Daily Journal Cover Story Regarding Class Arbitration Features Bryan Schwartz Law Principal

The following article picked up on the Bryan Schwartz Law blog article of December 26, 2012.

Employment disputes go to class arbitration, for now

The Daily Journal, January 11, 2013
By Laura Hautala, Daily Journal Staff Writer

Link to this article, featuring Bryan Schwartz, Principal of Bryan Schwartz Law, here:

When a company faces class action claims from employees, it normally won't hesitate in trying to enforce an arbitration agreement. But some employers who win the fight to arbitrate might be jumping out of the proverbial frying pan into the deep-fat fryer: class arbitration. It happened to VMware Inc., a technology company in Palo Alto that successfully compelled arbitration in an employment dispute with a worker who filed class claims. The company's agreement did not specifically ban class arbitration, so the arbitrator decided to consider certifying a class and hearing the claims together, according to court filings. Bryan J. Schwartz, a sole practitioner in Oakland who represents the plaintiff, said class arbitration is "a fairly brutal proposition for employers," pointing to the high cost and slow speed of the mass proceedings.

"They've got to be careful what they ask for," Schwartz said. VMware asked the judge who initially awarded arbitration to strike the arbitrator's decision, but the judge said in December it was not within his powers to do so. Laughlin v. VMware Inc., CV11-530 (N.D. Cal., filed Feb. 3, 2011).

Though it's not clear how often arbitrators decide to hear these cases as class proceedings, parties currently have to guess what an arbitrator is likely to decide.

The uncertainty comes from a 2010 U.S. Supreme Court decision, which said arbitrators cannot construe contracts that are silent on the matter of class arbitration to tacitly allow the proceedings. While defense lawyers hoped that would prevent arbitrators from hearing class claims in many cases, the decision left some questions open, according to Paul Hastings LLP partner Paul W. Cane Jr. Stolt-Nielsen S.A. et al. v. Animalfeeds International Corp., 130 US 1758 (2010).

"Some courts and arbitrators have taken silent agreements and reasoned through a variety of gymnastic exercises that the silent agreement really wasn't silent after all," Cane said. For example, an arbitrator might interpret an agreement that states "any and all types of disputes" must be settled in arbitration to include class claims, he said.

The high court accepted another case for review in the current session that attorneys on both sides expect to settle whether arbitrators can make this decision for parties "based solely on their use of broad contractual language." Oxford Health Plans LLC v. John Ivan Sutter, 11-1773.

For now, parties to some employment disputes might continue finding themselves in class arbitration, where the pressure to settle intensifies. And the downsides for employers can go beyond the cost - fees of roughly $700 per hour - to procedural drawbacks. For one, arbitration doesn't create a record that parties can later appeal. Often, companies are willing to take this risk for the speedy resolution promised by individual arbitration, Cane said, but the stakes are too high in a class arbitration.

Many plaintiffs' attorneys say the lack of a record hurts their clients more than it does the defense in an individual proceeding. But for employers in a class arbitration, "the shoe is on the other foot," said Victoria W. Ni, a senior attorney at Public Justice PC in Oakland.

What's more, the resolution might no longer be as quick as it is in individual proceedings.

"Class actions in courts move slowly," Cane said. "Class actions in arbitration move like glaciers."

Winston & Strawn LLP partner Joan B. Tucker Fife said class arbitration can still provide advantages for employers.

"You pretty much know who your judge is going to be, and you can anticipate what that looks like," Fife said. "I could certainly envision a circumstance where the employer is more comfortable with a selected arbitrator than they were with the judge that was selected for the case." She also said that a company might prefer class arbitration because it reduces publicity around the case, preventing other employees from filing "copycat" cases.

But, as in the VMware case, the prospect of class arbitration can give an employer "buyer's remorse" after compelling arbitration. Fife said that's an outcome attorneys should be prepared for. A case alleging violations of the California labor code against American Life and Accident Insurance Co. went to arbitration, but the arbitrator decided to continue the case for the group of all affected employees. The defendants asked the judge to reverse the decision, but just as in the VMware case, the judge left it up to the arbitrator. Banford v. American Life and Accident Insurance Co., DS1017566 (San Bernardino Co. Super. Ct., filed Dec. 30, 2010).

