Employment Law News – April 2016

Court of Appeal Holds Employer Required to Accommodate Employee Who Is Associated with Disabled Person

(Castro-Ramirez v. Dependable Highway Express, Inc. (April 4, 2016, B261165) __ Cal.App.4th __ [2016 Cal.App. LEXIS 255].)

The employee was hired as a truck driver in 2010, at which time he informed his employer he had a disabled son who required dialysis on a daily basis that the employee was responsible for administering.  Although his initial two managers were accommodating to the employee’s needs, a third supervisor took over and fired the employee after he refused to work a shift that would interfere with his ability to care for his son.  The employee thereafter sued alleging, inter alia, a “seldom-litigated” claim for associational disability discrimination in violation of the Fair Employment and Housing Act (FEHA) and retaliation in violation of the FEHA.  Summary judgment was granted in the employer’s favor and the employee appealed.

To establish a prima facie case of disability discrimination, the plaintiff must show he:  (1) suffered from a disability, (2) he was otherwise qualified to do his or her job, with or without reasonable accommodation, and (3) he was subjected to an adverse employment action because of the disability.  As to the first element, the court recognized that under the text of the FEHA, the “disability” from which the employee suffered was his association with a disabled person.

As to the second element, the court held as a matter of first impression that employers have a duty under the FEHA to provide reasonable accommodations (such as a modified schedule to administer dialysis to a family member) to an applicant or employee who is not himself disabled, but rather is merely associated with a disabled person.  Although federal precedent had previously interpreted the Americans with Disabilities Act as only requiring reasonable accommodations for applicants or employees who themselves have disabilities, the court found it was necessary to part ways with this authority given the clear difference in statutory language.

As to the third element, although the court began by recognizing three general categories of motive in associational disability discrimination cases (“expense,” “disability by association,” and “distraction”), it found the list non-exhaustive and held a neat fit is not required so long as a jury may infer the requisite discriminatory motive.  The court found there was a triable issue regarding the employer’s motive, given the supervisor knew of the employee’s needs, shortly thereafter scheduled the employee for his latest shift to date even though other shifts were available, lied about why the employee could not be scheduled for one of the earlier shifts, and fired him after a one-time refusal to work.  Accordingly, summary adjudication on the employee’s disability discrimination claim was reversed.

Regarding the employee’s retaliation claim, the court likewise found a question of fact whether he was terminated for engaging in protected activity.  The court cited evidence the employee had complained to both his supervisor and his manager on more than one occasion about his schedule changes, when both knew he required earlier hours to administer dialysis to his son, and he was terminated a month after his first complaint and on the heels of his last two complaints.  Even though the employee did not use the terms “unlawful” or “reasonable accommodation,” the complaints were sufficiently tied to his son’s disability that a trier of fact could find the supervisor had reason to know the employee’s protest was not simply an act of unexplained insubordination.  The court noted that effective January 1, 2016, it became unlawful for an employer to retaliate or otherwise discriminate against a person for requesting a reasonable accommodation, regardless of whether the employer granted the relief.

Mixed-Motive Defense Applies Equally to Common Law Wrongful Termination Claims and Claims Under the Fair Employment and Housing Act (FEHA), and An Employee Is Not the Prevailing Party if the Employer Prevails on the Mixed-Motive Defense

(Davis v. Farmers Insurance Exchange et al. (2016) 245 Cal.App.4th 1302)

The employee was a district manager classified as an independent contractor.  After the employer terminated the employee for poor performance, the employee brought suit alleging wrongful termination in violation of public policy, failure to pay wages, and unfair business practices under the Unfair Competition Law (UCL).  The employee was 57 years old at the time of termination, and alleged the termination was based on his age.

After the jury found the employee was improperly classified as an independent contractor, it determined that although the employee’s age was a “substantial motivating reason” for his discharge, the employer would have discharged the employee “anyway based on [his] poor job performance.” The jury did not award the employee damages, and the employer lodged a proposed judgment seeking costs as the prevailing party.  The employee objected, claiming an entitled to costs under Code of Civil Procedure (CCP) section 1032 and fees under CCP section 1021.5, arguing he was the prevailing party because the jury found he was improperly classified as an independent contractor and that his age was a substantial cause of his termination.  The employee also argued the court failed to adjudicate his claims for equitable relief under the UCL.  The trial court found: (1) the employee was not entitled to attorneys’ fees and costs under Harris v. City of Santa Monica (2013) 56 Cal.4th 203, because he had not alleged a FEHA claim; (2) could not recover fees under CCP 1021.5, because the lawsuit was brought for his own economic benefit (exemplified by his request for damages exceeding $3 million); (3) that the employer was the prevailing party for purposes of recovering costs; and (4) there was substantial evidence to support the directed verdict on the wage claims.

