Bay Area Employment Lawyer Blog

Tough Love for Applicant with History of Drug Addiction: Ninth Circuit Approves One Strike Rule for Drug Testing

Published on: March 21, 2011 | Siegel LeWitter Malkani

In a somewhat tortured opinion, the Ninth Circuit approved a one strike rule for drug testing of applicants to become longshore workers. In Lopez v. Pacific Maritime Association (9th Cir. Mar. 2, 2011) 636 F.3d 1197, Mr. Lopez applied to be a longshoreman in 1997, but was rejected because he failed the PMA’s mandatory drug test. By 2002, Mr. Lopez was clean and sober. In 2004 he again applied to be a longshoreman but was rejected due to the PMA’s one strike rule. Mr. Lopez sued under the California Fair Employment & Housing Act (FEHA) and the Americans with Disabilities Act (ADA), claiming he was a rehabilitated drug addict and that the one strike rule’s lifetime ban was a per se violation of these Acts. He asserted that the one strike rule invariably excluded protected individuals based on their past behavior and constituted disability discrimination.

Mr. Lopez was a protected individual – clean and sober – but with a history of drug addiction. Indeed, under the one strike rule, nothing he could do would ever make him eligible for the job he wanted to hold. Ergo, it seems like FEHA and the ADA should provide him with some protection. However, the Ninth Circuit reached and stretched to find otherwise, relying on the fact that the PMA’s rules and actions were not intended to exclude past drug addicts, but rather to ensure a safe workforce. The Court noted that PMA faces a “culture that accepted the use of drugs and alcohol in the workplace.” The Court further noted that there was no evidence “that defendant targeted or attempted to target recovered drug addicts, as distinct from recreational uses.”

The Court attempted to distinguish a 2004 Ninth Circuit case finding for the employee by noting that, in that case, perhaps the employer was motivated by discrimination against the employee, due to his past addiction, because the employee brought in a note from Alcoholics Anonymous. Hernandez v. Hughes Missile Systems Co. (9th Cir. 2004) 362 F.3d 564. The Court might have well just said it was changing its mind, and that, it was simply deciding that discriminating against someone with a history of drug abuse was acceptable.

US Supreme Court Declares that Discriminatory Bias of Non-Decision Maker/Supervisor Taints Decision to Fire Employee under Cat’s Paw Theory

Published on: March 12, 2011 | Siegel LeWitter Malkani

Plaintiff’s employment lawyers have long been urging the courts to follow an important reality in employment decisions: discriminating individuals can taint an employment decision made by someone else, and the fact that the final decision maker doesn’t harbour a discriminatory motive himself/herself, should not protect the employer. Some courts have already accepted the “cat’s paw” theory, including several circuit courts. See Long v. Eastfield College (5th Cir. 1996) 88 F.3d 300, 307; Kientzy v. McDonnell Douglas Corp. (8th Cir. 1993) 990 F.2d 1051, 1057; Kendrick v. Penske Transp. Services, Inc. (10th Cir. 2000) 220 F.3d 1220, 1231; Shager v. Upjohn Co. (7th Cir. 1990) 913 F.2d 398. California’s courts of appeals have also adopted this standard. See, e.g., Reeves v. Safeway Stores, Inc. (2004) 121 Cal. App. 4th 95 (applying cat’s paw theory in a retaliation claim).

In good news for employees, the U.S. Supreme Court has now adopted its own version of cat’s paw liability in Staub v. Proctor Hospital (March 1, 2011) 131 S.Ct. 1186, making employer liability where discriminatory animus taints the ultimate decision to fire the law of the land.

The Supreme Court adopted this standard while interpreting USERRA (the Uniformed Services Employment & Reemployment Rights Act), which prohibits discrimination against an employee due to his or her military status or obligations. 38 U.S.C. § 4311. Like many statutes prohibiting employment discrimination, if the protected status (here military service) is a “motivating factor” in the decision to fire, the decision to fire is illegal.

