EMPLOYMENT CASES AND A SCHOOLS CIVIL RIGHTS CASE

In reaching its decision, the Court focused on the third element a public entity must establish to claim design immunity: (1) a causal relationship between the plan or design and the accident; (2) discretionary approval of the plan or design prior to construction; and (3) substantial evidence supporting the reasonableness of the plan or design. As to the third element, “substantial evidence,” as explained by the Court of Appeal, is “evidence of solid value and which reasonably inspires confidence.” The Court affirmed longstanding precedent: “‘[A]s long as reasonable minds can differ concerning whether a design should have been approved, then the governmental entity must be granted immunity. The statute does not require that property be perfectly designed, only that it be given a design which is reasonable under the circumstances.’” Grenier v. City of Irwindale (1997) 57 Cal. App.4th 931, 941. The Court further noted that its role in evaluating the third element of the design immunity, even during summary judgment, is not to provide a de novo interpretation of the design, but instead to decide whether there is any substantial evidence supporting its reasonableness. Evidence may be found in the discretionary approval of the designs themselves, the expert opinion of a civil engineer, or evidence that the design or plan complies with prevailing professional standards. Moreover, a mere conflict in the testimony of expert witnesses provides no justification for the matter to go to a lay jury who will then second guess the judgment of skilled public officials. Applying the above, the Court of Appeal rejected Plaintiff’s first argument, concluding instead that Caltrans provided substantial evidence as to the reasonableness of the design through its expert opinion and evidence that the design complied with California’s approved standards. Specifically, Caltrans provided evidence demonstrating its civil engineer responsible for the engineering design work on the project and exercised his discretionary authority to approve the relevant pavement delineation and signage plans in advance of construction. The Court held this alone was sufficient to establish the third element of the design immunity. Additionally, Caltrans’ expert reviewed the complaint, collision reports, photos, the applicable manual on traffic control, and conducted a site inspection to conclude that the improvements that were in place at the time of the accident were done with reasonable professional engineering judgment in design and construction and complied with approved standards. Plaintiff only offered her experts’ differing opinion, which alone is insufficient evidence to defeat the reasonableness of the design. As to Plaintiff’s second argument that the construction of the interstate off-ramp did not match the previously approved design plans, the Court held that “substantial conformance” with the design plans is all that is required in order to successfully invoke design immunity and that a minor deviation from the approved plan as designed will not preclude the application of design immunity. Since Plaintiff’s experts failed to raise a triable issue of material fact that Caltrans did not substantially conform to the design plans, summary judgment was appropriate. At bottom, the Court of Appeal held that the normal rules governing a motion for summary judgment, requiring its denial if any triable issue of fact appears, do not apply to cases involving design immunity under Government Code section 830.6 because the statute provides immunity when there is substantial evidence of reasonableness, even if contradicted.

EMPLOYMENT CASES AND A SCHOOLS CIVIL RIGHTS CASE Summaries provided by Neal Meyers of Meyers Fozi & Dwork, LLP

CIVIL RIGHTS

Manahoy Area School District v. B.L., a Minor, et. al (2021) 141 S.Ct. 2038.

Summary: Public high school student brought an action against a school district, alleging that her suspension from junior varsity cheerleading squad based on her use of profanity (for example, “F*** school f*** softball f***cheer f*** everything”) in a social media post, made off-campus and on a Saturday, violated the First Amendment. While recognizing that schools have considerable freedom on campus to discipline students for conduct that the First Amendment might otherwise protect, the court held that the special characteristics that

give schools additional license to regulate student speech do not always disappear when a school regulates speech that takes place off-campus. In this case, the school violated the student’s First Amendment rights when it suspended her from the junior varsity cheerleading squad. The court held that when it comes to political or religious student speech that occurs outside school or a school program or activity, the school has a heavy burden under the First Amendment to justify intervention. Discussion: This was a well-publicized case. While the court was able to find a “line” between protected ofcampus and on-campus speech in this case, it recognized that it would take some time, and much litigation, to fully develop the parameters between “off-campus” and “on-campus speech.” The court recognized this in its majority opinion, noting: We are uncertain as to the length or content of any such list of appropriate exceptions or carveouts…. [to the off-campus speech rule] …. Particularly given the advent of computer-based learning, we hesitate to determine precisely which of many school-related off-campus activities belong on such a list. Neither do we now know how such a list might vary, depending upon a student’s age, the nature of the school’s off-campus activity, or the impact upon the school itself. Thus, we do not now set forth a broad, highly general First Amendment rule stating just what counts as “off campus” speech and whether or how ordinary First Amendment standards must give way off campus to a school’s special need to prevent, e.g., substantial disruption of learning-related activities or the protection of those who make up a school community.”