The court of appeal upheld the trial court’s ruling on all issues except the wage claim.  Specifically, the court found Harris applied equally to common law wrongful termination claims and FEHA claims, that the employee had failed to plead an entitlement to declaratory and injunctive relief with respect to his wrongful termination claim, that attorneys’ fees under CCP section 1021.5 were not warranted because the jury verdict did not result in the enforcement of an important right affecting the public interest (based in part on the employee’s large monetary demand), and that the employer had failed to present any evidence that the deductions from the employee’s pay were warranted under California law.  As such, the court of appeal reversed the direct verdict on the wage claim and the UCL claim was revived, to the extent it sought restitution for such wages.

For An Eight Hour Shift The Preferred Rest Break Schedule Contemplates Two Rest Periods of Ten Minutes Each; One Twenty Minute Rest Period Is Likely Insufficient

(Rodriguez v. E.M.E., Inc. (April 25, 2016) ____ Cal. ____.)

Employees working eight-hour shifts at a metal finishing business were provided with a combined 20-minute rest break that either preceded or followed a 30-minute meal break.   The employee argued “a single, combined rest period” violated California’s IWC Wage Order No. 1, section 12(A) which requires employers to provide a 10-minute rest break in the middle of the work periods occurring before and after the 30-minute meal break “insofar as practicable” (preferred rest break schedule).  In this case the existence of triable issues regarding whether or not it was practicable to for this employer to follow the preferred rest break schedule precluded summary adjudication on the employees’ rest break claims. Relying on Brinker Restaurant Corp. v. Superior Court, 53 Cal.4th 1004 (2012), the appellate court found that employers are required to provide 10-minute rest breaks in the middle of work periods before and after the 30-minute meal break. The court concluded “a departure from the preferred (two rest break) schedule” is permissible only when (1) the schedule will not unduly affect employee welfare and (2) is tailored to alleviate a material burden that would be imposed on the employer by implementing the preferred schedule.

Although the Brinker court said an employer may deviate from the preferred rest break schedule, “where practical considerations render it infeasible” (53 Cal.4th at 1031), the circumstances where a deviation would be appropriate were not described.  The appellate court here noted the lack of any case law or agency guidance on when such a departure would be lawful but suggested an employer wishing to follow an alternate rest break schedule should be able to show that the usual two 10-minute rest breaks with a 30-minute meal break in between is not capable of being put into practice or is not feasible in a particular workplace.  The employer in this case put forth evidence of significant time spent  shutting down and ramping back up after a rest break such that two rest breaks resulted in an unacceptable amount of unproductive time, and also showed the employees preferred a single 20-minute break.  However, plaintiff was able to submit contradictory evidence thus creating a triable issue of fact.

An Employer is Only Required to Prove the Authenticity of an Employee’s Electronic Signature on an Arbitration Agreement After the Signature’s Authenticity is Challenged

(Espejo v. Southern California Permanente Medical Group, et al., Espejo v. Southern California Permanente Medical Group (April 22, 2016) __ Cal.App.4th [2016 Cal. App. LEXIS 316])

To enforce an arbitration agreement, the employer has the burden of proving the employee agreed to resolve the dispute by arbitration.  Many employers have now “gone digital,” asking employees to sign arbitration agreements and other initial hiring documents electronically, raising the issue of when and how an employer can prove the employee did in fact sign the arbitration agreement in the first place.

In this case, a California court of appeal held that an employer can satisfy its initial burden of showing the employee entered into the arbitration agreement by simply attaching a copy of the arbitration agreement purportedly bearing the employee’s signature.  If the employee challenges the authenticity of that signature, the employer must establish by a preponderance of the evidence that the signature was authentic.  In the case of electronic signatures, the employer must satisfy the requirements of Code of Civil Procedure section 1633.9 governing the authenticity of electronic signatures.  For instance, here the employer satisfied its burden by providing a supplemental declaration demonstrating the employer had a security procedure (e.g., a unique user name and password) that proves only the employee could have electronically signed the agreement.

Arbitration Agreement Allowing the Parties to Seek Preliminary Injunctive Relief in Superior Court Survives Supreme Court Review

(Baltazar v. Forever 21, Inc. et al. (Supreme Court of California March 28, 2016) No. S208345)

The California Supreme Court held that the language “Pursuant to California Code of Civil Procedure [section] 1281.8 either party hereto may apply to a California court for any provisional remedy, including a temporary restraining order or preliminary injunction,” is not substantively unconscionable.

