California Public Agency Labor and Employment Blog - Useful Information for Navigating Legal Challenges

The way complaints for violation of the Fair Employment and Housing Act (“FEHA”) are processed and enforced by the Department of Fair Employment and Housing (“DFEH”) is about to undergo a significant transformation.  Motivated by a desire to close a nearly $16 billion budget deficit by reducing duplication and maximizing efficiency within State government, Governor Brown signed SB 1038 which eliminates the Fair Employment and Housing Commission.  The Commission is a quasi-judicial administrative agency that is currently responsible for administrative adjudication of FEHA complaints.  The Commission also conducts mediations, engages in rulemaking, and provides public information and training.

As a result of the elimination of the Commission, a new arm of the DFEH, the Fair Employment and Housing Council, will handle aspects relating to rulemaking and holding public hearings on civil rights issues that were formerly administered by the Commission.  In addition, the DFEH will now have the power to directly file complaints against employers in civil courts for FEHA violations. 

Here is how the DFEH processes FEHA complaints under the current and new law.

Under the current law an aggrieved employee can choose to have the DFEH investigate a FEHA complaint on his or her behalf or request a “Right-to-Sue” letter in order to allow the employee to immediately sue the employer in court.  If the DFEH investigates and finds that there is violation under FEHA, then the DFEH can file an accusation with Commission to which the employer has 90 days to respond.  During this time, voluntary mediation services are offered for purposes of settlement negotiations.  If the case is not settled, then the case is prosecuted before an Administrative Law Judge of the Commission.  However, where emotional distress damages or administrative fines are being sought, the employer may elect to have the case removed to civil court.

Under the new law which goes into effect on January 1, 2013, the DFEH will now be able to file lawsuits directly with the court instead of having the claims adjudicated by the Commission.  However, before filing a lawsuit, the DFEH will now require all parties to undergo mandatory dispute resolution free of charge in the DFEH’s Internal Dispute Resolution Division.  As discussed above, mediation is currently a voluntary process.  If the DFEH’s lawsuit is successful, the new law also authorizes courts to award the DFEH reasonable attorney fees and costs including expert witness fees.  The DFEH will continue to offer pre-investigation voluntary mediation.

It is unclear at this time if these changes will affect the processing of FEHA complaints or spawn a spike in DFEH driven lawsuits in the courts.  Consequently, all of our followers are encouraged to stay tuned to the blog for any updates in this evolving area.      

Public agency officials and employees may read newspaper articles about recently decided landmark cases in public sector labor and employment law, and may feel relief, anger, surprise, or vindication in the result.  This is especially true if the decision impacts how the agency functions on a day-to-day basis.  These same individuals may also find developing U.S. Supreme Court and California Supreme Court decisions important and interesting enough to want to join the fight directly in a particular case, and try to persuade the Court which way a case should be decided.  Understandably, though, they would prefer not to do this if it meant their agency had to be a defendant in a lawsuit. 

There is a way organizations can join the fight on landmark cases without having actually to be a party, and that is by filing an amicus curiae brief with the Court. 

The brief of an amicus curiae (“friend of the court”) is submitted by a company, government agency, trade association, or other organization or individual who is not an actual party to the case but wishes to contribute argument or general information for the Court to consider.  Leave of Court is required to submit an amicus brief.  Although Courts usually grant such leave freely, they expect organizations seeking to file briefs to explain why they have an interest in the case’s outcome, and to explain what their brief can contribute that will help the Court decide.  Such briefs can be filed not only in the U.S. Supreme Court and state Supreme Courts, but in state and federal intermediate appellate courts.

Why would a lower level appellate court decision in a particular case, or even a Supreme Court decision, be important to an agency?  To understand this requires a short digression on the principle of precedent, something all lawyers learn in law school but rarely have occasion to explain in detail to clients.  Rules of precedent require courts to follow the prior decisions of higher courts.  In both state and federal courts, the decisions of trial courts (the first level of courts which conduct jury trials and bench trials, rule on requests for writs, and conduct other proceedings) are not precedential.  Their decisions affect the parties only, and although for example a large jury verdict or an injunction may send a “signal” to an industry, the outcome does not control anyone except the parties.  A Court of Appeal decision designated for publication, however, is controlling on all trial courts in the state.  Thus, if the Court of Appeal holds that individual supervisors can be held personally liable under the Fair Employment and Housing Act (“FEHA”) for retaliation, then every trial court in the state has to follow that holding and has to take that position in every case. 

