Category: Daily News

California Labor Code 510 requires that “any work in excess of eight hours in one workday and any work in excess of 40 hours in any one workweek and the first eight hours worked on the seventh day of work in any one workweek shall be compensated at the rate of no less than one and one-half times the regular rate of pay for an employee.”

And that “any work in excess of 12 hours in one day shall be compensated at the rate of no less than twice the regular rate of pay for an employee. In addition, any work in excess of eight hours on any seventh day of a workweek shall be compensated at the rate of no less than twice the regular rate of pay of an employee.”

California Labor Code Section 515.5 provides that certain computer software employees are exempt from the overtime requirements stipulated in Labor Code Section 510 if certain criteria are met.

One of the criteria is that the employee’s hourly rate of pay is not less than the statutorily specified rate, which the Department of Industrial Relations is responsible for adjusting on October 1st of each year to be effective on January 1st of the following year by an amount equal to the percentage increase in the California Consumer Price Index for Urban Wage Earners and Clerical Workers.

Assembly Bill 10 (Committee on Budget, Chapter 753, Statutes of 2008) amended Labor Code Section 515.5 effective on September 30, 2008, to extend the exemptions to salaried employees whose annual and monthly salaries are not less than the statutorily specified rates, which the department is responsible for adjusting every October 1st of each year to be effective on January 1st of the following year by an amount equal to the percentage increase in the California Consumer Price Index for Urban Wage Earners and Clerical Workers.

The State of California Department of Industrial Relations (DIR) just issued new annual adjusted minimum thresholds for computer software employees who are considered exempt from the state’s overtime requirements under California Labor Code Section 515.5.

The department has adjusted the computer software employee’s minimum hourly rate of pay exemption from $53.80 to $55.58, the minimum monthly salary exemption from $9,338.78 to $9,646.96, and the minimum annual salary exemption from $112,065.20 to $115,763.35 effective January 1, 2024.

This increase reflects the 3.3% increase in the California Consumer Price Index for Urban Wage Earners and Clerical Workers.

The computer software employee exemption in Section 515.5 generally applies to employees who are “primarily engaged in work that is intellectual or creative and that requires the exercise of discretion and independent judgment,” are “highly skilled,” and have job duties such as computer programming, systems analysis, or software design and testing.

There are several provisions where the exemption does not apply. For example, if the employee is engaged in the operation of computers or in the manufacture, repair, or maintenance of computer hardware and related equipment. Or if the employee is an engineer, drafter, machinist, or other professional whose work is highly dependent upon or facilitated by the use of computers and computer software programs and who is skilled in computer-aided design software, including CAD/CAM, but who is not engaged in computer systems analysis, programming, or any other similarly skilled computer-related occupation.

Natalie Operstein was employed as a professor of linguistics at California State University, Fullerton (CSUF). In the course of her employment, she experienced conflict with her colleagues in the linguistics department for which she made various written complaints. By May 2014, the matter had escalated to human resources.

In November 2014, CSUF engaged Seyfarth Shaw LL, a law firm, to investigate Operstein’s accusations against three of her colleagues. Colleen Regan, at the time a partner at Seyfarth, had primary responsibility for the investigation. Regan interviewed Operstein’s three colleagues she accused of misconduct and another individual, but Operstein agreed only to respond to written questions.Regan provided a summary of her investigation and findings in an eight-page report dated December 18, 2014.

The report concluded that none of Operstein’s allegations was well founded and that much of Dr. Operstein’s conduct and email communication was the opposite of collegial. She regularly accused her coworkers of violations and infractions of policy, and of defaming her and violating her rights, all with no apparent basis. Regan also wrote: “Every witness interviewed stated that Dr. Operstein is well regarded as a scholar and researcher, and appears to be a fine teacher. However, since the beginning of her employment at CSUF, she has been difficult for virtually everyone to work with. At least one administrative support employee has requested never to work with her again, and many others find her behavior odd, and even threatening.”

