In September 2018, Governor Jerry Brown signed a series of bills aimed at drastically reshaping California’s approach to claims of discrimination and harassment amidst the “#MeToo” Movement. Among the legislation is Senate Bill 1300 which clarifies and expands employee rights under the California Fair Employment and Housing Act (“FEHA”). SB 1300, which was met with both opposition and support, became effective January 1, 2019. In addition to Senate Bill 1300, Gov. Brown also signed into law a series of bills on issues relating to workplace harassment, gender equality and human trafficking.

CALIFORNIA SENATE BILL 1300: HEIGHTENED EXPOSURE FOR EMPLOYERS

SB 1300 intends to close loopholes in the law that discourage or prevent victims from speaking out, and allow employers to avoid sexual harassment and discrimination laws and leave employees vulnerable to sexual harassment at work. In an attempt to aid these efforts, SB 1300 provides the following enhancements, further described below: 1) a new “single occurrence” standard for sexual harassment cases; 2) increases the challenges of recovering litigation costs for defendants; 3) potentially holds employers liable for third-party harassment; 4) prohibits release of both claims and non-disparagement agreements; and 5) provides for workplace accommodation and bystander training.

“SINGLE OCCURRENCE” STANDARD

One highly significant implication of SB 1300 is that it now makes a single instance of sexually harassing conduct a potentially triable sexual harassment claim by statute. Under FEHA, action was required to be so “severe or pervasive” so as to create a hostile work environment before it was actionable. However, the term “severe or pervasive” was subjective, leaving room for interpretation as to what conduct would be significantly severe or pervasive to support a claim under the existing law. For example, in Brooks v. City of San Mateo, 229 F.3d 917 (9th Cir. 2000), the Ninth Circuit Court of Appeals found that an employee touching another employee’s chest under her sweater was not significant enough to rise to the level of “severe or pervasive,” and, thus, granted the employer’s motion for summary judgment.

SB 1300 narrows the definition of “severe or pervasive” by clarifying that a single incident of harassing conduct is sufficient to create a triable issue, so long as the conduct limited the employee’s work performance or created a hostile work environment. The Legislation specifically rejects the court’s holding in Brooks and states that the case opinion shall not be used in determining what kind of conduct is sufficiently severe or pervasive to constitute a violation of the FEHA.

Of significance to litigation resulting from employment claims, SB 1300 affirms the court’s opinion in Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4th 243. In Nazir, the Plaintiff filed a lawsuit against his former employer, United Airlines, and his former supervisor (“Defendants”). Defendants filed a motion for summary judgment/summary adjudication, seeking adjudication of 44 issues. The appellate court found that hostile work environment cases involve issues that are “not determinable on paper.” SB 1300’s reference to the finding in the Nazir case that employment issues are too complex for motions for summary judgment may be a threat to the validity of future motions for summary judgment in employment law cases which has been a common and successful defense tactic. Continue Reading California Enacts Legislation to Combat Discrimination and Harassment

Recently, a team of attorneys from MG+M successfully obtained a dismissal of all claims against their client, based on the lack of personal jurisdiction.  The case was Howell v. Asbestos Corporation, pending in Los Angeles County Superior Court before the coordinating asbestos judge, the Honorable Steven J. Kleifield.  In his decision dismissing the claims, Judge Kleifield applied the stringent personal jurisdiction standards recently set forth in Bristol-Meyers Squibb Co. v. Superior Court of California 137 S. Ct. 1773 (2017).

 

In Bristol-Meyers, the United States Supreme court examined whether a state court could exercise personal jurisdiction over the claims of non-resident plaintiffs against a non-resident corporate defendant for injuries occurring out of the forum state.  Id. at 1778  Specifically, a group of plaintiffs sued Bristol-Myers Squibb (Bristol) in a California court for injuries sustained after ingesting a drug manufactured and supplied by Bristol.  Many of the plaintiffs were not from California. Bristol was incorporated in Delaware with its principal place of business in New York; however, it did have some connections with California, as it sold its drug within the state.

