A.¾¾¾¾¾¾¾ EEOC Regulation Allowing A Complainant To Verify A Discrimination Charge After The Filing Time Has Expired Is Proper.

Edelman v. Lynchburg College [Mar. 19, 2002, 2002 DJDAR 3011.] Justice Souter wrote the majority opinion, joined by Rehnquist, Stevens, Kennedy, Thomas, Ginsberg, and Breyer.

Title VII of the Civil Rights Act of 1964 requires that a Acharge@ of employment discrimination be filed with the EEOC within a specified number of days after alleged unlawful acts occur.¾ It further provides that charges Abe in writing under oath or affirmation.@¾ (' 706(b).)¾ An EEOC regulation allows an otherwise timely filed charge¾ to be verified after the time for filing has expired.

Edelman sued Lynchburg College after being denied tenure.¾ Edelman faxed a letter to the EEOC asserting gender, national origin and religious discrimination, but it was not under oath or affirmation.¾ EEOC advised him to file a charge within 300 days, but he returned the charged 313 days after being denied tenure.¾ He sued in a Virginia State Court on various state law claims and later added a Title VII claim.¾ The college removed to Federal court and moved to dismiss on the ground of his failure to file a verified charge with the EEOC within the applicable filing period.¾ Edelman argued that his letter was a timely filed charge and that under an EEOC regulation, his later signed verification related back to the date of the letter.¾ The district court dismissed the Title VII claim finding the letter was not a charge, and the Fourth Circuit affirmed holding that the relation back regulation was inconsistent with Title VII=s plain language.

The Supreme Court reversed, holding that the EEOC=s regulation allowing a late filed verification to relate back to the original filing date was a proper interpretation of Title VII, section 706.¾ The court rejected an argument that the two provisions of Title VII requiring a charge to be filed within a certain number of days and that it Abe in writing under oath or affirmation@ had to be read together.¾ The court also did not accept the argument that the verification was needed at the time of filing to establish that the complainant is serious enough to support such a charge under oath.¾ The court found that the oath was only required by the time the employer is obliged to respond to the charge, not at the time the employee filed the charge with the EEOC.¾ The court declined to resolve any question of whether deference should be given to the EEOC and instead based its ruling on a construction of section 706.¾ The court found it reasonable to allow relation back of an oath omitted from an original charge to protect lay complainants who may not know enough to verify the charge upon filing.¾ The court did not reach the question of whether Edelman=s letter was a Title VII¾ Acharge@ where neither Edelman nor the EEOC treated it as one.

Justice Thomas in a separate concurring opinion stated he would concur because the EEOC had the authority to promulgate this procedural regulation and the regulation was reasonable and not proscribed by statute.¾ O=Connor concurred in the judgment, and was joined by Scalia, stating Abecause the statute is at least somewhat ambiguous, I would defer to the agency=s interpretation.@¾ They believed deference to the EEOC would be appropriate despite the fact that they believed the statute should be read to require a charge be made under oath or affirmation within the specified time.

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B.¾¾¾¾¾¾¾ Supreme Court Strikes Labor Department Regulation That Would Penalize Employers Who Fail To Inform Workers That Their Leave Counts Against Their 12 Week Entitlement Under The Family And Medical Leave Act.

Ragsdale v. Wolverine World Wide, Inc. [Mar. 19, 2002, 2002 DJDAR 3017.] Where an employer grants an employee a leave under the Family and Medical Leave Act (FMLA), a labor department regulation provides that if the employee is not informed that his or her absence counts against the 12 week FMLA entitlement, the employee is entitled to an additional 12 weeks of leave.¾ The Supreme Court struck down this regulation as being beyond the Secretary of Labor=s authority.¾ Kennedy wrote the majority opinion, joined by Rehnquist, Stevens, Scalia, and Thomas.¾ O=Connor filed a dissenting opinion, joined by Souter, Ginsberg and Breyer.

