Wage Law

We found a website called Glass Door has a pretty cool feature that lets you provide or retrieve salary information for more than 14,000 places of employment. Check it out.

Yesterday, the California Labor Commissioner announced another settlement, this time for $450,000, for unpaid wage claims brought on behalf of carwash workers.

Sixty workers at a Redondo Beach carwash will receive $450,000 in unpaid wages, thanks to a settlement reached in a lawsuit against the carwash by the California Labor Commissioner on the workers' behalf. The Bruno Scherrer Corporation dba Hollywood Riviera shorted their employees' earned wages and intentionally failed to record employee total work hours. This deceptive practice resulted in payment of sub-minimum wage to the carwash employees.

The settlement arose from an investigation that began in October 2006, leading to a lawsuit filed by the Labor Commissioner in September 2007 in Los Angeles County Superior Court. Hollywood Riviera carwash had been paying employees minimum wage for as little as 3 to 4 hours of work then requiring them to finish out the day with no further wages, being paid in tips only. As a result of the settlement, each affected worker will receive an average of $7,500.

You have to have a subcription to read the entire thing, but the National Law Journal has a very interesting article written by Tresa Baldas, entitled: Is Booting Up a Computer Work, or a Work Break? More Companies Fending Off Suits on the Issue.

Lawyers are noting a new type of lawsuit, in which employees are suing over time spent booting [up] their computers. ... During the past year, several companies, including AT&T Inc., UnitedHealth Group Inc. and Cigna Corp., have been hit with lawsuits in which employees claimed that they were not paid for the 15- to 30-minute task of booting their computers at the start of each day and logging out at the end. Add those minutes up over a week, and hourly employees are losing some serious pay, argues plaintiffs' lawyer Mark Thierman, a Las Vegas solo practitioner who has filed a handful of computer-booting lawsuits in recent years. ...

We aren't sure why it takes 15 to 30 minutes to boot your computer, even if you have Vista, but it seems ridiculous to us that an employer would argue that you have to get to your desk and wait while the equipment warms up or boots up on your own time. The absurd defense position is that employees can boot the computer, then engage in nonwork activities, which must remain off the clock. Richard Rosenblatt, of Morgan, Lewis & Bockius, argues:

"They go have a smoke, talk to friends, get coffee — they're not working, and all they've done at that point is press a button to power up their computer, or enter in a key word."

Lawyers face similar situations frequently. We arrive on time for a deposition or a court hearing, only to find that the witness is running late, or the court won't be taking the bench for 20 minutes. Do lawyers like Richard Rosenblatt stop billing during these minutes, since, after all, they can go have a smoke, talk to other lawyers, get coffee or read their newspapers? Or are they on the clock, ready, willing and able to proceed? If the judge tells you to be in court at 8:30 a.m., and you are, but then you sit there for 15 to 30 minutes playing on your iPhone or Blackberry until your case is called, should you be off the clock? We think we know the answer to that question.

Can a company defeat several of an employee's claims and still be on the hook for all of his attorney's fees if the employee wins on just one substantial claim? Yes. "The law does not mandate . . . that attorney fees bear a percentage relationship to the ultimate recovery of damages in civil rights cases." Harman v. City and County of San Francisco (2007) 158 Cal.App.4th 407. In Harman, a jury found in favor of the employee on a discrimination claim, and even though the court had dismissed most of the employee's claims, the jury award of $30,300 in damages justified an award of attorney's fees, and the trial court found $1.1 million to be the reasonable amount of fee incurred pursuing the case. Aside from $144,170 spent on a prior appeal, the Court of Appeal upheld the award.

In conclusion, we borrow from Justice Powell's observations in his concurring opinion in Riverside: “On its face, the fee award seems unreasonable. But [we] find no basis for this Court to reject the findings made and approved by the [court] below.” (Riverside v. Rivera, supra, 477 U.S. 561, 581 (conc. opn. of Powell, J.).) Although we may have exercised our discretion differently, we “cannot conclude that the detailed findings made by the [trial court] … were clearly erroneous, or that the [trial court] abused its discretion in making this fee award.”

We have a case headed in this direction, not out of a lack of trying to settle it early.

The one industry that the Labor Commissioner likes to pursue as much as the car wash industry, is the agriculture industry. In September, the DLSE issued citations totaling over $269,000 in fines to agriculture businesses in a statewide two-day enforcement sweep as part of an ongoing effort to address illegal operations in the underground economy. Twenty-four teams of investigators conducted the two-day sweeps on Sept. 24-25. Out of 194 inspections, 35 agriculture businesses were cited. Twenty-five agriculture businesses received stop work notices until they can provide workers’ compensation insurance for their employees. The violations included failure to: Provide work permits for minors; Failure to pay the minimum wage; Provide employees with an itemized wage deduction statement; Pay overtime wages; Pay the annual registration with the Commissioner’s Office and Provide workers’ compensation.

You'll recognize this quote from yesterday's post:

“Our efforts are directed at illegally operating businesses as part of the underground economy,” said California Labor Commissioner Angela Bradstreet. “These illegal operations have a negative impact on our state’s economy, do not provide the protection workers are legally afforded, and have an unfair advantage over competitors who do follow the law.”

Exploited farm workers are a good political subject matter. Sacramento notices those, too.

