of the United States Constitution. The Act affords preferential treatment to speech concerning labor disputes over speech about other issues. It declares that labor protests on private property are legal, even though a similar protest concerning a different issue would constitute trespassing. And it denies the property owner involved in a protest over a labor dispute access to the equity jurisdiction of the courts even though it does not deny such access if the protest does not involve a labor dispute.

So, unless the Legislature acts somehow to create a constitutional anti-injunction law, the courts will have to enforce anti-trespass injunctions against unions on the same basis as it does so outside the union picketing context.

The case is Ralphs Grocery Company v. UFCW, Local 9 and the opinion is here.

Ninth Circuit: Fired Harassers Lose Sex Discrimination Claim

The plaintiffs were males who worked for Executive Jet. They were fired after an investigation revealed they engaged in certain inappropriate conduct that violated the Company's anti-harassment policy. The female who complained filed a charge with the EEOC, which found cause to believe a violation of Title VII occurred. The male employees claimed that the female was a willing participant and engaged in the same conduct of which she complained.

The males sued for, among other things, sex discrimination. They claimed that Executive Jet fired male employees for sex-based conduct, but not females who engaged in similar conduct.

The court engaged in detailed analysis regarding whether the male and female employees were "similarly situated," but found that they were not. The males never complained about harassment. The female did. Although the presence of a complaint by one group is not per se enough to render employees non-similar, that was enough to render their situations different in this case.

The court's analysis also included whether the EEOC's probable cause finding should be admitted as evidence that the males' conduct warranted action taken against them. The court of appeal reaffirmed its rule that EEOC probable cause determinations may be admissible in some circumstances, particularly in summary judgment proceedings and bench trials, where there is little chance of prejudice.

The case is Hawn v. Executive Jet and the opinion is here.

Ninth Circuit: Triable Issue on Accommodation of Hearing Impaired

The EEOC brought suit against UPS Supply Chain Solutions for failing to accommodate a hearing impaired employee. The employee, Mauricio Centeno, was deaf since birth and American Sign Language was his primary language.

He was able to do his job in accounting without a sign language interpreter. But he asked for an interpreter at company meetings. The employer offered post-meeting recaps in writing and contemporaneous notes during the meetings. He also wanted an interpreter's help with respect to certain job training and to understand the company's sexual harassment policy.

The district court granted UPS' motion for summary judgment because, it found, UPS had engaged in an interactive process with Centeno and had provided accommodations that were sufficient to enable Centeno to understand what transpired at meetings, etc.

But the court of appeals reversed. The appellate court held it was a genuine dispute of fact regarding whether the accommodations were effective. The court decided that agendas, contemporaneous notes, and summaries in English were not necessarily sufficient substitutes for a sign language interpreter. The court was especially concerned because Centeno was not proficient at written English, but the court also said it would be a triable issue even if Centeno were fluent in English.

Similarly, the court held that UPS may have failed to accommodate Centeno by delaying Excel training. Centeno claimed he could not read the online training program and required an interpreter. UPS ultimately provided him one, but two years later.

Centeno also complained he did not understand the company's anti-harassment policy and training materials because he was not given a sign language interpreter to read them. The court held that Centeno's professed lack of comprehension was sufficient to put UPS on notice that an accommodation was necessary.

This case raises the bar for employers who employ hearing impaired employees. Even when the hearing impaired can perform essential job functions without interpreters, they may be necessary so the employee can enjoy the "benefits and privileges" of employment.

The opinion is EEOC v. UPS Supply Chain Solutions and the opinion is here.

Court of Appeal Expands Wrongful Discharge Law

OK, so let's say an employee has a non-compete agreement with a former employer. After Employee is hired by new employer, the former employer sends a "cease and desist" letter to the new employer. The new employer, fearling litigation, fires the employee. Employee sues new employer for wrongful discharge?!

Yep. I know....#@^!%.

In 2003, Silguero began employment with Floor Seal Technology, Inc. as a sales representative. In August 2007, FST threatened Silguero with termination unless she signed a confidentiality agreement. The agreement prohibited her from sales activities for 18 months following either departure or termination. (A Non-compete). FST terminated Silguero's employment in October 2007.

Shortly therafter, Silguero was hired by with Creteguard. But FST contacted Creteguard and requested enforcement of the non-compete.

In November 2007, Creteguard's chief executive officer, Thomas Nucum, did not call me. Instead, he informed Silguero in writing that "although we believe that non-compete clauses are not legally enforceable here in California, [Creteguard] would like to keep the same respect and understanding with colleagues in the same industry." Nice.

Silguero argued the noncompetition agreement enforced by Creteguard was void pursuant to section 16600, that no statutory exception to section 16600 applied, and that Creteguard's enforcement violated public policy.

