Key California Employment Law Cases: January 2021

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International Brotherhood. of Teamsters, Local 2785 v. Federal Motor Carrier Safety Administration No. 18-73488, 2021 WL 139728 (9th Cir. Jan. 15, 2021)

Summary: Federal law preempts California’s meal and rest break rules as applied to drivers of property-carrying commercial motor vehicles who are subject to Federal Motor Carrier Safety Administration rest break regulations.

Read our in-depth analysis HERE.

Vazquez v. Jan-Pro Franchising International, Inc.,No. S258191, 2021 WL 127201 (Cal. Jan. 14, 2021)

Summary: The three-part “ABC test” to determine independent contractor status announced in Dynamex Operations West, Inc. v. Superior Court, 4 Cal. 5th 903 (2018), applies retroactively.

Read our in-depth analysis HERE.

Scalia v. Department of Transportation & Public Facilities, No. 19-35824, 2021 WL 139738 (9th Cir. Jan. 15, 2021)

Summary: Congress intended to adopt the definition of “workweek” contained in the Fair Labor Standards Act, defined as a fixed period of seven consecutive days, when it granted employees “a total of 12 workweeks of leave” under the Family and Medical Leave Act.

Facts: The Family and Medical Leave Act of 1993 (“FMLA”) grants eligible employees a total of 12 “workweeks” of leave during any 12-month period in order to attend to certain qualifying family or medical needs. Plaintiff, the United States Secretary of Labor, brought suit against Defendant, the State of Alaska’s Department of Transportation and Public Facilities, contending that Defendant was miscalculating the amount of FMLA leave that rotational employees of the Alaska Marine Highway System who took continuous leave were entitled to take. Defendant argued that a rotational employee working a “one week on, one week off” schedule who takes 12 workweeks of continuous leave must return to work 12 weeks later because both the “on” and the “off” weeks count against the employee’s FMLA leave entitlement. Plaintiff argued that the employee should return to work after 24 weeks, because a rotational employee’s “off” weeks cannot be counted as “workweeks” of leave under the FMLA. The district court agreed with Plaintiff, holding that the term “workweek” refers to “time that an employee is actually required to be at work,” and because rotational employees are not required to be at work during their off weeks, these weeks cannot be counted against an employee’s FMLA leave entitlement. Defendant appealed.

Court’s Decision: The Court of Appeals for the Ninth Circuit reversed, holding that when an employee works a “one week on, one week off” schedule, and takes continuous leave, the employer may count both the on and off weeks against the employee’s FMLA leave entitlement, and therefore, that Defendant’s method of calculating rotational employees’ continuous leave did not violate the statute. Specifically, the court maintained that Congress intended to adopt the Fair Labor Standards Act’s (“FLSA”) definition of “workweek” when it granted employees “a total of 12 workweeks of leave” under the FMLA. It explained that under the FLSA, a “workweek” is a fixed, pre-established period of seven consecutive days in which the employer is operating. The court remanded the case with instructions to enter summary judgment in Defendant’s favor.

Practical Implications: This case provides welcome clarity for employers calculating FMLA leave entitlement for employees with non-traditional rotational schedules. As the court made clear in a footnote, the holding is not limited to one week off followed by one week on schedules, but applies equally to other rotational schedules, including two or more weeks off followed by two or more weeks on.

Ali v. Daylight Transport, LLC, No. A157104, 2020 WL 7777912(Cal. Ct. App. Dec. 4, 2020)

Summary: An arbitration agreement was not enforceable where it provided for a shortened limitations period, fee-splitting, and unilateral judicial remedy in favor of defendant.

Facts: Defendant Daylight Transport, LLC was an expedited less-than-truckload (“LTL”) carrier. It contracted with independent California truck drivers who provided services within the state. These truck drivers each entered into an “Independent Contractor Service Agreement” (the “Agreement”). All of these Independent Contractor Service Agreements contained identical arbitration provisions. Two truck drivers filed a putative class action against Defendant, alleging unlawful misclassification of former and current delivery drivers and asserting violations of various provisions of the California Labor Code and the Industrial Welfare Commission Wage Orders. Defendant moved to compel arbitration and stay the underlying action, but the trial court denied the motion, finding that Defendant’s superior bargaining position, coupled with the Agreement’s shortened limitations period for claims, fee-splitting arrangement, and provision of a unilateral judicial remedy in Defendant’s favor rendered the Agreement unconscionable and unenforceable. Defendant appealed.

Court’s Decision: The California Court of Appeal affirmed, finding the Agreement to be both substantively and procedurally unconscionable. The court explained that Defendant enjoyed a superior position for bargaining and offered the agreement on a take-it-or-leave-it basis, which supported the trial court’s finding of procedural unconscionability. Additionally, the court of appeal agreed that the Agreement was substantively unconscionable based on three provisions that provided for a substantially shorter limitations period than the statutory limitations period, splitting of arbitration fees, and a provisional judicial remedy that was not provided to truck drivers. The court of appeal also concluded that the trial court did not abuse its discretion in declining to sever the unconscionable terms.

Practical Implications: Employers who hire independent contractors should consider adopting arbitration provisions that apply employment arbitration rules and protections rather than commercial arbitration rules, lest the court find that the relationship between the employer and the contractors is nonetheless “sufficiently similar to that of an employee-employer relationship” to conclude the parties’ arbitration agreement is subject to the requirements of Armendariz v. Foundation Health Psychcare Services, Inc., 24 Cal. 4th 83 (2000), and its progeny.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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