Sunday, April 05, 2015

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.

Sunday, March 29, 2015

U.S. Supreme Court Upholds U.S. DOL's "Administrator Interpretations"

In 2010, the U.S. Department of Labor began issuing "Administrator Interpretations."  These are analyses of regulations that are broader and more comprehensive than the traditional opinion letters that DOL used to issue. The opinion letters generally were targeted to respond to requests made by individual stakeholders, often employers.  The Administrator Interpretations contain the DOL's view on how its regulations apply generally, not in response to a particular set of facts.

The DOL issued three of these in 2010, of which two remain published on its website. (Here)  These two address the definition of "clothes" under part of the Portal-to-Portal Act and whether mortgage loan officers qualify as "exempt" under the Fair Labor Standards Act.  In 2014, the DOL issued two more interpretations concerning home health care workers.

On the issue of mortgage loans officers, the DOL has changed its views several times in opinion letters over the years.  The 2010 Administrator Interpretation opines that mortgage loan officers are non-exempt.  Here.  That is because they primarily sell, and salespersons are not exempt under the "administrative test."

It has been argued that the Administrator Interpretations are actually in the nature of regulations, rather than opinion letters.  As such, the argument goes, they cannot be issued without going through the formalities of the federal Administrative Procedure Act.  That Act requires the agency to issue proposed regulations, followed by notice and comment by the public.  

There has also been a dispute as to whether an agency's "flip-flopping" or reversal of a prior interpretation is akin to a regulation, requiring APA procedures.  The Court of Appeals for the District of Columbia Circuit had held that when the DOL issues an interpretation that contradicts prior interpretations it is making what is in effect a new or amended regulation.

The U.S. Supreme Court in Perez v. Mortgage Bankers Association upheld the right of the DOL to issue these Administrator Interpretations without going through the APA requirements.   The Court disapproved the DC Circuit's approach and held that the Administrative Procedure Act does not require "notice and comment" procedures when the agency interprets its own regulations.

First, the APA does not require procedural safeguards with respect to agency interpretations generally.  But what is the difference between an interpretation and new rule?  Here is what the Court said:

the critical feature of interpretive rules is that they are “issued by an agency to advise the public of the agency’s construction of the statutes and rules which it administers.” Shalala v. Guernsey Memorial Hospital, 514 U. S. 87, 99 (1995) (internal quotation marks omitted). The absence of a notice-and-comment obligation makes the process of issuing interpretive rules comparatively easier for agencies than issuing legislative rules. But that convenience comes at a price: Interpretive rules “do not have the force and effect of law and are not accorded that weight in the adjudicatory process.” Ibid.
The Supreme Court rejected the Mortgage Bankers Association's argument that the DOL's decision to reverse course is analogous to amending the regulation.   The Court also refused to address the argument that the Administrator Interpretation was in fact a "legislative rule" or regulation rather than an interpretation of an existing rule.  That is because, the Court wrote, the parties had not litigated the case under that theory.

All nine justices rejected the D.C. Circuit's approach. But three justices pointed out in concurrences and partial dissents that the majority's decision allowed too much discretion in the administrative agencies' power to interpret their own regulations.  These justices based their objections not on the Administrative Procedure Act, but on the constitution's separation of powers.  Those arguments did not carry the day in this case.  However, the three justices signaled a willingness to walk back some older precedents on the power of administrative agencies.

What does this all mean?
- the DOL will continue to be allowed to issue Administrator Interpretations
- Administrator Interpretations may be attacked as inconsistent with the underlying regulation, but under a very deferential standard of review by the courts.
- The courts do not have to give deference to an Administrator Interpretation the same way that it must give deference to a regulation, particularly when the interpretation is inconsistent over time.
- Mortgage loan officers are probably non-exempt under the FLSA for now and the reasonably foreseeable future.

This case is Perez v. Mortgage Bankers Association and the opinion is here. 

P.S. I wrote about the first three Administrative Interpretations here.  The Supreme Court issued its ruling on the definition of clothes in Sandifer v. U.S. Steel, which I wrote about here.

Wednesday, March 25, 2015

U.S. Supreme Court Explains Burdens in Pregnancy Discrimination Cases

The Supreme Court analyzed the federal Pregnancy Discrimination Act, which amended Title VII of the Civil Rights Act of 1964.  The Court in an opinion written by Justice Breyer on behalf of himself and five more justices, analyzed how pregnant employees can prove discrimination in cases where they cannot do their jobs, but claim other employees were provided accommodations not afforded to the pregnant workers.

