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Unfair Business Practice?

In our California and Los Angeles discrimination, wrongful termination, harassment, whistle blowing practice, we often add a cause of action for violations of California’s Unfair Business Practices Act. This is found at Bus & Pro Code Section 17200, et seq. Two recent decisions have given added life to the use of this section in our employment law cases, even though both of the cases we’ll talk about now are not employment law cases.

In Rose vs. Bank of America, 57 Cal 4th 390 (2013), the California Supreme Court found that a claim of unlawful business practices could be based on a violation of a federal statute, even though the US Congress has repealed a provision of that law which authorized private rights of action. Even though the new law repeated private enforcement of Truth in Savings, Congress clarified that state law consistent with this Truth in Savings new law are not superseded. Thus, the federal law could serve as a legal predicate for a UBP claim.

In the second UBP decision (same day; same conservative Justice Carol Corrigan – reminds us of Justice Robets’ upholding the Affordable Care Act), the highest court of this state, in Zhang vs. Superior Court, 57 Ca l4th 364 (2013), held that insurance companies found to have violated the Unfair Insurance Practices Act could also be found liable under the more general UBP. ┬áThe similarity between Rose and Zhang is that in Zhang there was also no private right of action under the Unfair Insurance Practices Act.

We are proud ;to support our Consumer Attorney of California members who have contributed amicus briefs to these types of cases. We are watching closely the outcome of Patterson vs. Domino’s Pizza (NO S204543), in which the issue to be brief is whether a franchiser is liabile vicariously for tortuous conduct by a supervising employee at a local franchise. Traditionally, franchisers insulate themselves from wage and hour, or other employer-employee issues. Currently, in our state-wide discrimination practice and especially here at Los Angeles employment lawyer, we have about 10% of our cases dealing with franchisees. There are numerous policy-based reasons to hold franchisors liable for wage and hour violations of franchisees. These include the “ability to make whole”, the absolute control franchisors have (usually through assuring “quality standards) over franchisees and other reasons.