18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 399 further proceedings consistent with Jacks. On remand, the trial court was tasked with deciding whether the City’s 2% charge, including both the 1% t initial term charge and the 1% surcharge, had a reasonable relationship to the value of the property interests transferred. Following a bench trial, the trial court entered judgment for the City. The trial court concluded that the 2% charge was a valid franchise fee under Proposition 218 and not a tax. Plaintiffs appealed the trial court’s ruling. Plaintiffs contended that the trial court erred by finding: (i) that the franchise fee included both the 1% initial term charge and the 1% surcharge; and (ii) that a reasonable relationship existed between the 2% charge and the value of the property interests transferred. Specifically Plaintiffs argued that the trial court erred in evaluating the 2% surcharge as a whole against Proposition 218 rather than separately analyzing the 1% surcharge incorporated into a higher electricity rate and the extra 1% surcharge on bills. The Court of Appeal affirmed the trial court’s judgement. The Court of Appeal concluded that Plaintiffs’ position was contrary to Jacks , which held that the fact that the 1% surcharge was placed on customers’ bills pursuant to the franchise agreement rather than a unilateral decision by the electric company does not alter the substance of the surcharge. The Court of Appeal reasoned that like the initial 1% charge, it was a payment made in exchange for a property interest that was needed to provide electricity to City residents. In sum the Court of Appeal found that Jacks stood for the proposition that valid fees do not become taxes simply because their cost is passed on to the ratepayers. Given this instruction, the Court of Appeal determined that the trial court appropriately analyzed the entire 2% charge for compliance with Proposition 218, finding that it bore a reasonable relationship to the value of the property interests transferred. For these reasons, the Court of Appeal affirmed the judgment of the trial court. Johnson, et al. v. Maxim Healthcare Services, 2021 Cal. App. LEXIS 594 (Cal. App. 4th Dist. July 21, 2021). Plaintiff, a former employee, filed a class action under the California Private Attorneys General Act of 2004 (“PAGA”) alleging that Defendant’s non-solicitation, non-disclosure, and non-competition agreement she had signed violated § 432.5 of the California Labor Code. The trial court sustained the employer’s demurrer to complaint. It found that the employee’s individual claim was time-barred and thus it subsequently dismissed the suit with prejudice. On appeal, the California Court of Appeal reversed the judgment. The Court of Appeal held that Plaintiff was an aggrieved employee with standing to pursue her PAGA claim, as she alleged that she was employed by the employer and that she personally suffered at least one violation of the California Labor Code violation on which the PAGA claim was based Id. at *7. The Court of Appeal noted that the fact that Plaintiff’s individual claim might be time-barred did not nullify the alleged Labor Code violations nor strip the employee of her standing to pursue PAGA remedies. Id . at *8. The Court of Appeal reasoned that because Plaintiff alleged that Defendant violated § 432.5 during the applicable statute of limitations, it could hold Defendant liable for penalties under the PAGA. Accordingly, the Court of Appeal ruled that the trial court erred in sustaining the demurrer, and therefore it reversed and remanded the trial court’s ruling. Jones, et al. v. UPS Supply Chain Solutions, 2021 Cal. App. Unpub. LEXIS 4358 (Cal. App. 1st Dist. July 1, 2021). Plaintiffs, a group of delivery drivers, filed an action alleging various state wage & hour violations. Defendants UPS Supply Chain Solutions, Inc. and United Parcel Service, Inc. filed a motion to compel arbitration of Plaintiffs’ claims. The trial court denied the motion, and on appeal, the California Court of Appeal affirmed the trial court’s ruling. Plaintiffs executed arbitration agreements that extended to all claims or controversies between the parties, and waived "any right to bring on behalf of persons other than myself, or to otherwise participate with other persons in, any class, collective, or representative action with respect to any claim covered by this arbitration provision." Id . at *2-3. The trial court found that Plaintiffs’ putative class action fell within a statutory exemption from the Federal Arbitration Act (“FAA”) for transportation workers engaged in interstate commerce. Defendants acknowledged that the FAA exempts from arbitration employment contracts workers engaged in interstate commerce, but asserted that Plaintiffs did not qualify for the exemption because "there is no evidence establishing that they crossed into California to make deliveries…” Id . at *2. Defendants submitted electronic records showing only deliveries made within Arizona, but which included numerous pick- ups from and deliveries to the Phoenix Sky Harbor Airport. Plaintiffs contended that they made deliveries to Defendants’ warehouses in San Francisco, California and downtown Los Angeles, California. The Court of Appeal found that the evidence suggested that Plaintiffs made deliveries from Arizona to multiple states including California, Texas, and New Mexico, and therefore the transportation worker exemption applied and Plaintiffs were not obliged to arbitrate. Further, Court of Appeal agreed with the trial court’s determination that Plaintiffs at least likely fell within the exemption even if they made only intrastate deliveries because they