The Court of Appeal agreed:

The complaint in this case alleges an ―understanding‖ between Creteguard and FST pursuant to which Creteguard would honor FST‘s noncompetition agreement. Creteguard admitted in writing that it entered into this understanding with FST, ―although [Creteguard] believe[d] that non-compete clauses are not legally enforceable here in California,‖ because Creteguard ―would like to keep the same respect and understanding with colleagues in the same industry. This alleged understanding is tantamount to a no-hire agreement.

No hire agreements are illegal too.

This case is Silguero v. Creteguard, Inc. and the opinion is here.

California Supreme Court Bings Google

I think Reid v. Google (opinion here) will be more memorable for its discussion of objections in summary judgment proceedings than for its discussion of the stray remarks doctrine.

I will post my upcoming article here next Monday, which will explain the above gibberish. (Or I'll cheerfully refund your money, and that's a promise!)

Ninth Circuit Thwarts End Run Around California Labor Code

EGL, a Texas transportation company, came up with an idea. Avoid all those pesky California wage and hour laws by making everyone an independent contractor, and inserting a choice of law clause into the agreement.

First, the court had to get by the Texas choice of law clause. The clause said only that the independent contractor agreement would be "interpreted under the law of the State of Texas." The claims, however, were not brought under the agreement, but rather were brought under the California Labor Code. So, this case is a warning to practitioners to draft choice of law clauses expansively. The court did not consider whether the Texas choice of law clause could be enforced in California.

Then, applying California law, the court reversed summary judgment. The court held that there was significant evidence of an employment relationship under California's test for independent contractor status. The court went on at length. So, you can read the opinion in Narayan v. EGL, Inc. et al. here.

California Supreme Court Holds No Private Right of Action Re: Tip Pooling

Labor Code Section 351 provides that tips belong to the servers who generate them. Tip pooling - employer-mandated sharing of tips among service staff, has been held lawful under that section. But certain tip pooling arrangements, particularly those in which management shares tips, have been held illegal.

In Lu v. Hawaiian Gardens Casino, Inc., a card dealer sued over a tip pooling arrangement, claiming that the employer's policy violated section 351. The lower courts held that Section 351 does not authorize private lawsuits. The Supreme Court stepped in to resolve a split in the courts of appeal. Applying general principles regarding when the Legislature intends to create private causes of action, the Court held there was none authorized under Section 351.
Of course, the plaintiffs can pursue their unfair competition claims, etc. The main disadvantage I can see off the cuff is the absence of a claim for attorney's fees under the Labor Code.

This case does not address whether tip pooling itself is lawful. So, employers should continue to draft tip pooling arrangements in accordance with lower court decisions on the subject, such as Leighton v. Old Heidelberg, Ltd. (1990) 219 Cal.App.3d 1062, 1067; Etheridge v. Reins Internat. California, Inc. (2009) 172 Cal.App.4th 908, 921-922; Budrow v. Dave & Buster’s of California, Inc. (2009) 171 Cal.App.4th 875, 878-884; and Jameson v. Five Feet Restaurant, Inc. (2003) 107 Cal.App.4th 138, 143.

The case is Lu v. Hawaiian Gardens Casino, Inc. and the opinion is here.

Trial

Trial in employment cases is as rare as hen's teeth. Most cases settle. With the increasing prevalence of "EPLI" insurance, there is often little appetite for taking a case "all the way" and facing a jury. At least for us defense lawyers, going to trial is unusual.

Trial also is, to say the least, arduous. Sleep is something you get in between preparing for trial, conducting the trial, and preparing for the next day. No matter how much you prepare, there is much to do once the trial begins.

Once you're there, the odds are against you. Plaintiffs win as much as 60% of the time, depending on the type of claim and the court's location. That's another reason cases settle a lot. Let's not forget the time and money the employer has to spend, and victory defined only as a jury's conclusion that the defendant was right.

Don't let anyone tell you different. Winning is special. So, we're proud to let you know about two employment law trials that concluded this week with favorable outcomes.

First, Shaw Valenza alumnus Shane Anderies, now of Anderies and Gomes, won a verdict in style. His case, covered by the media (also rare), resulted not only in a defense verdict, but also a huge award on a cross-claim for defamation. Read about Moreno v. Ostly et al here.

Oh, yeah, and the Shaw Valenza trial team just received a verdict on behalf of our client Signature Properties in a retaliation case, tried in Sacramento Superior Court. The jury was out just 6 hours after a four week, fifteen trial-day, trial. No press coverage so far. The facts of our case were nowhere near as interesting as Shane's. (His involved a paralegal suing a lawyer for sexual harassment and his defamation cross-action). But winning was just as exciting for our client as us as it was for Shane and his.

Thanks to all of you who patiently waited for return calls during July. I will get back to you soon. I promise. I also will be posting on a number of new cases in the coming days. And congratulations again to Shane, Mr. Ostly, and of course Signature Properties.

DGV