Key California Employment Law Cases: April 2021

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California Trucking Association v. Bonta, No. 20-55106, 2021 WL 1656283 (9th Cir. Apr. 28, 2021)

Summary:  The Federal Aviation Administration Authorization Act does not preempt the “ABC test” for determining whether a worker was an employee or independent contractor.

Read our in-depth analysis HERE.

Wilson-Davis v. SSP America Inc., No. B306781, 2021 WL 1338078 (Cal. Ct. App. Mar. 11, 2021)

Summary:  A collective bargaining agreement will not be interpreted as requiring arbitration of statutory wage-and-hour claims unless it contains a clear and unmistakable agreement to arbitrate such claims.

Facts:  Plaintiff Tramon Wilson-Davis was employed as a dishwasher by Defendants SSP America LAX, LLC (“SSP LAX”) and SSP America, Inc. (“SSP Inc.”) (food, beverage, and concessions services providers at Los Angeles International Airport). In December 2018, SSP Inc. and labor union Unite Here Local 11 entered into a collective bargaining agreement covering “certain employees of [SSP],” including dishwashers, “at Los Angeles International Airport.” Plaintiff filed a putative class action against Defendants for violations of various provisions of California’s wage-and-hour laws. Defendants removed the action to federal court, asserting that federal jurisdiction existed under the Labor Management Relations Act (“LMRA”).  The district court disagreed and remanded the case to state court. The court explained that while the LMRA gives federal courts exclusive jurisdiction of suits “for violation of contracts between an employer and a labor organization,” none of Plaintiff’s claims alleged a violation of a labor contract. The district court further explained that the collective bargaining agreement’s language did not contain a “clear and unmistakable” waiver of bargaining unit employees’ rights to pursue their claims in a judicial forum. After remand, Defendants filed a motion to compel arbitration. The trial court denied the motion, and Defendants appealed.

Court’s Decision:  The California Court of Appeal affirmed. First, the court explained that the collective bargaining agreement did not clearly and unmistakably delegate the question of arbitrability to an arbitrator. Second, the court held that while the collective bargaining agreement between SSP Inc. and the union provided for arbitration of claims arising under the agreement, it did not contain a “clear and unmistakable” waiver of Plaintiff’s right to litigate his statutory wage-and-hour claims in a judicial forum. The grievance and arbitration provisions of the collective bargaining agreement applied only to “grievances,” which as defined in the collective bargaining agreement only included claims “which involve[] interpretation, application or enforcement of this Agreement disputed between the parties.” Plaintiff’s claims for violations of the Labor Code and other statutes did not involve “interpretation, application or enforcement” of the collective bargaining agreement, and thus were not within the plain language of the grievance and arbitration provisions.

Practical Implications:  Employers should review their collective bargaining agreements to ensure that if they purport to require arbitration of statutory wage-and-hour claims, they contain clear and unmistakable language reflecting an agreement to arbitrate those claims. 

Rubio v. CIA Wheel Group., No. B300021, 2021 WL 1421690 (Cal. Ct. App. Apr. 15, 2021)

Summary:  Punitive damages award calculations may take into account noneconomic damages unrecoverable due to Code of Civil Procedure section 377.34.

Facts:  Plaintiff Maria Teresa Lopez brought a wrongful termination action against her former employers Defendants CIA Wheel Group dba The Wheel Group and Wheel Group Holdings dba The Wheel Group, alleging that she was terminated because she had cancer, in violation of public policy. After the first trial ended in a mistrial, and following Plaintiff’s death, her children were appointed as her successors in interest. Following a second trial, the trial court found that Plaintiff was terminated due to her medical condition, and awarded her $15,057 in economic damages. The court found Plaintiff’s noneconomic damages to be in the $100,000 to $150,000 range, but determined that those damages were not recoverable by her successors after her death under California Code of Civil Procedure section 377.34. The court awarded punitive damages in the amount of $500,000 against Defendants. Defendants appealed, contending, among other issues, that the punitive damages award was constitutionally excessive because it was 33 times the amount of the economic damages award.

Court’s Decision:  The California Court of Appeal affirmed, finding that in calculating punitive damages, the trial court properly considered the total harm, including the $100,000 to $150,000 in noneconomic damages the successor plaintiffs could not recover after Plaintiff’s death due to Code of Civil Procedure section 377.34.

Practical Implications:  Employers involved in litigation or threatened litigation, and weighing potential exposure, must take into account the possibility that substantial punitive damages may be awarded even in an instance where noneconomic damages are not recoverable.

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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