This morning, we got our 500,000th hit. We're up above 1,000 hits a day on weekdays, with a considerable drop on the weekends. At the rate we're going, we'll probably get our millionth hit sometime late next year. That's more readers than we ever expected, given our fairly narrow subject matter.

Almost every time you send a PAGA notice to the LWDA, you'll never hear back from them. If you are thinking about taking on a car wash, however, you will pique their interest. Almost every month, the Labor Commissioner toots her horn about car wash raids.

July 21, 2008: Officials with the State Division of Labor Standards Enforcement (Labor Commissioner’s Office) issued 47 citations totaling $356,200 in fines to car wash businesses in Los Angeles and Orange counties as part of an ongoing effort to address illegal operations in the underground economy. As part of the recent two-day enforcement sweep, investigators visited 64 carwashes in Los Angeles County and eight in Orange County. ... Thirteen investigators conducted the sweeps of 72 carwashes and found that 24 businesses were cited for not having the required registration and 19 businesses failed to have workers’ compensation insurance. In addition three businesses were found to be employing minors without the proper work permits and one business failed to provide itemized deductions to their employees.

August 22, 2008: Officials with the State Division of Labor Standards Enforcement (Labor Commissioner’s Office) issued citations totaling $521,000 in fines to car wash businesses in Northern California as part of an ongoing effort to address illegal operations in the underground economy. As part of the recent three-day enforcement sweep, investigators visited 97 carwashes. Fifteen teams of investigators conducted the two day sweeps on Aug. 13-14 and 54 carwash businesses were cited. Thirty out of the 54 carwashes received work stop notices until they can provide workers’ compensation insurance for their employees. The violations included failure to: Provide work permits for minors; Provide employees with an itemize wage deduction statement; Pay overtime wages; Pay the annual registration with the commissioner’s office and Provide workers’ compensation.

“Our efforts are directed at illegally operating carwash businesses as part of the underground economy,” said California Labor Commissioner Angela Bradstreet. “These illegal operations have a negative impact on our state’s economy, do not provide the protection workers are legally afforded, and have an unfair advantage over competitors who do follow the law.”

For some reason, car wash owners aren't producing the kind of jobs, or campaign donations, that show up on the radar in Sacramento. That, and they are easy pickings for investigators.

The 90th edition of the Parker Directory of California Attorneys, due out in 2009, will be its last. We remember when this was one of the key books every litigator we knew had on the desk or shelf, along with the Rutter Group's Civil Procedure Before Trial and the Standard California Codes, Four-in-One edition and a couple of others. We no longer use it much. The Internets are probably to blame.

The federal Worker Adjustment and Retraining Notification Act ("WARN" Act) 29 USCA § 2101 et seq., requires certain employers to provide 60 days' advance notice of a "plant closing" or a "mass layoff" to affected employees and state and local government officials. 29 USCA § 2102(a); Hollowell v. Orleans Regional Hosp. LLC (5th Cir. 2000) 217 F.3d 379. An employer who conducts a closing or layoff without giving the required advance notice is liable for up to 60 days' pay and benefits to affected employees. Allen v. Sybase, Inc. (10th Cir. 2006) 468 F.3d 642.

The federal WARN Act has an exception called the "Faltering Company" exception. A faltering company "may order the shutdown of a single site of employment before the conclusion of the 60-day period if as of the time that notice would have been required: the employer was actively seeking capital or business which, if obtained, would have enabled the employer to avoid or postpone the shutdown; and the employer reasonably and in good faith believed that giving the required notice would have precluded ... obtaining the needed capital or business." 29 USCA § 2102(b)(1).

The DOL regulations provide that the employer must have been seeking financing or refinancing or additional business through a commercially reasonably method. 20 CFR § 639.9(a)(1). To prove the defense, the company must identify specific actions taken at that time to obtain financing or new business. Local 397, Int'l Union of Electronic, Elec., Salaried, Mach. & Furniture Workers, AFL-CIO v. Midwest Fasteners, Inc. (D.NJ 1990) 763 F.Supp. 78. There must have been a realistic opportunity to obtain the financing or business sought. 20 CFR § 639.9(a)(2). The financing or business sought would have been sufficient to enable the employer to avoid or postpone the shutdown and to keep the facility open for a reasonable period of time. 20 CFR § 639.9(a)(3). And the employer must be able to demonstrate objectively that it could have kept the facility open for a reasonable period of time with the amount of financing or new business sought. 20 CFR § 639.9(a)(2). The employer must have objectively and subjectively believed that a potential customer or source of financing would have been unwilling to provide the new business or capital if notice were given. 20 CFR § 639.9(a)(4); Childress v. Darby Lumber, Inc. (9th Cir. 2004) 357 F.3d 1000. The employer must show that, upon learning that the workplace would be closed, it promptly notified the employees and explained why it had not given earlier notice. Local 397, Int'l Union of Electronic, Elec., Salaried, Mach. & Furniture Workers, AFL-CIO v. Midwest Fasteners, Inc. (D. NJ 1990) 763 F.Supp. 78.