The facts are as follows, per the Court:
Peggy Young, worked as a part-time driver for the respondent, United Parcel Service (UPS). Her responsibilities included pickup and delivery of packages that had arrived by air carrier the previous night. In 2006, after suffering several miscarriages, she became pregnant. Her doctor told her that she should not lift more than 20 pounds during the first 20 weeks of her pregnancy or more than 10 pounds thereafter. App. 580. UPS required drivers like Young to be able to lift parcels weighing up to 70 pounds (and up to 150 pounds with assistance). Id., at 578. UPS told Young she could not work while under a lifting restriction. Young consequently stayed home with- out pay during most of the time she was pregnant and eventually lost her employee medical coverage.

Young's theory of discrimination was
that her co-workers were willing to help her with heavy packages. She also said that UPS accommodated other drivers who were “similar in their . . . inability to work.” She accordingly concluded that UPS must accommodate her as well.

UPS, on the other hand, 
responded that the “other persons” whom it had accommodated were (1) drivers who had become disabled on the job, (2) those who had lost their Department of Transportation (DOT) certifications, and (3) those who suffered from a disability covered by the Americans with Disabilities Act of 1990 (ADA), 104 Stat. 327, 42 U. S. C. §12101 et seq. UPS said that, since Young did not fall within any of those categories, it had not discriminated against Young on the basis of pregnancy but had treated her just as it treated all “other” relevant “persons.”
So, Young sued. Her federal claim under the Pregnancy Disability Act required the Court to interpret this language:
“women affected by pregnancy, childbirth, or related medical conditions shall be treated the same for all employment-related purposes . . . as other persons not so affected but similar in their ability or inability to work....”
The Court rejected the plaintiff's argument that the employer must provide pregnant employees the same accommodations it provides to any other worker, even if some nonpregnant workers would not receive that accommodation. For example, the plaintiff sought to invalidate policies that provide accommodations only to employees with industrial injuries. Here's what the court wrote:
We doubt that Congress intended to grant pregnant workers an unconditional most-favored-nation status. The language of the statute does not require that unqualified reading. The second clause, when referring to nonpregnant persons with similar disabilities, uses the open-ended term “other persons.” It does not say that the employer must treat pregnant employees the “same” as “any other persons” (who are similar in their ability or inability to work), nor does it otherwise specify which other persons Congress had in mind.
So, how can a plaintiff prevail in a pregnancy discrimination lawsuit involving denial of accommodation?  The Court answered.  First -
plaintiff alleging that the denial of an accommodation constituted disparate treatment under the Pregnancy Discrimination Act’s second clause may make out a prima facie case by showing, as in McDonnell Douglas, that she belongs to the protected class, that she sought accommodation, that the employer did not accommodate her, and that the employer did accommodate others “Similar in their ability or inability to work.”
Then it's the employer's turn - 
The employer may then seek to justify its refusal to accommodate the plaintiff by relying on “legitimate, nondiscriminatory” reasons for denying her accommodation. 411 U. S., at 802. But, consistent with the Act’s basic objective, that reason normally cannot consist simply of a claim that it is more expensive or less convenient to add pregnant women to the category of those (“similar in their ability or inability to work”) whom the employer accommodates. 

And finally - the employee will have to prove pretext to prevail. The Court offered some advice for plaintiffs -
If the employer offers an apparently “legitimate, non- discriminatory” reason for its actions, the plaintiff may in turn show that the employer’s proffered reasons are in fact pretextual. We believe that the plaintiff may reach a jury on this issue by providing sufficient evidence that the employer’s policies impose a significant burden on pregnant workers, and that the employer’s “legitimate, nondiscriminatory” reasons are not sufficiently strong to justify the burden, but rather—when considered along with the burden imposed—give rise to an inference of intentional discrimination.
The plaintiff can create a genuine issue of material fact as to whether a significant burden exists by providing evidence that the employer accommodates a large percentage of nonpregnant workers while failing to accommodate a large percentage of pregnant workers. Here, for example, if the facts are as Young says they are, she can show that UPS accommodates most nonpregnant employees with lifting limitations while categorically failing to accommodate pregnant employees with lifting limitations. Young might also add that the fact that UPS has multiple policies that accommodate nonpregnant employees with lifting restrictions suggests that its reasons for failing to accommodate pregnant employees with lifting restrictions are not sufficiently strong—to the point that a jury could find that its reasons for failing to accommodate pregnant employees give rise to an inference of intentional discrimination.
So, this case calls into question light duty and other accommodation policies that would categorically exclude pregnant employees.  But it does not outright invalidate them.  The Court's explanation of pretext is strange.  The Court wants a jury to decide whether the employer's explanation for a policy is not "sufficiently strong" to justify the burden on pregnant employees.  So, the Court IS sitting as a "super-personnel department" now?