Tracy Ragsdale was given 30 weeks of leave for cancer treatment by her employer, Wolverine World Wide, Inc.¾ She was terminated after the 30 week leave.¾ She sued her employer asserting that it was in technical violation of the Labor Department regulation that she be notified that 12 of those weeks were under FMLA, and she asserted that this entitled her to 12 more weeks of leave.¾ The parties brought cross-motions for summary judgment, the employer conceded it had not given Ragsdale notice of the 12 weeks of FMLA leave, but that it had granted her 30 weeks of leave, more than twice what the act required.¾ The district court granted summary judgment for Wolverine, which was affirmed on appeal.

The Secretary of Labor issued regulations pertaining to the FMLA requiring that employers give individualized written notice whenever they designate an employee=s leave as FMLA leave.¾ This includes providing the employee with detailed information concerning the employee=s rights and responsibilities within a reasonable time after the employee gives notice of a need for leave.¾ These regulations are in addition to the statutory notice requirements that require the employer to post in a conspicuous place a notice concerning pertinent provisions from the FMLA.¾ The purpose of the notice provisions was to make sure employees are aware of their rights under the FMLA.

The regulation provides a penalty for employers who fail to give the required individualized notice that their leave was designated as FMLA by the employer, such that the employee=s leave will not count against the employee=s FMLA entitlement.¾ This penalty is unconnected to any prejudice the employee might suffer from lack of notice.

In affirming summary judgment for the employer, the court found this penalty to be Aincompatible with the FMLA=s¾ comprehensive remedial mechanism.@¾ The FMLA statutory provisions allow for recovery to the extent an employee is prejudiced by a violation of the act, and the employer is liable only for lost compensation and benefits that result from the violation.¾ The court noted that the FMLA does not itself require that employers give individualized notice, and that to the extent the regulation=s penalty has no substantial relation to any harm suffered by the employee in most cases, it effectively amended the FMLA=s guarantee of 12 work weeks of leave.¾ The court also noted that Congress did not want to discourage employers from providing more generous periods of leave, and that such a penalty and its disproportionate¾ punishment would be inconsistent with Congress=s intent and the admonition that nothing in the act would be construed to discourage employers from adopting more generous leave policies.

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NINTH CIRCUIT COURT OF APPEALS

A.¾¾¾¾¾¾¾ Employer=s Claim That Termination Was Due To Employees= Damaging Airplane Prevails Over Employees= Claim That Termination Was Based On Discrimination And Violation Of Public Policy.

Villiarimo v. Aloha Island Air, Inc. [Feb. 28, 2002, ___ F. 3d ___ (O=Scannlain, Thompson, Berzon).]¾ Plaintiff Villiarimo was a ramp supervisor for Aloha Island Air.¾ Plaintiff Harvest worked as a ramp agent under Villiarimo=s supervision.¾ They were involved in an accident that resulted in damage to one of the airplanes when a small vehicle (called a tug), connecting a ground power unit to an airplane engine with a power cord for start up pulled away without disconnecting the cord.¾ The cord was forceably yanked from the plane and caused severe damage to the aircraft.¾ The plane had to be grounded, the flight canceled and the passengers taken off the plane.¾ Villiarimo was terminated for procedural violations and dishonesty B her version of the events contradicted that of some others during the investigation.¾ Harvest was fired because this was the second time he had damaged a plane during the past year.

Villiarimo claims she was fired in violation of Title VII=s gender discrimination laws and that male ramp agents involved in similar incidents were not immediately terminated (in this case it was Harvest=s second such event, for which he was now being fired).¾ She also claimed she was fired because she had a filed a wage and hour complaint in 1997 - the accident occurred in 1998.

Harvest asserted he was fired for filing a sexual harassment complaint against a station manager.¾ He also claimed his termination resulted because he authorized a review of his employment records in connection with Villiarimo=s wage and hour complaint.