There is also an "Unforeseen Business Circumstances" exception, whereby an employer need not give the full 60 day notice if the closing was caused by a business circumstance that was not reasonably foreseeable as of the time notice would have been required. 29 USCA § 2102(b)(2)(A). However, where an unforeseen business circumstance prevents an employer from timely giving notice, the employer must give "as much notice as is practicable and at that time shall give a brief statement of the basis for reducing the notification period." 29 USCA § 2102(b)(3); Allen v. Sybase, Inc. (10th Cir. 2006) 468 F.3d 642. However, in one recent case, layoffs could be attributed to unforeseen business circumstances where the employer's lender bank gives numerous warnings that employer was at risk of losing credit, the market price of its product was depressed, and its operations had been losing money over a significant period of time. Childress v. Darby Lumber, Inc. (9th Cir. 2004) 357 F.3d 1000.

California law has a similar requirement, with similar defenses. Under Labor Code § 1400, most of the federal WARN Act requirements are also mandated under state law. Notice of a relocation or termination, but not a mass layoff, is excused where the employer furnishes records and affidavits and the Employment Development Department determines that (i) at the time notice was required, the employer was actively seeking capital or business that would have enabled it to avoid or postpone the relocation or termination; and (ii) the employer reasonably and in good faith believed that giving the 60 days' notice would preclude it from obtaining the needed capital or business. Labor Code § 1402.5.

Without running afoul of the Fair Labor Standards Act or various California Labor Code provisions, a public entity is permitted to contract with employees to have the workers reimburse training costs if they leave their jobs within a certain time period. At least, the employer can do so if the employee fails to allege a violation of Labor Code § 2802. Nonetheless, employers cannot withhold a worker's final paycheck as a set-off to cover the expenses. City of Oakland v. Hassey (2008) 163 Cal.App.4th 1477.

The City of Oakland sued appellant Kenny D. Hassey for breach of contract after Hassey failed to reimburse the city (as agreed) for the costs of training him to become a police officer with the Oakland Police Department. Hassey filed a cross-complaint against Oakland and respondent Richard Word, the chief of the Oakland Police Department, alleging that the agreement to repay Oakland for training costs violated the Fair Labor Standards Act (29 U.S.C. §§ 201-219 (FLSA)) and various state laws. Specifically, the cross-complaint alleged causes of action for deprivation of civil rights (42 U.S.C. § 1983); violation of the FLSA; violations of Labor Code sections 221, 223, 432.5, and 450; “unlawful contract” (Civ. Code, §§ 1667-1668); “void contract” (Bus. & Prof. Code, § 16600); and unfair competition (Bus. & Prof. Code, § 17200). More notably, the cross-complaint failed to assert that the repayment agreement violates Labor Code sections 2802 [employer shall indemnify employee for all necessary expenditures and losses] and 2804 [any contract waiving provision invalid]. (Campos v. Anderson (1997) 57 Cal.App.4th 784, 794, fn. 3.

The trial court granted Oakland’s motion for summary judgment on its complaint, granted its motion for summary judgment on Hassey’s cross-complaint, and denied Hassey’s summary judgment motion on both complaints. The Court of Appeal concluded that Hassey failed to establish that the agreement to reimburse Oakland for training costs violated the FLSA, although Oakland’s withholding of Hassey’s final paycheck to cover his debt did.

The opinion was subsequently modified, and a petition for rehearing was denied. The modification was noteworthy, because it noted that one of the reasons Hassey might have lost was that he didn't rely on a statute that might have savd his case.

Appellant's petition for rehearing is denied. The opinion filed June 17, 2008, is modified as follows: Add, as the last three sentences of the eleventh paragraph in part II.A.2. of the opinion, "We decline to address Hassey's argument, raised for the first time in his reply brief, that the repayment agreement violates Labor Code sections 2802 [employer shall indemnify employee for all necessary expenditures and losses] and 2804 [any contract waiving provision invalid]. (Campos v. Anderson (1997) 57 Cal.App.4th 784, 794, fn. 3 [points raised in reply brief for first time will not be considered absent good cause].) We note that Hassey's answer to Oakland's complaint did not rely on Labor Code sections 2802 and 2804, and his cross-complaint did not allege causes of action based on them." The above modification does not effect any change in the judgment. [emphasis added]

Would Hassey have won a defense or cross-claim based upon Section 2802? Here's what section 2802 provides:

(a) An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer, even though unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful.

(b) All awards made by a court or by the Division of Labor Standards Enforcement for reimbursement of necessary expenditures under this section shall carry interest at the same rate as judgments in civil actions. Interest shall accrue from the date on which the employee incurred the necessary expenditure or loss.

(c) For purposes of this section, the term "necessary expenditures or losses" shall include all reasonable costs, including, but not limited to, attorney's fees incurred by the employee enforcing the rights granted by this section.

Since the training was a prerequisite to getting the job in the first place, it's unclear. Moreover, the opinion relies somewhat on a 7th Circuit case entitled Heder v. City of Two Rivers (7th Cir. 2002) 295 F.3d 777, in which public policy concerns based upon the employer's status as a public entity, and particularly, an agency providing for public safety, suggest that a similar case brought against a private entity might face a different standard. Because section 2802 wasn't raised by Hassey until his appellate briefs, we'll have to wait for some other case to answer that question.

The Supreme Court denied a petition for review and a request for depublication. Justice Kennard voted in favor of review. You can download City of Oakland v. Hassey here in pdf or MS Word format.

