18th Annual Workplace Class Action Report - 2022 Edition

394 Annual Workplace Class Action Litigation Report: 2022 Edition Castellanos, et al. v. State Of California, 2021 Cal. Super. LEXIS 7285 (Cal. Super. Ct. Aug. 20, 2020). Plaintiffs, a group of individuals and two unions, filed a petition for issuance of a writ of mandate compelling Defendants not to enforce any provisions of the Protect App-Based Drivers and Services Act (“Proposition 22”), which classified some app-based drivers as independent contractors. As a result, app-based drivers had been removed from participation in the worker’s compensation system, as presently codified, because it protects only employees, not independent contractors. Id . at *3. The Court agreed that Proposition 22 was unconstitutional because it infringed on the California Legislature’s power to set workers’ compensation laws. Under the California State Constitution, the Court observed that the Legislature has "plenary power, unlimited by any provision of this Constitution, to create, and enforce, a complete system of workers’ compensation." Id . at *6. The Court opined that the Constitution also provided that the Legislature may not act to amend or repeal an initiative statute without a subsequent vote of the people, which directly contradicted the previously addressed grant of “plenary power.” Id . at *4. The Court reasoned that if the Legislature’s authority was limited by an initiative statute, that authority was not “plenary” or “unlimited by any provision of the Constitution.” Id . at *5. The Court determined that the grant of power was not “plenary” if the Legislature’s power to include app-based drivers in the worker’s compensation program was limited by initiative statute, nor was it “unlimited by any provision of this Constitution” if it is limited by an initiative statute. Id . The Court concluded that the plain meaning of Article XIV, Section 4’s plenary-and-unlimited clause should govern over the more general limitation on amendment. The Court thus held that in order to proceed with the initiative statute, there must first be a constitutional amendment. The Court also opined that since the voters adopted Proposition 22, its provisions were to be severable, except if found that § 7467 was unconstitutional, then the entire Act should be struck. The Court concluded that Proposition 22 was unconstitutional, and thereby it granted Plaintiffs’ petition for a writ of mandamus. Citizens Of Humanity, et al. v. Ramirez, 2021 Cal. App. LEXIS 320 (Cal. App. 2d Dist. April 19, 2021). A retail employee brought a putative wage & hour class action against her employer. The wage & hour lawsuit settled for $50,000 after the employer filed a motion to strike the employee’s class claims and PAGA claims on the basis that she lacked standing to pursue them. After the claims were dismissed, Plaintiff, the employer, filed suit alleging malicious prosecution against Defendants, the employee and her attorney. Defendants moved to strike the action under California’s anti-SLAPP (“strategic lawsuit against public participation”) law. The trial court denied the anti-SLAPP motions on the basis that Plaintiff had established a prima facie showing of prevailing on its malicious prosecution cause of action. On Defendants’ appeal, the California Court of Appeal reversed the trial court’s order. With respect to an anti-SLAPP motion, the parties did not dispute whether Defendants had made a threshold showing that the challenged cause of action was one arising from protected activity in furtherance of Defendants’ right of petition or free speech under the United States or California Constitution in connection with a public issue. However, the parties disputed whether Plaintiff had demonstrated a probability of prevailing on its claim for malicious prosecution as required under the anti-SLAPP law. The Court of Appeal noted that an action for malicious prosecution has three required elements, including: (i) Defendants brought or continued to pursue a claim in the underlying action without objective probable cause, (ii) the claim was pursued by Defendants with subjective malice, and (iii) the underlying action was ultimately resolved in Plaintiff’s favor. Defendants argued on appeal that because the underlying wage & hour was not ultimately resolved in Plaintiff’s favor, its claim for malicious prosecution failed as a matter of law. The Court of Appeal agreed and held that because the underlying wage & hour prior was resolved by settlement, Plaintiff was unable to establish that the underlying action was terminated in its favor as a matter of law. The Court of Appeal rejected Plaintiff’s attempt to avoid this result by parsing the underlying complaint into two separate actions involving the employee’s individual claims and her class claims. Pointing to the disputed facts surrounding whether the class claims were encompassed by the settlement, Defendants argued that they had established a probability of success because the class claims themselves were terminated in its favor. The Court of Appeal was not persuaded by Plaintiff’s argument and concluded that the class claims could not be considered separately and were not severable from the individual claims for the purposes of the favorable termination analysis. Thus, the Court of Appeal concluded that the entire action terminated by settlement – a termination which was not favorable to Plaintiff. Thus, the Court of Appeal reversed the trial court’s orders denying the anti- SLAPP motions. Because the trial court did not rule on Defendants’ anti-SLAPP motion with respect to Plaintiff’s second cause of action seeking sanctions against Defendants under § 128.5 of the Code of Civil Procedure, for