THIS MONTH IN LABOR AND EMPLOYMENT LAW HISTORY
December 7, 1976: The United State Supreme Court held in General Electric Co. v. Gilbert that exclusion of pregnancy from a disability plan was not gender discrimination because the distinction it drew was between pregnant women and “nonpregnant persons.” The decision led to enactment of The Pregnancy Discrimination Act of 1978.
December 27, 1946: Following a wave of post-World War II lawsuits for wages for preparatory activities, Representative Hoffman was reported to have drafted two amendments to the FLSA that were preparatory to passage of the Portal-to- Portal Act of 1947 (the subject of a new United State Supreme Court decision discussed below).
December 29, 1988: The California Supreme Court decides Foley v. Interactive Data Corporation, allowing employees to sue for breach of implied contracts but barring tort damages for breach of the covenant of good faith and fair dealing.
TOP FOUR NEWLY-PUBLISHED LABOR AND EMPLOYMENT CASES
Diego v. Pilgrim United Church of Christ (California Court of Appeal, November 21, 2014) 2014 DJDAR 15586. Held that discharge of an employee perceived to have reported an alleged violation of a statute or regulation to a government agency violates public policy, even if the employee did not actually make the report. Under Diego, perceived whistleblowers are protected from retaliatory discharge.
Integrity Staffing Solutions, Inc. v. Busk (United States Supreme Court, December 9, 2014) 2014 DJDAR 16194. The Supreme Court unanimously held the FLSA does not require warehouse employees be paid for 25 minutes a day allegedly spent clearing anti-theft security screenings at the end of each day. Results under California law may vary.
Aguilar v. ASARCO LLC (9th Circuit Court of Appeals, en banc, December 10, 2014) 2014 DJDAR 16273. This Case affirmed a Title VII award of $300,000 in punitive damages where only $1 nominal damages (and no compensatory damages) were awarded.
Garden Fresh Restaurant Corporation v. Superior Court (California Court of Appeal, November 17, 2014) 2014 DJDAR 15365. When an arbitration agreement is silent about whether arbitration may proceed as a class or representative action, and silent about whether the trial court or arbitrator decides this issue, the trial court must decide. This is an issue not yet resolved by the United State Supreme Court.
This month, Practice Tips uses three quotes to describe three pieces of advice employers should follow if they do not want to encourage employees to sue.
“People must not be humiliated; that is the main thing.” --Anton Chekhov
“Diplomacy is the art of telling plain truths without giving offense.” --Winston Churchill
“It is not what a lawyer tells me I may do; but what humanity, reason, and justice tell me I ought to do.”
The Source of this Article is Cited by: Labor and Employment Law Section of The State Bar of California – California Labor & Employment Law e News
No. E051769 12 C.D.O.S. 12625 [4th App. Dist.] (November 8, 2012)
Corporate officer could not use his license to operate as contractor in his individual capacity when the license was already use to qualify a corporation.
Twenty-Nine Palms Enterprises Corporation, a tribal corporation, hired Paul Bardos, doing business as Cadmus Construction Co., to perform a casino construction project. At that time, neither Bardos nor Cadmus had a contractor's license in their own name. Upon discovering that Cadmus did not hold its own license, Twenty-Nine Palms sued for disgorgement under Business & Professions Code section 7031 ("section 7031) of the entire amount it paid Bardos for the work.
Bardos argued that Cadmus was adequately licensed because it was operating under the contractor's license issued to Bardos Construction, Inc. (BCI). Bardos was the responsible managing officer of BCI. The trial court granted summary judgment in favor of Twenty-Nine Palms, finding that Cadmus did not have a contractor's license at the time it performed the construction work. Bardos appealed, and the court of appeal affirmed summary judgment.
As an initial matter, the court of appeal held that Twenty-Nine Palms’ status as a tribal entity did not render section 7031 inapplicable. The sovereign immunity defense is only available to the tribe and the tribal entities, and not to parties attempting to avoid liability to tribal entities.
The court also rejected Bardos' argument that the license issued to BCI allowed him to operate as a licensed contractor because he was the officer that held the license to qualify BCI. The problem with this argument, the court explained, was that BCI, as a corporation, was a separate legal entity from its officers and shareholders.
Business & Professions Code section 7059.1 prohibits a licensee from conducting business under more than one name for each license. BCI was already using the license at the time Bardos was doing the work for Twenty-Nine Palms. Thus, Bardot’s status as BCI's qualifying officer did not entitle either Bardos or Cadmus to operate under the license at that time. Furthermore, Cadmus did not "substantially comply" with section 7031's licensing requirement. Bardos knew at the time Cadmus entered into its contract with Palms that neither he nor Cadmus was licensed. He nonetheless made no effort to apply for a license until a few days before the project was completed. This could not be deemed substantial compliance.
No. D060849 12 C.D.O.S. 12848 [4th App. Dist.] (November 20, 2012)
Subcontractor could recover prevailing party contractual attorneys' fees incurred in defeating breach of contract claim, even though it lost on related claim for promissory estoppel based on prime contractor's reliance on its bid.
The prime contractor on a public construction project, Douglas E. Barnhart, Inc., sought bids for metal work, and CMC Fabricators, Inc. submitted a bid. Barnhart relied on CMC's bid in preparing its own bid for the project. Barnhart did not sign CMC's bid, but instead sent back a counterproposal. The entities never reached agreement, and Barnhart proceeded with a different subcontractor for the metal work.
Barnhart sued CMC for breach of contract and promissory estoppel. It sought recovery of the additional amount it had to pay a substitute contractor to perform the metal work. At trial, the court rejected Barnhart' s breach of contract claims, but awarded Barnhart recovery on its promissory estoppel claim. CMC sought recovery of its attorney fees under the potential contract with Barnhart, arguing that it was the prevailing party on the contract action and would have owed fees to Barnhart had it lost. The court denied the claim for fees because Barnhart had prevailed on the promissory estoppel claim and thus had achieved its objective.
The court of appeal reversed the order denying attorney fees. First, the court of appeal found that Barnhart did not prevail on its breach of contract claim. And having asserted a breach of contract claim, Barnhart assumed the risk of invoking the contract's attorney fee provision, rendering Barnhart potentially liable if it lost the breach of contract claim. Second, CMC was the prevailing party on the contract. Under Code Civil Procedure section 1717 ("section 1717"), the determination of the party prevailing on the contract, for purposes of an attorney fee award under the section, is to be made independently of the determination of the prevailing party in the overall action.
The court held that prevailing on the promissory estoppel claim did not constitute prevailing on the contract. Such a claim does not "involve" an agreement and is therefore not a claim "on a contract" under section 1717. Promissory estoppel, which is founded on equitable principles, is distinct from contract in that the promisee's justifiable and detrimental reliance on the promise is regarded as a substitute for the consideration required as an element of an enforceable contract. In addition, a promissory estoppel claim also lacks the essential element of a contract claim in the form of the parties' consent. Breach of contract and promissory estoppel claims therefore have been characterized as mutually exclusive.