Few firms attract as many challenging employment defense cases. Our representations include:

Systemic Discrimination and Pay Equity Actions

We have help companies navigate sensitive pattern-or-practice claims for sexual harassment, gender and racial discrimination, and pay equity. Our representations include:

• Activision Blizzard in aggressively litigating California Civil Rights Department (CRD) claims of systemic sexual harassment and gender discrimination. We persuaded CRD to drop its pattern-and-practice claims of harassment, limit the period for individual claims and settle for approximately half of what comparable companies facing similar claims had paid.
• A major sports equipment company in advising senior leadership on CRD’s ongoing investigation into claims of an alleged pervasive culture of gender discrimination and harassment.
• Southern California Edison in obtaining voluntary dismissal of a putative class action alleging racial discrimination against African American employees. Through depositions of the named plaintiffs and statistical evidence, MTO demonstrated there was no pattern or practice of discrimination, and that class certification would not be appropriate. Plaintiffs dismissed the lawsuit after the initial phase of discovery.
• NBCUniversal in achieving a very favorable settlement in a series of long-running putative class actions alleging that all the major TV networks, studios, and talent agencies engaged in a pattern and practice of discriminating against older television writers.

Harassment, Discrimination, Retaliation and Wrongful Termination

We frequently lead litigation and confidential investigations involving allegations of workplace misconduct, counsel clients on compliance matters, recommend policy changes, and help develop communication strategies with respect to these challenging issues. Our representations include:

• A technology startup in preventing disruptions to a critical capital raising process. A senior executive terminated for non-performance asserted whistle-blower retaliation claims, alleging that the start-up had improperly shared user data in violation of California law. We negotiated a favorable confidential settlement that prevented any public allegations of improper data privacy practices and allowed the company’s capital raise to proceed unimpeded.
• University of California in:
  • Persuading a federal court to abstain from interfering with sexual-harassment disciplinary proceedings against a former dean of the UC Berkeley School of Law.
  • Defeating, on summary judgement, a whistle blower retaliation and wrongful termination suit brought by a former senior administrator who alleged he was terminated for identifying health and safety issues in clinical laboratories of the UCLA Health pathology department.
• Morgan Stanley Smith Barney in:
  • Obtaining dismissal, without further investigation, of an EEOC complaint brought by a former employee alleging discrimination and harassment.
  • Defeating challenges in multiple venues to an arbitrator’s decision against an employee alleging religious discrimination and whistleblower retaliation.
• A specialty retailer in an internal investigation of alleged sexual abuse of a minor employee by a high-level field manager.

Employee Classification

We have been at the forefront of employee misclassification matters even before California’s AB 5 created new opportunities for independent contractors to claim they are entitled to employee benefits. Our representations include:

• Lyft in actions brought in California by the California Attorney General, several city attorneys, the California Labor Commissioner and private plaintiffs and in Massachusetts by the Massachusetts Attorney General alleging that rideshare drivers are misclassified as independent contractors. We resolved similar suits brought by private plaintiffs in New York, Massachusetts and Washington, DC, on favorable terms.
• Instacart in using strategic enforcement of the company’s arbitration agreement, and an anticipated change of venue motion, to obtain dismissal of a proposed class action based on misclassification claims.
• Handy Technologies, a subsidiary of Angi, Inc., in resolving a lawsuit claiming the company misclassified tens of thousands of its “Pros” in California as independent contractors. The settlement with the district attorneys of San Francisco and Los Angeles County permits Handy to maintain its business model with some modest changes to its app.

Wage and Hour Litigation

We have handled numerous class and representative actions alleging California and federal wage-and-hour law violations, winning our clients dismissals, de-certifications and other precedent-setting verdicts, including:

• See’s Candies in using a fact-gathering campaign to demonstrate that break policies were lawful when a statistical analysis of employee timecards suggested otherwise.
• Carrington Mortgage Services in defeating class certification in a proposed class action alleging that 11,000 employees were not properly paid for overtime work.
• GardaWorld in obtaining a ruling that federal law preempts California’s meal and rest period laws for armored car drivers. The ruling helped settle a similar matter in Washington.
• 99 Cents Only Stores in defeating class certification in a wage-and-hour class action for alleged off-the-clock work arising from store security policies.
• Cornerstone Building Brand in dismissing, or resolving on favorable terms, two class actions and multiple individual actions claiming meal and rest period violations and off-the-clock claims.
• Merrill Lynch in settling a nationwide class action covering more than 21,000 financial advisors, setting the standard for such settlements throughout the industry.