Operstein’s relationship with CSUF further soured shortly after Seyfarth completed its report. She filed a number of lawsuits related to her complaints, including in April 2020, she filed the lawsuit underlying this appeal. In a complaint solely against Seyfarth and Regan, plaintiffs asserted 11 causes of action based on Seyfarth’s work for CSUF in connection with Operstein’s internal complaints of workplace harassment and related mistreatment. In sum, the Seyfarth complaint alleges that, with improper motive, defendants (1) conducted a biased and otherwise flawed investigation of Operstein’s complaints; and (2) prepared and submitted a report that was defamatory of Operstein.

Defendants responded with a motion to strike plaintiffs’ complaint under the anti SLAPP statute (C.C.P § 425.16 strategic lawsuit against public participation), and supported their motion with declarations and extensive documentary evidence, including documents they reviewed in the course of their investigation and the resulting report. Plaintiffs opposed the motion and submitted declarations and evidence of their own totaling nearly 3,000 pages. Defendants filed a reply and plaintiffs filed a 70 page surreply.

On the same day plaintiffs filed their surreply, the trial court issued a tentative ruling. and was inclined to strike three of the 11 causes of action (“negligent misrepresentation and constructive fraud,” “defamation,” and “fraud and deceit”) because those causes of action “arise solely from protected activity under . . . subdivisions (e)(1) and (e)(2),” but was inclined to request further briefing as to whether defendants’ alleged investigative conduct was protected under the anti SLAPP statute.

Later, on the same day the trial court issued its tentative ruling, plaintiffs voluntarily requested dismissal of their entire lawsuit. The court granted their request.

Shortly thereafter, defendants filed their motion for attorney fees and costs pursuant to subdivision (c). Their ultimate total request was $79,889. The trial court granted this only in part, finding defendants would have only partially prevailed on their special motion to strike. It adopted its tentative ruling, and awarded defendants $63,911- 80 percent of the fees they requested.

The trial court awarded the fees without finally ruling on defendants’ anti SLAPP motion to strike – it issued a tentative ruling granting in part and denying in part the motion, and plaintiffs immediately thereafter dismissed their complaint.

Plaintiffs Craig Ross and Natalie Operstein appeal the fee award on three general theories. First, the anti SLAPP statute did not apply to their claims, and, in any event, their claims were meritorious. Second, the fees should not have been awarded because defendants did not meet the fee award requirements of subdivision (c)(1) or because judicially created exceptions to their right to seek a fee award applied. Third, even if fees were awardable, the amount awarded was unreasonable.

Defendants cross appealed and argued that the trial court should have awarded all the fees they requested, not just a portion of those fees, because all of plaintiffs’ claims were based on conduct protected by the anti SLAPP statute, no exceptions applied, and their request was reasonable.

The Court of Appeal agreed with defendants that their motion to strike was wholly meritorious and their fee request therefore should not have been reduced on the grounds that they would have prevailed only partially on their motion. And it disagreed with plaintiffs that the trial court erred in the ways they claim. It therefore affirmed in part and reverse in part and remand for further proceedings consistent with its opinion in the published case of Ross v. Seyfarth Shaw LLP (October 2023).

The anti SLAPP statute provides a procedure for courts to dismiss at an early stage nonmeritorious litigation meant to chill the valid exercise of the constitutional rights of freedom of speech and petition in connection with a public issue. Courts must “broadly” construe the anti-SLAPP statute to further the legislative goals of encouraging participation in matters of public significance and discouraging abuse of the judicial process. (§ 425.16, subd. (a).)

Defendants argued that Seyfarth’s investigation was not an official proceeding authorized by law, and in support cite Vergos v. McNeal (2007) 146 Cal.App.4th 1387 (Vergos), which treated all investigative conduct as communicative.

However, since the Vergos decision issued, our Supreme Court in Bonni v. St. Joseph Health System (2021) 11 Cal.5th 995, 1015, has mandated a more granular evaluation of the allegations underlying a cause of action and its subsidiary claims, and disapproved of the gravamen analysis that appears to have been employed in Vergos, so it said “so we will not rely on Vergos. The Court of Appeal agreed with defendants and concluded “that all conduct by defendants alleged in the complaint is protected under the anti SLAPP statute.”

