Storm's California Employment Law
MoFo says [pdf]:
The 2009 legislative sessions in both Sacramento and Washington, D.C. have yielded significant developments for labor and employment law.
Both? I would say, on the contrary, the 2009 legislative session in Sacramento was probably the least eventful of the decade in developments “for” labor and employment law.
I apologize for the almost total lack of posting. I was in a trial that involved testimony over 4 weeks starting October 6, and just finished up the concluding briefs today. If you can believe it, in the middle of all of that I had stomach surgery which cured a debilitating case of heartburn and as an added bonus has caused me to lose 15 pounds already.
So, I thought I’d point to this post from Robin Weideman on Dowell v. Pacesetter, Inc., a case which is more or less unremarkable, except that it is part of a continuing trend from the Court of Appeals: quit trying to make exceptions to B&P 16600.
We saw this earlier this year in TRG v. Galante and FLIR Systems v. Parrish. I noticed that I was hoping in my FLIR post to see the TRG ruling in July, but it came down in August.
Here’s CalBizLit’s comment on Justice Gilbert’s reworked opinion on arbitration finality.
I find this interesting because what I have termed in the past “arbitroskepticism” seems to be a contrarian point of view, but it is increasingly gaining traction among lawyers who blog. The simple logic was always this: if the forum really was so advantageous for employers (or any one side, whoever) how long could it really be before the courts and/or legislature took notice. Added to that was, where’s the data?
And of course, the Courts took notice long ago.
I know it was a big political thing, but as I said it was damned-if-you-do damned-if-you-don’t:
So, the upshot of the politicized Ricci decision is that there can be more racial demagoguing completely out of the context of Title VII, and that’s fun for cable news. But this puts employers in the position of not being able to remedy a mistake in EEO compliance without being liable to someone, one way or another. Good thing the U.S. Chamber of Commerce is spending its membership’s dollars arguing that the earth is flat instead of lobbying on this nuts and bolts kind of thing that will affect everyone subject to Title VII.
You have to read this opinion. Basically, the Court of Appeal destroys the parties (and the trial court) for their voluminous summary judgment motions, which added up to about 4,000 pages, and for the blanket acceptance of the objections by the trial court.
The thing is, are you willing to be the first lawyer that goes really lean on your briefs? Are you a partner?
Until there is a massive state-wide trial-court-level implementation of the demands in this decision, we don’t dare risk it. Do we?
The last two bills we were tracking were vetoed today.
Employers:
Please remember that Rosh HaShanah begins on Friday night and that Yom Kippur is Monday, September 28. Please also remember that you don’t get to set the level of observance for your employees, so just because you see them eating a bacon cheeseburger while carrying fists of cash around on Saturday doesn’t mean that they can’t observe these days. (You want Christmas off, right? When was the last time you were in church?)
As I said, levels of observance vary. Just in case, I should also mention that Friday October 9 is a day that traditional Jews would not do any work for sukkot, or the Feast of Tabernacles.
L’shanah tovah.
AB 335 is awaiting action by the governor.
AB 527 is awaiting action by the governor.
The rest are dead for this year, and the Governor is saying he’s going to veto everything anyway. My guess is that we won’t need to write any “new law” updates come 2010 other than the ongoing look at the courts.
Shocker, I know.
No movement in the last little while on any bills that I’m tracking for changes to California employment law. Most of them are alive in name only.
Comments are a source of spam, processor overhead, and don’t produce the intended civil discussion. I am happy to correspond and debate with readers at any time. Send me a Tweet or an e-mail. I will post your comment (if you wish) and my response.
Go read Greg on TRG v. Galante.
My only comment is that the courts could eliminate a lot of so-called “trade secrets” litigation and other back-door attempts to create and enforce covenants not to compete in California by continuing with the trend of cases we’ve seen this summer, including TRG and Flir.
The Legislature is free to reconsider Bus. & Prof. Code 16600 at any time. It can also add more teeth to the UTSA if it wishes. But as written, those statutes allow for employee mobility, but with remedies for intellectual property theft. They do not provide for entrepreneur-killing bad faith lawsuits. I’m glad to see the Court of Appeal is going to make people think twice about that.
Dan Walters complains that they haven’t done anything except the budget this session. The LA Times reports that prisons and water are the main issues left on the agenda. Not much in the way of labor and employment issues this year.
I thought I’d point out this quote from Justice Louis Brandeis:
Stare decisis is usually the wise policy, because in most matters it is more important that the applicable rule of law be settled than it be settled right.
