Feb 15 2012
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Class Actions, Collateral Estoppel/Res Judicata

In an Employment Case, Denial of Class Certification Cannot Establish Collateral Estoppel Against Unnamed Putative Class Members

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The Court of Appeal for the Second District held that a denial of class certification cannot establish collateral estoppel against unnamed putative class members. Bridgeford v. Pacific Health Corporation, et al., No. B227486, 202 Cal.App.4th 1034 (2d Dist. Jan. 18, 2012).

Background

Plaintiffs Bridgeford and Tarin filed a class action complaint in May 2010 against Pacific Health Corporation and other entities, alleging that defendants committed numerous wage and hour violations, including (1) failure to pay wages due upon discharge or resignation, (2) failure to pay regular and overtime wages due semimonthly, (3) failure to provide meal breaks, (4) failure to provide rest breaks, (5) failure to provide itemized wage statements, (6) failure to pay minimum wages for time worked off-the-clock, (7) failure to pay overtime wages, and (8) unfair competition.  Id.

The trial court sustained a demurrer without leave to amend.  Id.  Plaintiff’s appealed, contending the trial court misapplied the doctrine of collateral estoppel in holding that their class claims are precluded, and there is no basis to dismiss their individual claims or their representative claims under the Labor Code Private Attorneys General Act of 2004 (PAGA) (Lab. Code section 2698, et seq.).

Discussion

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Feb 14 2012
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Trade Secrets

Trade Secrets Preemption Ruling: CUTSA Supersedes Common Law Claims Where Plaintiff Alleges a Confidentiality Agreement But Failed to Allege Defendant Was Bound by It

District Judge Jeffrey S. White of the Northern District of Californ

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ia held that the California Uniform Trade Secret Act (“CUTSA”) superseded common law claims for misappropriation, conversion, unjust enrichment, and trespass to chattels.  Heller v. Cepia, L.L.C., No. C1101146JSW, 2012 WL 13572 (N.D. Cal. Jan. 4 2012) (slip op.).  Plaintiff alleged the existence of confidentiality agreements but not that defendants were bound by them.  Id.

Background

Plaintiff Heller was the sole proprietor of Floating Lightbulb Toys. Id. *1. He accused Cepia, A-Tech, The Bean and Ying Leung International Limited (“Ying Leung”) of misappropriating his trade secrets regarding his toy hamster project.  Id.  Cepia moved to dismiss Plaintiff’s claims for failure to state a claim and for sanctions under FRCP 11. Id. Plaintiff filed a counter-motion for sanctions against Cepia. Id. The Bean and A-Tech moved to dismiss based on lack of personal jurisdiction. Id.

Discussion

Cepia argued that Plaintiff’s common law claims were superseded by CUTSA. Id. Citing Silvaco Data Systems v. Intel Corp., 184 Cal.App.4th 210 (April 29, 2010), the court noted that “common law claims premised on the wrongful taking of information that does not qualify as a trade secret are also superseded, unless the plaintiff identifies some law which confers property rights protecting the information.”   Heller, 2012 WL 13572, at *1.

While Plaintiff argued that his confidential information that was not a trade secret is still property because he entered into agreements providing that any non-secret confidential and proprietary business information would remain his property. Id. The court disagreed, dismissing the common law claims: Continue reading →

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Aug 26 2011
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Exemptions, Professional

Unlicensed Law School Graduate Still May Be Exempt Under Learned Professions Exemption

Harvey A. Nell, Clerk and Recorder, Anaconda, MT

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The First District Court of Appeal held that summary judgment was properly granted in a wage and hour case because plaintiff unlicensed law school graduate performed duties that brought him within the exemption for learned professionals.  Zelasko-Barrett v. Brayton-Purcell, LLP, — Cal.Rptr.3d —-, 2011 WL 3594015, No. A130540 (1st Dist. Aug. 17, 2011) .

Background

Plaintiff was employed by the Brayton-Purcell, LLP (Brayton) law firm as a Law Clerk II after he graduated from law school but before he passed the bar examination. Id. *1. After being admitted to the bar, plaintiff was designated as an associate attorney, and performed tasks customarily performed by junior attorneys. Id. He drafted pleadings, discover demands and responses, did legal research and drafted memoranda of points and authorities, interviewed witnesses, etc. Id. The trial court granted Brayton’s motion for summary judgment and sustained objections to numerous statements where plaintiff denied he was employed in a professional capacity and performed work covered by the professional exemption. Id.

