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Legislative Update

 

This column is intended to provide general information and does not constitute legal advice in any individual case. Since facts differ in each specific situation, you should seek the advice of an attorney or other employment law expert.

 

Jenna H. Leyton, Esq., Pettit Kohn Ingrassia & Lutz PC


 

 

 

JUDICIAL

 

 

California

California Supreme Court Alters "Mixed Motive" Landscape in Employment Discrimination Cases

In Harris v. City of Santa Monica, the California Supreme Court issued a long-awaited decision clarifying the extent to which the "mixed motive" defense applies to employment discrimination claims brought under the Fair Employment and Housing Act ("FEHA").  The Supreme Court ruled that when a plaintiff has shown by a preponderance of the evidence that discrimination was a "substantial factor" motivating his or her discharge, the employer is entitled to demonstrate that legitimate, nondiscriminatory reasons would have led it to make the same decision at the time.  If the employer proves that it would have made the same decision for lawful reasons, regardless of any discriminatory conduct, the plaintiff cannot be awarded economic damages or reinstatement.  However, where appropriate, the plaintiff may be entitled to declaratory or injunctive relief, as well as reasonable attorneys' fees and costs.

The City of Santa Monica ("the City") hired Wynona Harris ("Harris") as a bus driver during October 2004.  During the first few months of her employment, Harris was involved in two minor "preventable" accidents and missed one shift.  A few months later, she was late for another shift and was placed on probation. Then, in May 2005, Harris revealed to her supervisor that she was pregnant.  The supervisor requested a doctor's note authorizing Harris' continued work.  On the same day Harris submitted the note, her supervisor received a management directive indicating that Harris had not been meeting appropriate work standards given her probationary status.  Harris was fired on May 18, 2005.

In October 2005, Harris sued the City, alleging sex discrimination based on her pregnancy.  The City denied the allegations and asserted that it had legitimate, nondiscriminatory reasons for firing Harris.  At trial, the City requested that the trial court instruct the jury that the City could not be liable for discrimination if it could prove that, even in the face of discriminatory and non-discriminatory reasons for firing Harris, its legitimate reasons, standing alone, would have induced it to make the same discharge decision.  The trial court denied the City's request, instead giving a "motivating factor" instruction, which would impose liability on the City if Harris was able to prove that her pregnancy was a "motivating factor" in the discharge decision.  Harris met this burden at trial and was awarded $177,905 in damages, and $401,187 in attorneys' fees.

The Court of Appeal reversed the trial court's decision, holding that the City's request for a "mixed motive" instruction should have been granted.  Harris then appealed to the California Supreme Court, which held that in FEHA-based "mixed motive" discrimination cases,  the initial burden is on the plaintiff to demonstrate, by a preponderance of the evidence, that discrimination was a "substantial factor" (not simply a "motivating factor") in the termination decision.  The burden then shifts to the employer to demonstrate, again by preponderance of the evidence, that it would have made the same decision based on legitimate, nondiscriminatory reasons.  If the employer is successful in doing so, the plaintiff may not recover damages for back pay, front pay, or emotional distress, or be awarded reinstatement.

As the Supreme Court explained, forcing an employer to retain someone when it has sufficient and legitimate reasons not to do so would cause "inefficiency" and would tend to "deprive the state of the fullest utilization of its capacities for development and advancement, contrary to FEHA's purposes."  Moreover, permitting a plaintiff to recover for economic losses when he or she would have been discharged regardless of any discriminatory motive would amount to an "unjustified windfall."

While the Supreme Court's decision may be seen as a boon for employers, its scope is not unlimited.  The Court acknowledged that the FEHA still operates to prevent discrimination in the workplace.  Thus, even if an employer meets its burden, a plaintiff may still be provided declaratory or injunctive relief (and attorneys' fees and costs) as a means of eradicating discriminatory practices from the workplace.

California employers should attempt to avail themselves of the additional protections afforded them Harris by ensuring (and documenting) that employee decisions are based upon legitimate, understandable performance and business concerns.

California Appellate Court Holds the Independent Contractor/Employee Classification Issue

May Be Determined On a Classwide Basis

In Ayala v. Antelope Valley Newspapers, Inc., a California appellate court held that whether newspaper delivery carriers were independent contractors or employees of a newspaper was a question amenable to class treatment through common proof.

