Date:
11/09/2020
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Key California Employment Law Cases: October 2020

Garcia-Brower v. Premier Automotive Imports of CA, LLC, No. A156985, 2020 WL 6074454 (Cal. Ct. App. Oct. 15, 2020)

Summary: Employers have a duty to investigate the accuracy of any criminal conviction report prior to terminating an employee on the basis of such information where there is evidence that the report may be incorrect.  

Facts: Tracey Molina was hired by Premier Automotive Imports of CA, LLC (“Premier”) in 2014. She did not disclose on her job application a dismissed 2010 conviction for misdemeanor grand theft, and she passed Premier’s criminal background check. She had been working for Premier for four weeks when the Department of Motor Vehicles (“DMV”) mistakenly reported that Molina had a criminal conviction related to Molina’s application for the Business Partnership Automation Program. Without investigating, Premier terminated Molina for “falsification of job application,” even after she explained to her superiors that her conviction had been dismissed by court order. Although the DMV issued a corrected notice three weeks later, Premier did not rehire Molina. Molina filed a retaliation complaint with the Labor Commissioner. The Labor Commissioner determined that Molina had been wrongfully terminated and ordered her reinstatement with back pay. Premier appealed, but its appeal was denied. Premier then failed to comply with the Labor Commissioner’s orders. In turn, the Labor Commissioner filed an enforcement action on Molina’s behalf. Following the Labor Commissioner’s presentation of evidence at trial, the trial court granted Premier’s motion for nonsuit, finding an absence of any evidence that Premier was aware at the time it terminated Molina that her conviction had been judicially dismissed. The Labor Commissioner appealed. 

Court’s Decision: The California Court of Appeal reversed. Premier was not entitled to judgment as a matter of law because the Labor Commissioner presented sufficient evidence that Premier was aware or had reason to believe that Molina’s criminal conviction had been dismissed and used the dismissed conviction as a factor in her termination, in violation of Labor Code section 432.7. Premier had credible information from its own background check suggesting that the DMV letter was incorrect or incomplete, and Premier then failed to investigate the discrepancy. In addition, Molina testified that she told her superiors who made the termination decision multiple times that the conviction had been dismissed.  

Practical Implications: California law places complex and detailed limitations on employers’ ability to consider applicants’ criminal backgrounds. This case is an important reminder that employers need to exercise due diligence and fully investigate when an applicant’s criminal background check may adversely affect an employment decision, including investigation of any credible evidence that the information suggesting a criminal history is erroneous.

Lares v. Los Angeles County Metropolitan Transportation Authority, No. B293850, 2020 WL 6261442 (Cal. Ct. App. Sept. 29, 2020)

Summary: Where an employer’s no-fault absenteeism policy provides that an employee may clear absences that otherwise would count for purposes of disciplinary action by working (or being available to work) during a certain clearance period, the employer does not violate CFRA by extending the absence clearance period by the number of days the employee was on CFRA leave during that period, provided that the employer extends the absence clearance period by the number of days the employee was on any unpaid leave.

Facts: Plaintiff Alfonso Lares, a bus operator for Defendant Los Angeles County Metropolitan Transit Authority (“MTA”), was terminated after he exceeded the maximum number of non-excluded absences. Under the applicable collective bargaining agreement, an employee was subject to progressive discipline, up to and including termination, if he or she had a certain number of absences. To avoid discipline, the employee could remove (or clear) an absence from his or her count by not having any absences for 60 consecutive calendar days. Certain kinds of absences were expressly excluded from the absenteeism rule, including absences covered under the Family and Medical Leave Act or the California Family Rights Act (“CFRA”). Although more than 60 calendar days had passed between absences on two occasions (i.e., two of the absences would have been cleared from his count), Lares had taken leaves under CFRA during each of those periods, so MTA did not count those days as part of the 60-day clearance period. Laressued MTA for, among other things, CFRA interference and retaliation. Both parties brought motions for summary judgment. The primary issue raised in both motions was whether MTA’s absence clearance policy violated CFRA by interfering with an operator’s right to take CFRA leave or by retaliating against an operator for taking the leave. The trial court granted MTA’s motion, concluding that MTA did not violate CFRA because it was not required to count the time Lares was on CFRA leave toward the 60-day absence clearance period. Lares appealed.

Court’s Decision: The California Court of Appeal affirmed. Where an employer’s no-fault absenteeism policy provides that an employee may clear absences that otherwise would count for purposes of disciplinary action by working (or being available to work) during a certain clearance period, the employer does not violate CFRA by extending the absence clearance period by the number of days the employee was on CFRA leave during that period. However, the court noted one caveat to this rule based on section 11094 of the California regulations, which provides that “if an employee on leave without pay would otherwise be entitled to full benefits (other than health benefits), the same benefits would be required to be provided to an employee on unpaid CFRA . . . leave.”  Cal. Code Regs., tit. 2, § 11094(b). Because the clearing of an absence is an employee benefit, this provision applied to MTA’s absenteeism rule. Therefore, there would be no violation of CFRA only if the employer extended the absence clearance period by the number of days the employee was on any unpaid leave.

Practical Implications: An Employer with a no-fault absenteeism policy that permits employees to clear absences may extend the absence clearance period by the number of days an employee was on the CFRA leave during that period, so long as the same rules apply to any other unpaid leaves of absence.

Midwest Motor Supply Co. v. Superior Court, No. A160096, 2020 WL 6305492 (Cal. Ct. App. Oct. 28, 2020)

Summary: Labor Code section 925 applies when any part of a contract containing a forum-selection clause is modified on or after January 1, 2017, not just when the forum-selection clause itself is modified on or after January 1, 2017.

Facts: Plaintiff Patrick Finch began his employment as a sales manager in training with Defendant Midwest Motor Supply Co. (“Midwest Motor”) in October 2014. The terms of Finch’s employment were memorialized in an employment agreement, which contained a forum-selection clause stating that claims would be venued in Ohio. Midwest Motor sought to enforce this forum-selection clause when, in September 2019, Finch filed a wage-and-hour lawsuit in Contra Costa County Superior Court against Midwest Motor. Midwest Motor filed a motion to dismiss, asserting that Finch was required to bring his lawsuit in Franklin County, Ohio. Finch opposed the motion, arguing that the forum-selection clause was unenforceable under Labor Code section 925. Labor Code section 925 provides that a forum-selection clause in an employment contract is voidable by an employee if the contract containing the clause was “entered into, modified, or extended on or after January 1, 2017.” The trial court held that section 925 applied because Midwest Motor modified the compensation provision of Finch’s employment agreement, though not the forum-selection clause, in 2017 and again in 2018. Midwest Motor filed a petition for writ of mandate. 

Court’s Decision: The California Court of Appeal denied Midwest Motor’s writ petition. Based on the plain and commonsense meaning of the statutory language, the court concluded that under section 925, a forum-selection clause is voidable by an employee if it is contained in a contract that is modified on or after January 1, 2017, regardless of whether the modification was to the forum-selection clause or another provision. The text of the statute contains no language limiting its application to the modification or addition of a forum-selection clause, and the court refused to read such a limiting clause into the statute.  

Practical Implications: Employers with contracts pre-dating January 1, 2017 that contain an enforceable forum-selection clause, who wish to continue to enforce that clause, cannot make any modifications or extensions of the contract without triggering Labor Code section 925.