Setareh Law Group is expanding. If you are an attorney with wage and hour experience and have been practicing for roughly three to six years, you are welcome to reach out to me or Shaun Setareh at Setareh Law Group (contact information available via state bar -- if you can't find that, you shouldn't be sending anything anyhow). Reading my blog already demonstrates your discerning eye for insightful discourse, so test 1 is complete.
The California Supreme Court has agreed to weigh in on the issue of whether time spent on security searches is compensable. Here is the Court's description of the issue:
Frlekin v. Apple, Inc., S243805. (9th Cir. No. 15-17382; ___ F.3d ___, 2017 WL 3723235; Northern District of California; Nos. C 13-03451 WHA, No. C 13-03775 WHA, C 13-04727 WHA.) Request under California Rules of Court rule 8.548, that this court decide a question of California law presented in a matter pending in the United States Court of Appeals for the Ninth Circuit. The question presented is: “Is time spent on the employer’s premises waiting for, and undergoing, required exit searches of packages or bags voluntarily brought to work purely for personal convenience by employees compensable as ‘hours worked’ within the meaning of California Industrial Welfare Commission Wage Order No. 7?”
Justice Chin was recused and did not participate in the decision. Between this and other issues currently before the California Supreme Court, we will see more changes in wage and hour litigation in the next few years.
Well, it isn't a post that is devoid of law as a subject, but no appellate decisions to digest here at any rate.
Two stories caught my eye over at abovethelaw.com. In the first, it is reported that young associate hiring is set to increase at law firm. Yay! But, in the second, a hint that large corporation general counsel are looking at refusing to pay for time billed by young associates. That would impact the leverage model that large firms use. I suppose one is a longer term trend while the hiring is immediate, but it isn't outside the realm of possibility that the net impact of service outsourcing and automation, coupled with events like the proposed refusal to pay for young associates, might result in the substantial restructuring of the legal market in the next couple of decades.
How do you make summer associates feel like they are part of a team? You prank them.
I won't diminish the expectant quality of your Friday by providing a blow-by-blow of the decision, but Lambert v. Nutraceutical Corp. (9th Cir. Sept. 15, 2017) takes a thorough look at the timing requirements of Fed. R. Civ. P. 23(f) petitions, concluding that the 14-day filing deadline of Rule 23(f) is not jurisdictional and can be extended or tolled for a variety of reasons. The opinion also reversed the District Court's decertification order in the consumer class action, concluding that it erred in its treatment of the plaintiff's damage model.
Appellant was successfully represented by Gregory Weston (argued) and David Elliott, The Weston Firm, San Diego, California; and, Ronald A. Marron, The Law Offices of Ronald A. Marron APLC, San Diego, California.
When I started reading this opinion, I went a little too fast on the first page, read on a few more pages, got really confused, re-read the first page, and then re-read the next four pages, marveling and what happened. Cortez v. Doty Bros. Equipment Company (September 1, 2017) (Second Appellate District, Division Seven) is one of those decisions that you read and say, "I didn't know they could do that."
Here's what gets you. The first page say, "APPEAL from orders of the Superior Court of Los Angeles County, Jane L. Johnson, Judge. Appeal dismissed." Slip op., at 1. If you are rushing, you assume that some procedural failing led to a dismissal. This incorrect conclusion is only amplified when you read this:
While Cortez’s appeal was pending, the appellate courts in Munoz v. Chipotle Mexican Grill, Inc. (2015) 238 Cal.App.4th 291, 310 (Munoz) and Miranda v. Anderson Enterprises, Inc. (2015) 241 Cal.App.4th 196, 201-202 (Miranda) held the death knell doctrine did not apply to the denial of class certification or dismissal of class claims while a plaintiff’s PAGA claim remained pending in the trial court. Concerned about the viability of his initial appeal, Cortez voluntarily dismissed his PAGA claim with prejudice on March 30, 2016 and filed a second notice of appeal on May 20, 2016, again identifying the September 19, 2014 order compelling arbitration and the March 23, 2015 order dismissing all class claims as the orders subject to appellate review. We consolidated the two appeals.
Slip op., at 2-3. At this point (if you were me), you figure that the filing of the second appeal and the dismissal of the PAGA claim in the trial court were going to interact somehow to lead to the dismissal of the appeal, perhaps on some timeliness ground. Nah. You're way off base (if you are me).
Here's where the whiplash gets you:
Although not fully identified by the parties in their briefs, Cortez’s appeal poses several difficult jurisdictional questions, in particular, the effect of Cortez’s dismissal of his PAGA claim on the appealability of the earlier order dismissing the class claims, including whether a plaintiff’s voluntary action can create an appealable order under the death knell doctrine and whether the second notice of appeal from an order entered more than a year before was timely; and the applicability of Code of Civil Procedure section 906 to an order made appealable under the judicially created death knell doctrine rather than pursuant to Code of Civil Procedure section 904.1. We resolve none of those issues. Rather, in light of the uncertainty of the appealability of the orders challenged by Cortez and the absence of any delay or prejudice our intervention at this stage would cause, we find this an appropriate case in which to exercise our discretion to treat the consolidated appeal as a petition for writ of mandate and reach the merits of the superior court’s orders compelling arbitration of Cortez’s individual claims and terminating the class claims.
