California Employment Law Notes - July 2011

Class Of 1.5 Million Female Wal-Mart Employees Was Improperly Certified

Wal-Mart Stores, Inc. v. Dukes, 564 U.S. ___, 2011 WL 2437013 (2011)

The United States Supreme Court held that this class of as many as 1.5 million current and former female Wal-Mart employees was improperly certified by the lower court. The three lead plaintiffs claimed they were discriminated against on the basis of their gender and that Wal-Mart's policy of providing deference to local managers' subjective pay and promotion decisions satisfied the commonality test for certifying a class action under Fed. R. Civ. P. 23(a)(2). Plaintiffs sought injunctive and declaratory relief, punitive damages and backpay for the class members. In a 5-to-4 majority opinion, the Court rejected plaintiffs' showing of commonality, including the fact that they submitted only 120 affidavits (one for every 12,500 class members) purportedly evidencing gender discrimination. In the second part of the opinion, the Court unanimously held that plaintiffs' claims for backpay were improperly certified under Fed. R. Civ. P. 23(b)(2) because the monetary relief was not incidental to the injunctive or declaratory relief sought.

Arizona Law Requiring Use Of E-Verify Is Upheld

Chamber of Commerce v. Whiting, 563 U.S. ___, 131 S. Ct. 1968 (2011)

In 1996, Congress created E-Verify, which is "an internet-based system that allows an employer to verify an employee's work-authorization status." In 2007, Arizona enacted the Legal Arizona Workers Act, which allows Arizona to suspend or revoke the licenses necessary to do business in the state if an employer knowingly or intentionally employs an unauthorized alien. Among other things, the Arizona law also requires that "every employer, after hiring an employee, shall verify the employment eligibility of the employee" by using E-Verify. In this case, the Chamber of Commerce challenged the Arizona law on the ground that it is expressly and impliedly preempted by federal immigration law, but the Supreme Court rejected those claims, upholding the statute.

U.S. Court Has Jurisdiction Over Argentinean Employees' Claims Against Mercedes-Benz Argentina

Bauman v. Daimler Chrysler Corp., 2011 WL 1879210 (9th Cir. 2011)

In this case, 22 Argentinian residents (including a Chilean national) sued DaimlerChrysler Aktiengesellschaft ("DCAG") in federal court in California, alleging that one of DCAG's subsidiaries, Mercedes-Benz Argentina ("MBA"), collaborated with state security forces to kidnap, detain, torture and kill plaintiffs and their relatives during Argentina's "Dirty War" in the 1970s. (Some of the plaintiffs are former employees of MBA.) In an opinion by Judge Reinhardt, the Ninth Circuit held that the district court has personal jurisdiction in California over DCAG through the contacts of its subsidiary and agent, Mercedes-Benz USA, in view of the "interest of California in adjudicating important questions of human rights...." See also McCollum v. California Dep't of Corrections and Rehabilitation, 2011 WL 2138221 (9th Cir. 2011) (court has no jurisdiction over Wiccan chaplain's claim that he should be eligible for employment in the paid-chaplaincy program).

Employee Was Not Sexually Harassed By His Male Supervisor, But Could Proceed With Retaliation Claim

Kelley v. The Conco Cos., 196 Cal. App. 4th 191 (2011)

Patrick Kelley, an apprentice ironworker, complained to his employer, Conco, that he had been subjected to a "barrage of sexually demeaning comments and gestures by his male supervisor" (David Seamen). After Kelley's union suspended him from its apprenticeship program, he was not rehired by Conco. Kelley sued for sexual harassment and retaliation in violation of the Fair Employment and Housing Act. The trial court granted summary...