Associational Retaliation Broadened by US Supreme Court’s Holding that Firing Fiancé of Employee who Filed Charge of Discrimination is Illegal

Published on: March 3, 2011 | Siegel LeWitter Malkani

In an important case, Thompson v. North American Stainless, LP, 131 S.Ct. 863 (January 24, 2011), the US Supreme Court put an end to retaliation against an employee who takes protected activity by retaliating against someone “closely” associated with her. It did so in order to protect the spirit of Title VII’s anti-retaliation provision.

In this case, Ms. Regalado, an employee of defendant North American Stainless, filed a charge of sex discrimination with the Equal Employment Opportunity Commission (EEOC). Three weeks later, the defendant fired her fiancé, plaintiff Thompson. Thompson alleges that his firing was in retaliation for his fianceé’s filing of her charge of discrimination.

The US Supreme Court upheld Thompson’s charge, indicating that, if true, his firing violated the anti-retaliation provisions of Title VII. Relying on the spirit of the anti-retaliation provision, the Court held that the provision was intended to protect against employment actions that “….might have dissuaded a reasonable worker from making or supporting a charge of discrimination”, quoting Burlington Northern & Santa Fe Railway v. White, 548 US 53 (2006). The Court went on to indicate that not all third parties will be protected by this ruling, noting that a close family member will be treated differently than a mere acquaintance.

Court Warns that Use of Employer’s Computer & Email Account to Confidentially Communicate with Lawyer is Not Confidential

Published on: February 13, 2011 | Siegel LeWitter Malkani

Communications with employment attorneys are generally confidential. Emails communications are generally confidential. However, beware of these overgeneralizations! If you are an employee with concerns about your employer, and are using your work email on your employer’s computer to consult a lawyer, that may NOT be confidential!

In this case, Holmes v. Petrovich Development Co., LLC, , 191 Cal.App.4th 1047 (2011), Ms. Holmes emailed a lawyer about her claims of pregnancy discrimination from her employer’s computer, using her work email account, after signing a handbook acknowledging that the employer maintains the right to monitor all electronic communications including computers, which are to be used only for work purposes.

When Ms. Holmes claimed that her communications with the lawyer were confidential, the Court of Appeals practically railed that, “the e-mails sent via company computer under the circumstances of this case were akin to consulting her lawyer in her employer’s conference room, in a loud voice, with the door open, so that any reasonable person would expect that their discussion of her complaints about her employer would be overheard by him.” The court concluded that there was no reasonable expectation of privacy here, and thus the employer could read and use as evidence in the lawsuit, such communications.

Let Me Count the Ways Non-Compete Clauses are Illegal: Court of Appeals Holds that Firing an Employee because of a Prior Illegal Non-Compete Clause is itself Illegal & in Violation of Public Policy

Published on: January 23, 2011 | Siegel LeWitter Malkani

By now this ought to be the accepted and undisputed black letter law: in the State of California, nothing good can come of a non-compete clause. A non-compete clause is generally illegal and in violation of the public policy set forth in California Government Code Section 16600. The reasoning is simple: the public policy of the State of California simply and unequivocally supports the rights of employees to seek work in their chosen profession or field. An employer’s general attempts to limit where an employee finds his or her next job, except for the employer’s legitimate interest in maintaining its confidential and proprietary information, is against public policy. An employer – who, under the “at will” laws of the same State of California, has the right to fire an employee “at will” (that is, for any reason that does not violate any specific law) – should not be permitted to prohibit an employee from finding new, gainful employment in his or her field. After all, fair is fair.

Therefore, it should come as no surprise that the court in Silguero v Creteguard, 187 Cal. App. 4th 60 (2010) held that a plaintiff stated a cause of action for violation of public policy where her current employer fired her because her past employer wrote a letter asking that her current employer assist in enforcing an illegal non-compete agreement prohibiting her from working in sales for 18 months after the termination of her employment. This is a simple, straight forward, public policy claim that should serve as a warning to employers to act cautiously regarding non-compete agreements – or better yet – just stay away from them.