Finally, in 2014, the EEOC issued Enforcement Guidance broadly interpreting the Pregnancy Disability Act's provisions.  The EEOC apparently issued these regulations after the Court granted review of this case.   The Court was not amused:

we have long held that “the rulings, interpretations and opinions” of an agency charged with the mission of enforcing a particular statute, “while not controlling upon the courts by reason of their authority, do constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance.” Skidmore v. Swift & Co., 323 U. S. 134, 140 (1944). See Brief for United States as Amicus Curiae 26.
But we have also held that the “weight of such a judgment in a particular case will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors that give it power to persuade, if lacking power to control.” Skidmore, supra, at 140. These qualifications are relevant here and severely limit the EEOC’s July 2014 guidance’s special power to persuade. 
We come to this conclusion not because of any agency lack of “experience” or “informed judgment.” Rather, the difficulties are those of timing, “consistency,” and “thor- oughness” of “consideration.” The EEOC promulgated its 2014 guidelines only recently, after this Court had granted certiorari in this case. In these circumstances, it is fair to say that the EEOC’s current guidelines take a position about which the EEOC’s previous guidelines were silent. And that position is inconsistent with positions for which the Government has long advocated. . . . Nor does the EEOC explain the basis of its latest guidance.  Does it read the statute, for example, as embodying a most-favored-nation status? Why has it now taken a position contrary to the litigation position the Government previously took? Without further explanation, we cannot rely significantly on the EEOC’s determination. 

So, the Court sent the case down to the circuit court for examination of its decision upholding summary judgment in favor of UPS.

In dissent, Justice Scalia, along with Thomas and Kennedy, argued that the pregnancy discrimination provision is the same as the prohibition of sex discrimination.  The dissent accused the majority of making up a mushy test that had no basis in the text of the law. And the dissent writes that the majority conflated the concept of disparate treatment and disparate impact. 

This case is Young v. United Parcel Service, Inc. and the opinion is here.

Saturday, March 07, 2015

Court of Appeal: No Duty to Remove Essential Job Functions as Reasonable Accommodation and More...

The Court of Appeal in Nealy v. City of Santa Monica upheld summary judgment in a disability discrimination case.  The case involved an injured "solid waste equipment operator," which may mean garbage truck operator.  Nealy injured his right knee lifting a large bin, leading to several surgeries.

In a nutshell, the City allowed Nealy a long leave of absence. They met with him several times. His doctors placed many physical restrictions on him, precluding him from the heavy lifting required of the solid waste equipment operator.   Nealy asked for accommodations, including removing lifting requirements and allowing Nealy to work on one particular type of truck. The City took the position it was not required to remove essential job functions.  The City also looked into transfers. But  Nealy apparently was not qualified for the open, available jobs.

Nealy sued for disparate treatment, denial of reasonable accommodation, and failure to engage in the interactive process. He also sued for retaliation.  The Court of Appeal upheld summary judgment on several grounds.  The explanation of the law on each claim is clear and will help employers understand the legal issues. So, here goes:

Reasonable accommodation

The elements of a reasonable accommodation cause of action are (1) the employee suffered a disability, (2) the employee could perform the essential functions of the job with reasonable accommodation, and (3) the employer failed to reasonably accommodate the employee’s disability. (Wilson v. County of Orange (2009) 169 Cal.App.4th 1185, 1192; Nadaf-Rahrov, supra, at p. 977.)  * * *  The fact that one essential function may be up for debate does not preclude summary judgment if the employee cannot perform other essential functions even with accommodation.

In this case, there was copious evidence that Nealy could not perform one or more of the job's essential functions. The Court rejected his arguments about accommodations via removal of essential functions. 

FEHA does not obligate the employer to accommodate the employee by excusing him or her from the performance of essential functions. (Lui v. City and County of San Francisco (2012) 211 Cal.App.4th 962, 985.) There is no dispute heavy lifting was an essential function of the solid waste equipment operatoreven for those who operated the automated side loader. 

