Employment Law

California Appellate Court Moves Associational Disability Claims Forward

Why it matters

Recognizing associational disability claims, a California appellate panel ruled that an employee's claim for disability discrimination in violation of the Fair Employment and Housing Act (FEHA) can move forward. Luis Castro-Ramirez claimed that when he began working for Dependable Highway Express in 2010 he informed the employer that he had a disabled son who required dialysis on a daily basis, which he was responsible for administering. A supervisor scheduled his delivery routes so that he could be home to help his son in the evenings. But when a new supervisor took over in 2013, Castro-Ramirez was terminated for refusing to work a shift that would have interfered with his son's dialysis, he alleged in his FEHA suit. A trial court granted the employer's motion for summary judgment but the appellate panel reversed, finding triable issues of material fact on his causes of action for associational disability discrimination, failure to prevent discrimination, retaliation, and wrongful termination in violation of public policy. While the court did not go so far as to find employers could be liable for failure to provide an accommodation based on associational disability, the decision provides an important reminder for companies about the risks of associational disability claims under FEHA.

Detailed discussion

Luis Castro-Ramirez began working as a driver for Dependable Highway Express (DHE) in 2010. He claimed that when he started work, he told the company he had a disabled son who required dialysis on a daily basis and that he was the person responsible for administering the dialysis, requesting a work schedule that would allow him to be home in the evenings.

The scheduling worked until 2013, when a new supervisor took over and gave Castro-Ramirez a late shift with a route that would not get him home in time to help his son. When he objected, the supervisor terminated him, telling him that he "quit by choosing not to take the assigned shift."

Castro-Ramirez filed suit under the Fair Employment and Housing Act (FEHA), alleging disability discrimination, failure to prevent discrimination, retaliation, and wrongful termination in violation of public policy. A trial court judge granted DHE's motion for summary judgment and he appealed.

A panel of the California appellate court reversed but granted additional briefing after the state legislature enacted Assembly Bill 987, which amended FEHA to establish that "[a] request for reasonable accommodation based on religion or disability constitutes protected activity … such that when a person makes such a request, he or she is protected against retaliation for making the request."

In an amended opinion, the panel stuck with its reversal of summary judgment in favor of the employer, recognizing a claim for associational disability discrimination in violation of FEHA while not going so far as to hold that employers can be liable for a failure to accommodate an associational disability request.

DHE argued that Castro-Ramirez's case was essentially about reasonable accommodations. While FEHA mandates that employers provide accommodations for employees who are themselves disabled, the defendant told the court that the statute does not require that employers make accommodations for associates of the disabled.

The panel took a different approach. "To us, the proper inquiry is: Even if DHE had no separate duty under FEHA to provide plaintiff with reasonable accommodations for his son's illness, was there sufficient evidence that discriminatory animus motivated [the supervisor's] refusal to honor plaintiff's scheduling request and his termination of plaintiff?"

Maybe, the court said, as triable issues of material fact existed as to discriminatory motive and pretext. "A jury could reasonably find from the evidence that plaintiff's association with his disabled son was a substantial motivating factor in [the supervisor's] decision to terminate him, and, furthermore, that [the supervisor's] stated reason for termination was a pretext."

The supervisor knew that Castro-Ramirez needed to finish his assigned route at a time that permitted him to administer dialysis to his son and had been reminded by the former supervisor about the issue after the plaintiff complained. "Despite knowing plaintiff's need to be home early, the month after [the supervisor] took over, he scheduled plaintiff for a shift that started at noon, later than plaintiff had ever started before," the court added, "even though eight other shifts well before noon were available, and even though DHE's customer had specifically requested that plaintiff—the customer's regular driver—do their 7:00 a.m. deliveries. There was no apparent reason why [the supervisor] could not have scheduled plaintiff for one of these earlier shifts."

When the plaintiff asked to take the earlier shift, the supervisor lied and said the customer was unhappy with his work—despite the fact he had specifically asked for Castro-Ramirez to make the 7:00 a.m. delivery, the court said.