The court found that in response to the employer=s stated business reason for the termination, Villiarimo failed to show that the reasons for her termination were a pretext for discrimination.¾ Villiarimo argued that Aloha had changed its reasons for firing her, first stating it was firing her for lying during the investigation and then stating it was firing her because of a procedural violation.¾ The court found the report cited both reasons, and¾ that they were not contradictory.¾ The court also found that the adding of a reason for termination does not show pretext unless it were to conflict with a prior stated reason for the treatment.¾ Villiarimo also attacked the credibility of the witnesses on whom Aloha relied, whose version of the incident varied from hers.¾ The court rejected this argument stating that the issue is only whether the employer honestly believed its reasons for the termination, even if they were Afoolish or trivial or even baseless.@

Harvest claimed he was fired in retaliation for making a sexual harassment complaint against a supervisor.¾ The court found that this complaint, which was made nearly a year and a half before his termination, failed to show causation, citing cases that had rejected causation where the proximity to the protected action ranged from four months to eight months time.

Both Villiarimo and Harvest also asserted their firing was in violation of public policy and constituted intentional infliction of emotional distress.¾ The court found no showing that Aloha knew of Harvest=s facilitation of Villiarimo=s wage and hour claim, and also concluded his actions did not qualify as performing an important public obligation.¾ As to Villiarimo=s claim, the court found she failed to demonstrate any causal connection between the filing of her wage and hour claim ten months earlier, and her termination.

The court rejected the emotional distress claim finding there was no evidence of outrageous conduct.

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B.¾¾¾¾¾¾¾ Dualing Arbitrators - Dispute Between Contractor And Local Union With Separate Arbitration Provisions Is To Be Resolved By Arbitrator Assigned Under The Project Wide Labor Agreement.

Huber, Hunt and Nichols, Inc. v. United Assn. Of Journeymen and Apprentices of Plumbing and Pipefitting Industry, Local 38 [Mar. 6, 2002, 2002 DJDAR 2653, ___ F. 3d ___, (Beezer, Trott, and Tallman).] The Ninth Circuit found that a project labor agreement (PLA) in a project to build a new ballpark for the San Francisco Giants authorized the PLA arbitrator to decide what type of substantive dispute was at issue and which dispute resolution route must be taken where there was a work assignment dispute that involved multiple grievance procedures.¾ The court found that when a PLA gives the arbitrator the authority to decide all nonjurisdictional questions involving interpretation of the PLA, Ait is implicitly assigning to him the threshold determination whether a dispute is jurisdictional.@¾ AUnder any other interpretation a trip to court would be necessary whenever the parties disagreed, or even purported to disagree, whether a dispute was >jurisdictional= in character.@

In this case, the Plumbers and Pipefitters Local filed a grievance against the general contractor claiming that a subcontractor violated the collective bargaining contract by assigning certain work to carpenters and laborers rather than the pipefitters.¾ The general contractor also filed a grievance against the pipefitters claiming the union=s grievance violated the dispute resolution procedures in the PLA, which reconciles and overrides the bargaining agreements with all of the unions.¾ Two different arbitrators decided the grievances in conflicting manners.¾ On appeal, the court found that the PLA dispute procedures authorized the PLA arbitrator to decide what type of substantive dispute was at issue and the dispute resolution option that must be taken.¾ Its determination that this was a jurisdictional dispute meant that it would be resolved by the leaders of the three unions.¾ The court concluded that only the project wide arbitrator would have the power over all of the contractors and employees to make such a determination.

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CALIFORNIA COURTS OF APPEAL

A.¾¾¾¾¾¾¾ Employee=s Discrimination And Breach Of Contract Verdict Reversed With Judgment Entered For Employer Where Termination Was Dictated By Foreign Principal, And Employee Did Nothing To Mitigate Damages.

West v. Bechtel Corporation [Mar. 6, 2002, 2002 DJDAR 2685,___ Cal.App.4th ___, lst App. Dist. Div. 4, (Kay, Sepulveda, Rivera).]¾ West was an engineer for Bechtel who worked over 30 years at various Bechtel locations.¾ When West worked overseas, he was employed by other Bechtel entities because the corporation has a policy against retaining employees residing in foreign countries to avoid subjecting itself to foreign laws and taxes.¾ In 1997, he accepted a project in Saudi Arabia by a Saudi Arabia limited liability company (SABCO) and a Bechtel foreign subsidiary; the client was the Royal Commission, an organ of the Saudi government.¾ The position was to be for two years, and West intended to retire in California when it was completed.¾ His contract stated that the assignment was for an indefinite period.¾ Assignments are permanent when an employee is directed to work at an international location and the assignment is normally expected to exceed nine months.¾ Under the contract with SABCO, the Royal Commission retained the right to reject or require the removal or replacement of personnel at any level who were assigned to provide services.¾

