Another Low Impact CRASH Test for LASC Pilot

When I first wrote about the CRASH program last year with its first launching, I thought it would be a more dominant feature of the LA Superior Court.  It seems to be occasional and brief, running one to two weeks at a time, and not at all for several months between sessions.  It is after all a pilot program, and its success will determine its future.  This long delayed second phase and its short new duration makes one wonder whether the pilot will get the go-ahead for a "full season" run. 

The Central District in Downtown Los Angeles is again trying out the single referee assisted settlement hearing, or “CRASH” program.   The 47 member court is giving the settlement program its second run. 


This year the program will run for 5 days. The program is limited to employment law cases, and uses the services of a volunteer plaintiff's attorney and a volunteer defense attorney acting as mediators for each case. Currently there are about 145 active cases in the program. This number of cases is hardly significant given the 79,125 "general jurisdiction" lawsuits filed in Los Angeles Superior Court in the last 12 months.  Still, the program is getting positive reviews from participating attorneys. 

Judge Rex Hesseman, as quoted in the Los Angeles daily Journal June 4, 2012, said of employment law cases: “I think it's fair to say they have a disproportionate number of discovery disputes which often need judicial involvement.” Also quoted in the same journal article, Los Angeles Superior Court judge Mary Ann Murphy said employment law cases tend to have more witnesses once the case reaches trial.

Attribution:  Los Angeles Daily Journal, Monday, June 4, 2012, page 5. 

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California State Bar President to Chair "Task Force" to Decide "Clinical Education" Requirement for Law Grads

The current President of the State Bar of California is chairing a committee to explore a requirement that newly graduated attorneys satisfy a practical training curriculum as a condition of licensing.  That is, that Bar Applicants undergo a clinical experience to acquire the practical skills of lawyering before being allowed to provide legal counsel to the public.  


The Committee will explore the scope and structure of such a proposal.  Will a clinical program be rolled out gradually?  What will be the minimum clinical experience?  Will there be exemptions?  What will be the economic impact on the public?  How will the program be implemented?  Where will the clinical training be given, and who will provide it?  All unanswered questions currently.


I applaud our State Bar President for bringing this issue into focus.  There are many lawyers in this State graduating from unaccredited schools who pass the Bar with no real opportunity to obtain training as summer law clerks or as new associates in large law firms with internal training and mentoring.  The result can be confusing, and sometimes disastrous.  Further, the complexity and range of the law is daunting to the experienced.  It is overwhelming to the uninitiated. The public must be protected, and the reputation of the Profession as competent served as well.  


Other professions, as medicine and accounting, require such clinical accountability.  It is over time to move the legal profession in this same direction.


Kudos to State Bar President Jon Streeter.  I just hope his one year term of office is long enough to accomplish meaningful dialogue of lawyers AND the public on this important issue.  


For a full reading of the President's letter in the California State Bar Journal, go to:  Jon Streeter .

Public Reporting of Arbitration Proceedings

Arbitration proceedings are not confidential. There is no statute or State Bar rule that requires arbitrations to be confidential. Confidentiality is required only by contract.


An employee may have reasons to want the arbitration to be public. Public disclosure may influence the employer to settle. Public disclosure may influence the employer to change its discriminatory or retaliatory practices. Public disclosure may enhance the reputation of the employee attorney. Public disclosure may provide a stronger sense of justice being done for the employee. Public disclosure may persuade other employers not to engage in similar practices.  


If the original arbitration agreement does not provide for confidentiality of the arbitration proceedings, the employer may attempt to obtain a stipulation from counsel for confidentiality. For the reasons listed above, the employee's attorney may want to resist entering into such a stipulation. 


If the employee’s attorney requests court reporter transcripts of the proceeding, those transcripts can be made public unless there is a stipulation are agreement to limit that right. It reasons that if the parties have not agreed to the privacy of arbitration, members of the public can be invited to attend the arbitration. Simply that the matter is heard in a private location does not prevent the person in control of the premises from admitting persons to attend. An arbitrator may exercise his discretion in excluding witnesses, but he may also exercise his discretion in allowing observers to the proceedings. 


 When counsel reviews “verdict and award” results and sees that there are arbitration awards listed, that information is the result of one or both of the parties declining to enter into an agreement of confidentiality. For various tactical reasons, employee’s counsel should consider refusing such agreements if the original arbitration agreement does not already provide for confidentiality.

Taking a Second Bite at the Apple: Foreign Suppliers Abuse Workers

While California employment lawyers fight over minutes granted or denied to employees for rest and meal breaks, foreign suppliers to some of these same U.S. companies go unchecked by U.S. law while violating minimum standards of human decency. Unsafe or unsanitary working conditions, unlimited working hours per day, and “barely survival” pay, are commonplace for third world manufacturing employees. To the extent the American consumer unquestioningly buys cheaper products based labor approaching conditions of slavery, the consumer economically supports the practice. 


