John Russo, City Attorney
One Frank H. Ogawa Plaza, 6th Floor
Oakland, California 94612
(510) 238-3601
www.oaklandcityattorney.org
LABOR AND EMPLOYMENT LAW UPDATE
LEAGUE OF CALIFORNIA CITIES
CITY ATTORNEYS DEPARTMENT
Annual Conference
September 8-10, 2003
Sacramento, California
Presented by:
Deputy City Attorney Tracy Chriss
Deputy City Attorney April Ramsey
League of California Cities
Labor and Employment Law Update
TABLE OF CONTENTS
Page
AMERICANS WITH DISABILITIES ACT/FEHA DISABILITY
DISCRIMINATION........................................................................................................... 1
Echazabal v. Chevron USA, Inc. (9th Cir. July 23, 2003) 03 C.D.O.S. 6466 ................... 1
Hastings v. Department of Corrections (2003) Cal.App.4th (Ct.App.3d. Dist.
July 22, 2003, No. C041708)........................................................................................... 2
PUBLIC SAFETY OFFICERS PROCEDURAL BILL OF RIGHTS ACT
(“PSOPBRA”) .................................................................................................................. 2
Operating Engineers Local 3 v. Johnson (2003) Cal.App.4th (Ct.App.1st
Dist. July 2. 2003 No. A097487) ...................................................................................... 2
EXHAUSTION OF ADMINISTRATIVE REMEDIES ........................................................ 3
Cherosky v. Henderson (9th Cir. 2003) No. 01-35254 ..................................................... 3
Grant v. Comp USA, Inc. (2003) Cal.App.4th (Ct. App. 6th Dist. June 9,
2003 No. H023839) ......................................................................................................... 4
FMLA (“Family Medical Leave Act”) ................................................................................ 4
Nevada Department of Human Resources v. Hibbs (2003) 123 S.Ct. 1972.................... 4
CFRA (“California Family Rights Act”) ............................................................................. 5
Gradilla v. Ruskin Manufacturing (9th Cir. 2003) 320 F.3d 951........................................ 5
ELECTRONIC COMMUNICATIONS ............................................................................... 5
Intel Corporation v. Hamidi (2003) 30 Cal.4th 1342 ........................................................ 5
ARBITRATION ................................................................................................................ 6
Ingle v. Circuit City Stores, Inc. (9th Cir. 2003) 328 F.3d 1165 ........................................ 6
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TABLE OF CONTENTS
(Continued)
Page
LABOR RELATIONS ....................................................................................................... 7
Senate Bill 440 ................................................................................................................ 7
DISCRIMINATION........................................................................................................... 7
Desert Palace v. Costa (2003) 123 S. Ct. 2148 ............................................................. 7
SEXUAL HARASSMENT ................................................................................................ 8
Carter v. California Department of Veterans Affairs (2003) 109 Cal.App.4th
469 .................................................................................................................................. 8
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League of California Cities Labor and Employment Law Update
City Attorneys Annual Conference
September 8-10, 2003
AMERICANS WITH DISABILITIES ACT/FEHA DISABILITY DISCRIMINATION
Echazabal v. Chevron USA, Inc., 03 C.D.O.S. 6466 (9th Cir. July 23, 2003)
In a 2002 decision in the same case, the U.S. Supreme Court held that the "direct
threat" defense to a claim of discrimination against a person on the basis of disability
under by the ADA, encompasses threats to an employee's own health. Chevron U.S.A.
Inc. v. Echazabal, 122 S. Ct. 2045 (2002) ("Echazabal I"). It further held that the
EEOC’s regulations issued pursuant to this section of the statute were valid. The Court
remanded to the Ninth Circuit the determination of whether Chevron was entitled to
refuse employment in a refinery to an individual with asymptomatic hepatitis C.
To exclude an individual from employment, an employer must demonstrate that it has
made an "individualized assessment" of the employee's ability to perform the essential
functions of the job without posing a direct threat to his or her own health or safety or to
the health or safety of others. Such an assessment must be based upon "'a reasonable
medical judgment that relies on the most current medical knowledge and/or the best
available objective evidence,' and upon an expressly 'individualized assessment of the
individual's present ability to safely perform the essential functions of the job,' reached
after considering, among other things, the imminence of the risk and the severity of the
harm portended." Echazabal, 122 S. Ct. at 2053 (quoting 29 C.F.R. § 1630.2(r) (2001).