Burnet v. Coronado Oil & Gas Co., 285 U.S. 393, 406 (1932) (Brandeis, J., dissenting). Some people might find this disturbing. Brandeis was talking about the federal Constitution and he was actually arguing against relying on stare decisis in that instance. There are a lot of objections you can make to this statement. In many circumstances, it’s better to get it right than have it settled. But in the domain of the California law as it relates to employers and employees in their relationship as such, the helter-skelter pace at which significant changes in the law occur both from the courts and the legislature puts us squarely in a position where we need things to be settled more than we need them to be settled “right”—whichever your view is.
The costs of compliance are one thing. The cost of re-complying, or attempting to comply with unclear rules, are another.
At long last, we have an opinion from the California Supreme Court.
My analysis will be forthcoming shortly.
UPDATE:
The Court correctly identifies the distinguishing factor that made Saunders such a useless precedent: the “invader” in that case was not a co-worker. (Slip Op. 19-20.) The Court then lays out a spectrum between highly “public” areas of the workplace, and highly private areas, such as locker rooms (the latter are subject to an express statutory protection). But do employees have some reasonable expectation of privacy in a closed office? Yes.
Such a protective setting generates legitimate expectations that not all activities performed behind closed doors would be clerical and work related. As suggested by the evidence here, employees who share an office, and who have four walls that shield them from outside view (albeit, with a broken “doggie” flap on the door), may perform grooming or hygiene activities, or conduct personal conversations, during the workday. Privacy is not wholly lacking because the occupants of an office can see one another, or because colleagues, supervisors, visitors, and security and maintenance personnel have varying degrees of access.
(Slip Op. 21-22.) So, you would be mistaken—as I was—to go with the Court of Appeal in Saunders and suggest as a blanket rule that employees have no expectation of privacy in the workplace from their employers only, except for those areas specifically designated by statute. The Court apparently finds this kind of privacy in a “penumbra” analysis (i.e., the opposite of limiting the circumstances to an enumerated list) of legislative acts, such as those prohibiting changing room and other “peeping tom” behavior. The Court hints in dicta that a properly drawn policy might have abolished the expectation of privacy. Of course the problem here is that notice of surveillance basically destroys its utility.
The Court then engages in a lengthy factual analysis and concludes that because Hillsides was very careful about what they spied on and how, that even though this wasn’t necessarily the least intrusive means, because it served a legitimate purpose it was ok.
Privacy rights in California have always been all about balancing tests, which means that it’s very hard to know what to do in any given situation. Here, it looks like the message is that you can monitor an office to catch someone breaking the rules if you don’t create too much of a dragnet. How egregious the violation must be and how careful you have to be aren’t 100% clear to me.
It’s also not clear to me what would have happened if the Plaintiffs had been caught on tape in the following different circumstances: (1) doing nothing important; (2) doing something like changing; or, (3) being caught as the guilty party. Nor is it clear to me what effect scenario #3 would have on the liability for scenarios #1 or #2.
My sense is the Court did not like this case because it saw the Plaintiffs making a mountain out of a molehill. So, instead of taking the opportunity to expound some law in detail, they engaged in a fact-intensive analysis in order to dispose of this case. Oh well.
Just to follow up on my speculation yesterday that the court closures will cause backlogs and possibly blow up Track I:
A Sacramento judge who fought the once-a-month court closures approved earlier this week by the state Judicial Council said Thursday the action is unwarranted locally and will result in monstrous new backlogs.
From the Bee.
So, the courts are closing one Wednesday per month thanks to the latest budget deal.
This will affect all of your filing deadlines, because these will not count as court days. At least they settled on a uniform day, state-wide. Our local presiding judge explained to us that Wednesday was chosen due to criminal arraignments needing to be processed in a certain amount of time.
So, this will slow down the law and motion calendar in civil. It may be just a little, but it seems to me like the idea of filing to trial in one year for unlimited civil cases is getting less and less realistic. I know some judges don’t mind going to Track II, but some really, really don’t want continuances.
I think it’s time to reconsider these time lines and the civil law and motion filing deadlines based on this.
UPDATE: Apparently, the furlough days will be treated as holidays, extending deadlines by a day.
{ 2 comments }
Paging Alanis. Is this ironic?
Frank Ricci got his job by suing under the ADA for discrimination against his dyslexia.
“In a confidential settlement, struck two years later, Mr. Ricci withdrew his lawsuit in exchange for a job with the fire department and $11,143 in attorney’s fees.”
I started this blog 5 years ago. I can’t believe it’s been that long. Thanks to all my readers!
I agree. I think the Court said you’re between a rock and a hard place; we’re picking the hard place for you.