Can a defendant bring a motion to decertify a class action before the court has certified the class in the first place? The answer, it appears, is sometimes. In re BCBG Overtime Cases (2008) 163 Cal.App.4th 1293.

Christina Denkinger appeals from the order granting the motion made by the defendant, AZ3, Inc., to strike class allegations from her complaint. She contends the trial court erred in granting the motion to strike based on evidence outside the pleadings; at the least, she contends, the trial court should have given her leave to amend the 2 complaint. Alternatively, Denkinger contends if the trial court properly relied on evidence outside the pleadings, it erred in striking the class allegations without affording her an opportunity to test the evidence through discovery. We find the trial court correctly handled the motion under class certification guidelines, properly receiving evidence on the class certification issue and exercising its discretion in denying certification. Accordingly, we affirm.

More than four years after the action was filed, the defendant filed a motion to strike the class allegations. The Plaintiffs opposed the motion, contending it was an improper attempt to circumvent the class certification process. At oral argument, the plaintiffs requested leave to amend, time to conduct further depositions, and a Pioneer notice. The trial court refused, and granted the motion to strike the class allegations, finding the motion was properly before it because “class certification issues may be determined at any time during the litigation.” It found that BCBG had met its burden to show that the action is not suitable for class certification by producing “substantial evidence which establishes that Plaintiffs cannot prove the elements of typicality or commonality necessary for class certification.”

On appeal, plaintiffs contended the motion to strike was improper because (i) evidence outside the pleadings cannot be considered on a motion to strike; and (2) the motion was a premature challenge to class certification. THe Court of Appeal rejected both arguments. First, a

motion filed under rule 3.767 was not an attack on the pleadings ... a traditional motion to strike; rather, it was a request to initiate the class certification process. The motion was timely, and the trial court properly took evidence outside the pleadings and denied the belated discovery request. Trial courts are given broad flexibility when dealing with the certification of class actions. (Fireside Bank v. Superior Court (2007) 40 Cal.4th 1069, 1087.) In fact, our Supreme Court has urged trial courts “to be procedurally innovative, encouraging them to incorporate procedures from outside sources in determining whether to allow the maintenance of a particular class suit.” (City of San Jose v. Superior Court (1974) 12 Cal.3d 447, 453.) motion and when discovery on the issue is still on-going.” (Ibid.)

Second,

The record in the case before us presents a different procedural posture. BCBG’s motion was filed 22 months after the filing of Plaintiffs’ coordinated complaint, 33 months after Denkinger’s complaint, and four years after Williams and Thornhill’s complaint. During the time between the filing of the coordinated complaint and the motion, Plaintiffs had, as Deckinger puts it, been engaged in “an extensive law and motion battle regarding the identity of members of the putative class and the declarations filed in support of Respondent’s Motion ....

Had this motion been brought at the beginning of the case, it almost certainly would have been denied. See, e.g., Sharp v. Next Entertainment, Inc. (2008) 163 Cal.App.4th 410 (motion to determine class representatives’ adequacy was an "end-run around the certification procedures and an attempt to deny plaintiffs the ability to present their case.") But because the plaintiffs had the benefit of several years of prosecuting their case, the court was willing to entertain an evidentiary motion on certification filed by either side.

The record on appeal wasn't clear, but there appear to have been some discovery motions rendered moot by the order granting the motion to strike. However, the Court of Appeal was not swayed by this detail, for a variety of procedural reasons:

BCBG’s motion to strike the class allegations was not made before the Plaintiffs had a chance to conduct discovery on class certification issues. Such discovery had been going on for some time, although some of the plaintiffs’ efforts had apparently been thwarted by adverse rulings from the court. The propriety of these rulings is not before us. The Plaintiffs received proper notice of BCBG’s motion and had the opportunity to respond with evidence of their own. They presented nothing to counter BCBG’s evidence that the action did not meet the requirements of a class action. Deckinger complains Plaintiffs have not had the opportunity to test the veracity of the declarations submitted by BCBG in support of its motion; she argues they should have been granted leave to depose the declarants. But she could have asked for leave to conduct discovery and a continuance after she received notice of the motion. The only discovery request Plaintiffs made was at oral argument, and that request was for an opportunity to explore their suspicion that BCBG had engaged in misrepresentations to the declarants.

One bit of dictum in this opinion is noteworthy for anyone seeking a class representative enhancement award, particularly in Orange County. During oral argument, Judge Sundvold remarked

“[T]his is frankly when a class rep ought to be out there dialing for dollars, talk[ing] to their friends and former employees, . . . and saying what’s going on out there, what have you heard. And that’s the kind of investigative work that would really, to me, make a class rep worth their weight in gold.”

A class rep's weight in gold is a lot less than most receive in some courts.

The Supreme Court denied a petition for review and a request for depublication. Justice Kennard voted in favor of review. You can download In re BCBG Overtime Cases here in pdf or MS Word format.

Next week, the National Constitution Center will present a 60-minute audio conference entitled "Complex Wage & Hour Law: Are you State, Federal & FLSA Compliant?" The conference will take place on Wednesday, November 19, 2008, beginning at 1:00 p.m. EST (10:00 a.m. PST). The topics will include:

• New developments in  State & Federal wage and hour law 
• Strategies to correct time-keeping and pay practice errors 
• Policies and procedures necessary to avoid liability and
• The Most Common Classification "Gotcha's" - and How to Avoid Them

The speaker will be Michael Gray, from Jones Day's Chicago Office. The program costs $199. Extra listeners are free. You can register online or by calling 800-859-8676.

