Recent Employment Law Decisions

California Courts of Appeal

The Labor Code means what it says when it holds “other person[s]” responsible for wage theft. An individual who causes a violation of minimum wage or overtime laws will be subject to a civil penalty, even if there is a corporation in place, and even if there is no evidence of alter ego.

ATEMPA v. PEDRAZZANI

PLAINTIFFS SUED FOR MINIMUM WAGE AND OVERTIME VIOLATIONS

Plaintiffs Atempa and Reyes worked in a restaurant, Atempa first as a dishwasher and then as a cook, and Reyes as a dishwasher. They sued under the Labor Code Private Attorneys General Act (“PAGA”) for various wage claims, including failure to pay overtime under Ca. Lab. Code §558.1, and failure to pay the minimum wage under Ca. Lab. Code §1197.1.

Both of those statutes impose liability for civil penalties on the employer, as well as “any other person acting on behalf of an employer,” in the case of §558, or “other person acting either individually or as an officer, agent, or employee of another person” who causes the statutes to be violated.

THE TRIAL COURT FOUND IN FAVOR OF PLAINTIFFS AND ORDERED THE INDIVIDUAL DEFENDANT HELD LIABLE

After a bench trial, the court found in favor of the plaintiffs, and awarded $31,074 in penalties, as well as wages (which were not part of the appeal). Those penalties were awarded against both Pama, the corporate defendant, and Pedrazzini himself as an individual. The trial court also ordered both entities held jointly and severally liable for attorney’s fees in excess of $315,000.

SINCE THE L&WDA COULD RECOVER PENALTIES AGAINST THE INDIVIDUAL, THE PLAINTIFF COULD AS WELL UNDER PAGA

In upholding the judgment, the court found the statutory language unambiguous, and therefore there was no need for construction. “[O]ther person” included individuals who caused the statutes to be violated, and 1197.1(a) even went so far as to list the types of individuals who could be held so liable.

The court went further, and stated that there was no need to harmonize the statutes with the alter ego doctrine. Alter ego is a common law doctrine, and the statutes therefore take precedence. The Labor Code is unambiguous, and it means what it says.

The statutes at issue, of course, only authorize the Labor Commissioner to recover the penalties. A plaintiff may recover them instead of the Labor Commissioner through application of the PAGA statute.

The attorney’s fees, interest and costs were all chargeable to the individual defendant as well, through PAGA’s unambiguous language.

CONCLUSION

California courts continue to protect the wages of California workers, and the penalties for violating wage and hour laws are severe. Even a corporate shield will not protect individuals who engage in wage theft.

Ca. Ct. App., 4th Dist., Div. 1, Filed 9/28/18, Opinion by Judge Irion

Read All Decisions

Legislative Update
By Mariko Yoshihara, CELA Legislative Counsel & Policy Director

Mariko Yoshihara

Mariko Yoshihara

In his final month of bill signing, Governor Brown ceremoniously cleared his desk of the hundreds of bills sent to him by the California Legislature this year. In the end, CELA tallied four big wins this year, enacting important legislation to combat sexual harassment and advance pay equity in California. SB 1300, by Senator Jackson, was our FEHA omnibus bill that directly disallows some of the underhanded legal tactics employers use to strip workers of their legal rights and provides powerful new advocacy tools for CELA members to use in pursing sexual harassment claims. AB 3109, by Assembly Member Stone, addresses the horrific injustice faced by many women speaking out in the #MeToo movement, like McKayla Maroney, who found herself bound by a confidentiality clause that prevented her from even testifying in a legislative or judicial proceeding. This bill will now void any contract provision that purports to deny a person the right to testify in a government proceeding about alleged criminal conduct or sexual harassment. SB 224, also by Senator Jackson, will make significant changes to the sexual harassment protections under the Unruh Civil Rights Act, providing another clear and effective legal avenue to fight sexual harassment in business and professional settings. And on the equal pay front, we were also successful in enacting AB 2282, by Assembly Member Eggman, which clarifies that prior salary can never be used as a factor, whether on its own or in combination with other factors, to justify a gender or race wage differential under the California Equal Pay Act.

Unfortunately, the Governor also vetoed a couple of our priority bills, including AB 1870, a bill we co-sponsored with the Consumer Attorneys of California and Equal Rights Advocates, which would have extended the filing deadline for employment complaints under the Fair Employment and Housing Act from one to three years. Despite the broad bipartisan support the bill received in the state legislature, the Governor rejected the bill because, according to his veto message, “the current filing deadline–which has been in place since 1963–not only encourages prompt resolution while memories and evidence are fresh, but also ensures that unwelcome behavior is promptly reported and halted.” In addition, the Governor vetoed AB 3080, which would have prohibited employers from retaliating against a worker who refuses to sign an arbitration agreement. Although this bill took a much different approach to avoid preemption under the Federal Arbitration Act, by focusing on retaliation before any agreement is actually formed, the Governor was still convinced that the “bill plainly violates federal law.” With a new Governor in office next year, we can expect to see these bills back again in the upcoming term.

In addition to looking at reintroducing bills that failed under Governor Brown, in the next couple months CELA’s Legislative Committee will be considering fresh ideas to help advance workers’ rights in California and strategies to help preserve existing protections that have become vulnerable to attack. One pressing issue that is squarely in our path is the fight to fend off

the forceful attempts by the business lobby to dismantle or delay the recent California Supreme Court decision, Dynamex Operations West, Inc. v. Superior Court. Gig companies and their allies are making desperate pleas to the Legislature, falsely arguing that the decision is impossible to comply with and will result in the loss of billions of dollars and millions of jobs. Unfortunately, these apocryphal cries are falling on many sympathetic ears, so our work will be cut out for us next year as we come together with our labor allies to preserve Dynamex and ensure workers are not exploited and denied protections and benefits under our labor laws.

Another issue we will be working on next year is a recent proposal put together by the Judicial Council to create three tiers for general civil cases, based on the complexity of the case, with each tier having different discovery limitations. The purported goal of the proposal “is to make discovery more proportional to the value and nature of claims in a case.” However, as detailed in CELA’s comments submitted to the Judicial Council on the proposal, the proposed limitations on discovery will only result in more unnecessary discovery battles and gamesmanship that will further hinder plaintiffs, especially for low-wage workers whose damages may be lower despite egregious violations of civil rights laws, from accessing justice and vindicating important statutory rights.

As this proposal and others move forward, we will continue to keep our membership informed and we will call on our members to help share their expertise and compelling stories about how these proposals would impact the workers we represent. In doing so, we will help defend and advance the rights of workers and protect the civil justice system that serves them.

For a list of the top 20 labor and employment bills from 2018, click here. For a complete list of labor and employment bills from this year, click here. If you have an idea for legislation that you would like CELA’s Legislative Committee to consider, or if you would like to get involved with CELA’s Legislative Committee, please email mariko@cela.org.

Read More

Read Full Article