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
equirements to the timing of meal and rest breaks. The Wage Orders, however, also contain more obscure sections, with no corresponding Labor Code provision, regulating things such as the location of clocks and, in some cases, bathroom temperature. These obscure sections have inspired claims that their violation constituted a violation of California Labor Code section 1198, 262 and therefore give rise to PAGA penalties. The first case to reach the California Court of Appeal asserting this theory was Bright v. 99¢ Only Stores. 263 There, Bright filed a putative class action alleging that her employer violated a requirement in Wage Order 7-2001 264 to provide employees with “suitable seats” where the nature of the work reasonably permits their use. Bright argued that 99¢ Only Stores, by violating the Wage Order, also violated California Labor Code section 1198, entitling her to PAGA penalties under Section 2699(f). 265 In response to the complaint, 99¢ Only Stores demurred on two grounds: (1) that the violation of the Wage Order’s seating provision is not a violation of Section 1198, because it is not a “prohibited” condition of labor; and (2) that even if a violation of the seating provision was a violation of Section 1198, civil penalties under PAGA are not available because the Wage Order has its own penalty provision. 266 The trial court sustained the demurrer. 267 Bright appealed and the appellate court, in a case of first impression, found in her favor, holding that the seating requirement in Wage Order 7-2001 is a condition of labor under Section 1198 and that the use of the word “prohibited” in the statute did not mean that the conduct had to be prohibited by the Wage Order for it to come within the statute’s protections. 268 Moreover, the court found that the penalties provided for in Wage Order 7- 2001 section 20 are, by the Wage Order’s own terms, nonexclusive. And because Section 1198 does not contain its own penalty provision, the penalty provision contained within PAGA applies. 269 262 California Labor Code section 1198 states: 263 264 265 266 267 268 269 The maximum hours of work and the standard conditions of labor fixed by the commission shall be the maximum hours of work and the standard conditions of labor for employees. The employment of any employee for longer hours than those fixed by the order or under conditions of labor prohibited by the order is unlawful. 189 Cal. App. 4th 1472 (2010). Wage Order 7-2001 applies to retail employers. 189 Cal. App. 4th. at 1475. See id. at 1476. See id. See id. at 1478-79. See id. at 1481. Seyfarth Shaw LLP | www.seyfarth.com Litigating California Wage & Hour Class Actions (12th Edition) 62
Shortly thereafter, another Division of the Court of Appeal for the Second District reached the same result. In Home Depot U.S.A., Inc. v. Superior Court, 270 the appellate agreed with the Bright ruling and held that PAGA provides employees with a private right of action to recover civil penalties for violations of the “suitable seating” requirement in Wage Order 7- 2001. 271 These cases represent a new breed of class action lawsuit not previously seen in California. Though both refer to the “suitable seats” requirement in Wage Order 7-2001, it is likely that plaintiffs’ counsel will attempt to use the rulings to create private causes of action for similar Wage Order provisions. XII. Unfair Competition Claims, Business & Professions Code Section 17200 A. Former Law—Pre-Proposition 64 Beginning in the late 1990s, many plaintiffs in wage and hour cases also filed companion claims under California’s Unfair Competition Law (“UCL”), Business & Professions Code Section 17200, et seq. Before the UCL was amended in 2004, it was an extremely potent weapon because it had no traditional standing requirement. Rather, it literally authorized “any person acting for the interests of itself . . . or the general public” to bring an action to enjoin unfair competition. Court decisions gave a generous reading to the term “general public.” 272 Moreover, unfair competition was defined as any “unlawful, unfair or fraudulent business practice.” The California Supreme Court construed this language in the disjunctive, so that the UCL was turned into an omnibus consumer protection law, reaching such issues as the sale of whale meat, 273 the filing of small claims court lawsuits by a collection agency in counties distant from where the defendants live, 274 the use of the “Joe Camel” caricature to advertise cigarettes, 275 marketing sugar coated breakfast cereals as something other than candy, 276 and the sale of cigarettes to minors. The statute has never, however, permitted damage awards. 277 It has authorized only injunctive relief, including, 270 271 272 273 274 275 276 191 Cal. App. 4th 210 (2010). Id. A UCL representative action cannot, however, be brought on behalf of sophisticated business entities in their capacities as “consumers” of goods or services. Rosenbluth Int’l, Inc. v. Superior Court, 101 Cal. App. 4th 1073 (2002). People v. Sakai, 56 Cal. App. 3d 531 (1976). Barquis v. Merchants Collection Ass’n, 7 Cal. 3d 94 (1972). Mangini v. R. J. Reynolds Tobacco Co., 7 Cal. 4th 1057 (1994). Comm. on Children’s Television, Inc. v. Gen. Foods Corp., 35 Cal. 3d 197 (1983). Seyfarth Shaw LLP | www.seyfarth.com Litigating California Wage & Hour Class Actions (12th Edition) 63
- Page 13 and 14: 3) The employee performs his or her
- Page 15 and 16: decisions have concluded that under
- Page 17 and 18: Bell court to look beyond the Wage
- Page 19 and 20: place of business, would that quali
- Page 21 and 22: IWC had the authority to promulgate
- Page 23 and 24: stores” by providing them a porti
- Page 25 and 26: declare such a system illegal witho
- Page 27 and 28: employers should be able to defend
- Page 29 and 30: waive the right to reimbursement, s
- Page 31 and 32: Due to the ambiguity in the meaning
- Page 33 and 34: For each workday the employer fails
- Page 35 and 36: Arguably, no additional $100-per-pa
- Page 37 and 38: permitted” the employee to work t
- Page 39 and 40: federal decisions also held that an
- Page 41 and 42: for all overtime hours worked. The
- Page 43 and 44: much broader, such as the court’s
- Page 45 and 46: In the appeal of Chau, the appellat
- Page 47 and 48: years before the lawsuit, or for an
- Page 49 and 50: imposition of penalties, 194 routin
- Page 51 and 52: In one such class action, Elliot v.