We did a follow up earlier this week about a case we thought might result in a published opinion on the issue of restitution under the Unfair Competition Law for waiting time penalties. Although that case resulted in a postcard denial of the defendant's writ petition, there are at least two other cases currently before the Courts of Appeal dealing with this issue of waiting time penalties under Labor Code § 203 being recoverable as restitution under Business & Professions Code § 17203.

In Ayvazi v. Superior Court (Ralphs Grocery Co.) 2nd District, Case No. B208190, a petition for writ of mandate has been fully briefed. That case has temporarily stalled because

Division One is unable to proceed with the above entitled matter because Associate Justice Rothschild has recused herself, and there are two vacanices, leaving only one Justice in the division. The Standards and Guidelines for Judical Assignments promulgated by the Administrative Office of the Courts allow only one Justice Pro Tempore on a case. This situation has been reported to the Administrative Presiding Justice Roger W. Boren in accordance with California Rules of Court, 10.1004, subdivision (b) and (c) (4), 10.1008 and 10.1012.

Another case is pending in the First Appellate District. In Pineda v. Bank of America, Case No. A122022, the Court of Appeal will be considering that issue, along with an issue concerning the statute of limitations for waiting time penalties where the underlying wages are no longer part of the claims, as aprt of a review of an order on a motion for judgment on the pleadings.

This could create yet another conflict with McCoy v. Superior Court (Kimco) (2007) 157 Cal.App.4th 225 (review denied). The first case to disagree, Hoffman v. Uncle P Productions, LLC (2008) 2nd Appellate District, Case Number B198477, was never published.

We will be working and posting today, but on this day every year, we pause to remember the sacrifices American soldiers made, and continue to make, to protect the rest of us and help preserve our way of life here in the United States of America.

Just got around to reading our Daily Journal for October 30. It had this description of the Brinkley v. Public Storage, Inc. (DAR 16341) case:

"Labor Law: Employee must suffer injury from employer's knowing and intentional misstatement to recover for violation of Labor Code section 226."

We thought the case had much more to say than that, and we didn't think the 226 issue was the most interesting issue in the holding.

The Supreme Court will neither review nor publish the opinion in Gonzalez v. Western Pacific Roofing Corp. (2008) Case Number S162086. The Court of Appeal has reversed the sustaining of a demurrer in a Los Angeles County Superior Court class action case in which the Plaintiffs alleged they were not paid the correct wages in public works projects.

They set forth the hourly rate they were paid and the minimum wage they should have been paid. Their claims are on behalf of themselves and for others. Thus, the action is a class action. We hold that plaintiffs for themselves stated facts sufficient to state a cause of action with respect to each of the alleged causes of action, and that the validity of the class action allegations should await determination in a certification proceeding. Therefore, we reverse the judgment entered pursuant to a court order sustaining a demurrer.

The case had a good overview of prevailing wage law in California, and what it takes to plead such a case.

In general, publicly financed construction projects are governed by the prevailing wage law. (Lab. Code, §§ 90.5, 1720-1861; see Lusardi Construction Co. v. Aubry (1992) 1 Cal.4th 976, 985-988.) With certain exceptions, a contractor on a public works project must pay workers "not less than the general prevailing rate of per diem wages for work of a similar character in the locality in which the public work is performed." (Lab. Code, § 1771.) The Department of Industrial Relations ("DIR") is responsible for determining that wage for each "craft, classification, or type of worker." (Lab. Code, §§ 1770, 1773; Cal.Code Regs., tit. 8, § 16200; Pipe Trades Dist. Council No. 51 v. Aubry (1996) 41 Cal.App.4th 1457, 1466-1467.)

Plaintiffs allege the following: plaintiffs are sheet metal workers formerly employed by defendants to work on public works projects; the legal minimum wage for workers employed on California public works projects is known as the general prevailing rate of per diem wages (Lab. Code, § 1771) or the "prevailing wage"; the proper prevailing wage classification for plaintiffs, defined by the actual work they performed on the public works, is sheet metal worker, and defendants were required to pay plaintiffs the prevailing wage for such workers as published by the DIR; the two defendants are in reality a single company owned and operated by the same owner, with a common place of business, common management, common policies and procedures and common employees; plaintiffs would routinely receive paychecks from either company, without explanation, although their supervisors and managers remained the same; the defendants employed hundreds of workers on public works projects throughout California; as a matter of common company policy, defendants did not pay prevailing wages and other wages--overtime, travel time and subsistence--to the individual plaintiffs or to hundreds of other workers who were employed by public works projects; each plaintiff, as an individual, is owed back wages for work performed for defendants on California public works; in addition to their individual claims, plaintiffs seek to represent the claims of all other current and former employees of defendants who were subject to the common policy to deny workers their lawfully earned wages. The subclasses are for each defendant and for each type of compensation due.

Plaintiffs specifically alleged the two defendants are, in fact, the same entity; they were employed by the defendants, and worked on, one or more public works projects, including but not limited to 25 specifically identified projects; the hourly wage that they each were paid; and the prevailing hourly wage that the defendants were required by law and contract to pay them.

