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Employment Law Notes May 2010

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Employment Law Notes May 2010

  1. 1. newsletter May 2010 By Anthony J. Oncidi Vol. 9, No. 3 Anthony J. Oncidi Ninth Circuit Affirms Certification Of Class In Wal-Mart Gender is a partner in and the Discrimination Case Chair of the Labor and Employment Dukes v. Wal-Mart Stores, 2010 WL 1644259 (9th Cir. 2010) (en banc) Department of The district court certified a class encompassing all women employed by Wal-Mart at any time Proskauer Rose LLP in after December 26, 1998 who claimed gender discrimination under Title VII and who sought Los Angeles, where he injunctive and declaratory relief, back pay and, in a separate opt-out class, punitive damages. exclusively represents Among other things, plaintiffs claim they received lower pay and fewer and slower promotions employers and than did their male counterparts. In this en banc decision, the Ninth Circuit affirmed the management in all district court in a narrow 6-5 ruling. The class includes as many as 1.5 million women who areas of employment worked at over 3,400 stores throughout the United States. The Court affirmed certification and labor law. His under Fed. R. Civ. P. 23(b)(2), which imposes less stringent requirements for class telephone number is certification and applies to cases in which the injunctive relief sought predominates over the 310.284.5690 and his monetary relief sought. See also Porter v. Winter, 2010 WL 1780864 (9th Cir. 2010) (federal e-mail address is c ut h v s b c matrui ii o e c i bo g t o lt rc v r t re ’fe o r a e u j t t j s co v r lms ru h s ly o e o e at n y e s s e e rd tn a e o s aoncidi@proskauer.com incurred in Title VII administrative proceedings); United Steel, Paper & Forestry, etc. v. Shell Oil Co., 2010 WL 1571190 (9th Cir. 2010) (denial of Rule 23 class certification in removed action does not divest district court of jurisdiction). Company Whose General Counsel Was Responsible For $4 Million Default Judgment Was Relieved Under CCP § 473 Gutierrez v. G&M Oil Co., 2010 WL 1818904 (Cal. Ct. App. 2010) Maria Gutierrez filed a wage-and-hour class action lawsuit against G&M Oil Company, an o eao o ac a o g s tt n tru h u C l ri Mi a l ry a G M’v e p rtr f h i f a s i s ho g o t af n . c e G a w s & s i n ao i a o h c president and general counsel and its registered agent for service of process. Gray agreed to a c p s ri o tec mp i f m G t r z atre a dd c e t h n l ted fn e ce t ev e fh o ln r c a t o ui r ’ t n y n e i d o a d h ee s ees o d e of the case himself. Gray did not send a copy of the pleadings to anyone else at G&M and kept the existence of the lawsuit to himself. Over the course of the next 12 months, there were no fewer than three separate requests for default, based on a lack of response to the operative complaint. Finally, a default judgment of $4 million was obtained against G&M. After Gray was removed from his position and outside counsel was retained to defend G&M, the company filed a motion to vacate the default judgment, relying upon Code Civ. Proc. § 4 3( lv gap r f m ad fu b s du o a atre ’“ s k , a v r n e 7 ri i ee n at r yo ea l a e p n n t n y mia e i d et c , t o s t n e s rr eo n g c ) T eta c ut rne G M’moi t v c t ted fu , o i ta upi r e l t. h r lo rga td & s t n o a ae h ea l h ln h t s e” i o t dg Section 473 applies to in-house counsel such as Gray as well as outside counsel. The Court o A p a afme e e to g G a w s o o lG M’g n rlo n e b t l o eo i f p e lf i d v n h u h ry a n t n & s e ea c u s l u a o n f s r y s t corporate officers.