"The lawyers should be advising the clients of the risk of demanding arbitration," Fife said.

Employers: Be Careful What You Wish For - Your Motion to Compel Arbitration Can Lead to Expensive, Class-Wide Arbitration

In the wake of ATT Mobility v. Concepcion and Stolt-Nielsen v. AnimalFeeds,* many employers have sought to enact new arbitration agreements or to enforce arbitration provisions in older agreements to eliminate their employees' ability to come together when seeking to vindicate their rights to enforce statutory protections for workers. Employers should be careful what they wish for, in seeking to compel arbitration. They may indeed wind up in arbitration - but unable to strike class allegations, and required to pay the full and exhorbitant costs of class-wide arbitration.

In a case on which Bryan Schwartz Law serves as local counsel for Richard J. Burch of Bruckner Burch, in Houston, Texas, the employer is now feeling the danger of a Stolt-Nielsen-based strategy seeking to compel individual arbitration in a putative, wage-hour class action. In the Laughlin v. VMWare case, in which VMWare employees assert they were misclassified as exempt employees and denied overtime and other compensation to which they were entitled, the company moved to compel arbitration based on an agreement which did not specifically provide for class-wide arbitration.

Judge Edward Davila of the Northern District of California struck some of the more offensive provisions of the arbitration agreement under Armendariz v. Foundation Health Psychcare Services (2000) 24 Cal.4th 83, such as a provision which would have required Plaintiff to share the costs of arbitration. However, Judge Davila found these unlawful provisions severable (i.e., refused to kill the whole arbitration agreement). Perhaps most importantly, though, Judge Davila referred to the arbitrator the decision on the Stolt-Nielsen argument - namely, as argued by VMWare, the notion that class-wide arbitration cannot proceed where the parties' arbitration agreement did not expressly consent to class arbitration. His initial decision from early 2012 is available here:

In arbitration, AAA arbitrator LaMothe then rejected the employer’s Stolt-Nielsen motion to strike class allegations, notwithstanding the fact that the agreement did not expressly give permission to bring class allegations, finding the parties' agreement intended to encompass all claims by Plaintiff Laughlin, including her class claims. The AAA order is available here:

In the last 18 months, numerous other arbitrators from JAMS, AAA, and other nationwide arbitration services have likewise denied motions to strike class allegations, employing similar reasoning.

On review, Judge Davila confirmed the arbitrator's partial final clause construction award allowing class allegations to proceed, meaning - in light of all the foregoing - that VMWare will now be forced to arbitrate a putative class action, and will be forced to bear all of the costs of doing so, shown here.

Be careful what you wish for, employers. You may find that sometimes, allowing employees their day in court is better than the alternative.

If you are an employee and have questions about an arbitration agreement you signed, which might affect your right to proceed with class action claims, or other rights, contact Bryan Schwartz Law today.

DISCLAIMER: Nothing in this article is intended to form an attorney-client relationship with the reader. You must have a signed representation agreement with the firm to be a client.

*See our numerous prior blog posts relating to the subject of arbitration class waivers in light of Concepcion and Stolt-Nielsen, including:

http://bryanschwartzlaw.blogspot.com/2012/09/california-supreme-court-grants-review.html

http://bryanschwartzlaw.blogspot.com/2012/09/wage-and-hour-class-actions-sky-is.html

http://bryanschwartzlaw.blogspot.com/2012/01/landmark-decision-by-national-labor.html

http://bryanschwartzlaw.blogspot.com/2011/05/civil-rights-lawyer-and-employee.html

A Post-Brinker Victory for Employees: Bradley v. Networkers International, LLC

In the aftermath of the California Supreme Court’s landmark decision in Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004 (Brinker), employers and non-exempt employees are still hashing out the implications of the clarified meal and rest period requirements.  In April, Bryan Schwartz Law discussed the implications of that case on this blog, which can be found here: California Supreme Court's Long-Awaited Brinker Decision.