The only question in the Silguero case is whether the employee should have also brought a claim against her past employer based on the letter it wrote, for violation of public policy and/or other tort claims such as intentional interference with contract or intentional interference with prospective economic advantage. After all, Silguero’s past employer really is as guilty a party as her current employer, as its actions caused her current employer to fire her. Let’s keep hoping that employers stay away from these non-compete agreements, and if they don’t, that the courts keep telling them to do so!

US Supreme Court Permits Arbitrators Rather Than Court to Rule on Whether an Arbitration Agreement is Enforceable Creating an Inherent and Untenable Conflict of Interest

Published on: January 3, 2011 | Siegel LeWitter Malkani

Despite the prevalence and overreaching of arbitration agreements in employment cases, traditionally in state and federal court, interpreting both the Federal and California Arbitration Acts (FAA and CAA, respectively), employees have at least been permitted to seek a Court’s determination about whether or not the arbitration agreement the employee signed is enforceable. In other words, despite the fact that an employee signed an arbitration agreement, the employee still generally had been able to ask a court to rule on important enforceability issues such as the existence of the agreement and whether an agreement is so unconscionable as to be unenforceable.

Then came the US Supreme Court in Rent-A-Center, West, Inc. v Jackson, 130 S. Ct. 2772 (2010) and poked a rather major hole in this important safeguard.

Rent-A-Center, interpreting the FAA, held that – where the arbitration agreement itself took this important safeguard away from the courts and assigned it to the arbitrator – the arbitrator holds all the power to rule on whether or not the arbitrator gets to hear the case (i.e., the existence and enforceability of the agreement).

Is a Holding Company, or a Parent Corporation, a Proper Defendant in an Employment Action?

Published on: December 3, 2010 | Siegel LeWitter Malkani

In every employment case it is important to name as a defendant the proper employer or employers. Of course, prior to discovery, it is sometimes difficult to ascertain which, out of a myriad of interwoven entities, are the proper defendants.

In the recent case of BBA Aviation v Superior Court (Engen) (190 Cal.App.4th 421) the California Court of Appeals held that an employee simply didn’t set forth enough information to be able to establish jurisdiction over an out-of-state parent corporation. The parent corporation claimed it was merely a holding company, and had nothing to do with the plaintiff’s termination. In accepting this explanation, the Court of Appeals made a wide assortment of factual findings without an appropriate factual record, precipitously closing the door to Mr. Engen’s desire to make sure he named and sued all the correct corporate actors.

Although it is unfortunately too late to do much for Mr. Engen, for the rest of us, here are some cautionary factors to consider when determining whether to sue a parent or holding company:

Employment Arbitration Agreement Struck Down as Procedurally & Substantively Unconscionable Where Employee not Provided with Arbitration Rules and Other Provisions Favored the Employer

Published on: November 20, 2010 | Siegel LeWitter Malkani

It is another win for the employee in the ongoing battle to make mandatory employment arbitrations more equitable to the employee. Since the concept of mandatory arbitration agreements has been so overwhelmingly endorsed by the courts, some courts have still felt compelled to keep striking down a host of scurrilous provisions employers keep tacking onto their mandatory arbitration agreements. After a while, we must simply ask, again: should employer really be permitted to make arbitration agreements mandatory when there is all this abuse of the process going on?

In Trivedi v Curexo Technology Corp. (Cal. Court of Appeals, October 2010), the court looked first at whether the agreement was “procedurally unconscionable” (i.e. whether the manner in which the employer obtained the agreement was so unfair that it was illegal). Curexo presented Mr. Trivedo with the arbitration agreement in a take-it-or-leave-it manner, requiring that he arbitrate all claims that may arise in the future, using American Arbitration Association (“AAA”) rules without providing him with a copy of the rules. The court found the failure to provide the rules made the procedure procedurally unconscionable.