On remand, the Ninth Circuit concluded that Chevron could not rely on generalized
statements of potential harm. Chevron was required, under the terms of 29 C.F.R.
§ 1630.2(r), to consider the severity, imminence, and potential likelihood of harm. Based
on consideration of these factors, Chevron had the burden of demonstrating at least a
"significant risk of substantial harm" to Echazabal.
The Court concluded, in a divided opinion that the plaintiff had adduced expert
testimony from specialists in his disorder and the refinery environment that were
sufficient to create a triable issue of fact as to Chevron’s improper reliance on the
opinions of its physicians, neither of whom had specialized knowledge or expertise,
indicating that Chevron had made a "reasonable medical judgment that relies on the
most current medical knowledge and/or on the best available objective evidence."
Significance: This decision reaffirms the Ninth Circuit’s insistence that employers
make an individualized assessment prior to excluding an applicant or employee as a
“direct threat.” The individualized assessment must rely on an assessment by a
physician with sufficient specialized knowledge to make an appropriate determination.
It is unlikely that an employer could rely on a physician-generalist to make all such
determinations.
Instead, employers must make referrals to specialists when
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appropriate, particularly when confronted by an opinion from the employee’s own
specialist that the employee does not pose a direct threat.
Hastings v. Department of Corrections (2003) Cal.App.4th (Ct.App.3d. Dist. July 22,
2003, No. C041708)
Plaintiff Walter Hastings, a probationary candidate for correctional officer with the
California Corrections Department (“CDC”), permanently injured his knee during the
Basic Correctional Officer Academy. The CDC released him from probation on the
basis that his knee injuries permanently precluded him from performing the essential job
functions of a correctional officer. He thereafter requested reassignment to a different
position with the CDC as a reasonable accommodation. The CDC did not respond to
his request, and Hastings filed suit under FEHA for disability discrimination. The trial
court granted defendant’s motion for summary judgment, concluding that Hastings was
unable to establish that he was qualified to be hired as a correctional officer. Hastings
appealed.
The Court of Appeal affirmed the trial court’s decision that Hastings had failed to
produce evidence that he was qualified for the position even with a reasonable
accommodation. Even assuming Hasting’s was qualified with accommodation, he was
not entitled to the accommodation he sought—reassignment to a desk job. The Court
held that reassignment to another position, in the context of a civil service system, is
limited to assignment to a job in the same classification, absent complying with the civilservice requirement for a competitive exam.
Significance: Whether the duty to reassign disabled employees is limited by a civil
service system to positions in the same job classification is an issue of first impression.
It is worth noting, however, that the reasoning employed by the court is at odds with
established case law requiring an employer to permit a permanent employee to be
reassigned to a new position without requiring him or her to compete for that position.
PUBLIC SAFETY OFFICERS PROCEDURAL BILL OF RIGHTS ACT (“PSOPBRA”)
Operating Engineers Local 3 v. Johnson (2003) Cal.App.4th (Ct.App.1st Dist. July 2.
2003 No. A097487)
Plaintiff Bonita Vinson, an Alameda County probation officer, received a notice
reassigning her because “certain duties and responsibilities required of [her] as a
supervisor . . . [had] not been met” and there were “six instances in which [she] did not
respond in a manner consistent with [her] level of responsibility.” Plaintiff and her union
sued the Chief Probation Officer for Alameda County and the County of Alameda for
refusing to grant Vinson an administrative appeal from a reprimand and reassignment,
alleging a violation of Cal. Gov’t. Code §3304, the Public Safety Officers Procedural Bill
of Rights Act.
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The trial court concluded that the county had violated § 3304 by failing to provide an
administrative appeal from the letter of reprimand, but held that reassignment did not
trigger such a right.
Plaintiff appealed the adverse determination concerning her right to appeal a
reassignment, arguing that it was punitive and therefore appealable pursuant to § 3304.
The Court found that a reassignment due to performance deficiencies was not
“necessarily punitive.” It noted that there was no evidence that the reassignment or the
memorandum listing Vinson’s performance deficiencies would lead to any type of future
disciplinary action, or have any impact on Vinson’s career opportunities. Accordingly,
the Court of Appeal affirmed the trial court decision.
Significance: This decision marks a departure from a number of recent decisions in
which procedural rights under §3304 have been expanded.