Last week, in Bradley v. Networkers International, LLC (December 12, 2012)  ---Cal. Rptr.3d ---, 2012 WL 6182473, the California Court of Appeal in San Diego addressed a common problem in meal and rest period cases: where an employer has no compliant meal and rest period policies that are distributed to employees. This case makes clear that a lack of a meal or rest period policy can provide sufficient commonality for class certification, which is a significant victory for plaintiffs.

Background
While the Brinker case was pending, a number of cases appealed to the Supreme Court were granted review and held, pending the decision in Brinker.  Among the cases relegated to judicial limbo was Bradley v. Networkers International, Inc. (Feb. 5, 2009, D052365). In Bradley, three plaintiffs filed a class action complaint against Networkers International, LLC, alleging violations of California’s wage and hour laws including nonpayment of overtime and failure to provide rest breaks and meal periods. The plaintiffs moved to certify the class, which requires that they “demonstrate the existence of an ascertainable and sufficiently numerous class, a well-defined community of interest, and substantial benefits from certification that render proceeding as a class superior to the alternatives.” Brinker, 53 Cal.4th at 1021. The court determined that the plaintiffs did not demonstrate that common factual and legal questions would predominate over the individual issues and denied class certification. The plaintiffs appealed, but the decision was upheld by the California Court of Appeal.

Plaintiffs appealed to the California Supreme Court, which granted petition for review but held the case for over three years until Brinker was resolved. After issuing their decision in Brinker, the California Supreme Court remanded Bradley to the California Court of Appeal, Fourth Appellate District, with directions to vacate its decision on class certification and reconsider the case in light of the Brinker decision.

Before getting to the recent decision from the Fourth Appellate District, a little background is useful. A common fight between employers and employees arises when an employer classifies its employees as “independent contractors,” as opposed to employees. True independent contractors have control over the terms and conditions of their employment and are not subject to California wage and hour protections including overtime and meal and rest periods. Employees, on the other hand, remain under their employer’s control during their working hours and are protected by California’s wage and hour laws. The employee versus independent contractor issue has been a battleground for years in the employment law arena and California courts have developed numerous criteria to assess whether an individual is truly an independent contractor or an employee.

In the recent Bradley case, the three plaintiffs alleged that they were misclassified as independent contractors, and should instead have been treated as employees. All three of the plaintiffs worked for Networkers. Each of the plaintiffs was required to sign an “independent contractor agreement,” which stated that each was an independent contractor rather than an employee. As such, plaintiffs did not receive overtime pay or meal or rest periods. However, contrary to the terms of the agreement, the plaintiffs alleged that they were treated as employees and were subject to the same employment policies.

Networkers argued that plaintiffs’ motion to certify the class should be denied because the case did not involve common questions of fact or law, and therefore, resolution of the case would require mini-trials for each plaintiff. Although the court agreed with Networkers on the first go-around, after the Brinker decision, the court agreed with plaintiffs on all but one cause of action.

The Court of Appeal’s Decision on Remand

Because Networkers applied consistent companywide policies applicable to all employees regarding scheduling, payments, and work requirements, those policies could be analyzed on a class-wide basis. The court would not need to assess them with respect to each potential class member. In analyzing whether class certification was appropriate the court noted that, “[t]he critical fact is that the evidence likely to be relied upon by the parties would be largely uniform throughout the class.” The court held that the factual and legal issues related to the independent contractor issue would be the same among the plaintiff class members, and therefore appropriate for class treatment.

Moreover, in Bradley, as in many workplaces, the employer did not have a policy actually distributed to employees that provides for meal and rest periods. Networkers argued that Brinker was not controlling, in its guidance about meal and rest requirements, because in Brinker the plaintiffs challenged an express meal and rest break policy whereas in Bradley, the plaintiffs were arguing that the employer’s lack of policy violated the law. The Court rejected this argument, holding: “This is not a material distinction on the record before us. Under Brinker, and under the facts here, the employer engaged in uniform companywide conduct that allegedly violated state law.” Bradley, 2012 WL 6182473 *13. The Court noted that plaintiffs had presented evidence on Networkers’ uniform practice and that Networkers acknowledged that it did not have a policy and did not know if employees took meal or rest breaks. In assessing the lack of evidence presented by Networkers and relying on Brinker, the Bradley Court held: “Here, plaintiffs’ theory of recovery is based on Networkers’ (uniform)  lack of a rest and meal break policy and its (uniform) failure to authorize employees to take statutorily required rest and meal breaks. The lack of a meal/rest break policy and the uniform failure to authorize such breaks are matters of common proof.” Bradley, 2012 WL 6182473 *13.