PREVAILING WAGE

Kaanaana v. Barrett Business Services Inc (2021) 11 Cal.5th 158.

Summary: Work done by workers hired through a temporary staffing agency for a “special district” can be considered a “public work” under Labor Code section 1720(a)(2), and the payment of prevailing wages is therefore required. Discussion: The employees worked as belt-sorters, sorting trash and refuse for recycling that moved along conveyor belts in facilities owned and operated by the District. They were directly employed and supervised by a staffing agency, which was sued in a class-action lawsuit alleging it unlawfully failed to pay prevailing wages. The trial court dismissed the prevailing wage claims because the sorting and other work performed by the staffing agency did not fall under the California Prevailing Wage Act. The Court of Appeal reversed the trial court, concluding that the belt sorting activities met the definition of “public works” under the prevailing wage law. The California Supreme Court affirmed the appellate court decision, holding that “public works,” as used in California’s prevailing wage law in guaranteeing a certain minimum wage to those employed on public works, had to be interpreted broadly as not limited only to workers employed in construction activities. In this case, the work was covered. The case also has implications of expanding prevailing wage requirements to “special districts” that previously may not have considered themselves subject to the law.

Busker v. Wabtec Corporation (2021) 2021 WL 3612126 (8/16/21)

Summary: This California Supreme Court case involved two questions: (1) Does publicly funded work on rolling stock, like train cars, fall under the statutory definition of “public works”? (2) Alternatively, does the work on rolling stock, in this case, qualify as “public work” because it is integral to other activities that themselves qualifies as public work? The answer to both questions was no.

Mendoza v. Fonseca McElroy Grinding Co (2021) 2021 WL 3612745

Summary: The question here was whether the prevailing wage must be paid for the Contractor’s mobilization work, which involved transporting heavy machinery to and from a public works site. It was undisputed that the operation of the machinery at the site qualified as “public work.” However, plaintiffs argued that while transporting the equipment to the site, they were still “deemed to be employed upon public work” because their mobilization work was performed “in the execution” of a public works contract. The court held that this

“expansive interpretation” was unsupported by either the statutory language or legislative history. Discussion: While the first case (Kaanaana) arguably expanded the pool of agencies subject to prevailing wages, the Supreme Court also sent a message in the last two decisions that efforts to expand the scope of prevailing wage law beyond its statutory limits will be highly scrutinized and likely will fail.

TAX TREATMENT OF EMPLOYMENT SETTLEMENTS

Stassi v. Commissioner (T.C. Summ.Op 2021-5 (February 8, 2021).

Summary: The United States Tax Court found that the entire settlement amount in an employment dispute was not excludable from income as a personal physical injury because Plaintiff failed to demonstrate that her employer’s workplace caused her shingles. The entire settlement amount should have been allocated as lost wages, and it was taxable as a whole. Discussion: Generally (and much simplified), in a settlement, personal and emotional distress injuries are not considered to be taxable income, but an economic loss is taxable. To enhance the settlement’s net value, it is not unusual for a plaintiff to try to allocate as much of the settlement as a non-taxable “pain and suffering” event. Here, Plaintiff was diagnosed with shingles and had symptoms of shingles during her employment. Plaintiff sent a letter to a company board member complaining about the work environment. Although the letter contained several specific complaints, none included any complaints about physical injury or sickness. She subsequently retained an attorney who sent a demand letter alleging wage and hour violations, constructive termination, and emotional distress. The case was settled, and Plaintiff tried to allocate only a small portion of the settlement to economic damages. The tax court disagreed. This case is an excellent example of the subtle dynamics that can exist during settlement discissions and how the employer must be careful not to get ensnarled in the Plaintiff’s tax avoidance strategies.

