Litigating California Wage & Hour and Labor Code Class Actions
Litigating California Wage & Hour and Labor Code Class Actions
Litigating California Wage & Hour and Labor Code Class Actions
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law enforcement agencies, representing the same legal right <strong>and</strong> interest as those agencies, in a<br />
proceeding that is designed to protect the public, not benefit private parties.” 512 The court<br />
concluded that, because the purpose of the FAA was to govern arbitration of private disputes, as<br />
opposed to enforcing “public rights,” the FAA does not preempt state law exemptions PAGA claims<br />
from arbitration. 513<br />
The National <strong>Labor</strong> Relations Board entered the fray, joining the assault on class-action waivers, in<br />
Cuda v. D.R. Horton, Inc., where the Board ruled that Concepcion did not apply in cases that<br />
involved waiver of rights protected by the NLRA . 514 The Board held that employers cannot force<br />
employees to sign arbitration agreements that include class action waivers. Such an agreement<br />
unlawfully restricts employees’ Section 7 right to engage in concerted action for mutual aid or<br />
protection, notwithst<strong>and</strong>ing the FAA. The Board stressed that arbitration agreements are not per se<br />
unenforceable. However, whether the class/collective action mechanism is used in arbitration or in<br />
a court of law, the Board held that class resolution must be available to employees. The Board<br />
distinguished Concepcion on the ground that it involved a conflict between FAA <strong>and</strong> state law,<br />
whereas D.R. Horton involved a conflict between two federal statutes.<br />
XVIII. Individual Liability<br />
Some plaintiffs have employed the tactic of suing corporate officials personally in seeking unpaid<br />
wages. In 2005, in Reynolds v. Bement, 515 the <strong>California</strong> Supreme Court held that individuals<br />
cannot be held liable for overtime pay under <strong>Labor</strong> <strong>Code</strong> Sections 510 or 1194. The court left open<br />
the possibility, however, that individual supervisors could be held liable for civil penalties.<br />
Seyfarth Shaw advocated in Reynolds that <strong>California</strong> law does not impose individual liability on<br />
managers for wage <strong>and</strong> hour violations. Rather, the law imposes the primary civil obligation to<br />
comply with the wage <strong>and</strong> hour laws—including the obligation to provide back pay or damages—<br />
upon “employers” (a term that is not defined), while expending the scope of criminal liability or civil<br />
punishment to broader categories, such as “other persons” or “officers or agents” of an employer.<br />
Where the Legislature wanted to create individual liability, it referred to “any person” being liable, as<br />
opposed to cases where it held that an “employer” is liable. 516<br />
512<br />
513<br />
514<br />
515<br />
516<br />
197 Cal. App. 4th 489, 500 (2011).<br />
Id. (“AT&T does not provide that a public right, such as that created under PAGA, can be waived if such a waiver is<br />
contrary to state law”).<br />
Cuda v. D.R. Horton, Inc., 12-CA-25764 (N.L.R.B. Jan. 3, 2012)<br />
36 Cal. 4th 1075 (2005).<br />
Compare Lab. <strong>Code</strong> § 553 (criminal liability for overtime violations available against “[a]ny person”) with Lab. <strong>Code</strong><br />
§ 510 (discussing only “employer’s” liability); see also Lab. <strong>Code</strong> § 1197.1 (imposing a civil fine on “[a]ny employer or<br />
Seyfarth Shaw LLP | www.seyfarth.com <strong>Litigating</strong> <strong>California</strong> <strong>Wage</strong> & <strong>Hour</strong> <strong>Class</strong> <strong>Actions</strong> (12th Edition) 116