Wage and Hour Case Notes

• Citation: Vol. 33 No. 2
• Publication year: 2019
• Author: By Leonard H. Sansanowicz

Wage and Hour Case Notes

By Leonard H. Sansanowicz

Leonard H. Sansanowicz is the principal of Sansanowicz Law Group, P.C. and represents employees in all aspects of employment law. He is a member of the Executive Board of the California Employment Lawyers Association, as well as the Executive Committee of the Labor and Employment Section of the Los Angeles County Bar Association. He can be contacted at: leonard@law-slg.com.

Individuals Acting on Employer's Behalf Personally Liable for PAGA Penalties

Atempa. v Pedrazzani, 27 Cal. App. 5th 809 (2018)

Labor Code § 558(a) provides that an employer "or other person acting on behalf of an employer" who causes a violation of the laws in the 500 series of the Code (which includes statutes pertaining to overtime and meal periods) is subject to a civil penalty. Labor Code § 1197.1(a) similarly provides that an employer "or other person acting either individually or as an officer, agent, or employee of another person" who pays or causes to be paid less than the applicable minimum wage is subject to a civil penalty. The plaintiffs worked for a restaurant owned by a corporation of which the defendant was the owner, president, secretary, and director. Plaintiffs filed a class action for, inter alia, failure to pay overtime and the minimum wage, and included a cause of action for civil penalties under the Labor Code Private Attorneys General Act of 2004 (PAGA). Plaintiffs prevailed at a bench trial and were awarded PAGA penalties against both the restaurant and the defendant, jointly and severally.

The defendant contended he should not be held personally liable simply for being an individual officer of the corporate employer (restaurant), since he was not the plaintiffs' employer. The court of appeal rejected this argument, holding that the plain meaning of the statutes' language established individual liability based on the facts at issue. The Atempa court distinguished Reynolds v. Bement¹ and Martinez v Combs,² noting that those two cases focused on who could be held liable for the employer's conduct and how to determine the employer's "identity" for purposes of a private right of action for wages, whereas the statutes in question focus on the actions of individuals and conduct giving rise to civil penalties. The court highlighted that dictum in Reynolds suggested there were remedies other than recovering lost wages from corporate officers and directors, such as through civil penalties.³ In a footnote, the Atempa court agreed that the two statutes in question allowed for recovery of flat sums in amounts "sufficient to recover underpaid wages," not as wages qua wages but rather as civil penalties. Because the defendant was a person other than the employer who had caused the Labor Code sections regarding overtime and minimum wage to be violated, he was subject to civil penalties, which could be enforced by the plaintiffs through a PAGA action, and to post-judgment interest. The court also held that the alter ego doctrine did not apply.

PAGA Notices Must Contain More Than Bare Pleadings and Must Be Timely Filed

Brown v. Ralphs Grocery Co., 28 Cal. App. 5th 824 (2018)

Labor Code § 2699.3(a)(1) requires an aggrieved employee under PAGA to give written notice of the Labor Code sections alleged to have been violated to both the employer and the Labor and Workforce Development Agency (LWDA), and the notice must describe the facts and theories supporting each violation. Here, the plaintiff's description of the violations was little more than "a string of legal conclusions with no factual allegations or theories of liability to support them,"⁴ such as the employees "did not take all meal and rest periods and were not properly compensated for missed meal and rest periods" in violation of Labor Code §§ 226.7 and 512. The court of appeal held that such a notice did not provide enough information for the LWDA to assess how serious the violations were (i.e., whether it should investigate), or for the employer to understand which policies or procedures needed curing. The court did note two exceptions, however. First, in the plaintiff's description of the alleged wage statement violations, "the failure to include the name and address of the legal entity that is the employer," was adequate to describe the violation of Labor Code § 226(a) requirements. Second, the claimed violation of Labor Code § 558, which sets forth a civil penalty for the violation of other Labor Code provisions, was "not the type of provision to be specified in a PAGA notice," since the employee needed to allege an underlying violation...