Mastagni Holstedt Ranked #1 Litigation Firm by Sacramento Business Journal

The Sacramento Business Journal ranked Mastagni Holstedt the #1 litigation law firm.  The list ranks the top twenty-five law firms in Sacramento metro by number of litigators.

According to Mastagni Holstedt Founder, David P. Mastagni, "We are very pleased to have the growth and success of our litigation practices recognized in this way.  As the firm grows in Southern California, it is important to us to remain the leader in Sacramento litigating on behalf of employees, public safety labor associations, and individual plaintiffs, as well as class and mass actions."

Employers Can be Sued for Invading Employees' Privacy

In Ignat v. Yum Brands, Inc. (March 18, 2013) Case No. G046343, the Fourth District Court of Appeal ruled employees can sue when their employers publicly disclose private facts about them, even if just verbally.  The case started when Melissa Ignat, a Yum Brands employee, returned to work after an absence to learn that her employer had revealed to her co-workers that she suffered from bipolar disorder.  She filed a lawsuit, alleging public disclosure of private facts.

The case is especially significant because the Court of Appeal abolished the requirement that disclosure happened in a document.  The Court decided there was no good reason for the "document requirement" and recognized that verbal disclosures can be just as harmful and written ones.  Since the requirement served no legitimate purpose, the Court allowed Ms. Ignat to sue her employer for verbally disclosing her condition to her co-workers.

Anti-SLAPP: New California Appellate Decision Reinforces the Need to Exhaust Administrative Remedies

In Nesson v. Northern Inyo County Local Hospital District, (4th Dist., Div 2, March 6, 2012) Case No. SICVCV1049815, the California Court of Appeal affirmed the trial court’s grant of the hospital’s anti-SLAPP motion and held that (1) the trial court properly found that all causes of action arose from alleged actions and conduct by the hospital during medical peer review that qualify as official proceedings under the anti-SLAPP statute; (2) all causes of action were barred due to the plaintiff's failure to exhaust his administrative and judicial remedies before filing suit; and (3) even if the plaintiff had exhausted his remedies, he failed to meet his burden to establish a probability he would prevail on any of his claims.

Plaintiff John Nesson, a radiologist, sued defendant Northern Inyo County Local Hospital District (hospital) after the medical executive committee (MEC) summarily suspended his medical staff privileges and the Hospital terminated his contract to provide radiology services because the hospital deemed that it would be impossible for Nesson to comply with the requirements of his contract with the hospital without the medical staff privileges. Nesson filed a complaint against the hospital for breach of contract, breach of the covenant of good faith and fair dealing, violation of Health and Safety Code section 1278.5, violation of the Unruh Civil Rights Act, and violation of the Fair Employment and Housing Act. In response, the hospital filed a special motion to strike pursuant to the Code of Civil Procedure section 425.16 (hereinafter, “the anti-SLAPP statute”). The Legislature enacted the anti-SLAPP statute to provide a procedural remedy to dispose of lawsuits that are brought to chill the valid exercise of constitutional rights.

The anti-SLAPP statute establishes a two-step procedure. First, the defendant is required to show that the cause of action arises from protected activity, i.e., activity by the defendant in furtherance of his constitutional right of petition or free speech. Statements and activity made in connection with an “official proceeding authorized by law” fall within the scope of the first prong of anti-SLAPP. In this case, the court held that the adverse employment actions were protected because the termination of employment and privileges arose from the hospital’s peer review process, which is an official proceeding required by a comprehensive statutory scheme and subject to review by the courts in administrative mandamus proceedings.

