Last year, the holding in Reynolds v. Bement (2005) 36 Cal.4th 1075 put to rest most direct wage claims employees might make against individuals in connection with any failure by a corporate defendant to pay wages. The Supreme Court deferred, however, expressing any opinion about whether employees could assert penalty claims against the corporate officers and individuals responsible for the wage violations. Some plaintiffs still pursue such claims, while employers invariably discount any reasonable likelihood that individuals will be held personally liable for any part of any wage claim against a corporation, absent a finding of alter ego; but amazingly, not all employers and not all employers' counsel argue against such personal liability.
In our pending class action against Dollar Tree Stores, Inc., the employer and its counsel (attorneys with the defense firm Thelen, Reid & Priest, LLP) argued vociferously that Dollar Tree's managers could be found liable, individually, for civil penalties, writing that
Plaintiff ... overlooks key sections of the Labor Code which provide for the imposition of penalties against corporate agents ... if they fail to permit employees to take rest and meal breaks. See Cal. Lab. Code §§ 558, 2966.
Plaintiff ... completely misconstrues the holding in Reynolds v. Bement (2005) 36 Cal.4th 1075. ... While the Reynolds court did conclude that "corporate agents acting within the scope of their agency are not personally liable for the corporate employer’s failure to pay its employees’ wages," the court also noted that its holding did not preclude employees ... from recovering penalties against corporate agents. Reynolds, supra, 36 Cal.4th at 1087 and 1089. Specifically, the court stated that "pursuant to section 558, subdivision (a), any 'person acting on behalf of an employer who violates, or causes to be violated' a statute or wage order relating to working hours is subject to a civil penalty, payable to the affected employee, equal to the amount of any underpaid wages." Id. at 1189. The court further stated that "the Legislature has provided that aggrieved employees may under certain circumstances maintain civil actions to recover such penalties." Id. Accordingly, under Reynolds, Plaintiff could conceivably seek to recover penalties ... pursuant to Sections 558 and 2699 of the Labor Code for ... alleged failure to provide her rest and meal breaks.
Why would an employer want to argue such a thing? In this case, it was a lawyer's tactical maneuver, trying (unsuccessfully) to disqualify a member of our legal team who had previously represented a Dollar Tree manager. Nonetheless, it was a curious move that probably wouldn't be well received by most managers and officers at most corporate employers.