The Bradley decision disposes of a significant hurdle in wage and hour cases by holding that this type of scheme – where no policy is distributed to provide for meal and rest periods- can meet the commonality requirement for class certification. For example, Bryan Schwartz Law is currently representing a group of restaurant workers who were not aware of a meal/rest period policy, and who were not provided with meal or rest periods. In the Bryan Schwartz Law case, there was no policy that provided the workers with coverage to enable them to take their breaks. Under Bradley, certification is appropriate to test, class-wide, whether the employer’s lack of a well-defined policy or practice of providing meal/rest periods violated the Labor Code.

Although several meal and rest period cases have been decided adversely to workers post-Brinker, the Bradley court determined that each of those cases was distinguishable.  In distinguishing Lamps Plus Overtime Cases (2012) 209 Cal.App.4th 35, the Bradley Court of Appeal noted that it was undisputed that the Lamps Plus employer’s written meal and rest period policy was consistent with state law requirements and that the violations differed at each store and with respect to each employee. Similarly, the Bradley court held that Hernandez v. Chipotle Mexican Grill, Inc. (2012) 208 Cal.App.4th 1487 was distinguishable because the only evidence of a company-wide policy or practice was Chipotle’s evidence that it provided meal and rest breaks as required by law. Likewise, Bradley distinguished Tien v. Tenet Healthcare Corp. (2012) 209 Cal.App.4th 1077, noting that in that case there was “overwhelming” evidence that meal periods were made available and the employer’s liability with respect to each employee depended on issues specific to each employee. Brookler v. Radioshack Corp. is an undecided case that was remanded after Brinker involving wage and hour class certification, which may provide additional clarification on these issues.

The court also rejected Networkers’ argument that because each plaintiff would be owed a different amount of damages, the case should not be certified. Relying, in part, on the concurring opinion in Brinker, the court held that even where plaintiffs are required to individually prove damages, individualized damages inquiries do not bar class certification. The court also reversed its prior decision and determined that class certification on the issue of overtime was appropriate because, assuming the plaintiffs were employees, proof of damages could be determined from the common proof of the pay records.

Although the court decided to remand the off-the-clock work issue, it did so because the factual record did not show that there was a uniform policy requiring each employee to work off the clock.

If you believe you have been misclassified as an independent contractor, have meal and rest period claims, or have questions about other wage and hour violations, contact Bryan Schwartz Law.

Disclaimer: Nothing in the foregoing commentary is intended to provide legal advice in a specific case or to form an attorney-client relationship with any reader. You must have a representation agreement with Bryan Schwartz Law to be a client of this firm or author.

What it Means to Stand Up for Our Clients

One of the things that makes me most proud of the work we do, as plaintiffs’ employment lawyers, is that we routinely stand up for the little guy or gal against the bullies – beating the side that is more staffed, better-funded, and has more documents and witnesses at its ready disposal. What we have on our side, usually, is – we strongly believe – the truth of our claims, the righteousness of our cause, and the important public policies we are seeking to vindicate. We have smart lawyers and sympathetic clients. And, there is one other advantage we have: we will stand by our clients and fight for justice, and to protect their rights, even though sometimes there is no “business” reason for doing so – when it only minimally stands to profit our firm, but is just the right thing to do, to let our clients know we are really on their side, and let the bad guys know that there is no easy escape.

Take, for example, our class action practice. Time and again, we have seen employers challenged with class actions lash out against the courageous workers who brought the claims on behalf of their colleagues, terminating their employment, denying them job opportunities, trying to soil their reputations, conducting intrusive discovery into their lives to distract from the real issues, and even sometimes filing counterclaims against them. Repeatedly, we have beaten back such tactics.