Specifically, plaintiffs alleged they were sheet metal workers. They alleged that the work they performed was that of a sheet metal worker, and they alleged the specific work they performed. They alleged that instead of the $39 to $46 per hour rate required by California law, they received as low as $11 per hour. They also alleged that defendants failed to pay overtime at all or travel time and subsistence pay, all required by law. They set forth the dates each of the named plaintiffs worked and the specific hourly rate each received. They listed all of the various projects on which one or more of the plaintiffs worked.

Plaintiffs set forth the prevailing wage for straight time, overtime, and Sunday and holiday work for sheet metal workers for 2001, 2002, 2003, 2004, and 2005. The rates begin at $39.76 per hour (straight time wage for 2001-2002) and top out at $ 78.84 per hour for Sunday and holiday overtime in 2005. The allegations are that Gonzalez and Sanchez were paid approximately $11.50 per hour, Alcantar approximately $20.00 per hour during the last four years of his employment, Allen approximately $ 14 per hour, and Smith approximately $11 per hour during the last four years of his employment. Plaintiffs alleged that they were paid less than required prevailing wage for holiday and overtime work and travel time, and that they were not paid overtime, travel time, or required subsistence at all. They alleged that defendants required them to work "excessive hours of overtime."

The prevailing wage law requires a contractor to keep records, verified under penalty of perjury, showing "the name, address, social security number, work classification, straight time and overtime hours worked each day and week, and the actual per diem wages paid" for each employee on a public works project. (Lab. Code, § 1776.)

Plaintiffs are required only to set forth the essential facts of their case with reasonable precision and with particularity sufficient to acquaint a defendant with the nature, source and extent of his cause of action. (Youngman v. Nevada Irrigation Dist., supra, 70 Cal.2d at p. 245.) Plaintiffs are not required to plead the specific amount of damages. (Furia v. Helm (2003) 111 Cal.App.4th 945, 957.)

The amount of unpaid wages due to each plaintiff is only a matter of proof (the number of hours worked on public works projects multiplied by the difference between the lawful wage and the wages actually paid). The amount of waiting time penalties under section 203 is also a simple matter of proof; the penalty is the amount of unpaid wages for a 30-day period. (Lab. Code, § 203.) Defendants should have full and complete records dealing with this subject. "Once an employee shows that he performed work for which he was not paid, the fact of damage is certain; the only uncertainty is the amount of damage. [Citations.] In such a case, it would be a perversion of justice to deny all relief to the injured person, thereby relieving the wrongdoer from making any restitution for his wrongful act. [Citation.]" (Hernandez v. Mendoza (1988) 199 Cal.App.3d 721, 726-727.)

We thought that last part would have made the case worthy of publication.

Back in May, we were talking about a Orange County Superior Court order holding that waiting time penalties under Labor Code § 203 were recoverable as restitution under Business & Professions Code § 17203. In Ybarra v. Aramark Corp., No. 30-2008-00180008-CU-OE-CXC, the court treated section 203's "wages of the employee [that] shall continue as a penalty" as ordinary wages. Apparently, I was busy recovering from my one of my serial surgeries when the followup was timely, but two months later, the 4th District summarily denied Aramark's writ petition in Aramark Corporation v. Superior Court.

 Petitioner's request for judicial notice is GRANTED. The petition for a writ of mandate is DENIED as petitioner has an adequate remedy at law. (Omaha Indemnity Co. v. Superior Court (1989) 209 Cal.App.3d 1266; 1271-1273; Code Civ. Proc., 904.1.) Sills, P.J., Fybel, J., and Ikola, J.

In a funny side note, petitioner's counsel, Thomas M. Peterson, was listed as being with the law firm of Brobeck, Phleger & Harrison, which disintegrated about five years ago.

A few days ago, the UCL Practitioner did Blawg Review #183 for Blawg Review. We appreciate getting a mention, but even more so, we enjoyed how detailed and inclusive Kim was in her review of California legal blogs. There were several we had never seen before, and we might be adding a few to the blogroll.

It isn't a wage & hour case, but this is the most ridiculous b.s. settlement tactic we've ever seen in an employment dispute: Nelson v. American Apparel, Inc. In an unpublished opinion, which should be published if for no other reason than so that people will read the facts, the Second District enforced an arbitration agreement under the most bizarre of circumstances:

Defendants, American Apparel, Inc., Dov Charney, and Martin Bailey, appeal from an order denying their petition to compel arbitration under a settlement agreement. Defendants seek to arbitrate two issues. First, defendants seek to arbitrate the issue of whether plaintiff, Nancy Nelson, and her attorneys breached the settlement agreement by failing to appear in San Francisco at an “arbitration” with foreordained facts and a predetermined award which would be followed by the issuance of a misleading press release. Second, defendants seek to compel arbitration of whether plaintiff or her attorneys breached the confidentiality provisions of the settlement agreement. We conclude the language in the arbitration clauses in the settlement agreement required the petition to compel arbitration of these two disputes be granted. We emphasize defendants are not seeking to compel arbitration of the questionable “arbitration” with foreordained facts and a predetermined award which would be followed by the issuance of a misleading press release.

