Tag: 2023 News

The National Labor Relations Board has decided to issue a final rule rescinding and replacing the final rule entitled “Joint Employer Status Under the National Labor Relations Act,” which was published on February 26, 2020, and took effect on April 27, 2020.

The final rule establishes a new standard for determining whether two employers, as defined in the Act, are joint employers of particular employees within the meaning of the Act.

The Board believes that this rule will more explicitly ground the joint-employer standard in established common-law agency principles and provide guidance to parties covered by the Act regarding their rights and responsibilities when more than one statutory employer possesses the authority to control or exercises the power to control particular employees’ essential terms and conditions of employment.

Under the final rule, an entity may be considered a joint employer of another employer’s employees if the two share or codetermine the employees’ essential terms and conditions of employment. Joint employment issues typically arise when using professional employment organizations, in contractor-subcontractor, parent-subsidiary, and franchisor-franchisee situations, and in other arrangements. .

Section 2(2) of the National Labor Relations Act defines an “employer” to include “any person acting as an agent of an employer, directly or indirectly.” In turn, the Act provides that the “term ’employee’ shall include any employee, and shall not be limited to the employees of a particular employer, unless [the Act] explicitly states otherwise . . . .”

The Act does not specifically address situations in which statutory employees are employed jointly by two or more statutory employers ( i.e., it is silent as to the definition of “joint employer”), but the Board, with court approval, has long applied common-law agency principles to determine when one or more entities share or codetermine the essential terms and conditions of employment of a particular group of employees.

Following a change in the Board’s composition under the Trump administration, a divided Board issued a notice of proposed rulemaking with the goal of establishing a joint-employer standard that departed in significant respects from the prior common-law standard. Thereafter, on February 26, 2020, the Board promulgated a final rule that introduced control-based restrictions that narrowed the joint-employer standard.

With the intent of reversing the 2020 standard created during the Trump era law, on September 7, 2022, the Board issued a new joint-employer proposed rule, and now a final rule that takes effect on the end of the year. In reversing course over the Trump era standard, the Board concluded that the actual-exercise requirement reflected in the 2020 rule is contrary to the common-law agency principles that must govern the joint-employer standard under the Act and that the Board has no statutory authority to adopt such a requirement.

The new final rule, like the proposed rule, provides that a common-law employer of particular employees shares or co-determines those matters governing employees’ essential terms and conditions of employment if the employer possesses the authority to control (whether directly, indirectly, or both) or exercises the power to control (whether directly, indirectly, or both) one or more of the employees’ essential terms and conditions of employment, regardless of whether the employer exercises such control or the manner in which such control is exercised.

The Board has however modified the proposed rule (1) to clarify the definition of “essential terms and conditions of employment,” (2) to identify the types of control that are necessary to establish joint-employer status and the types that are irrelevant to the joint-employer inquiry, and (3) to describe the bargaining obligations of joint employers. Further details about the new 2023 standard, please see the NLRB Fact Sheet on the new rule.

The Board received almost 13,000 comments from interested organizations, labor unions, trade associations, business owners, United States Senators and Members of Congress, State Attorneys General, academics, and other individuals. The Board has carefully reviewed and considered these comments, as discussed on its website.

Steve Snoeck sued ExakTime Innovations Inc., for six claims: five claims under the FEHA – failure reasonably to accommodate a known or perceived disability, failure to engage in a good faith interactive process, disability discrimination, failure to prevent discrimination and retaliation, and retaliation – and a claim for wrongful termination in violation of public policy.

In June 2019, a jury returned a verdict in Snoeck’s favor on his claim for failure to engage in a good faith interactive process and found in favor of ExakTime on Snoeck’s five other claims. The jury awarded Snoeck $58,088 in economic damages and $72,000 in non-economic damages, for a total of $130,088.

Snoeck then filed a motion for attorney fees under Government Code section 12965, former subdivision (b), now subdivision (c)(6), as the prevailing plaintiff on a FEHA claim. He asked for the lodestar amount of $1,193,870 plus a 1.75 multiplier for a total of $2,089,272.50.

After several additions and reductions to the requested fee, the court applied a .4 negative multiplier to its $1,144,659.36 adjusted lodestar calculation “to account for [p]laintiff’s counsel’s . . . lack of civility throughout the entire course of this litigation.” His attorney, Perry Smith, was ultimately awarded $686,795.62 in attorney fees.

Snoeck appealed the reduction in fees for “incivility” of his attorney, however the Court of Appeal affirmed the trial court’s reduction of fees in the published case of Snoeck v. ExakTime Innovations -B321566 (October 2023).

Snoeck contends the $457,863 reduction in attorney fees based on his counsel Perry Smith’s incivility must be reversed for several reasons. In essence, he argues that – because the fee reduction was not associated with any costs – the court impermissibly applied it to punish Smith and had no legal authority to shift attorney fees to defendant as a sanction.

The Court of Appeal reviewed a number of examples of the behavior in question. The trial court record, for example. noted that Smith’s “incivility was not only directed to opposing counsel; it was also directed to the Court.” The court remarked that, in its October 8, 2019 minute order, more than two years ago, it had stated, “Plaintiff’s counsel’s tone of voice (which was not reflected in the Court Reporter’s record) was both belittling and antagonistic; at times it verged on the contemptuous.”