The losing party may, a short time after the appellate case is decided, ask the California Supreme Court to review the case.  The Supreme Court picks and chooses the cases it takes, and does so with an eye toward shaping California law.  If the Supreme Court decides to review the Court of Appeal decision in our example, and ultimately reverses it, holding that supervisors cannot be personally liable, then every Court of Appeal as well as every trial court in California must follow this rule.  (The Supreme Court in fact rejected a rule of personal liability for retaliation in Jones v. Lodge at Torrey Pines, 42 Cal. 4th 1158 (2008), a case in which our firm participated in amicus briefing.) 

Federal courts work the same way.  The first level of the appellate courts, the one that can issue binding decisions in California, is called the United States Court of Appeals for the Ninth Circuit, which lawyers commonly call just the “Ninth Circuit.”  It covers other states as well, including Arizona, Nevada, Hawaii, and Alaska.  Other federal circuits cover different states, and at the top of all the “circuits” is the United States Supreme Court, which, like the California Supreme Court, picks and chooses the cases it takes, and issues decisions that control all the circuit courts and all the federal trial courts.  As you would expect, the California Supreme Court generally decides issues of state law, and the U.S. Supreme Court issues of federal law.

Thus, influencing how an appellate court decides a case can be important, and influencing how the U.S. Supreme Court or a state Supreme Court rules can be very important. 

What are the best arguments for amicus curiae briefs to make?  Generally, they are those that present the organizations’ unique perspective in a cogent light.  For example, in an employment case between an individual and a private company, neither side may think to brief the Court on how the Justices’ decision will affect the public sector, where employment laws can apply differently.  Briefing by public organizations can alert the Court to these issues, so that the Court’s holding can be phrased to avoid unintended problems in the public sector.  Briefs can also emphasize the impact of the case’s ruling on particular segments of the workforce, for example, police, fire, utilities, or educators.  Perhaps most importantly, the amicus brief can present practical, real-world examples from the sponsoring party’s industry, that show why as a public policy matter the Court should rule in a certain way, or at a minimum craft its ruling to avoid certain pitfalls.  

In addition, although it is a less traditional function, amicus briefs can join the legal debate directly by advancing unique and/or creative legal arguments the parties might not have presented.  It can develop one side’s legal case in an alterative way, or even in a more forceful way, if the party was reluctant to take certain approaches or positions.  (That said, counsel for the actual parties have often spent enormous time on the case, and may not have made certain arguments for tactical reasons.  It is best to coordinate with them in presenting arguments.)

What cases are coming up in which amicus curiae briefing is possible?  For the U.S. Supreme Court, there are two cases that the Court just decided to hear.  The first is Vance v. Ball State University, Case No. 11-556, in which the Court will decide whether Title VII’s definition of “supervisor” means only someone with power to take formal employment actions against an employee in question, or whether a broader definition applies.  A supervisor is someone whose unlawful harassment in violation of Title VII can render the employer vicariously liable.  Another case is Genesis HealthCare Corp. v. Symczyk, No. 11-1059, in which the Court will decide whether an employer can moot, and effectively end, a collective action under federal overtime laws by offering full relief to the named plaintiff, before he or she can persuade anyone else to join the class.  Two upcoming California Supreme Court employment law cases are Salas v. Sierra Chemical Co., No. S196568, and Wisdom v. Accentcare, Inc., No. S200128.  In Salas, the Court will decide the extent to which an employer sued for a violation of the FEHA can invoke as a defense the employee’s use of false documentation to obtain the job.  This defense is commonly referred to as the “after-acquired evidence doctrine.”  In Wisdom v. Accentcare, the Court will decide if an employer can hold a job applicant to a promise in an employment agreement to arbitrate disputes rather than go to Court.   (The deadline for amicus briefs has passed in this case, but the fact that oral argument will not occur until fall 2012 and the lack of any substantial amicus briefing may mean the Court may still accept amicus briefs).

As described above, intermediate appellate cases are important areas for amicus briefing as well.  What are a few rapidly developing areas of employment law to which amicus briefing could contribute at this level?  A partial list is the vested rights of public employees in retirement benefits (a very rapidly developing area), enforceability of arbitration agreements, cyber-bullying and the First Amendment rights of students, use and misuse of social media by public employees, anything regarding the scope of laws against harassment and discrimination, and increasingly the protections for concerted activity of individual non-unionized employees under labor relations statutes.  This is definitely a partial list, however.  In fact, any published case that has an important effect on public employers is worth consideration as a candidate for amicus briefing. 