FoxConn is the Chinese factory where our iPads and iPhones are assembled. The Apple logo on the back of our Apple product is hand-carved, and that the employee doing that work may never see the final shipped item. Recently, ABC News exposed the treatment of workers at the FoxConn factory. Many workers were underage, “warehoused” in overcrowded dorms, and forced to work most of their waking hours, day after day. For a summary of those conditions, go to http://mashable.com/2012/02/22/apple-foxconn-nightline-video/. 


The overworked FoxConn employees were killing themselves in such numbers that suicide nets were placed below the windows of the FoxConn dormitories. 


There are both legal and economic solutions to these abuses. It may be that the most immediate and effective solution is economic—that is, that U.S. consumers unite to state their outrage that Apple (or other U.S. based company using their foreign sources) allows such inhumane conditions. Often, U.S. companies will be concerned that their sales may drop by a boycott of their products, or a tarnishing of their brand, if their passivity is exposed. That is, these companies may not have a legal obligation to improve working conditions of foreign workers hired by an “independent” supplier, but there is not doubt the U.S. corporation has the economic leverage to improve conditions. The ethical argument is that the U.S. company should use this economic leverage not only to obtain the best price, but the best price consistent with the basic human dignity of the supplier’s workers. 


The short form of the legal issue is this: What degree of control and co-ownership does the U.S. Company have over the foreign supplier? A related question is: Does a U.S. Company have an independent duty of truthful advertising to the American consumer that it supports fair and decent working conditions of the foreign workers hired by its suppliers? 


In Doe v. Wal-Mart, a code of ethics merely stated that Wal-Mart reserved the right to control or direct the activities of its suppliers, but did not promise to do so. This lack of promise was enough for the Ninth Circuit to hold there was not false advertising that would give U.S. consumers a direct “false advertising” claim against Wal-Mart. The Court also held that Wal-Mart’s “control” over the supplier was too slight to make it a “joint employer.” 


One case is positive potentially for California consumers seeking to redress inhumane working conditions of foreign workers: in Nike v. Kasky (2002) 27 Cal.4th 939, 949, Nike issued widely published rebuttals to charges that it engaged in widespread abuse of its suppliers’ foreign workers. A California resident, Kasky, sued under Bus. & Prof. Code Sec. 17200. He alleged that Nike that Nike was engaged in false and misleading advertising. Since Kasky was decided, California enacted Proposition 64 required a litigant to demonstrate actual economic harm to have standing to sue. Kasky could not bring his case today as a result UNLESS he showed that he (and others like him) would not have completed a purchase of the particular product but for the false and misleading publicity statements. See generally, Klein v. Chevron USA Inc. 2012.Ca.0000564.


Thus, if a California consumer were to bring a “false and misleading advertising” case successfully, one element of pleading and proof would be that the consumer himself was induced to make the purchase based on the “advertising” and that “but for” the advertising, would have refrained from the purchase. This would of course also be a matter of individual proof for each consumer, and would be one factor contrary to class certification. Even without class status, a group of like employees could proceed independently, and seek consolidation of their cases, assuming their primary motive was to achieve a principled outcome rather than a mega-judgment. 


Plaintiffs' counsel could seek recovery of fees based on the “private attorney general” theory. C.C.P. Sec. 1021.5. However, the real financial incentive will be the threshold certification issue: Do individual issues of intention and purchase decision override the other common issues of fact and law? 


Will consumers stop buying the latest versions of the iPad or refuse to shop at Wal-Mart? Apple has intervened in the FoxConn scandal not because of a drop in sales, although that could happen depending on how Apple publicly responded. No, Apple has intervened because it cares about the “luster” of its brand and its corporate reputation. Over the long haul, such intangibles can have tangible results, especially if an upstart competitor enters the market. The risk of loss, when weighed against the short term increased costs, indicated that Apple would act to influence its suppliers. 


In conclusion, while legal avenues are still open to attack a U.S. corporation that is complicit in creating inhuman working conditions for foreign workers, economic leverage and public exposure are probably the best immediate tactics. 


Note: This article is derived in part from an article by Anne K. Richardson, Hadsell Stormer LLP, published in the Daily Journal May 9, 2012.

Crush the "I'm Not Creative" Barrier - Jeff Dyer, Hal Gregersen, and Clayton M. Christensen - Harvard Business Review

Crush the "I'm Not Creative" Barrier - Jeff Dyer, Hal Gregersen, and Clayton M. Christensen - Harvard Business Review 


This article provides a quick "creativity mind set" self-assessment.  Good news:  you can develop mental habits that increase your daily creativity.  