- Page 53 and 54: First, there has been a substantial
- Page 55 and 56: Recent court decisions have begun t
- Page 57 and 58: of her hours was paid at a rate of
- Page 59 and 60: the limitations period for a penalt
- Page 61 and 62: passage, then the employee could st
- Page 63: all, but rather simply to proceed w
- Page 67 and 68: and the ability to bring a collecti
- Page 69 and 70: XIII. Class Action Fairness Act of
- Page 71 and 72: the plaintiff is “master of her c
- Page 73 and 74: alleged conduct or any related cond
- Page 75 and 76: Initially, the decisions were split
- Page 77 and 78: XIV. Class Certification A. General
- Page 79 and 80: expectations and the realistic requ
- Page 81 and 82: In the immediate wake of Sav-On, th
- Page 83 and 84: Similarly, employers may argue that
- Page 85 and 86: A 5 to 4 ruling reversed the Ninth
- Page 87 and 88: facility to the next, or variations
- Page 89 and 90: employer’s defense arsenal, and t
- Page 91 and 92: In reaching this conclusion, the Co
- Page 93 and 94: party who seeks the same relief, pr
- Page 95 and 96: is to be so maintained.” This det
- Page 97 and 98: speech. 429 Therefore, the court he
- Page 99 and 100: Puerto, or Crab Addison cases would
- Page 101 and 102: epresentative. That question was an
- Page 103 and 104: CashCall to disclose the identities
- Page 105 and 106: nothing but still are bound by the
- Page 107 and 108: Initially, there appeared to be a v
- Page 109 and 110: the case. As any one of these class
- Page 111 and 112: have any great impact on class sett
- Page 113 and 114: plaintiff’s attorney and putative
equirements to the timing of meal <strong>and</strong> rest breaks. The <strong>Wage</strong> Orders, however, also<br />
contain more obscure sections, with no corresponding <strong>Labor</strong> <strong>Code</strong> provision, regulating<br />
things such as the location of clocks <strong>and</strong>, in some cases, bathroom temperature. These<br />
obscure sections have inspired claims that their violation constituted a violation of <strong>California</strong><br />
<strong>Labor</strong> <strong>Code</strong> section 1198, 262 <strong>and</strong> therefore give rise to PAGA penalties.<br />
The first case to reach the <strong>California</strong> Court of Appeal asserting this theory was Bright v. 99¢<br />
Only Stores. 263 There, Bright filed a putative class action alleging that her employer<br />
violated a requirement in <strong>Wage</strong> Order 7-2001 264 to provide employees with “suitable seats”<br />
where the nature of the work reasonably permits their use. Bright argued that 99¢ Only<br />
Stores, by violating the <strong>Wage</strong> Order, also violated <strong>California</strong> <strong>Labor</strong> <strong>Code</strong> section 1198,<br />
entitling her to PAGA penalties under Section 2699(f). 265<br />
In response to the complaint, 99¢ Only Stores demurred on two grounds: (1) that the<br />
violation of the <strong>Wage</strong> Order’s seating provision is not a violation of Section 1198, because it<br />
is not a “prohibited” condition of labor; <strong>and</strong> (2) that even if a violation of the seating<br />
provision was a violation of Section 1198, civil penalties under PAGA are not available<br />
because the <strong>Wage</strong> Order has its own penalty provision. 266 The trial court sustained the<br />
demurrer. 267 Bright appealed <strong>and</strong> the appellate court, in a case of first impression, found in<br />
her favor, holding that the seating requirement in <strong>Wage</strong> Order 7-2001 is a condition of labor<br />
under Section 1198 <strong>and</strong> that the use of the word “prohibited” in the statute did not mean<br />
that the conduct had to be prohibited by the <strong>Wage</strong> Order for it to come within the statute’s<br />
protections. 268 Moreover, the court found that the penalties provided for in <strong>Wage</strong> Order 7-<br />
2001 section 20 are, by the <strong>Wage</strong> Order’s own terms, nonexclusive. And because Section<br />
1198 does not contain its own penalty provision, the penalty provision contained within<br />
PAGA applies. 269<br />
262<br />
<strong>California</strong> <strong>Labor</strong> <strong>Code</strong> section 1198 states:<br />
263<br />
264<br />
265<br />
266<br />
267<br />
268<br />
269<br />
The maximum hours of work <strong>and</strong> the st<strong>and</strong>ard conditions of labor fixed by the commission shall<br />
be the maximum hours of work <strong>and</strong> the st<strong>and</strong>ard conditions of labor for employees. The<br />
employment of any employee for longer hours than those fixed by the order or under conditions<br />
of labor prohibited by the order is unlawful.<br />
189 Cal. App. 4th 1472 (2010).<br />
<strong>Wage</strong> Order 7-2001 applies to retail employers.<br />
189 Cal. App. 4th. at 1475.<br />
See id. at 1476.<br />
See id.<br />
See id. at 1478-79.<br />
See id. at 1481.<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) 62
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