 

Ultimately, the Court ruled that California courts could not exercise specific personal jurisdiction over Bristol with respect to any plaintiffs who did not reside in California, because any conduct giving rise to the non-resident plaintiffs’ claims occurred outside of California. The Court noted that specific jurisdiction necessitates “an affiliation between the forum and underlying controversy, principally, [an] activity or an occurrence that takes place in the forum state.”  Id. at 1781.  Thus, because the complaint did not allege any acts or occurrences in California that specifically resulted in injury, the Court ruled that California could not exercise personal jurisdiction over the claims against Bristol.

 

In the Howell v. Asbestos Corporation case decided last week, the plaintiffs alleged that Mr. Howell developed malignant epithelial mesothelioma as a result of exposure to various asbestos-containing products. Although the plaintiff did reside in California for a short period of time, the vast majority of the plaintiff’s alleged exposure to asbestos occurred in the state of Texas. On behalf of one of the defendants, attorneys from MG+M argued that California courts lacked personal jurisdiction over our client pursuant to the standard set forth in Bristol-Meyers. Specifically, MG+M attorneys argued the plaintiff’s claims did not relate to any contacts that the defendant had with the state of California. For example, the defendant was not incorporated in California, did not have its principal place of business in California, and had less than 1 percent of employees residing in California, meaning there was no general jurisdiction. Additionally, the plaintiff’s alleged injury from the defendant’s product occurred outside of the state of California, meaning there was no specific jurisdiction. Ultimately, Judge Kleifield applied the Bristol-Meyers standard and held that because the plaintiffs’ claims did not bear a substantial connection to the non-resident defendant’s forum contacts, the exercise of personal jurisdiction was not appropriate.

 

 

The Future of Bristol-Meyers

 

Since the decision in Bristol-Meyers, corporate defendants are raising more personal jurisdiction challenges and achieving greater success. The Bristol-Meyers standard for personal jurisdiction has fundamentally changed the rules governing where corporate defendants can be sued, limiting plaintiffs’ lawyers’ ability to select favorable forums in which to file claims (i.e. forum shopping).  To establish specific jurisdiction, plaintiffs’ lawyers now must plead specific facts that show a connection between their client’s claims and the forum in which they seek adjudication.

A California appellate court recently ruled that Tinder’s age-based pricing strategy violated the state’s Unruh Civil Rights Act, which broadly outlaws discrimination based on sex, race, sexual orientation, age, and other classes. California’s Second District Court of Appeal in Los Angeles reversed the trial court’s dismissal of a class action brought by a putative group of customers over 30 years of age, who claim Tinder improperly charged them more for a premium service than it did users in the 18-29 age range.

This case, which has drawn a great deal of publicity, may appear to signal the beginning of a judicial push against age-based price differences, but the implications outside California are likely limited.

 

In March 2015, the free dating service switched to a “freemium” pricing model. Users could still join Tinder without cost, but for a fee, they could upgrade their membership to Tinder Plus and receive additional features, including the ability to undo mistaken swipes or expand their geographic filter for potential matches. For this membership upgrade, users over 30 paid a $20 subscription fee, while users under 30 paid only $14.99 (or $9.99, depending on any promotions in effect).

 

Tinder claimed that before setting the price, it conducted market research that showed that users under 30 were more likely to be “budget constrained” and were less likely to pay an increased fee. The named plaintiffs (one of whom previously sued a women-only networking event to allow the inclusion of men) argued that this stated basis failed to justify what amounted to a surcharge on older customers, some of whom might actually have had less disposable cash than younger users.

 

The court found that, under the Unruh Civil Rights Act, Tinder’s stated basis failed to justify what amounted to age discrimination. The court acknowledged that while this practice might make business sense, it violated the spirit of California’s law, which treats people equally unless the legislature provides an explicit basis to do otherwise (as it has for discounts for elderly persons and minor children). The court found no such legislative basis for young adults generally.