Why post this article on  a legal blog?  Creative problem solving applies to every discipline. 

NLRB On A Collision Course

Do non-union employees have a right under the National Labor Relations Act [NLRA] to join in a class-action to secure their rights as employees?


 The interesting dilemma arises from the National Labor Relations Act’s protection of employees to engage in collective or “concerted” action to secure their employment rights. The dilemma arises because a class action is also a form of concerted action. A couple of recent National Labor Relations Board [NLRB] decisions highlight the political tension between the conservative majority of the Supreme Court and the Obama appointed members of the National Labor Relations Board. [NLRB.] This battle in my mind casts a shadow over the “equal” branches of government, putting in doubt the executive’s respect for the judiciary. 


 Our own California Supreme Court ran headlong into the conservative brick wall of the U.S. Supreme Court in Sonic-Calabasas A, Inc. v. Moreno (2011) 51 Cal.4th 659, which was remanded by the U. S. Supreme Court on appeal (late 2011), with directions that the California Supreme Court should reconsider its 4 to 3 decision to invalidate the employment arbitration agreement.  The U.S. Supreme Court has held that consumers can be compelled to waive their class-action rights and to arbitrate their individual claims.  AT&T Mobility LLC v Concepcion http://en.wikipedia.org/wiki/AT%26T_Mobility_v._Concepcion.  [“Concepcion”]  


 This federalism fight turns on the legal principle that a contract cannot be enforced if doing so would be in violation of federal law. Stated simply, you cannot enter an agreement to violate the law, and expect courts to enforce your contract. In a battle between federal and State law covering the same issue, the federal law pre-empts a conflicting State law.    


Of relevance to this battle is an NLRB decision currently on appeal to the Fifth Circuit Court of Appeals, known as the "Horton" case.  In Horton the NLRB concluded that an employer violated the NLRA when it obtained employee agreements to waive their class action rights to sue the employer. "Horton" I believe is likely to be reversed on appeal. 


A recent administrative complaint filed by the General Counsel for the NLRB charges that an employer promulgated contract waiving employees rights to file a class action collides with the federal rights of non-union employees to engage in concerted action. 


 This NLRB charge against "24 Hour Fitness" goes even farther than the Board's decision in Horton. The “Horton” employer did not allow the employees to opt out of the binding arbitration agreement. In contrast, the “24 Hour Fitness” employer permitted its employee's to request, complete, and deliver an "opt out" form within 30 days of signing the arbitration agreement.  Nonetheless, General Counsel for the NLRB charges that this “opt out” option does not bring the arbitration agreement within the requirements of the NLRA. 


 At first view, this "24 Hour Fitness" NLRB Complaint seems like political "flag waving" with little chance of success.  But maybe the General Counsel for the Board is on to something:   


This fight over "concerted action" is not a simple pre-emption case of the Federal Arbitration Act ["FAA"] invalidating a conflicting state statute.  This is a question of legislative intent where Congress has enacted two sets of statutes addressing the same question:  "concerted action" as defined by the NLRA and "class action" as defined by the Rules of Civil Procedure.  Both concerted action and class action are undertaken by one subclass of the general population:  employees acting within their employment.  


If the U.S. Supreme court addresses the legal issue in this framework, then I predict they will find that Congress intended the NLRA to provide the prevailing law.  Why?  Because the FAA covers class actions generally, while the NLRA covers "concerted action" by employees specifically.  The inference is that Congress intended to exempt employees engaged in class actions from the general policy favoring arbitration found in the FAA.  Of course, a logical step is also required:  that "concerted action" is inclusive of "class action."  The Supreme Court, if it wills, can make that step consistent with law.  


Finally, the NLRA is not limited to unionized employees.  It covers all employees engaged in "concerted action" to address their concerns over the terms and conditions of employment.  Thus, the seemingly Quixotic recent maneuver by the NLRB may have a few more teeth than the usual toothless tiger we see, if the case is taken up on appeal. In the meantime, I urge the Plaintiff's bar to add this argument to their assault on class-action waivers:  the waivers violate the NLRA, and the NLRA controls over the "general" provisions of the FAA to permit class actions.  

On the Brink With Brinker: Snacking Within Legal Guidelines.

If there is an equivalent to “viral” in the legal writing community, it would be the coverage given to the case of Brinker Restaurant Corp. v. Superior Court decided by the California Supreme Court on August 12, 2012. This may be as close as lawyers come to experiencing Internet hysteria.

To join or not to join? I have decided to join, but somewhat less hysterically.