A “prevailing defendant” on a special motion to strike is “entitled to recover that defendant’s attorney’s fees and costs.” (§ 425.16, subd. (c)(1).) The purpose of this provision is to provide the SLAPP defendant financial relief from the plaintiff’s meritless lawsuit. (Liu v. Moore (1999) 69 Cal.App.4th 745, 750 (Liu).) The trial court’s fee award pursuant to this authority is the subject of this appeal.

When a plaintiff dismisses his or her complaint while the defendant’s special motion to strike is pending, courts agree they retain jurisdiction to award fees and costs. (See, e.g., Coltrain v. Shewalter (1998) 66 Cal.App.4th 94, 107 (Coltrain); Liu, supra, 69 Cal.App.4th at p. 752; Tourgeman v. Nelson & Kennard (2014) 222 Cal.App.4th 1447, 1456 (Tourgeman).) This is because permitting an eleventh-hour dismissal to eliminate financial liability would undermine the deterrent purpose of the anti SLAPP statute. (See Liu, at pp. 750-751.)

The Court of Appeal also concluded that “Under either the Coltrain standard or the Liu standard, defendants entirely prevailed in their special motion to strike” and thus was entitled to the entire fee they requested.

Founded in 1903, the Teamsters Union represents 1.2 million workers in the U.S., Canada, and Puerto Rico. Following a legislative session where he vetoed a multitude of bills that would have improved worker’s rights, occupational safety, and financial security for the middle class, the Teamsters are condemning California Gov. Gavin Newsom saying he is making life harder for working families in the nation’s most populous state.

“The way Gavin Newsom reacted to a vast majority of the pro-labor bills that came before him this year is something that we would expect to see from a governor who got elected with support from the Koch brothers – not someone who received support from organized labor,” said Jason Rabinowitz, President of Teamsters Joint Council 7. “Being a pro-union governor doesn’t mean you stand with us when it’s convenient. It means you stand with organized labor when it counts, which is when it’s time to sign pro-union legislation.”

The worst veto for good-paying careers in transportation was AB 316 – legislation that would have required a human operator in any vehicle over 10,000 pounds. In addition to being a priority for the Teamsters, the bill was incredibly popular. Over 90 percent of the state legislature voted in favor of it, and public polling shows that nearly three-fourths of Californians across party lines, gender, geography, and all other demographics support AB 316 – unsurprising data given that collisions and accidents with self-driving vehicles continue to occur.

In addition to AB 316, other pro-worker legislation that Newsom vetoed includes:

– – AB 504 – would have banned employers from disciplining or taking any other adverse action against public employees for honoring picket lines or other strike activities;
– – SB 686 – would have required that all household domestic service employers comply with and adhere to all applicable occupational safety and health regulations by January 1, 2025, and remove the exemption of domestic workers from safety and health laws;
– – SB 799 – would have enabled union members who were either on strike or locked out by their employer to collect unemployment insurance benefits (New York and New Jersey both allow this);
– – SB 725 – would have required a successor grocery employer to provide an eligible grocery worker a dislocated allowance equal to one week of pay for each year of employment;
– – SB 627 – would have required an employer, following the shutdown of a chain or franchise location, to provide laid off workers the opportunity to transfer to another site within 25 miles of the closed business;
– – AB 575 – would have expanded eligibility for Paid Family Leave (PFL) benefits to include workers who take time off from work to bond with a child that they are acting as the legally-recognized primary caregiver for. AB 575 would have also removed a restriction that allowed only one family member at a time to access PFL, as well as a provision that allowed employers to make workers use up to two weeks of vacation time prior to accessing PFL;
– – AB 1123 – would have required the California State University (CSU) system to grant workers a leave of absence with pay for one semester of an academic year, or an equivalent duration in a one-year period, following the birth of a child or in connection with the adoption or foster care placement of a child by the CSU worker;
– – SB 751 – would have prohibited franchise agreements for solid waste services from containing provisions that excused a service provider from complying with the agreement in the event of a work stoppage associated with a labor dispute;
– – AB 699 – would have expanded occupational safety protections to lifeguards employed on a full-time basis in the Boating Safety Unit by the City of San Diego Fire–Rescue Department;
– – AB 1145 – would have expanded worker’s compensation benefits for certain nurses, psychiatric technicians, and various medical and social services specialists employed by the Department of Corrections and Rehabilitation, the State Department of Developmental Services, and the State Department of State Hospitals.
– – SB 640 – would have required any food service contract or hotel development project undertaken by the CSU Board of Trustees to be with employers signatory to labor peace agreements; and
– – SB 90 – would have prohibited health plans from imposing a copayment of more than $35 for a 30-day supply of an insulin prescription drug.