EXHAUSTION OF ADMINISTRATIVE REMEDIES
Cherosky v. Henderson, 330 F.3d 1243 (9th Cir. 2003)
Last year, the U.S. Supreme Court substantially limited the use of the continuing
violations doctrine in employment discrimination actions in National Railway Passenger
Corp. v. Morgan, 536 U.S. 1010 (2002). The Court held in Morgan that Title VII
plaintiffs could not recover for discrete acts of discrimination that occurred outside the
statutory time period for filing claims. The Ninth Circuit was asked in Cherosky to
decide whether Morgan also precluded recovery for employment decisions that
occurred outside the limitations period, but were made pursuant to an allegedly
discriminatory policy that was in effect during the limitations period. The Court
concluded that it did.
Four employees of the United States Postal Service filed suit under the Rehabilitation
Act claiming that the Postal Service had an ongoing policy prohibiting the use of
respirators in violation of the Rehabilitation Act. The Rehabilitation Act requires that an
aggrieved person must consult with an EEOC Counselor within 45 days of the date of
the alleged discriminatory action or its effective date. Plaintiffs conceded that they failed
to do so, but argued that the policy prohibiting the use of the respirators constituted an
ongoing “pattern or practice,” and was therefore a continuing violation.
The Ninth Circuit held that the denial of respirators occurred as a result of discrete,
individual decisions, rather than conduct that was a routine and regular part of the
workplace. The Court therefore reasoned that such decisions constituted discrete,
discriminatory acts that must be brought within the statutory limitations period.
Significance: Employees cannot challenge conduct that occurred prior to the
limitations period simply by alleging that the conduct was undertaken pursuant to a
discriminatory policy in effect during that period. Individual employment decisions made
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pursuant to an alleged ongoing discriminatory policy will be viewed as involving discrete
acts.
Grant v. Comp USA, Inc. (2003) 104 Cal.App.4th 637 (Ct.App.6th Dist. June 9, 2003
No. H023839)
On March 31, 1995, Saundrea Grant filed an administrative complaint against her
former employer, Comp USA, Inc., with the California Department of Fair Employment
and Housing. On April 11, 1995, the DFEH issued a right to sue notice. On
September 14, 1995, the DFEH notified Grant that the matter was being reopened and
the April 11, 1995 right to sue was rescinded. On March 21, 1996, the DFEH proposed
a settlement that was not accepted. On April 11, 1996, Grant filed a civil action against
her former employer. Following trial, Comp USA moved for judgment notwithstanding
the verdict, claiming that Grant had failed to exhaust her administrative remedies
because Grant should have obtained a second right to sue from the DFEH after the
original was rescinded. The trial court denied the motion and Comp USA appealed.
The Court of Appeal affirmed the denial of the motion, concluding that Grant’s right to
sue arose by virtue of the DFEH’s inaction within a year of her filing her complaint, even
absent a request for a right to sue letter.
Significance: A failure by the DFEH to issue a right to sue notice within a year does
not preclude a determination that an employee has exhausted her administrative
remedies.
FMLA (“Family Medical Leave Act”)
Nevada Department of Human Resources v. Hibbs (2003) 123 S.Ct. 1972
Hibbs, a Nevada state employee, worked for the Welfare Division of the Nevada
Department of Human Resources. In April and May of 1997, Hibbs sought and was
granted FMLA leave to care for his wife, who was recovering from a car accident and
neck surgery. In October 1997, the Department informed Hibbs that he had exhausted
his FMLA leave, and ordered him to return to work. Hibbs did not. As a result, his
employment with the State of Nevada was terminated.
Hibbs sued, alleging that the State violated his rights under the FMLA. The State of
Nevada claimed immunity from suit pursuant to the 11th Amendment.
The U.S. Supreme Court rejected Nevada’s claim to constitutional immunity from suit.
The Court held that an individual may sue a state government for money damages in
federal court for violating the Family and Medical Leave Act. According to the Court, the
long history of gender-based discrimination by State governments justified Congress’
decision to abrogate the immunity from suit that states normally enjoy under the 11th
Amendment. The FMLA was passed to protect employees from gender-based
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discrimination in the workplace; it targeted the old adage that caring for family members
is “women’s work”.
Significance:
State government employers must ensure compliance with the
provisions of the FMLA. State government employees have the right to sue their
employers in federal court for FMLA violations.