West was 62 years old.¾ When West arrived in Saudi Arabia he met the project director, Shotwell, who immediately told West that there would be problems because his gray hair was showing, he was over 50, and that people over 50 were regarded with suspicion.¾ West understood that this remark referred to the perceptions of the client, Royal Commission.¾ Within one month, Shotwell received a memo from the deputy director of the Royal Commission, directing Shotwell to fire West and that West did not satisfy their requirements as engineer manager.¾ West was treated as if he had completed his assignment rather than being fired for cause, and thus he did not have to pay the cost of his return trip.¾

In arriving in California, his wife referred to him as a Abroken man@, and despite receiving numerous offers of other work assignments at Bechtel, he did not accept any of them.¾ ¾West decided to retire about six months later, determining that he had a net worth in excess of $1.9 million.¾ He decided to sue Bechtel, stating he understood from his son, who had recently passed the bar, that he could sue Bechtel Corporation even if he turned down its job offers.¾ West never looked for work after he returned from Saudi Arabia, but admitted at trial that he could have been working for Bechtel Corporation even at that point if he had wanted to.

His claims for age discrimination and breach of contract were tried to a jury, which awarded him a net amount of $101,852.27, representing lost salary plus $50,000.00 for emotional distress.

The court of appeal found that the Royal Commission=s bias against West because of his age could not be imputed to Shotwell, Bechtel=s agent.¾ The court found that a principal=s discriminatory intent cannot be imputed to an agent to make the agent liable for an otherwise neutral business decision.¾ This is particularly applicable where the principal is a foreign sovereign who is able to compel the employee=s discharge and is not bound by anti-discrimination laws in its dealings with the employee.¾ Saudi Arabian employment law does not prohibit age discrimination.¾ The court also found that there was no evidence that any statement by Shotwell indicated his personal thought was that West was too old, but rather that he was simply stating the perceptions of the Royal Commission, the client.¾ The court also noted the presumption that if Shotwell had been biased against West based on his age, he would not have hired him in the first place.¾ While the presumption is not irrebuttable, it applied here because Shotwell fired West only slightly more than a month after he hired him.¾ There was no evidence that Shotwell had any intent of terminating West before Shotwell was ordered to do so by the Royal Commission.¾ The court found that there was no evidence of discriminatory intent by Shotwell or Bechtel.¾

On the breach of contract claim the court found that West failed to make any effort to mitigate his loss, and that an employee cannot simply remain idle, but must make a reasonable effort to secure other employment.¾ The evidence was undisputed that Bechtel gave West numerous opportunities to resume work after he returned from Saudi Arabia, and that he was offered other projects, which was flattering to West, but which he rejected.¾ The court concluded the evidence showed West made no effort to pursue any Acomparable employment.@¾ As to one position, where West would have had to make one visit to a location with an altitude of 14,500 feet, West said he could not do this based on medical advice to avoid such elevations, but Bechtel had offered to accommodate this matter.¾ And West had not illustrated that he suffered from a disability. ¾Based on these findings the court reversed the judgment for the plaintiff with directions to enter judgment for Bechtel.

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B.¾¾¾¾¾¾¾ A Sitting Judge Cannot Conduct A Binding Contractual Arbitration.

Heenan v. Sobati [Mar. 7, 2002, 2002 DJDAR 2739,___ Cal.App.4th ___, 4th App. Dist. Div.3, (Sills, Rylaarsdam, O=Leary).]¾ A homeowner sued a general contractor for a Anightmare@ of a remodel job on their home.¾ The parties agreed to submit the dispute to a binding arbitration before a sitting superior court judge, to be assigned by the master calendar judge.¾ The parties also waived a court reporter and any right to appeal.¾ Following the arbitration, plaintiffs filed a petition for a judgment to confirm the arbitration award and a memorandum of costs.¾ They also moved for attorneys= fees in excess of $80,000.00.¾ A commissioner heard the petition and confirmed the arbitration award, but declined to award attorney fees.¾ The plaintiff appealed the resulting arbitration award.¾ The appeal centered on whether the judge intended to include attorneys= fees as part of the cost award; no fees were included in the order confirming the arbitration award.