California Private Attorneys General Act (PAGA)

Originally enacted to help the state regulate its underground economy, PAGA allows employees to sue on behalf of others for almost any alleged Labor Code violation, no matter how technical in nature, creating new challenges for employers. In this climate, we have successfully applied existing employee agreements to compel many matters to arbitration and have defeated or vastly narrowed PAGA claims for lack of manageability. Our deep experience with PAGA litigation includes:

• 99 Cents Only Stores in resolving a PAGA action involving over 30,000 employees for just $289,000 after causing the plaintiffs to abandon most of their claims through aggressive motion practice.
• Martin Luther King, Jr., Community Hospital in a PAGA and class action over payment for time spent in required pre-shift COVID-19 screenings. We mediated the matter to a very favorable settlement.
• Multiple major retailers in so-called “suitable seating” cases, all of which were resolved at various stages at extraordinary discounts – some for less than a penny on the dollar – compared to similar defendants.

Employee Mobility and Trade Secrets

We have performed substantial work in the employee mobility space, advising companies on their rights to protect their intellectual property and executives on their rights to change jobs within confidentiality-driven industries. Our experience includes:

• Applied Materials, Inc. in federal litigation and a civil lawsuit against multiple parties, including former executives who conspired to misappropriate Applied trade secrets.
• Intel Corporation in obtaining a temporary restraining order against a former employee who allegedly stole trade secrets before leaving for a competitor.
• A high-level technology executive in multi-forum litigation concerning the executive’s move to a California employer from an out-of-state rival.
• Amgen in advising on restrictive employment covenants and their enforceability.

Case Studies

We take an innovative and aggressive approach to employment litigation, helping our clients overcome broad challenges:

Activision Blizzard: Aggressive Litigation Ends CRD Claims of Systemic Harassment

Munger, Tolles & Olson represented Activision Blizzard in defending the company and two subsidiaries in a government action brought by the California Civil Rights Department (CRD) alleging systemic sexual harassment and gender discrimination. Our aggressive litigation strategy persuaded CRD to drop its pattern-and-practice claims of sexual harassment, limit the period for individual claims, and settle for approximately half of what comparable companies facing similar claims had paid.

MTO was hired in early 2022 as co-counsel in this July 2021 enforcement action. Faced with a rush to litigation over efforts at conciliation, we established that CRD’s claims for past sex discrimination in pay, assignments, and promotions; sexual harassment; failure to prevent harassment; and retaliation on behalf of female employees were subject to the same statute of limitations as other Fair Employment and Housing Act claims, not an unlimited period as CRD had contended. We also moved for summary adjudication on the ground that the pay equity claims were demonstrably without merit and convinced CRD to drop the systemic harassment claim.

In December 2023, the matter resolved through a consent decree for just $54 million, compared to a $100 million settlement CRD had reached on similar claims against another gaming company.

Media Coverage: California Drops Sexual Harassment Suit in $54 Million Settlement With Activision

99 Cents Only Stores: Defeating Class Certification for Off-the-Clock Claims

Munger, Tolles & Olson persuaded the Superior Court of Riverside County to deny class certification in an action alleging that 99 Cents Only Stores implemented security policies that forced employees to remain in stores after clocking out and during meal periods. Our team demonstrated that there was no set off-the-clock policy. The court agreed and denied certification, distinguishing this matter from similar cases that have been certified across the industry.

The plaintiff appealed and a divided California Court of Appeal reversed based on a technical error in an underlying evidentiary motion. On remand, we once again defeated class certification. Plaintiff’s counsel sought to pursue the same claims under California’s Private Attorneys General Act (PAGA), but we obtained a ruling staying the case pending the appeal of the certification order, cementing the notion that if the class claims were unmanageable this could also undermine the PAGA claims.

Contact:

Katherine M. Forster

Malcolm A. Heinicke