The Court then turned to reassignment as a form of accommodation.  Here's the legal standard:

FEHA requires the employer to offer the employee “comparable” or “lower graded” vacant positions for which he or she is qualified. (Cal. Code Regs., tit. 2, § 11068, subd. (d)(1), (2).) FEHA does not require a reassignment, however, if there is no vacant position for which the employee is qualified. (Cuiellette v. City of Los Angeles (2011) 194 Cal.App.4th 757, 767.) Additionally, FEHA does not require the employer to promote the employee or create a new position for the employee to a greater extent than it would create a new position for any employee, regardless of disability. (Cal. Code Regs., tit. 2, § 11068, subd. (d)(4); Spitzer, supra, 80 Cal.App.4th at p. 1389.)  * * * 
In cases when courts have found a triable issue on reassignment, the employees have adduced evidence obtained through discovery that vacant positions for which they were qualified existed during the relevant period, but the employer failed to offer the positions to them. (Nadaf-Rahrov, supra, 166 Cal.App.4th at p. 968; Spitzer, supra, 80 Cal.App.4th at p. 1390.) Nealy has not adduced any such evidence here to dispute the City’s evidence that no other vacant positions for which he was qualified existed during the relevant period in 2010. Under FEHA, the City was thus relieved of its duty to reassign Nealy. (Spitzer, supra, 80 Cal.App.4th at p. 1389.)  * * * 
 In short, an employer can prevail on summary judgment on a claim of failure to reasonably accommodate by establishing through undisputed facts that there simply was no vacant position within the employer’s organization for which the disabled employee was qualified and which the disabled employee was capable of performing with or without accommodation . . . .
Disparate treatment

The Court also held that because Nealy was not a "qualified individual," he could not prevail on a disability discrimination claim.
The showing required is identical to that required for a cause of action for failure to reasonably accommodate. That is, a qualified individual is someone who is able to perform the essential functions of his or her job, with or without reasonable accommodation. (Id. at p. 262.) FEHA permitted the City to discharge Nealy if he was unable to perform the essential functions of his job even with reasonable accommodations. (Gov. Code, § 12940, subd. (a)(1) [“This part does not prohibit an employer from . . . discharging an employee with a physical or mental disability . . . where the employee, because of his or her physical or mental disability, is unable to perform his or her essential duties even with reasonable accommodations . . . .”]; Green v. State of California, supra, at p. 262.) 
Interactive Process

To prevail on a claim for failure to engage in the interactive process, the employee must identify a reasonable accommodation that would have been available at the time the interactive process occurred. (Scotch v. Art Institute of California (2009) 173 Cal.App.4th 986, 1018 (Scotch); Nadaf-Rahrov, supra, at p. 984.) An employee cannot necessarily be expected to identify and request all possible accommodations during the interactive process itself because ‘“‘[e]mployees do not have at their disposal the extensive information concerning possible alternative positions or possible accommodations which employers have . . . .’”’” (Scotch, supra, at p. 1018.) But the employee should be able to identify specific, available reasonable accommodations through the litigation process, and particularly by the time the parties have conducted discovery and reached the summary judgment stage. (Id. at p. 1019.) * * * *
The only accommodations Nealy argues should have been available are (1) restructuring his old job so that he did not lift heavy objects or kneel; (2) assigning him to the automated side loader permanently; (3) reassigning him to another position; and (4) retraining. As we concluded above, the first two were not reasonable accommodations allowing him to perform the essential functions of the job, and the third was not reasonable because there were no vacant positions for which he was qualified. The fourthretrainingdoes not assist Nealy. He provides absolutely no detail as to what type of retraining would have enabled him to perform the solid waste equipment operator job or some other vacant position. The bare assertion that the City should have provided retraining does not create a triable issue of fact. 

Nealy also lost on his retaliation claim.  The Court of Appeal made clear that he had not "engaged in a protected activity" merely by asking for a reasonable accommodation. The Court listed what counts as protected activity under the statute.

