California Court of Appeal Clarifies Application of Relation-Back Doctrine in PAGA Cases

On February 7, 2022, the California Court of Appeal granted a petition for writ of mandate filed by Altshuler Berzon LLP and co-counsel, resolving an important question regarding application of the relation-back doctrine to claims brought under California’s Private Attorneys General Act (“PAGA”). Former UBS Financial Services employee Andrew Hutcheson, who had timely notified the California Labor and Workforce Development Agency of alleged Labor Code violations by his former employer, sought to substitute as the plaintiff in a lawsuit filed by another former UBS employee, who also had timely notified the Agency of the same claims prior to Mr. Hutcheson. The trial court concluded that, with Mr. Hutcheson as the new named plaintiff, the PAGA claims at issue in the amended complaint could not relate back for statute of limitations purposes to those in the original complaint because relation back would frustrate PAGA’s exhaustion requirement. Mr. Hutcheson filed a petition for writ of mandate seeking to vacate the trial court’s order.

The Court of Appeal initially issued a summary denial of Mr. Hutcheson’s petition. Mr. Hutcheson then filed a petition for review in the California Supreme Court, which the Supreme Court granted, remanding the question to the Court of Appeal for plenary consideration. On remand, the Court of Appeal revisited Mr. Hutcheson’s writ petition and issued an opinion holding that the relation-back doctrine may apply in PAGA cases where a substitute plaintiff administratively exhausted claims after a first plaintiff. The Court of Appeal recognized that barring application of the relation-back doctrine in cases like Mr. Hutcheson’s would be “contrary to PAGA’s goal of strengthening Labor Code enforcement.”

Altshuler Berzon LLP, Clapp & Lauinger LLP, and the Wynne Law Firm represented Mr. Hutcheson in the appellate proceedings.

A copy of the Court’s opinion can be found here.

Altshuler Berzon LLP Seeks Justice for Lieutenant Colonel Alexander Vindman

On February 2, 2022, Altshuler Berzon LLP and nonpartisan nonprofit Protect Democracy filed a civil rights conspiracy complaint in federal court in Washington, DC on behalf of Lieutenant Colonel Alexander Vindman (ret.) against former White House and Trump Campaign officials, including Donald Trump, Jr., Rudolph Giuliani, Julia Hahn, and Daniel Scavino, Jr., alleging a campaign of witness intimidation and retaliation against him after he was subpoenaed by Congress to testify during former President Trump’s first impeachment proceeding.

In July 2019, as part of his official duties as the National Security Council’s singular Ukraine expert, Lt. Col. Vindman listened to a phone call between former President Trump and Ukrainian President Volodymyr Zelensky, during which President Trump attempted to coerce Zelensky into publicly undertaking an investigation of then-former Vice President Biden and his son. Lt. Col. Vindman, a career public servant, was immediately concerned that President Trump’s attempt to pressure Zelensky was improper, and likely unlawful, and risked national security. Honoring his oath of office to support and defend the Constitution, he reported his concerns through appropriate internal channels.  Months later, Lt. Col. Vindman was twice called as a witness in impeachment proceedings against President Trump and provided sworn testimony.

The lawsuit alleges that, as a result, Lt. Col. Vindman became the target of an unlawful conspiracy by President Trump and his close aides and allies, including key figures in the media, to intimidate and retaliate against him for his testimony.  According to the Complaint, the defendants in the suit and other unnamed conspirators engaged in a coordinated campaign to falsely portray Lt. Col. Vindman as disloyal to the United States and to ruin his career in the military.  Neither the former president nor his conspirators have been held accountable for their blatant attempts to obstruct the impeachment proceedings.

The entire complaint can be found here.  A press release regarding the case can be found here.

Court Certifies Class of Almost 100 Sexual Harassment Survivors Seeking Justice From McDonald’s Restaurant Where They Worked

On December 29, 2021, the United States District Court for the Western District of Michigan certified a class of 95 women who allege they all suffered sexual harassment at the hands of the same manager while employed at a franchised McDonald’s restaurant.  The lawsuit, Ries v. McDonald’s, alleges a years-long pattern of unchecked sexual harassment at the McDonald’s restaurant, including near-constant physical and verbal harassment that three General Managers witnessed on multiple occasions.  Despite observing an unrelenting stream of sexual harassment by one of their managers and receiving multiple verbal complaints from employees, the General Managers and their superiors did not take action to end the harassment and protect their employees.  The members of the class range in age and include many women who were in high school during the time they worked at the McDonald’s restaurant, with some class members who were as young as 16 when they were harassed.