Here are the facts:

On May 4, 2005, plaintiff filed an action against defendants American Apparel, Inc., its chief executive officer, Mr. Charney, and a vice president, Mr. Bailey. Plaintiff alleged that during her employment as a sales manager for American Apparel, Inc., Mr. Charney subjected her to a hostile work environment based on her gender by regularly making unwelcome, inappropriate comments, and suggestive non-verbal gestures, and ultimately wrongfully terminating her employment. In her first amended complaint, filed on September 19, 2005, plaintiff asserted causes of action for violations of the Government, Labor, and Business and Professions Codes, wrongful termination in violation of public policy, and defamation. The matter was set for trial on January 24, 2008.

On January 23, 2008, however, the parties entered into the settlement agreement. In the settlement agreement, defendants, without admitting liability, agreed to pay plaintiff $1.3 million. Also, plaintiff agreed to release all of her claims against defendants and to dismiss the present lawsuit.[1] Additionally, the parties agreed that an arbitrator selected by and paid for by defendants would enter a specified award (stated word for word) in defendant’s favor based on a stipulated record.

Paragraph 7 of the settlement agreement provided in part: “Confidential Arbitration [¶] The parties agree to conduct a confidential arbitration pursuant to the following terms and conditions: [¶] (a) The Arbitrator shall be selected by American Apparel at its sole and unfettered discretion. The Arbitrator’s fee will be paid by American Apparel. [¶] (b) The issue presented to the Arbitrator will be, ‘Did American Apparel or Dov Charney subject Mary Nelson to unlawful sexual harassment in violation of the California Fair Employment & Housing Act.’ [¶] (c) The Arbitrator will issue a decision based solely on the following stipulated record: [¶] (i) The Supreme Court’s decision in Lyle v. Warner Brothers Television Productions, including the concurring opinion by Justice Chin, 38 Cal.4th 264 (2006), is the governing law. [¶] (ii) Nelson complains that she was unlawfully harassed by American Apparel’s marketing materials, as well as the use of sexual speech by employees of American Apparel. [¶] (iii) Dov Charney never sexualized, propositioned or made any sexual advances of any nature whatsoever towards Mary Nelson. [¶] (iv) The marketing materials, sexual speech and much of the conduct about which Nelson complains are protected under the First Amendment’s guarantee of free speech. [¶] (v) The remainder of the speech and conduct about which Nelson complains was not directed at her or other women because of their gender. [¶] (d) The Arbitrator’s decision will state only the following: [¶] ‘Mary Nelson was not subjected to unlawful sexual harassment in violation of the California Fair Employment & Housing Act. Dov Charney never sexualized, propositioned or made any sexual advances of any nature whatsoever towards Mary Nelson. The marketing materials, sexual speech and much of the conduct about which Nelson complains are protected under the First Amendment’s guarantee of free speech and cannot form the basis for any claim. The remainder of the speech and conduct about which Nelson complains was not directed at her or other women because of their gender and therefore was not actionable.’”

The settlement agreement contemplated that following defendants’ receipt of the arbitrator’s order, and concurrent with receipt from plaintiff of a fully executed request for dismissal with prejudice—no later than February 7, 2008—defendants would deliver the $1.3 million to plaintiff.

Finally, the parties agreed American Apparel, Inc. would be allowed to issue a press release stating an arbitrator had ruled in defendants’ favor. Paragraph 7(e) of the settlement agreement provided: “Following issuance of the Arbitrator’s decision and order, American Apparel may issue the following press release:

‘American Apparel and its CEO Dov Charney announced today that an Arbitrator has ruled in their favor in the highly-publicized action brought by former sales manager Mary Nelson. The Arbitrator ruled that the marketing materials, sexual speech and much of the conduct about which Nelson complained are protected under the First Amendment’s guarantee of free speech and could not form the basis for any claim. The Arbitrator further ruled that Dov Charney never sexualized, propositioned or made any sexual advances of any nature whatsoever towards Mary Nelson, and the remainder of the speech and conduct about which Nelson complained was not directed at her or other women because of their gender, and therefore was not actionable. The decision puts an end to the sexual harassment claims against Charney and the Company. ‘I am pleased that we have been able to bring clarity to the role of the First Amendment in the American workplace,’ Charney stated.”

[1] Defendants, without admitting liability, agreed to compensate plaintiff as follows: “In consideration of the covenants undertaken and releases given herein by Plaintiff, specifically including but not limited to, the Arbitrator’s Award referenced in Paragraph 7 below, the Company shall provide Plaintiff with the following consideration in full and final settlement of any and all matters of any kind or nature which were alleged by, or could have been alleged by, Plaintiff against the Company and/or any of the Releasees identified in Paragraph 4 below: following receipt by the Company of the decision and order of the Arbitrator pursuant to Paragraph 7, below, and concurrent with the receipt by counsel for the Company of a fully executed Request for Dismissal with prejudice, as set forth in Paragraph 3, below (and in no event later than February 7, 2008), the Company will pay the total amount of One Million Three Hundred Thousand Dollars ($1,300,000.00), for alleged emotional distress damages . . . .”

Apparently, $1.3 million can buy you a fair amount of free speech, but it didn't really turn out to be so free.

Next week: we'll be reviewing 24 cases that came down in the last quarter and haven't yet been discussed here.

We can now be found at: http://www.californiawagelaw.com/ as well as the old typepad address.

