Recent notable developments include:
California Supreme Court Negates Jury Trial Waivers: The state’s high court has concluded broadly that contractual waivers of the right to a jury trial are not enforceable in California courts, because the controlling state statutes permit jury trial to be waived by a party only after suit has been filed, and then only by following the statutory specifications (California Code of Civil Procedure Section 631). The Supreme Court’s decision is founded on the high priority of jury trial rights under the California Constitution, Article I, Section 16. The court’s sweeping decision arises in a case involving sophisticated commercial parties, and by its terms, invalidates predispute jury trial waivers in any contract whether commercial or consumer. Importantly, as noted by our colleague Jeff Smith in Philadelphia, the decision expressly does not impair the validity of contractual mandatory arbitration provisions, which of course eliminate court trials altogether whether by judge or jury. The court reasons that mandatory arbitration is specifically authorized by statute, and also unburdens the court system of handling cases, neither of which is true for a jury trial waiver. (Grafton Partners LP v. Superior Court, California Supreme Court No. 123344, filed August 4, 2005)
Non-California Counsel for California Arbitrations: The California legislature has passed a permanent extension of existing interim rules whereby (1) a party to a labor arbitration may choose to be represented in the arbitration by a non-lawyer, and (2) a party in other arbitration proceedings in California may be represented by corporate counsel or other legal counsel not licensed in California, so long as the party’s non-California-licensed legal representative files and serves a specific disclosure certificate. These are exceptions to more general requirements for State Bar licensing of lawyers practicing in California. (AB 415, enrolled September 8, 2005 and awaiting Governor’s action)
Easement Access Rights: A federal District Court’s written opinion finds that a franchised cable operator has a private right of action under Section 621 of the federal Cable Act, to sue a property owner for access to “dedicated” utility easements. The case, also reported by Kagan Research, follows the better line of split authority to find a private right of action under Section 621. It also finds that the developer’s initial recordation of a town-approved subdivision plan showing utility easements, was a sufficient “dedication” of property for utility use to ripen easement access rights for a cable operator under Section 621. (RCN Telecom Services v. DeLuca Enterprises, E.D. Pa. 04-264, July 12, 2005)
California Public Utilities Commission Seconds FCC Broadband Consumer Choice Policy: The California PUC has adopted a nonbinding Policy Statement which reflects the FCC’s August, 2005 adoption of a similar nonbinding policy statement regarding broadband deployment. The FCC consumer choice principles as adopted in the CPUC statement, provide that “consumers are entitled to: access the lawful Internet content of their choice, run applications and services of their choice, subject to the needs of law enforcement, connect their choice of legal devices that do not harm the network; [and] competition among network providers, application and service providers, and content providers”. In announcing its policy statement, the FCC did not adopt any rules, but stated that it will incorporate these principles into its ongoing policymaking activities, and further observed that “All of these principles are subject to reasonable network management.” (Policy Statement, FCC 05-151, August 5, 2005). The CPUC adopted similar language in its statement of policy, but presumably due to the current lack of jurisdiction over broadband Internet service, the CPUC’s Internet policy is couched in recitals grounded in CPUC jurisdiction over regulated telephone service. Accordingly, the CPUC’s Policy Statement specifically casts aspersions on “requiring consumers to pay for separate plain old telephone service as a condition of accessing high-speed Internet Service”, and goes on to note that “nothing in this resolution is intended to advocate prohibiting the bundling of services over high-speed Internet facilities or requiring the low frequency portion of the loop to be unbundled or offered as a network element.” As such, the CPUC’s Policy Statement is not expected to have any immediate impact on cable broadband/Internet service. Meanwhile, the CPUC has obtained permission from the FCC to implement “technology-specific overlays” for telephone area codes in California. This will permit the use of a new area code for all newly-assigned phone numbers for new-technology phone service, principally VOIP phone numbers in California. Thus, regardless of the traditional telephone area code in a given region, VOIP and other new-technology phones can get their own area code (to begin with, there will be one for Northern California and one for Southern California).
Employer/Employee Pitfalls: Recent notable case developments include:
Non-Sexual, Discriminatory Harassment: The federal Ninth Circuit Court of Appeals for California and other western states has ruled that harassing conduct in the workplace can be actionable on a gender discrimination basis, even if not sexual in nature, where the women are simply harassed more than men at the receiving end of a supervisor’s bullying, intimidation, and abuse. (EEOC v. National Education Association, Ninth Circuit No. 04-35041, September 2, 2005)
Let Mamdouh Use His Real Name: The Ninth Circuit also ruled that an employee had a valid claim for racial discrimination based on the employer’s refusal to allow him to use his own, characteristically ethnic name, on the job and in dealings with customers. Here, Mamdouh El-Hakem was told by his employer not to use his Arabic given name, Mamdouh, but rather to call himself “Manny”. After the employer declined the employee’s repeated request to use his real name instead, and continued to identify him as Manny, the employee then suggested using his last name, “Hakem” which the employer then attempted to substitute with “Hank”. After a jury decided that the employer’s conduct was offensive and discriminatory, the Ninth Circuit upheld the jury’s award on grounds of prohibited racial discrimination. Mamdouh El-Hakem v. BJY Inc., Ninth Circuit No. 04-35063, July 21, 2005).
Prescription-Marijuana Drug Test Failure Justifies Termination: According to the California Court of Appeal, where an employer has a drug-free workplace policy and requires a drug test in conjunction with hiring, it is not liable for wrongful termination from an employee’s drug test revealing marijuana use, even if the employee produces a doctor’s recommendation for marijuana usage under California’s Compassionate Use Act. The distinction here is that the marijuana usage is illegal and may be included in the employer’s drug-free workplace policy, regardless of a doctor’s individual usage recommendation. (Gary Ross v. Ragingwire Telecommunications, Inc., California Court of Appeal No. C043392, September 7, 2005)