Where our named plaintiffs are terminated from employment, stripped of duties or denied career opportunities they deserved, or have received negative references, we have consistently initiated or amended to add (or threatened to amend to add) an individual retaliation cause of action, and my named plaintiffs have consistently received additional compensation when a matter resolves, for having to endure this reprisal. To be sure, our clients tend to feel better off (particularly after achieving additional compensation) when they have moved on from the employer that was depriving them of earned wages or opportunities to advance, or subjecting them to other unlawful employment practices.

We have sought and obtained a court order prohibiting any informal contact with class members (to prevent bad-mouthing and intimidation), requiring corrective notice to be sent to the entire class. We have repeatedly gotten retaliatory counterclaims against representative plaintiffs dismissed or withdrawn with prejudice. I am confident that such counterclaims, in fact, alone warrant adding independent claims for retaliation under federal and state worker protection laws, though each of our cases has settled before we have even had to assert such causes of action, so far.

We have also sought to quash intrusive discovery aimed (I have felt) at harassing my clients and their favorable witnesses, with mixed results. Despite the uncertain success – given courts’ propensity to be permissive in allowing a wide swath of discovery – I maintain that workers who step forward to assert protected claims (and the witnesses who back them) should not be forced to open up their private lives beyond the scope of the issues they have put into dispute. We have fought, and will fight, to keep out records from other employers, unrelated personal emails, extensive personal medical records, and other such information which, when sought, creates an obvious, intimidating effect on those whose participation in vindicating important public policies we should be encouraging, not chilling.

We have also continued to pursue claims on my clients’ behalf even when employers have sought to hide behind bankruptcy or other declarations of insolvency, behind endless appeals and motions, and other tactics that seek to prevent from getting to the heart of the matter. While chasing an empty pocket does not help anyone, I also do not accept that wrongdoers should find it convenient to hide behind their financial irresponsibility to avoid liability.

Today, for example, we finally received an order on a case against the government where my client has been pursuing her claims literally since the late 1980s. The employer has hoped that – despite its losing decision after decision, and refusing to pay up – my client and I would eventually just disappear. But, she stuck to her guns, and we continued to fight on her behalf. The decision today related to reimbursement of my client’s attorneys’ fees on a fight we waged to get her reimbursed for the extra tax consequences she had to pay, because she won all of her backpay for many years in a lump sum in a single year, instead of getting paid the wages steadily over the years in question. Though several years ago my client finally received compensation for the extra tax burden, when the governmental employer had run out of avenues of appeal, they then refused to reimburse my client for the attorneys’ fees owed in chasing down this result. We were forced to file yet another enforcement action and today, years later, my client won again – forcing the agency to pay her fees yet again. This is wasted taxpayer money because the government has continually made bad choices, failing to own up to wrongdoing that began long ago. I can only hope that all of these victories ultimately teach the government’s officials a lesson, so other workers will not suffer like my client did.

So, employees – know this: if you hire this firm, or another reputable plaintiffs’ employment practice like ours, and you remain a good client, we will represent you and pursue your claims through thick and thin, if that is the right decision for you personally and for your case. And, employers – know this: if you are faced with claims of discrimination, whistleblower retaliation, wage violations, or other unlawful employment practices, then by all means investigate and assert reasonable defenses to the claims. But, if the allegations start to appear corroborated (or even viable), pay up, unless your very business model is at stake and it is a principle you must fight to preserve. If you try to shoot the messenger – by attacking the employee who had the courage to bring these matters to your attention- or try to drown the plaintiffs in endless paper, you will only ultimately increase your exposure and prolong the distraction caused by the case against you.

We stand up for our clients.

If you have suffered discrimination, whistleblower retaliation, wage violations, or other unlawful employment practices, contact Bryan Schwartz Law for an initial consultation today. Nothing in this blog posting is designed to create an attorney-client relationship. This firm cannot represent you unless you have a signed representation agreement with the firm.

