California Supreme Court Hears Important Employment Law Cases
Yesterday the California Supreme Court heard oral argument in three employment cases: Roby v. McKesson HBOC, Schachter v. Citigroup, Inc., and Costco Wholesale Corp. v. Superior Court. The Roby case addresses the following issues: (1) can a supervisor’s management and personnel actions be considered in determining whether an employee has been subjected to hostile work environment harassment? and (2) may an appellate court determine the maximum constitutionally permissible award of punitive damages when it reduces a compensatory damage award, or must the appellate court remand the issue to the trial court for a new determination of punitive damages?
The Schachter case addresses the following issue: Does the forfeiture provision of a voluntary incentive compensation plan, which gives employees the option of using a portion of their earnings to purchase shares in the company’s stock below market price but provides that employees forfeit both the stock and the money used to purchase it if they resign or are terminated for cause within a two-year period, violate Labor Code sections 201 or 202? Our previous post on the Schachter case is here.
The Costco case addresses the following issues relating to application of the attorney-client privilege to advice provided by outside counsel to in-house counsel in a wage and hour misclassification action: (1) does the attorney-client privilege protect factual statements made by outside counsel in a legal memorandum to in-house counsel?and (2) is a trial court prohibited from conducting an in camera review of the legal memorandum to determine whether the attorney-client privilege applies? Our previous post on the Costco case is here.
Each of these three cases has important implications for many California employers. The California Supreme Court is expected to issue decisions in these cases in the next 90 days. We will continue to monitor the cases and post significant developments.