 

Many other products lend themselves well to different pricing tiers like the one challenged in the Tinder case: software licenses, content subscriptions, club memberships, etc. This scrutiny of Tinder’s pricing suggests that potential plaintiffs may scrutinize any pricing benefitting a non-elderly or minor age group. However, because the age-based claim that will now proceed in California is cutting-edge and largely untested, the full impact of this ruling remains to be seen. In several states (California, Maryland, Pennsylvania, and Wisconsin), courts have found that ladies’ nights violate state discrimination laws, but have not clearly addressed age-based pricing in a similar context.  Regardless, the case law in California and elsewhere will continue to develop. For example, it remains an open question whether student discounts would pass the Appeal Court’s “legislative-findings” standard as applied in the Tinder case.

 

 

A group of companies that advertised job opportunities through Facebook’s ad-serving platform discriminated against older members of the applicant pool, claims a proposed class action filed in the U.S. District Court for the Northern District of California. This filing suggests potential liability for any employer that posts jobs via ads that target recipients based on demographic metadata.

 

As Facebook’s roughly two-billion active users view, like, and share content, they give Facebook concrete information about their preferences and behaviors. Facebook’s ad platform leverages this data by allowing advertisers to reach the users most likely to find their ads relevant. Because Facebook also collects information on its users’ demographic factors, such as  age, race, and gender, critics note a potential for discriminatory ad targeting. In a December 20th filing, a proposed class of older job-seekers on Facebook argued that this discriminatory potential came to fruition when a group of employers (including Amazon, Cox, and T-Mobile) used an age filtering feature for their job postings to target younger cohorts and screen out older ones in violation of the Age Discrimination Employment Act (ADEA).

 

Largely in response to concerns about the opacity of Facebook’s ad-targeting, Facebook offers a feature on each ad that allows users to determine “Why am I seeing this ad?” Based on job postings like the one above, class members claim they were screened off from job postings that reached younger Facebook users. Since this filing, Facebook, which was not named a defendant, commented in response to this suit that its ads could be part of a broader media campaign by hiring employers, and that targeting is a permissible part of a diversified hiring strategy. Facebook further noted that its ads are no different from TV and magazine ads, which inherently reach different demographics by virtue of their viewer and subscriber bases.

 

Several important implications from this filing:

 

  • Targeting may not equal discrimination, but it can get you sued.

 

The defendant employers likely share Facebook’s view—that targeting is not per se discrimination. Whether or not this argument prevails, this filing shows that applicants scrutinize potential discrimination in posting criteria as well as in the hiring decision. The plaintiffs argue that Facebook ads are so ubiquitous and pervasive that being screened off from those ads is to be effectively eliminated from the pool. Courts will have to decide whether or not targeting gives rise to ADEA liability, but before the question can be settled, employers accused of targeting will be dragged into expensive, broad-ranging suits like this one if their postings facially preference a certain age.

 

  • This is bigger than Facebook postings.

 

Facebook is not the only platform with targeted ads. A 12/20/17 ProPublica and New York Times report highlighting potentially discriminatory employment ads found that Google’s AdSense and LinkedIn ads had the same age-filtering capability (LinkedIn since eliminated this function). Going forward, postings through these and other, smaller ad-serving platforms can expect the same scrutiny by potential plaintiffs and their lawyers. The proposed class presently includes the Communications Workers of America, an international union representing 700,000 workers in telecom, cable, IT, media, education, and public service sectors, but the groups affected by these targeted online ads putatively include job seekers and employers in every conceivable industry.

 

  • This age filter was just the one the plaintiffs could see—the next frontiers of litigation are the ones we can’t yet see.

