California Supreme Court Limits Employer Liability to IC's Employees

Typically, when an organization hires a vendor / independent contractor, the hiring organization is not liable to the vendor's employees when something goes wrong. The vendor/contractor is the "employer" responsible to its own employees.

As explained by the California  Supreme Court:

Defendant US Airways uses a conveyor to move luggage at San Francisco International Airport. The airport is the actual owner of the conveyor, but US Airways uses it under a permit and has responsibility for its maintenance. US Airways hired independent contractor Lloyd W. Aubry Co. to maintain and repair the conveyor; the airline neither directed nor had its employees participate in Aubry‘s work.

The conveyor lacked certain safety guards required by applicable regulations. Anthony Verdon Lujan, who goes by the name Verdon, was inspecting the conveyor as an employee of Aubry, and his arm got caught in its moving parts.

Plaintiff SeaBright Insurance Company, Aubry‘s workers‘ compensation insurer, paid Verdon benefits based on the injury and then sued defendant US Airways, claiming the airline caused Verdon‘s injury and seeking to recover what it paid in benefits. Verdon intervened as a plaintiff in the action, alleging causes of action for negligence and premises liability.

Of special relevance to this case, the insurance company argued that US Airways was liable because of its obligations under CalOSHA to provide a "safe workplace." The issue was whether US Airways could delegate the duty to provide a safe workplace to its contractor, with respect to the safety of the contractor's employees.

Was US Airways liable for the injury to Verdon, even though Aubry was Verdon's employer and Verdon was covered by Workers' Compensation Insurance?  Hmmm?  Heck I don't know, I was asking you.

Oh, right the California Supreme Court knows. And the Court said:
plaintiffs here cannot recover in tort from defendant US Airways on a theory that employee Verdon‘s workplace injury resulted from defendant‘s breach of what plaintiffs describe as a nondelegable duty under Cal-OSHA regulations to provide safety guards on the conveyor. Hence, the Court of Appeal erred in reversing the trial court‘s grant of summary judgment for defendant.
The court emphasized that US Airways owed its own employees a non-delegable duty to provide a safe workplace. But Verdon, an employee of Aubry, could not look to US Airways for relief.

The decision is Seabright Ins. Co. v. US Airways and the opinion is here.

NLRB Soon to Require Poster!

Effective this November, Non-union employers will have to post a new poster explaining to employees their rights under the National Labor Relations Act.  For a simple posting regulation, there sure are a lot of rules.

- Multiple languages if more than 20% of employers speak a language other than English
- posting on intranets
- size of the poster, placement, etc.

The poster's content basically is a short seminar on the National Labor Relations Act, the right to unionize, what unfair labor practices are, how to file a charge, etc.  Handy!

The good news is that the NLRB will let you download the poster free from its website, or you can order paper copies gratis from the Agency. So, printing costs will be minimal.

The regulations are at the bottom of this long long website page, which includes the "comments" to the final proposed rules and the NLRB's response to them.

Court of Appeal: No Reinstatement after 12 weeks of CFRA Leave

After taking 19 weeks of leave, the first 12 of which was covered under the California Family Rights Act, LA County reinstated Katrina Rogers, but then transferred her to a new job as a business decision. Rogers did not take the transfer well and sued under various causes of action, including the CFRA.  A jury awarded her damages and the county appealed.

The court first rejected Rogers' argument that the transfer amounted to "interference" with her rights under the CFRA:

Here, the following is undisputed—the County accorded Rogers the full 12 workweeks of leave to which she was entitled under the CFRA; Rogers did not return to work at the end of this period, but instead remained on leave for 19 weeks; and the decision to transfer her was made within the 12-week leave period, but never communicated to Rogers during her leave. Rogers nevertheless argues that she suffered interference with her CFRA rights because the transfer decision was made during her protected CFRA leave. But she cites no authority to support her position, which we therefore disregard. (Perez v. Grajales (2008) 169 Cal.App.4th 580, 591–592.) Based on the foregoing, we conclude that Rogers’s right to reinstatement expired when the 12-week protected CFRA leave expired. Her CFRA interference claim therefore fails as a matter of law, and should never have been submitted to the jury.
Then the court turned to Rogers' claim that the transfer was "retaliation" for her exercising her rights. The court could not find any evidence that the county took its action because Rogers took leave, other than the fact that she took it and the transfer occurred thereafter:

In short, Rogers “failed to establish the requisite causal connection between her protected actions in taking a CFRA medical leave” and the decision to transfer her to another position. (Neisendorf, supra, 143 Cal.App.4th at p. 519.) “The unchallenged finding that [the County] had a legitimate, nondiscriminatory reason to [transfer Rogers], which had nothing to do with her CFRA leave, bars [Rogers] from articulating a cognizable cause of action for the jury’s consideration based on [the County’s] alleged refusal to honor the CFRA’s right to reinstatement.” (Id. at p. 520.) The Neisendorf court cited to several federal courts interpreting the FMLA that endorse this principle. (See e.g. Throneberry v. McGehee Desha County Hosp. (8th Cir. 2005) 403 F.3d 972, 979 [“‘As long as an employer can show a lawful reason, i.e., a reason unrelated to an employee’s exercise of FMLA rights, for not restoring an employee on FMLA leave to her position, the employer will be justified to interfere with an employee’s FMLA leave rights’”].) Like the Neisendorf court, we conclude that because the County’s “legitimate, nondiscriminatory reason” for the decision to transfer Rogers eliminated any obligation the County might have had to reinstate her, Rogers “could not state a valid claim under the CFRA.” (Neisendorf, supra, at p. 520.)
The decision is important regarding CFRA/FMLA leave, but it does not address reasonable accommodation obligations under the ADA/Fair Employment and Housing Act.  So, employers still need to consider reinstatement following extended leave when an employee has a covered disability and takes more leave than allowed under CFRA / FMLA.

The case is Rogers v. County of LA and the opinion is here.

Pre-Bar Admission Law Grads Can Be Exempt

Matthew Zelasko-Barrett graduated law school and obtained a job with Brayton-Purcell, a large, Marin County firm. Before passing the bar and becoming a licensed lawyer, he was designated a Law Clerk II; after admission he became an associate.  After quitting, he decided to sue Brayton-Purcell, claiming he was "mis-classified" as exempt during his time as a Law Clerk II.

Although licensed, salaried lawyers qualify as exempt, so do "learned" professionals.  The associate's principal argument was that because licensed professionals qualify as exempt under one part of the definition, unlicensed lawyers cannot.  The court of appeal rejected that argument.

It bears noting that the Law Clerk II's duties practically mirrored  a licensed associate's, with the exception of signing documents as a lawyer, court appearances, etc.  Had the Law Clerk II's duties been more clerical, this case might have come out another way.

The court here also heavily relied on a 9th Circuit decision, in which the Court of Appeals held that certain accountants were exempt, even though they were not licensed as CPAs.  CPA is another category of licensed professional. See Campbell v. Pricewaterhouse Coopers, LLP (E.D.CA 2009) 602 F.Supp.2d 1163, 1172, revd. (2011) 642 F. 3d 820.  The district court held that the accountants were non-exempt, but the court of appeals reversed and held they were. 

That means this case has more applicability than just to law firms.  The other licensed professionals are: "medicine, dentistry, optometry, architecture, engineering, teaching, or accounting."  Again, unlicensed professionals will have to pass the duties test of the exemption and receive the required salary.

The case is Zelasko-Barrett v. Brayton-Purcell LLP and the opinion is here.

Court of Appeal: "Me Too" Evidence of Harassment Admissible to Prove "Intent"

So, a plaintiff in a sexual harassment case attempts to introduce evidence that the harasser harassed other employees, but not in the plaintiff's presence, and that the conduct was not directed to the plaintiff. 
Can the plaintiff use that information to prove she was harassed?  Basically, the plaintiff wants to say, "the defendant is a bad person because he mistreated others; therefore, it is more likely that he harassed me even though he denied doing so."  That's what's called "character evidence," and it's usually inadmissible.

Except when it's admissible. The Evidence Code allows for admission of "character" evidence if used to prove intent, motivation, common plan, and other things. 

Thomas Anton was a lawyer. Lorraine Pantoja was a member of the staff. Pantoja alleged Anton touched her inappropriately, used slurs and profanity, and engaged in other conduct amounting to sexual harassment. Anton denied engaging in those behaviors.

Pantoja's lawyers attempted to introduce other female employees' testimony that Anton engaged in similar conduct towards them.  Anton successfully had that conduct excluded as character evidence. But Pantoja's lawyers argued that evidence was necessary to prove Anton's intent.  A jury decided in favor of Anton. Pantoja appealed.