We won't believe it until we see it, but this rumor keeps popping up:

Speculation is swirling that Schwarzenegger will be offered the role of energy czar in the incoming Obama administration. There has been Beltway chatter about the prospect ever since he was named as a contender for the job by the authoritative politico.com website.

If he did accept the post before the end of his two remaining years as governor, Democrat John Garamendi would be elevated from Lieutenant Governor to Governor. We don't believe it, but it wouldn't upset us in the least.

Orange County Superior Court judge John M. Watson was admonished today, for the third time, and has resigned from the bench. Judge Watson submitted his resignation last month, and will remain on leave pending a formal retirement date early next year.

In a press conference today, Governor Schwarzenegger called for a temporary 1½ cent statewide sales tax increase, along with new taxes on liquor and oil as part of a plan to increase revenues $4.4 billion to make up part of an $11 billion budget deficit. At the same time, Schwarzenegger proposed $4.5 billion in spending cuts.

To save money on wages to state workers, the governor proposes to require them to take a one-day unpaid furlough each month. Columbus Day and Lincoln's Birthday would no longer be paid state holidays, and premium pay for working a holiday would be dropped. State agencies would be given the option of establishing 10-hour, four-day work weeks, and employees would no longer be allowed to count leave time as hours worked while computing overtime pay.

Oddly enough, part of this plan requires "[k]eeping high paying jobs in California by providing overtime exemptions and allowing more flexible work schedules to increase productivity; and " [c]larifying meal and rest periods to save businesses hundreds of millions of dollars in litigation costs and create less confusion from meal break violations which will mean fewer terminations."

The governor proposes to:

Provide Overtime Exemptions: Exempt employees in executive, sales, administrative, and professional jobs who earn more than $100,000 annually from overtime pay.
· Keep high-paying jobs from leaving the state. (For every 10,000 jobs paying more than $100,000 placed out of state, California’s economy misses out on $1 billion in employee spending.)
· Save approximately $90 million per year in employee classification costs.

Allow More Flexible Work Schedules: Allow employees to work more flexible hours upon request, such as 10 hour work days for a 40 hour work without being paid overtime.
· Reduce absenteeism and boost productivity, which save employers real dollars.
· Raise employee retention rates, which will reduce claims on the Unemployment Insurance trust fund.

Clarify Meal And Rest Period Laws: Clarify existing law regarding meal and rest periods to provide employers and employees with a clear understanding of meal breaks and offering flexibility to both businesses and workers.
· Will save businesses hundreds of millions of dollars in litigation costs.
· Less confusion means fewer terminations over meal break violations and a more welcoming work environment.

Full details of the governor's plan have not been released.

With the election of Barack Obama as the 44th President of the United States and with the Democrats gaining seats in the House and Senate, some changes in employment law, including wage and hour law, could be coming in the next four years. Some changes that are reasonably foreseeable:

• Minimum Wage. Though the federal minimum has been increased in recent years, and moves to $7.25 per hour in 2009, greater increases in the federal minimum wage could follow.
• Sick Leave. The Obama administration is expected to push for new legislation requiring employers to provide at least seven days of annual paid sick leave to employees.
• Family and Medical Leave. The Obama administration is expected to expand the FMLA to cover more workers, including those employed by smaller firms (20-25 employees), and to cover a broader range of causes for leave.
• Equal Pay. Though Senate Republicans filibustered the Lilly Ledbetter Fair Pay Act of 2007, intended to overturn the Ledbetter v. Goodyear Tire & Rubber Co. (2007) 550 U.S. ___, 127 S.Ct. 2162, 167 L.Ed.2d 982, decision, the Democrats will take up the cause again in 2009. The 5-4 opinion severely curtailed an employee's right to recover Title VII wage claims for violations of the Equal Pay Act. The losing plaintiff, Lilly Ledbetter, spoke at the Democratic National Convention.
• NLRB/NLRA: Union membership is below ten percent. That could change with the passage of the Employee Free Choice Act, the RESPECT Act, and the Public Safety Employer-Employee Cooperation Act. President Obama's appointees to the National Labor Relations Board are likely to be much more protective of unions and employees than the appointees of President Bush, who tended to favor management and employers.
• Executive compensation. Expect more executive compensation limitations, particularly in any future bailout legislation, including clawback provisions and bans prohibiting golden parachutes. Current restrictions are vague, prospective and limited in scope. Stronger regulations with more detailed limitations and a broader scope affecting existing contracts could pass.
• Arbitration. Expect to see a new effort to pass the Arbitration Fairness Act, an amendment to the Federal Arbitration Act in 1925, which would provide new procedures and limitations on pre-dispute mandatory arbitration clauses in consumer and employment contracts.
• ERISA. A key goal of the Obama administration will be the passage of a universal health care plan with guaranteed eligibility, comprehensive benefits, and affordable premiums and co-pays.
• Supreme Court appointments. Barack Obama mentioned Ruth Bader Ginsburg and Stephen Breyer as examples of the kind of justice he would look for to fill vacancies in the SCOTUS. In the next four year, John Paul Stevens, 88, and Ginsburg, 75, are thought to be likely to retire. David Souter, 69, has expressed some interest in leaving Washington and returning to his home state of New Hampshire. Justices Anthony Kennedy and Antonin Scalia are 72 years old.

If you see anything else on the horizon, leave a comment.