Slip op., at 4. "We resolve none of those issues." What? "[W]e find this an appropriate case in which to exercise our discretion to treat the consolidated appeal as a petition for writ of mandate and reach the merits of the superior court’s orders compelling arbitration of Cortez’s individual claims and terminating the class claims." Spectacular.
The actual result is far less amazing than the procedural knot that was circumvented to get there. The outcome is a fairly standard application of how Stolt-Nielsen is current construed:
We grant Cortez’s petition in part, finding Cortez’s cause of action under the Labor Code for Doty Bros.’ failure to timely pay wages upon his separation from employment (Lab. Code, § 203) (sixth cause of action) and his unfair competition action based on that alleged statutory violation (Bus. & Prof. Code, § 17200) (seventh cause of action) are not encompassed by the arbitration provision in the CBA. In all other respects, we deny the petition, concluding the remaining causes of action are subject to 5 arbitration, and the court’s termination of class claims proper on the ground the CBA does not authorize classwide arbitration.
Slip op., at 4-5.
Near the end of the opinion, the Court notes the split of federal authority at the Circuit level on the issue of whether a ban on classwide arbitration is antithetical to the NLRA. While this panel might have done that issue justice, it noted that the California Supreme Court had rejected that argument in Iskanian, and concluded that it was bound by that determination.
Kingsley & Kingsley, Eric B. Kingsley, Liane Katzenstein Ly, Kelsey M. Szamet and Ari J. Stiller; DesJardins & Panitz, Michael A. DesJardins and Eric A. Panitz successfully represented Plaintiff and Appellant (though as a petitioner)
Yes, yes I did write that post title. In Sprunk v. Prisma LLC (August 23, 2017), the Court of Appeal (Second Appellate District, Division One) considered whether a defendant in a putative class action can waive its right to compel arbitration against absent class members by deciding not to seek arbitration against the named plaintiff. The Court agreed that it did, holding that Prisma LLC "waived its right to seek arbitration by filing and then withdrawing a motion to compel arbitration against the named plaintiff, Maria Elena Sprunk, and then waiting until after a class had been certified to seek arbitration against class members." Slip op., at 2.
Some of the less interesting issues in the opinion concern the sufficiency of evidence of arbitration agreements with class members. The juicy stuff, however, is described as follows:
Plan B [Prisma LLC] also raises a legal issue concerning the status of absent class members. Plan B argues that the trial court erred in considering Plan B’s delay in moving to compel arbitration before the court decided class certification because the unnamed class members were not parties until a class was certified. Because this argument raises an issue of law concerning the time period that the trial court could properly consider in analyzing waiver, we review it de novo. (Sky Sports, Inc. v. Superior Court (2011) 201 Cal.App.4th 1363, 1367 (Sky Sports) [applying the de novo standard to the issue whether a defendant “waived its right to compel arbitration because it did not bring the motion before certification of a class that included parties to the arbitration agreement”].)
Slip op., at 12. The Court concluded that strategic delay can properly result in waiver:
An attempt to gain a strategic advantage through litigation in court before seeking to compel arbitration is a paradigm of conduct that is inconsistent with the right to arbitrate. For example, Bower was a putative wage and hour class action in which the defendant engaged in discovery and attempted to settle the case on a classwide basis when the class was a modest size. (Bower, supra, 232 Cal.App.4th at pp. 1038–1040.) When the plaintiff sought an amendment that would have expanded the class, the defendant (Inter-Con) moved to compel arbitration. The trial court found waiver, and the appellate court affirmed, concluding that Inter-Con’s decision to delay seeking arbitration “appears to have been tactical.” (Id. at pp. 1045, 1049). Based upon Inter-Con’s litigation conduct, “[o]ne can infer that InterCon chose to conduct discovery, delay arbitration, and seek a classwide settlement because it saw an advantage in pursuing that course of action in the judicial forum.” (Id. at p. 1049.) Such conduct provided substantial evidence to support the finding that “Inter-Con’s actions were inconsistent with a right to arbitrate.” (Id. at p. 1045.)
Slip op., at 18. The discussion about waiver is extensive (seriously - about 24 pages of the opinion concern waiver). The Court seems to leave the door open for situations where the trial court believes that there is a bona fide desire to wait for an expected clarification in the law, but it would seem to be a risky bet for a defendant if its actions could just as well be perceived as done for strategic benefit.
I'm somewhat surprised that this hasn't come up more frequently.
Knapp, Petersen & Clarke, André E. Jardini, Gwen Freeman and K. L. Myles successfully represented Plaintiff and Respondent.
Hey, so I went to Occidental College. Just like Mr. Obama (Emily Post says the title of "President" ends with the end of the term of office - yes, I checked). Two differences stand out between us, I think. I graduated. And he's more famous. Oh, plus I never inhaled.
