Eleven of Wilke Fleury’s attorneys have been listed as 2014 Northern California Super Lawyers and Rising Stars. The firm’s Super Lawyers are Philip Birney, Daniel Egan, George Guthrie, Ronald Lamb, Stephen Marmaduke, Thomas Redmon and Robert Tyler. The firm’s Rising Stars are Daniel Baxter, Anthony Eaton and Steven Williamson.
Super Lawyers® is a service of the Thomson Reuters, Legal Division. Each year, the research team at Super Lawyers® undertakes a rigorous multi-phase selection process that includes a statewide survey of lawyers, independent evaluation of candidates by the attorney-led research staff, a peer review of candidates by practice area and a good-standing and disciplinary check.
Super Lawyers® can be found online at www.superlawyers.com.
The California Supreme Court recently issued a decision with widespread ramifications for employers. Previously, the Court determined that class action waivers in employment contracts may be enforceable as long as they were not unconscionable or violative of public policy. The California Supreme Court, following intervening U.S. Supreme Court precedent, determined that its prior decision was abrogated and reversed itself. Class action waivers in employment contracts are enforceable in California notwithstanding unconscionability or State public policy to the contrary.
In Iskanian v. CLS Transp. Los Angeles, LLC, 2014 WL 2808963 (June 23, 2014), an employee brought a wage and hour class action lawsuit. The employer sought to enforce an arbitration agreement whereby the employee had waived the right to proceed by class and representative proceedings. The lower courts ordered individual arbitration and dismissed the class claims with prejudice. Similarly, the California Supreme Court determined that the class action wavier was enforceable because the Federal Arbitration Act (“FAA”) does not permit States to refuse to enforce class action waivers on public policy or unconscionability grounds.
On the other hand, the California Supreme Court determined that representative actions under the Labor Code Private Attorneys General Act of 2004 (“PAGA”) cannot be waived. PAGA allows employees to bring claims on behalf of the State of California against their employers, and seek statutory penalties for violations of the California Labor Code, such as overtime and meal and rest period violations. The FAA did not require a contrary result because the FAA seeks to ensure a forum for resolution of private disputes (e.g., disputes between an employer and employee relating to their employment contract), but PAGA actions are not private disputes. PAGA disputes are disputes between the State and the employer concerning violations of the Labor Code.
Individual arbitration of employee claims can be advantageous for employers. For example, it can prevent employees from aggregating otherwise small dollar claims that may not otherwise be economically feasible for an employee to bring as an individual claim. Employers will want to make sure their arbitration agreements do not contain overbroad language that could invalidate otherwise enforceable class action waivers (e.g. waivers of representative actions). PAGA representative actions cannot be waived as a condition of employment in any forum, including arbitration and state and federal court.
_________________________________________________________________________________ DID YOU KNOW…
The Equal Employment Opportunity Commission (“EEOC”) issued new guidance on the application of federal employment discrimination law under Title VII to religious dress and grooming practices, and what steps employers can take to meet their legal responsibilities in this area. The guidance can be viewed at:http://www.eeoc.gov/eeoc/publications/qa_religious_garb_grooming.cfm
Our firm was proud to participate in the Sacramento Habitat for Humanity ‘s 2nd Annual Attorney Build!
Wilke Fleury’s 11-member team included attorneys and professional staff who worked on the home in order to provide home buying opportunities for low-income families. The Habitat for Humanity builds affordable homes in partnership with families in need, supported by a host of volunteers, faith based organizations, donors and corporations for the betterment of Sacramento’s community.
We also congratulate our managing partner, Ronald Lamb, on his recent appointment to the Habitat for Humanity Board.
In overturning a trial court decision made two years ago and ordering a new trial to establish damages, California’s Fifth District Court of Appeals has ruled that hospitals can no longer expect to seek reimbursement from health plans in amounts well in excess of the actual value of services rendered to plan members.
