June 21, 2024


Think Differently

California Supreme Court docket Retains Employee May well Sue Staffing Agency’s Shopper Even Immediately after Settling Same Claims Against Agency

July 1, 2022

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Decided June 30, 2022

Grande v. Eisenhower Professional medical Centre, S261247

Yesterday, the California Supreme Courtroom held that an staff who delivers an employment class motion in opposition to a staffing agency and executes a settlement arrangement releasing the agency and its agents may deliver a 2nd class action against the staffing agency’s customer premised on the similar violations.

Track record: Lynn Grande was assigned to do the job as a nurse at Eisenhower Health care Center by FlexCare, LLC, a short-term staffing company. Grande submitted a course motion against FlexCare, alleging that it underpaid its workers.  The get-togethers achieved a settlement and executed a launch of statements.

Eight months after the courtroom authorised the settlement and entered judgment, Grande submitted one more wage and hour course action—this time in opposition to Eisenhower.  Grande’s statements versus Eisenhower had been premised on the very same violations more than which she had sued FlexCare.

FlexCare moved to intervene in this observe-on circumstance, arguing that Grande was precluded from suing Eisenhower mainly because she experienced settled her statements versus FlexCare in the previously case.  The trial courtroom and the Fourth District Courtroom of Enchantment disagreed.  The Court of Enchantment held Grande was not precluded from suing Eisenhower for the reason that it was neither a produced occasion in the initially case nor in privity with FlexCare.  The courtroom expressly disagreed with the 2nd District’s decision in Castillo v. Glenair, Inc. (2018) 23 Cal.Application.5th 262, 266, which held that a class of workers could not “bring a lawsuit against a staffing enterprise, settle that lawsuit, and then bring equivalent statements in opposition to the business in which they had been placed to work.”

Challenge: May perhaps an employee convey an work class action from a staffing company, settle the case and launch the company and its agents from legal responsibility, and then bring a next class action based on the similar alleged violations from the staffing agency’s customer?

Court’s Keeping:

Indeed, on the specifics of this situation. The settlement settlement releasing FlexCare did not identify Eisenhower or if not advise that it was intended to incorporate Eisenhower. Nor was FlexCare in privity with Eisenhower, including for the reason that Eisenhower would not have been certain by an adverse judgment in the initial circumstance in opposition to FlexCare. As a consequence, Grande was not barred from asserting the very same promises towards Eisenhower in a 2nd circumstance.

While the launch in the settlement settlement amongst a nurse and her staffing agency did not consist of the medical center in which she labored, “future litigants can specify that their releases increase to staffing agency clients—if that result is intended.”

Main Justice Cantil-Sakauye, creating for the Court

What It Means:

  • The Court said that its determination as to the scope of the settlement settlement was “fact- and scenario-unique,” but also solid some doubt on “the broader notion that a shopper is an ‘agent’ of a staffing agency.”
  • In drafting settlement agreements, staffing companies and other companies need to consider particularly naming any related customer, or at least like “clients” amongst the releasees, as the Court’s view preserves employers’ means to “specify that their releases lengthen to staffing company clients—if that consequence is intended.”

The Court’s opinion is available below.

Gibson Dunn’s legal professionals are offered to help in addressing any questions you may well have relating to developments at the California Supreme Court. Be sure to feel totally free to speak to the following observe leaders:

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Associated Apply: Labor & Employment