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PAGA Lawsuits Not Subject to Arbitration

PAGA Lawsuits

The Labor Code Private Attorneys General Act (PAGA) authorizes aggrieved employees to file PAGA lawsuits to recover civil penalties on behalf of themselves, other employees, and the State of California for Labor Code violations. Employees pursuing PAGA claims must follow specified requirements. Labor Code Sections 2698 – 2699.5.

Courts enforce employer-mandated arbitration agreements more often than before. Attorneys representing employees generally view arbitration as a less-favorable place for resolving disputes. They usually prefer to be in court. A recent California Court of Appeals decision held that a PAGA lawsuit is not subject to arbitration. The court opened with:

Bernadette Tanguilig, an employee at Bloomingdale’s, Inc. (Bloomingdale’s), filed a representative action on behalf of herself and fellow employees pursuant to the Labor Code Private Attorneys General Act of 2004 (PAGA) (Lab. Code, § 2698 et seq.), alleging several Labor Code violations by the company. Bloomingdale’s moved to compel arbitration of Tanguilig’s “individual PAGA claim” and stay or dismiss the remainder of the complaint. The trial court denied the motion. We affirm. Under Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348 (Iskanian) and consistent with the Federal Arbitration Act (FAA) (9 U.S.C. et seq.), a PAGA representative claim is nonwaivable by a plaintiff-employee via a predispute arbitration agreement with an employer, and a PAGA claim (whether individual or representative) cannot be ordered to arbitration without the state’s consent.

Iskanian and PAGA Lawsuits

Bloomingdale’s argued Iskanian was wrong under more recent U.S. Supreme Court decisions. On appeal, the company dropped it’s argument that it was distinguishable from Iskanian because the employee had the ability to opt out of the arbitration process. The court disagreed.

[W]e are bound by the Iskanian court’s interpretation of the pre-Iskanian United States Supreme Court decisions cited by Bloomingdale’s. Finally, we note that the Ninth Circuit has ruled that Iskanian correctly decided the federal question, thus superseding conflicting prior federal district court decisions cited by Bloomingdale’s. (See Sakkab v. Luxottica Retail North America, Inc., supra, 803 F.3d at p. 427.)

An essential point in Iskanian and Tanguilig is that PAGA lawsuits are not a dispute between an employer and an employee arising out of their contractual relationship. “It is a dispute between an employer and the state.” The employee is merely acting as a “deputized” agent of the state. Since the state did not sign an arbitration agreement with the employer, the company cannot force the state’s agent–e.g., the employee–into arbitration.

I can think of a couple of different unintended consequences of this analysis. For now, however, I’m keeping those close to my chest as I have a couple of ongoing cases where I may need to use the arguments. No sense giving away all my trade secrets.

Employers wishing to use arbitration agreements should review the agreements with counsel. Not all arbitration agreements are alike, and employees may be able to void an arbitration agreement as unconscionable. I anticipate seeing many more arbitration cases in the upcoming years. If you have an arbitration agreement you would like reviewed, or if you are considering using an arbitration agreement, feel free to contact the Nuddleman Law Firm, P.C.

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law. We cannot answer questions about specific situations or provide legal advice over the Internet. If you desire legal advice, you should contact an attorney.

Your use of this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Do not post confidential or time-sensitive information in this blog. The Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted to this blog.

The Nuddleman Law Firm, P.C. represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Pleasanton, Oakland, San Ramon, Hayward, Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

 

The Magnificent Seven Wage and Hour Rules

The Magnificent Seven

The Magnificent Seven is one of my all-time favorite movies. The story is timeless and has been adapted several times. Yes, I know the Magnificent Seven is an adaptation of Akira Kurosawa’s Seven Samurai. Even Pixar came out with it’s own version in A Bug’s Life. I never tire of the story-line and the actors in the original Magnificent Seven. I even bare a scar on my forehead from when my brother tired to imitate James Coburn’s knife throwing skills. Thankfully the butt-end of the screwdriver hit me instead of the other end. Thanks, David!

When I saw the remake coming out with some of my current favorite actors, it definitely made my “must-see” list. It also got me thinking: what other Magnificent Sevens are worth considering?

The Magnificent Seven Wage and Hour Rules

Those familiar with my law practice know that I represent a lot of employers and employees regarding wage and hour disputes. I also frequently present seminars to attorneys, HR staff and payroll specialists regarding how to pay employees correctly. Therefore, I thought it would be fun to provide my Magnificent Seven Wage and Hour Rules.