The court of appeal instead addressed the issue of whether a superior court judge could conduct a private arbitration subject to confirmation under the California Arbitration Act.¾ The parties did not raise the jurisdictional defects in the appeal; the court of appeal raised this on its own.¾ The court referred to the term Ajudicial binding arbitration@ as Aoxymoronic@.¾ The court found that no such Abeast@ existed.¾ Referring to the Aincoherent hybrids and bizarre mutations of supposed agreements for judicial or contractual arbitration@ the court stated that litigants who fashion such variances should be warned that the law may create unintended consequences.¾ The court found the arbitration to be nothing more than a bench trial, and the court stated Apublic judges must engage in public judging.@

The court noted that only two types of arbitrations exist:¾ Nonbinding judicial arbitration under the Judicial Arbitration Act, and binding contractual arbitration under the California Arbitration Act.¾ These are mutually exclusive and independent of each other.¾ The parties did not claim they had stipulated to nonbinding judicial arbitration, and their conduct indicated that they were trying to invoke the California Arbitration Act=s provisions by using its confirmation proceedings.¾

The court stated judicial involvement in contractual arbitration Ais limited to the award enforcement process.@¾ The purpose of contractual arbitration is to have it take place outside the legal system, to avoid the delays of litigation.¾ The court cited to the California Constitution which prohibits a judge from accepting public employment other than as a judge.¾ The court found that the judge conducted a bench trial in which the parties waived a court reporter and the right to appeal.¾ However, the judge did not satisfy the criteria for a judgment, and instead left that to a commissioner.¾ The court found that there was no arbitration award for the commissioner to confirm, the commissioner had no authority to confirm any order issued by the judge, and only the judge had the power to enter judgment, and to correct or modify it on post-trial review.¾ Thus, the judgment and order obtained from the commissioner were invalid.¾ The matter was remanded to Judge McEachen to address the various issues the parties raised before the commissioner, and to enter judgment.¾

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C.¾¾¾¾¾¾¾ Contractual Arbitration May Be Nonbinding.

Trabuco Highlands Community Association v. Head [Mar. 15, 2002, 2002 DJDAR 2947, ___ Cal.App.4th ___, 4th App.Dist. Div. 3, (O=Leary, Sills, Moore)].¾ The Court of Appeal reversed a judgment confirming an arbitration award in favor of the plaintiff and denying the defendants relief under Code of Civil Procedure section 473.¾ In a dispute involving violations of an association=s conditions, covenants and restrictions, the defendant property owners and the association agreed to nonbinding arbitration.¾ However, the retired judge issued a Abinding arbitration award and decision@.¾ In opposing a petition to confirm the arbitration award, the defendants asserted the arbitration was not binding.¾ The court decided the matter, relying on a letter from the arbitrator stating that it was a binding arbitration, and also finding that the defendants did not do anything to pursue any other remedies.¾

The court of appeal discussed the California Arbitration Act, the exclusive grounds for vacating a contractual arbitration award.¾ The court found that the trial court failed to fulfill its function of determining whether the arbitrator exceeded his powers by issuing a binding award after the parties agreed only to nonbinding arbitration.¾ The court found that the trial court could not rely on what the arbitrator stated, and that although in private arbitrations the parties impliedly agree that the arbitrator=s decision will be both binding and final, any such presumption was rebutted here by the parties= express written agreement that the arbitration would not be binding.¾ The court of appeal found the trial court improperly relied on the arbitrator=s characterization in making this determination.