What steps can an agency actually take?  Trade associations and leagues designed to benefit the agency can help.  The agency should be sure to consult lawyers with expertise not only in appellate law and preparation of amicus curiae briefs, but in the substantive area of law at issue – be it retirement, wage and hour, disability, employee free speech, privacy, or labor relations.   

Public employers in California have a powerful tool available to them in California’s anti-SLAPP statute, California Civil Procedure Code section 425.16.  This availability was confirmed in a recent case named Vargas v. City of Salinas.  Not much fanfare accompanied the Vargas decision, which issued last November.  But the Court of Appeal’s decision, on constitutional grounds, not to deny public employers access to this statute is significant. 

To understand why, let’s review what an anti-SLAPP motion is.  “SLAPP” stands for “strategic lawsuit against public participation.”  In general, SLAPP suits are understood to be lawsuits filed by a plaintiff to stifle a defendant’s exercise of free speech rights.  The term “strategic” more or less serves as a euphemism for “meritless.” SLAPP’s are considered bogus lawsuits designed only for the purpose of bludgeoning the defendant, and threatening those who wish to avoid being sued, into refraining from criticizing the plaintiff, or from making public statements contrary to the plaintiff’s interests.  Further, the common understanding is that a plaintiff who files a SLAPP knows that, even though it is meritless, it will take months if not years for a court or jury to make that determination.  By then, the defendant will have already been stigmatized by having a lawsuit pending for a considerable time, and been required to spend substantial attorney’s fees to dispose of it. 

California’s anti-SLAPP statute serves as a remedy by targeting these two harms caused by SLAPPS at an early time.  First, it remedies the lingering effect of the lawsuit by allowing the defendant at the very outset of the case to demand that the plaintiff present evidence showing that plaintiff has a “probability” of prevailing.  The court will dismiss the case if plaintiff cannot make this early showing.  Second, the statute alleviates the financial harm to the defendant by requiring plaintiff to pay the defendant’s attorneys’ fees if the case is in fact dismissed pursuant to the statute.  

If your agency is sued, how can you determine if the lawsuit can be disposed of early under the anti-SLAPP statute?  This will depend initially on whether the lawsuit arises from what the statute defines as protected activity (i.e., the first step of the anti-SLAPP statute’s test).  The fairly broad definition is as follows – a lawsuit will be covered if it arises from any of the following by the defendant: “(1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law, (2) any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law, (3) any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest, or (4) any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest.”  

Items (1) and (2) of this definition are of particular importance to public agencies.  They encompass within the scope of the anti-SLAPP statute statements before or in connection with any “official proceeding authorized by law,” regardless of whether the statements relate to a matter of public interest.  An “official proceeding” can include an administrative proceeding, and also an investigation by a public agency in preparation for initiating such a proceeding.  For example, in Vanginderen v. Cornell University, a federal court in California found that anti-SLAPP protection applied to the Cornell University Department of Public Safety's investigation into the plaintiff's involvement in alleged thefts, because the investigation was preparatory to the potential initiation of official proceedings against the plaintiff. 

Continue Reading

On June 20, 2011, the United States Supreme Court issued its opinion in the Wal-Mart Stores, Inc. v. Dukes.  The decision makes it much more difficult for very large groups of employees to join to sue an employer for alleged discrimination -- at least in federal court.  

Betty Dukes, a greeter at a Wal-Mart in Pittsburg, California alleged that Wal-Mart violated Title VII of the Civil Rights Act of 1964 by engaging in gender discrimination in both pay and promotions on a national basis.  In the lawsuit, Dukes sought to certify a class action consisting of approximately 1.5 million female employees who worked for Wal-Mart after December 26, 1998.  The issue before the Supreme Court was whether the plaintiffs satisfied the requirements for certifying a class action under Federal Rule of Civil Procedure 23 so as to proceed with one national gender discrimination case against Wal-Mart.  The Court did not address the merits of the case, i.e., whether Wal-Mart engaged in gender discrimination.

Despite the fact that Wal-Mart’s official written policy prohibited discrimination of any kind, Dukes alleged that Wal-Mart’s (1) corporate culture of stereotyping women, and (2) its policy allowing mid-level managers to make pay and promotion decisions (rather than having them made at a higher level) resulted in discrimination against women for many years.  Dukes alleged that these policies constituted discrimination under both disparate impact and disparate treatment theories. 

The district court made several findings justifying its decision to certify the employees as a class.  It found significant evidence of company-wide practices and policies that resulted in gender discrimination, including gender stereotyping, excessive subjectivity in personnel decisions and the maintenance of a strong corporate culture. The court also found statistical evidence that discrimination caused gender disparities and anecdotal evidence of bias.  The Ninth Circuit Court of Appeals upheld the district court’s decision to certify the employees as a class.