The court of appeal reversed the defense verdict and judgment. The court decided that the trial court erroneously did not permit "me too" evidence to prove Anton's anti-female intent. The evidence also was admissible to impeach Anton's denials. A significant issue was whether Anton used profanity "at the situation" or directed towards females.

This case is significant for a few reasons:

1.  The appellate court's discussion of intent suggests that the plaintiff must prove intent to win in a sexual harassment case. I think the court meant that the harassment must be "based on" the plaintiff's sex, race, etc.  But intent to harm or to discriminate actually is not an element of a harassment case.  If conduct has the "effect" of creating an objectively hostile work environment in the eyes of a reasonable victim, that's supposed to be enough.

2.. The court did not mention whether a defendant would be entitled to a special jury instruction explaining that the purpose of the testimony is not to establish the plaintiff's claim of a hostile environment or damages. Defendants certainly should request such an instruction, or the jury may be confused into thinking that the plaintiff can prove her own work environment was hostile because of the way others were treated, even outside of her presence.

3.  The court does not take into account the possibility that if a bunch of people testify about the defendant, the jury will find in the plaintiff's favor just to punish the defendant, even if the evidence of conduct against the plaintiff is thin.  The court did not draw the line at all - allowing evidence by employees who did not even work at the same time as the plaintiff.

4.  This case makes it highly dangerous to retain an employee who has previously been found to violate an anti-harassment policy. If all evidence of harassment conduct against other employees is admissible, even offered by employees who did not work at the same time as the plaintiff, then it will be a big risk to permit an employee previously identified as a  "harasser" to stay employed..

The case is Pantoja v. Anton and the opinion is here.

Court of Appeal: False Social Security Number = Unclean Hands = No Case

Vicente Salas worked for Sierra Chemical Company. He was seasonal, and was repeatedly laid off and re-hired.  Along the way, he injured himself.  The company allegedly denied him re-hire after he did not produce a release from his doctor. Salas claimed he was told he had to be 100% healed, which is one of those ADA no-nos.  He sued for a variety of employment based claims, including disability discrimination, failure to provide reasonable accommodation, etc.

But Sierra found out that Salas used a false social security number and obtained summary judgment because of the "unclean hands" / after acquired evidence defenses.  (The trial court actually denied the motion, but the court of appeal issued an order to show cause in response to a petition for a writ, resulting in the trial court's changing its mind.)

Salas's use of another person's Social Security number to obtain employment with Sierra Chemical went to the heart of the employment relationship and related directly to his claims that Sierra Chemical wrongfully failed to hire him following his seasonal lay off and discriminated against him by failing to provide a reasonable accommodation for his back injury. Because Salas was not lawfully qualified for the job, he cannot be heard to complain that he was not hired. This is so even though he alleges that one reason for the failure to hire was Sierra Chemical's unwillingness to accommodate his disability.
In light of the nature of the misrepresentation, the fact that it exposed Sierra Chemical to penalties for submitting false statements to several federal agencies, and the fact that Salas was disqualified from employment by means of governmental requirements, we conclude that Salas‟s claims are also barred by the doctrine of unclean hands.

The court also rejected Salas' claim that the Legislature foreclosed the unclean hands/ after acquired evidence defense by passing SB 1818, which provides in pertinent part:
"The Legislature finds and declares the following: [¶] (a) All protections, rights, and remedies available under state law, except any reinstatement remedy prohibited by federal law, are available to all individuals regardless of immigration status who have applied for employment, or who are or who have been employed, in this state. [¶]
(b) For purposes of enforcing state labor, employment, civil rights and employee housing laws, a person‟s immigration status is irrelevant to the issue of liability...
The court noted that SB 1818 was intended to be "declarative of existing law," and so it did not abrogate existing defenses to employment law actions.

The upshot is that this case denies relief to employees who falsify their employment credentials, resulting in a violation of law if the employer continues to employ the employee.  The employer will have to show as well that the employer's settled policy is to discharge / refuse to hire employees who commit the type of violation at issue.

The case is Salas v. Sierra Chemical Co. and the opinion is here.


Court of Appeal Raps Employee Appellant

This one is mainly for the practitioners.

