Can You Be Fired For Being Gay? The Supreme Court Will Soon Decide.

Next month, the Supreme Court will hear three cases about workplace discrimination. Under Title VII of the 1964 federal Civil Rights Act, it's illegal for an employer to discriminate against an employee on the basis of sex. What "sex" encompasses is what's at issue in these cases. Up until now, federal law has treated "sex" to include gender only, meaning an employer can't discriminate against you just because you're a man or a woman. The question at issue in these cases is whether the word "sex" also encompasses sexual orientation and gender identity. If you identify as LGBTQ+, are you protected from discrimination in the workplace? That's what SCOTUS will soon decide.

In one case, a transgender woman was fired from her job after revealing that she was transgender and would be dressing in accordance with the female dress code for the office. In the other two cases, gay men were fired because of their sexual orientation. 28 states currently have no protections for LGBTQ+ employees in the workplace (although a few of those states protect public sector workers). The Obama Administration had interpreted federal non-discrimination statutes to include discrimination on the basis of sexual orientation and gender identity, but the Trump Administration reversed course, and is essentially saying an employer may fire someone for being gay or transgender, without consequences under Title VII. That shouldn't be surprising coming from an Administration that implemented a transgender military ban (which Bryan Schwartz Law has written about before); denies citizenship for the foreign-born, adopted children of gay couples; and nominates judges to the federal bench who are openly hostile to LGBTQ+ people. The Democrat-controlled House passed the Equality Act earlier this year, which would enshrine LGBTQ+ workplace protections into federal law, but the Republican-controlled Senate has not advanced the Act, making the Supreme Court's upcoming hearing especially important.

In this climate, and given the current composition of the Supreme Court, LGBTQ+ advocates and allies are understandably worried. Some are hopeful that since these cases don't involve interpreting the Constitution (as was required in the same-sex marriage case of Obergefell), but rather a statutory interpretation of Title VII, some of the conservative justices who voted no in Obergefell might vote yes in these cases. Advocates also hope that Chief Justice Roberts will remember what he famously said in 2015 when the Court heard arguments about same-sex marriage: “I’m not sure it’s necessary to get into sexual orientation to resolve this case. I mean, if Sue loves Joe and Tom loves Joe, Sue can marry him and Tom can’t. And the difference is based upon their different sex. Why isn’t that a straightforward question of sexual discrimination?” Excellent question, Chief Justice. We look forward to your answer - which could come anytime between next month and next summer.

If you've been discriminated against in the workplace because of your sexual orientation or gender identity, contact Bryan Schwartz Law today.

Fair and Square: California Supreme Court Recognizes Unruh Act Standing in Case Against Online Purveyor

California’s Unruh Civil Rights Act (“Unruh Act”) protect each person’s right to full and equal access to all California business establishments.  Cal. Civ. Code §§ 51(b)., 52. But the extent to which it applies to online forums presents an interesting question.

Earlier this month, the California Supreme Court weighed in with an important decision in White v. Square, Inc. The Court was asked by the Ninth Circuit Court of Appeals, the court hearing the case, whether a plaintiff may bring a claim under the Unruh Act when the plaintiff leaves a website after encountering discriminatory terms and conditions, without entering into any agreement with the service provider. According to the Court, the answer is yes.

The case involves bankruptcy attorney Robert White’s allegations against Square, a company that provides a service to allow individuals or businesses to receive and accept electronic payments. Mr. White wished to use this service for his bankruptcy practice. He visited the website multiple times, reviewed the documents filed in a previous lawsuit against Square and a bankruptcy law firm, and carefully reviewed the terms and conditions. However, when he visited the web page to register for services, he did not proceed because Square's terms and conditions prohibited the use of its services for certain businesses, including the practice of bankruptcy law. Based on his research, Mr. White believed he could not sign the agreement without committing fraud.

He then filed suit under the Unruh Act, but his case was dismissed. The trial court ruled that White could not proceed with his case because he lacked standing. Standing is a legal doctrine that covers who may bring a particular lawsuit. Generally, people can only bring lawsuits under the Unruh Act in which they themselves “ha[ve] been the victim of the defendant’s discriminatory act.” Angelucci v. Century Supper Club (2007) 41 Cal. 4th 160, 175. The California Supreme Court disagreed with the trial court, holding that Mr. White had sufficiently shown that he was injured by Square’s discriminatory terms and conditions.

