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October 2012 Archives

HR director who hid that she hadn't signed her arbitration agreement still can't be forced to arbitrate

A California appellate court ruled that an employee who misled her employer into thinking she had signed an arbitration agreement could still refuse to arbitrate because she never signed. In Gorlach v. The Sports Club Company, the employee, a former Human Resources director, was in charge of rolling out the company's new mandatory arbitration agreements in 2010. Before then, the employer did not have any arbitration agreements with its employees. The employee repeatedly told her managers that the company's entire management team (including herself) had signed the arbitration agreement. She also knew that agreeing to the new mandatory arbitration policy was a condition of ongoing employment with the Sports Club Company. But in fact, the employee had never signed her arbitration agreement and she opposed the mandatory arbitration policy so much that she quit her job rather than risk being bound by it (she subsequently sued in court for discrimination, harassment and various other claims). The court held that there was not enough evidence to show that the employee ever intended to be bound by the arbitration agreement. Even though the agreement was a condition of ongoing employment, the employee quit before signing it, thereby evincing her unwillingness to submit to the agreement. And while the employee had indeed misled her employer into thinking she had signed it, the employer suffered no damage from that misrepresentation. The employer was still rolling out its new arbitration agreement at the time the employee quit, and there was no indication what (if anything) the employer would have done to the employee if it knew she was refusing to sign the agreement.

More loopholes in employee arbitration agreements

Despite recent rulings from the Supreme Court, employee arbitration agreements might not be as rock-solid as some employers believe. In Elijahjuan v. Superior Court (Mike Campbell & Associates), a California appellate court held that a narrowly-tailored arbitration provision did not mandate arbitration of employees' statutory wage claims.The arbitration provision, found in the plaintiffs' employment contracts, mandated arbitration of any claims involving the "application or interpretation" of the contracts.This language was much narrower than other arbitration provisions, which typically mandate arbitration of any and all disputes involving the parties.The employees, who had been characterized as independent contractors, brought claims under California state law for unpaid overtime, break payments and other fees and penalties.The court concluded that because the claims arose from wage-and-hour statutes, they were not subject to the arbitration agreement, which again applied only to claims related to the parties' contracts.In its ruling, the court relied on Hoover v. American Income Life Ins. Co., which previously held that statutory overtime claims are not subsumed by an arbitration provision governing claims "arising out of or relating to" a contract.Litigants should scrutinize arbitration language very carefully, as not all arbitration provisions necessarily apply to all employment-related claims (especially claims arising from federal or state statutes, such as overtime).

Employees lose reporting time claim, must pay employer's fees

That's the bad news. The only good news is, the employees who lost the case of Aleman v. AirTouch Cellular will likely have to pay less than the $140,000 each that the trial court originally ordered them to pay. In 2007, a group of employees, including Daniel Krofta and Mary Katz, sued AirTouch Cellular for reporting time and split shift pay arising from mandatory meetings the employees had to attend. The employees worked at mall kiosks selling AirTouch phones and service plans. They had set schedules which included occasional weekend training meetings that ran for approximately one hour. The employees claimed they should have received "reporting time" pay for days they attended meetings without doing any other work and "split shift differential" pay for days when they attended meetings and subsequently worked regular shifts. Regarding reporting time pay, which is required when employees come in to work but do not work at least half their "usual or scheduled" shifts, the court held that the employees were not entitled to it because their training meetings had been previously scheduled. Regarding split shift pay, which requires that employees be paid at least minimum wage (plus one additional hour) for all hours they work during split shifts, the court held that it is only owed if employees net less than the applicable state minimum wage. Since AirTouch's employees made close to double the then-applicable minimum wage, they were not entitled to any additional pay, even though they worked split shifts. Because they lost, Krofta and Katz were initially ordered to pay AirTouch $146,000 and $140,000, respectively, for attorneys' fees. The court ordered those amounts reduced, finding that the employees could be made to pay fees for their split shift claim (which does not seek minimum wages) but not for their reporting time claim (which does). In its ruling, the court called the employees' claims "misguided and fruitless," perhaps explaining why they were assessed such significant fees.

Workers' compensation discrimination not "wrongful termination," court rules

An esoteric distinction, but a firm one nonetheless. In Dutra v. Mercy Medical Center Mt. Shasta, an employee sued the hospital where she worked for defamation and wrongful termination in violation of California public policy. The employee, who worked as a housekeeper, made a workers' compensation claim in January 2008 after she slipped while dragging a laundry bin across a snow-slicked alley. She was then fired in March 2008, after which she filed a lawsuit claiming wrongful termination in violation of California's public policy of not allowing discrimination or retaliation against employees who make workers' compensation claims, as established in California Labor Code Section 132a. Public policy wrongful termination claims, sometimes referred to as "Tameny" claims (after the case from which the claim originated), are common law tort claims that mirror claims already established by statute. For example, if a statute specifically prohibits discrimination on the basis of race, an employee fired because of race can make both a statutory claim and a claim wrongful termination because race discrimination violates fundamental public policy, as established by the statute. But in Dutra, the court held that employees cannot sue for wrongful termination on the basis of Labor Code Section 132a, which prohibits retaliation against employees who make workers' compensation claims, because that statute specifically limits any such claims to the Workers' Compensation Appeals Board (i.e., employees can only make 132a claims to the WCAB). According to the court, employees cannot have greater rights in wrongful termination claims than they have in the substantive statutory claims that the wrongful termination claims mirror. So because 132a limits claims only to the WCAB, employees cannot make an end-run by bringing wrongful termination claims in court.

And the official "golden rule" of summary judgment is...

...never forget to file a separate statement of facts! That's the lesson from Batarse v. Service Employees International Union Local 1000, in which an appellate court upheld dismissal of a discrimination and retaliation case because the employee forgot to include a separate statement of facts with his opposition to the employer's motion for summary judgment. In its ruling, the court cited both the "golden rule" of summary judgment (if evidence is not included in a separate statement then it "does not exist"), as well as a general lack of evidence of unlawful conduct by the employer, the SEIU. The SEIU purportedly fired the employee, a labor relations representative, because he had not disclosed relevant issues about his past during his job interview (mainly, that he had resigned as a lawyer with numerous complaints pending against him).


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