In issuing its decision in Children’s Hospital Central California v. Blue Cross of California, the appellate court shifted the state’s health care provider reimbursement landscape. Wilke Fleury’s Dan Baxter, a member of the legal team that tried the original case in 2012 on behalf of Blue Cross in Madera County Superior Court, explained the court’s ruling means the ‘charge master’ system—whereby providers sought, for example, $10.00 in reimbursement for the provision of two aspirin—will no longer stand as a legitimate, defining measure of expected compensation. The appellate court found the trial court erred in not allowing Blue Cross to present evidence of the reasonable value of the services rendered by Children’s Hospital Central California. The court ordered the case retried and awarded Blue Cross its appellate costs.
The California Supreme Court recently issued a decision with widespread ramifications for employers. Previously, the Court determined that class action waivers in employment contracts may be enforceable as long as they were not unconscionable or violative of public policy. The California Supreme Court, following intervening U.S. Supreme Court precedent, determined that its prior decision was abrogated and reversed itself. Class action waivers in employment contracts are enforceable in California notwithstanding unconscionability or State public policy to the contrary.
In Iskanian v. CLS Transp. Los Angeles, LLC, 2014 WL 2808963 (June 23, 2014), an employee brought a wage and hour class action lawsuit. The employer sought to enforce an arbitration agreement whereby the employee had waived the right to proceed by class and representative proceedings. The lower courts ordered individual arbitration and dismissed the class claims with prejudice. Similarly, the California Supreme Court determined that the class action wavier was enforceable because the Federal Arbitration Act (“FAA”) does not permit States to refuse to enforce class action waivers on public policy or unconscionability grounds.
Individual arbitration of employee claims can be advantageous for employers. For example, it can prevent employees from aggregating otherwise small dollar claims that may not otherwise be economically feasible for an employee to bring as an individual claim. Employers will want to make sure their arbitration agreements do not contain overbroad language that could invalidate otherwise enforceable class action waivers (e.g. waivers of representative actions). PAGA representative actions cannot be waived as a condition of employment in any forum, including arbitration and state and federal court.
DID YOU KNOW…
The Equal Employment Opportunity Commission (“EEOC”) issued new guidance on the application of federal employment discrimination law under Title VII to religious dress and grooming practices, and what steps employers can take to meet their legal responsibilities in this area. The guidance can be viewed at: http://www.eeoc.gov/eeoc/publications/qa_religious_garb_grooming.cfm
Arbitration agreements are commonplace in California employment relationships. As with employee handbooks, employers may attempt to reserve the right to modify their arbitration agreements with employees. The reservation of this right may be unilateral, meaning that the employer can modify or terminate the agreement but the employee cannot change his or her mind about the agreement. Such modification clauses are not illusory because the law implies a promise by the employer to exercise its right in good faith and pursuant to fair dealings, and hence, these modification clauses may be enforced.
In Casas v. Carmax Auto Superstores California, LLC, 224 Cal.App.4th 1233 (2014), an employee sued his employer and the employer moved to compel arbitration pursuant to an arbitration agreement. The trial court refused to enforce the arbitration agreement based on the employer’s unilateral modification clause. The court of appeal reversed. In upholding the employer’s modification clause, the court of appeal noted that the arbitration agreement was separate from (and not lost within) an employee handbook and required notice to the employees by a date certain each year of any modifications. However, the court of appeal would not enforce a provision of the arbitration agreement applying the agreement in effect at the time the employer received the claim. Instead, the arbitration agreement in effect at the time the claim arose applied, notwithstanding any subsequent modification to the arbitration agreement by the employer after the claim arose. Nevertheless, the employer’s arbitration agreement contained a savings clause to modify the provision to comply with the law, so the employer’s modification clause
could be enforced.
California employers have some authority now for unilaterally reserving the right to modify or terminate their arbitration agreements with employees. Employers should make sure their arbitration agreements are not lost within other employment documents, and should include a savings clause to modify any arbitration provisions that conflict with the law to conform to the law. Employers should also consider providing advance notice to employees, though the failure alone to provide advance notice will not make the agreement illusory since employers must exercise their right to modify in good faith and pursuant to fair dealings with employees.
DID YOU KNOW…
Employees who are terminated for failing to fulfill important functions of their position cannot demonstrate that their employer’s reasons were untrue or pretexutal based simply on after-acquired evidence years after the termination that the employer was not damaged by their failure to perform. Serri v. Santa Clara University, 14 Cal. Daily Op. Serv. 5922 (Cal. Ct. App., May 28, 2014) (discrimination claim on motion for summary judgment).