The California Supreme Court had previously addressed standing under the Unruh Act with respect to physical stores, but the Court had not yet issued an opinion addressing online forums. In Koire v. Metro Car Wash (1985) 40 Cal. 3d 24, a male plaintiff sued several car washes that observed “Ladies’ Day,” on which female patrons were offered discount prices. The California Supreme Court held that the plaintiff established standing because his requests for the same discount price was turned down. In Angelucci v. Century Supper Club (2007) 41 Cal. 4th 160, a group of men sued a nightclub they frequented where they had been paying more than female patrons. The Court held that the men had standing to proceed under the Unruh Act because they had paid the unfair prices, even though they had not asked to pay the same rate as the female patrons. These brick-and-mortar cases demonstrated the broad reach of standing under the Unruh Act, the Court opined.

The California Supreme Court further likened Square’s website to a physical storefront with a sign that reads, “We sell on credit. (Black people must pay cash.)” According to the Court, a person who declines to enter the store has suffered the type of discrimination envisioned by the Unruh Act and has standing to sue under it. No different if the discriminatory posting were online. In another analogy, the Court compared Mr. White’s experience to that of “an individual who intends to take a drink at a shopping mall and leaves upon encountering unattended segregated drinking fountains.” The result remained the same with Square’s website, in the Court’s view of the Unruh Act.

The Court rejected Square’s arguments to the contrary. Square argued that Mr. White did not sign up for the service, so he was never actually subject to the discriminatory terms and conditions. But the Unruh Act protects against discriminatory terms that deter people from engaging a service to begin with, the Court countered. Similarly, the Court rejected the notion that Mr. White would have needed to show that Square had applied its allegedly discriminatory policy on a particular occasion to prevent Mr. White from patronizing the service in the first place. Square also raised the scepter of overlitigation should plaintiffs like White be allowed to proceed under the Unruh Act, but the Court rejected this argument as well, reasoning that such a consideration was for the legislature, not the courts.

The Court also rejected the reasoning of the Court of Appeals in Surrey v. TrueBeginnings, LLC (2008) 168 Cal. App. 4th 414. The plaintiff in Surrey had sought to patronize an online dating site but decided not to after he discovered that men were charged higher rates than women. The Court of Appeals held that the prospective patron lacked standing because he neither attempted to nor actually patronized the services. The White court expressly held the opposite.

If you have faced discrimination by a business or website, contact Bryan Schwartz Law today.

Fair is Hair: California Makes It Illegal to Discriminate on the Basis of Hair Styles

Last month, Governor Newsom signed a landmark anti-discrimination bill into law. This law takes aim at grooming policies that discriminate on the basis of race through restrictions against types of hairstyles.

Under the California Fair Employment and Housing Act (“FEHA”), employers cannot engage in certain employment actions, such as hiring, firing, promoting, or disciplining, on the basis of protected characteristics, including race. One might think that this prohibits discrimination based on hair styles that are historically associated with race. Not necessarily. FEHA does not say so explicitly, California courts have not considered the issue, and some federal courts have held the opposite. SB 188, which goes into effect at the start of 2020, seeks to clarify that race discrimination includes hair-based discrimination.

In enacting SB 188, the California Legislature was concerned by the story of New Jersey high school wrestler Andrew Johnson, who was forced to choose either to cut his dreadlocks or forfeit a match. The Legislature also took note of Rafael Scott and Sheldon Lyke, two African-American men who were turned away from a Chicago nightclub because of their braided hair styles. Even outside the employment context, the Legislature noted in the findings section of SB 188, “hair remains a rampant source of racial discrimination with serious economic and health consequences, especially for Black individuals.”

However, leading federal court decisions have held that hair-based discrimination does not implicate the federal Title VII to the Civil Rights Act of 1964. Federal courts have generally held that federal civil rights applies only to “immutable” characteristics—characteristics a person is born with and cannot control. A New York federal court relied on this notion to rule that an American Airlines grooming policy prohibiting braided hairstyles did not discriminate on the basis of race. Rogers v. Am. Airlines, Inc., 527 F. Supp. 229, 232 (S.D. N.Y. 1981). In the court’s view, the policy did not discriminate on the basis of race because American Airlines employees could choose whether or not to braid their hair.

