Key California Employment Law Case Summaries: May & June 2023
Glacier Northwest Inc. v. International Brotherhood of Teamsters Local Union No. 174, 143 S.Ct. 1404 (2023)
See our in-depth analysis HERE.
People ex rel. Garcia-Brower v. Kolla’s, Inc., 14 Cal. 5th 719 (2023)
See our in-depth analysis HERE.
Groff v. DeJoy, 143 S.Ct. 2279 (2023)
Summary: An employer must accommodate an employee’s religious beliefs unless it can show that doing so would “result in substantial increased costs in relation to the conduct of its particular business.”
Facts: Plaintiff, United States Postal Service (“USPS”) “Rural Carrier Associate” Gerald Groff, refused to work on Sundays, instead holding the day out for rest and worship in accord with his Evangelical Christian beliefs. After an agreement between USPS and Plaintiff’s union (the National Rural Letter Carrier’s Association) was made, USPS required its employees. including Groff, to make deliveries on Sundays and holidays. The agreement specified a particular order in which USPS employees would be called to work on Sundays. First would be part-time “Assistant Rural Carriers,” then volunteers, and last would be any available carrier who would be called on a rotating basis. This last category included Plaintiff. With Plaintiff unwilling to make Sunday deliveries, USPS made other arrangements, including requiring other employees (including the postmaster) to pick up Plaintiff’s deliveries. This arrangement continued for nearly two years, with Plaintiff receiving progressive discipline each time he missed a Sunday shift. Plaintiff eventually resigned in 2019 and brought suit against USPS under Title VII of the Civil Rights Act of 1964, arguing that USPS could have accommodated his Sunday practice “without undue hardship on the conduct of [its] business.” The district court granted summary judgment for USPS and the Court of Appeals for the Third Circuit affirmed. The Third Circuit held that it was “bound by” the United Supreme Court’s holding in Trans World Airlines Inc. v. Hardison. 432 U.S. 63 (1977). This holding, as construed by numerous lower courts including the Third Circuit, interpreted Title VII’s “undue hardship” standard to mean any effort or cost that is “more than…de minimis.” Both Plaintiff and USPS agreed that the “de minimis” reading of Hardison was incorrect, but they disagreed on what should replace it. Plaintiff, arguing for a more employee-friendly reading, maintained that undue hardship should be interpreted to mean “significant difficulty or expense,” while the USPS believed that the phrase “substantial expenditures” or “substantial additional costs” better accorded with Title VII. Plaintiff petitioned for a writ of certiorari.
Court’s Decision: Reversing the Third Circuit’s ruling for USPS and disagreeing in part with both parties’ suggestions, the United Supreme Court held that “more than a de minimis cost, as that phrase is used in common parlance, does not suffice to establish undue hardship under Title VII.” Rather than overrule Hardison, the Court reached this decision by construing Hardison “to mean that undue hardship is shown when a burden is substantial in the overall context of an employer’s business.” The Court explained that “[t]his fact-specific inquiry comports with both Hardison and the meaning of undue hardship in ordinary speech.” In practice, when “[f]aced with an accommodation request like Groff’s, it would not be enough for an employer to conclude that forcing other employees to work overtime would constitute an undue hardship. Consideration of other options, such as voluntary shift swapping, would also be necessary.” The Court left it to lower courts to apply the “clarified” de minimis standard to specific contexts.
Practical Implications: Employers must remember that their obligation to reasonably accommodate their employees extends not only to employees’ disabilities, but also to employees’ religious beliefs. Before Groff, religious accommodations requests could be denied if they would impose “more than a de minimis cost.” In practice, this often meant employers could deny even minor accommodations like coverage for occasional absences or relaxed dress codes. Now, under the new Groff standard, an employer must show that costs of an accommodation are “substantial” in relation to the conduct of the particular business. This fact-intensive inquiry means an employer will need to consider numerous potentially relevant factors when making an accommodations decision: from the size of the business, to the nature of the work, and the costs of operating the business.
Sharp v. S&S Activewear LLC, 69 F.4th 974 (9th Cir. 2023)
Summary: Playing “sexually graphic, violently misogynistic” music throughout the workplace routinely and publicly can foster a hostile or abusive environment constituting discrimination and harassment based on sex.