This decision would matter to you if you were one of 60,000 employees working for the Brinker Restaurant Group. If you are one of the legion of white-collar exempt workers it may not matter much at all. Most of the “buzz” was generated by class action lawyers on both sides of the Bar. If you are an attorney who does not generally practice class action, you could easily doze off during the extensive discussion of the 10-hour work shift.

With so much written, I will add a pedestrian point. It has to do with the simple matter of hunger.  A restaurant worker might experience if working back-to-back shifts. Individual hunger pangs might not matter much to class-action lawyers, but they do matter to your waitress or waiter.

Here is where the stomach growl can be heard: a restaurant operator wants his table waiters to be available during peak service hours. In my own experience representing restaurant workers, I learned that the worker herself would prefer to continue working to avoid loss of tips from customers she had served, only to see those customers pay the tip to the waiter taking over her busy tables. Tips are a major source of compensation for restaurant workers.

The operator solution was to require the restaurant worker to begin his or her meal break immediately upon clocking in to work for his or her shift. This creates the odd situation in which one arrives at work, clocks in, and sits down for 30 min. to do nothing.  This was the situation for many of the Brinker workers.

The industrial welfare commission regulations require that the 30-minute meal break be provided after 4 hours and no later than the 5th hour. [Sometimes the employee can work straight through a six hour shift without a break if there is a written disclosure and consent by the employee].

The  “first” meal break rule is satisfied by giving the employee a 30-minute break immediately upon commencing his shift. But now the hunger sets in. It has been 4 ½ hours since the employee ate. The employee now moves into the 2^nd 5 hours of his 9½ hour shift. Should he be expected to work up to an additional 5 hours without a meal break? That is, is the restaurant operator allowed by law to work the employee just short of 10 hours without providing a 2nd meal break in the 5^th to 10^th hour? The California Supreme Court has answered “yes.” 

Restaurant workers or other employees in comparable situations will have to be adaptable. They may find this law an excellent way to lose weight. They may also find inventive ways to prepare snacks for consumption during their break periods. The California Supreme Court implicitly seem to recognize that employees need this “rest” break by also concluding that the 2nd 10 min. rest break must be given between the 6th and 8th hours of work. I suspect that the holding of the Court affirming that an employee can do what ever he or she wishes during his meal and rest break takes into account that most starving employees will choose to eat.

The “hype” surrounding this decision finds both the plaintiff's Bar and the defense Bar spinning the case to assert victory. This scrambling leads me further to believe that the California Supreme Court has done an admirable job of giving something to everybody.  The Brinker decision was reached by a unanimous opinion. Reading between the lines, I believe that the members of the Court understood that there was indeed a great political and economic lobby waiting for the outcome, and that unanimity would give weight and credibility to the Court's opinion. In the meantime I hope that these hard-working Justices remember to have a snack before taking the Bench.  

For a full copy of the decision:  Brinker

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No more “SLAPPing” Around of Whistleblowers

Employers continue to use “anti-SLAPP” motions to attack wrongful termination cases, and the Courts of Appeal continue generally to deny them access to this procedure. An anti-SLAPP motion is one that asserts that the basis of the wrongful termination case is protected constitutional speech by the employer. The motion permits the court to shift the burden of proof to the employee well before the beginning of the trial to demonstrate a probability of winning on the merits.

In the decision of Donovan v. Dan Murphy Foundation  B-230820 decided April 18, 2012, Court of Appeal reversed a trial court granting of the employer's anti-SLAPP motion. The Court of Appeal held that the “essence” of the allegations were the employee’s resistance of supposedly illegal conduct by the employer’s Board of Directors. Specifically, the employee alleged that the Board acted outside the requirements of the Probate Code in managing the Foundation's assets. The long list of disputes between Donovan and the Board of Directors looked like an internal squabble. Code of Civil Procedure Section 425.16 permits the motion to be granted to dismiss the wrongful termination suit only if the allegations interfere with a person's “right to free speech or petition” on a matter “in connection with a public issue.”

The Donovan decision is significant because it seems to tether the requirement of a “public issue” to a “official proceeding authorized by law.” The Court held that although the Board of Directors was created by the Corporations Code, and that the Board operated within the authority granted by the code, it was not acting as a “official body”. Of course, if the employer had succeeded in this novel argument, virtually any action by a Board of Directors would have become a “official proceeding.”

On the separate issue of whether there was communication that was in the “furtherance of the public interest,” the Court noted that the employer did not provide any evidence that there was widespread public interest in the actions of this particular Board of Directors. For example, it noted that the Board had not presented evidence of widely disseminated news articles.

Disturbing in this decision is not the holding of the Court of Appeal but the ruling by the trial court initially that the employer should prevail on its anti-SLAPP motion. Hopefully, with the accumulation of these Court of Appeal decisions, trial courts will be guided to grant these anti-SLAPP motions only in the most clear circumstances.

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