The 11th Circuit Court of Appeals reached a similar conclusion in EEOC v. Catastrophe Management Solutions, 852 F.3d 1018 (11th Cir. 2011) (“Catastrophe”). In that case, an employer rescinded an employment offer when it learned the prospective employee styled her hair in dreadlocks. According to the employer, the dreadlocks violated the company’s grooming policy, which required employees “to be dressed and groomed in a manner that projects a professional and businesslike image while adhering to company and industry standards.” Again relying on the idea that hair styles are not immutable traits, the 11th Circuit determined that the employer’s grooming policy was not discriminatory.

Some federal decisions have come out the other way. In Jenkins v. Blue Cross Mutual Hospital Insurance, Inc., 538 F.2d 164 (7th Cir. 1976) (“Jenkins”), an employee alleged that she was subject to racial discrimination because she wore an afro. The 7th Circuit Court of Appeals ruled that this allegation sufficiently expressed an actionable discrimination claim. But the Eleventh Circuit distinguished this case, reading it to hold that African-American hair texture is an immutable characteristic while African-American hair styles are not; the employee in Jenkins wore a “natural afro,” while the employee in Catastrophe chose to wear braids.  

The California Legislature passed SB 188 out of concern that state courts looking to the federal courts for guidance would agree with the Catastrophe court. To ensure there would be no confusion, the Legislature included in the section of findings and declarations, “The courts do not understand that afros are not the only natural presentation of Black hair. Black hair can also be naturally presented in braids, twists, and locks.”

In practical terms, SB 188 adds two subsections to FEHA clarifying that “Race” includes traits historically associated with race, including hair texture and protective hairstyles. The law also adds two new subjections to Section 212.1 of the Education Code to the same effect.

Two weeks after California passed SB 188, New York followed suit with a similar law. Perhaps other states will follow.

If you are facing racial discrimination in the workplace based on your hair style, contact Bryan Schwartz Law today.

Lamps Plus Dims the Future of Class Arbitration.

The Supreme Court dealt another blow to employees seeking to assert their workplace rights with its decision in Lamps Plus, Inc. v. Varela, 139 S. Ct. 1407 (2019), all but killing the possibility of concerted arbitration in most cases. Lamps Plus is centered around mandatory, pre-dispute arbitration agreements. Employees often sign mandatory arbitration agreements as a condition of their employment. When faced with unlawful conduct in the workplace, these agreements prevent employees from suing their employers in court. Instead, employees must adjudicate disputes in arbitration, which is often a process skewed toward employers. Bryan Schwartz Law has blogged about problems with arbitration several times, including here, here and here. Though the Supreme Court pretends that arbitration is a more efficient and cost-effective means of resolving a conflict, arbitration is really only more efficient and cost-effective to the extent that it kills statutorily-protected claims all together – nothing more than a windfall for law-breakers, harming workers and consumers and preventing law-abiding businesses from competing on a level playing field.

In Lamps Plus, the Court examined when arbitration claims could be brought on behalf of multiple employees in a single action. Often, employees with valid grievances cannot and would not sue their employers individually because the cost of hiring an attorney outweighs the value of their claims and litigation and arbitration are time-consuming, draining, and always raise fears of retaliation. Fortunately, employees can band together against an employer as a class or collective, allowing them to bring claims together that would be too costly and difficult to pursue as individuals.

Over the past decade, the Supreme Court has chipped away at the availability of both class actions in court and class arbitration through its interpretation of the Federal Arbitration Act (“FAA”). In 2010, the Court held that individuals cannot pursue class arbitration if it is not permitted by their arbitration agreement. Stolt-Nielsen S. A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (2010). In April of this year, the Supreme Court extended Stolt-Nielsen’s holding to include contracts that are ambiguous on the issue of class arbitration in its Lamps Plus decision. Like silent arbitration agreements, the Court held, ambiguous arbitration agreements do not provide employees the option of pursuing class arbitration.

In Lamps Plus, the company was alleged to have disclosed sensitive personal information belonging to 1,300 employees, including that of the plaintiff, Frank Varela.  As a result, Mr. Varela was the victim of identity theft. Mr. Varela sued Lamps Plus on behalf of himself and the other employees affected by the security breach.

Lamps Plus moved to kick the case out of court and into arbitration based on Mr. Varela’s arbitration agreement. The District Court granted Lamps Plus’s motion. However, it rejected Lamp Plus’s request for individual arbitration and instead authorized Mr. Varela to proceed with class arbitration.