  2. 2. Start-Up Company Owned Source Code That Was Developed By Employee JustMed, Inc. v. Byce, 600 F.3d 1118 (9th Cir. 2010) Michael Byce developed the source code used in the software of a digital audio larynx device that JustMed owned. JustMed contended that Byce was its employee when he developed the code and that the code, therefore, belonged to JustMed under the work-for-hire doctrine of the federal Copyright Act. Byce, however, contended he was an independent contractor and that he expected to receive shares in JustMed upon transferring ownership of the source code to JustMed. The district court found that Byce was an employee of JustMed when he wrote the software and that JustMed owned the copyright to the software under the work-for-hire d c i .T ed tc c ut l fu dB c lb fr s p rpi i o J s d t d o tnr e h ir t o ra o o n ye i l o mi po r t n f u t ’ r e si s ae a ao Me s a s ces T eNnhCru afme ted tc c ut j g n rg ri v l i o te e rt h i . t i ifc t i d h ir t o rsu me te ad g ia o fh r si ’ d n o tn C p r h A tn t gta a h u h“u t d[s s ru c mp n ] i n t o lwt o yi t c oi h t l o g J s g , n t Me a a t t p o a y d o c mp i a- d y h fd rl n s t e l me t ra l s terme y o te efi g ls o wt d n i e ea a d t e mp y n o txa … h e d frh s ai si n t i e y g a o w ln e h n tefm i i ee ta po et b t i e fri terl a t w . H w v rteC ut h i t n lc l rp r u wt noc g h e v n l s o e e,h o r r s tl u y h n e a ” rv re tej g n i oa a ted tc c ut a d tr n dB c h dv l e Ia o e es d h u me t s fr s h ir t o rh d eemi d n si e ye a ia d d h ’ ot s v ri o teU i r Ta eS ces c b c u eB c h dn i e “s d n rd c s d es n fh n om rd e rt A t e a s ye a e h ru e ” o “i l e ” o f t so J s d t d s ces T eNnhCru rma d dtec s frh d tc c uto u t ’ r e e rt h i Me s a . t i i e n e h a e o te ir t o rt ct si determine whether and in what amount JustMed could recover damages on its conversion and breach of fiduciary duty claims and whether an injunction to prevent further misappropriation was warranted. See also Thomas Weisel Partners LLC v. BNP Paribas, 2 1 WL1 6 7 4( .. a 2 1 )c mp n ’d e tr ra h df u i y uy y a iai 00 2 7 4 ND C l 0 0 (o a y i c be c e i c r d t b fci t g . s r o d a l n t en masse defection of 26 employees to competitor). E ly n S re igB sn s H dRg t oR p bihMe a ’ mpo me t ce nn u ie s a ih T e u ls g ns Law Information Mendoza v. ADP Screening & Selection Servs., Inc., 182 Cal. App. 4th 1644 (2010) Wia Me d z s e A PS re i a dS l t nS ri s Ic ( A S)o v l i s f lm l i n o a u d D ce n g n e co ev e ,n .“ S ”fr ia o o n ei c S o tn Penal Code §§ 290.4 and 290.46, the Investigative Consumer Reporting Agencies Act and d c rtr rlf a e u o S S ’a p rn d c s r t apo p cv e l e o e l aoy ee b s d p n A Ss p ae t i l ue o rs e te mp y r f a i so i o information uncovered during a background check conducted on Mendoza, indicating his s ts s rg trds x f n e ltdo teMe a ’L ww b i .( n o a c mp i t u a a e iee e of d rie n h a s e s g n a e se Me d z ’ o ln s t s at i ldte efc b t i n t f mai lae ete )I rs o s t Me d z ’ mpe h s a t u d o af te lg h m. n e p n e o n o a i s d i vy l r s c mp i , A Sf das e i moi t s i p ru n t C l ris ni L P s tt. o ln S S i at le p c l t n o tk us a to af n ’a tS A P t ue a o re i a o - a T eta c ut rne S S ’moi t s i tec mp i atr o c d gtec n u t h r lo rga td A Ss t n o tk h o ln f c n l i h o d c i o re at e un ae e b Me d z ao ei fr ea c o S S ’Frt me d n r hs f o lg d y n o a rs n ut rn e f A Ss i A n me ti t o c mmec l l h s g ria speech on a matter of public interest and that Mendoza could not establish a probability that h w u pe a o temei.T eta c ut d c i a oi l e ama d tr a ado e o l rv i n h d l rs h r lo rs e io l n u d t i ’ sn s cd n aoy w r f atre ’fe i tea u t f 4 ,9 .5i favor of SASS. The Court of Appeal affirmed, t n y e sn h mo n o $ 25 37 n o s holding that the anti-SLAPP statute is available to SASS even though it is a commercial e trr ea dta po in e l e sre i rp r ia“rtc da ti” n e nepi n h t rv i mp y e ce n g e ot s poe t cvy u d r s dg