CFRA (“California Family Rights Act”)
Gradilla v. Ruskin Manufacturing (9th Cir. 2003) 320 F.3d 951 withdrawn by (9th Cir.
2003) 328 F.3d 1107
This case is no longer good law. The opinion filed by the 9th Circuit on February 14,
2003 has been ordered withdrawn. Pursuant to stipulation of the parties, this case was
ordered DISMISSED with prejudice.
Significance: The holding of this case, which placed travel restrictions on those caring
for seriously ill family members, is no longer good law. There is no law prohibiting
employees from using CFRA leave to travel with a seriously ill family member who is in
need of care while away from home.
ELECTRONIC COMMUNICATIONS
Intel Corporation v. Hamidi (2003) 30 Cal.4th 1342
Hamidi, a former employee of Intel Corporation, formed an organization called Former
and Current Employees of Intel (FACE-Intel). Over a 21-month period, Hamidi, as
Webmaster and spokesperson for FACE-Intel, sent six (6) mass e-mails to current Intel
employees using their work email addresses and, therefore, Intel’s email servers. The
messages criticized Intel’s employment practices, warned employees of the dangers
those practices posed to their careers and suggested that employees consider working
for other companies. Hamidi offered to, and did, remove from FACE-Intel’s mailing list
any recipient who requested removal.
Intel brought suit claiming that Hamidi committed trespass to chattels by communicating
with its employees over the company’s e-mail system. The company claimed to have
suffered consequential economic damage as a result of loss of productivity caused by
employees’ reading and reacting to Hamidi’s messages and further claimed loss of staff
time involved in attempts to block FACE-Intel’s messages.
The California Supreme Court ruled against Intel. The Court held that trespass to
chattels does not encompass an electronic communication that does not damage or
impair the functioning of the recipient’s computer system. The Court likened sending an
offensive e-mail to sending an unpleasant letter. The Court opined that reading an
offensive e-mail does no more harm to a computer system than an unpleasant letter
does to a mailbox.
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Significance: Employers seeking damages against an individual who sends mass email messages over the employer’s computer system do not have a valid cause of
action for trespass to chattels absent evidence that the messages damaged, or
impaired the functioning of, the employer’s computer system. If the messages are so
voluminous as to significantly impair the functioning of the employer’s computer system,
the employer may be able to state a cause of action for trespass.
ARBITRATION
Ingle v. Circuit City Stores, Inc. (9th Cir. 2003) 328 F.3d 1165
In September 1996, Ingle applied to work at a Circuit City retail store. As a condition of
employment, she signed an agreement agreeing to submit all employment-related legal
claims to arbitration.
She later filed suit against Circuit City, alleging sexual
harassment, sex discrimination, disability discrimination and retaliation. Circuit City
moved to compel arbitration.
The Ninth Circuit denied Circuit City’s motion to compel arbitration. The Court ruled that
Circuit City’s arbitration agreement was both procedurally and substantively
unconscionable, and therefore, invalid under California law.
The Court reasoned that the agreement was procedurally unconscionable because
Circuit City maintained considerably more bargaining power than Ingle. The company
refused to hire anyone who did not sign its arbitration agreement; Ingle would not have
been hired if she did not sign the agreement.
The Court ruled that under California law an agreement to arbitrate employment-related
claims raises a rebuttable presumption of substantive unconscionability. An employer
may rebut this presumption by showing that its agreement is not one-sided. Circuit City
failed to present any rebuttable evidence and for that reason its contract was
substantively unconscionable.
The Court analyzed several provisions of Circuit City’s arbitration agreement and found
that they were one-sided, providing substantial benefits to Circuit City while diminishing
the rights of employees. The agreement only applied to claims likely to be filed by
employees and did not include claims likely to be filed by Circuit City; it barred classwide arbitration; it contained a one-year statute of limitations provision which required
employees to forego the possibility of relief under FEHA’s continuing violations doctrine,
and it required a $75 filing fee, payable to Circuit City, regardless of one’s ability to pay.
In addition the agreement limited the relief available to employees, excluded punitive
damages, and contained a fee-splitting provision which required successful litigants to
split the costs of arbitration with Circuit City and authorized arbitrators to require
unsuccessful litigants to cover the arbitration expenses of Circuit City. Finally, the
agreement allowed Circuit City the right to unilaterally amend or terminate the arbitration
agreement.
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Significance: Under California law, agreements to arbitrate employment-related claims
raise a rebuttable presumption of substantive unconscionability.