The Ninth Circuit affirmed. The court determined that the language in Mr. Varela’s arbitration agreement was ambiguous on the issue of class arbitration. In resolving the ambiguity, the court applied the California legal principle requiring ambiguous contract terms be construed against the drafter, a doctrine known as contra proferentem. All fifty states apply contra proferentem because it encourages clear contract drafting. Lamps Plus 139 S. Ct. 1407 (Kagan, J., dissenting). Here, Lamps Plus submitted that the contract only conveyed consent to individual arbitration, while Mr. Varela argued that the contract implied consent to class arbitration. The court construed the meaning of the contract against the drafter, Lamps Plus. Thus, the court disagreed with Lamps Plus’s interpretation and ruled Mr. Varela could bring a class arbitration claim.

The Supreme Court rejected the Ninth Circuit’s application of contra proferentem and held that contracts ambiguous on the issue of class arbitration do not authorize class arbitration. In its reasoning, the Court relied heavily on a false distinction between individual and class arbitration. The majority opined that class arbitration does not achieve the FAA’s goals of making litigation faster, simpler and less expensive. Lamps Plus, 139 S. Ct. at 1416. According to the current Supreme Court majority, class arbitration “makes the process slower, more costly, and more likely to generate procedural morass than final judgement.” Id. (citing AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 348 (2011)).  Therefore, the Court concluded that the term “arbitration” does not intrinsically include class arbitration. The Court’s reasoning is based on the mistaken belief that individual arbitrations are indeed faster, simpler, and less expensive. Id. This leap of reasoning is unsupported, in fact, and contrary to the experience of this firm. Hundreds of individual arbitrations are not actually faster, simpler, or less expensive than a single class case.

The Court then decided how to interpret the ambiguity in Mr. Varela’s contract. The Court conceded that, normally, courts apply state law when interpreting contracts. Id. at 1415. Here, however, the Court held that the federal FAA conflicts with the state doctrine of contra proferentem, thereby displacing it. Id. at 1417-18.

According to the Court, the two laws conflict because, under the FAA, “[a]rbitration is strictly a matter of consent.” Id. at 1415 (quoting Granite Rock Co. v. Teamsters, 561 U.S. 287, 299 (2010)).  Contra proferentem, on the other hand, provides a method of contract interpretation that disregards consent between the parties in favor of a practical solution. Id. at 1418. Considering this manufactured conflict between supposed “consent” between parties under the FAA (which, as Justice Ginsburg explained in her dissent, is a fallacy) and standard principles of contract law, the Court decided that the FAA applies instead of contra proferentem. Id. Thus, the Court held employees cannot pursue class arbitration if their contracts are ambiguous on the issue. Id. Rather, arbitration agreements only authorize class arbitration when there is clear language that shows both parties intended to provide for class arbitration. Id.

This opinion inspired a flurry of dissents. In the main dissent, Justice Kagan argued that Mr. Varela’s contract was not ambiguous in the first place – it clearly allowed for class arbitration. Id. at 1428-29. Even if the contract were ambiguous, she argued, contra proferentem should apply because it does not conflict with the FAA. Id. at 1430-35. Justice Sotomayor’s dissent rejected the notion that class arbitration is fundamentally different from individual arbitration. Id. at 1427. She argued that consent to arbitration necessarily includes the ability for complainants to proceed as a class. Id. Justice Breyer argued that the Court of Appeals lacked jurisdiction altogether. Id. at 1422-23.

Justice Ginsberg crafted the most scathing dissent. She called out the disingenuity of the majority’s central premise that arbitration “is strictly a matter of consent.” Id. at 1421. In reality, people rarely have genuine choice when signing arbitration agreements. Rather, they are often a condition of employment. Id. When Congress passed the FAA in 1925, Ginsberg noted, Congress intended arbitration to simplify dispute resolution between businesses with equal bargaining power. Id. at 1420. This is a far cry from the role of arbitration today. Now, employers can force arbitration agreements on employees to insulate themselves from the consequences of unlawful employment practices. As Ginsberg argued in her dissent, mandatory individual arbitration thwarts “effective access to justice.” Id. at 1422.  