In no particular order, here is my list of seven wage and hour rules to follow if you want to avoid problems in the workplace:

  1. Only pay a salary to employees if they are truly exempt from overtime.
  2. Keep accurate records of the hours worked for at least 4 years.
  3. Have policies in place providing for regular rest and meal breaks, and have employees clock out for unpaid meal breaks.
  4. Just because you think someone is an independent contractor, doesn’t mean the government or the courts will agree.
  5. Know if local ordinances require different rules for employees working in different cities and counties.
  6. Commission and bonus agreements should be in writing and identify when a commission or bonus is earned.
  7. Tips belong to the employees, not to the employer!

Employing workers in California can be difficult. Most employers make mistakes out of good intentions rather than evil objectives. Regardless of the intent, however, employers are responsible for following state and federal wage and hour laws. Hopefully this short list will help employers and employees avoid the most common wage and hour problems.

Now, go buy your ticket for the new Magnificent Seven. I don’t know if Denzel Washington, Chris Pratt and Ethan Hawke can match Yul Brynner, Steve McQueen and James Coburn, but I’m sure it will be a good time.

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law. We cannot answer questions about specific situations or provide legal advice over the Internet. If you desire legal advice, you should contact an attorney.

Your use of this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Do not post confidential or time-sensitive information in this blog. The Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted to this blog.

The Nuddleman Law Firm, P.C. represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Pleasanton, Oakland, San Ramon, Hayward, Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

State Penalized for Failing to Timely Pay Final Wages

Prompt payment of final wages. It’s not just a good idea. It’s the law. The State of California apparently didn’t get the memo on that one. The California Supreme Court had to tell the state that retiring employees are entitled to their final wages on their last day of employment. Labor Code sections 202 and 203, requires employers to make prompt payment of the final wages owed to employees who quit. Failure to timely pay final wages allows a court to impose statutory penalties. In McLean v. State of California, a retired deputy attorney general, sued the State of California on behalf of herself and a class of former state employees who did not timely receive their final wages when they quit or retired.

The state argued that sections 202 and 203 do not apply when employees retire. It also argued that McClean should have sued the state agency for which she worked instead of the State. The court concluded that:

Labor Code sections 202 and 203 apply when employees retire from their employment. We also conclude that McLean‟s decision to name the State of California as a defendant rather than the Department of Justice is not a basis for dismissing her suit.

When Are Final Wages Due?

For most California employees, final wages are due immediately upon termination (Labor Code section 201). It does not matter whether the employee is fired or laid off. If the employer is the moving party (i.e., the one to end the relationship) then it is a termination.

In contrast, California employees who quit their employment without notice must be paid within 72 hours of his last day of work(Labor Code section 202). There is an exception when an employee provides at least 72-hours notice. In that case, the final wages are due on the last day of employment.

There are some slightly different rules for:

Penalties for Failing to Timely Pay Final Wages

Employers willfully failing to timely pay final wages pay a penalty. (California Labor Code section 203). And don’t forget that “wages” includes accrued vacation or PTO (but not paid sick leave in most cases).

This “waiting time” penalty is calculated by multiplying the employee’s daily wage by the number of days until the employee is paid. There is a 30-day maximum on the waiting time penalties, but the penalty is imposed every day–not just every working day. There are a lot of cases where the penalty exceeds the actual wages owed. The penalties are almost mandatory unless an employer can show a good faith dispute that the wages were owed.

As the State of California just learned, employees must promptly receive their final wages. Employers cannot hold the wages hostage pending return of the employer’s keys or other equipment. If you have questions about California wage and hour issues, call an experienced employment attorney.

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law. We cannot answer questions about specific situations or provide legal advice over the Internet. If you desire legal advice, you should contact an attorney.

Your use of this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Do not post confidential or time-sensitive information in this blog. The Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted to this blog.

The Nuddleman Law Firm, P.C. represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Pleasanton, Oakland, San Ramon, Hayward, Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

More Local Paid Sick Leave Ordinances

 

Over the last few years, several cities and counties in California have passed ordinances requiring paid time off or paid sick leave for employees.  California employers are still trying to figure out how to comply with California’s paid sick leave law (aka: Healthy Workplace Healthy Family Act).  Santa Monica, Los Angeles, San Diego, and Long Beach have added their own sick leave ordinances, and San Francisco has amended its sick leave ordinance, making it that much more difficult for employers to comply with the sometimes contradicting requirements.  Below are brief highlights the new/amended local ordinances.