Employees who resign sometimes sue their employer for constructive discharge. An employee is constructively discharged under California law when the employer intentionally creates or knowingly permits working conditions that are so intolerable that a reasonable person in the employee’s position would have been forced to resign. The conditions must be so objectively bad that the employee’s only reasonable option is to resign or quit. This situation may arise when employers fail to reimburse non-exempt employees for necessary work expenditures.
In Vasquez v. Franklin Management Real Estate Fund, Inc., 222 Cal.App.4th 819 (2013), Vasquez drove his personal vehicle as part of his job and earned $10 per hour. Vasquez resigned after his employer failed to reimburse him for vehicle expenses (e.g., gasoline and maintenance), and sued his employer for constructive discharge. Vasquez alleged he was unable to meet basic living expenses and effectively earned less than the state minimum wage because he had to apply his wages towards his vehicle expenses. Vasquez also alleged that he repeatedly asked for reimbursement from his supervisors, and that his supervisors were aware of his financial situation. The court of appeal allowed Vasquez to proceed with his claim because a reasonable trier of fact could find that an employee had no option but to resign when an employer passes on its operating expenses to a low wage worker by failing to reimburse the employee for the expenses.
Employers should be mindful that they are statutorily obligated to reimburse employees for necessary work expenditures. Failing to reimburse employees for expenses the employer should have covered will not generally be sufficient to pursue a constructive discharge claim. However, it may when the employee’s hourly wage is close to the minimum wage. (The minimum wage will increase from $8.00 per hour to $9.00 per hour beginning July 1, 2014.) More commonly, employees will seek recovery of unreimbursed expenses by filing a claim with the Labor Commissioner. Awards for reimbursement carry 10% interest.
DID YOU KNOW…
When an employee takes leave under the Family and Medical Leave Act (FMLA), employers must return the employee to work after receiving a certification from the employee’s health care provider that the employee is able to work. But, employers may require a fitness for duty exam thereafter if they have reason to question the health care provider’s opinion. White v. County of Los Angeles (Cal. Ct. App., Apr 15, 2014) 22 Wage and Hour Cas.2d (BNA) 676.
The California Labor Code Private Attorneys General Act of 2004 (“PAGA”) does not provide a basis for employers to remove PAGA actions from state to federal court. PAGA allows employees to bring claims on behalf of the State of California against their employers. PAGA claims seek statutory penalties for violations of the California Labor Code, such as overtime and meal and rest period violations. Under PAGA, employees can bring the action on their own behalf and on behalf of other aggrieved employees and recover twenty-five percent of the statutory penalties, in addition to attorneys’ fees and costs. (The State retains seventy-five percent of the statutory penalties.)
In Baumann v. Chase Inv. Services Corp., 2014 WL 983587 (9th Cir., March 13, 2014, 12-55644), Baumann sued his employer in California state court under PAGA based on statutory violations for withheld overtime pay. Baumann did not assert any federal claims. However, Baumann’s employer removed the action to federal court based on the federal Class Action Fairness Act of 2005 (“CAFA”), which confers original jurisdiction in federal courts for certain class actions. Baumann’s employer argued that the PAGA claims were a class action under CAFA. The district court found removal to federal court was proper. The Ninth Circuit Court of Appeal reversed. The Court of Appeal held that the district court did not have original jurisdiction over Baumann’s removed PAGA suit under CAFA. The Court of Appeal determined that PAGA actions are not sufficiently similar to federal class actions because they are not claims for class relief. Rather, they are enforcement actions “filed on behalf of and for the benefit of the state.” Accordingly, CAFA did not provide a basis for federal jurisdiction of the PAGA lawsuit.
When employers are served with a lawsuit by their employees, one of the first considerations for defending that lawsuit will be deciding venue for the action in state or federal court. Employees generally file employment actions in State court. Employers oftentimes prefer to defend employment lawsuits in federal court. Federal courts have stricter pleading requirements, expedited discovery schedules, and may even be considered more employer friendly. Employers need to establish a grounds for federal jurisdiction in order to remove a state action to federal court. PAGA will not provide grounds for removing an action from state to federal court. But, a federal court may allow a PAGA action to proceed in federal court if the federal court has other grounds for establishing federal jurisdiction.