Facts: Plaintiffs, eight former employees (seven women and one man) of Defendant S&S Activewear LLC, sued Defendant alleging that it permitted its managers and employees to routinely play “sexually graphic, violently misogynistic” music throughout its warehouse. Plaintiffs claimed the music and related conduct created a hostile work environment in violation of Title VII. According to Plaintiffs, the songs’ content denigrated women and used offensive terms, and the music was blasted from commercial-strength speakers placed throughout the warehouse. Plaintiffs also alleged the music served as a catalyst for abusive conduct by male employees, who frequently pantomimed sexually graphic gestures, yelled obscenities, made sexually explicit remarks, and openly shared pornographic videos. Although the music was particularly demeaning toward women (who comprised roughly half of the warehouse’s workforce), some male employees also took offense. Despite “almost daily” complaints, Defendant’s management defended the music as motivational and allowed it to play for nearly two years. Defendant moved to dismiss for failure to state a claim. The district court granted Defendant’s motion and denied leave to amend on the ground that the music’s offensiveness to both men and women and audibility throughout the warehouse nullified any discriminatory potential. Plaintiffs appealed.
Court’s Decision: The Court of Appeals for the Ninth Circuit vacated the district court’s dismissal, noting two key principles. First, the Ninth Circuit concluded that harassment, whether aural or visual, need not be directly targeted at a particular plaintiff in order to pollute a workplace and give rise to a Title VII claim. The court explained that “even if the ubiquitous music was not (and need not have been) targeted toward any particular woman, female employees allegedly experienced the content in a unique and especially offensive way.” Second, the Ninth Circuit concluded the challenged conduct’s offensiveness to multiple genders was not a certain bar to stating a Title VII claim. The Ninth Circuit explained that “an employer cannot evade liability by cultivating a workplace that is broadly hostile and offensive.” The court remanded the case to the district court to reconsider the sufficiency of the pleadings in light of these principles.
Practical Implications: Sexual harassment can take many forms, and to be actionable it need not be directed at one sex. Employers must be careful to monitor their workplaces for images, displays, audio recordings, music, and the like that could contribute to a hostile work environment.
Duran v. EmployBridge Holding Co., 92 Cal. App. 5th 59 (2023)
Summary: Both individual and non-individual representative PAGA claims were excluded from arbitration pursuant to arbitration agreement’s broad carve-out for “claims under PAGA.”
Facts: Plaintiff Griselda Duran brought an action pursuant to the California Labor Code Private Attorneys General Act (“PAGA”) against her employer, Defendant EmployBridge LLC. As part of her employment application, Plaintiff electronically signed an arbitration agreement, which contained a class and representative action waiver. That waiver provided: “Except as prohibited under applicable law, . . . neither [Plaintiff] nor the Company will assert any class action, collective action, or representative action claims against each other in arbitration, in any court, or otherwise; and [Plaintiff] and the Company shall only submit their own respective, individual claims in arbitration and will not seek to represent the interests of any other person.” The agreement also included a carve-out provision stating that “claims under PAGA . . . are not arbitrable under this Agreement.” Defendant moved to compel arbitration, arguing that the court should compel arbitration of Plaintiff’s claim on an individual, nonrepresentative basis and that the representative action waiver was enforceable. The trial court denied the motion, concluding that the issues presented were not subject to arbitration because the agreement specifically excluded PAGA claims from arbitration under its carve-out provision. Defendant appealed.
Court’s Decision: The California Court of Appeal affirmed. As the court explained, because the agreement’s carve-out provision was unambiguous, it was unreasonable to interpret the phrase “claims under PAGA” to include some PAGA claims (i.e., non-individual, representative PAGA claims) while excluding others (i.e., the individual PAGA claims). In other words, individual and representative PAGA claims are both “claims under PAGA” for purposes of the carve-out provision. In doing so, the court rejected Defendant’s argument that the clear intent of the carve-out clause was simply to except from arbitration claims that are nonarbitrable as a matter of law. Citing Code of Civil Procedure section 1858, the court declined to insert the term “nonarbitrable” into the carve-out provision: “If [Defendant] intended the clause to be a truism—that is, only nonarbitrable PAGA claims would not be arbitrable under the agreement—it should have drafted the clause to say so.”
Practical Implications: This case presents an important reminder to proceed carefully when drafting employment agreements, especially arbitration agreements. Employers should avoid recycling or reusing old agreements, or adopting “off the shelf” agreements without reviewing them. As this case shows, even minor wording changes can have significant impacts.