FEHA makes it unlawful for the employer to discharge or discriminate against an employee because he or she has “opposed any practices forbidden under this part or because the person has filed a complaint, testified, or assisted in any proceeding under this part.” (Gov. Code, § 12940, subd. (h).) Thus, protected activity takes the form of opposing any practices forbidden by FEHA or participating in any proceeding conducted by the DFEH or the State Fair Employment and Housing Council (FEHC). (Cal. Code Regs., tit. 2, §§ 11002, subds. (a), (b), 11021, subd. (a).) 
Opposing practices forbidden by FEHA includes seeking the advice of the DFEH or FEHC; assisting or advising any person in seeking the advice of the DFEH or FEHC; opposing employment practices the employee reasonably believes to exist and believes to be a violation of FEHA; participating in an activity perceived by the employer as opposition to discrimination; or contacting, communicating with, or participating in the proceeding of a local human rights or civil rights agency regarding employment discrimination.  * * * * 
 And then the Court emphasized:

Nealy does not identify any activity that qualifies as protected activity. He contends his protected activity was seeking the City’s assistance to return to workthat is, seeking reasonable accommodationand initiating the interactive process. These acts alone do not amount to “oppos[ing] any practices forbidden under” FEHA or participating in DFEH or FEHC proceedings. (Gov. Code, § 12940, subd. (h); Rope, supra, 220 Cal.App.4th at p. 652.) If they did, this interpretation of protected activity “‘would significantly blur and perhaps obliterate the distinction between an action for failure to accommodate or engage in the interactive process and retaliation.’” (Rope, supra, at p. 653.) 

* * * *
This case is Nealy v. City of Santa Monica and the opinion is here.


Sunday, March 01, 2015

Ninth Circuit: Summary Judgment in Employment Discrimination Cases Should Not Happen Much

The Ninth Circuit reversed summary judgment in a disability discrimination case alleged under the California Fair Employment and Housing Act.  We can't even say what the facts are, because the court does not recite them.

What we do know is:
To establish that he was terminated by Sears because of his disability, Nigro submitted a declaration stating that on June 29, 2009, he had a phone conversation with Larry Foerster, General Manager of the Sears Carlsbad store at which Nigro worked, and Foerster told him that “[i]f you're going to stick with being sick, it's not helping your situation. It is what it is. You're not getting paid, and you're not going to be accommodated.” Nigro also testified in his deposition that Sears's District Facilities Manager Alan Kamisugu told him not to be concerned about his pay issue because Chris Adams, Sears's District General Manager, had indicated to Kamisugu that Nigro was “not going to be here anymore.” The district court disregarded the evidence proffered by Nigro, on the basis that “the source of this evidence is Nigro's own self-serving testimony.”
* * * *
Nigro's direct supervisor Jason Foss also testified that Chris Adams said to him—referring to Nigro—that “I'm done with that guy .” 

What's so unusual about this case, warranting the court to publish the opinion?  Maybe it's because the district court found that Nigro's declaration could be disregarded as "self-serving."  The court explained that is not a basis to ignore the plaintiff's declaration:

We have previously acknowledged that declarations are often self-serving, and this is properly so because the party submitting it would use the declaration to support his or her position. S.E.C. v. Phan, 500 F.3d 895, 909 (9th Cir.2007) (holding that district court erred in disregarding declarations as “uncorroborated and self-serving”). The source of the evidence may have some bearing on its credibility, and thus on the weight it may be given by a trier of fact. But that evidence is to a degree self-serving is not a basis for the district court to disregard the evidence at the summary judgment stage. See 10A Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 2727 (3d ed. 2011) (“[F]acts asserted by the party opposing the [summary judgment] motion, if supported by affidavits or other evidentiary material, are regarded as true.”). Here, Nigro's declaration and deposition testimony, albeit uncorroborated and self-serving, were sufficient to establish a genuine dispute of material fact on Sears's discriminatory animus. We conclude that the district court erred in disregarding Nigro's testimony in granting Sears's motion for summary judgment. 
The Court also reversed summary judgment on the plaintiff's claims for denial of accommodation and failure to engage in the interactive process, also on the basis of alleged hostility by General Manager, Foerster. 

The Court then commented about summary judgment in discrimination cases as follows, which is why I entitled this post the way I did:

We have previously held in several cases that it should not take much for plaintiff in a discrimination case to overcome a summary judgment motion. See, e.g., Diaz v. Eagle Produce Ltd. P'ship, 521 F.3d 1201, 1207 (9th Cir.2008); Davis v. Team Elec. Co., 520 F.3d 1080, 1089 (9th Cir.2008); Metoyer v. Chassman, 504 F.3d 919, 939 (9th Cir.2007); Dominguez–Curry v. Nevada Transp. Dep't, 424 F.3d 1027, 1042 (9th Cir.2005); Chuang v. Univ. of Cal. Davis, Bd. of Trustees, 225 F.3d 1115, 1124 (9th Cir.2000). “This is because the ultimate question is one that can only be resolved through a searching inquiry—one that is most appropriately conducted by a factfinder, upon a full record.” Id.

