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Posts Tagged ‘Superior court’

Press Quotes About Analysis of Second District’s Compton Case

In Arbitration on March 25, 2013 at 4:22 pm
California Supreme Court

California Supreme Court (Photo credit: Jamison Wieser)

Law360 published an article today quoting the blog author’s analysis of the Compton v. Superior Court case.  Compton v. Superior Court of Los Angeles County, No. B236669, — Cal.Rptr.3d —-, 2013 WL 1120619 (2d Dist. Mar 19, 2013):

“In both cases, the First and Second districts applied Armendariz and invalidated arbitration agreements for lack of mutuality,” said Charles Jung, a Nassiri & Jung LLP attorney. “At least as far as California courts are concerned, Armendariz is alive and well, and it appears that this is going to continue to be the case until the California Supreme Court overrules it.”

In light of the latest ruling, plaintiffs and their attorneys looking to defeat mandatory arbitration agreements will keep an eagle eye out for any type of one-sidedness, according to Jung.

“The Compton ruling creates an avenue for employees to argue that mandatory agreements are unlawfully one-sided and that under Armendariz, they should be stricken,” he said. “For employers, it suggests the way to make arbitration agreements enforceable is by making them simple and even-handed. Employers can’t have their cake and eat it too.”

“The California Supreme Court really has its work cut out for it,” Jung said. “The challenge for the California Supreme Court is to try to preserve what it can of California’s public policy, yet not fall afoul of and directly contradict or simply ignore the U.S. Supreme Court. It’s a very tricky position for the court to be in.”

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Second District Reverses Arbitration Order in Wage & Hour Case, Citing Lack of Bilaterality

In Arbitration, Class-wide Arbitration, Concepcion on March 20, 2013 at 5:48 pm
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BgKahuna squeezes his way inside. Abandoned and decaying Ambassador Apartments in Gary, Indiana (Photo credit: slworking2)

Yesterday, the California Court of Appeal for the Second District reversed the lower court’s order granting a petition to compel arbitration.  Compton v. Superior Court of Los Angeles County, No. B236669, — Cal.Rptr.3d —-, 2013 WL 1120619 (2d Dist. Mar 19, 2013).  Plaintiff was a property manager who filed a putative wage & hour class action complaint in Los Angeles Superior Court.  She was required to sign an arbitration agreement that also barred arbitration of class claims.  The trial court granted defendants’ petition to compel arbitration.

Normally an order compelling arbitration is not appealable.  But the Court of Appeal determined it had jurisdiction, citing the “death knell” doctrine:

An order compelling arbitration is not appealable. (Elijahjuan v. Superior Court (2012) 210 Cal.App.4th 15, 19.) The parties argue over whether this matter is appealable under the “death knell” doctrine, which applies when an order effectively terminates a class action. Rather than parse the case law on that issue, we conclude that we have jurisdiction to treat this nonappealable order as a petition for writ of mandate in this unusual case because: (1) the unconscionability issue is one of law based on undisputed facts and has been fully briefed; (2) the record is sufficient to consider the issue and it appears that the trial court would be only a nominal party; (3) if we were to dismiss the appeal, and the ultimate reversal of the order is inevitable, it would come in a post-arbitration award after the substantial time and expense of arbitrating the dispute; and (4) as a result, dismissing the appeal would require the parties to arbitrate nonarbitrable claims and would be costly and dilatory.

The Court concluded that the arbitration agreement was unconscionably one-sided because (1) it exempted from arbitration claims the employer would more likely bring, such as claims for injunctive or equitable relief from trade secret disclosures; (2) it limited the time to demand arbitration to a period shorter than the relevant statutes of limitation; (3) it retained the statute of limitations period for itself  and (4) it suggested that the arbitrator had the discretion not to award mandatory attorney’s fees under the Labor Code.

The Court determined that it was not violating Concepcion by enforcing Armendariz’s bilaterality rule.

Concepcion did not discuss the modicum of bilaterality standard adopted by Armendariz, which is not a class action case. And Concepcion did not overrule Armendariz. We both agree with and are therefore bound to follow our Supreme Court and apply Armendariz to this case. (Truly Nolen of America v. Superior Court, supra, 208 Cal.App.4th at p. 507.) Accordingly, we conclude that Concepcion does not apply to invalidate Armendariz’s modicum of bilaterality rule, at least in this context.

Justices and Judge

Justice Laurence D. Rubin wrote the opinion for the Court, with Justice Madeleine I. Flier concurring.  Presiding Justice  Tricia A. Bigelow dissented.  Judge Michael Johnson, Los Angeles Superior Court.

Attorneys

R. Rex Parris Law Firm, R. Rex Parris, Alexander R. Wheeler, Kitty Szeto and John M. Bickford; Lawyers for Justice and Edwin Aiwazian, for Petitioner.

