Plaintiffs, non-exempt hourly dental professionals working at a state prison, sued the State for unpaid wages related to pre- and post-shift activities, including security procedures and travel time. The trial court sustained the State’s demurrer, finding that the federal Portal-to-Portal Act, incorporated into the parties’ MOU, barred such claims. Plaintiffs appealed.

The Court of Appeal reversed in part and remanded. It held that the trial court erred in resolving factual issues about the employees’ duties at the demurrer stage. Notably, the court relied on Stoetzl v. Department of Human Resources (2019) 7 Cal.5th 718 to hold that while an MOU might preclude Labor Code claims, it did not extinguish the employees’ independent contractual right to be paid for completed work. This right, the court explained, matures into a contractual obligation upon performance, allowing employees to pursue a breach of contract claim for unpaid wages. However, the court agreed with the State that Stoetzl barred plaintiffs’ claims under Lab. Code §§ 1182.11, 1182.12, and 1194. It also rejected plaintiffs’ claim under § 222, holding that the statute does not apply to public employees.

Full opinion

Plaintiff, a COO, reported potential FCA violations to his employer. He was later terminated for allegedly disclosing confidential information unrelated to those violations. He sued for FCA retaliation, breach of contract, and breach of implied covenant. The district court granted summary judgment for defendant on all claims, and plaintiff appealed.

On appeal, the Ninth Circuit reversed and remanded the FCA retaliation claim. It applied the McDonnell Douglas rather than Mt. Healthy framework, following sister circuits and Stilwell v. City of Williams (9th Cir. 2016) 831 F.3d 1234. It also applied the Moore test but not the Hopper investigating requirement, finding Plaintiff engaged in protected activity. The court rejected a heightened notice standard for compliance officers, finding that Plaintiff satisfied the FCA’s notice requirement. The Ninth Circuit also reversed and remanded the breach of contract and implied covenant claims, finding the district court failed to view the evidence in the light most favorable to Plaintiff.

Full opinion

Defendant terminated Plaintiff for cause in 2018, voiding his stock options. Plaintiff sued Defendant for breach of contract, breach of implied covenant, wrongful termination, retaliation, and conversion, alleging he was terminated in retaliation for “asserting his rights to his vested benefits.” The trial court dismissed Plaintiff’s tort claims, ruling that the voided stock options were not “wages,” but a jury found Defendant liable for breach of contract and awarded Plaintiff approximately $11.5 million. The court conditionally granted Defendant’s motions for JNOV and a new trial, contingent on Plaintiff accepting a $4.3 million remittitur. Plaintiff accepted, Defendant appealed, and Plaintiff cross-appealed.

On appeal, the court held that “under both California and Delaware law, damages for lost stock options in a breach of contract action may be measured from a date other than the date of breach based on equitable considerations.” It upheld the trial court’s remittitur, finding the jury verdict excessive. However, the court found the trial court erred in excluding damages for breach of a performance grant and entered a new judgment for $6.7 million.  Finally, the court affirmed dismissal of the tort claims, holding, per International Business Machines Corp. v. Bajorek (9th Cir. 1999) 191 F.3d 1033, 1039, that “stock options are not wages because they ‘are not’ ‘amounts.’”

Full opinion