INDEPENDENT CONTRACTOR TEST

Vazquez v. Jan-Pro Franchising Int’l, Inc. (2021) 10 Cal.5th 944.

Summary: In 2018, Dynamex v. Superior Court upended the rules defining an independent contractor vs. an employee under California wage law, instilling the “ABC test.” One open question was whether the rule applied retroactively, thus impacting employers before Dynamex was decided. Discussion: The court held that Dynamex is retroactively applied because it did not consider its decision to be a significant change of existing law. Although significant, this decision impacts only a small subset of older claims.

EMPLOYEE DRUG TESTING

Espindola v. Wismettac Asian Foods, Inc. (2021) 2021 WL 1947284

Summary: The District Court held that an employer could condition an offer of employment on passing a pre-employment drug screening, including a test for marijuana. The court further held that an employer is not obligated to engage in the interactive process before terminating an employee under such circumstances. Discussion: The employer is a wholesaler and distributor of Asian food products. For a Vice-President position, the company offered Plaintiff a position subject to a pre-employment drug test. Plaintiff delayed his drug test to after the date his employment started. The day before Plaintiff began his employment, he completed a “Personnel Information Sheet,” indicating that he was not “disabled.” He never informed his prospective employer that he used marijuana. During onboarding, Plaintiff expressed his concern about the drug test, disclosing for the first time that he had “chronic back pain” and that he was “prescribed” and used marijuana to treat that condition. However, Plaintiff did not provide any additional details or documentation (such as a doctor’s note or medical records) to substantiate the nature of his condition or explain any limitations on his ability to perform his job

duties. He then provided a medical marijuana card that he had obtained the day before. The employer still required the drug screen, and, not surprisingly, it tested positive for marijuana. Plaintiff was terminated for the stated reason that he failed the pre-employment drug test. He sued. The company filed a summary judgment motion, which the court granted under this specific set of facts. First, the court found that Plaintiff has not demonstrated that his general claim of a “chronic back injury,” without more, qualified as a “disability” that limited a major life activity. Instead, Plaintiff had indicated on the Personnel Information Sheet that he did not have any disability, nor did he provide any explanation or detail concerning how his chronic back pain limited his ability to work. Also, importantly, the employer established that it had established a legitimate, nondiscriminatory reason for the Plaintiff’s termination, which was not passing the drug screen. The court pointed out that employers are legally permitted to condition employment under California law upon completing a pre-employment drug screening. Where, as in this case, the employer had a uniform policy requiring employees to complete a pre-employment drug test as a condition of employment, the fact that the employee had notice of that condition, and coupled with the result of the test, the employer’s decision was determined to be legitimate.

DISABILITY DISCRIMINATION

Brown v. Los Angeles Unified School District (2021) 60 Cal. App. 5th 1092.

Summary: Following activation of the new wi-fi system, Plaintiff began to experience chronic pain, headaches, nausea, itching, burning sensations on her skin, ear issues, shortness of breath, inflammation, heart palpitations, respiratory complications, foggy-headedness, and fatigue. She reported the symptoms to her superiors and was granted leave from work “due to these symptoms, on an intermittent basis, for several days thereafter.” She returned to campus the following week and fell ill again “[w]ithin 2 to 3 hours.” Her medical provider subsequently diagnosed her with electromagnetic hypersensitivity (EHS), also referred to as “microwave sickness.” The District attempted to accommodate by hardwiring her classroom. Plaintiff demanded the use of paints and other forms of shielding materials to block the wi-fi and radio frequencies in the classroom. District testing concluded that the classroom was “safe” and denied her further accommodation request. Plaintiff alleged she could not return to work “without being overcome with crippling pain.” She was “forced to go out on a disability leave from her job, which exhausted her approximately 800 hours of accrued paid time off and sick leave.” As a result, she experienced “an economic loss of earnings due to not receiving her full income.” She sued. The District demurred, arguing that it “went above and beyond to accommodate” Plaintiff’s alleged disability and provided examples of accommodations. The trial court sustained the demurrer and dismissed the case. The appellate court reversed as to some of the causes of action and reinstated the case. Discussion: It is important to keep in mind that this decision was at the demurrer stage where the court is required to accept as true all material facts properly pleaded in the complaint. At this early stage, the question of a plaintiff’s ability to prove the allegations or the possible difficulty in making such proof is not the issue. Here, LAUSD cited out-of-state cases holding that electromagnetic sensitivity is not a “recognized” disability. However, the court distinguished those cases since they were not based on the California FEHA statutes, where the definition of an actual or perceived disability is more expansive.

