Up-to-date information for employers on topics and issues that may affect workplace operations. The posts are current as of the date of the posting.


by Jennifer Brown Shaw | The Daily Recorder | Jul 17, 2006

The California Supreme Court

decided several significant employment law cases since our last summary.

The Court’s opinions address a number of topics, from sexual harassment

to wage and hour violations, and include decisions applicable to public

and private sector employers. Several important employment law cases remain

on the Supreme Court’s docket. We summarize below the recently decided

cases and those that remain pending.


Carter v. California

Dept. of Veterans Affairs, 38 Cal.4th 914 (2006)

Carter was a nurse at a California veterans’ home. She claimed the

California Department of Veterans Affairs failed to take sufficient action

to end alleged sexual harassment by a resident. The trial court held the

employer could be liable for third-party harassment under the Fair Employment

and Housing Act (“FEHA”), based on amendments to the law passed

after the conduct occurred. The Court of Appeal reversed, holding that

the amendments could not be applied “retroactively.” The Supreme

Court unanimously disagreed with the Court of Appeal, remanding the case

because the amendments merely “clarified” the law existing

when the alleged harassment took place. Clarifications to existing laws

are applied “retroactively”; new statutes typically are not.

Lyle v. Warner Brothers

Television Productions, 38 Cal.4th 264 (2006)

Lyle was a writers’ assistant

who was assigned to work on the television show, “Friends.”

Working with the show’s writers, Lyle was exposed to various rude,

crude, and overtly sexual jokes, comments, and the like. Lyle claimed

a “hostile work environment” based on her female sex under

the FHEA. The Supreme Court upheld the trial court’s granting summary

judgment in favor of the defendants. The Court discussed the standard

for hostile environment claims and held that Lyle had not adduced evidence

demonstrating a triable issue of fact. The Court clarified that merely

offensive, coarse, or vulgar language does not in and of itself create


Reynolds v. Bement,

36 Cal. 4th 1075 (2005)

The Court held that individual

corporate employees/managers/officers cannot be held personally liable

as “employers” for unpaid wages. That does not mean, however,

such individuals could not be held liable for other wage-hour violations.

Smith v. Superior

Court (L’Oreal USA, Inc.), ___ Cal.4th ____ (2006)

Smith was employed for a single

assignment lasting one work day. The California Labor Code requires employers

to pay employees on the date employment is separated for any reason. However,

L’Oreal, the employer, did not pay Smith on the day she started

and ended her assignment, but rather waited several weeks. L’Oreal

argued the wage payment statute does not apply to an employee hired for

a one-day assignment. The Supreme Court analyzed the statute and held

that pursuant to the statute, Smith should have been paid on the date

of her assignment. This ruling may cause significant administrative problems

for employers who hire short-term workers.

Stephens v. County

of Tulare, ___ Cal.4th ____ (2006)

The definition of termination

came up again in the Stephens case. Stephens, a county employee, was assigned

“light duty” work after sustaining injury to a thumb. When

he experience pain and complained, his supervisor placed him on a leave

of absence. Stephens claimed the involuntary leave was tantamount to termination

of his employment, thereby entitling him to certain benefits under Government

Code section 31725. The Supreme Court decided that the supervisor’s

decision to place Stephens on a leave until he was able to work was not

a termination, and therefore section 31725 did not apply.

Yanowitz v. L’Oreal

USA, Inc., 36 Cal. 4th 1028 (2005)

Yanowitz was a sales manager

who refused to fire an employee who was not sufficiently “hot”

for L’Oreal’s management. After the refusal, Yanowitz’s

superiors criticized her and gave negative appraisals of her performance.

The Supreme Court’s ruling addressed several open issues in FEHA

retaliation cases. First, the Court defined an “adverse employment

action,” one of the elements of any retaliation claim. The Court

held that an adverse action can be anything that materially affects the

terms and conditions of employment. The Court also decided that adverse

actions can be the result of a series of actions over time, and that the

“continuing violation” doctrine can suspend the applicable

statute of limitations. The Court further ruled that even though Yanowitz

had not stated why she protested terminating the employee at issue, the

employer had sufficient notice that Yanowitz was engaging in protected

activity to satisfy the elements of a retaliation claim.



California Supreme Court has a number of employment law cases pending. These


  • Dore v. Arnold Worldwide,

    Inc. (whether an employer preserved its “at will” employment

    relationship by saying that employment could be terminated “at

    any time.”);

  • Gentry v. Superior Court

    (Circuit City Stores, Inc.) (whether an arbitration agreement prohibiting

    class actions is enforceable or unconscionable);

  • Green v. California

    (whether an employer must prove in a disability discrimination case

    under the FEHA that an employee cannot perform his or her essential

    job functions with or without accommodation);

  • Murphy v. Kenneth Cole

    Prods. (whether statutory remedies for meal period law violations

    are penalties or wages, thereby affecting the statute of limitations

    for such claims);

  • Gattuso v. Harte-Hanks

    Shoppers, Inc. (whether employers are permitted to pay

    additional wages rather than reimburse employees for expenses under

    California. Labor Code section 2802);

  • Lonicki v. Sutter Health

    (whether an employee able to perform a similar job for another employer

    may take protected medical leave under the California Family Rights

    Act); and

  • Ross v. RagingWire Telecommunications,

    Inc. (whether the FEHA requires accommodation of medical marijuana



The California Supreme Court

continues to shape California employment laws. The lower California courts,

Legislature, and agencies also contribute to keeping employment law practitioners

on their toes. Employers should ensure their counsel stay current on California

law developments.