The Court found that “[g]iven the consistency, frequency, severity, and visibility of [the manager’s] conduct according to Plaintiffs’ evidence, there is sufficient overlap between the class members’ experiences to render the existence of an objectively hostile work environment one that can be resolved on a class-wide basis.”  The Court observed, “The class members worked in the same restaurant, in the same confined space, and experienced direct or indirect harassment by the same individual whose conduct was apparently consistent and unrelenting over an extended period of time,” and continued, “Defendants were consistent in their response to [the manager’s] behavior.  They apparently did almost nothing about it until March 2019.”

The Court’s certification of the class in Ries represents an enormous victory for the class members, as many would have financial difficulty pursuing individual claims against the McDonald’s restaurant.  The decision also shows the power of women’s collective voices in speaking out against harassment.  The  court’s ruling means that all 95 women may proceed together to trial against the McDonald’s franchise.

The Court appointed Altshuler Berzon LLP as Class Counsel, along with co-counsel from the ACLU Women’s Rights Project and McKnight, Canzano, Smith, Radtke & Brault P.C.

A copy of the Court’s order granting class certification can be found here.

Altshuler Berzon LLP Files Union Amicus Brief to the Supreme Court Supporting Stay of Injunction Against CMS Healthcare Industry Vaccination Regulation

On Wednesday, December 22, 2021, the Service Employees International Union (SEIU), the American Federation of Teachers (AFT), and the American Federation of State, County, and Municipal Employees (AFSCME) filed amicus curiae briefs in two cases in the United States Supreme Court: Biden v. Missouri, No. 21A240, and Becerra v. Louisiana, No. 21A241. In these cases, two district courts issued injunctions preventing the Center for Medicare and Medicaid Services (CMS) from enforcing a new regulation requiring the staff of all healthcare providers participating in Medicare or Medicaid to be vaccinated against Covid-19. The federal government has asked the Supreme Court to stay these injunctions pending appeal, and SEIU, AFT, and AFSCME support the federal government’s stay applications. As the Unions argue, under-vaccination poses severe risks to healthcare workers as well as patients, and CMS’s rule is critical for ensuring that healthcare facilities like hospitals and nursing homes can function safely and effectively in the face of an ongoing pandemic. The Unions’ briefs highlight the stories of two SEIU members who work in nursing homes on the frontlines of the fight against Covid-19 and have seen the need for staff vaccination firsthand. The Unions’ briefs also demonstrate that, contrary to the conclusion reached by the lower courts, CMS has clear statutory authority to issue the regulation, which is a straightforward health and safety standard for the Medicare and Medicaid programs and does not implicate the Supreme Court’s “major questions” precedents.

The amicus briefs can be found here and here.

Altshuler Berzon LLP is counsel of record for the Unions as amici curiae.

Altshuler Berzon LLP Partner Named a “Top 100” California Attorney

Michael Rubin honored for fifth year in a row

September 15, 2021 – California’s legal newspaper, the “Daily Journal,” today named Altshuler Berzon LLP partner Michael Rubin as one of California’s “Top 100 Attorneys.” This is the fifth straight year the “Daily Journal” has named Michael to the Top 100, and it has regularly named him one of California’s “Top 75 Labor and Employment Attorneys” as well.

The published profile focused on Michael’s work this past year on two major lawsuits seeking to reform California’s broken unemployment insurance system: In re Bank of America California Unemployment Benefits Litigation, MDL Case No. 21-MD-02992-LAB-MSB, and Center for Workers’ Rights v. Employment Development Department, Alameda County Superior Ct. No. RG21106525.