It is the unfortunate reality that a growing number of employees must agree to mandatory, pre-dispute, individual arbitration as a condition of employment. Nevertheless, employees may overcome arbitration agreements, or make employer’s pay in arbitration – employers sometimes fail to obtain arbitration consent from all employees, or waive a right to compel arbitration by proceeding in court extensively before moving to compel arbitration. Employers do not expect massive numbers of employees to file in arbitration – they hope employees will simply abandon their claims. However, mass filing of arbitrations by aggrieved employees sends a strong message: arbitration is not meant to be a get-out-of-jail free card. In California, employees have the option of bringing a representative action under the Private Attorneys General Act of 2004 (“PAGA”), standing in the shoes of the state, which cannot be compelled involuntarily to arbitration. With our vigilance, and notwithstanding the best efforts of the present U.S. Supreme Court to abandon workers’ rights to the whims of big business, workers’ claims may yet be vindicated. If you are an employee and have questions about a supposed arbitration agreement between you and your employer, contact Bryan Schwartz Law 

No Question of Timing – Dynamex Applies Retroactively, Ninth Circuit Court of Appeals Says

It makes a big difference whether a worker is an employee or an independent contractor. Employees benefit from the protections of labor, employment, and other valuable statutory protections that do not cover independent contractors.

The breadth of “employee” status has been clarified under developing California law. Last year, the California Supreme Court decided the landmark case Dynamex Operations W. v. Superior Court (2018) 4 Cal.5th 903, about which Bryan Schwartz Law has written previously. This case established the “ABC” test for determining whether a worker is an employee or an independent contractor, with a presumption that a worker is an employee, i.e., with the burden on putative employers to demonstrate that workers are independent contractors. Id. at 957. To meet this burden, the putative employer must show (a) that the worker is free from the control and direction of the hiring entity, (b) the worker performs work outside the usual scope of the entity’s business, and (c) the worker is engaged in an independently established trade, occupation, or business. Id. at 964. Failing to demonstrate any one of these elements is sufficient to show an employee-employer relationship. Id. at 964.

But does the Dynamex test apply retroactively to cases arising before it was decided? It does, according to the decision in Vazquez v. Jan-Pro Franchising International, Inc., which the Ninth Circuit Court of Appeals issued on May 2, 2019. Workers for international janitorial giant Jan-Pro filed this case in 2008, alleging Jan-Pro implements a business model to misclassify workers as independent contractors and escape the company’s minimum wage and overtime responsibilities. Jan-Pro contracts with franchises of “master owners,” which in turn contracts with “unit franchisees.” Master owners themselves do not clean but instead engage in various managerial or administrative duties; unit franchisees clean. The plaintiffs, janitorial workers at unit franchisees, alleged they were misclassified as independent contractors.

The case had a tortured procedural history with over a decade of litigation, dispositive decisions, and appeals in federal and state courts in California, Georgia, and Massachusetts. In the Ninth Circuit, Jan-Pro argued that a judicial ruling in Georgia had already decided the issue, thereby conclusively resolving the Ninth Circuit case as well under the doctrine of res judicata. Regardless, Jan-Pro argued, the Dynamex decision should not apply retroactively to cases arising before it was decided in 2018.

The Ninth Circuit rejected both arguments. The Court disposed of the res judicata arguments on grounds specific to the procedural history of the litigation. In brief, the Court held that the Massachusetts plaintiff was not in privity with the California plaintiffs, nor did he legally represent their interests—the California plaintiffs could not lose their day in court simply because of a similar case involving someone else on the east coast.

Next the Court addressed the important issue at stake for California workers: whether the Dynamex decision applied retroactively. The answer was a resounding “yes.” California’s judicial decisions traditionally apply retroactively, even when overruling past precedent. The Court adhered to this traditional rule, drawing further support from other California courts’ retroactive application of the Dynamex decision and the California Supreme Court’s summary denial of a petition to modify Dynamex to clarify that it was prospective only. Notably, despite its considerable impact on the lives of workers and employment law practice, the Dynamex decision did not create new law but instead hewed close to the fundamental purpose of existing California law. Because the lower court had dismissed the workers’ claims on summary judgment before Dynamex was decided, the Ninth Circuit remanded the case for a decision in light of Dynamex.

If you believe you are misclassified as an independent contractor and should enjoy the same rights as an employee, contact Bryan Schwartz Law.