Maria Ayala, Rosa Duran, and Osman Nuñez worked as newspaper carriers (collectively, the "carriers") for Antelope Valley Newspapers, Inc. ("AVP").  They entered into Independent Contractor Distribution Agreements ("Agreements"), which set forth various newspaper delivery requirements.   Among other things, the Agreements required the carriers to pick up the newspapers at a specified time, deliver the newspapers in a safe and dry condition, and use certain colors of bags for certain products.  The carriers were required to furnish their own vehicles and provide AVP with copies of their driver's licenses, social security numbers, and proof of automobile and workers' compensation insurance.  The carriers alleged that AVP incorrectly classified them as independent contractors and asserted claims for various Labor Code violations, including claims for unpaid overtime, meal and rest period violations, failure to reimburse for business expenses, unlawful wage deductions, wage statement and payroll records violations, and unfair competition.  The carriers moved for class certification and argued that the central issue-whether they were employees or independent contractors- was amenable to class treatment.  The trial court denied the request for class certification and the carriers appealed.

The issue before the appellate court was whether common issues regarding the carriers' employment status predominated, and thus whether class treatment was appropriate.  To determine whether the carriers were employees or independent contractors, the appellate court primarily examined "whether the person to whom service is rendered has the right to control the manner and means of accomplishing the result desired."  Examining the Agreements and other AVP policies, the appellate court concluded that common questions existed as to whether AVP exercised sufficient control over the carriers' work, and when, where and how the carriers performed the services required of them.

The appellate court found that "much of AVP's evidence, upon which the trial court relied, merely contradict[ed] [the] plaintiffs' allegations that AVP had policies or requirements about how carriers must do their jobs."  Although there may have been conflicts in the evidence regarding whether certain policies existed, that issue itself was common to the class.  Accordingly, the appellate court determined that the carriers' claims for failure to reimburse for business expenses, unlawful wage deductions, and payroll records violations turned on whether the carriers were employees, and thus were appropriate for class treatment.  However, the appellate court agreed with AVP that individual questions of fact predominated with respect to the carriers' claims for unpaid overtime and meal and rest period violations because the number of hours that each carrier worked each day and week varied significantly.  As such, the appellate court affirmed the trial court's ruling with respect to those claims.

Ayala demonstrates that in certain circumstances, the determination of whether an employer has correctly classified individuals as either employees or independent contractors may be subject to class treatment, particularly in instances where the court must examine the nature of a particular job and the employer's level of control.  Employers should review their classification guidelines and systems to ensure that all individuals performing work on their behalf are correctly classified.

California Court Holds That Employee's Exhaustion of PDLL Leave Rights Does Not Abolish Employer's Obligations Under the FEHA

In Sanchez v. Swissport, Inc., a California Court of Appeal held, in a case of first impression, that an employee who has exhausted her leave rights under California's Pregnancy Disability Leave Law ("PDLL") may still assert claims for discrimination, failure to accommodate disability, and retaliation under the Fair Employment and Housing Act ("FEHA").

Plaintiff Ana Sanchez ("Sanchez") was employed by Swissport, Inc. ("Swissport") as a cleaning agent.  During February 2009, Sanchez was diagnosed with a high-risk pregnancy, which required bed rest.  After receiving her diagnosis, Sanchez requested and received from Swissport approximately nineteen weeks of leave, which consisted of her accrued vacation time as well as the time allotted under PDLL.  At the end of the nineteen weeks, Swissport terminated Sanchez's employment.  Sanchez alleged that she was fired because of her pregnancy, her pregnancy-related disability and/or her request for accommodations, and brought claims against Swissport for pregnancy-, sex-, and disability-based discrimination under the FEHA, failure to accommodate and engage in a good faith interactive process, retaliation, and wrongful termination.

Swissport filed a demurrer to Sanchez's complaint, arguing that because it provided Sanchez with all of the leave mandated by the PDLL, it necessarily had satisfied all of its obligations under the FEHA.   The trial court sustained the demurrer, and Sanchez appealed.

In reversing the trial court's ruling, the appellate court confirmed that under the PDLL, an employee disabled by pregnancy is entitled to up to four months of disability leave, regardless of any hardship to her employer.  Moreover, under the FEHA, a disabled employee is entitled to reasonable accommodation-which may include leave of no statutorily defined duration-provided that such accommodation does not impose an undue hardship on the employer.  The appellate court additionally confirmed that the rights afforded to an employee under PDLL are in addition to her rights under the FEHA, and therefore rejected Swissport's argument that the exclusive remedy for an employee seeking reasonable accommodation of her pregnancy-related disability is the PDLL.  As the appellate court made clear, a finite leave of greater than four months may be a reasonable accommodation for a known disability under the FEHA.  Thus, the trial court erred when it accepted Swissport's contention that it had no further obligations under the FEHA once it provided Sanchez with four months of PDLL leave.

This case serves as an important reminder of employers' distinct obligations under the PDLL and the FEHA.  Even when an employee has exhausted her PDLL rights, the employer is still obligated to engage in a good faith interactive process to determine if there is a reasonable accommodation (which may consist of additional leave) that can be provided under the FEHA.

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