Second, if the defendant meets the initial burden, then the burden shifts to plaintiff to demonstrate a reasonable probability of prevailing on the merits of his cause of action. The court emphasized that a plaintiff, who has failed to exhaust his administrative and judicial remedies, cannot prove a probability of prevailing on any claim, irrespective of how it is labeled. More specifically the court outlined specific steps that a physician, who is a victim of faulty medical peer review, must take to rectify the situation prior to filing a lawsuit. First, the physician must fully exhaust his internal hospital administrative remedies. Second, if the physician has fully exhausted his administrative remedies at the hospital but has failed to overturn the hospital’s peer review negative disciplinary action against him, the physician is required to petition for issuance of a writ of mandamus under Code of Civil Procedure section 1094.5. Only after the physician has obtained a writ of mandamus setting aside the hospital’s discipline of him, may the aggrieved physician file a civil lawsuit asserting state law claims against the hospital and its associated defendants. Here, the court held Nesson’s claims are barred because he failed to exhaust his administrative and judicial remedies. He did not request a timely hearing as required by the hospital bylaws; refused to cooperate with the evaluations requested by the peer review committee; refused to cooperate with the investigation undertaken by the medical staff; and did not file a petition for writ of mandamus to set aside the hospital’s adverse actions.

Ninth Circuit Revives the Employee Friendly, Burden Shifting Standard Known as the McDonnell Douglas Test to Age Discrimination in Employment Act (ADEA) Summary Judgment Motions

With 11 percent-high unemployment rate in California an increasing number of older workers are being laid off and are competing for jobs with younger applicants.  In this economic climate, with the age-bias stereotypes that some older workers already confront, it is not surprising that the number of age discrimination complaints being filed is at a record high. However, the road from filing a complaint with the Equal Employment Opportunity Commission (EEOC) to winning a case is not easy under the Age Discrimination in Employment Act (ADEA).

The Age Discrimination in Employment Act protects individuals who are 40 years of age or older from employment discrimination based on age. Under the ADEA, it is unlawful to discriminate against a person because of his/her age with respect to any term, condition, or privilege of employment, including hiring, firing, promotion, layoff, compensation, benefits, job assignments, and training.  It has always been the plaintiff’s burden to prove discriminatory treatment in an ADEA claim.  Numerous frameworks have been established by the U.S. Supreme Court for proving discriminatory treatment.

Some of these frameworks are employee friendly, such as the McDonnell Douglas burden shifting framework. Under the McDonnell Douglas burden shifting framework, a plaintiff would first have to establish a prima facie case of discrimination. If successful, the burden of production shifts to the employer to articulate a legitimate non-discriminatory reason for its action. It is then the plaintiff’s task to demonstrate that the employer’s justification is merely a pretext for behavior actually motivated by discrimination. The McDonnell Douglas framework was initially applied to a Title VII mixed motive employment discrimination case. Since its inception in 1973, many federal courts adopted the framework to employment discrimination claims brought under other federal laws, including the ADEA.

Other frameworks make it tougher for plaintiffs to prevail, such as the “but for” test.  Under the “but for” test, a plaintiff must show by a preponderance of the evidence that the employer would not have acted that way it did but for the employee’s age. Under this test, the employer does not need to show that it would have made the same decision regardless of age.

In 2009, the U.S. Supreme Court in Gross v. FBL Financial Services, Inc., 557 U.S. 167 (2009), rejected the application of the employee friendly McDonnell Douglas framework to the ADEA and instead applied the “but-for” test. This decision was a victory for employers because the “but for” standard of causation is a far more stringent requirement than the mixed motive standard used in most discrimination cases.

Last week, with the Ninth Circuit’s decision in Shelley v. Geren, No. 10-35014 (9th Cir. Jan. 12, 2012), the pendulum began to slowly swing back to the employees’ side. The Ninth Circuit read Gross narrowly to apply only to cases that had already progressed to trial. The Court overturned the District Court’s decision to apply the employer friendly, strict “but-for” test to a motion for summary judgment in an ADEA claim. Instead, the Ninth Circuit held that in a mixed motive case, an employee friendly, burden-shifting test applies to a motion for summary judgment in an ADEA claim.

As a result, the McDonnell Douglas test, an employee friendly burden shifting standard, applies in the summary judgment phase and the Gross test, a strict “but for” standard, is left for the trial phase. Even though a small victory, this legal proof structure is a tool that will assist plaintiffs at the summary judgment stage so that they can have their day in court.