So I mention Occidental College because I received correspondence from my alma mater today that struck me immediately as insipid and deeply troubling. Here's what the e-mail said:
To the Occidental Community,
n Charlottesville last weekend, we saw the ugly face of racism and hate, naked and unadorned. White supremacy in all of its manifestations is an assault on the fundamental values of Occidental, the community of scholars of which we are a part, and the kind of country we want to be. Love of knowledge, intellectual rigor and mutual respect are essential in creating the kind of just, inclusive and loving community we all want to be a part of. As we welcome the Class of 2021 to campus next week, and throughout the coming months, let’s embrace these values as we continue our effort to create such a community here at Oxy.
A few questions came to mind immediately. The first thing I asked myself was whether the current crop of incoming students needs to be told that white supremacists are bad. It never came up when I was there, but I'm really confident that had I conducted a poll, 100% of my classmates would have, without hesitation, said, "Bad." (A few might have first asked if it was some sort of trick.) This would have been the easiest quiz, with the highest average score in the history of Occidental.
But, today, not so much. The school has to tell them it's bad. Here's my first tip to the admissions committee at Occidental: if you think you need to tell incoming freshmen this, raise your standards. You are diluting the value of my degree. Maybe there's a class action there. Kidding. Probably. No, kidding for sure.
The second thing I asked myself was why the President of Occidental didn't think to make any mention of the fact that Occidental also abhors the use of violence to silence even reprehensible hate speech. I've heard quite a few political commentators in recent months suggesting that the First Amendment doesn't protect "hate speech." Go check with a colleague that practices First Amendment law and see if they concur. Surely it must be the case that as much as hateful viewpoints like white supremacy, misogyny, or other bigoted beliefs are contrary to fundamental values of Occidental, so, too, are any attempts to forcibly silence even unpleasant ideas. However, as I am sure that President Veitch did not issue this letter without substantial thought and input, I have to wonder whether the omission of any warning to new students that violent suppression of speech will not be tolerated was intentional.
I can't say it isn't tempting to be sympathetic, for a moment, when a nutter white supremacist is receiving a beat down with a club. But I would caution everyone to remember Neimoller's words:
First they came for the Socialists, and I did not speak out—
Because I was not a Socialist.
Then they came for the Trade Unionists, and I did not speak out—
Because I was not a Trade Unionist.
Then they came for the Jews, and I did not speak out—
Because I was not a Jew.
Then they came for me—and there was no one left to speak for me.
You can't send a message that criticizes what is, fortunately, a viewpoint considered by a vast majority of Americans as reprehensible while tacitly condoning vigilantism to silence that idea (if you actually doubt that, consider that a little more than 100 years ago, the KKK had membership in the millions, but a century later the membership was believed to be under 10,000). Violent repression of speech won't stop at the white supremacists. It's already moved past that. Recall riots at Berkley, the birthplace of contrary viewpoint expression, to silence a speaker. If thuggish retaliation against speech is allowed to build up a head of steam, it will be hard to stop.
Occidental's alumni should be very disappointed by the absence of a strong message renouncing violence to limit speech and encouraging civil dialog between members of the Occidental community at all times (with at least an implied reminder that anyone acting contrary to that principle will need to find themselves a new college to attend in short order).
I would note, in closing, that Occidental's website does a far better job of recognizing that dialog can often be challenging, but open discussion and critical thinking are central to the educational mission. Why doesn't the President of Occidental know that?
Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal. 4th 348 (2014) held that PAGA representative claims for civil penalties are not subject to arbitration. In Esparza v. KS Industries, L.P. (August 2, 2017), the Court of Appeal (Fifth Appellate District) tackled the question of whether any claims asserted under PAGA can be "individual" claims, and, if so, how are they treated for purposes of arbitration agreements. The issue arose, in particular, because it appeared that the plaintiff asserted, within the PAGA claim, a claim to recover wages under Labor Code section 558, which, unlike the other PAGA penalties (in the sense of the word meaning something akin to a fine) sought, would result in the recovery of the underlying wages owed, with no portion going to the State from the recovered wages. The Court directed the plaintiff on remand to declare unequivocally whether only penalties would be sought or whether, in addition, individual recovery claims would be pursued. The Court concluded that such individual recovery claims would be severed and arbitrated.
Don't see the Fifth Appellate District having to wade into these issues regularly, so hat tip to that District for getting into the PAGA mix.
The trial court was technically affirmed, but the holding and directions on remand make this one a win for defendant/respondent, who was represented by Call & Jensen, John T. Egley and Jamin S. Soderstrom.
The DOJ announced on Friday, June 16, 2017, that it was reversing its position on the validity of class action waivers in arbitration agreements and would file an amicus brief in support of the employer's position in NLRB v. Murphy Oil. I get that a change in administration can bring with it a change in policy, but this is unfortunate in that it overtly politicizes a legal analysis that should at least attempt to be a textual analysis that doesn't depend on which way the wind blows. I suppose Judge Posner has the right of it when he argues that all the supposedly dispassionate judicial reasoning is just a veneer over personal preference and wanting anything as significant as this issue to be decided apolitically is laughably naive. Still, I think the better approach for the DOJ would have been to undertake the equivalent of a noisy withdrawal, officially retracting its position and choosing to take a neutral position in the case.