Mcle Self-study: Top Employment Law Cases of 2021

• Publication year: 2022
• Author: By Andrew H. Friedman, Anthony J. Oncidi, & Ramit Mizrahi

MCLE Self-Study: TOP EMPLOYMENT LAW CASES OF 2021

By Andrew H. Friedman, Anthony J. Oncidi, & Ramit Mizrahi

Andrew H. Friedman is a founding partner of Helmer Friedman LLP in Beverly Hills, where he (almost) exclusively represents employees in all areas of employment law. Mr. Friedman is the author of a two-volume employment law treatise, Litigating Employment Discrimination Cases (James Publishing 2005-2020). Mr. Friedman served as Counsel of Record in Lightfoot v. Cendant Mortgage Corp. et. al. 137 S.Ct. 553 (2017), where he successfully persuaded the U.S. Supreme Court to grant certiorari. In January 2017, the Supreme Court, in a unanimous decision authored by Justice Sotomayor, reversed the Ninth Circuit and ruled in favor of Mr. Friedman's clients. Mr. Friedman's email address is afriedman@helmerfriedman.com. Anthony J. Oncidi is a partner in and the Chair of the Labor and Employment Department of Proskauer Rose LLP in Los Angeles, where he exclusively represents employers and management in all areas of employment and labor law. His telephone number is (310) 284-5690 and his email address is aoncidi@proskauer.com. Ramit Mizrahi is the founder of Mizrahi Law, APC in Pasadena, where she represents employees exclusively. She is Chair of the Pasadena Bar Association Labor and Employment Law Section and Immediate Past Chair of the CLA Labor and Employment Law Section. She can be reached at ramit@mizrahilaw.com.

INTRODUCTION

After 2020's slight lull, 2021 saw a resumption of what has become the new normal—a deluge of employment decisions, with an average of more than one new opinion each day! Indeed, despite the continuing pandemic, and the slow halting resumption of civil trials, federal and state appellate courts continue to regularly churn out multiple important decisions that directly affect employees and employers.

CALIFORNIA SUPREME COURT ISSUES IMPORTANT WAGE & HOUR, PROCEDURAL, AND ANTI-SLAPP DECISIONS

The California Supreme Court offered several major victories to employees in a trio of wage and hour cases.

In Vazquez v. Jan-Pro Franchising International, Inc.,¹ the Court held that its decision in Dynamex Operations West, Inc. v. Superior Court²—which set forth the ABC test that applies in determining whether workers should be classified as employees or independent contractors for purposes of the obligations imposed by California's wage orders—applies retroactively.

In Donohue v. AMN Servs., LLC,³ a unanimous court answered two important questions about meal periods: (1) Can employers engage in the practice of rounding time punches in the meal period context? Answer: No. (2) Do time records showing noncompliant meal periods raise a rebuttable presumption of meal period violations, including at the summary judgment stage? Answer: Yes. While the Supreme Court recognized that time rounding was, in general, permitted under federal law and prior California decisions, it decided not to follow that authority in the case of meal periods. Instead, citing "health and safety concerns" that underlie meal period requirements, the Court distinguished "the meal period context from the wage calculation context, in which the practice of rounding time punches was developed" and noted that "even relatively minor infringements on meal periods can cause substantial burdens to the employee."⁴ The Court went on to endorse a concurrence by Justice Werdegar in Brinker Restaurant Corp. v. Superior Court,⁵ oft-cited by plaintiffs' lawyers, in which she suggested that if an employer's records did not reflect a compliant meal period, it would raise a rebuttable presumption that none was provided. However, the Court did provide helpful clarification about how employers could overcome such a presumption: "by presenting evidence that employees were compensated for noncompliant meals or that they had in fact been provided compliant meal periods during which they chose to work."⁶

In Ferra v. Loews Hollywood Hotel, LLC,⁷ the Court considered whether an employer violated California law by failing to include an employee's nondiscretionary bonuses when calculating meal and rest break premiums. Both the trial court and the Court of Appeal held in favor of the employer, concluding that the "regular rate of pay" as used in Cal. Lab. Code § 510 was not synonymous with the "regular rate of compensation" as used in § 226.7. The California Supreme Court saw things differently,

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however. In an opinion authored by Associate Justice Goodwin Liu, the Court held that "regular rate of compensation" as used in § 226.7 means the same thing as "regular rate of pay" in this context.⁸ Finally, the Court rejected Loews's argument that this opinion should apply only prospectively and determined the opinion applies retroactively.⁹

