Part 3: The California Supremes Circa 2010

Pausing on our trip down memory lane, we take a quick peek around the corner at what the California Supreme Court will be soon be waxing so eloquently about. Here are this reporter’s favorites:

Shorten Those Pesky Statutes Of Limitations?: Why can’t employers simply impose an Armendariz-compliant arbitration requirement on their employees as a condition of employment, and (while they are at it) include a provision whereby the parties “agree” that the statute of limitations will be shortened to something less than that permitted by FEHA? Seems reasonable (if you are an employer), doesn’t it? The Supreme Court will help us with this when it rules in Pearson Dental Supplies, Inc. v. Superior Court (No. S167169.) The matter is fully briefed. (Check here for latest court update or to request automatic email notifications about the case.)

Ignore Those Stray Bad Comments?: Sometimes, a manager will have good reasons to terminate an employee. Sometimes that same manager will run off at the mouth and say stupid things here or there that are less than professional. Should these “stray remarks” (“Hey, old man,” “he’s such a fuddy duddy,” "your mother wears army boots" (that last one was big when I was growing up, and I still don't really understand it)) be considered by a trial court when evaluating an employer’s motion for summary judgment (“he was terminated because of poor performance, not his age”)?

In other words, if the employer demonstrates a non-discriminatory basis for the termination, should summary judgment nonetheless be denied if the employee can come up the existence of isolated or “stray remarks” which occurred outside the employment decision? The Supreme Court will tell us in Reid v. Google, (S158965). This case is also fully briefed. (Check here for the court update or for automatic notifications.)

Force Them To Take Their Breaks: Does the California Supreme Court believe that employers are inherently good or inherently evil? This seems to be the underlying tension in Brinker Restaurant v. Superior Court (S166350). (Click here for latest update and notifications.)

In Brinker, the Court is being asked whether California’s wage and hour laws require employers to merely make rest and meal breaks available to their employees, or must they ensure that the employees actually take those breaks?

The lower courts have ruled that the employer need only make the breaks available; they don’t need to police each and every employee to ensure that they actually clock out. The Supreme Court should rule shortly as the matter is fully briefed.

Officers and Directors Personally Liable?: In a case that should have officers and directors paying rapt attention, the California Supreme Court will decide in Martinez v. Combs (S121552) whether officers and directors can be held personally liable for causing the corporation to violate the statutory duty to pay minimum and overtime wages. (Click here for the court update or for notifications.) This is fully briefed.

One Would Think This Would Already Be Resolved: With our economy having been a national one for decades – with employees working in different states from time to time – one would think the question of whose labor laws apply would be well settled. Apparently not.

In late 2008, the Ninth Circuit ruled in Sullivan v. Oracle Corp. that California’s overtime rules (which are generally stricter than the overtime rules in other jurisdictions) apply to the portion of work performed in California even if the work is done by residents and employees of other states. In other words, California’s labor laws can have extraterritorial effect. In contrast, the Ninth Circuit ruled that California’s unfair competition law (UCL) at Business & Professions Code Section 17200 could not be applied outside California’s borders.

However, the Ninth Circuit later withdrew its opinion and certified the question to the California Supreme Court, which accepted the case in April, 2009.

Pending now before the Court in Sullivan v. Oracle Corp. (S170577) is whether California Labor Code’s overtime rules will apply to work performed in California for a California-based employer by out-of-state employee residents. It will also look at whether 17200 will apply to work performed inside California by out-of-state residents, and to work performed outside California for a California-based employer by out-of-state plaintiffs. (Click here for the court update or notifications.)

Attorneys Fees: In California, successful employee plaintiffs can recover their reasonable attorneys fees under the Fair Employment and Housing Act (FEHA) (what a surprise that it is much more difficult for successful employers to recover its fees). There are some cynics out there (o.k., there are many cynics out there) who believe this plaintiff-friendly fee shifting statute encourages the filing of marginal cases since in the past, even very modest recoveries have justified attorney’s fee awards worth many times the actual damages.

On the Court’s docket in Chavez v. L.A. (S162313) is the question of whether a court can deny attorney’s fees to a FEHA plaintiff who received only a modest recovery. A negative ruling could impact the filing of future employment cases in California. (Click here for the update and notification link.)