Plaintiff filed an action after voluntarily departing from the law firm, and alleged that he had been misclassified.  Brayton successfully moved for summary judgment on the ground that in the Law Clerk II position plaintiff had been an “exempt professional employee.” Id. Plaintiff appealed. Id. Continue reading →

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Feb 08 2011
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Jury

Jury Rejects Disability Discrimination and Failure to Accommodate Claims

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In a wage and hour, failure to accommodate, and disability discrimination case, a welder alleged that his employer terminated him because of his intestinal ailment.  Cubias v. Murray’s Iron Works Inc., 7 Trials Digest 14th 14, 2010 WL 5690615, Case No. BC406749 (Cal. Superior, Verdict: July 29, 2010).

Plaintiff alleged that he was employed as an aluminum welder until defendant Murray’s Iron Works terminated his employment.  Plaintiff alleged he was harassed and terminated, when he disclosed his medical condition/disability called diverticulosis or diverticular disease., which occurred when pressure in plaintiff’s colon formed bulging pouches that can cause severe stomach cramps, aches, constipation, and/or diarrhea. Id.

Plaintiff alleged disability discrimination, failure to provide reasonable accommodation, failure to engage in the interactive process, unlawful retaliation, unlawful retaliation in violation of public policy, harassment, wrongful termination in violation of public policy, failure to prevent discrimination and harassment, failure to prevent retaliation, invasion of privacy, intentional infliction of emotional distress, and failure to pay overtime wages against defendant Murray’s Iron Works.  Id. Against defendant Irene Leisner, the Human Resources Manager and co-owner of Murray’s Iron Works, plaintiff alleged harassment, invasion of right to privacy, and intentional infliction of emotional distress for allegedly entering the men’s restroom at work and yelling at him to get back to work and to hurry up while he was using the restroom. Id. Continue reading →

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Feb 08 2011
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Noncompetes

50 State Noncompete Survey Shows That California Is in Rare Company

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A 50 state noncompete survey shows that California is in elite company with respect to its general prohibition against noncompete agreements.  North Dakota and Oklahoma are the only other states to disallow noncompetes.

By CHARLES JUNG

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Jan 09 2011
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Customer Lists, Ready Ascertainability, Secrecy, Sister State Construction of UTSA, Trade Secrets

Eastern District of New York Holds That Contact List Is Not Entitled to Trade Secret Protection Because Information is Readily Duplicated Through Facebook or LinkedIn

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In a sign of the times, District Judge Arthur D. Spatt of the Eastern District of New York adopted the recommendations of Magistrate Judge A. Kathleen Tomlinson who denied a motion for preliminary injunction in a trade secrets misappropriation case involving a customer list.  Sasqua Group, Inc. v. Courtney, No. CV 10-528(ADS)(AKT), 2010 WL 3613855 (E.D.N.Y. 2010 Aug. 2, 2010) (slip op.). The court reasoned that because the information could be properly acquired or readily duplicated through public databases such as Facebook and LinkedIn, the information was not entitled to trade secret protection.  Id. *23.

In sum, Plaintiffs have failed to prove a physical appropriation or copying of confidential information or wrongful disclosure or use of a trade secret. See Leo Silfen, 29 N.Y.2d at 389, 328 N.Y.S.2d at 424, 278 N.E.2d 636. The information in Sasqua’s database concerning the needs of its clients, their preferences, hiring practices, and business strategies, as well as Sasqua’s acquaintance with key decision-makers at those firms may well have been a protectable trade secret in the early years of Sasqua’s existence when greater time, energy and resources may have been necessary to acquire the level of detailed information to build and retain the business relationships at issue here. However, for good or bad, the exponential proliferation of information made available through full-blown use of the Internet and the powerful tools it provides to access such information in 2010 is a very different story. Continue reading →

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Jan 09 2011
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23(b)(2) Class, Claims, Class Actions, Class Notice, FLSA, Jury, Opt-in, Opt-out, Overtime, Preemption, Professional, Trial, Unfair Competition Law

Ninth Circuit Holds That Newspaper Reporters Not Exempt

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On Monday, the U.S. Court of Appeals for the Ninth Circuit affirmed in “all respects” the trial court’s grant of partial summary judgment to plaintiffs, a judgment after jury and bench trials, and an award of attorney’s fees to plaintiffs.  Wang v. Chinese Daily News, Inc., Nos. 08-55483, 08-56740, — F.3d —-, 2010 WL 3733568 (9th Cir. Sept. 27, 2010).  Among other things, the Ninth Circuit held that plaintiff newspaper reporters were non-exempt.  (Thank you to Randy Renick for bringing this case to my attention.)