Amended San Francisco Paid Sick Leave

Effective January 1, 2017, San Francisco’s paid sick leave law is amended in an attempt to better align its provisions with California’s paid sick leave law. The amendments provide that San Francisco’s sick leave begins to accrue upon the commencement of employment, but employers may limit usage until after 90 days of employment.  The amendments allow employers to “advance” the sick leave at the beginning of the year instead of permitting employees to accrue the time. This is treated as an advance, temporarily halting accrual until after working the number of hours necessary to have accrued the advanced amount, at which point accrual resumes.  However, unlike the grant method under California’s paid sick leave law, employers  still have to allow employees to carry over unused sick time to the following year.  I suspect this will continue to cause problems for San Francisco employers, and doesn’t really address the accrual versus one-time grant problem.

The amendments also change to the definition of “family members” for whom time may be used, expands the permitted uses to include preventative care and time for purposes related to domestic violence, sexual assault, and stalking suffered by the employee, clarifies how and when sick leave must be paid, requires written notice to employees regarding available balances of paid sick leave, and, like California’s law, requires reinstatement of unused sick leave if an employee is rehired within one year of separation.

San Francisco is usually pretty good about providing FAQ’s about their ordinances, so I suspect the city will publish material to help guide employers in the near future.

Los Angeles Paid Sick Leave

Covered employees: Employees who work two or more hours in a particular week in the City of Los Angeles

Effective date: Businesses must comply with the sick leave requirements starting July 1, 2016

Accrual rate: The ordinance provides that paid sick leave begins to accrue at the commencement of employment, and the employee shall accrue one hour of paid sick leave for every 30 hours worked

Accrual cap: Employers may implement an accrual cap of 72 hours of accrued paid sick leave.  Accrued time must be carried over from year to year

Usage cap: Employees must be permitted to use up to 48 hours of accrued sick leave each year

One-Time Grant: Instead of permitting employees to accrue paid sick leave, employers may grant the full amount of leave at the beginning of each year, and if they do so, the time need not carry over from year to year

Usage: Employers may prohibit employees from using any accrued paid sick leave until after the first 90 days of employment

Leave to care for others: In addition to the persons identified in the California sick leave law for whose care employees can use sick leave, the ordinance permits employees to use sick leave to care “for any individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship”

Santa Monica Paid Sick Leave

Covered employees: Employees who work two or more hours in a particular week in Santa Monica

Effective date: Businesses must comply with the sick leave requirements starting January 1, 2017

Accrual rate: The ordinance provides that paid sick leave begins to accrue at the commencement of employment, and the employee shall accrue one hour of paid sick leave for every 30 hours worked

Accrual cap: Employers with 26 or more employees shall provide at least 40 hours of paid sick leave as of January 1, 2017 (note, however, that the California law requires employees be permitted to accrue up to 48 hours) and at least 72 hours of paid sick leave as of January 1, 2018

Employers with 25 or fewer employees shall provide at least 32 hours of accrued paid sick leave as of January 1, 2017 and at least 40 hours of accrued paid sick leave as of January 1, 2018 (remember: California law requires employees be permitted to accrue up to 48 hours)

Accrued time must be carried over from year to year

Usage cap: Unlike the California sick leave law, the ordinance does not permit a usage cap

One-Time Grant: Instead of permitting employees to accrue paid sick leave, employers may grant the full amount of leave at the beginning of each year, and if they do so, the time need not carry over from year to year

Usage: Employers may prohibit employees from using any accrued paid sick leave until after the first 90 days of employment

San Diego Paid Sick Leave

Covered employees: Employees who, in one or more calendar weeks of the year, performs at least two hours of work in the City of San Diego

Effective date: The voters of San Diego approved the paid sick leave ordinance on June 7, 2016.  Under San Diego election laws, the law will take effect on the date the City Council adopts a resolution declaring the result of the election.  It is assumed this will occur sometime in July

Accrual rate: The ordinance provides that earned sick leave begins to accrue at the commencement of employment, and the employee shall accrue one hour of earned sick leave for every 30 hours worked within the geographic boundaries of the City of San Diego

Accrual cap: Employers may not implement an accrual cap; employees must be permitted to continue to accrue earned sick leave.  Accrued time must be carried over from year to year

Usage cap: Employers may limit usage of earned sick leave to 40 hours per year

One-Time Grant: The law does not expressly provide for a grant of earned sick leave

Usage: Employers may prohibit employees from using any accrued earned sick leave until after the first 90 days of employment

So far, Oakland and Emeryville have not changed their paid sick leave ordinances. None of the local ordinances require employers to pay out unused paid sick leave upon termination. However, if an employer allows employees to use paid sick leave for purposes other than sick leave, the employer could turn the paid sick leave into a paid time off policy which would have to be paid out at the end of the employment.