In its appeal to the United States Supreme Court, Wal-Mart challenged the certification of the case as a class action on the grounds that the claims of the putative class members were not common (i.e., a requirement to certify a group of individuals as a class).  To support its argument, Wal-Mart argued that its official policy strictly prohibited discrimination and that the plaintiffs’ evidence of an alleged pattern of disparate pay and promotions was too insignificant to establish a company-wide practice of gender discrimination.  Instead, Wal-Mart argued that since thousands of different supervisors and managers were delegated with authority to make decisions about pay and promotion, and since the plaintiffs’ own expert witnesses could not say what percentage of those decisions were “infected” by the alleged corporate culture of stereotyping women, plaintiffs’ evidence was insufficient to support class certification under Federal Rule of Civil Procedure 23. 

Justice Scalia, writing for the majority, agreed with Wal-Mart and ruled that the plaintiffs failed to satisfy Rule 23(a)’s commonality requirement.  Both the majority and the minority decisions also held that the district court and the Ninth Circuit improperly certified the class under Rule 23(b)(2) because the plaintiffs’ claim for back pay was not “incidental” to their request for injunctive and declaratory relief.

With respect to the commonality requirement, the majority held that there must be a common answer to a common question of law or fact -- not simply a common question of law or fact in the first instance.  In the employment law context, this means that a class action plaintiff must show that there is a common reason for the employment decisions at issue.  For example, if one person were responsible for making the thousands of pay or promotion decisions that the Dukes plaintiffs sought to certify, then there would be a common link to the adverse employment decisions – an alleged discriminatory decision maker.  But, where those decisions are made by thousands of different supervisors or managers considering a host of different variables, the majority held that the plaintiffs’ statistical evidence of disparate impact was too insignificant to create an inference of discrimination on a national, company-wide basis. 

Another significant aspect of the majority’s opinion is that class actions seeking monetary relief (as opposed to injunctive or declaratory relief) in all likelihood must proceed under Rule 23(b)(3), which has more procedural safeguards (e.g., a court must find that common questions of law or fact predominate, that a class action is superior to individual actions, mandatory notice and the right of a plaintiff to opt-out, etc.) than class actions certified under Rule 23(b)(2).  Justice Scalia, writing for the majority, also believed it was unacceptable to allow discrimination lawsuits to proceed as large class actions when monetary awards to plaintiffs would be based on a broad formula using something akin to representative sampling.  The majority held that an employer is entitled to individualized determinations of each employee’s eligibility for back pay, and Wal-Mart would be deprived of that right if the Ninth Circuit’s “Trial by Formula” plan were to be sanctioned. 

The bottom line is that this decision will be helpful to employers who are sued in federal court class action lawsuits for alleged discriminatory employment practices so long as the employer’s personnel decision makers are de-centralized.  Whether this decision will impact class actions brought in state court, however, remains an open question. 

The cell phone, in particular the so-called “smartphones” (e.g. iPhones, Blackberrys, Android phones) are amazing.  These devices allow us to be in contact no matter where we are on a 24/7 basis.  Some employers issue these devices to their employees both as a benefit to the employee but primarily as a benefit to the employer for the same reason: it allows contact at all hours of the day and night when necessary.

But when employees use these devices for work-related phone calls, text messages and emails while off-duty, should they be paid for this time?  This issue may be resolved in a case currently pending in the federal court in Illinois entitled Allen v. City of Chicago.

We normally do not report on a case pending in a trial court and certainly not about the ruling on a motion, which did not result in a judgment.  But this case seems of such particular significance that it merits a report.  Indeed, a number of other blogs have already commented on this case.

Here’s the situation.  The Chicago Police Department issued Blackberrys to a number of its officers including a Sergeant named Jeffrey Allen.  Sergeant Allen claims that he and other officers are required to use their Blackberrys to perform off-duty work including responding to telephone calls, emails, voicemails, and text messages.  Allen filed a purported class action lawsuit against the City alleging that he and other officers are entitled to overtime pay under the U.S. Fair Labor Standards Act for these phone based off-duty activities.  The City moved to dismiss the action but the trial court denied the motion and the matter will now proceed forward towards trial.

How this case will be resolved remains to be seen.  However, the novelty of this claim and the wide publicity the decision has received, may well result in a new cottage industry of FLSA litigation.