 

This suit focuses on an overt age filter, one that is visible to the applicant-user. The direct connection between the targeting factor and the impermissible criteria (age) presents an ideal argument for the plaintiffs’ lawyers, i.e.: where the defendants chose to click on an age range to target, their intent to discriminate based on age can be inferred. The immediate result of this filing will likely be the removal of age-filtering options (following LinkedIn’s example), but this will not end the inquiry into targeted job postings. Ad-serving platforms have a wealth of data that gives them a subtler capacity to discriminate, and plaintiffs will dig deeper into the nuances of Facebook’s and other algorithms to uncover more sophisticated discrimination, like using permissible targeting factors as a proxy for impermissible ones.

 

The diversity of the data collected by Facebook creates the ability to use other factors as a proxy for age. For example, if a tech company sought to preference millennial applicants and exclude older ones, it might target users who liked, viewed, and shared content about fidget spinners, vape pens, and avocado toast (or any number of factors that correlate strongly with millennial status), rather than flagging its intent by selecting the 18-38 age range. The age-filtering effect on who receives the ads might be the same, but the intent would be harder to discern. Ads could use proxies to target factors other than age, such as race, gender, or sexual orientation, which by their nature would be more likely to use coded methods than overt ones. The basis for these “proxy-factor” claims requires an understanding of an ad-serving platform’s targeting algorithm. If this class action proceeds to discovery, the key struggle will be between the plaintiffs’ press to lay bare the criteria of this algorithm and Facebook’s push to protect its and its advertisers’ proprietary information. The stakes in this struggle are the viability of future claims along these lines.

 

In the meantime, employers posting jobs online should avoid applying overt age filters to targeted ads on platforms like Facebook. Other sites with embedded ads may use similar functionalities, so be sure to double check what you’ve selected before posting.

In the first case of its kind to go to trial, a jury recently returned a defense verdict against a plaintiff who claimed that exposure to Johnson & Johnson’s Baby Powder caused her to develop mesothelioma.

The plaintiff, Tina Herford, filed suit in the Los Angeles County Superior Court and alleged that her exposure to asbestiform fibers, through the inhalation of Johnson & Johnson’s Baby Powder, caused her to develop mesothelioma. In seeking 24 million dollars in damages, Ms. Herford alleged that Johnson & Johnson was aware that its talcum-based products, and specifically its baby powder, were contaminated with asbestos, and that the company concealed this information from the public for approximately 100 years.

Johnson & Johnson presented expert testimony from an oncologist that the proximate cause of Ms. Herford’s mesothelioma was her exposure to radiation from treatments for an unrelated, prior cancer. Johnson & Johnson also denied that its talcum-based products ever contained talc contaminated with asbestos, and stated that Johnson & Johnson complies fully with FDA regulations and standards regarding its baby powder and other products, as well as industry standards established by the Personal Care Products Council (formerly the Cosmetic Toiletries Fragrance Association) for testing crude talc.

After two days of deliberations following a trial that lasted approximately four weeks, a Pasadena, CA jury returned with a verdict for Johnson & Johnson and its co-defendant, Imerys Talc America Inc. The jury rejected the Plaintiffs’ allegations that Imerys had supplied and that Johnson & Johnson sold talc which was contaminated with asbestos. The jury found that J&J did not negligently design or sell its talc products, that the talc product did not fail to perform as safely as a reasonable consumer would have expected, that the talc product was not defective, and that Johnson & Johnson did not fail to warn of any potential risks, “known or knowable based on general scientific knowledge at time of sale.”  As a result, the jury never reached the issue of causation.

The Herford verdict comes in the wake of two rulings which reversed plaintiff verdicts in cases in which plaintiffs had alleged that Johnson & Johnson’s Baby Powder had caused ovarian cancer: Echeverria v. Johnson & Johnson, JCCP4872, Superior Court of Los Angeles, in which a $417M verdict was overturned; and Fox v. Johnson & Johnson, ED104580, Missouri Court of Appeals, Eastern District, where a $72-million verdict against Johnson & Johnson was thrown out.

There are currently more than 5,500 talc-related claims pending in state and federal courts in multiple jurisdictions throughout the United States. The Herford verdict is a reminder that reliable scientific evidence and facts, rather than rumors and rushed judgment, should decide these cases.