California employers with employees working in any of the cities above should review their paid sick leave f policies to evaluate whether they comply with both the state and municipal sick leave ordinances.  Businesses with employees in multiple cities should either adopt a different policy for employees in certain cities or create a single policy complies with whichever municipality is the strictest.

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.

Your use of this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted to this blog.

The Nuddleman Law Firm, P.C. represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Pleasanton, Oakland, San Ramon, Hayward, Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

Class Action Waiver Unenforceable

In Garrido v. Air Liquide Industrial U.S. LP (CA2/2  B254490 on rehearing 10/26/15) the court held the employer’s class action waiver unenforceable for non-FAA arbitration.

Mario Garrido signed a written employment agreement with his employer, American Air Liquide, Inc. (Air Liquide).  The agreement required all disputes arising out of Garrido’s employment with Air Liquide to be resolved by arbitration, and the agreement prohibited class arbitration.

After being terminated, Garrido filed a class action complaint against Air Liquide, alleging various Labor Code violations and unfair business practices.  The trial court denied a motion to compel arbitration brought by Air Liquide, finding that the agreement’s class waiver provision was improper under the test laid out in Gentry v. Superior Court (2007) 42 Cal.4th 443 (Gentry).  Following the trial court’s ruling, our Supreme Court held, in Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 364 (Iskanian), that Gentry’s rule against employment class waivers was preempted by the Federal Arbitration Act (9 U.S.C. § 1 et seq.) (FAA).

Class Action Waiver Unenforceable

The court determined that if the case were governed by the FAA, arbitration (on an individual basis) would likely be required. Because Garrido’s lawsuit was not subject to the FAA, and Gentry’s holding has not been overturned under California law in situations where the FAA does not apply, the court found that the agreement’s class waiver unenforceable.  Neither party claimed that class arbitration was appropriate.

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.

Your use of this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted to this blog.

The Nuddleman Law Firm, P.C. represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Pleasanton, Oakland, Berkeley, San Ramon, Concord, Hayward, Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

Don’t Retaliate Against Desperate Housewives

OK. I admit it.  For a short-time I watched Desperate Housewives.  I’d like to say I only watched it because my wife made me, but the truth is, I liked the show.  I also learned you don’t retaliate against desperate housewives.  So, when I heard that actress Nicolleta Sheridan—who played my favorite character, Edie Britt—was suing Touchstone Television Productions, it piqued my interest.

Apparently, Sheridan sued Touchstone under Labor Code section 6310, alleging that Touchstone fired her in retaliation for her complaint about a battery allegedly committed on her by the show’s creator, Marc Cherry.  Touchstone claimed Sheridan failed to “exhaust her administrative remedies” by filing a claim with the Labor Commissioner.  Although the trial court agreed with Touchstone, the appellate court made it clear you don’t retaliate against desperate housewives.

Don’t Retaliate Against Desperate Housewives

Sheridan alleged that “during a September 24, 2008 rehearsal, Sheridan attempted to question Cherry about the script, and he struck her in response. Sheridan complained about the alleged battery to Touchstone.”  When Touchstone did not renew Sheridan’s contract for the 6th season—I had stopped watching by then—she sued Touchstone for wrongful termination in violation of public policy.  In true Hollywood fashion, the jury deadlocked and the court declared a mistrial.  Sheridan filed a second amended complaint, alleging that Touchstone “retaliated against her in violation of section 6310 for complaining about Cherry’s alleged battery.”

Touchstone argued that Sheridan had to first file a claim with the Labor Commissioner under sections 98.7 and 6312.  Touchstone’s position had some merit, since a depublished case said employees had to exhaust their administrative remedies before filing a retaliation claim.  But in 2013, the legislature amended the Labor Code to specifically state “An individual is not required to exhaust administrative remedies or procedures in order to bring a civil action under any provision of this code, unless that section under which the action is brought expressly requires exhaustion of an administrative remedy.”

The appellate court, which was not bound by the previously depublished decision, found that the plain language of sections 6312 and 98.7 before the 2013 amendments allowed filing a Labor Commissioner complaint, but did not require exhaustion. The court went on to find that the 2013 amendment to the Labor Code “merely clarified existing law.”

So, Sheridan will get another day in court and we get to find out if Touchstone should have headed my advice: Don’t retaliate against desperate housewives.

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.

Your use of this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted to this blog.

The Nuddleman Law Firm, P.C. represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Pleasanton, Oakland, San Ramon, Hayward, Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

New Law Promises More Liability for Employee Wages

California has been a pioneer in terms of enforcing the state’s wage and hour laws.  No sooner is a problem identified than a new law is passed to resolve the problem. This year, the governor signed SB 588 to help ensure employers pay employees the wages they are owed.  It creates powerful enforcement mechanisms for the Labor Commissioner, but it also expands who can be sued when an employee thinks s/he is owed wages.