Next the court looked at whether the agreement was “substantively unconscionable” (i.e. whether the actual terms of the agreement were so unfair that it made the agreement illegal). Curexo’s agreement contained two terms that the courts had already frowned upon, so it was little surprise that the court found the terms unconscionable. The first was changing the law to make it easier for the company to collect attorneys’ fees against the employee, should the employee lose his claim. The second was allowing a party to by pass the so-called mandatory arbitration process for claims generally brought by employers, thus making the arbitration mandatory for employees but not for the employer.

Court Speaks with More than One Tongue on the Disclosure of Arbitrator’s Bias

Published on: October 18, 2010 | Siegel LeWitter Malkani

On August 2, 2010 the California Supreme Court saw no problem with the fact that a disgraced and discredited retired judge – who was publicly censured for creating “an overall courtroom environment where discussion of sex and improper ethnic and racial comments were customary” – served as an arbitrator in a medical malpractice case brought by a female patient, without even disclosing the censure to the parties. The Court, in an opinion for which it should be deeply embarrassed, basically held that a retired judge’s clearly sexist and harassing conduct towards female staff does not in any way establish that the judge holds any bias against female litigants enough to even disclose the fact. In reality, the Court simply felt that the finality of arbitration awards was more important than fairness to the female plaintiff. Haworth v. Superior Court (Ossakow) S165906.

On October 12, 2010, the California Court of Appeals did what it could to limit the impact of this holding and raised some very good issues while doing so. Addressing a different set of facts involving potential arbitrator bias, it ruled the other way, distinguishing the facts from Haworth. In Benjamin, Weills & Mazer v. Kors, A125732, the arbitrator failed to disclose that he regularly represented law firms in fee disputes, in a case involving just such a fee dispute, i.e. he did not disclose that he normally and currently represents one side in the very type of case before him. The Court of Appeals held that the arbitrator should have disclosed this. The court held that this business relationship “could reasonably cause a person aware of the facts to reasonably entertain a doubt that the proposed neutral arbitrator would be able to be impartial.”

The Court went on to approve of a broader disclosure for an arbitrator than what is required for a judge, and to analyze the different circumstances and interests of arbitrators and judges. Explaining that since arbitrators have their own business interests, and that private arbitration as a whole “is a commercial enterprise”, the situation is different than the judicial system. (Indeed, there are other reasons to provide a higher level of scrutiny to arbitrator bias than judicial bias. For example, an arbitrator is the gatekeeper and fact finder, judge and jury, whereas in a court preceding the litigants normally have the right to a jury to act as the ultimate fact finder instead of the judge).

Sandell v Taylor-Listug Once Again Establishes that if it Smells like Disability or Age Discrimination, the Case should go to a Jury

Published on: September 13, 2010 | Siegel LeWitter Malkani

I am not sure why this happens over and over again, but for some reason some trial courts keep believing that if they would vote for the employer if they were sitting as jurors, they should grant summary judgment to the employer and deny the employees their day in court. Sandell v Taylor-Listug (California Court of Appeals No. D055549, September 7, 2010) demonstrates that we are lucky to have an appellate court system to reverse this type of action.

Sandell involved a garden variety age and disability discrimination case in which the company claimed it did not discriminate, but there was plenty of evidence by which a fact finder or jury could side with the employee and find that there was discrimination. Besides the timing that Mr. Sandell was fired after returning from a leave of absence due to a stroke and right after his 60th birthday, there was evidence that the employer simply was not pleased with Mr. Sandell’s disability. The record included statements by Sandell that his boss told him, “that if I don’t make a full recovery, that the company has the right to fire me” and that this same boss chastised him with, “when I was going to get rid of the cane and when I was going to drop this dramatization.” It also noted that these types of comments were certainly evidence of discrimination, and were not “stray comments” to be disregarded by the court.

The Court of Appeals reinstated the case and stated the obvious, “The evidence is in conflict, and it is not up to the court to weigh conflicting evidence or to assess the credibility of witnesses.”