18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 393 out” of participating in Solution Channel within the next 30 days, they would be automatically enrolled in the program. Plaintiffs opposed the motion to compel, arguing that Defendants failed to demonstrate the existence of valid arbitration agreements between the parties. The trial court denied the Defendants’ motion to compel. The trial court determined that no valid agreement to arbitrate existed because: (i) Plaintiffs did not impliedly assent to their enrollment into Solution Channel by continuing to work for Defendants and failing to opt-out of the program after receiving notice of its establishment; and (ii) the agreements to arbitrate were unsupported by consideration. The trial court emphasized that Plaintiffs could continue to be employed without agreeing to the arbitration agreement, and therefore it found an absence of acceptance and consideration. On appeal of Defendants to the California Court of Appeal challenging the trial court’s order, the Court of Appeal reversed the trial court’s order. The Court of Appeal held that the trial court erred in its findings that: (i) Plaintiffs did not impliedly assent to their enrollment into Solution Channel by continuing to work for Defendants and failing to opt- out of the program after receiving notice of its establishment; and (ii) the agreements to arbitrate were unsupported by consideration. Specifically, the Court of Appeal determined that because Plaintiffs did not opt- out within the 30-day period, the changes to the terms of their employment agreements took effect upon the expiration of that time period. At that point, the Court of Appeal concluded that Plaintiffs were enrolled in Solution Channel and, consequently, agreed to arbitrate their employment-related disputes under the program’s terms. Subsequently, Plaintiffs’ conduct of continuing to work for Defendants after their enrollment in the program constituted implied acceptance of the addition of an agreement to arbitrate as a new term of their employment contracts. Furthermore, the Court of Appeal opined that the trial court’s finding was also in error insofar as it ruled that the arbitration agreements were not supported by adequate consideration. The Court of Appeal determined that the parties’ mutual promises to forego a judicial determination and to arbitrate their disputes provided the necessary consideration. For these reasons, the Court of Appeal reversed the trial court’s order denying Defendant’s motion to compel arbitration. California Medical Association v. Aetna Health of California, 2021 Cal. App. LEXIS 357 (Cal. App. 2d Dist. April 28, 2021). Plaintiff, a professional organization that represents over 37,000 physicians throughout the state of California, brought a putative class action seeking injunctive relief. Plaintiff challenged Defendant’s policy of restricting or eliminating patient referrals by its in-network physicians to out-of-network physicians , alleging, among other things, that this policy v iolated California’s unfair competition law (“UCL”) because it unlawfully interfered with its member physicians’ exercise of their independent medical judgment and treatment of patients. The trial court granted Defendant’s motion for summary judgment on the basis that Plaintiff, as an association, lacked standing under the UCL because it was not directly injured by Defendant’s policy. On Plaintiff’s appeal, the California Court of Appeal affirmed the trial court’s judgment that Plaintiff failed to demonstrate a material factual dispute as to standing. The Court of Appeal concluded that summary judgment in favor of Defendant was proper because Plaintiff’s evidence that it had diverted substantial resources to assist its physician members who were injured by Defendant’s policy to restrict or eliminate patient referrals by its in- network physicians to out-of-network physicians did not create a material dispute of fact as to whether Plaintiff itself suffered an injury-in-fact and lost money or property. As such, the Court of Appeal affirmed the trial court’s grant of summary judgment in Defendant’s favor on that basis. While California case law authorities have permitted associations like Plaintiff to bring a representative action on behalf of their members and others under § 382 of the Code of Civil Procedure where such an action is justified by considerations of necessity, convenience, and justice, the Court of Appeal noted out that no California precedents have recognized representational standing under § 382 for UCL claims. The Court of Appeal opined that the law recognizing an association’s standing to bring a representative action developed many years before the legislature had passed Proposition 64 in 2004, which changed the requirements for standing to bring UCL claims. Proposition 64 amended the UCL to limit standing to bring a private enforcement action only to one who had suffered an injury- in-fact and had lost money or property as a result of the unfair competition. Moreover, in so ruling, the Court of Appeal was unpersuaded by the federal case law authorities cited in Plaintiff’s brief, concluding that it was not instructive in deciding the issue of an association’s standing to bring a representative action under the UCL in light of the fact that there was now current, binding California law that governed the issue of the requirements to establish UCL standing necessary to bring a representative action. For these reasons, the Court of Appeal affirmed the judgment of the trial court in favor of Defendant.