September | 2016 | Chapman Glucksman

The Ongoing Debate Concerning Automobile Service Advisors’ Rights to Overtime Wages

Sep 30 2016

By: David A. Napper and Alexandra R. Rambis
September 30, 2016

Are automobile service agents exempt from the Fair Labor Standard Act’s (“FLSA”) overtime requirements? Although the United States Supreme Court has remanded the case back to the Ninth Circuit to interpret the statute without deference to the Department of Labor’s decision, one thing is certain now: the answer will have significant implications for automobile dealerships.

In Navarro v. Encino Motorcars, LLC (2016) 136 S. Ct. 2117, service advisors brought an action against the automobile dealership where they were employed, alleging that their employer was required by the FLSA to pay them overtime wages. The dealership argued that the position and duties of a service advisor brought the plaintiffs within an exemption to the FLSA provisions, which exempts employees engaged in selling or servicing automobiles from overtime wages. Indeed, the FLSA exemption, codified as 29 U.S.C. §213(b)(10)(A), exempts “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles.”

Proof or It Did Not Happen: California Court of Appeal Rules on Electronic Signature Authentication

Sep 30 2016

By: Ashley Verdon and Neil Eddington
September 30, 2016

If you belong to one of the ever-increasing number of businesses using electronic signatures, then it might be time to review your authentication security procedures in place. As electronic signatures become the norm in conducting business, California courts are busy with cases challenging their enforceability. Recently, in Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, the Second District Court of Appeal ruled that an employer sufficiently authenticated an employee’s electronic signature to an arbitration agreement. In doing so, the court offered some clarity as to what evidence is necessary to enforce an electronic signature under the Uniform Electronic Transmissions Act (“UETA”). (Cal. Civ. Code §1633.)

Pokémon Go: Green Light for Future Litigation

Sep 30 2016

By: Zachary P. Marks
September 30, 2016

Though it debuted to the public just two months ago, Pokémon Go, the latest gaming craze to sweep the nation, broke mobile app download records within one week of its release and achieved more daily active users than any other game on the market. The game allows users to see animated creatures, known as Pokémon, on their cell phones while the user traverses the real world, with the goal being to “catch” as many Pokémon as possible. The viral phenomena has already led to numerous claims and violations across the nation, with some bizarre examples to include the following:

UPDATE – McMillin Albany LLC v. Superior Court

Sep 30 2016

By: Richard H Glucksman and David A. Napper September 30, 2016

The matter has been fully briefed and the construction industry is one step closer to receiving the California Supreme Court’s highly anticipated decision regarding McMillin Albany LLC v. Superior Court (2015) 239 Cal.App.4th 1132. The Supreme Court will address the split of authority presented by the Fifth Appellate District Court’s holding in McMillin Albany, which outright rejected the Fourth Appellate District Court’s holding in Liberty Mutual Insurance Co. v. Brookfield Crystal Cove LLC (2013) 219 Cal.App.4th 98. The issue is whether the Right to Repair Act (SB800) is the exclusive remedy for all defect claims arising out of new residential construction sold on or after January 1, 2013. Oral argument is still pending, and CGDRB will continue to closely monitor the progress of this case. Stay tuned.

Failure to Maintain Equipment “Integrally Related” to Medical Diagnosis or Treatment Resulting in an Injury is Professional Negligence Under MICRA and Therefore Subject to a One Year Statute of Limitations

Sep 30 2016

By: Kacey R. Riccomini
September 30, 2016

Recently, in Flores v. Presbyterian Intercommunity Hospital (2016) 63 Cal.4th 75, the California Supreme Court clarified whether and when the general negligence statute of limitations or, alternatively, the Medical Injury Compensation Reform Act’s (“MICRA”) special statute of limitations, applies to health care providers. Generally, a two-year statute of limitations for general negligence applies to personal injury actions. (Code Civ. Proc. §335.1.) However, under MICRA, claims for professional negligence against health care providers must be brought within the earlier of (1) “three years after the date of injury,” or (2) “one year after the plaintiff discovers, or…should have discovered, the injury.” (Code Civ. Proc. §340.5.)

