A Single Incident Of Harassing Conduct May Create A Hostile Work Environment

Beltran v. Hard Rock Hotel Licensing, Inc., 97 Cal. App. 5^th 865 (2023)

Stephanie Beltran, a server at the Hard Rock Hotel in Palm Springs, alleged she had been sexually harassed by Juan Rivera, the former General Manager of the hotel. Beltran reported to Human Resources that Rivera had “grabbed or slapped her ass.” Beltran also testified in her deposition about “multiple incidents of conduct over a period of months, including leering gestures, hand massages, and inappropriate questions, which culminated with the slapping or groping incident.” Although the trial court granted summary adjudication in favor of the employer, the Court of Appeal reversed, holding that this evidence was more than sufficient to raise a triable issue of fact as to whether “a reasonable person who was subjected to the harassing conduct would find that the conduct so altered working conditions as to make it more difficult to do the job.” In so holding, the Court relied principally upon Cal. Gov’t Code § 12923 and the case law that post-dates the January 1, 2019 effective date of the statute.

The Court also published that portion of its opinion concerning the “appropriate scope” of a separate statement of undisputed material facts filed in support of a motion for summary judgment, concluding that the separate statement filed in this case, which included over 600 paragraphs and ran over 100 pages, was neither “convenient nor expeditious” in that it included not only “material” facts but also “merely background information that has [no] relevance to any cause of action or defense.” The Court similarly criticized the plaintiff’s opposition separate statement, holding that “it is completely unhelpful to evade the stated fact in an attempt to create a dispute where none exists.”

New Trial Of Sexual Harassment Claim Ordered Following Admission Of Evidence Of Other Employees’ Complaints Against Plaintiff

Argueta v. Worldwide Flight Servs., Inc., 97 Cal. App. 5^th 822 (2023)

Eunices Argueta worked as an agent in the import department of the employer, a freight operations company, reporting to Dzung Nguyen whom she claimed had sexually harassed her. A jury returned a defense verdict, and Argueta filed a motion for new trial and for judgment notwithstanding the verdict, both of which the trial court denied. Over the spirited dissent of Justice Grimes, the Court of Appeal reversed, holding that Argueta was entitled to a new trial based on the lower court’s admitting evidence of multiple complaints that other employees had made against Argueta. The complaints accused Argueta of “bullying, harassment, retaliation, yelling, making threats and other bad behavior, including discriminating against a pregnant subordinate employee.” The trial court denied Argueta’s motion in limine regarding the employee complaints against her on the ground that they were relevant to “the plaintiff’s motive for making the complaints of sexual harassment.” Argueta contended and the Court of Appeal agreed that the evidence in question was improper and irrelevant character evidence and that, in any event, motive is not an element of a sexual harassment claim and that the employer would be strictly liable for the harassment regardless of what motive Argueta may have had to complain.

Trial Court Gave Erroneous Jury Instructions In Whistleblower Case

Garrabrants v. Erhart, 2023 WL 9016436 (Cal. Ct. App. 2023)

Charles Matthew Erhart was an internal auditor for a financial institution who “blew the whistle” on the employer concerning the actions of the bank’s CEO, Gregory Garrabrants. While Erhart’s whistleblower case was pending in federal court, Garrabrants sued Erhart in state court for copying, retaining and transmitting to multiple regulatory authorities documents Erhart believed evidenced possible wrongdoing; those documents included personal and confidential information that belonged to Garrabrants. At trial, a jury awarded Garrabrants $1,502 on his claims against Erhart for invasion of privacy, receiving stolen property and unauthorized access to computer data in violation of Penal Code § 502. The trial court awarded Garrabrants more than $65,000 in costs and more than $1.3 million in attorney’s fees as the prevailing party. The Court of Appeal reversed the judgment, holding that the trial court erroneously instructed the jury that bank customers have an unqualified reasonable expectation of privacy in financial documents disclosed to banks; that Erhart needed to believe the documents may have been lost or destroyed had he not removed them; and other instructional errors regarding the Penal Code claims. See City of Whittier v. Everest Nat’l Ins. Co., 97 Cal. App. 5^th 895 (2023) (Cal. Ins. Code § 533 barring insurer liability for a loss caused by the wilful act of the insured does not preclude insurer indemnification of whistleblower claims arising under Cal. Lab. Code § 1102.5).

Health Care “Opt-Out Credits” Do Not Count Towards Calculation Of FLSA Regular Rate of Pay

Sanders v. County of Ventura, 87 F.4^th 434 (9th Cir. 2023)

The Ninth Circuit affirmed the district court’s grant of summary judgment in favor of the employer (Ventura County) in this putative class action arising under the federal Fair Labor Standards Act (“FLSA”), brought by county firefighters and police officers who opted out of their union- and employer-sponsored health plans. The employees who opted out of these health plans received monetary compensation in return, however part of the compensation was deducted as a fee that was then used to fund the plans from which they had opted out. The employees argued that this opt-out fee should count as part of their “regular rate” of pay for purposes of calculating overtime compensation under the FLSA.

The Court held that these opt-out fees should not be considered part of the employees’ “regular rate” of pay. Instead, the fees should be exempted as “contributions irrevocably made by an employer to a trustee or third person pursuant to a bona fide plan for providing” health insurance, per the statutory exemption set forth in 29 U.S.C. § 207(e)(4). The opt-out fees deducted from the credit employees received was provided to their union, and employees had no ability to access this sum. The court also rejected an argument from the plaintiffs that the 29 U.S.C. § 207(e)(4) exception should only apply to contributions made to support plaintiffs’ own health care (not that of other employees).

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