Here, Nigro presented several state law claims that deserved trial. It should not take a whole lot of evidence to establish a genuine issue of material fact in a disability discrimination case, at least where the fact issue on discrimination is genuine and the disability would not preclude gainful employment of a person working with accommodation. We acknowledge that this is not a wholly one-sided case on the side of Nigro, and Sears put forward substantial evidence showing that it had a non-discriminatory reason for terminating Nigro's employment, i.e., Sears's position that Nigro did not comply with Sears's attendance and leave policies resulting in job abandonment. It is possible that Sears will prevail at trial, but the statements attributed to Sears's supervisors by Nigro are, if not dispositive, sufficient to raise a genuine issue for the trier of fact. See Metoyer, 504 F.3d at 939 (holding that an employer's evidence of a non-discriminatory motive does not warrant entry of summary judgment when the employee also proffered evidence to the contrary).
Sure, it's still possible to win summary judgment in state and federal court.  However, there of late has been a shift in courts' willingness to grant summary judgment, at least in my opinion.  The trial courts may fear reversal, as appellate courts frequently do.  Trial courts may perceive that employers rarely take cases to trial and settle, which makes it unlikely that a courtroom will be clogged with cases that cannot be won at trial.  Who knows why the pendulum is shifting.  But it is.  

Employers and their lawyers are going to have to decide how to address this shift, whether it be arbitration in lieu of the court system, taking every case to trial until the courts shift back towards summary judgment, lobbying for a change in the law, or something else. 

This case is Nigro v. Sears Roebuck & Co. and the opinion is here

Saturday, February 28, 2015

Court of Appeal Finds Insufficient Evidence Attributing Electronic Signature to Employee

Employers increasingly rely on electronic acknowledgements of policies and procedures.  An "electronic signature" is valid under California law.  But the reason those signatures exist is so that employers can prove the employee read and signed the document.  That's what Moss Bros. Auto found out in a recent case.

The document was an arbitration agreement, which Moss Bros. claimed that its employee, Ruiz, signed.  However, Ruiz claimed he did not "remember" signing it.  So, Moss Bros. had to establish that he did when it moved to compel Ruiz to arbitrate his wage-hour claims.

Moss Bros. adduced the declaration of its business manager, Mary K. Main, who was “required to be familiar with the generation and maintenance” of employee personnel records. Main summarily asserted that Ruiz “electronically signed” the 2011 agreement “on or about September 21, 2011,and that the same agreement was presented to all persons who seek or seek to maintain employmentwith Moss Bros. or its affiliated dealerships and service/parts centers. Main did not explain how Moss Bros. verified that Ruiz, or other Moss Bros. employees, electronically signed the 2011 agreement. 
The 2011 agreement is just over two pages in length. “Ernesto Zamora Ruiz” appears in print on the first page, under the title, “Employee Acknowledgment and Agreement,and the phrases “Ernesto Zamora Ruiz (Electronic Signature)” and “9/21/2011 11:47:27 AM” appear in print on the third page, under the signature and date lines of the 2011 agreement. 
In a supplemental declaration, Main testified that Ruiz had to log in using a unique user name and password. 

The court of appeal decided that was not enough because Main did not "authenticate" the electronic signature.  here is the standard for doing so:
Civil Code section 1633.9 addresses how a proponent of an electronic signature may authenticate the signaturethat is, show the signature is, in fact, the signature of the person the proponent claims it is. The statute states: “(a) An electronic record or electronic signature is attributable to a person if it was the act of the person. The act of the person may be shown in any manner, including a showing of the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributable.” (Civ. Code, § 1633.9, subd. (a), italics added.) 
Here, the court found that Main's testimony about the general procedures applicable to electronically signing the arbitration agreement was insufficient.  The court provided some hints as to what would have been enough:

Main did not explain that an electronic signature in the name of “Ernesto Zamora Ruiz” could only have been placed on the 2011 agreement (i.e., on the Employee Acknowledgement form) by a person using Ruiz’s “unique login ID and password”; that the date and time printed next to the electronic signature indicated the date and time the electronic signature was made; that all Moss Bros. employees were required to use their unique login ID and password when they logged into the HR system and signed electronic forms and agreements; and the electronic signature on the 2011 agreement was, therefore, apparently made by Ruiz on September 21, 2011, at 11:47 a.m. Rather than offer this or any other explanation of how she inferred the electronic signature on the 2011 agreement was the act of Ruiz, Main only offered her unsupported assertion that Ruiz was the person who electronically signed the 2011 agreement. In the face of Ruiz’s failure to recall electronically signing the 2011 agreement, the fact the 2011 agreement had an electronic signature on it in the name of Ruiz, and a date and time stamp for the signature, was insufficient to support a finding that the electronic signature was, in fact, the act ofRuiz. (Civ. Code, § 1633.9, subd. (a).) For the same reason, the evidence was insufficient to support a finding that the electronic signature was what Moss Bros. claimed it was: the electronic signature of Ruiz. (Evid. Code, § 1400, cl. (a).) This was not a difficult evidentiary burden to meet, but it was not met here. 
As a result, the court found there was insufficient evidence of an agreement to arbitrate and upheld the trial court's denial of Moss Bros.'s petition to compel arbitration.

Yes, it may be that Moss Bros. failed to compel Ruiz to arbitrate due to a poorly drafted declaration, rather than some flaw in the electronic signing protocol.  But litigators need proof that an employee signed handbook acknowledgements, training attendance forms, etc. Although an arbitration agreement was involved here, this decision applies to all sorts of electronically signed documents.  The average manager has no idea how the electronic signing process works, cannot testify that he or she actually saw the employee at the computer electronically signing, etc.

Therefore, when implementing electronic versions of documents, employers must have their IT professionals build in ways to do so.  For example, there could be an acknowledgment email sent to the employee, with a copy to the employer.  Or  the IT management could create a step-by-step explanation of how the system ensures that the  name appearing on the electronic application is attributable to the actual person and not merely inserted later. 

This case is Ruiz v. Moss Bros. Auto and the decision is here.

Thursday, February 19, 2015

Ninth Circuit to California Supreme Court: About that One Day's Rest in Seven Law?

If only I could ask the California Supreme Court to answer some wage and hour questions for my clients and me. Fortunately, the federal Ninth Circuit Court of Appeals has that authority.
In this instance, the Ninth Circuit has asked the California Court to take up three questions pertaining to California's rarely litigated "day of rest" laws.   In California, there is a statute requiring "one day's rest" in seven. There are some exceptions too.

Here are the questions the Court asked about these statutes:

"Rolling v. Workweek" 

(A) California Labor Code section 551 provides that “[e]very person employed in any occupation of labor is entitled to one day’s rest therefrom in seven.” Is the required day of rest calculated by the workweek, or is it calculated on a rolling basis for any consecutive seven- day period?
This question is very important.  Sometimes employees may work seven days in a row, but across two different work weeks.  If the rule is any consecutive seven days, that could cause significant scheduling issues.

Exemption for Part Timers?
(B) California Labor Code section 556 exempts employers from providing such a day of rest “when the total hours of employment do not exceed 30 hours in any week or six hours in any one day thereof.” (Emphasis added.) Does that exemption apply when an employee works less than six hours in any one day of the applicable week, or does it apply only when an employee works less than six hours in each day of the week?
The Court wants to know:  may an employee work 7 days if he works 8-8-8-5-8-8-8 without causing a violation?  Or must the hours be under 6 for each day worked in the seven consecutive days, e.g., 5-5-5-5-5-5-5?

Switching / Trading Shifts 
(C) California Labor Code section 552 provides that an employer may not “cause his employees to work more than six days in seven.” What does it mean for an employer to “cause” an employee to work more than six days in seven: force, coerce, pressure, schedule, encourage, reward, permit, or something else? 
Here the Court wants to know whether an employer violates the law merely by allowing a worker to work 7 days in a row?  For example, what if an employee is scheduled to work only 6 days per week. But the employee 'picks up" a shift because a co-worker asks him or her to do so?

* * * *

The Supreme Court may decline to answer the questions, but may choose to do so.   If the Court rules in favor of the employee-friendly interpretation presented as an alternative in the Ninth Circuit's order, it would completely change the way employers schedule employees, and likely would result in fewer hours worked per employee.   So, this is a very important case for the Supreme Court to rule on.

The case is Mendoza v. Nordstrom, and the opinion is here.  Interesting reading, employers and lawyers.