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