Jackson Lewis, Thomas G. Mackey and Brian D. Fahy for Real Parties in Interest.

By CHARLES H. JUNG

DFEH Charge Does Not Toll Statute of Limitations Under the Labor Code

In Statutes of Limitation on October 19, 2010 at 12:30 pm
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The Court of Appeal for the Second District held that a “DFEH complaint will [not] toll the statute on a claim for unpaid wages under the Labor Code.”  Parvizian v. California Department of Transportation, No. B215608, 2010 WL 4012070 (Cal. Ct. App. 2d Dist. Oct. 14, 2010).

Background

Plaintiff-appellant Syrus Parvizian brought a suit against his former employer, respondent State of California Department of Transportation (“DOT”).  Id. *1.  The operative first amended complaint brought six causes of action, titled Damages for Violation of Statutory Duty to Pay Wages and Compensation, Unpaid Wages, Accounting, Conversion, Money Had and Received, and Discrimination, Harassment and Retaliation in Violation of Government Code section 12940.  Id. DOT’s demurrer was sustained with leave to amend as to the causes of action for Damages of Violation of the Statutory Duty to Pay Wages and Compensation, Accounting, Conversion, and Money Had and Received.  Id. The court ruled that the claims were not properly pled, noting that “the state can only be sued if it authorizes a lawsuit, and you don’t plead the proper statutory authority to do so.”  Id. The court overruled the demurrer to the cause of action for unpaid wages, which was brought under Labor Code sections 201 and 202. Id. The court found that the cause of action for violation of Government Code section 12940 had been dismissed with prejudice in the earlier case, and sustained the demurrer as to that cause of action without leave to amend. Id. Plaintiff elected not to amend his complaint, and DOT filed a motion for judgment on the pleadings on the cause of action under the Labor Code, on the defense of statute of limitations.  Id. The court granted the motion and dismissed the complaint. Id.

Statute of Limitations Read the rest of this entry »

Northern District Rejects Stay of Meal and Rest Break Action Pending California Supreme Court’s Decision in Brinker v. Superior Court

In Meal and Rest Breaks, Stay on October 11, 2010 at 6:56 am
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The Northern District rejected defendant’s motion for stay of a meal and rest break action where the primary focus of complaint was unrelated to the break claims.  Murphy v. J.B. Hunt Transport Services, Inc., No. C 10-01568 WHA, 2010 WL 3911786 (N.D. Cal. Oct. 5, 2010) (slip op.).  Defendant J.B. Hunt Transport, Inc., moved to stay a case alleging three claims for discrimination and one claim for nonpayment of wages for regular meal-and-rest periods.  Id. *1.  Defendant’s stay motion sought a stay pending the resolution of a case pending before the California Supreme Court, Brinker Restaurant Corp. v. Superior Court, 196 P.3d 216 (Oct. 22, 2008), in which the court will decide whether the California Labor Code requires employers to affirmatively ensure that employees take rest and meal breaks. Id.

The court recited the standard for a stay of federal court proceedings as follows:

The proponent of a stay bears the burden of establishing its need. Clinton v. Jones, 520 U.S. 681, 708 (1997). Read the rest of this entry »

Second District Holds That Hotel Service Charge Reform Ordinance Is Not Preempted by Labor Code’s Tip Provisions

In Preemption, Tips on September 9, 2010 at 7:09 am
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Yesterday, the Second District issued an opinion addressing the validity of the Hotel Service Charge Reform Ordinance (Ordinance) enacted by the City of Los Angeles, which requires non-unionized hotels in the Century Corridor near Los Angeles International Airport (LAX) to pass along mandatory service charges to workers who render the services for which the charges have been collected.  Garcia v. Four Points Sheraton LAX, et al., Nos. B210720, B210716, B210719, B210726, B210730, — Cal. Rptr. 3d —-, 2010 WL 3491954 (Cal. Ct. App. 2d Dist. Sept. 8, 2010). Read the rest of this entry »

Waiting Time Penalty Under Labor Code Section 203(a) Should Be Calculated Based on Actual Hours Worked

In Waiting Time Penalties on August 15, 2010 at 1:46 am

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The Fourth District issued an unpublished opinion discussing the proper means of calculating the waiting time penalty under Labor Code section 203.  In Riley v. Valencia, 2010 WL 3195816 (Cal. Ct. App. 4th Dist. Aug. 13, 2010), the trial court utilized the actual hours the employee worked to calculate the penalty.  The employee, Ashley Riley, contended the trial court improperly calculated the section 203 waiting time penalty, arguing that the court should have multiplied her hourly rate ($6.75) for 30 days at eight hours per day for a total penalty of $1,620, as opposed to multiplying her hourly rate ($6.75) by her average daily hours worked (3.5 hours) for 30 days for a total penalty of $708.75.  Riley contends that section 203 required the trial court to use eight hours per day in its calculations, even though Riley actually worked only three to four hours per day.

