Court of Appeal Reaffirms PAGA Claims Are Not Subject to Binding Arbitration

Roberto Betancourt sued Prudential, alleging a single cause of action under the Private Attorney Generals Act (Labor Code 2698 et seq.), in which he sought civil penalties on behalf of himself and other aggrieved Prudential employees for failure to pay overtime, failure to provide meal and rest periods, failure to pay minimum wage, failure to reimburse business expenses, and other claims. Prudential moved to compel arbitration under a 2006 agreement, whereby Betancourt agreed Betancourt agreed “to forego any right to bring claims on a representative or class member basis.” The Court of Appeal found that the trial court correctly denied the motion because, under settled law (Iskanian v. CLS Transp. Los Angeles, LLC (2014) 59 Cal.4th 349), a defendant cannot compel arbitration in a PAGA case, which is brought on behalf of the state.

Prudential made several arguments attempting to limit Iskanian, the most creative being that although “Iskanian held predispute waivers of the right to bring a representative action are unenforceable,” it did not hold that where an employer has agreed to litigate the PAGA claim in arbitration, which Prudential agreed to do here (despite contrary language in the agreement), “the agreement on the forum for the PAGA claim is enforceable.” The Court disagreed, holding again that becaue PAGA claims are brought on behalf of the state, “the fact that Betancourt may have entered into a predispute agreement to arbitrate does not bind the state to arbitration.”

Perhaps the most legally significant argument should a PAGA case ever get before the U.S. Supreme Court is that “if Iskanian is interpreted as prohibiting arbitration of all PAGA claims, then that state law prohibiting arbitration is preempted by the Federal Arbitration Act (FAA).” The Court of Appeal sidestepped that question — basically saying that if Betancourt had AGREED to arbitrate, then it could have done so, or at least that question isn’t before the Court. However, since employees rarely agree to arbitrate (where recovery is often lower), it remains true that for all intents and purposes a PAGA case will never be arbitrated, which a conservative SCOTUS could find to be an FAA violation. But that remains to be seen.

The takeaway for employees is that, once again, a published opinion harshly dismantled the arguments of an employer attempting to enforce an arbitration of PAGA claims. For employers, it will more often be the case that, where an employee has signed an arbitration agreement, they will find themselves on the receiving end of a one-count lawsuit seeking only PAGA penalties as was done here.

Betancourt v. Prudential Overall Supply, 2017 S.O.S. 1202
(Cal. Ct. App., 4th Dist. Mar. 7, 2017) http://sos.metnews.com/sos.cgi?0317//E064326.

Pervasive Hugging Can Create Hostile Work Environment


Where correctional officer alleged sheriff created sexually hostile work environment, summary judgment for defendants was error because a reasonable juror could conclude that differences in the sheriff’s hugging of men and women were not, as the defendants argued, just “genuine but innocuous differences in the ways men and women routinely interact with members of the same sex and the opposite sex.”

The Ninth Circuit Court of Appeals ruled that hugging can create a hostile or abusive workplace when it is unwelcome and pervasive, and summary judgment on a hostile work environment claim is appropriate only if the defendant’s conduct was neither severe nor pervasive enough to alter the conditions of the plaintiff’s employment.

Zetwick v. County of Yolo, 2017 S.O.S. 14 (9th Cir. Feb. 23, 2017), http://sos.metnews.com/sos.cgi?0217//14-17341.

Sea Lion Waste Not a Public Nuisance

Every so often an appellate decision from another area of law will catch my eye. This is one of those instances. It falls under the category of cases where you realize that there are problems that you had no idea people had until you read about them in a published opinion. Such as battling over sea lion poop.

Apparently La Jolla has a long and sordid history as the lavatory of migratory animals. Originally, flocks of birds were the primary culprit of the offending odors. The stench was bad enough for San Diego Mayor Bob Filner to issue an emergency finding in 2013 declaring bird odors from “cormorants, gulls, pigeons and pelicans” a public health hazard and contracted with an outside company to remove the bird excrement requiring remediation. That plan worked, but that’s when public enemy #2 joined the party. “[T]he sea lion population at La Jolla Cove has grown exponentially in recent years, resulting in significant waste buildup on the bluffs” that was bad enough to affect residents and business owners, who formed CONA (“Citizens for Odor Nuisance Abatement (CONA)”).

When the City didn’t treat sea lions with the same urgency as sea gulls, CONA finally decided that enough was enough and in January 2014 sued the City of San Diego for failing to eliminate “an alleged public nuisance caused by noxious sea lion waste odors permeating the picturesque La Jolla Cove.” The crux of their argument was that the City had built fences to prevent humans from accessing parts of the cove, making those areas overly sea lion friendly.

The fence proved a barrier to the City’s ability to dismiss the case at the pleading stage, as a fence is not a “natural condition” and therefore could be the cause of a public nuisance. However, the trial court subsequently granted the City’s motion for summary judgment, finding that pursuant to Civil Code 3482 (which declares that anything done “under the express authority of a statute can be deemed a nuisance”), the sea lions’ waste — or more to the point, the functioning of their digestive processes — was protected under the Marine Mammal Protection Act. Ergo, no nuisance.

The Court of Appeal affirmed. It took issue with the Court’s reasoning on Section 3482, pointing out that merely because sea lions were protected by statute “does not imply authorization for noxious odors emanating from sea lion waste buildup.” Indeed, there can be “circumstances in which a public entity’s
actions in connection with wild animals give rise to public nuisance liability” and, moreover, the City could be held liable for the odors if its actions were “a substantial factor in causing the alleged harm.” Here, however, summary judgment was proper because of lack of causation. The evidence presented showed that the “uncontrolled habitation” of sea lions on the bluffs was not caused by the fence, which had been there for decades (the sea lions were a more recent phenomenon). Also, the City’s environmental expert showed that the protection of local fisheries and the physical properties of the cove itself led to the sea lions’ prosperity and their decision to settle on the bluffs. These were “natural population dynamics.” And although the City perhaps could have scooped the poop, there was no legal requirement for it to act.

This is one of those cases where it would be hard to imagine a court ruling in favor of the plaintiff. As bad as the odors might be, what CONA really wanted was for the City to get the sea lions to pack up and relocate elsewhere. That’s probably not something a judge wants to direct a public entity to do, so absent some extreme negligence on the City’s part, the residents of La Jolla Cove were likely doomed from the start. You do have to feel for them somewhat, though — the stench must have been pretty bad for them to go to this amount of trouble.

On the plus side, perhaps this is the one place in California where home prices are going down…

Citizens for Odor Nuisance Abatement v. City of San Diego (Cal. Ct. App. 4th Dist. Feb. 9, 2017) 2017 S.O.S. 652, available at http://sos.metnews.com/sos.cgi?0217//D068086.