The California Supreme Court also offered victories to employees in a duo of procedural cases. In Pollock v. Tri-Modal Distrib. Servs., Inc.,¹⁰ the Court addressed two questions. First, when does the statute of limitations begin to run in a failure to promote case brought under the harassment provision of the Fair Employment and Housing Act (FEHA)?¹¹ The Court held that such a claim accrues, and thus the statute of limitations begins to run, at the point when an employee knows or reasonably should know of the employer's allegedly unlawful refusal to promote the employee.¹² "Second, does Cal Gov't Code § 12965(b)'s directive that a prevailing FEHA defendant 'shall not be awarded fees and costs unless the court finds the action was frivolous, unreasonable, or groundless when brought, or the plaintiff continued to litigate after it clearly became so,' apply to an award of costs on appeal?" The Court answered "yes," holding that a prevailing-party employer may only recover costs on appeal if the action was "frivolous, unreasonable, or groundless when brought."¹³

In Bonni v. St. Joseph Health System,¹⁴ the Court was called upon to determine what types of retaliatory conduct alleged by a doctor stemming from a hospital's medical peer review are subject to dismissal under California's anti-SLAPP statute.¹⁵ The Court held that "[w]hile some of the forms of retaliation—including statements made during and in connection with peer review proceedings and disciplinary reports filed with official bodies—do qualify as protected activity, discipline imposed through the peer review process does not."¹⁶Thus, the Court held that "while the hospital may seek to strike some of the physician's retaliation claims, the hospital was not entitled to wholesale dismissal of those claims under the anti-SLAPP law."¹⁷

EMPLOYEE PROTECTIONS OF A.B. 51 CAL. LAB. CODE § 432.6 AND PAGA ARE NOT PREEMPTED BY THE FAA

In Chamber of Commerce of United States v. Bonta,¹⁸ the Ninth Circuit reversed in part a 2020 preliminary injunction issued by a district court and partially resurrected Cal. Lab. Code. § 432.6, which had been added by A.B. 51,¹⁹ prohibits California employers from requiring employees and applicants with respect to claims under FEHA and the California Labor Code to waive any right, foum, or procedure, including the right to file a civil action or complaint, as a condition of employment or continued employment. It also includes enforcement mechanisms that sanction employers for violating the law including punishing employers with civil and criminal penalties for entering into agreements to arbitrate in violation of the law. In a 2-1 ruling, the Ninth Circuit held that at least part of § 432.6 is not preempted by the Federal Arbitration Act (FAA) insofar as it prohibits "pre-agreement employer behavior," i.e., requiring an applicant or employee to enter into an arbitration agreement—but only in those instances in which the employee fails or refuses to execute the agreement.²⁰ If, however, the employee does sign the arbitration agreement, then the statute does not apply per § 432.6(f), and the employer is not in violation of the statute or subject to its criminal and civil penalties, which the Ninth Circuit struck down in that limited context.²¹ Section 432.6 applies to arbitration agreements that were entered into, modified, or extended on or after January 1, 2020.

In a spirited dissent that serves as a beacon for United States Supreme Court review, Judge Sandra Segal Ikuta noted:

The majority holds that if the employer successfully "forced" employees "into arbitration against their will," . . . the employer is safe, but if the employer's efforts fail, the employer is a criminal. . . . This tortuous ruling is analogous to

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holding that a statute can make it unlawful for a dealer to attempt to sell illegal drugs, but if the dealer succeeds in completing the drug transaction, the dealer cannot be prosecuted.²²

In Iskanian v. CLS Transportation Los Angeles, LLC,²³ the California Supreme Court had held that individual employees cannot contractually waive their right to bring a representative action under the Private Attorney General's Act (PAGA), and that this state law rule is not preempted by the FAA. In Williams v. RGIS, LLC,²⁴ an employer argued that Iskanian was subsequently abrogated by the United States Supreme Court's decision in Epic Systems Corporation v. Lewis.²⁵ The Court of Appeal, agreeing with every published Court of Appeal decision on this issue, rejected the employer's argument and followed the holding in Iskanian.²⁶

GUIDELINES FOR COURTS IN EVALUATING CLASS ACTION SETTLEMENTS

In Amaro v. Anaheim Arena Management, LLC,²⁷ the Court of Appeal, bemoaning a paucity of state law guidance for evaluating class action settlements, published its opinion to fill in that void. While the opinion offers too many nuggets of wisdom to list in this article, some of the more important pieces of guidance include: (1) the release in any class action settlement should be limited to the factual allegations set forth in the complaint; (2) employers may settle Fair Labor Standards Act (FLSA) claims within the context of a state law wage and hour class action...