California Employment Updates and Minimal Wage Raises by County


In Grande v. Eisenhower Medical Heartthe California Supreme Court docket allowed an worker who sued and settled its case in opposition to a staffing company to maneuver ahead with a second lawsuit in opposition to the staffing company’s consumer (a hospital) as a result of (i) the settlement settlement with the staffing company didn’t explicitly launch the hospital; (ii) an company relationship didn’t exist between the hospital and the staffing company such that the hospital would come underneath the phrases of the settlement settlement; and (iii) the hospital was not in privity with the staffing company such that ideas of declare preclusion would apply.


FlexCare LLC (FlexCare) is a staffing company that provides non permanent workers to numerous entities all through the State of California. One among its shoppers was Eisenhower Medical Heart (Eisenhower). FlexCare and Eisenhower had a staffing settlement underneath which FlexCare would maintain “unique and complete obligation because the employer” and would preserve an obligation to make sure compliance with wage and hour legal guidelines. FlexCare additionally agreed to indemnify Eisenhower for sure obligations regarding this staffing association. In 2012, FlexCare assigned Lynn Grande, a nurse, to work at Eisenhower.

A putative class motion was later filed in opposition to FlexCare alleging Labor Code violations at services for which it provided non permanent employees. Nonetheless, Eisenhower was not a named defendant on this lawsuit. The events entered right into a settlement in opposition to the “Launched Events,” that included each FlexCare and its brokers, however didn’t point out Eisenhower by title.


After consummation of the FlexCare settlement, Grande filed a putative class motion in opposition to Eisenhower based mostly on alleged wage and hour violations associated to all nonexempt workers of the hospital positioned by any staffing company (not simply FlexCare). Eisenhower asserted the affirmative protection of declare preclusion, arguing that each one rights associated to the alleged violations had been extinguished by the settlement with FlexCare. FlexCare filed a criticism in intervention, agreeing that the declare ought to be precluded and that Eisenhower was entitled to the good thing about the discharge underneath FlexCare’s settlement. The decrease courtroom held a bench trial on the discharge and declare preclusion. The courtroom held that the discharge couldn’t moderately be construed to increase to Eisenhower and that Eisenhower was not in privity with the staffing company, extinguishing any protection of declare preclusion. Eisenhower filed a petition for writ of mandate. The Court docket of Enchantment denied the petition for writ of mandate concluding that declare preclusion was inappropriate as a result of Eisenhower was not in privity with FlexCare.


On overview, the California Supreme Court docket first thought-about whether or not an company relationship existed between Eisenhower and FlexCare. FlexCare’s settlement launched the events and their brokers. The Court docket affirmed the trial courtroom’s discovering that FlexCare’s settlement didn’t lengthen to Eisenhower. Along with Eisenhower not being named within the launch, there was no discovering of company. Company requires a big degree of management, which the Court docket decided will not be inherently established in a possible joint employment relationship between a staffing company and its shoppers. As a result of there was no degree of management enough to create an company relationship, Eisenhower was not coated by FlexCare’s launch.

The Court docket additionally discovered that Eisenhower was not entitled to judgment in its favor underneath declare preclusion, noting that the affirmative protection would require Eisenhower, which was not a celebration within the authentic swimsuit, to have been in privity with FlexCare. Privateness “require[es] the sharing of ‘an identification or neighborhood of curiosity,’ with ‘sufficient illustration’ of that curiosity within the first swimsuit, and circumstances such that the nonparty ‘ought to moderately have anticipated to be certain’ by the primary swimsuit.” DKN Holdings LLC v. Faerber, 61 Cal.4th 813, 826 (2015). A nonparty alleging to be in privity will need to have an curiosity so just like the celebration’s curiosity that the celebration acted because the nonparty’s digital consultant within the preliminary lawsuit. id. at 826.

Right here, had Eisenhower been a celebration to the primary lawsuit, it might need tried to shift duty to FlexCare, which FlexCare wouldn’t have supported. Their pursuits have been subsequently not so inherently aligned as to determine privity. Moreover, Eisenhower wouldn’t have been certain by an antagonistic judgment within the first swimsuit, which involved all workers of FlexCare positioned at any location inside California.

Eisenhower additionally argued that it was entitled to say preclusion as a result of the staffing company agreed to indemnify Eisenhower. Nonetheless, FlexCare was not sued within the first motion in its capability because the indemnitor. Eisenhower additionally tried to argue that this second swimsuit was completely by-product of the primary and that declare preclusion ought to apply for that motive. Nonetheless, the Court docket held that joint and a number of other legal responsibility doesn’t create privilege or make a declare by-product. Moreover, the factual overlap between the 2 lawsuits additionally didn’t robotically set up by-product legal responsibility.


Make clear Settlements and Releases. Defendants ought to clearly establish who’s launched of their settlement agreements. Staffing corporations can’t assume that their shoppers are brokers for functions of together with their shoppers in a settlement. Shoppers of staffing corporations can’t assume that indemnification will embrace subsequent lawsuits on the identical or related causes of motion.


As of July 1, 2022 a number of California jurisdictions raised their native minimal wage. Please see beneath for the brand new minimal wage charges and hyperlinks to related websites:

We acknowledge the contributions to this publication from our summer season affiliate Katy Ramos

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