New Law Promises More Liability for Employee Wages

The new law promises more liability for employee wages by making employers, directors, officers and managing agents responsible for unpaid wage claims.

SB 588 creates Labor Code section 588.1, which provides:

Any employer or other person acting on behalf of an employer, who violates, or causes to be violated, any provision regulating minimum wages or hours and days of work in any order of the Industrial Welfare Commission, or violates, or causes to be violated, Sections 203, 226, 226.7, 1193.6, 1194, or 2802, may be held liable as the employer for such violation.

In other words, directors, officers and managing agents of the employer can be personally liable for the failure to pay wages owed.  This new law may apply to any persons that have control over an employee’s wages, and will make it easier for employees to sue a variety of people to recover allegedly unpaid wages.  The move is seen as a strong tool in the effort to ensure employees are paid properly.  Unfortunately, in the wrong hands, it can also mean more individuals will be sued even when they were “just following orders.”

SB 588 also gives the Labor Commissioner the power to mail a notice of levy to anyone possessing any credits, money, or property belonging to the judgment debtor, or who owe any debt to the judgment debtor at the time they receive the notice of levy.  For example, if a customer owes the employer money, and the employer fails to pay the Labor Commissioner’s award, the customer could receive a notice of levy informing the customer to pay the Labor Commissioner instead of the employer.  If the customer fails or refuses to pay, the customer could be liable to the Labor Commissioner for the amount it should have turned over to the Labor Commissioner

If an employer fails to pay a Labor Commissioner judgment within 30 days, the employer can be prohibited from conducting business in California unless the employer obtains a bond equal to about 10 times the amount of the actual judgment. Failure to obtain a bond can result in a stop notice and, in the instance of a long-term care facility, result in denial of licensure.

SB 588 goes into effect on January 1st. The new law promises more liability for employee wages. In addition to reviewing your policies to ensure compliance with California law, employers should also consider Employer Practices Liability insurance and Directors and Officers Liability insurance to help defray the increasing costs of litigation.

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.

Your use of this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted to this blog.

The Nuddleman Law Firm, P.C. represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Pleasanton, Oakland, San Ramon, Hayward, Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

Private Attorney General Act

Labor Code Private Attorney General Act – L.C. §2698, et seq.

The Labor Code Private Attorney General Act (“PAGA”) enables aggrieved employees to recover civil penalties for violations of the Labor Code on behalf of himself and other aggrieved employees.  If the Labor Code allegedly violated does not set forth a specific civil penalty, the employee can recover a default penalty of up to $100.00 for each aggrieved employee per pay period.

Because a PAGA plaintiff is entitled to prosecute an action on behalf of himself/herself as well as any other aggrieved employee, and because the default penalties can be assessed “per employee” and “per pay period,” PAGA penalties in a modest case can easily exceed $250,000.00. Courts have discretion to lower the penalties if, based on the facts and circumstances of the particular case, to do otherwise would result in an award that is unjust, arbitrary and oppressive, or confiscatory. Although 75% of any PAGA penalties recovered must be paid to the Labor Workforce Development Agency, an employee prosecuting a PAGA claim is entitled to recover his/her attorneys’ fees and costs.  Employers are never able to recover their attorneys’ fees defending a PAGA claim even if successful.

Before filing a PAGA lawsuit, the aggrieved employee must provide written notice by certified mail to the Labor Workforce Development Agency and the employer “of the specific provisions of the code alleged to have been violated, including the facts and theories to support the alleged violation.”  Failure to adequately describe the facts and theories can result in dismissal of the claims.  If the LWDA does not investigate the employee’s claim, the employee can file suit on the alleged violations.  In some situations, an employer may be able to “cure” the alleged violations and avoid penalties.

Recent court decisions make it difficult for an employer to force PAGA plaintiffs into arbitration or other forms of alternative dispute resolution.

Robert Nuddleman has represented aggrieved employees pursuing PAGA claims.  He has also successfully defended employers against lawsuits seeking PAGA penalties.  When the Labor Code Private Attorney General Act was first established, and when it was amended shortly thereafter, Robert Nuddleman was invited by the Labor and Employment Law Section of the State Bar of California to educate other employment attorneys regarding PAGA and its impact on employee-employer litigation.  Robert Nuddleman frequently trains other attorneys regarding pursuing and defending PAGA claims.

If your company has been accused of violating the Labor Code, or if you believe you may have a PAGA claim, contact the Nuddleman Law Firm to learn how to protect your interests.