The Fourth District concluded the trial court properly calculated the penalty and affirmed the judgment.

Facts

Riley bused tables for employer Valencia (doing business as La Carreta Mexican Restaurant). Eventually, Riley left or was discharged from her employment and filed suit against Valencia for waiting time penalties for unpaid wages due, among other employment-related causes of action. The trial court found in favor of Riley pursuant to section 203 and made the following calculations: “a. Penalty for failure to pay all wages due upon discharge: 6.75 x 3.5 = 23.625 x 30 = $708.75.”

Issue

The sole issue facing the Fourth District was whether the trial court properly calculated the waiting time penalty pursuant to section 203 where it used Riley’s actual hours worked, instead of a generic eight-hour work day, to calculate the “wages” of the employee at the “same rate” pursuant to Labor Code § 203(a).

Because section 203 does not explicitly define “same rate,” Riley contends the waiting time penalty calculus should rely on section 510, subdivision (a)’s definition of a day’s work: “Eight hours of labor constitutes a day’s work.” We conclude the trial court properly calculated the waiting time penalty because the trial court averaged Riley’s daily pay rate ($6.75 x 3.5 hours) and applied that number ($23.625) to reach the correct penalty result of $708.75.

Section 203(a) states:

If an employer willfully fails to pay, without abatement or reduction, in accordance with Sections 201, 201.3, 201.5, 202, and 205.5, any wages of an employee who is discharged or who quits, the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefor is commenced; but the wages shall not continue for more than 30 days. An employee who secretes or absents himself or herself to avoid payment to him or her, or who refuses to receive the payment when fully tendered to him or her, including any penalty then accrued under this section, is not entitled to any benefit under this section for the time during which he or she so avoids payment.”

The court concluded that “same rate” as used in Section 203(a) means the “employee’s actual daily wage and does not refer to an arbitrary daily wage based on a standard eight-hour workday.”  Id. *2.

Following the plain meaning of section 203, California courts have consistently construed the “same rate” variable of the waiting time penalty calculus to consist of the ratio of dollars per hours actually worked. (Mamika v. Barca (1998) 68 Cal.App.4th 487, 490; Barnhill v. Robert Saunders & Co. (1981) 125 Cal.App.3d 1, 7-8; Oppenheimer v. Sunkist Growers, Inc. (1957) 153 Cal.App.2d Supp. 897, 898-899.) Courts take this “daily wage” and multiply it by up to 30 days, thereby yielding the waiting time penalty. (Mamika, at p. 490; Barnhill, at pp. 7-8; Oppenheimer, at pp. Supp. 898-899.)

Following this authority, we also conclude that section 203, subdivision  (a) means exactly what it says that “the wages of the employee shall continue … at the same rate” for up to 30 days. Here, the trial court correctly calculated the waiting time penalty because the employee’s “same rate” plainly refers to the employee’s actual daily wage and does not refer to an arbitrary daily wage based on a standard eight-hour workday. (Mamika v. Barca, supra, 68 Cal.App.4th at pp. 492-493.) This interpretation has been utilized by California courts since at least 1957, and as early as 1909 in other state courts interpreting similar statutes. (Oppenheimer v. Sunkist Growers, Inc., supra, 153 Cal.App.2d at pp. Supp. 898-899; St. Louis, I.M. & S.R. Co. v. Bryant (1909) 92 Ark. 425 [122 S.W. 996].) Riley does not cite, nor have we found, any case law supporting her contention that section 203 requires trial courts to calculate the waiting time penalty with a fixed eight-hour workday.

Plaintiff contended that the court should import section 510(a) statement that eight hours of labor constitutes a “day’s work” into section 203’s waiting time penalty calculation.  But the court concluded that section 510(a) “applies to overtime pay rates and thus is not applicable to section 203’s waiting time penalty calculation”.  The court noted that “neither a ‘day’s work,’ nor ‘an 8 hour workday,’ nor any reference to section 510 appears in section 203.”  Id. *2.  The court found that section 203(a) requires “employee-specific calculations because it refers to ‘the wages of an employee’ or the employee’s wage per the employee’s hours worked.”

Judges and Attorneys

The appeal was taken from a judgment of Hon. Eddie C. Sturgeon, the Superior Court of San Diego County.

Justice Gilbert Nares wrote the opinion, with Justices Patricia D. Benke and Cynthia Aaron concurring.

Scott A. McMillan of The McMillan Law Firm, APC in La Mesa, CA represented Plaintiff and Appellant.

Marc Howard Mandelblatt of the Law Offices of Marc Mandelblatt in San Diego, CA represented Defendant and Respondent.

By CHARLES H. JUNG

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