To rebut this
presumption, an employer must present evidence that its arbitration agreement is not
one-sided and lacking “mutuality.” For employers of large numbers of non-management
employees or other workers without specialized expertise or leverage derived from
other sources, it is difficult to see how this showing can be made. Accordingly,
boilerplate arbitration agreements are unlikely to be enforceable in the employment
setting under California law.
California courts may refuse to enforce arbitration agreements that are both
procedurally and substantively unconscionable.
LABOR RELATIONS
Senate Bill 440 is currently wending its way through the legislature in response to the
Supreme Court’s ruling in County of Riverside v. Superior Court, which held that a state
statute requiring mandatory arbitration of economic issues with public safety officers is
unconstitutional. As this paper is written, the measure is pending on the Senate floor for
concurrence in Assembly amendments. Thus, the measure may reach the Governor’s
desk before the end of the summer legislative session. The Court found that SB 402
(the initial legislation mandating binding arbitration of economic issues with public safety
employees) was an unconstitutional delegation of a local government’s authority over
employee compensation. To address the Court’s concerns regarding mandatory
binding arbitration, SB 440 provides that an interest arbitration decision will not be
binding if it is rejected by a unanimous vote of all members of the governing body. The
bill attempts to address the Court’s concerns about abrogation of local government
control over employee compensation by providing a means for local agencies to reject
the determination of an interest arbitration. It remains to be seen whether the changes
in SB 440 are sufficient to overcome the constitutional issues raised by the state
mandating arbitration. Further litigation is likely.
Significance: If SB 440 passes and is upheld, it could be costly to local governments.
For that reason the League of Cities has opposed this legislation.
DISCRIMINATION
Desert Palace v. Costa (2003) 123 S. Ct. 2148
Ms. Costa was fired from her position as a forklift operator for Desert Palace after
engaging in a fight with a male co-worker. The co-worker received a five-day
suspension for the same conduct. Costa filed a sexual discrimination lawsuit alleging
discriminatory dismissal. Jurors were given a “mixed motive instruction.” Following trial
defendant appealed the jury instruction, claiming that plaintiff needed to produce “direct
evidence” to demonstrate that the employer had used a forbidden consideration entitling
her to a “mixed motive” instruction. The Supreme Court upheld the decision to give a
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“mixed motive” instruction, concluding that the Civil Rights Act of 1991 does not require
a plaintiff to adduce any particular type of evidence, such as a direct evidence (a
decision maker’s discriminatory remark) to show that sex (or race or national origin,
etc.) was a motivating factor in a decision. Once a plaintiff has shown that an unlawful
factor was a consideration in the decision, the defendant is required to prove that it
would have reached the same decision even in the absence of the unlawful
consideration, a difficult burden.
Significance: This case is a significant change in the playing field to the advantage of
discrimination plaintiffs. It is far more difficult for a defendant to prevail under a “mixed
motive” standard. This case greatly expands the situations in which a plaintiff is entitled
to such an instruction, since a plaintiff need not produce “direct evidence,” (a
discriminatory remark), which most Courts of Appeal previously required, and can
instead rely on circumstantial evidence, which is far more readily obtained.
SEXUAL HARASSMENT
Carter v. California Department of Veterans Affairs (2003) 109 Cal.App.4th 469 (4th
Dist. June 4, 2003 Case No. E030908)
Yet another court ruled that the Fair Employment and Housing Act does not protect
employees from sexual harassment by clients or non-employees. Helga Carter worked
as a nurse in a veterans’ residence facility. She alleged that her employer was liable for
hostile environment sexual harassment which was created, not by a co-employee, but
by one of the patients of the facility. A jury found for the plaintiff and the employer
appealed. The appellate court held that FEHA does not impose an obligation on
employers to protect employees against harassment by third parties. This ruling is
consistent with Salazar v. Diversified Paratransit, Inc. (2002) 103 Cal.App.4th 131,
review granted 130 Cal. Rptr.2d 656.
Significance: The Supreme Court is currently reviewing Salazar. The Supreme
Court’s decision in that case will determine whether the Carter ruling remains in effect.
Regardless of the Supreme Court’s decision, there is a bill currently moving through the
legislature (AB 76) that would overrule Salazar and extend employer liability for
harassment to harassment by non-employees if the employer knows or should have
known of the harassment and fails to take corrective action.
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