You Can’t Split This Baby—Employees Cannot be Forced to Arbitrate Parts of PAGA Claims, Appeals Court Rules

Arbitration agreements are more and more popular among employers (and the United States Supreme Court) as a way to get out of concerted actions brought by wronged employees. In California, they cannot be enforced to stop state prosecution of wage claims through qui tam representative plaintiffs under the Private Attorney General Act (“PAGA”), Cal. Lab. Code § 2698 et seq. See Iskanian v. CLS Trans. Los Angeles, LLC (2004) 59 Cal.4th 348, 382-92.

Nevertheless, employers have sought ways to force PAGA actions out of court and into arbitration, arguing that PAGA claims for wages should go to arbitration, while only the statutory PAGA penalties could remain before a court. A handful of cases in the Courts of Appeal have dealt with this issue, one of which, Lawson v. ZB, N.A., (2017) 18 Cal.App.5th 705, is pending before the California Supreme Court. Bryan Schwartz Law has submitted an amicus brief to the California Supreme Court in this case.

On March 28, 2019, a California appellate court issued another decision rejecting this argument, adding to the list of decisions protecting PAGA enforcement in this rapidly developing area of the law.  See Zakaryan v. The Men’s Wearhouse, Inc. (Mar. 28, 2019) __Cal.App.5th__. To understand why Zakaryan is noteworthy, we must understand the legislative intent behind PAGA. Before PAGA was enacted in 2003, California struggled to enforce the worker protections in the Labor Code. The financial crisis was in full effect, and the state government could not afford to oversee California’s massive workforce. So it decided to let employees enforce the Labor Code themselves, on behalf of the state, provided that first they comply with some straightforward procedures and the state decides not to take the case itself. Cal. Lab. Code § 2699.3. A PAGA action is “brought by an aggrieved employee on behalf of himself or herself and other current or former employees.” Cal. Lab. Code § 2699. PAGA also provides for penalties to be assessed against liable employers. Cal. Lab. Code § 2699(f). The state gets 75% of any PAGA award, while the employee gets 25% plus reasonable attorney fees and costs. Cal. Lab. Code §§ 2699(g)(1), (i).

Employers have tried to contract around PAGA using arbitration agreements. It hasn’t worked. Although arbitration agreements can waive employees’ class action rights (Epic Systems Corp. v. Lewis, 138 S.Ct. 1612 (2018)), employers cannot force the state to arbitrate its claims, which are vindicated through PAGA. Iskanian, 59 Cal.4th at 378-92. The suing representative plaintiff just stands in the state’s shoes. Id at 386-87. Because an employee cannot contractually waive a right belonging to the state, an arbitration agreement cannot waive an employee’s right to proceed under PAGA.

Despite this, The Men’s Wearhouse tried to argue that a PAGA claim for wages should go to arbitration. The California Court of Appeals didn’t buy it in Zakaryan (Mar. 28, 2019) __Cal.App.5th__.

Plaintiff Zakaryan worked for The Men’s Wearhouse as a store manager from 2002 until 2016, before suing under PAGA, alleging that the company wrongfully misclassified its store managers as exempt from California’s overtime and meal and rest break laws. The Men’s Wearhouse moved to send the portion of Mr. Zakaryan’s claims involving underpaid wages to arbitration. It lost, and appealed.

After a careful analysis of PAGA and arbitration law, the appellate court rejected The Men’s Wearhouse’s argument for two reasons. First, splitting the PAGA claim would violate California’s “primary rights theory,” under which “one injury gives rise to only one claim for relief.” A PAGA claim, the court ruled, involves “one and only one ‘particular injury’—namely the injury to the public that the ‘state labor law enforcement agencies’ were created to safeguard.” Therefore, a PAGA claim cannot be split between a court and arbitration.

Second, sending part of the case to arbitration would run contrary to labor and arbitration law. PAGA awards the state 75% and the aggrieved employee the remainder of “a single civil penalty,” the court observed, which could not be properly heeded if portions of the civil penalties were syphoned off to arbitration. Moreover, “a PAGA claim is, fundamentally, a representative claim,” in which the suing employee represents other aggrieved employees in a suit brought on behalf of the state. As such, there was no individual portion of the claim to break off in an arbitration proceeding. In addition, Mr. Zakaryan had elected to pursue claims under PAGA’s representative action mechanism rather than his individual claims. Forcing him to arbitrate as if he had brought individual claims would effectively hijack his case. Finally, splitting the PAGA action would send the most important aspect of the claim to be determined—the employer’s liability—to the arbitrator, thereby circumventing the state’s right to have its enforcement action heard in court.