"One reasonable inference from these facts is that [the supervisor], as the person responsible for scheduling the drivers, wanted to avoid the inconvenience and distraction plaintiff's need to care for his disabled son posed to [the supervisor]," the panel wrote. "Thus, [the supervisor] engineered a situation in which plaintiff would refuse to work the shift, giving [the supervisor] a reason to terminate him. In other words, plaintiff's termination for refusal to work the shift was a pretext for [the supervisor's] desire to be rid of someone whose disabled associate made [the supervisor's] job harder."

For similar reasons, the panel found the evidence would permit a reasonable trier of fact to find protected activity to support Castro-Ramirez's retaliation claim, even though he did not use terms such as "unlawful" or "reasonable accommodation" when discussing his schedule.

"The trier of fact could reasonably find that plaintiff's repeated complaints to [both supervisors] about the change in his scheduling, when both knew that he needed earlier hours to administer dialysis to his son, constituted opposition to the denial of an accommodation in his schedule," the court wrote. "Put otherwise, plaintiff showed opposition to a practice he believed was unlawful. Tied as the complaints were to his son's disability, the trier of fact also could find that [the supervisor] had reason to know plaintiff's complaints were not just an unexplained insubordinate act bearing no relation to perceived unlawful practices."

As part of the rehearing of the case, DHE argued that Assembly Bill 987 should not have retroactive effect on the actions in the case, which took place years prior to its enactment. Sidestepping the issue, the court said changes to the law were irrelevant because Castro-Ramirez did more than simply request an accommodation. "A reasonable juror could find that his repeated complaints about the sudden changes to his schedule represented 'some degree of opposition' to DHE's failure to continue to provide that schedule," the court said.

The plaintiff's other claims—failure to prevent discrimination and wrongful termination—were also reinstated by the panel.

A dissenting opinion sided with the employer, writing that "the conduct at the heart of plaintiff's claim is defendant's refusal to assign a shift that would allow plaintiff to tend to his disabled son. No authority has held an employer must do so, and nor should we." FEHA should not be construed to declare that a person with no disability ipso facto becomes "disabled" by association with a disabled person, the dissent said, also finding no evidence of discriminatory animus.

"However desirable it might seem for the law to require an employer to accommodate the needs of the disabled associate of a nondisabled employee, the courts are not free to expand the law in this way without any basis in the statutory language or other precedent," the dissent wrote.

To read the opinion in Castro-Ramirez v. Dependable Highway Express, click here.

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Ninth Circuit Crashes Uber Drivers' Claims Into Arbitration

Why it matters

Complicating the already convoluted lawsuits filed by Uber drivers seeking classification as employees and not independent contractors, the Ninth Circuit Court of Appeals ruled that arbitration provisions used by the company in 2013 and 2014 agreements were valid, requiring the drivers to individually arbitrate their claims. Multiple driver class actions against the company were consolidated in California federal court. Earlier this year, the parties appeared to have reached a record-setting deal of $100 million, but the judge overseeing the case refused to grant approval. Lowering the amount of any potential subsequent settlement negotiations, the Ninth Circuit decision reversed the district court's ruling that the agreements were invalid and unenforceable. The agreements were not unconscionable, the panel wrote, particularly given that drivers were provided with the option to opt out of the arbitration provision. The victory for Uber also provides some peace of mind for employers making use of arbitration provisions in employee agreements.

Detailed discussion

Former Uber drivers Abdul Mohamed and Ronald Gillette filed suit against Uber after their access to the company's app was cut off, effectively terminating their work. Mohamed began driving in 2012, and in July 2013, he accepted an updated agreement with the company. The agreement included an arbitration provision requiring Uber drivers to submit to arbitration to resolve most disputes with the company and included a provision requiring drivers to waive their right to bring disputes as a class action, a collective action, or a private attorney general representative action.

Drivers were given the ability to opt out of the arbitration provision by delivering notice of their intent to opt out to Uber within 30 days either in person or by overnight delivery service. Mohamed accepted the agreement and did not opt out. Gillette, who began driving in early 2013, similarly accepted the 2013 agreement.

In June 2014, Mohamed accepted an updated version of the agreement with an easier opt-out provision enabling drivers to opt out via e-mail (as well as the other options) and again declined to opt out. Mohamed's access to the app was terminated in October 2014—Gillette's in April 2014—both because of negative information on their consumer credit reports. Both drivers filed suit alleging violations of the Fair Credit Reporting Act (FCRA) and including a claim under the Private Attorney Generals Act (PAGA). Uber moved to compel arbitration in both cases.

