California Supreme Court Schedules Oral Arguments In Cases Of Potential Interest To Employers

The California Supreme Court has scheduled for oral argument two cases of potential interest to employers:

On May 25, 2010, the Court will hear oral arguments in Lu v. Hawaiian Gardens Casino. The issue to be decided in that case is whether "Labor Code section 351, which prohibits employers from taking 'any gratuity or part thereof that is paid, given to, or left for an employee by a patron,' create a private right of action for employees?" In other words, the Court will decide whether a current or former employee can personally sue his or her current or former employer for alleged violation of Labor Code section 351.

On June 2, 2010, the Court will hear oral arguments in Clark v. Superior Court. Although the issue to be decided is whether statutory penalties for violations of California's elder abuse laws are recoverable as restitution under California's Unfair Competition Law ("UCL") codified at California Business and Professions Code section 17200, et seq., the case is potentially of interest to California employers because the California Labor Code provides for a variety of penalties, and it is currently understood that such penalties are not recoverable as "restitution" under the UCL. If the Court holds that statutory penalties for violations of California's elder abuse laws are recoverable as restitution under the UCL, that might pave the way for plaintiff current or former employees to argue that Labor Code penalties are likewise recoverable under the UCL.

We will report on any further significant developments in these cases as information becomes available.

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