The trial court record continued, “The language quoted above is uncalled-for and unacceptable. Plaintiff counsel’s ad hominem attacks were unnecessary for the zealous representation of his client.” Citing caselaw, the court noted the absence of civility “heightens stress and debases the legal profession,” and reminded Smith that the California Rules of Court, rule 9.7 requires the attorney oath to conclude with, “As an officer of the court, I will strive to conduct myself at all times with dignity, courtesy and integrity.”

Thus, the Court of Appeal concluded “Substantial evidence supports the trial court’s finding that Smith was uncivil toward opposing counsel and the court, and his ‘ad hominem attacks were unnecessary for the zealous representation of his client.’ “

In order to calculate an attorney fee award under the FEHA, courts generally use the well-established lodestar method, the product of the number of hours spent on the case, times an applicable hourly rate. The trial court then has the discretion to increase or reduce the lodestar figure by applying a positive or negative multiplier based on a variety of factors. Those factors include, among others, the novelty and difficulty of the issues presented, the skill demonstrated in litigating them, and the contingent nature of the fee award.

In Karton v. Ari Design & Construction, Inc. (2021) 61 Cal.App.5th 734 ,a trial court limited prevailing plaintiffs’ recovery of statutory attorney fees to about one third of the lodestar amount they had requested, after it found the requested fees were unreasonable – in part due to counsel’s overlitigation of the matter and lack of civility in plaintiffs’ briefing. The Court of Appeal in this case thus agreed that “a trial court may consider an attorney’s pervasive incivility in determining the reasonableness of the requested fees.

The Court of Appeal concluded that the “record before us amply supports the trial court’s finding that plaintiff’s counsel was repeatedly, and apparently intentionally, uncivil to defense counsel – and to the court – throughout this litigation. We thus find no abuse of discretion and affirm.”

Andrew Glover, filed an Application for Subsequent Injuries Fund Benefits (“SIBTF”) on August 19, 2019, alleging a date of injury of September 2, 2001, as a professional athlete while working for the Oakland Raiders/New Orleans Saints. The underlying case for regular benefits had been resolved by Compromise and Release on October 8, 2008. In his SIBTF petition, he alleged injury to the subsequent injury to his head, neck, upper extremities, and lower trunk.

Glover therefore filed his application for SIBTF benefits, 11 years after his Compromise and release in the claim was approved, and 19 years after his original end date of injury.

The matter came to trial on the issue of Statute of limitations and the WCJ found that the original Compromise and Release, and its approval, constituted a finding of permanent disability for purposes of the Statute of limitations in SIBTF claims: that the applicant’s date of knowledge for purposes of SIBTF eligibility was no later than October 8, 2008; and that the filing of the application for SIBTF benefits after the date of knowledge was not made timely, as it was not a reasonable amount of time to wait to file.

Glover’s Petition for Reconsideration was granted in the panel decision of Glover v New Orleans Saints; SIBTF -ADJ916498 (October 2023).

There are four Supreme Court cases that provide guidance on the issue of timeliness of a SIBTF claim. (Subsequent Injuries Fund v. Workmens’ Comp. Appeals Bd. (Talcott) (1970) 2 Cal.3d 56, 65 [35 Cal.Comp.Cases 80];  Subsequent Injuries Fund v. Workmens’ Comp. Appeals Bd. (Pullum)(1970) 2 Cal.3d 78 [35 Cal.Comp.Cases 96]; Subsequent Injuries Fund v. Workmens’ Comp. Appeals Bd. (Woodburn) (1970) 2 Cal.3d 81 [35 Cal.Comp.Cases 98]; Subsequent Injuries Fund v. Workmens’ Comp. Appeals Bd. (Baca) (1970) 2 Cal.3d 74 [35 Cal.Comp.Cases 94].)

The Supreme Court in Talcott, the seminal case on this issue, provided that if applicant knew or could reasonably be deemed to know that there will be a substantial likelihood of entitlement to subsequent injuries benefits before the expiration of five years from the date of injury, then the limitation period to file a SIBTF claim is five years from the date of injury.

However, if applicant did not know and could not reasonably be deemed to know that there will be a substantial likelihood of entitlement to subsequent injuries benefits before the expiration of five years from the date of injury, then the limitation period to file a SIBTF claim is a reasonable time after applicant learns from the WCAB’s findings on the issue of permanent disability that SIBTF has probable liability.

The WCAB panel agreed with the WCJ that the second prong of the Talcott analysis applies here: whether applicant filed his SIBTF claim within a reasonable time after he learned from the WCAB’s findings on the issue of permanent disability that SIBTF has probable liability.

The WCJ opined that the 2008 Compromise and Release constitutes a finding of permanent disability because once a Compromise and Release is approved by the WCAB, it has the same force and effect as an award made after a full hearing.

The WCAB disagreed. “The Compromise and Release is not a finding on the issue of permanent disability. Paragraph 9 of the Compromise and Release specifically states that, “The parties wish to settle these matters to avoid the costs, hazards and delays of further litigation, and agree that a serious dispute exists as to the following issues (initial only those that apply).”

Lastly, the WCAB noted that “the WCJ failed to discuss applicant’s knowledge of SIBTF’s probable liability when there is no discussion of how applicant met the SIBTF eligibility thresholds found in Labor Code, section 4751 (Lab. Code, § 4751.)”

Accordingly, it granted reconsideration, rescinded the July 19, 2023 Findings and Order, and returned this matter to the trial level for further proceedings on the issue of timeliness of applicant’s SIBTF application.

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.