This week, in Konig v.
U-Haul Co. of Cal., the Second District issued a ruling that held that an
employment contract requiring employees to waive their rights to class or
representative actions in arbitrations with the employer was enforceable. U-Haul, the employer, required employees to
sign an arbitration agreement and a waiver of “any right to join or consolidate
claims in arbitration with others or to make claims in arbitration as a
representative or as a member of a class or in a private attorney general
capacity” unless U-Haul agreed to the procedure. An employee bringing a wage and hour claim
against U-Haul sought to have the waiver declared unconscionable. 

    Applying Discover Bank,
the Second District noted that, while contractual class-action waivers are
unconscionable when they apply to claims that have “predictably . . . small
amounts of damages,” wage and hour claims against an employer, such as the one
disputed in Konig, are not predictably small. Therefore, the Court reasoned, a class-action waiver was not
substantially unconscionable under the standard outlined in Discover Bank. 

    This case is sure to generate a lot of comment, including
some recommendations to employers that they begin adding representative claim and
class-action waivers to their employment contracts. However, this
opinion will not be the last word on the issue, and I expect more changes to
the law in this area soon. Because
the California Supreme Court granted a petition to review an opt-in employment
arbitration agreement with a similar class-action waiver in April, there will likely be changes to the standard announced in Konig.

Yesterday,
the Sixth District filed an opinion that found an employer immune from state
law tort claims under the Communications Decency Act of 1996 (CDA). The plaintiffs alleged that an Agilent
employee had used Agilent’s computers to send threatening email messages to the
plaintiffs, and sought damages from Agilent for intentional and negligent
infliction of emotional distress. Agilent successfully brought a motion for summary judgment, claiming
immunity under the CDA, which plaintiffs appealed.

Under the
CDA, a defendant has immunity when: 1) the defendant is a provider or user of
an interactive computer service; 2) the cause of action treats the defendant as
a publisher or speaker of information; and 3) the information at issue is
provided by another information content provider. 47 U.S.C. 230(c)(1). Because plaintiffs did not dispute that the
Agilent employee was the “information content provider,” the court in Delfino
focused on the following two questions in its application of the CDA. First, the court asked whether Agilent was a “provider
of an interactive computer service.” Second, the court asked whether plaintiffs’ state law claims for
negligent and intentional infliction of emotional distress treated Agilent as a
publisher or speaker of the information at issue.

Addressing
the first question, the court stated that it was unaware of another opinion
that addressed the issue of whether a corporate computer network qualifies an “interactive
computer service” under the CDA. The
court first compared the approaches used by various federal circuits and California state courts,
and noted that courts have broadly defined the term to encompass entities other
than ISPs. The court also surveyed
academic sources, and noted that several journal articles concluded that
employers, like ISPs, should be covered by the CDA’s immunity provisions. Ultimately, the court found that employers
who provide employees access to the internet meet the CDA’s definition of a
“provider of an interactive computer service.”

Addressing
the second question, the court first noted that most cases addressing the scope
of CDA immunity under section 230 involve defamation. However, the court noted that some cases had
applied CDA immunity to claims of intentional infliction emotional
distress. In addition, the court cited a California opinion from the First District had applied CDA immunity to claims of nuisance,
premises liability, and a taxpayer suit under CCP section 526a. The court found further support for the
proposition that CDA immunity applies to civil claims generally. Without further elaboration, or a statement
of the exact claims CDA immunity applies to, the court held that plaintiffs’
claims of negligent and intentional infliction of emotional distress treated
Agilent as “a publisher or speaker of the information at issue” under the
CDA.

The court’s
opinion in Delfino seems part of a trend, where courts will broadly interpret
the CDA’s immunity provisions in section 230 to limit plaintiffs’ ability to
bring state law tort claims against any entity that provides a means for
transmission of tortuous electronic communications. However, the opinion in Delfino resulted, at
least in part, from the plaintiffs’ inability to provide a sufficient rebuttal
to the evidence offered by Agilent in its summary judgment motion. It remains to be seen if the CDA’s immunity
provisions will be applied as broadly in a case where the facts are more
favorable to plaintiffs seeking to overcome an assertion of immunity under the
CDA.

In November, the Second District
issued an opinion in this case that outlines both California Law under the FEHA
and Federal Law under Title VII. The
case involved claims under the FEHA against an employer for retaliation and a supervisor
for failing to prevent discrimination. The
case is worth reviewing, because court applied both the state and federal
standards in its analysis of the plaintiff’s claims.

The Second District first applied
the materiality test for FEHA retaliation claims under the California Supreme
Court decision in Yanowitz. The court then applied the deterrence
test for retaliation claims under the United States Supreme Court decision in

Burlington

. The court held that the retaliation claims
against both the employer and the supervisor stated a cause of action
sufficient to overcome a demurrer under either standard.

However, in its analyses of the
different standards, the court did not state the practical differences between
the two standards. While the court noted
that it saw no difference between the legislative intent of the FEHA and Title
VII, it failed to discuss what practical differences, if any, exist between the
materiality and deterrence tests. It
thus seems that the differences in application of the two standards are
currently an open question.

In addition to its analysis of the
FEHA and Title VII, the court also held that employer notice of protected
activity, when considered with the timing of adverse employment actions in
relation to the protected activity, could be considered constructive knowledge
by the employer of the plaintiff’s protected activity.

Finally, the court interpreted
section 12940(k) of the FEHA in regards to supervisor liability, and held that
supervisors are “persons” under the statute, and may thus be found liable for failing
to prevent acts of discrimination and harassment. While the court noted that a
supervisor may not be held liable for employment discrimination under the FEHA,
a supervisor may be liable for failing to prevent discrimination. As part of its ruling on this issue, the
court also held that a failure to prevent retaliation against protected
activity, in this case opposition to discrimination, is the same as a failure
to prevent discrimination.