This blog is rapidly approaching its 5th anniversary. It’s hard for me to believe that it’s been that long. This is the third different software platform I’ve used, staring with Blogger, then TypePad, and finally WordPress. I have gone through numerous design changes and used different hosting companies. I’ve even changed law firms. I’m proud to say, though, that I’ve more or less been able to preserve my original concept: information about legislation and court cases in California, with original reporting from time to time. Instead of just stenography, I’ve provided analysis; yet, I believe I have provided that analysis without delving too far into politics or favoring one side of the bar too much over the other.
I’m also proud to say that this site was the first one to focus on issues of California’s specific employment law world. In fact, this is one of the earliest legal blogs period. Before I began this site, I did legal blogging back almost 10 years ago when people first started transitioning from directly editing webpages to using software to keep “logs.”
Despite that long history, this site has always been about the issues. I only put up advertisements very briefly, and this has never been primarily about marketing my services. That is something that is even more rare in the blogging world, and I would say it correlates more directly to age. The people who have been doing this the longest seem to be the most likely to be doing it for its own sake instead of trying to keep up with the latest way to market overheard at a CLE conference on seen on TV.
Thanks for reading. I have no plans to change the core mission of this site or to stop doing this any time soon.
However, I do have plans for a companion site in the works. We’ll see.
This is not the decision I was hoping for. It’s close, but it’s not quite there.
Here’s the problem with this case: the facts are so overwhelmingly good for Parrish that it’s wishful thinking to assume this will happen to you. FLIR filed their case based on “inevitable disclosure” of trade secrets. That isn’t the law in California, even though it is the majority rule. FLIR engaged in all kinds of rough litigation tactics, but, though that’s mentioned, something tells me that’s hardly a sufficient element of what happened here. What is significant is that the Court of Appeal repeats that the CEO of FLIR testified that he did not “think it would be good, healthy for them [respondents] to go and directly compete with us.” Lewis stated that FLIR “couldn’t tolerate a direct competitive threat by [respondents] because it would fly in the face of everything that we spent 200 million dollars to buy.” (Slip. Op. at 5 and 16.) Derivative shareholder lawsuit on your mind, Mr. Lewis? Oy.
Better, there was no evidence of any threatened misappropriation. The best FLIR could muster was that Parrish had downloaded some information while working for them and had made some comments about patent filings after he departed. In the IP world, that has to ring absurd, because the whole point of patents is that you get the ability to prevent others from using your patent in exchange for disclosing what you did. Trade secrets, on the other hand, are things you keep secret, but it someone figures it out fairly, you can’t stop them from using it.
In the end, the award in favor of Parrish for $1,641,216,78 in attorneys’ fees and costs was affirmed, with an order for the trial court to have a hearing on costs and fees on appeal. Coupled with the fact that Parrish now appears to have a slam dunk collaterally estopped case for malicious prosecution based on this opinion—and FLIR’s actions, according to the Court, caused Raytheon to stop doing business with Parrish—and the fact that they have their own attorneys to pay, this is not a good day for FLIR. Or is it?
If FLIR is a $200 million dollar company as their CEO claimed (more or less, roughly, in that area, etc.), then they can probably take this hit, and, regardless of what else happens, they were successful in keeping Parrish and his partner from starting a competing business. (Slip. Op. at 3.) Now they just have a better idea of whether that was worth it or not.
The factual strength of Parrish’s case, combined with the fact that, at the end of the day, FLIR succeeded in what they wanted to do, is another reason why I’m not entirely satisfied with this case. FLIR takes the hit here, in theory, but what they do is more or less standard practice. Most defendants can’t afford to hire Wilson, Sonsini to defend them, and, if they can, they don’t have hundreds of thousands to spend on fees. In a run-of-the-mill case, the issue is not actually some scientifically advanced high tech thing like infrared scopes, but the highly dubious “customer list,” which are not, of course, in and of itself a trade secret. Ironically, this law is often used as a substitute for California’s unique objection to noncompete agreements. It is ironic because those were abolished to foster competition, but the result has been even scarier litigation under the UTSA which has much more powerful remedies than your average noncompete agreement gives rise to.
It’s simply an anticompetitive trick, and, apparently, even when the Court of Appeal throws the book at you and you have terrible facts, you can still get the outcome you want: no competition.
Finally, I would add that of course I support an employer’s right to protect its trade secrets. But just as employers make the case that frivolous litigation under the FEHA and wage/hour laws hardens the hearts and minds of the courts to the actual real and worthy cases, I think the same is true here. FLIR doesn’t make filing a bona fide trade secrets claim legally harder that it was last week, but it shows you the depths of the abyss you stand on if things go bad, which probably does chill its use for legitimate claims more than anticompetitive ones. How can I say that? The latter group know what they want to do and just need a price tag. The former face a cracked egg problem of their own, and this may go into their worst case cost calculus regardless. In other words, instead of pricing what you have to pay to achieve the goal of putting your competitor out of business, your are pricing what it takes to protect your secrets. Should a legitimate claimant worry about this case? Arguably no, but I guess it at least functions as a bookend.