o n s e it the statute. Fih E gn e’ Whslbo e Cam Wa N t re tdB l t n ie r g s it lw r li e s o P e mpe y Federal Law Ventress v. Japan Airlines, 2010 WL 1729705 (9th Cir. 2010) Mat V nrs, f h e g e ro J p nAr e ( A ” ae e h e l me t a rn e t s a l t n i e fr a a in s “ L) lg d i mp y n w s i e i g n l i J ,l s o terminated in violation of the California whistleblower statute (Labor Code § 1102.5(b)) for allegedly reporting safety violations six months after they occurred. JAL moved for judgment on the pleadings, asserting complete federal preemption by the Federal Airline Deregulation Act of 1978, as amended by the Whistleblower Protection Program. The Ninth Circuit held California Employment Law Notes 2
  3. 3. ta b c u eV nrs d n t tr p “ev e (e,tepi s sh d l , r i a d h t e a s e t s i o i er ts ri ”i .“ e d n u c . h r e , c e u s oin n c e gs d sn t n o tep i - -o trn p r t no p se g r, ag o ma” h c i w s e t ai s fh o top i t s ot i f a s n es c ro r i , i lm a i o nt n a ao l s a ) not preempted by federal law. Compare Wise v. Verizon Communications Inc., 600 F.3d 1180 (9th Cr2 1 )e l e ’c i ain f m d n l f i bi b n f w r i 0 0 (mp y e lms r i r . o s a s g o e i o d a iy e ei ee a s l t ts preempted by ERISA). P rc eD ae Ma O e“ id r F e T S ls es n os h e lr y w Fn e’ e ” o ae p ro s Wald v. Truspeed, 2010 WL 1744893 (Cal. Ct. App. 2010) Ae Wa , h ii teb s e s ff d g b y ga dte s l ga a u e P rc e , l x l w o sn h u i s o “n i , u i n h n ei g i s d osh s d n i n n ln n ” found 11 Porsches for Truspeed (a car dealer), which Truspeed sold without paying Wald the f d r fe I rs o s t Wa ’l s i g i t rs e dae i be c o c nrc i e’ e . n e p n e o lsa u a a s Tu p e lg g ra h f o t t n s d w t n l n a, u j t ni me t n f u , rs e da s r dta Wa l k dad a r le s a da n s e r h n a d r d Tu p e set h t l a e u c a e d c e l ’ i ne n es c s l p ro ’le s a d teeoe h w s ardf m rc v r ga a s Tu p e .Wa a s es n i n e n ,h rfr, e a b r r e o ei g i t rs e d e sc e o n n l d argued that he was really a salesperson and not a dealer and that he should be able to rc v r g i t rs e d T eta c ut u ti dTu p e ’d murr i o t a et e o e a a s Tu p e . h r lo rs s n n i a e rs e d e r wt u l v o s e h e a n , u teC ut f p e le es d h ln ta Wa w s i s b tn eas l p ro ” me d b th o ro A p a rv re , o i h t l a “ u s c dg d n a a s es n e fr rs e d A frh fc ta Wa a ol k das l p ro ’le s ,h C ut e o Tu p e . s o te a th t l l a e d s c a s es n i n e te o rh l e sc d that the licensing requirement exists to protect the public from unscrupulous dealers and not dealers from their own salespeople. The Court also held that Wald could proceed with his fraud claim. Trial Court Properly Denied Class Certification To Restaurant Managers Arenas v. El Torito Restaurants, Inc., 183 Cal. App. 4th 723 (2010) The plaintiffs in this case are salaried managers at El Torito, El Torito Grill and G a a H r ’rs ua t i C l ri f m Ma 2 0 t tepe e t Pa t s lg dte u d l ar s e t rnsn af n r a y a i a o o y 0 2 o h rs n. lni ae e h y if l f were misclassified as employees exempt from overtime because they routinely spent more than half of their working hours performing duties delegated to non-exempt employees such as operating and closing cash registers, preparing food products, cooking, preparing drinks, tending bar, etc. In support of their motion to certify the class, plaintiffs alleged common questions of law and fact, including that all managers share the same or similar employment duties and activities, are automatically classified as exempt, and are denied the benefits and protections of the employment laws and regulations in the same manner. Plaintiffs moved for certification of three subclasses of employees: kitchen managers, department managers and general managers. The trial court denied class certification after determining that resolution of the common issues would require mini-trials concerning the circumstances of each i id aso d t s T eC ut f p e l f me , ge i wt teta c ut c n l i n v u l j ui . h o ro A