Background

Employees of Chinese Daily News, Inc. (“CDN”), a Chinese-language newspaper, filed suit against CDN on behalf of current, former, and future CDN employees based in CDN’s San Francisco and Monterey Park (Los Angeles), California locations.  Id. *1.  Plaintiffs claimed violations of the FLSA, California’s Labor Code, and California’s Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, alleging that employees were made to work in excess of eight hours per day and forty hours per week. Id. Continue reading →

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Jan 09 2011
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Class Actions, First to File, FLSA, FLSA Collective Action, Transfer

Eastern District Denies “First to File” Transfer of FLSA Collective and Labor Code Class Action

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The United States District Court for the Eastern District of California denied defendant employer’s motion to transfer pursuant to the “first-to file” rule.  Wilkie v. Gentiva Health Services, Inc., Civ. No. 10-1451 FCD/GGH, 2010 WL 3703060 (E.D. Cal. Sept. 16, 2010) (slip op.).  Plaintiff filed a putative nation-and California-wide class action/collective action against plaintiff’s former employer Gentiva for alleged violations of the Federal Labor and Standards Act (“FLSA”) and the California Labor Code § 201 et seq. for: (1) misclassification as exempt from overtime pay and failure to pay overtime; (2) willful failure to pay wages due within the time specified by the Code; (3) violation of California Wage Order No. 4 for knowingly and intentionally failing to provide timely, accurate, itemized wage statements including request for an injunction and damages; (4) failure to give proper rest and meal breaks; and (5) violation of California’s Business & Professions Code § 17200 et seq.  Id. *1

A prior FLSA collective action and New York and North Carolina state law class action against Gentiva was filed in the United States District Court for the Eastern District of New York, entitled Rindfleisch, et al. v. Gentiva Health Services, Inc., No. CV10-2111 (E.D.N.Y.) (“Rindfleisch”). Defendant moved to transfer plaintiff’s complaint under the “first-to-file rule,” on the ground plaintiff’s claims are the subject of the Rindfleisch action. Plaintiff opposed the motion, arguing the parties and claims are not substantially similar in the two actions and other equitable factors militate against transfer under the first-to-file rule.  Id. The court denied Gentiva’s motion.  Id. Continue reading →

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Jan 09 2011
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Attorneys' Fees, Bonuses, Class Actions, Collateral Estoppel/Res Judicata, Trial

Second District Reverses Class Action Judgment Relating to Bonuses Allegedly Due After Merger

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The Second District reversed a trial court’s judgment in favor of employees in a class action trial.  Pearline Zalewa v. Tempo Research Corporation, B210429, 2010 WL 3735240 (Cal. Ct. App. 2d Dist. Sept. 27, 2010).  Defendant  fiber-optic equipment manufacturer was sued in a class action by its former employees who claimed that the manufacturer breached an obligation to pay them annual bonuses, an obligation that allegedly continued for years after they were laid off from work during a business downturn.  Id. The court concluded that the employees were not entitled to any recovery: “All but two of the employees relinquished their right to sue when they were laid off, in return for compensation that exceeded their earned severance pay. In any event, there was no promise made to pay bonuses to the employees after they were laid off.”  Id.

The Trial Court’s Judgment

The trial court conducted a bench trial in January 2008, finding that plaintiffs were entitled to recover a direct bonus under theories of breach of contract, promissory estoppel, accounting, and unfair business practices. Id. The court deemed the bonus payments to be “wages” under the Labor Code. Id. And because the bonus payments are wages, plaintiffs were awarded prejudgment interest and attorney fees under the Labor Code. Id. The court enumerated the amount of the award for each employee, less offsets for monies already paid by defendants, plus interest. Id. The total amount of the award, including interest, was approximately $99,000, and plaintiffs’ counsel was awarded attorney fees of $881,715.  Id. Continue reading →

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Jan 09 2011
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Meal and Rest Breaks, Motion for Summary Judgment/Adjudication, Overtime

Second District Reverses Summary Judgment on All Wage and Hour Claims

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The Court of Appeal for the Second District reversed summary judgment on wage and hour claims in Porter v. Ralphs Grocery Company, No. B218220, 2010 WL 3704055 (Cal. Ct. App. 2d Dist. Sept. 23, 2010).  Plaintiff alleged that defendant required him to work overtime off the clock, and by doing this defendant both denied plaintiff proper wages and made it difficult for plaintiff to calculate the overtime pay due him.  Id. *8.  Plaintiff also alleged that defendant failed to afford meal periods of at least one-half hour in which he was relieved of all duties, and that he regularly worked without taking the 10 minute rest breaks due him.  Id. Plaintiff alleged violation of Labor Code sections 1174, 226.7, and 512. Id. He also alleged violation of Labor Code sections 201 and 203 for failure to pay all sums due plaintiff immediately upon termination of his employment.  Id. Additionally, he alleged defendant retaliated against him for his having requested that he not have to work off the books. Id.

The Court of Appeal held that “when an employee continues to work at the end of his shift even when not requested or required to do so, and the employer knows or has reason to know about such continuing work, then the time is considered working time and it is the duty of management to see that the post-shift work is not performed if it does not want the employee to work past his shift.” Id. *9 (citing Morillion v. Royal Packing Co., 22 Cal. 4th 575 (2000)). Continue reading →

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