Happy Birthday Jennifer Shaw

OK, I know it's a little gross for me to post this. But I know Jennifer's clients and friends check in on the blog from time to time. Please give her a shout for her birthday! I know she'll be happy to hear from you.


Court of Appeal: No Individual Liability for Wages or UCL

The Wins Corporations were three garment manufacturers owned by the Wongs. After some business reverses, the businesses did not pay all wages due. The Labor Commissioner sought to hold the Wongs personally liable for the wages under a variety of theories. The trial court held they could not be personally liable. On appeal, the Labor Commissioner argued that managing agents like the Wongs may be held personally liable when the Labor Commissioner commences an action to recover wages under Labor Code section 1193.6. Relying on the Supreme Court's decision in Reynolds v. Bement, 36 Cal.4th 1075 (2003), the court of appeal held no personal liability for unpaid vacation, final pay, or associated penalties was available under the common law definition of "employer" applicable to these claims.
The court also rejected the Labor Commissioner's argument that the unfair competition law, Bus. Prof. Code section 17200 allowed for personal liability. The court reasoned that the remedy available under 17200 - restitution - could not apply to the Wongs. That's because they personally did not withhold the subject wages. As such, the could not be held liable for "restoring" those wages to the plaintiffs.
Of note, the Labor Commissioner did not dispute the superior court's conclusions that the Wongs were not "alter egos" and therefore waived the issue for appeal. (The superior court had determined the Wongs had respected corporate formalities and adequately capitalized the companies and, therefore, were not alter egos.) The Labor Commissioner also did not challenge the superior court's conclusion that the Wongs could not be held liable under a special statute applicable to the garment industry (section 2673.1) because she did not pursue that liability properly in the administrative forum. So, these theories remain potentially viable ways of holding corporate executives personally liable.

The case is Bradstreet v. Wong and the opinion is here.

CA Supreme Court Rules on California Family Rights Act Issues

So, Lonicki was an employee claiming major depression and work-related stress stopped coming to work and requested medical leave. In the employer’s view, the employee did not have a serious health condition and was capable of performing her duties. The employer ordered the employee to return to work, and fired her when she did not. The twist: While taking FMLA/CFRA leave, she worked for another employer. While her other job was not identical, there was a substantial overlap.
The Supreme Court considered two issues: First, could the employer just fire Lonicki without seeking additional medical certifications as provided by the CFRA statute? The court concluded (6-1) that employers need not do so. Justice Moreno, though, said that the employer must follow that procedure before denying leave based on an employer's belief that the employee is not eligible for leave.
The second issue is the one that got the headlines: If an employee seeks FMLA/CFRA leave for her own health condition, and she works another job, does she really have a serious health condition? Here, the Supreme Court split 4-3 that she MIGHT. The court decided that working another position is evidence that the employee's condition might not qualify for FMLA or CFRA. But the Court refused to hold that working in a comparable job was "conclusive" evidence no serious health condition justified leave. So, off to trial with Lonicki and her employer.

The case is Lonicki v. Sutter Health Central and the opinion is here.

Another Arbitration Agreement Invalidated

Metters worked for Ralphs Grocery. He believed he was a victim of discrimination and harassment and complained to human resources, and to the President of the company via a hotline.
Ralphs Grocery has a dispute resolution policy and an arbitration agreement that it includes with a request for dispute resolution. The language requiring arbitration, although on the second page of the form, is surrounded by a border box, is in white type on a black background, and emphasizes that arbitration is required. However, the arbitration agreement is contained in the request for dispute resolution, not in a separate document that is styled "arbitration agreement" or something similarly unambiguous.
The trial court and court of appeal agreed that the Ralphs forms did not establish an "agreement to arbitrate" because there was no contractual "meeting of the minds." Therefore, there was no need to decide whether the arbitration agreement was unconscionable, or whether the Federal Arbitration Act required arbitration. Without an agreement to arbitrate, the FAA does not apply.
The court of appeal found significant that Ralphs would have had a duty to investigate Metters' claims even if he did not submit the request for dispute resolution form. Yet, Ralphs apparently did not adequately explain Metters' options to him.
The case is Metters v. Ralphs Grocery. The opinion is here.