Employment Cases Split California High Court

Daily Journal, August 27, 2008

By Laura Ernde
Daily Journal Staff Writer

Workplace Law Proves Fractious for Typically Unanimous Group of Justices

San Francisco - The justices of the California Supreme Court are a collegial bunch. In the term ending this month, 83 percent of the courts decisions were unanimous.

But take a look at the employment cases alone, and you'll see a much less harmonious court. Dissents popped up in four of the six employment cases decided in the past year.

Employment law experts and court watchers said they were not surprised to see frequent disagreements over issues like overtime pay and discrimination, which can be intensely emotional and political.

The outcome is especially crucial in a state that has blazed its own path in employment law rather than following federal rules, practitioners said.

"California is kind of a laboratory for the development of employee rights," said Fred Alvarez, a partner at Wilson Sonsini Goodrich & Rosati, who heads the firm's employment law litigation practice in Palo Alto. "It's part of our culture in a lot of ways in the employment field to march off our own drummer."

In the constant tug of war between employee rights and business interests, a moderate court has emerged, say lawyers on both sides of the debate.

"I think that the court has an overarching desire to be seen as a centrist court that doesn't blaze trails in employment law," said Sacramento attorney Greg Valenza, who represents employers. "I think they've tried to make incremental changes in the law in employment cases."

Some predictable alliances have emerged.

Justices Ming W. Chin, Marvin R. Baxter and carol A. Corrigan tend to side more often with business interests. Justices Joyce L. Kennard, Kathryn M. Werdegar and Carlos R. Moreno lean toward employee rights.

Chief Justice Ronald M. George plays the powerful and familiar role of swing vote.

Rich Frank, an employee-side lawyer with Cooley Godward Kronish's San Francisco office, noted that George has been in the majority of every employment decision since January 2007.

That's particularly interesting because when you look at the outcome of the cases it's a mixed outcome for the employers," Frank said. "It's almost evenly split."

When it comes to wage and hour disputes, the court has more often sided with employees.

Recent decisions have allowed employees to collect greater damages for violations of wage and hour law. Murphy v. Kenneth Cole Productions Inc., 40 Cal. 4th 1094 (2007).

The court has also made it easier for them to pursue claims through class actions rather than individual arbitration. Gentry v. Superior Court, 42 Cal. 4th 443 (2007)

But when it comes to interpreting employment discrimination law, employers have been more likely to come out ahead.

The high court absolved individual managers from liability for retaliation claims. Jones v. Lodge at Torrey Pines, 2008 DJDAR 3101.

A slim 4-3 majority put the burden on people with disabilities to prove that they were able to perform the jobs essential functions before they could sue for discrimination. Green v. State of California, 42 Cal. 4th 254

San Francisco employment lawyer Doug Dexter at Farella Braun + Martel said he views the court as less political and more analytical in its approach to employment law.

They're looking at laws and interpreting them in a literal sense and an intellectually honest sense and not necessarily focused on what the larger policy implications are going to be, he said.

With a first class plaintiffs bar constantly coming up with novel arguments, the court is never lacking for interesting new issues to resolve, Alvarez said.

They are top of the heap in terms of their imagination and skill so the court is always getting a strong and persuasive diet of how to be cutting edge about things, he said.

But it's difficult to predict whether the decisions break new ground or preserve the status quo.

A good example, Alvarez said, was the courts recent decision in Edwards v. Arthur Andersen, 2008 DJDAR 12286.

The court affirmed the states unique public policy against non-competition clauses in employment contracts, which is thought to have fueled California's economy.

But two justices dissented over another issue in the case dealing with whether an employer can ask an employee to release it from any and all claims.

Justices Kennard and Werdegar said the release was used to try to mislead employees into thinking they were not entitled to bring a lawsuit.

But the majority took the more conventional approach by approving the general language, saying that no matter what the release said, employees can't be forced to give up protections guaranteed by state law.

While the court can be hard to predict at times, it's not nearly as difficult as anticipating the next move of the U. S. Supreme Court, said Berkeley law professor Joseph Grodin.

Grodin, a former California Supreme Court justice, said the nine U.S. Supreme Court justices have formed loose alliances that have split the court in a number of different directions.

Plaintiffs' lawyers have noticed other differences in the two courts.

I'd say compared to the U.S. Supreme Court, the California Supreme Court in the last five years or so has been more employee-friendly and expanded the rights of employees, said James M. Finberg of Altshuler Berzon in San Francisco.

David A. Lowe, a plaintiff's lawyer and co-chair of the California Employment Lawyers Association Legislative Committee, said he has been impressed with the state courts recognition that many laws were designed to protect those who are more vulnerable.

The majority of the justices seem to take civil rights very seriously, said Lowe, a partner at Rudy, Exelrod & Zieff in San Francisco. If that's the legacy of the George Court, I think it would be something to be proud of.