The California Supreme Court will soon decide this issue in Lawson.

If you have California wage claims and your employer is trying to force you into arbitration, contact Bryan Schwartz Law.

On-Call Scheduling Practice Ruled a Violation of Employees’ Rights

On February 4, 2019, the Court of Appeals for California’s Second District ruled in favor of retail employees in an important decision about on-call work time in Ward v. Tilly’s, Inc., Case No. B280151. This decision is a major victory for on-call employees who have to set aside time for shifts they might not get to work. You can find the opinion here.

The employer, Tilly’s, a clothing and accessories retailer, required their employees to call two hours ahead of some shifts to find out if they were actually needed. These on-call shifts had concrete start and end times, and Tilly’s instructed its employees to plan as if they were definitely going to work the shifts. Some on-call shifts were scheduled immediately after an employee’s regular shift, in which case the employee would learn whether she was needed during her regular shift. Although Tilly’s could reprimand or even fire employees for failing to call in before their on-call shifts, they were not paid for any on-call shifts they did not work, nor were they paid for the two hours between calling in and the start of the on-call shift.

A scheduling scheme like Tilly’s puts workers, especially low-wage workers, in a tough spot. An employee scheduled for a potential shift has to plan her day as if she will work the shift, despite not having the guarantee of compensation. This stressful arrangement means setting up child care or care for aging relatives, pursuing additional employment, rearranging health care appointments and education schedules, or foregoing sleep, personal hygiene, or leisure, even though an employee may not know whether she will be called in to work until just two hours before her potential shift. In essence, Tilly’s required their employees to block out their time for work without the assurance of being paid.

The plaintiff filed a putative class action suit against Tilly’s, challenging this scheduling practice. Tilly’s argued that the lawsuit did not state a cause of action—that everything the employee said Tilly’s did, in Tilly’s view, was legal. The Superior Court in Los Angeles agreed and threw out the case.

The Court of Appeals reversed, ruling that Tilly’s on-call scheduling scheme violated the law, specifically Wage Order 7 (Spanish) (Chinese). The Industrial Welfare Commission has issued 17 Wage Orders, including Wage Order 7, to regulate wages and work conditions for California workers. Wage Order 7 requires employers to pay employees for “[e]ach workday an employee is required to report for work, but is not put to work . . . .” Wage Order 7-2001 (8 Cal. Code Regs § 11070). Tilly’s argued that the phrase “report to work” requires an employee’s physical presence at the workplace when a shift starts.

Not so, said the Court of Appeals. The Court of Appeals drew attention to the unbalanced burdens that Tilly’s on-call scheduling scheme placed on its workers. The scheme benefited Tilly’s immensely: “This permits employers to keep their labors costs low when business is slow, while having workers at the ready when business picks up. It thus creates no incentive for employers to competently anticipate their labor needs and to schedule accordingly.” Ward, Case No. B280151, at *22. In contrast, the scheme “impose[d] tremendous costs on employees. . . . [O]n-call shifts significantly limit employees’ ability to earn income, pursue an education, care for dependent family members, and enjoy recreation time.” Id. at *22. These burdens affect employees not just during their on-call potential shifts, but for the two hours between the phone call and the shift itself. Id. at 22-23. The Court of Appeals held that Wage Order 7 was designed to prevent unfair scheduling practices such as this, and determined that the phrase “report for work” included the act of calling in. Id. at 23, 25. The wage orders covering workers in other industries use the phrase “report to work” in the same way as Wage Order 7.

In conclusion, the Court of Appeals pronounced that “if the employer directs employees to present themselves for work by logging on to a computer remotely, or by appearing at a client’s job site, or by setting out on a trucking route, then the employee ‘reports for work’ by doing those things. And if . . . the employer directs employees to present themselves for work by telephoning the store two hours prior to the start of a shift, then the reporting time requirement is triggered by the telephonic contact.” Id. at 25-26. This conclusion is similar to a California Supreme Court decision that an employer cannot require its employees to keep their pagers and phones on to remain on-call during their rest breaks, which Bryan Schwartz has blogged about before. See Augustus v. ABM Sec. Servs., Inc., 2 Cal.5th 257, 269 (2017).

If your employer has asked you to call in before scheduled shifts to determine if you are needed to work, please contact Bryan Schwartz Law today. Click here for more information about Bryan Schwartz Law.