In the Bank of America case, Altshuler Berzon LLP attorneys Michael Rubin, Stacey Leyton, Connie Chan, and Matt Murray, in conjunction with co-counsel at Cotchett, Pitre & McCarthy, LLP, obtained a preliminary injunction requiring the Bank to cease freezing the UI accounts of hundreds of thousands of Californians who had complained to the Bank about unauthorized transactions made on their Bank-issued UI benefit debit card accounts. In the EDD case, Altshuler Berzon attorneys Michael Rubin and Amanda Lynch, in conjunction with co-counsel at the Center for Workers’ Rights, negotiated a settlement that requires EDD to promptly pay UI benefits to 300,000 UI claimants in “continuing claims” status whose UI payments had been delayed, often for months, as a result of unjustified administrative delays.

Court Rules Proposition 22 Unconstitutional

The Alameda County Superior Court issued a decision on August 20 holding that California’s Proposition 22 conflicts with the California Constitution and is invalid in its entirety.  The case, Castellanos v.  California, No. RG21088725, was filed by SEIU, SEIU California, and four individual drivers and consumers after gig economy companies funded a $225 million initiative campaign that convinced the voters to exempt drivers who work for transportation and delivery network companies like Uber, Lyft, and DoorDash (who the proposition calls “app-based drivers”) from California’s employment law protections.

The court held Proposition 22 unconstitutional for three reasons.  First, by excluding “app-based drivers” from the state’s workers’ compensation system and forbidding the state legislature from including them in the future, Proposition 22 impermissibly interferes with the legislature’s “plenary power” over the workers’ compensation system under Article XIV, Section 4 of the California Constitution.  Second, although Proposition 22 lacks any substantive provisions addressing collective bargaining by “app-based drivers,” it impermissibly deems any legislation authorizing representation of app-based drivers an “amendment” to Proposition 22 that may be enacted only by a seven-eighths vote of each house of the state legislature.  A statutory initiative cannot limit future legislation that does not actually amend the substantive terms of an initiative.  And third, Proposition 22 violates the requirement, under Article II, Section 8(d) of the California Constitution, that initiative statutes be “limited to a single subject.”  The Court concluded that Proposition 22’s limitation of drivers’ collective bargaining rights “appears only to protect the economic interests of the network companies in having a divided, ununionized workforce” and was “utterly unrelated to” the Proposition’s “stated common purpose” of “protecting the opportunity for Californians to drive their cars on an independent contract basis, to provide those drivers with certain minimum welfare standards, and to set minimum consumer protection and safety standards to protect the public.”

The petitioners in the case are represented by Altshuler Berzon LLP, Olson Remcho, LLP, and the SEIU legal department.   A copy of the Superior Court’s decision is available here.  News coverage of the decision can be found here and here.

Workers at Oakland McDonald’s Restaurant Reach Precedent-Setting Settlement

August 11, 2021 – When a COVID-19 outbreak at the Telegraph Ave. McDonald’s restaurant in Oakland threatened workers and their families, four workers filed a public nuisance lawsuit in Alameda County Superior Court and sought a temporary restraining order (TRO) to ensure that the restaurant implemented necessary safety measures.  The court granted plaintiffs’ requested relief and issued a TRO on June 22, 2020; later continuing the TRO’s provisions on July 9, 2020, and converting the TRO to a preliminary injunction on August 13, 2020.  In late July 2021, the parties reached a settlement agreement that resolves this litigation.  The settlement continues the workplace safety measures for up to another year and establishes a health and safety committee.  The committee, which will include the restaurant owner-operator, the restaurant’s general manager, and three crew members on a rotating basis, will meet on a monthly basis to discuss the protective measures required by the settlement, as well as any other measures that may be necessary to prevent the spread of COVID-19 in the workplace.  The committee will provide workers with a voice in addressing the evolving COVID-19 pandemic and the need to ensure safe working conditions.  The plaintiffs issued this statement regarding the historic settlement.  For press coverage of the settlement, see here and here.

