2018 saw some major developments in employment law, particularly in California. The California Supreme Court embraced the ABC test for independent contractors in Dynamex, and rejected the de minimis doctrine for Labor Code claims in Troester. While 2019 has already brought legislative changes through the #metoo laws effective January 1, attention should also be on cases before the California Supreme Court. These cases may present new challenges for all employers, but particularly for media companies and employers doing business across state lines. The Court’s decisions in these cases have the potential to increase employers’ exposure to liability. We highlight some such cases here.
First, in Wilson v. Cable News Network, Inc., the California Supreme Court will decide whether an employer’s allegedly discriminatory and retaliatory motivation is relevant in ruling on an Anti-SLAPP motion. Here, CNN fired Wilson, a long-time producer, for plagiarism. When Wilson sued for discrimination and retaliation, CNN filed an Anti-SLAPP motion, asserting that its employment decisions are part and parcel of its editorial discretion and therefore its news reporting and free speech activities. CNN also argued that any alleged discriminatory motive is irrelevant for an Anti-SLAPP motion, the purpose of which is to dismiss complaints early on where the complaint was filed to silence free speech. The appellate court disagreed with CNN and held the acts that form the basis for Wilson’s claim are not CNN’s free speech activities, but its alleged discrimination, retaliation, and defamation, none of which are entitled to Anti-SLAPP protection. Employers, especially news and media companies, should be aware of this case as it may create a loophole for plaintiffs to file strategic lawsuits to circumvent Anti-SLAPP motions, resulting in more protracted and costlier litigation. Moreover, were the Court to adopt the lower court’s holding, this would create a new problem by way of encouraging plaintiffs seeking to silence employers’ speech.
The Supreme Court also will tackle two cases that come to it via an increasingly common path – through certification by the Ninth Circuit. Both cases address the extraterritorial reach of the California Labor Code to out-of-state employers. In Ward v. United Airlines, Inc., the Court is set to address whether Labor Code § 226, which governs wage statement requirements, applies to wage statements provided by an out-of-state employer to an employee who resides in California, receives pay in California, and pays California income tax on wages, but who does not principally work in California or in any other state. Oman v. Delta Air Lines Inc. asks a similar question, whether the requirements of Labor Code §§ 204 and 226 apply to an out of state employer whose employees seldom work in California and when they do, work in California for less than a day. The answers to these questions will have important implications for employers whose employees regularly cross state lines in and out of California to perform work.
Lastly, in Kim v. Reins Int’l California, Inc., the Court will decide whether a former employee may continue to pursue his or her Private Attorneys General Act (PAGA) claim after settling individual claims. The lower court found Kim lost standing to pursue a PAGA claim after settling his individual claims. In a victory for employers, the appellate court affirmed, reasoning that Kim was no longer an “aggrieved employee” under PAGA because he settled his individual claims against Reins. Litigants throughout California and beyond will watch Reins closely because if the Supreme Court affirms, employers will have another tool to try to limit the spread of PAGA claims. For further information on Reins, read our prior coverage here.
In years past, the opinions of the California Supreme Court have had substantial impact on the way in which employers engage with their employees, in some cases altering the playing field in a material way. The Court’s decisions in these cases may have a similar effect, presenting new potential liability and litigation for your company. All employers are advised to monitor these cases carefully.