Richard Foust lost at court trial, in which he sued his former employer, San Jose Construction Company, for breach of contract.  He appealed from the judgment. The court of appeal not only affirmed, but also held the appeal was frivolous and imposed sanctions. Foust apparently failed to provide an adequate record, made arguments for the first time in his reply, and generally made it impossible for the appellate court to adequately consider his appeal.

The court sanctioned Foust $6000, payable to the court, for the frivolous appeal, and awarded sanctions to San Jose in the amount of $8743. 

The obvious takeaway - If you're going to appeal, it's best to designate an adequate record or the appellate court may make losing more expensive.

The opinion is Foust v. San Jose Construction Company, Inc. and the opinion is here.

Court of Appeal: What's a Vacation?

Some companies give paid "sabbaticals" to long term employees. I am jealous of people who work for those companies.

Eric Paton worked for Advanced Micro Devices for seven years before he resigned.  He then sued AMD, claiming the sabbatical that he had not yet earned had "vested" during his entire employment, like vacation.  Therefore, he claimed, he was entitled to a proportional amount of sabbatical pay upon his termination of employment.  His lawsuit is a class action, brought on behalf of some 1400 former employees who had earned portions of their sabbaticals.

Preposterous, you say? Not so fast, said the court of appeal.

To figure out whether the sabbatical is vested vacation, which must be paid out upon termination under Labor Code Section 227.3, the court came up with a definition of "vacation:"
It is paid time off that accrues in proportion to the length of the employee's service, is not conditioned upon the occurrence of any event or condition, and usually does not impose conditions upon the employee's use of the time away from work.
Thus, consistent with the employment lawyer's understanding of vacation, holidays and sick days are not vacation because they are "conditioned upon the occurrence" of sickness or holidays.  Paid days off that do not require a condition to occur (like PTO and floating holidays) tend to fit within this definition.

The court then considered what is a true sabbatical.  The court borrowed from a test the state Division of Labor Standards Enforcement developed, and added an additional criterion:
First, leave that is granted infrequently tends to support the assertion that the leave is intended to retain experienced employees who have devoted a significant period of service to the employer. Every seven years is the traditional frequency and it seems an appropriate starting point for assessing corporate sabbaticals, as well. In many cases, an interval of seven years would be long enough for an employee to gain experience and demonstrate expertise that an employer might want to retain. Greater or lesser frequency could be appropriate depending upon the industry or particular company involved.

Second, the length of the leave should be adequate to achieve the employer's purpose. Since we are concerned here with unconditional sabbaticals given for the purpose of reenergizing the employee then, as the Labor Commissioner suggested, the length of the leave should be longer than that “normally” offered as vacation. Since regular vacation time may be used for rest, a sabbatical ought to provide the extended time off work that regular vacation does not.

Third, a legitimate sabbatical will always be granted in addition to regular vacation. . . .Because an employer could offer a minimal vacation plan and reward senior staff with sabbaticals as a way to avoid the financial liability of a more generous vacation plan, the employer's regular vacation policy should be comparable to the average vacation benefit offered in the relevant market.

A fourth factor is one that is implicit in the DLSE test but is not called out specifically. Since a sabbatical is designed to retain valued employees, then a legitimate sabbatical program should incorporate some feature that demonstrates that the employee taking the sabbatical is expected to return to work for the employer after the leave is over.
Applying this test, the court decided that AMD's plan raised a triable issue of fact regarding whether it was a true sabbatical or deferred vacation. The court's central concern was the purpose of establishing the program:  is it just added vacation for long term employees, or is it an incentive for employees to remain employed with AMD and improve their productivity upon return to work (sabbatical).  So, the court remanded the case for trial.

The decision is Paton v. Advanced Micro Devices and the opinion is here.

California Legislature Clarifies Paid Bone Marrow Leave

Governor Brown just signed SB 272, which clarifies last year's paid bone marrow /organ donation leave law.  That law requires employers to grant up to five days' paid leave for bone marrow donation and up to 30 days' paid leave for organ donation.

Key changes: The new bill clarifies a few thing: the time off for bone marrow / organ donation leave is measured in "business days" rather than calendar days.  The employer may require the employee to use up to five days of PTO for bone marrow leave and up to two weeks of PTO for organ donation leave. The 12 month period for measuring entitlement is "rolling" based on the date of the leave request.

The new bill is here.