In order to minimize the likelihood of being the subject of such a case, the following steps are recommended:

1. If possible, limit issuance of such devices to employees who are truly FLSA exempt and thus not entitled to overtime pay.
2. If such phones must be issued to non-exempt hourly employees because of business necessity or operational demands, require employees to keep detailed time records of each phone related activity together with date, time of day, content description and actual duration of the call, email, text message, etc.  Be sure that the billings received from the service provider, such as AT&T, Verizon, etc., are maintained and reviewed and checked against the employee’s time reports for confirmation.  Keep in mind that FLSA requires the employer, not the employee, to keep accurate time records.  However, the employer can delegate that assignment to the employee as an additional part of their job.  Indeed, employees could be terminated for failure to keep accurate time records although they still must be paid because the employer receives the benefit of their services.
3. If such phones must be issued to non-exempt hourly employees, limit their issuance to those who really do have a bona fide job related necessity to have them.  That is, only give phones to those hourly employees when their jobs truly require them to be available on an instantaneous basis even while off-duty.
4. Some employees may need to have these phones while working but not while off-duty.  In these cases, issue a written policy prohibiting these employees from using their devices off-duty or institute a requirement that they reimburse the employer for personal use of the devices.  Another possibility is to require the employee to leave the phone at their job site, whereby they pick it up at the beginning of their work shift and leave it at the end.

The best advice is to develop a comprehensive written policy on the use of these devices so that employees are on clear notice of their entitlements and of their employer’s expectations of them.

LCW provides sample forms of Sample Electronic Communications Resources Policy and Authorization for Release of Information by Electronic Communications Service Provider in our Privacy Issues in the Workplace workbook for public agencies.  Additionally, LCW discusses the FLSA and strategies for complying with it in its Public Sector FLSA Compliance Guide workbook.

Keep visiting this website, as we shall update you on the progress of this case as it moves through the court system.

Photo Credit: Verizon Logo by methodshop.com, on Flickr

The “e-discovery” amendments to the Federal Rules of Civil Procedure were implemented in December 2006.  In 2009, California enacted similar “e-discovery” rules.  The adoption of these rules has greatly impacted the landscape for entities that find themselves in litigation in state or federal court.  There is an issue, for example, about the retention of documents that are stored in hard form and electronically.

The federal and state e-discovery rules are predicated in large part on the decision in Zubulake v. UBS Warburg LLC, a case which dealt with a litigant’s duty to preserve and produce documents and electronically stored information (“ESI”).  ESI comes in many forms.  It includes e-mail, voicemail, text messages, word processing documents, spreadsheets, websites, etc.  The duty to preserve ESI obligates a party who knows of actual or probable litigation not to destroy discoverable ESI or places where ESI is stored (e.g., hard drives, flash drives, servers, back-up tapes, etc.)  A party to a lawsuit cannot satisfy its e-discovery obligations simply by printing out hard copies of e-mails or other documents since electronic data (e.g., “metadata”) underlying an electronic document is often just as relevant as the document itself.  “Metadata” is the electronic data that can identify when a document was created, who created it, what changes or modifications to a document were made, who made those changes, when they were made, etc.

As explained in Zubulake, “anyone who anticipates being a party or is a party to a lawsuit must not destroy unique, relevant evidence that might be useful to an adversary.  While a litigant is under no duty to keep or retain every document in its possession…it is under a duty to preserve what it knows, or reasonably should know, is relevant in the action, is reasonably calculated to lead to the discovery of admissible evidence, is reasonably likely to be requested during discovery and/or is the subject of a pending discovery request.”

As for the scope of evidence and ESI that must be preserved, the Zubulake court observed, “[t]he broad contours of the duty to preserve are relatively clear.  That duty should certainly extend to any documents or tangible things . . . made by individuals ‘likely to have discoverable information that the disclosing party may use to support its claims or defenses.’  The duty also includes documents prepared for those individuals, to the extent those documents can be readily identified (e.g., the “from” and “to” fields in e-mails).  The duty also extends to information that is relevant to the claims or defenses of any party, or which is ‘relevant to the subject matter involved in the action.’  Thus, the duty to preserve extends to those employees likely to have relevant information – that is, the ‘key players’ in the case.”

Agencies should have a document retention policy in place that addresses retention of ESI.  Plus, we generally recommend that, if your agency is sued, you: (1) work with your legal counsel to develop a preservation plan related to the lawsuit; (2) immediately suspend the scheduled destruction of all documents that relate to a plaintiff’s claims (if any), and (3) preserve all ESI relating to plaintiff’s claims.