The district court overseeing the litigation against Uber denied the motions. On appeal to the Ninth Circuit Court of Appeals, a three-judge panel reversed.

Both the 2013 and 2014 agreements contained provisions that provided that disputes would be resolved by arbitration and, importantly, that any dispute as to arbitrability would be resolved by the arbitrator, the court said.

"The delegation provisions clearly and unmistakably delegated the question of arbitrability to the arbitrator for all claims except challenges to the class, collective, and representative action waivers in the 2013 agreement," the panel wrote. "In accordance with Supreme Court precedent, we are required to enforce these agreements 'according to their terms' and, in the absence of some other generally applicable contract defense, such as fraud, duress, or unconscionability, let an arbitrator determine arbitrability as to all but the claims specifically exempted by the 2013 Agreement."

Further, the panel found the delegation provisions were not unconscionable, rejecting the argument that the opt-out provision was illusory because it was so onerous. "While we do not doubt that it was more burdensome to opt out of the arbitration provision by overnight delivery service than it would have been by e-mail, the contract bound Uber to accept opt-outs from those drivers who followed the procedure it set forth," the court said. "There were some drivers who did opt out and whose opt-outs Uber recognized. Thus, the promise was not illusory. The fact that the opt-out provision was 'buried in the agreement' does not change this analysis."

Because the panel found the delegation provisions in both agreements were not procedurally unconscionable, it did not reach the issue of substantive unconscionability, instead ordering the parties to arbitrate their dispute over arbitrability—with one exception.

The agreements also implicated the drivers' PAGA claims, as the arbitration provisions waived class, collective, and representative actions. While the district court found that the agreements did not allow for the PAGA waiver to be severed from the remainder of the agreements, the Ninth Circuit reached a different conclusion.

Describing the agreement's severance provision as "hardly a model of clarity," the panel nevertheless found it operated to make the arbitration provision invalid as to any PAGA representative claim. "Thus, while Plaintiffs' PAGA claim must be litigated in court, the PAGA waiver does not invalidate the remainder of the arbitration provision in the 2013 Agreement, and it should be enforced according to its terms," the court said.

To read the opinion in Mohamed v. Uber Technologies, Inc., click here.

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Keeping an Eye on the California Legislature

Why it matters

The California legislature ended its session recently by sending several employment-related bills to Governor Jerry Brown's desk for a signature. Senate Bill 654 would expand parental leave protections in the state by requiring small businesses—those with 20 to 49 employees—to provide six weeks of unpaid maternity and paternity leave. Currently, only employers with 50 or more workers are required to provide parental leave. Continuing the focus on equal pay, Assembly Bill 1676 would prohibit employers from considering the prior salary of an applicant as a basis for disparity in compensation, while Senate Bill 1063 would extend last year's Fair Pay Act to include race and ethnicity, banning employers from paying employees a lower wage than that paid to employees of a different race or ethnicity for substantially similar work. Gov. Brown already signed one bill into law with a major shift for agricultural employers, providing a phased-in period of overtime payment for such workers.

Detailed discussion

As the end of the California legislative session drew near, lawmakers scurried to pass bills and managed to send several to the desk of Governor Jerry Brown for consideration. Below are a few of the measures proposed by legislators that require action by Gov. Brown by September 30.