Having said that, I’m hopeful that the Court of Appeal will deliver an even stronger blow in a case with very different facts, but arising under the same law and for the same anticompetitive reasons coming up in July.
{ 1 comment }
According to KQED. And remember, this is a U3 like number, meaning it doesn’t include underemployed or people who have stopped looking for work.
As such, the economic impact isn’t fully captured by this number, though my cursory look at BLS data shows a pretty strong correlation between this number and the other measures.
I worked in a bankruptcy court as a Judicial Extern in 2003, but otherwise, I don’t have much connection with the field. I am a newsie though, and I have to say, while reading up on the Chrysler sale, I came across Steven Jakubowski’s brilliant blog The Bankruptcy Litigation Blog. It’s one of the best of any kind out there. Take a look.
He even found a way to work Rashi in, recently. How can I top that?
Over two years after the Supreme Court granted review, it heard oral arguments in the first significant private employer workplace privacy case* to come before it. The L.A. Times’s report is here.
This is the analysis:
The justices’ queries and remarks suggested that they believe workers have the right to expect some privacy in their offices, but left open the question of whether the women who sued had suffered enough to win their case.
One exchange cited to bolster this analysis was this:
Chief Justice Ronald M. George appeared dubious of the company’s contention that an employee could never sue for loss of privacy if the worker was not the target of the surveillance. George cited a hypothetical of a camera placed in a company bathroom because of reports that people were engaging in lewd acts there.
If Justice George really asked this question, then he probably doesn’t know that this Larry Craig scenario is not allowed by statute. It’s the less extreme office “invasion” scenario that’s really in question here, because it isn’t covered by the statute.
I find it extremely dubious to base a prediction on an outcome (in this court especially) based on the oral arguments, though it did appear to give the right result in the Prop 8 case.
Click on the box to the right to see older posts about this case.
* Remember: Saunders was about invasion of privacy by a non-employer.
UPDATE:
Another quote:
Justice Joyce L. Kennard said the company had “a pretty big hurdle” in trying to argue that the case was not covered by a prior ruling that said employees in an office had a reasonable expectation of privacy.
Apparently, Justice Kennard is not finding the distinction between an outside party invading privacy in someone’s office and the employer who owns or controls and is responsible for the premises. I sure hope that if this right of privacy is created, which is, by the way, against the majority rule in the U.S. (not that that makes a difference in California), we get some clarity on how this meshes with other liabilities that occur in the workplace.
This has “mess” written all over it.
The significant language in this case is on page 16:
…the legal principles prohibiting an employer from requiring an employee to share his or her personal top with the employer’s agent (“mandatory tip pooling”) do not logically apply to an employer policy requiring equitable apportionment of the proceeds in a collective tip box (“tip apportionment”)
So—shift supervisors can share in tip proceeds like the advance sheets say? Not so fast.
This is what you might call a highly fact intensive situation. It’s hard to say, of course, what was outcome determinative in this case, but here are three important things to consider before rewriting your employee handbooks:
(1) Starbucks has a relatively complex formula and procedure for allocating tips and placing the tip container.
(2) Starbucks shift supervisors were in the record as performing the same tasks as the Baristas about 90% of the time and only having “reporting” authority to the managers.
Those two were in the opinion. Then there’s this:
(3) Starbucks may not have invented the tip jar, but they may it ubiquitous. It’s been in the news, it’s been on TV, and we all know that it’s not quite the same thing as a personal tip. In other words, we have socially understood expectations and rules about the Starbucks tip jars that we may not in other situations. I know the case law was said to be irrelevant, but much section 351 case law discusses “intent.”
So, unless you have these things all going for you, I think it might be inviting disaster to just label this a “liberalization” of tip pooling rules. We may or may not get a more definitive rule from the California Supreme Court, but an amendment to the law from the Legislature telling us exactly how this is supposed to work in the modern workplace would be best.
P.S. Instead of citing evidence on the record, or taking judicial notice of some kind of market data, the Court cites another court case for the seemingly factual proposition that “‘tipping the providers of personal service’ is a ‘well-accepted part’ of our daily lives.” Does anyone else have a problem with this?
I don’t have as much of a problem with that as just saying it, though in this particular case, it doesn’t seem to be something objectionable, but I don’t want to create that slippery slope. Why is case law citable for facts?
{ 2 comments }
From around the employment blogosphere