“Gavin Newsom wants to act like he’s both an ally of labor and an ally of Big Business,” said Chris Griswold, Teamsters International Vice President At-Large and President of Teamsters Joint Council 42. “The last thing America needs right now is more politicians who are friendly with Big Business. What we need is something that’s in short supply: elected officials who are going to stand up for workers.”

The Insurance Commissioner issued a May 24, 2023 Decision on the Workers’ Compensation Insurance Rating Bureau of California (WCIRB) September 1, 2023 Regulatory Filing. Since then, the WCIRB has issued over 90 percent of the January 1, 2024 experience modifications (X-Mods) that insurers, agents/brokers and policyholders rely on for January policy renewals.

The following are several tools to access published X-Mods and check the status of a pending X-Mod. The WCIRB provides these tools for member insurers and their authorized third-party administrators (TPAs) and managing general agents (MGAs) as well as licensed agencies and brokerages. See the How to Access X-Mods: A Comparison of WCIRB Products chart for various ways to access X-Mods.

WCIRB Connect®  – Insurer and agent/broker users of WCIRB Connect can view the X-Mod for any policyholder. Authorized users may view and download a PDF of published experience rating worksheets (ratesheets). Insurers are also able to search their own policies for X-Mods that are pending due to missing data.

X-Mod Direct®  – X-Mod Direct allows Connect users to request an email when a new or revised X-Mod is issued for a policyholder. To set an alert, click the “Subscribe to X-Mod Direct” button in the ribbon at the top of the Policyholder Details screen.

Comprehensive Risk Summary (CRS)® Report  – Authorized users can quickly obtain detailed policyholder information in Connect with the CRS Report. The automated process will request authorization directly from the policyholder. The report includes the following information:

– – Up to 10 years of historical data
– – Primary policyholder name, address and Bureau Number
– – All classifications reported on policies that incepted within the last five years
– – WCIRB assigned classifications
– – All policyholder names and FEINs reported on policies that incepted within the last five years
– – All addresses and locations reported on all current policies
– – All exposure and loss details on policies that incepted within the last eight years

Visit the CRS Report page for more information.

X-Mods and More® – This API web service is for member insurers and their authorized TPAs and MGAs as well as licensed agencies and brokerages. It provides real-time, automated retrieval of the following information to assist in underwriting workers’ compensation policies in California:

– – X-Mods
– – Assigned classification codes
– – Previously reported policyholder names and addresses, FEINs and other information

See the X-Mods and More® Web Service User Guide. Additional Resource – September 1, 2023 Regulatory Filing Documents

Given the exceedingly narrow scope of judicial review of arbitration awards, assuring both the actual and apparent impartiality of a neutral arbitrator is crucial to the legitimacy of arbitration as a dispute resolution mechanism. This month, a Court of Appeal published opinion illustrated on of the rare instances where an arbitration award was vacated for the impression of possible bias.

In January 2019, plaintiff FCM Investments, LLC (FCM) signed a Purchase Agreement to buy real property in Riverside, California from defendant Grove Pham, LLC (Grove), a company owned by Phuong Pham. Grove operated a nursing home on that property with resident patients. FCM agreed to pay Grove $7.45 million to buy the property, with an upfront deposit of $500,000. Escrow was to close in 30 days.