  • If signed by Gov. Brown, Senate Bill 654 would bring small employers into the fold of the parental leave requirements. Currently, the California Family Rights Act (CFRA) applies to employers with 50 or more workers, requiring them to provide for at least 12 weeks of job-protected parental leave. The New Parent Leave Act would expand prior law to include employers with 20 to 49 employees, who would be entitled to up to six weeks of job-protected parental leave to bond with a new child within one year of the child's birth, adoption, or foster care placement. SB 654 contains many similar provisions to the CFRA, from eligibility for leave (employees must have worked 1,250 hours in the prior 12-month period) to guaranteed reinstatement of the worker to the same or comparable employment upon the return from leave. Sen. Hannah-Beth Jackson (D-Santa Barbara) said the new measure—which would take effect January 1, 2018—would extend parental leave protections to an additional 2.7 million employees in California, or 16 percent of the state's workforce.
  • Two new bills would expand upon last year's Fair Pay Act with changes to considerations for employers deciding on a salary amount as well as providing protections for race and ethnicity. Similar to the Act to Establish Pay Equity recently passed in Massachusetts, Assembly Bill 1676 would no longer allow employers to consider prior salary as a reason to justify disparity in compensation. A second measure, Senate Bill 1063, would add two new protected categories to the Fair Pay Act: race and ethnicity. The Wage Equality Act would prohibit employers from paying employees a wage rate less than the rate paid to employees of a different race or ethnicity for substantially similar work, using the same evidentiary standards and burdens set forth in the amended Act.
  • One bill already signed by Gov. Brown: Assembly Bill 1066, which created a four-year phase-in process to pay agricultural workers overtime. Starting January 1, 2019, employers must pay agricultural workers overtime after they reach 9.5 hours or 55 hours per workweek, with the number of hours requiring overtime decreasing each year until January 1, 2022, when overtime is required after the workers reach 8 hours per day or 40 hours per week. Once that point is reached, employers must also pay no less than double the regular rate of pay when an employee works more than 12 hours in a given day. The new law provides an extra three years of phasing in for employers that have 25 or fewer workers.

To read SB 654, click here.

To read AB 1676, click here.

To read SB 1063, click here.

To read AB 1066, click here.

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Can Employees Bring Suit Over De Minimis Time? California Supreme Court to Decide

Why it matters

With the potential for a significant impact on employers, the California Supreme Court will decide whether employees can bring state law wage and hour claims based on de minimis amounts of time after the Ninth Circuit Court of Appeals certified the question to the state's highest court. The dispute involves former Starbucks employee Douglas Troester, who sued the coffee chain for failing to pay workers for tasks that lasted only a few minutes but were performed after they clocked out. While the Fair Labor Standards Act (FLSA) prohibits claims over small chunks of time, the Ninth Circuit said it found no definitive policy in state law. Uncertain how to rule on the appeal of summary judgment in favor of the employer, the federal appellate panel kicked the question to the California Supreme Court, which recently agreed to answer.

Detailed discussion

A former shift supervisor at a California Starbucks, Douglas Troester, filed suit in August 2012. He claimed that during his year of employment with the company, Starbucks' computer software required him to clock out on every closing shift before initiating the software's "close store procedure" on a separate computer terminal in the back office.

In addition, Troester walked coworkers to their cars (per Starbucks' policy), reopened the store to allow employees to retrieve items they left behind, brought in store patio furniture that had been left outside, or waited with employees for their ride to arrive. These tasks generally took between four and ten minutes, which in the aggregate over Troester's employment would have netted him $102.67 had he been paid for the time.

Ruling on Starbucks' motion for summary judgment, a federal district court found the time to be de minimis. While acknowledging that the closing activities occurred on a regular basis, the court said the Fair Labor Standards Act's (FLSA) de minimis doctrine foreclosed recovery in the suit.

Troester appealed but the Ninth Circuit Court of Appeals found itself unable to rule.

Under the FLSA, employers are relieved from liability for unpaid wages where otherwise compensable time was de minimis, a doctrine dating back to a 1946 U.S. Supreme Court decision. But the California Supreme Court has yet to rule on the application of the FLSA doctrine to state law, the panel wrote.

A smattering of state appellate courts have weighed in on the issue and a panel of the Ninth Circuit has issued an unpublished decision predicting that the state's highest court would find the doctrine applicable to state law claims. But these conjectures were not enough, the panel said, particularly as the California Supreme Court recently declined to incorporate FLSA standards in a case involving on-call time under state law.

"The California Supreme Court has long held that state wage and hour laws 'although at times patterned after federal regulations, also sometimes provide greater protection than is provided under federal law in the Fair Labor Standards Act and accompanying federal regulations,' " the Ninth Circuit wrote. "The federal de minimis rule could be seen as less employee-protective than California's wage and hour laws and, therefore, at odds with those laws."

For these reasons, the panel requested the court's assistance, certifying the following question: "Does the federal Fair Labor Standards Act's de minimis doctrine … apply to claims for unpaid wages under the California Labor Code?"

The California Supreme Court has agreed to answer.

To read the order in Troester v. Starbucks Corporation, click here.

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