In Flores, the plaintiff was injured when one of the rails on her hospital bed collapsed. The rail had been raised per the doctor’s orders following a medical assessment of her condition. Almost two years later, Flores sued the hospital, claiming that it negligently failed to inspect and maintain the equipment. The hospital, Presbyterian Intercommunity Hospital (“PIH”), sought to dismiss the claim by way of a demurrer, arguing that the claim was barred by §340.5’s one-year statute of limitations since Flores knew about her injury when she fell out of her hospital bed over a year before filing suit. Flores, on the other hand, argued that PIH’s conduct was ordinary negligence, subject to the two-year statute of limitations under §335.1. The trial court agreed with PIH, and sustained the demurrer without leave to amend.

UPDATE – Court Rejects Uber’s Proposed $100 Million Settlement

Sep 30 2016

By: Chelsea L. Zwart
September 30, 2016

In May 2016, Chapman Glucksman Dean Roeb & Barger published an article entitled, “$100 Million Uber Settlement Maintains Classification of Drivers as Independent Contractors,” which discussed a potential $100 million settlement related to a class-action reclassification suit against the on-demand driver service, Uber, brought on behalf of its drivers. The settlement, if approved by the Court, would maintain classification of the drivers as independent contractors rather than employees, resulting in significant future savings to Uber.

The plaintiffs and the California Labor and Workforce Development Agency estimated that the Private Attorneys General Act (“PAGA”) portion of the class action could result in civil penalties of over $1 billion for violations of the California Labor Code. However, the proposed settlement only allocated approximately $1 million to the PAGA claim. On August 18, 2016, Judge Edward Chen of the United States District Court for the Northern District of California issued an order rejecting the proposed settlement, stating that it “is not fair, adequate, and reasonable,” particularly given that the proposed settlement of the PAGA claim was only “.1% of its estimated full worth.”

Judge Chen commented that he expects his order to be appealed, and thus we will continue to monitor the case and provide updates as developments unfold.

Courts of Appeal are Reining in Ambiguous Settlement Offers

Sep 30 2016

By: Craig A. Roeb and Heather M. Patrick
Published by the Daily Journal

California Code of Civil Procedure Section 998 establishes a procedure to shift costs if a party fails to accept a reasonable pre-trial settlement offer. The statute has generally been considered an effective tool to force parties’ hands to settle by encouraging resolution and avoiding needless litigation and trials. Barba v. Perez, 166 Cal. App. 4th (2008). However, recent case law demonstrates that they must be carefully planned and composed, or else risk judicial nullification. Download Full Article

Complex Civil Litigation Program and its Expansion to San Bernardino County

Sep 30 2016

By: Richard H. Glucksman and David A. Napper
September 30, 2016

Complex Civil Litigation Programs have been utilized in California for over fifteen (15) years. Complex cases require more intensive judicial management, and include claims such as construction defects, mass torts, class actions, antitrust, securities claims, and toxic torts. The Presiding Judge in a department dedicated to managing highly complex cases is tasked with providing exceptional and individualized judicial management, expedited resolution of complex issues, and cost and resource efficiencies.

The creation of the department is the result of increased levels of funding received by the Court. With its creation of a Complex Civil Court system, San Bernardino joins numerous other counties throughout California – including, but not limited to: Alameda, Contra Costa, Los Angeles, Orange, Riverside, San Francisco, and Santa Clara – which already handle complex civil matters. San Bernardino Superior Court is the most recent Court to implement a Complex Litigation Department, effective September 6, 2016.

Top Dollar for the White Collar: Obama Administration Increases Salary Thresholds for White Collar Overtime Exemptions

Sep 30 2016

By: Ashley Verdon and Neil Eddington
September 30, 2016

With a regulation sure to invite both praise and condemnation, the Obama Administration announced new salary thresholds for the Fair Labor Standard Act’s (“FLSA”) overtime exemptions. The new thresholds will bring overtime eligibility to millions of previously-exempted white collar workers. Under the new guidelines, executive, administrative, and professional employees earning $47,476 per year or less will be entitled to overtime pay, doubling the previous federal threshold of $23,660.

Viability of Contractor’s Express Indemnity Claims are Not Dependent on Allegations In Underlying Third Party Actions

Sep 30 2016

By: Chelsea L. Zwart
September 30, 2016

On August 16, 2016, the First District California Court of Appeal held in Aluma Systems Concrete Construction of California v. Nibbi Bros. Inc. (2016) 2 Cal.App. 5th 620 that a general contractor’s demurrer to a subcontractor’s indemnity claim was erroneously sustained because (1) the allegations of underlying third-party lawsuits were not determinative of liability and (2) the subcontractor’s underlying claim for a worker’s compensation offset did not obviate the subcontractor’s indemnity claim.

Archive - September 2016