EXHAUSTION OF ADMINISTRATIVE REMEDIES

Briley v. City of West Covina (2021) 66 Cal.App.5th 119

Summary: A possible defense to an employment-related case involving a public agency is that the Plaintiff failed to exhaust their internal administrative remedies before filing suit. Here, the City argued that a deputy fire marshal’s retaliation lawsuit arising from safety issues and misconduct complaints should be dismissed because Plaintiff abandoned his appeal to City’s Human Resources Commission before filing suit. The appellate court agreed with Plaintiff that the commission had no authority to consider Briley’s retaliation claim and that his

appeal would have been futile because the hearing officers were embroiled in the underlying dispute (due process problem). Discussion: The failure to exhaust administrative remedies doctrine is a powerful defense when available. Here, it failed because of the commission’s limited jurisdiction and the implicit bias of the decision-makers. In all applicable cases, the agency should give Plaintiff the available administrative forum with unbiased decisionmakers. If Plaintiff fails to proceed, a strong defense exists. If the matter does proceed, sometimes it can resolve a dispute rather than litigating. On that note, the case proceeded to trial, and the jury found for Plaintiff and awarded him about $4 million, including $2 million in past noneconomic damages and $1.5 million in future noneconomic damages. On appeal, the court reduced the awards to $1 million and $100,000, respectively, so at least there was some “win” for the City on appeal.

DISCRIMINATION & HARASSMENT AGAINST A NON-EMPLOYER COMPANY

Smith v. BP Lubricants USA Inc. (2021) 64 Cal.App.5th 138

Summary: Plaintiff’s employer, Jiffy Lube, held a presentation for its employees to learn about a new Castrol product. A Castrol employee led the presentation. Plaintiff, African American, alleges that Castrol’s presenter made several comments to Plaintiff during the presentation that he considered racist and offensive. Plaintiff sued Castrol (BP) for harassment under FEHA and discrimination under the Unruh Act. He also personally sued the presenter for intentional infliction of emotional distress (IIED). The trial court sustained BP and the presenter’s demurrer without leave to amend, and Plaintiff appealed. The appellate court reversed, holding that Plaintiff sufficiently alleged claims for IIED against the presenter and violation of the Unruh Act against Castrol. Discussion: This is an excellent case illustrating that what some people think is a good laugh, is not. The comments alleged were demeaning and inappropriate, even at a Jiffy Lube. The most significant takeaway from the case was the court’s willingness to support a direct claim of IIED against the individual presenter. The court held that a rational juror could find the presenter’s conduct was extreme and outrageous based on the allegations. Plaintiff alleged that the presenter made three offensive comments to him in front of about 50 of his colleagues, including three of his supervisors. As alleged, after the presenter made the first comment, everyone except for African American employees laughed, yet the presenter made two more comments that Plaintiff found offensive. It likely was the succession of offensive comments that kept the claim alive. There is concern that this case could spawn more individual claims, which also raises coverage and conflict issues.

INTERACTIVE PROCESS & ACCOMMODATION

Shirvanyan v. Los Angeles Community. College District (2020) 59 Cal. App.5th 82.

Summary: This appeal came following a jury verdict in favor of Plaintiff. The claims were based on the District’s alleged failure to provide reasonable accommodations for and/or engage in an interactive process to identify reasonable accommodations for two injuries, each of which was sufficient to render the Plaintiff disabled for the purposes of FEHA. The District argued at trial that a necessary element of a FEHA interactive process claim is the availability of a reasonable accommodation when the interactive process occurs. Otherwise, the process is futile. The trial court erroneously rejected this argument. On appeal, the appellate court agreed with the District that to engage in the interactive process, Plaintiff must show that an available reasonable accommodation existed at the time and ordered a retrial. Discussion: This case provided much needed clarity that the requirement to engage in an interactive process only exists if a reasonable accommodation is available. Otherwise, the entire effort is unnecessary and futile. Here, since the jury did not have the opportunity to find whether a reasonable accommodation existed, judgment was reversed.