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DID YOU KNOW…
Employees have one year from the date of an allegedly wrongful act to file a complaint with the Department of Fair Employment and Housing under the Fair Employment and Housing Act (FEHA). Parties to a contract can agree to shorten statutes of limitation as long as the shortened period is reasonable, BUT employers probably cannot shorten the FEHA statute of limitations. Ellis v. U.S. Security Associates, 14 Cal. Daily Op. Serv. 3098 (Cal. Ct. App., Mar. 20, 2014) (six-month period not enforceable).
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As an attorney who practices primarily in the construction defect arena, I read Dr. Craner’s commentary1 with particular interest. My practice includes both prosecution as well as defense of owners and developers in residential and commercial property cases, many of which have a “mold” component. Indeed, my deposition of Dr. Bruce Kelman in the Kerruish v. Kimball Hill Homes case is cited in Craner’s article.
In my many years of experience on both the plaintiff and defense sides of the “mold” debate, i.e., whether and to what extent indoor mold arising in water-damaged buildings is a valid, diagnosable, treatable, and preventable environmental health disorder, I have, since its publication, consistently observed defense experts relying upon the ACOEM’s statement on “Adverse Human Health Effects Associated with Molds in the Indoor Environment”2 as the “final” scientific word on the issue. Plaintiff experts, on the other hand, are routinely challenged to defend and prove the scientific basis of their affirmative opinions as a rebuttal to the ACOEM Statement.
Those of us who practice in this area have long suspected that the heretofore concealed process by which the ACOEM Mold Statement was created was flawed and biased, not only in its content and balance as an “evidence-based” guideline, but especially in its tone, which blatantly comes across as a “defense argument” to any attorney willing to read it. How can any advocate come away with any other impression when the same experts who were profiting from defense medical/legal consultations and testifying in mold-related litigation were incredibly selected by ACOEM to be the primary authors of its organizational position statement on this subject?
Dr. Craner’s critique has finally brought some light and balance to the issue. Construction defects and resultant litigation related to indoor mold will go on, but I strongly suspect the ACOEM Mold Statement will no longer receive the same level of reliance or respect that it has been unduly given up to this point by attorneys and experts. ACOEM, as an organization, has major credibility problems as a result of this document and would do well to follow Dr. Craner’s recommendations to restore organizational integrity and respect.
References
1. Craner J. A critique of the ACOEM statement on mold: undisclosed conflicts of interest in the creation of an “evidence-based” statement. Int J Occup Environ Health. 2008 Oct-Dec;14(4): 283-98.
2. Adverse Human Health Effects Associated with Molds in the Indoor Environment. Journal of Occupational and Environmental Medicine:Volume 45(5): 470-478 (2003).
Wilke Fleury successfully obtained licensure for its dental disability insurance client, Premier Access Insurance Company, in six states. Wilke Fleury Partner Michael G. Polis obtained licensure for Premier Access in New York, Kentucky, Florida, New Jersey, Pennsylvania and Virginia. The licensure allows Premier Access to operate as a dental insurance company for PPO and indemnity dental products throughout the eastern seaboard. Previously doing business only on the west coast, these additional licensures significantly expand the scope of Premier Access’ offerings.
After a nine week trial in the Federal District Court in Sacramento, a jury unanimously awarded our client, Pacific MDF Products, Inc., $6,670,185. Pacific MDF manufactures home improvement products, such as baseboards and crown moulding, out of fiberboard at its plant in Rocklin, California. The manufacturing process generates a significant amount of sawdust, which must be disposed of in environmentally sensitive ways. Pacific MDF decided to purchase from Defendants, Advanced Recycling, Inc., Bio-Mass Energy Concepts, LLC and Donald Kunkel, a system which would permit Pacific MDF to burn the sawdust to create both steam heat and electricity to run its plant.
