September 21, 2022

Key Employment Law Case Summaries: August 2022

Technology Credit Union v. Rafat, 82 Cal. App. 5th 314 (2022) 

Summary: To obtain a workplace violence restraining order, an employer must produce evidence of a knowing and willful statement or course of conduct that would place a reasonable person in fear for his or her safety. 

Facts: A credit union filed a petition for a workplace violence restraining order (WVRO) against a credit union member, Matthew Rafat, after Rafat visited a branch and had an encounter with an employee at the counter. The employee claimed that Rafat became visibly angry and aggressive, recorded a video of her without her consent, and assaulted her when he pushed a pen and paper back toward her after she explained that she could not open a business account on the same day as opening another account for him. Rafat later uploaded the video to YouTube. The employee was concerned that Rafat would return to the branch and harm her because he frequented the branch. The trial court issued a temporary WVRO. At the hearing on the WVRO, Rafat admitted to having an altercation and recording the video, but he denied making a credible threat of violence. Rafat explained that he had not returned to the branch except for the day after the altercation. One witness at the hearing testified that he received two emails from Rafat following the incident; in one, Rafat sought an investigation into the incident, and in the other he forwarded a link to the YouTube video and demanded the employee’s termination. The video was entered into evidence. After the hearing, the trial court determined that the credit union met its burden for a WVRO. The trial court explained that Rafat was at a minimum rude, impatient, sarcastic, and intimidating while the employee was courteous and soft spoken. Notably, though, it was Rafat’s conduct following the incident that the trial court found to be a credible threat of violence. Rafat appealed. 

Court’s Decision: The California Court of Appeal reversed and ordered the trial court to dismiss the credit union’s petition. The court concluded that the evidence was not sufficient to find a credible threat of violence. The court found that while Rafat was indisputably rude, impatient, aggressive, and derogatory, the credit union had not produced sufficient evidence linking any of Rafat’s statements or conduct to any implied threat of violence. That is, there was insufficient evidence of “a knowing and willful statement or course of conduct that would place a reasonable person in fear for his or her safety, or the safety of his or her immediate family” pursuant to California Code of Civil Procedure section 527.8(b)(2). The court explained that the only threats Rafat made were of litigation and complaints to a federal agency. His actions toward the employee consisted of berating her, complaining to her supervisor, and posting an accurate video of their interaction on YouTube.

Practical Implications: A WVRO is a powerful tool to protect employee safety. But obtaining one is not always easy. Papers are usually prepared quickly, and under time constraints. This case underscores, however, the importance of marshaling all the necessary evidence—including documentary, audio-visual, and testimonial evidence—supporting the existence of a credible threat of violence before seeking the court’s involvement. 

NLRB v. Ampersand Publishing, LLC, 43 F.4th 1233 (9th Cir. 2022)

Summary: The NLRB may order an employer to reimburse a union for legal fees incurred during the contract bargaining process.

Facts: Between November 2007 and April 2009, Respondent Ampersand Publishing LLC (“Ampersand”) and its newsroom employees’ collective bargaining representative, the Graphic Communications Conference, International Brotherhood of Teamsters (“Union”) met several times to negotiate a collective bargaining agreement. The Union filed several unfair labor practice charges against Ampersand based on its alleged actions during negotiations. After a hearing, an administrative law judge determined that Ampersand had committed several violations of the National Labor Relations Act, including Ampersand’s discontinuance of its merit pay raise program, its transfer of bargaining unit work to non-union temporary employees without notice, its discharge of two employees, and its bad-faith bargaining with the Union. On appeal, the National Labor Relations Board (“NLRB”) adopted the administrative law judge’s findings and, finding that Ampersand engaged in unusually aggravated misconduct, ordered it to reimburse the Union for the costs and expenses it had incurred during collective bargaining negotiations. On appeal, the Court of Appeals for the District of Columbia Circuit upheld the NLRB’s findings. The parties could not reach an agreement on the total amount Ampersand owed in remedies. After further proceedings on the issue, an administrative law judge issued an order granting the Union a specified amount of fees, including legal fees for consultation with its outside counsel. Ampersand objected to the inclusion of legal fees. The NLRB affirmed, and enforcement proceedings were then brought before the Court of Appeals for the Ninth Circuit. 

