Ninth Circuit Clarifies “Day of Rest” Rule in Dismissing PAGA Claim

In Mendoza v. Nordstrom, Inc., 9th Cir. No. 12-57130 (8/03/2017), the Ninth Circuit affirmed a judgment against Nordstrom, Inc. for violation of California’s “day of rest” law. Plaintiff Christopher Mendoza had argued that Nordstrom violated Labor Code section 551, which grants employees a right to one “day’s rest” in seven and section 552, which provides that no employer “shall cause his employees to work more than six days in seven,” and thus was subject to penalties. Mendoza had claimed that he had worked more than six days three times during his employment, including times where he worked 11, 7, and 8 days. The district court had held that the seven-day period was “rolling” and based on any consecutive 7-day period, rather than based on a workweek, but that here this did not apply because Nordstrom employed Mendoza for six hours or less “on at least one day” of a week, triggering an exemption under section 556, and that there was no coercion (Mendoza willingly performed the work).

On appeal, the Ninth Circuit held that the District Court was incorrect on two counts.
First, sections 551 and 552 should be based on a workweek basis, such that each 7-day workweek (usually Monday through Sunday or Sunday through Saturday) operated as its own 7-day period. Employees are only entitled to one day of rest in each workweek. Second, the Court held that the exemption under section 556 only applied if the employee did not work more than 6 hours in any day of a workweek,, not just one day of a workweek.

However, the district court’s errors did not change the ultimate result because Mendoza (and other plaintiffs) were not “aggrieved employees” under the Private Attorneys General Act, because in each instance in which they worked 7 or more days in a row, those days were split over two workweeks, and in each one of those workweeks there was at least one day of rest. Therefore, a dismissal of the PAGA claim was appropriate.

Cal. Supremes Affirm Discovery Rights to PAGA Plaintiffs

In Williams v. Superior Court, Cal. Ct. App. Case No. S227228 (7/13/2017), the California Supreme Court held that a plaintiff in a claim under the Private Attorneys General Act (PAGA) may conduct discovery regarding the identities of other aggrieved employees to the same extent as in a class action. Further, a trial court cannot require a plaintiff to make a prima facie case as a condition of compelling the defendant to disclose employee contact information.

Briefly, Michael Williams worked for a Marshalls department store, and claimed that Marshalls failed to provide compliant meal and rest periods under California law, including because company policy resulted in stores being understaffed and managers had the authority to revise employee time records to eliminate meal break violatoins. statements.

After the case was filed, Williams sought the personal contact information of all California hourly employees during the statutory period. The trial court conditioned the disclosure of contact information on Plaintiff making a “threshold showing” of merit after having his deposition taken. The Court of Appeal rejected Williams’ writ petition. The California Supreme Court granted review.

At the outset, the Court noted that “Williams was presumptively entitled to an answer to his interrogatory seeking the identity and contact information of his fellow Marshalls employees.”
In reviewing Marshall’s objection that the request was overbroad, the Court explained that because the objection did not involve privilege, the question of discoverability depended on whether the request was “reasonably calculated to lead to the discovery of admissible evidence,” i.e., within the scope of discovery.

Second, the Court found that the interrogatory was not unduly burdensome, and even if there is some burden, the trial court should consider alternatives less than completely barring discovery to address that burden. But the Court found that simply providing contact information is not unduly burdensome, although seeking detailed payroll and timekeeping documentation may give rise to such an objection.

Finally, the Court held that there was no sufficient privacy interest in the identities of the aggrieved employees to preclude production and that it was too high of a threshold to require a “compelling need” to produce such information.

Stray Comments by Decisionmaker Created Question of Fact as to Anti-Gay Animus

In Husman v. Toyota Motor Credit Corp. (June 21, 2017) 12 Cal. App. 5th 1168, a 14-year former employee of Toyota, Joseph Husman, sued Toyota for discrimination and retaliation in violation of Fair Employment and Housing Act (FEHA) and for wrongful discharge, alleging he had been fired from his executive-level management position because of his sexual orientation and criticisms he made concerning Toyota’s commitment to diversity. The trial court granted Toyota’s motion for summary judgment. The employee appealed. The Court of Appeal affirmed in part and reversed in part, holding that (1) summary judgment evidence demonstrated that Toyota had legitimate, nondiscriminatory reason for discharging employee; but that (2) Toyota had not sufficiently demonstrated that Husman’s discharge was unmotivated by impermissible bias; (3) issues of fact remained as to whether the discharge was “substantially motivated” by impermissible bias; and (4) Husman’s complaints allegedly concerning Toyota’s commitment to diversity did not demonstrate Husman engaged in protected conduct.

The key was that Husman presented evidence that the decisionmaker, Pelliccioni, “harbored stereotypical views of gay men and articulated clear opinions as to what he considered appropriate gender identity expression.” Pelliccioni “ridiculed” Plaintiff for “wearing a scarf as an accessory when it was not cold outside,” which Husman argued revealed that Pelliccioni viewed him as “too gay” and incompatible with Toyota’s corporate culture, even if a less obviously gay employee would be acceptable. Although Pelliccioni’s remarks were not made in the direct context of the termination, the Court of Appeal held that “it is difficult to deny that any bias he felt or expressed toward Husman had the capacity to affect management’s perceptions of Husman’s performance and attitude, as well as exacerbate Husman’s own increasingly alienated behavior.” Thus, the proffered business reason, that Husman had become increasingly subordinate and difficult to manage, was potentially pretextual or merely evidence of a “mixed motive.”

On the other hand, Husman’s retaliation claim failed. Husman’s claim of retaliation was based on (1) his complaint that Pelliccioni had refused to include AIDS Walk LA on the list of automatic payroll deductions; and (2) his comment to the Diversity Advisory Board that, while Toyota’s LGBT employees had made some progress, “there was still work to be done.” The Court held that neither of these passed muster as the predicate for a retaliation claim, because as for the first, the denial did not violate any provision of the FEHA, and as to the second, it was too generalized and “common” to have placed the company on notice of any allegedly unlawful behavior, or to have form the basis of a retaliatory act.

The takeaway here on the discrimination side is that any statement made by a potential decisionmaker that may tend to show bias could be enough as a “stray comment” to preclude summary judgment. Plaintiffs should keep in mind that even if a single stray comment may not be enough to support a hostile work environment claim. On the retaliation front, this reflects that a retaliation claim must be based on a specific complaint of unlawful conduct, not generalized statements or a belief that a company could “do more.”