Robinson v. Southern Counties Oil Co, 53 Cal. App. 5th 476 (2020)
Summary: Res judicata bars a PAGA claim when the employer has already settled a separate PAGA claim covering the same claims and time period.
An employee does not have standing to serve as a PAGA representative for a time period beginning after he or she was no longer employed.
Read our in-depth analysis HERE.
Davidson v. O’Reilly Auto Enterprises, LLC, 968 F.3d 955 (9th Cir. 2020)
Summary: A plaintiff cannot establish commonality for purposes of class certification under Rule 23 of the Federal Rules of Civil Procedure solely by offering evidence that the employer’s written policy did not comply with the law, absent evidence that the employer enforced the non-compliant policy consistently across the class.
Facts: Kia Davidson brought a class action against her employer, O’Reilly Auto Enterprises (“O’Reilly”), alleging, among other things, that O’Reilly failed to provide rest breaks compliant with California law. California law requires employers to provide a 10-minute rest break for every four hours worked or major fraction thereof. The rest break claim was based on O’Reilly’s facially defective written rest break policy which did not contain the phrase “or major fraction thereof.” Davidson argued that the omission created a classwide issue that O’Reilly failed to provide legally compliant rest breaks. The district court denied Davidson’s motion to certify the rest break class. It explained that although O’Reilly’s written policy was inconsistent with California law, Davidson did not provide evidence that the policy was consistently applied across the entire class such that common questions predominated. Indeed, the district court noted that Davidson’s declaration did not state that she had been denied a proper rest break. On the other hand, O’Reilly provided declarations from 310 employees stating that they received proper rest breaks under California law. Davidson appealed.
Court’s Decision: The Court of Appeals for the Ninth Circuit affirmed. One of the requirements for class certification is that “there are questions of law or fact common to the class.” To satisfy this commonality requirement, a plaintiff must demonstrate that the class members have suffered the same injury. The court held that Davidson failed to establish commonality because she failed to show that the putative class members suffered a common injury. Although O’Reilly’s written rest break policy was inconsistent with California law because it did not have the phrase “or major fraction therefore,” Davidson did not show the policy was consistently applied in a way that violated the law and injured putative class members. Thus, there was no evidence that the class suffered the same injury. The mere existence of a facially defective policy without evidence that it was implemented is insufficient to meet the federal class certification standards.
Practical Implications: The existence of a uniform policy, by itself, is insufficient to prove commonality in federal court; a prospective class representative must show such a uniform policy was applied similarly against all class members. Because this standard increases the difficulty of certifying a class action within the Ninth Circuit, employers facing class action claims premised on an allegedly defective written policy should consider removing to federal court. The deadlines for removal are tight, so employers need to act quickly after receiving a class action complaint.
Conyer v. Hula Media Servs., LLC , No. B296738, 2020 WL 5035827 (Cal. Ct. App. Aug. 26, 2020)
Summary: An employee who signs an acknowledgment of receipt of a handbook that contains an arbitration clause may be bound by the arbitration clause, even if the employer did not call the employee’s attention to the arbitration clause.
Facts: When Hula Media Services, LLC (“Hula”) hired Plaintiff Michael Conyer in January 2017, it provided him with a copy of its employee handbook, which did not contain an arbitration clause. Plaintiff signed a “receipt and acknowledgment” of the handbook. In November 2017, Hula distributed to all employees a revised handbook, which now contained an arbitration provision. Plaintiff was provided the revised handbook and signed a “receipt and acknowledgment” of it. In August 2018, Plaintiff sued Hula and the company’s CEO for sexual harassment, failure to pay reimbursements, and other related claims. Defendants moved to compel arbitration under the November 2017 arbitration provision. The trial court denied the motion to compel, and Defendants appealed.
Court’s Decision: The California Court of Appeal reversed. The court held that Hula had no obligation to point out to Plaintiff that it added an arbitration provision to the November 2017 handbook. The long-standing rule in California is that parties are bound by a contract, including arbitration agreements, even if they do not read the contract before signing. The court also rejected Plaintiff’s contention that the agreement was unconscionable. While the court agreed that there was some procedural unconscionability because the employee handbook was a contract of adhesion and Hula had the right to modify the agreement from time to time, it also held that Hula’s failure to provide Plaintiff with a copy of the applicable arbitration rules did not increase the level of procedural unconscionability. The court also found that one provision of the agreement was substantively unconscionable because it required the parties to pay a pro-rata share of the arbitrator’s fees and costs, and it allowed Hula to recover prevailing party attorneys’ fees. However, the court severed the offending provision and enforced the remainder of the arbitration agreement.
Practical Implications: Employment arbitration agreements are a frequent source of litigation. While this case provides helpful authority for employers who maintain arbitration agreements as part of their employee handbooks, employers are encouraged to keep abreast of the ever-expanding corpus of arbitration decisions and to periodically review their arbitration agreements for compliance.