Legal Trickery by Small Businesses to Avoid Compliance with Employment Laws - Bryan Schwartz Quoted in Daily Journal Exposé

The following article appeared today in the Daily Journal:

http://www.bryanschwartzlaw.com/DailyJournal10-25-12.pdf

Small businesses use prevention, legal tricks, against class action woes

By Laura Hautala
Daily Journal, Staff Writer

When small business owners Soraya and Patrick Aughney faced allegations of wage-and-hour violations from their employees last year, they opted for an unusual defense: bankruptcy. According to one of their attorneys, it was a choice between that or losing their company, the valet parking service Certified Parking Attendants LLC. "That class claim would have destroyed the business," said David N. Chandler, their Santa Rosa-based bankruptcy lawyer. The plaintiffs were parking attendants who claimed unpaid overtime and meal-and-rest breaks as well as misappropriated tips. Combined with other claims, the action could have cost the Aughneys millions of dollars in back-wages and penalties. James Robert Mortland III et al. v. Certified Parking Attendants LLC et al., CIV1000135 (Marin Super. Ct., filed Jan. 11, 2010). Chandler is up-front about the fact that he used bankruptcy to avoid the plaintiffs' class claims, which have been dismissed in state court and federal bankruptcy court. The named plaintiffs are now filing individually as creditors in the bankruptcy.

Bryan J. Schwartz, the Oakland-based lawyer for the plaintiffs, said he has seen small businesses take such a tack several times. "There's always a moment of truth: will they engage or pull the tablecloth out from underneath?" he said. 

Bankruptcy is only the most dramatic in a range of tactics small businesses use to avoid wage-and-hour lawsuits. And while class actions might seem like a problem limited to bigger, wealthier employers like Wal-Mart Stores Inc and Costco Wholesale Corp., a substantial number of small businesses face these complaints, too.

In fact, while large corporations present deeper pockets, attorneys for employees and companies alike agree that small businesses are more likely to violate labor laws, leading to debilitating penalties.

Some 1,300 employment class actions have been filed in California since 2010, according to Keith A. Jacoby of Littler Mendelson PC, who estimates that a quarter to a third of them were filed against small, private companies. Littler Mendelson tracks employment lawsuit numbers by surveying the filings recorded by Courthouse News Service and LexisNexis's Courtlink database.

Even a business with a single location can be a target, Jacoby said. If some workers decide to sue a high-turnover business such as a 60-employee restaurant, "250 [class members] might be big enough for a class action," he said.

Jacoby said he doesn't recommend the bankruptcy technique Chandler used. "You're just trading one problem for another," he said. But he did say small businesses often have to place money in escrow and enter a multi-year payment plan when they lose class actions.

To avoid such a result, small businesses rely on a variety of legal, insurance and human resource services to avoid making big employment law mistakes or to cover court costs when they do.

For companies that can afford it, such as tech startups with venture capital backing, an ounce of prevention can save millions of dollars in liability.

One such liability is misclassifying workers as independent contractors when they should be employees, which can make employers vulnerable to expensive meal-and-rest claims and IRS enforcement. For this reason, many startups contract with outside companies to handle their human resources and payroll work.

Business insurance also can help buffer companies from claims of harassment, retaliation, wrongful termination and discrimination. "[Insurance] has become more important ever since the economy took a dip, because people had to be let go," said Lou Moreno, Senior Vice President of Heffernan Insurance Brokers in Menlo Park.

But insurance will only go so far when it comes to wage-and-hour claims, which make up between 80 percent and 90 percent of California's employment class actions, according to Littler Mendelson. While employment liability policies cover attorneys fees, the company is on its own to pay back wages and penalties. Moreno said many insurers that do cover attorneys fees for wage-and-hour claims generally won't do so in California because the risk of litigation in the state is much higher.

Small businesses without venture backing, like Certified Parking Attendants, do not typically carry these insurance policies. And without human resource departments or legal advice, they try to avoid class actions with any information available.

"They will rely on free Chamber of Commerce materials, and those are very good, but wage-and-hour law is about technical compliance," said Jacoby, who represents both small and large employers.

