This month\u2019s key California employment law cases involve wage and hour issues, arbitration, and employment discrimination based on marital status.<\/p>\n
Wage and Hour<\/strong><\/b>\u00a0\u2013<\/strong><\/b>\u00a0Lopez v. Friant & Assocs., LLC<\/em>, 2017 WL 4251126 (Cal. Ct. App. Sept. 26, 2017)<\/p>\n Summary<\/strong><\/b>\u00a0Employee seeking to recover only civil penalties under California Private Attorneys General Act for alleged wage statement violations need not demonstrate injury from knowing and intentional violation.<\/em><\/p>\n Facts<\/strong><\/b>:\u00a0 Plaintiff alleged that his employer violated California Labor Code section 226(a) by failing to issue wage statements showing the last four digits of employees\u2019 Social Security numbers or their employee identification numbers.\u00a0 Plaintiff asserted a single cause of action against defendant employer for civil penalties under the California Private Attorneys General Act (\u201cPAGA\u201d) based on section 226(a). \u00a0Defendant did not dispute the allegation but moved for summary judgment, arguing that plaintiff could not prevail because he did not suffer any injury resulting from a knowing and intentional violation as required by Labor Code section 226(e).\u00a0 The trial court granted summary judgment in defendant\u2019s favor, concluding that plaintiff must do more than show a mere violation of section 226(a) in order to recover civil penalties under PAGA.<\/p>\n Court\u2019s Decision<\/strong><\/b>: \u00a0The California Court of Appeal reversed, finding that the knowing and intentional requirement of section 226(e) does not apply to the recovery of civil penalties under PAGA for a violation of section 226(a).\u00a0 The statutory language and legislative history show that the remedy provided in section 226(e) is the recovery of individual damages or a statutory penalty rather than a civil penalty.\u00a0 Plaintiff\u2019s complaint sought only civil penalties under PAGA for violations of section 226(a); therefore, plaintiff did not have to demonstrate injury resulting from a knowing and intentional violation as required by section 226(e).<\/p>\n Practical Implications<\/strong><\/b>: \u00a0Lopez\u00a0<\/em>deals a loss to employers.\u00a0 It authorizes employees to sue under PAGA and seek penalties against an employer while conceding they have not suffered any injury.\u00a0 An employee can seek these penalties even if the employer made a technical, innocent mistake, and took remedial measures.\u00a0 This decision will inevitably spark a rise in paystub claims.\u00a0 Employers need to issue wage statements in full compliance with the Labor Code, and have contractual indemnification protections in place when outsourcing payroll to a third party vendor.<\/p>\n Arbitration<\/strong><\/b>\u00a0\u2013\u00a0Cortez v. Doty Bros. Equip. Co.<\/em>, 15 Cal. App. 5th 1 (2017)<\/p>\n Summary<\/strong><\/b>:\u00a0 Arbitration provision in collective bargaining agreement covered most claims for Labor Code violations, but agreement did not address class arbitration.<\/p>\n Facts<\/strong><\/b>:\u00a0 Plaintiff, a truck driver for a construction company, sued his former employer on behalf of himself and putative class members alleging failure to comply with multiple provisions of the California Labor Code governing overtime pay, meal periods and rest breaks, and requiring timely payment of wages upon termination of employment.\u00a0 He also alleged that defendant violated the recordkeeping requirements of Labor Code sections 226, 1174 and 1174.5, and Industrial Welfare Commission Wage Order No. 16-2001 (\u201cWage Order 16\u201d).\u00a0 The collective bargaining agreement governing plaintiff\u2019s employment provided that any dispute or grievance arising from Wage Order 16 shall be processed under and in accordance with the arbitration provisions.\u00a0 The trial court granted defendant\u2019s petition to compel arbitration of plaintiff\u2019s individual claims pursuant to the arbitration provision.\u00a0 The parties also stipulated to allow the superior court, rather than an arbitrator, to determine whether the class claims must be arbitrated.\u00a0 The trial court concluded that the agreement did not contemplate arbitration of class claims.<\/p>\n Court\u2019s Decision<\/strong><\/b>:\u00a0 The California Court of Appeal affirmed and reversed in part.\u00a0 First, some wage and hour claims were subject to arbitration while others were not.\u00a0 Since plaintiff\u2019s claims under the Labor Code for meal and rest break violations and recordkeeping violations dealt with the same subjects as parts of Wage Order 16, these Labor Code claims were subject to arbitration.\u00a0 However, claims for failure to timely pay wages upon separation and unfair competition were not addressed by Wage Order 16 and thus not encompassed by the arbitration provision in the collective bargaining agreement.\u00a0 Second, the court affirmed the trial court\u2019s finding that the agreement did not allow class arbitration.\u00a0 Absent language in the arbitration provision itself or extrinsic evidence establishing the parties\u2019 agreement to arbitrate class claims, only individual claims could be arbitrated.<\/p>\n Practical Implications<\/strong><\/b>:\u00a0\u00a0Cortez<\/em>\u00a0is a good reminder for employers to use clear and unambiguous language when specifying claims that are subject to arbitration.\u00a0\u00a0Cortez<\/em>\u00a0also illuminates a split of federal authority about whether class action waivers in employment arbitration agreements violate the National Labor Relations Act.\u00a0 In\u00a0Lewis v. Epic Systems Corp.<\/em>, the U.S. Supreme Court is reviewing three consolidated cases to resolve the split.\u00a0 When the Supreme Court rules, employers should review their arbitration agreements to determine whether class action waivers should be added, modified or removed.<\/p>\n Discrimination in Employment<\/strong><\/b>\u00a0\u2013<\/em><\/strong><\/b>\u00a0Nakai v. Friendship House Ass\u2019n of Am. Indians, Inc.<\/em>, 15 Cal. App. 5th 32 (2017)<\/p>\n Summary<\/strong><\/b>:\u00a0\u00a0Prima facie case of marital status discrimination was not established where plaintiff\u2019s allegations concerned marriage to particular person rather than marital status.<\/em><\/p>\n Facts<\/strong><\/b>:\u00a0 Plaintiff was fired after his wife complained to her mother (and plaintiff\u2019s supervisor) that plaintiff was armed, angry and on drugs.\u00a0 Plaintiff sued defendant employer, alleging marital discrimination in violation of the California Fair Employment and Housing Act.\u00a0 He argued that he was fired because he was married to his supervisor\u2019s daughter, and he and his wife were dealing with a difficult marriage.\u00a0 The trial court granted defendant\u2019s motion for summary judgment, reasoning that defendant did not discriminate against plaintiff because he was married, but rather because of who plaintiff was married to (his supervisor\u2019s daughter).<\/p>\n Court\u2019s Decision<\/strong><\/b>:\u00a0 The California Court of Appeal affirmed.\u00a0 Marital discrimination law is designed to prevent discrimination against classes of people and does not extend to the status of being married to a particular person.\u00a0 The court distinguished cases involving alleged discrimination due to marriage to a particular person as they were about discriminatory animus toward a spouse for another protected reason, such as race.<\/p>\n Practical Implications<\/strong><\/b>:\u00a0 While the identity of an employee\u2019s spouse does not warrant protection under discrimination laws, employers should be aware that an employee could assert a discrimination claim if the employer discriminates because his or her spouse is a member of a protected class.<\/p>\n
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