Labor & Employment Law Blog

On September 12, 2019, the California Supreme Court decided in a unanimous decision that in a Private Attorneys General Act (PAGA) action seeking to recover penalties under California Labor Code Section 558, a plaintiff may recover civil penalties but may not recover actual unpaid wages. This is an important decision, which now clearly prevents a plaintiff from seeking both statutory penalties and wages under PAGA (as is often argued by the plaintiff). The high court did, however, reinforce that actions seeking statutory penalties under PAGA cannot be compelled to arbitration.

Can an employee sue his employer for unpaid wages by claiming that his employer and its principals “converted” his personal property to their own use, and that the principals are individually liable for the employer’s conduct? No, held the California Supreme Court in the recent case of Voris v. Lampert, (Cal S Court Case No. S241812), issued on August 15, 2019. 

In Melendez v. San Francisco Baseball Associates LLC (2019) S245607, the California Supreme Court recently held that a security guard’s state law claim for unpaid wages and “waiting time” penalties could proceed over his employer’s objections that they had to be resolved under his union’s agreement.  Because the employee’s claim was founded on a right existing in state law, and not the agreement, he was permitted to proceed with his claim in court even though the agreement was relevant to the claim and would have to be “consulted” and determining it.

George Melendez worked as a security guard at AT&T Park in San Francisco, and filed a lawsuit when he was not paid his final wages immediately after the end of each San Francisco Giant’s home stand, concert, or other event at the stadium that he worked at.  He primarily claimed that the Giants’ failure to pay him wages due at the time of termination entitled him to “waiting time” penalties of up to 30 days’ additional pay after the completion of each assignment.  He principally relied on a 2006 Supreme Court Case, Smith v. Superior Court (2006) 39 Cal.4th 77, which held that a hair dresser who was hired to work for only a single day was required to be paid at the end of that job. 

The Giants argued that there were numerous provisions in its collective bargaining agreement with the Service Employees International Union, Melendez’s collective bargaining representative, which showed that security guards were employed on a continuous year-round basis and were not terminated after single job assignments. These included provisions that classified employees based on the number of hours worked per year, provided for probationary period of 500 hours of work, and required drug screening for new hires. Because of these provisions, the Giants argued that Melendez’s claim was preempted by Section 301 of the Labor Management Relations Act,  because it required “interpretation and application” of the union agreement.

Relying on past cases, including the Ninth Circuit Court of Appeal’s 2000 decision in Balcorta v. Twentieth Century-Fox Film Corp. (9th Cir. 2000) 208 F.3d 1102, the Supreme Court rejected the Giants’ federal preemption defense.  The Court stated that not every claim that requires resort to the language in a labor-management agreement is necessarily preempted, and that this is particularly the case when the meaning of the contract is not in dispute.  The case at hand did not involve a dispute over the terms of the agreement that required a court to interpret them, and preemption could not be found based only on the fact that interpretation of the contract terms was required to determine the validity of the employer’s defense. Instead, because the legal character of the claim relied on a state law right that was not substantially dependent on the contract’s terms, the employee was permitted to proceed in court with his unpaid wages and waiting time penalty claim.

The Melendez case confirms the important principle that unless a claim under a statutory law is expressly made the subject of an agreement to arbitrate under a union agreement, or is clearly and unmistakably provided for in the arbitration clause of the agreement, such a claim may proceed even though the employer’s factual and legal defenses to the claim are based on the provisions of the agreement.

Clients with questions regarding this case or arbitration and grievance procedures in collective bargaining agreements may contact the author or their usual labor law counsel at Atkinson, Andelson, Loya, Ruud & Romo.

On Thursday March 7, 2019, the U.S. Department of Labor (“DOL”) published its new overtime pay regulation, which raises the minimum salary threshold to $35,308 per year for an employee to qualify for the Fair Labor Standards Act’s (“FLSA”) “executive, administrative, or professional” exemption from federal overtime and minimum wage laws (commonly referred to as the “white collar exemption”).  The FLSA exempts from both minimum wage and overtime requirements “any employee employed in a bona fide executive, administrative, or professional capacity.”  29 U.S.C. § 213(a)(1).  When enacting the FLSA, Congress did not define the terms “bona fide executive, administrative, or professional capacity” and instead delegated the power to define and delimit these terms to the Secretary of Labor through regulations, which the Secretary of Labor delegated to the DOL.

In a case of first impression, the California Supreme Court recently decided that an employee cannot sue a payroll company for failing to include the legally required information on the employee’s earnings statements.  The Court held that because a payroll company’s obligations are solely to the employer, an employee cannot claim that they are a third‑party beneficiary of the employer’s contract for payroll services, and cannot maintain a claim for breach of that contract against the payroll provider. (Goonewardene v. ADP, No. S238941, February 7, 2019)

Many employers outsource some or all of their payroll and related tax duties to third party payroll service providers.  These related tax duties may include withholding, reporting, and paying over certain employment (i.e. FICA, Medicare, SDI) and income taxes to the Internal Revenue Service (IRS) and California Employment Development Department (EDD).

A California jury returned a verdict in favor of Dollar Tree Stores, Inc. last week, finding that the discount retailer’s practice of printing employee paystubs on cash register receipts did not violate California law requiring employers to provide accurate wage statements to employees.  Guillen v. Dollar Tree Stores Inc., case number 2:15-cv-03813, (U.S. District Court for the Central District of ...

Berkeley’s Paid Sick Leave Ordinance took effect October 1, 2017.  The Berkeley minimum wage also increased on October 1, 2017.  And earlier this month, the City issued new guidance on its Family Friendly and Environment Friendly Workplace and Paid Sick Leave Ordinances.  The details of the Ordinances are outlined below.

Minimum Wage

Berkeley’s current minimum wage is $12.53 per hour and is scheduled to ...

On September 15, 2017, the 2017 California legislative session ended, with several employment-related bills being sent to the Governor’s desk.  The Governor has until October 15, 2017 to sign or veto bills passed by the Legislature.  Below is a quick summary of key bills that may be signed and become effective in the upcoming year:

On August 31, 2017, a federal judge in the Eastern District of Texas ruled the Department of Labor (“DOL”) exceeded its authority by more than doubling the minimum salary level needed for an employee to qualify for the “executive, administrative, or professional” exemption from federal overtime and minimum wage laws (commonly referred to as the “white collar exemption”).  U.S. District Court ...