Settlement with California’s Employment Development Department Requires Immediate Payments to Hundreds of Thousands of Unemployed Californians

EDD agrees to sweeping changes in how it handles continuing unemployment insurance claims

July 23, 2021 – In a groundbreaking settlement negotiated by Altshuler Berzon LLP on behalf of the Center for Workers’ Rights, California’s Employment Development Department has agreed to make significant changes in how it processes unemployment insurance claims and to immediately pay millions of dollars in conditional UI benefits to unemployed Californians, many of whom have been waiting months to receive those benefits. The affected claimants were previously approved to receive unemployment benefits, but had their payments suspended without explanation while EDD has been working through its huge backlog of eligibility determinations.

EDD’s announcement follows months of negotiations, which culminated in the filing of a class action complaint for injunctive relief and a settlement that now awaits court approval – although EDD agreed to begin implementation immediately, without waiting for further court order. The complaint alleges that EDD’s prolonged delays in providing payment to unemployment insurance claimants in continuing claims status violate the Social Security Act, which requires state unemployment insurance programs to maintain “methods of administration 
 reasonably calculated to insure full payment of unemployment compensation when due.” The settlement requires EDD to provide conditional payment to unemployment insurance claimants in continuing claims status when EDD has failed to make a determination regarding the claimant’s eligibility by the end of the week following the week that EDD first became aware of the eligibility issue.  The settlement also requires EDD to notify those claimants that the payments they are receiving are conditional pending the result of EDD’s investigation and to inform those claimants of the basis for EDD’s eligibility concerns and how the claimant can respond to those concerns.  More information about the agreement is available here and here. The complaint, entitled Center for Workers’ Rights v. EDD et al., is pending in Alameda County Superior Court and can be read here.

Altshuler Berzon LLP attorneys Michael Rubin and Amanda Lynch represent the Center for Workers’ Rights in this case, assisted by summer associate Nina Oishi. The complaint, entitled Center for Workers’ Rights v. EDD et al., is pending in Alameda County Superior Court.

Court Refuses to Toss Case Against McDonald’s for Sexual Harassment at 100 Corporate Operated Restaurants in Florida

July 20, 2021 – In April 2020, Altshuler Berzon LLP, with co-counsel, filed a putative class action lawsuit against McDonald’s, on behalf of all women who work at McDonald’s corporate owned and operated restaurants in Florida.  The lawsuit, Fairley et al. v. McDonald’s Corp., et al.,  alleges a pattern of unchecked sexual harassment at 100 restaurants in Florida.  In particular, the lawsuit alleges that McDonald’s does not have sufficient policies, procedures, and training to prevent sex harassment.  It also alleges that McDonald’s fails to train low level managers – to whom reports of sex harassment are most frequently made or who may actually observe the harassment while performing their job – as to what to do when they receive a report of harassment or observe harassment themselves.  McDonald’s filed a motion to dismiss the case, and to strike the class action allegations.  The Court denied that motion, finding that Plaintiffs had alleged sufficient facts to move forward on all of their claims on behalf of all women workers at McDonald’s corporate owned and operated restaurants in Florida.  The Plaintiffs are seeking $500 million in class-wide damages.

California Supreme Court Rules that Meal and Rest Period Premium Pay Must Include All Forms of Nondiscretionary Compensation

In a significant victory for California workers, the California Supreme Court ruled on July 15, 2021, in Ferra v. Loews Hollywood Hotel, LLC, that the premium pay owed to an employee who does not receive a legally compliant meal or rest period is calculated by incorporating all forms of nondiscretionary compensation owed to the employee.

Labor Code Section 226.7(c) states that the premium pay is one hour of pay at the employee’s “regular rate of compensation.” Reversing the Court of Appeal, the Supreme Court ruled that this language is interpreted identically to the term “regular rate” in federal and state overtime law. In overtime law, the “regular rate” is a calculation that incorporates all forms of nondiscretionary compensation, including, for example, hourly wage rates, commissions, shift differentials, piece rate pay, and nondiscretionary bonuses. The Supreme Court rejected the employer’s argument that “regular rate of compensation” means only the employee’s base hourly wage rate. 

Michael Rubin and Eileen Goldsmith of Altshuler Berzon LLP filed an amicus brief in the Supreme Court on behalf of the California Employment Lawyers Association, supporting the employee plaintiffs. Ms. Goldsmith participated in the Supreme Court oral argument. 

You can read the decision here.