The court also found that the conclusion that the defendants waived any issue as to a non-binding arbitration by failing to request a trial de novo was error.¾ Under section 1141.20, the right to request a trial de novo within 30 days applies to judicial arbitrations and not to private arbitrations.¾ Also, the defendants could not have waived the issue of whether the arbitration was binding by not raising it at the arbitration because the arbitrator did not characterize the arbitration as binding until after it was over, which could not be corrected during the arbitration itself.¾ The order confirming the arbitration award was vacated to allow the lower court to consider the party=s evidence on the issue of whether the arbitration was binding and the lower court was directed not to consider statements by the arbitrator.¾

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D.¾¾¾¾¾¾¾ Federal Law Does Not Preempt State Method Of Overtime Calculation Unless¾ State Method Produces Lower Rates.

Lujan v. Southern California Gas Company [Mar. 13, 2002, 2002 DJDAR 2979, ___ Cal.App.4th __, 2d App.Dist. Div. 4 (Hastings, Epstein, Curry)].¾ Summary judgment for the Labor Commissioner against Southern California Gas Company was reversed and the matter sent back to determine whether application of the compensation plan determined through the collective bargaining process resulted in a failure of the employer to pay the required premium over the regular rate of pay.¾

Southern California Gas Company meter readers had a contract through the collective bargaining process that provided compensation under a APay Per Route@ (PPR) program.¾ It provided the meter readers would be paid a flat daily rate for working routes designed with the expectation they would be finished within an eight hour period.¾ If the meter reader took more than eight hours to finish the route, overtime was paid according to a formula that divided the flat daily rate by the number of hours actually worked that day, and as a result there was no fixed overtime rate of pay for hours worked in excess of eight hours per day.¾

The state=s industrial welfare commission issued a wage order, 4-89, requiring employees be paid not less than one and one half times the Aregular rate of pay@for all hours worked in excess of eight hours in a day or more than 40 hours in a work week.¾ There is an exemption to this provision where the employee is covered by a collective bargaining agreement, if the agreement provides premium wage rights for overtime work and a cash wage rate of not less than one dollar per hour more than the minimum wage.¾

The state labor commissioner brought an action against the employer alleging the PPR calculation for overtime wages violated the state=s overtime law, and seeking unpaid overtime wages on behalf of the meter readers.¾ The employer asserted that the state action was preempted by federal labor laws, and that the PPR compensation program fell under a special exemption to the overtime pay laws because it was covered by a collective bargaining agreement.¾ The trial court found federal preemption did not exist, that the agency=s determination of its regulation, (including its conclusion that the employer violated the regulation) deserve great weight, and that Skyline Homes, Inc. v. Department of Industrial Relations (1985) 165 Cal.App.3d 239 governed the calculation of overtime wages.¾ Skyline held, among other things, that where state or local laws provide greater protection to an employee, they are interpreted to override the provisions of the FLSA.¾

On appeal, the court reversed, concluding that the state may set its own standards regarding the adequacy of overtime pay, as long as it does not fall below federal standards.¾ The issue was not how to resolve a dispute over interpretation of the PPR, but rather a legal question of whether the PPR complied with the state law.¾ In this case, the overtime compensation was calculated by the taking the daily rate, dividing it by the number of actual hours worked to determine the Aregular rate@ of compensation, and then one and one half times this rate is paid for hours worked in excess of eight.¾ The court found that this worked out to be the same calculation allowed under federal law.¾ The court further noted that an employer and a union could not bargain away an employee=s right under state wage statutes, or inject a federal question into an action that is purely a state law claim.¾

As to the collective bargaining exemption in the wage order, the court agreed that a court must differ to the respondent=s interpretation of its wage order in calculating the amount of regular pay.¾ The respondent=s interpretation was that the exemption provided a less exacting standard of overtime compliance for employers covered by a collective bargaining agreement, and that anything paid above the collected regular¾ hourly rate would qualify as a premium.¾ Thus, although the wage order would calculate regular pay by dividing a flat daily rate by eight, the employer calculates an hourly rate by dividing the daily figure by the number of hours worked, and would at times have an hourly rate below that of the wage order.¾ But once it is multiplied by 1.5, if it comes to a figure higher than the wage order=s regular pay calculation, it would be sufficient.¾ The court noted that at times, it might be possible for the calculations not to satisfy the wage order, and remanded the matter to determine whether or not the actual application of the PPR had ever resulted in a failure to pay a premium over the regular pay of $16.56 per hour.

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