In Baltazar, the issue before the courts was whether an arbitration agreement was enforceable.  The trial court held the agreement was unenforceable because it was both procedurally and substantively unconscionable.  The court reasoned the agreement was procedurally unconscionable because the employer required the employee to sign the agreement, without modification, as a condition of receiving employment.

The court of appeal reversed, agreeing that the arbitration agreement was procedurally unconscionable, but rejecting the conclusion that the agreement was substantively unconscionable.  Specifically, rejecting the argument that the clause stating, “[p]ursuant to California Code of Civil Procedure [section] 1281.8 either party hereto may apply to a California court for any provisional remedy, including a temporary restraining order or preliminary injunction,” is substantively unconscionable because such relief favors the employer.

The Court addressed only the claims of substantive unconscionability, and rejected all of the employee’s arguments.  Notably, the Court held the clause allowing the parties to seek preliminary injunctive relief in the superior court, was not unconscionable because it simply stated existing law, California Code of Civil Procedure section 1281.8(b).  The Court reasoned the employer was not at an unfair advantage, where a clause merely states the parties ability to invoke undisputed statutory rights otherwise available in the litigation context, even where the employer is more likely to invoke those rights.  Finding no other basis to support the employee’s claim of unconscionability, the Court affirmed the judgement of the appellate court.

The Court also noted that because the employer failed to attach the AAA rules to the agreement, had the employee’s claim of procedural unconscionability concerned some element of the AAA rules of which she had been unaware when she signed the agreement, the outcome overall may have been different because the Court would have applied a greater degree of scrutiny to the employees claim of substantive unconscionability.

California Supreme Court Interprets Wage Order Requirements Regarding Suitable Seating

(Kilby v. CVS Pharmacy, Inc. (Apr. 4, 2016, S215614) __ Cal.4th __ [2016 Cal. LEXIS 1950].)

The California Supreme Court answered three certified questions from the Ninth Circuit regarding wage order requirements that state: “All working employees shall be provided with suitable seats when the nature of the work reasonably permits the use of seats.”  The questions arose out of two related federal appeals, one involving a class action filed by a customer service representative at CVS Pharmacy and another involving a class action filed by bank tellers at Chase.

The first question was whether the phrase “nature of the work” refers to individual tasks performed throughout the workday, or to the entire range of an employee’s duties performed during a given day or shift.  The Court rejected a “holistic” consideration of the entire range of an employee’s duties anywhere on the jobsite during a complete shift, finding no reason for denying an employee a seat when he spends a substantial part of his workday at a single location performing tasks that could reasonably be done while seated, merely because his job duties include other tasks that must be done standing.  However, the Court also rejected a task-by-task evaluation because it was inconsistent with the reasonableness standard and would require a seat even if the duration and frequency of the seated task if negligible.  Rather, the Court held that courts must examine subsets of an employee’s total tasks and duties by location, and consider whether it is feasible for an employee to perform each set of location-specific tasks while seated.  Consideration of all actual tasks performed at a particular location allows courts to consider the relationship between the standing and sitting tasks done there, the frequency and duration of those tasks with respect to each other, and whether sitting, or the frequency of transition between sitting and standing, would unreasonably interfere with other standing tasks or the quality and effectiveness of overall job performance.

The second question was what factors should a court consider when determining whether the nature of the work “reasonably permits” use of a seat.  The Court held an employee’s entitlement to a seat depends on the totality of the circumstances, beginning with an examination of the relevant tasks, grouped by location, and whether the tasks can be performed while seated or require standing.  The task-based assessment is also balanced against considerations of feasibility, for example, an assessment of whether providing a seat would unduly interfere with other standing tasks, whether the frequency of transition between sitting and standing would interfere with the work, and whether seated work would impact the quality and effectiveness of overall job performance.  Courts may also consider an employer’s “business judgment,” but the standard is objective and does not encompass an employer’s “mere preference” that particular tasks be done standing.  The physical layout of a workspace may also be relevant to the totality of the circumstances inquiry.  However, courts may not consider physical differences between employees because the provision requires a seat when the nature of the work reasonably permits it, not when the nature of the worker does.

The third question was whether an employee must prove a suitable seat is available in order to show an employer is violating the seating provision.  The Court held the “suitable seat” requirement was not an “independent element,” and employers seeking to be excused from the requirement bear the burden of showing compliance is infeasible because no suitable seating exists.