When Defendants were unable to overcome both design and manufacturing defects in the cogeneration system, Thomas G. Redmon and Daniel L. Baxter of our office filed the lawsuit alleging 11 different causes of action, including breach of contract, breach of warranty, fraudulent and negligent misrepresentation, and making false promises. The jury deliberated for less than two days before finding in favor of our client on every cause of action.
Pacific MDF expressed praise for the quality of the representation it received based, not just on the end result, but on the fact that Mr. Redmon and Mr. Baxter exhausted every effort on its behalf to settle the matter in a cost effective manner prior to taking the matter to trial.
A Sacramento jury deliberated less than three hours before returning a near-unanimous verdict in favor of Lodi Memorial Hospital in a medical negligence action. The two week trial in Sacramento County Superior Court pitted Joan Perry, the widow of Stanley Perry, against the hospital and its staff after her husband died suddenly of a ruptured aortic aneurysm during a routine treadmill test one day following admission for sudden onset of chest pain. Mrs. Perry claimed that the hospital and others mismanaged her husband’s care.
Retained by Optima Insurance, the insurance carrier for the hospital, Wilke Fleury partner, David A. Frenznick, successfully argued that the hospital had met and exceeded the standard of nursing care in all aspects of Mr. Perry’s care. Mr. Perry presented with classic signs of coronary artery disease and, prior to the treadmill test, his cardiologist was timely informed by the nursing staff of all pertinent changes in the patient’s condition.
Lodi Memorial Risk Manager, Daleen Murray, praised Wilke, Fleury attorneys after receiving the jury’s verdict. “Your devoted time, expertise and professionalism lead us to the desired outcome of a defense verdict,” she said.
Wilke Fleury recently completed the negotiation and sale of 125 acres of undeveloped land to the California Tahoe Conservancy. The sale is the second largest purchase in the history of the Conservancy. Wilke Fleury Partner Jim Krtil worked closely with the property owners, members of the Barton family, in negotiating acceptable terms for the sale of the land, which had been in the family for generations. The California Tahoe Conservancy will preserve the land, which is likely to be a vital link for a new bike trail through the south portion of the Tahoe basin. The Firm previously negotiated and closed the largest purchase ever to the Conservancy on behalf of Alva Barton. That sale involved over 300 acres of meadow land, with more than a half-mile of Lake Tahoe beach front. The land now serves as important stream zone land. Each transaction involved years of negotiations, taking into consideration not only the real estate aspects of the transaction, but also the income tax and estate tax implications to the family.
In a three week jury trial involving allegations of medical malpractice, a family practice specialist employed by the Regents of the University of California was successfully defended by Wilke Fleury. The case involved the death of a young man from an aggressive malignant melanoma. The lawsuit was brought on behalf of the patient’s son, who was born four months after his father died of his skin cancer. In a case that abounded with sympathy, Wilke Fleury Partner Scott Gassaway was successful in presenting a scientific and medically-based defense. The claim was largely based on a theory that an uncommon type of benign mole (a “halo nevus”) has a known but very, very uncommon association with a contemporaneously growing malignant melanoma somewhere else on the body. Plaintiff’s theory was that if a physician sees an admittedly benign halo nevus on one part of the body, the physician must rule out malignant melanoma elsewhere on the body. Plaintiff unsuccessfully argued that the presence of the uncommon mole required a full body skin and mucous membrane examination. The defense experts testified that the standard of care for a family practice physician does not require such measures given the extremely small statistical likelihood of discovering a malignant melanoma on a patient with a benign halo nevus. The jury unanimously found that the physician met the standard of care.
Wilke Fleury obtained an order from the San Diego County Superior Court dismissing its client—a large mortgage lender—from a piece of highly contested litigation. In the case, Wilke Fleury’s client was sued by a borrower who was attempting to rescind his home loan nearly three years after the transaction was consummated. After Wilke Fleury’s initial motion resulted in the plaintiff amending his complaint, Wilke Fleury again moved for dismissal on the basis that the amendments failed to state a legally cognizable claim. Over the strenuous opposition of plaintiff and his attorney, the court agreed with Wilke Fleury partner Dan Baxter’s argument that no degree of further amendment could cure the defective character of the plaintiff’s action. As a result, the court dismissed the action in full.
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