Schwartz puts it more strongly, saying these businesses often operate in a "lawless environment," relying on their workers' ignorance of the law to avoid paying legally mandated wages.

For the Aughneys, filing for Chapter 11 bankruptcy protection for their business and Chapter 13 bankruptcy protection to shield their personal assets has allowed them to stay in business.

The legal trick was to keep the employees from filing their claims in bankruptcy court until 180 days after they stopped working for the valet service, thus eliminating the special consideration given in bankruptcy court to wages owed to recent employees.

"You've got to stall them on class certification until the 180-day priority period runs out, and then you drop them into bankruptcy," Chandler said, "and then you're driving the bus."

laura_hautala@dailyjournal.com

Speaking Out Against the Unclean Hands and After-Acquired Evidence Defenses: Bryan Schwartz Authors Cover Feature in Law Review

Bryan Schwartz, principal of Bryan Schwartz Law, co-authored the featured article in the current edition of the California Labor & Employment Law Review, a Bar-published journal that reaches thousands of lawyers in the field statewide.

The story advocates for limiting employers' application of the overused unclean hands and after-acquired evidence defenses. The article is especially timely in light of the California Supreme Court's pending review of Salas v. Sierra Chemical Co., 133 Cal.Rptr.3d 392, review granted November 16, 2011. In Salas, an undocumented ex-employee charged the company with disability discrimination and a denied, reasonable return-to-work accommodation. The employer sought to defend based upon the worker's undococumented status, saying that he had no right to work anyhow and so could not seek relief.

The trial court barred Salas' claims for relief based on the unclean hands and after-acquired evidence doctrines, and the court of appeal affirmed the judgment, but the Supreme Court of California may now decide to what extent, if any, California law should embrace these defenses. In the view of workers' rights advocates, among other problems, these defenses unfairly let wrongdoing employers get off scot-free (or with only limited liability) when employers violate important public policies, like the prohibition on disability discrimination. Indeed, in 2002, the California Legislature passed Senate Bill (SB) 1818, providing that undocumented workers and job applicants are entitled to all civil remedies under state law, except reinstatement - and the Supreme Court will be considering the interplay between this statute and the unclean hands and after-acquired evidence defenses.

The article, co-authored with prominent defense attorney Baldwin Lee, of Allen Matkins, representing the employers' perspective, and with great assistance from 2012 Employee Justice Fellow at Bryan Schwartz Law, Joseph Spadola (Berkeley Law '13), is too lengthy to reproduce in this blog, but the entire article is available by clicking here.

If you have suffered discrimination, retaliation, or wage violations, and the employer is trying to deny you relief based upon the after-acquired evidence doctrine or the unclean hands defense, contact Bryan Schwartz Law today.

California Supreme Court Grants Review in Critical Case Regarding Arbitration Class Waivers

Today, the California Supreme Court granted the employees' petition for review in Iskanian v. CLS Transportation of Los Angeles (S204032). This case will determine the real impact of ATT Mobility v. Concepcion on California's workers - in particular: the extent to which employers can include arbitration clauses which waive all class action rights in pre-dispute agreements; whether such agreements can cover claims under the Private Attorney General Act (PAGA), Cal. Lab. Code sec. 2698, et seq.; whether the National Labor Relations Act (as interpreted by the National Labor Relations Board in the D.R. Horton decision) continues to protect workers' right to come together for their mutual aid and protection, after Concepcion; and generally, whether the seminal case of Gentry v. Superior Court (2007) 42 Cal.4th 443, carries any weight post-Concepcion.  The Iskanian Court of Appeal decision, from the employees' perspective, had decided all of these questions wrongly (i.e., that Gentry was undermined, D.R. Horton of no consequence, and class waivers permissible, even as to PAGA) and so the grant of review is a great source of relief to workers and their advocates. The Iskanian decision had split the Courts of Appeal on these issues, because previously, Brown v. Ralphs Grocery Co. (2011) 197 Cal.App.4th 489, review denied October 19, 2011, cert. denied April 16, 2012, had decided several of these issues favorably to workers. Today's grant of review provides hope that Brown will remain the law of the state. More to come on Iskanian in another post.