Disputes arose during the due diligence process, with the parties extending the escrow closing date several times. By April 2019, FCM filed a complaint in Riverside Superior Court against the sellers alleging that their dilatory tactics were preventing completion of the sale. The parties were required to mediate “any dispute or claim” and arbitrate disputes not resolved by arbitration.

Ultimately the parties stipulated to arbitrate their disputes before Honorable Judith C. Chirlin (Ret.) of Judicate West. Arbitration proceeded over two days in June 2021. The arbitrator concluded that the Phams breached the Joint Addendum by failing to provide proof of 66 live-in patients or a notarized agreement regarding the use of Longha’s license. FCM was accordingly justified in terminating escrow. FCM was awarded a return of its deposit with interest, loss-of-bargain damages of $9.1 million plus interest, $127,040 in attorney’s fees, and $20,048 in costs.

FCM filed a petition to confirm the arbitration award, while the Phams moved to vacate it pursuant to the California Arbitration Act (Code of Civ. Proc., § 1280 et seq.). Emphasizing the narrow scope of judicial review, FCM opposed the petition to vacate. Following hearings in December 2021 and January 2022, the court denied the Phams’s motion to vacate and entered judgment for FCM confirming the arbitration award.

The Court of Appeal vacated the arbitration award in the published case of FCM Investments v. Grove Pham, LLC – D080801 (October 2023).

Although the Phams asked to vacate the arbitration award on multiple grounds, the Court of Appeal largely focused on one. In making an adverse credibility finding against Phuong based on her use of an interpreter, the arbitrator’s decision creates a reasonable impression of possible bias requiring that the arbitration.

The arbitrator found the seller in breach based largely on an assessment of witness credibility. She felt the case was unique “both in 12 years of doing arbitration and 24½ years on the Los Angeles County Superior Court, in that the lack of credibility issues are so rampant and obvious.”

In the arbitrator’s view, defendant Phuong Pham lacked credibility because she used an interpreter during the arbitration proceedings. Reasoning that she had been in the country for decades, engaged in sophisticated business transactions, and previously functioned in some undisclosed capacity as an interpreter, the arbitrator felt that her use of an interpreter at the arbitration was a tactical ploy to seem less sophisticated.

While arbitration awards are “nearly immune” from attack, “one of the limited grounds for challenge is bias on the part of the arbitrator.” Courts are empowered to act where that impartiality can reasonably be questioned. “[A]ny tribunal permitted by law to try cases and controversies not only must be unbiased but also must avoid even the appearance of bias.” (Commonwealth Coatings Corp. v. Continental Casualty Co. (1968) 393 U.S. 145, 150.)

“Sensitivity toward language difficulties is the hallmark of our multi-lingual state.” (People v. Aguilar (1984) 35 Cal.3d 785, 794; see Gov. Code, § 68560, subd. (e).) Across California, “approximately 40 percent of us speak a non-English language at home; there are more than 200 languages and dialects spoken; roughly 20 percent of us (nearly 7 million) have English language limitations.”

“Arbitration proceedings were unreported, leaving us to guess what evidence, if any, was presented as to Phuong’s English proficiency during arbitration.”

“As a factual matter, FCM’s own pleadings undercut the notion that Phuong’s use of an interpreter was a ploy. In its original complaint, filed long before the relationship between the parties completely unraveled, FCM acknowledged that Phuong used her daughter as a translator during a conference call based on her daughter’s ‘proficiency in English.’ If Phuong relied on her daughter to translate a conference call before the deal unraveled, it seems unsurprising that she would use an interpreter to testify in commercial arbitration proceedings.”

Here, the arbitrator’s credibility finding “rested on unacceptable misconceptions about English proficiency and language acquisition. These misconceptions, in turn, give rise to a reasonable impression of possible bias on the part of the arbitrator requiring reversal of the judgment and vacating the arbitration award.”