p a af d a re g i h r lo rs o c s n di ’ b e i r n h i ’ uo ta “ n g r, a e s ly nte j d sr t n , eea arl mi l si w s o h tma a es b s d o lo h i o e ci i s w r s u e rb po e s a i d a nt csf e a n b t c mmo po f See also Weigele v. FedEx Ground Package Sys., 2010 WL me a l o o e n ro. ” 1 3 0 1(.. a 2 1 )ga t gF d x moi t d c rf c s o fr r n g r) 3 7 3 SD C l 0 0 (rni e E ’ t n o e et l s fome ma a es. . n s o i a y Police Officers Were Properly Denied Compensation For Donning And Doffing Uniforms Bamonte v. City of Mesa, 598 F.3d 1217 (9th Cir. 2010) The plaintiffs in this case are employed as police officers for the City of Mesa, Arizona. They c ne d dta tecy iae teF iL b r tn ad A t“L A) y ai t o tn e h th i v l d h a a o Sa d rs c ( S ”b fi g o t ot r F ln compensate them for the time spent donning and doffing their uniforms and accompanying gear. The district court dismissed the lawsuit on summary judgment, and the Ninth Circuit afme , o i ta b c u e“ ] rq i me t f w rl tee l e, rh n tr o fi d h ln h t e a s [ o e u e n o l ,u ,h mp y ro te aue f r dg n r a e o tew r ma d ts o n ga dd f ga tee l e’pe s s rte ta a h me te h ok n ae d n i n of th mp y r rmi ”ah rh n t o ,h n i n o s e time spent doing so was not compensable under the FLSA. California Employment Law Notes 3
  4. 4. Miitr l x e t nB r dS miain ’ li F r n adO et nsei E c pi ar e n r s Cams o U p i v rme a o e a i Rosas v. The Corporation of the Catholic Archbishop of Seattle, 598 F.3d 668 (9th Cir. 2010) Cesar Rosas and Jesus Alcazar were Catholic seminarians who sued the Corporation of the Catholic Archbishop for, among other things, failure to pay them overtime wages under Washington state law. Based on the ministerial exception, the district court dismissed the case on the pleadings. The Ninth Circuit affirmed, holding that the Religion Clauses of the Frt me d n rq i a“ n tr l xe t n t e l me t tttsfh s tt’ i A n me te u e mis i e c pi ”o mp y n s ue i e t ue s r ie a o o a t a s a pc t nw u i efr wt arli sn t t n e l me t e io s o c ri p lai o l n r e i i o d t e h eg u i i i ’ mp y n d c i c n en g io st o s u o sn n its ministers. Trainee/Interns Of Non-Profit Organization Are Exempt From Minimum Wage Law The California Division of Labor Standards Enforcement opined that an intensive educational and training program designed for young urban adults (18-24 years old) that places these individuals in internships with non-profit and for-profit businesses is exempt from the minimum wage law (interns receive a stipend but not a salary or wages). DLSE Opinion Letter (Apr. 7, 2010), available at http://www.dir.ca.gov/dlse/OpinionLetters-byDate.htm. Po k u r n al2 0L b r n E l me t w es a a de s h mo t o l a dc ae g gl o a d rsa e’ e r 0 a o a d mp y n l y r c n d rs te s c mp x n h ln i a r n s y o a e l n b employment law issues faced by employers. The following Los Angeles attorneys welcome any questions you might have. Contacts Harold M. Brody, Partner 3 02 45 2 –h rd @po k u r o 1 .8 .6 5 bo y rsa e. m c Anthony J. Oncidi, Partner 3 02 45 9 –a n i@po k u r o 1 .8 .6 0 o c i rsa e. m d c Mark Theodore, Partner 3 02 45 4 –mte d r@po k u r o 1 .8 .6 0 h o oe rsa e. m c  If you would like to subscribe to California Employment Law Notes, please send an e-mail to Proskauer_Newsletters@proskauer.com. We also invite you to visit our website www.proskauer.com to view all Proskauer publications. This publication is a service to our clients and friends. It is designed only to give general information on the developments actually covered. It is not intended to be a comprehensive summary of recent developments in the law, treat exhaustively the subjects covered, provide legal advice, or render a legal opinion. Boca Raton | Boston | Chicago | Hong Kong | London | Los Angeles | New Orleans | New York | Newark | Paris | São Paulo | Washington, D.C. www.proskauer.com © 2010 PROSKAUER ROSE LLP. All Rights Reserved. Attorney Advertising. California Employment Law Notes 4

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