Court’s Decision: The Court of Appeals for the Ninth Circuit granted the petition for enforcement. The court rejected Ampersand’s argument that D.C. Circuit precedent establishes that the NLRB lacks the power to order the reimbursement of legal fees. As the Ninth Circuit explained, the D.C. Circuit cases to which Ampersand cited establish only that the NLRB lacks the power to award attorney’s fees that are incurred as a litigation expense, not that it lacks the power to ever require the reimbursement of such fees. The Ninth Circuit held that, in this case, the NLRB’s award was limited to only those legal fees incurred during collective bargaining and, thus, were “directly targeted at Ampersand’s violation, compensating the Union for ‘the resources that were wasted because of the [company’s] unlawful conduct’ and ‘restor[ing] the economic strength that is necessary to ensure a return to the status quo ante at the bargaining table.’”

Practical Implications: This case is an important reminder for employers to take their collective bargaining obligations seriously. In the rough and tumble of negotiations, an employer should not lose sight of the legal boundaries that federal law has put up and the potentially costly risk of crossing those boundaries.

Siri v. Sutter Home Winery Inc., 82 Cal. App. 5th 685 (2022) 

Summary: A conditional acceptance of a section 998 offer is a counteroffer and, thus, not binding. 

Facts: Plaintiff Says Siri filed an action for wrongful termination against her former employer, Defendant Sutter Home Winery Inc. Defendant offered Plaintiff an offer of compromise under California Code of Civil Procedure section 998 for $500,000 in exchange for the dismissal of the action with prejudice. During the offer’s 30-day acceptance period, the parties’ lawyers disputed whether Plaintiff’s potential acceptance would trigger a right to prejudgment interest. Specifically, Plaintiff had served Defendant with a section 998 offer for $499,999 at the outset of litigation in 2012, which had not been accepted, and Plaintiff claimed that her acceptance of Defendant’s 2019 offer for a higher sum would trigger the cost-shifting provisions of California Civil Code section 3291, entitling her to recover pre-judgment interest of approximately $379,000. Defendant’s lawyer denied any such entitlement. Plaintiff indicated that she would accept the offer if it were amended to allow her to move for pre-judgment interest, but Defendant declined to modify the offer. Plaintiff served, but did not file, objections to the section 998 offer, contending that it was defective because it did not address the availability of pre- or post-judgment interest on the proposed $500,000 payment. Five days later, Plaintiff’s lawyer served a document entitled “Notice of Conditional Acceptance of [Defendant’s section] 998 Offer” stating that the acceptance was subject to the prejudgment interest. The next day, Plaintiff filed the objections to Defendant’s section 998 offer that she had served a week earlier, together with a motion asking the court to enter a judgment in her favor that would be “consistent with [her] conditional acceptance” and include prejudgment interest. Soon afterward, Defendant filed a “Notice of Plaintiff’s Acceptance of [Section] 998 Offer.” Subsequently, the trial court issued a minute order denying Plaintiff’s motion for entry of judgment. The trial court reasoned that if Plaintiff had accepted the section 998 offer, she would not be entitled to an order entering judgment in her favor, but would be obliged to dismiss her claims with prejudice, which she had not done. Defendant filed a motion to enforce the settlement agreement, which the trial court granted. The trial court reasoned that Plaintiff did not object to the characterization of her notice of acceptance. Plaintiff filed a motion for pre- and post-judgment interest, which the trial court denied. The court entered a judgment of dismissal, and Plaintiff appealed. 

Court’s Decision: The California Court of Appeal reversed. The court explained that the process for making and accepting offers pursuant to section 998 are contractual in nature. To form a binding settlement, the acceptance of the 998 offer must be absolute and unqualified. A conditional acceptance, like Plaintiff’s, forms a counteroffer, not a contract. As the court noted, Plaintiff’s conditional acceptance was conditioned on the addition of new terms, even if the terms were just to have the right for the trial court to consider arguments it rejected. Thus, the trial court erred in ruling that the conditional acceptance created a binding settlement.

Practical Implications: Section 998 offers can be a useful mechanism for reaching early resolution of a lawsuit. But the rules for properly making, and accepting, 998 offers are specific and unforgiving. Before making, or accepting, a 998 offer, be sure to have reviewed the rules to ensure you arrive at the outcome you expect.