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Click here for a copy of the schedule. Click here for a copy of the schedule.The California Supreme Court Clarifies Wages are NOT Part of the “Civil Penalty” under Labor Code Section 558 in a PAGA Action
On September 12, 2019, the California Supreme Court issued it decision in ZB, N.A., and Zions Bancorporation v. Superior Court [Lawson, real party in interest] (“Lawson”). In analyzing whether the Plaintiff’s lawsuit could be compelled to binding arbitration under the arbitration agreement she entered into with her employer, the Supreme Court clarified that under Labor Code section 558, employees are not entitled to recover underpaid wages in a Private Attorneys General Act (“PAGA”) claim.
Before the enactment of the PAGA, section 558 gave the Labor Commissioner authority to issue overtime violation citations for a civil penalty as follows:
(1) For any initial violation, fifty dollars ($50) for each underpaid employee for each pay period for which the employee was underpaid in addition to an amount sufficient to recover underpaid wages.
(2) For each subsequent violation, one hundred dollars ($100) for each underpaid employee for each pay period for which the employee was underpaid in addition to an amount sufficient to recover underpaid wages.
(Labor Code §558, italics added.)
The Lawson case concerned a PAGA action seeking civil penalties under Labor Code section 558. Lawson brought the representative action against her employer, ZB, N.A. — with whom she agreed to arbitrate all employment claims and forego class arbitration — and its parent company, Zions Bancorporation (collectively, “ZB”). ZB filed a motion compelling that Lawson individually arbitrate her “unpaid wages” claim under section 558 because it was not a PAGA civil penalty claim.
The trial court generally agreed, bifurcating Lawson’s action and granting ZB’s motion to compel arbitration of the “unpaid wages” issue. However, it ordered the issue to arbitration “as a representative action” for the unpaid wages of all aggrieved ZB employees. ZB responded by filing both an appeal and petition for writ of mandate with the Court of Appeal. After consolidating the two, the appellate court dismissed the appeal, holding that Code of Civil Procedure section 1294 only gave it appellate jurisdiction over an order dismissing, not granting, a motion to compel arbitration. However, ZB persuaded the Court of Appeal to issue the writ of mandate, but the court did so on a different ground from the one ZB asserted. The appellate court concluded that Lawson’s request for “unpaid wages” under section 558 in fact could not be arbitrated at all. Relying on Thurman v. Bayshore Transit Management (Thurman), the Court of Appeal interpreted section 558 to expressly include “underpaid wages” within the scope of its “civil penalty” provision. In the appellate court’s view, an employee could pursue the entire, indivisible civil penalty through the PAGA action, and that pursuant to Iskanian v. CLS Transportation Los Angeles, LLC, her employer could not compel the PAGA claim to arbitration.
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California Employers Have Another Year To Comply With New Mandatory Sexual Harassment Prevention Training Requirements
Last year, new California legislation effective January 1, 2019 expanded the mandatory sexual harassment prevention training requirements for California employees. That law required that, by January 1, 2020, employers with 5 or more employees must provide their supervisory employees with two hours of classroom or other effective interactive training and education AND must provide their
AB 51: Another Attempt to Take Down Mandatory Arbitration Agreements in California
By: Kritika Thukral
Background
Mandatory arbitration agreements are a source of contention in employment law. However, since 2000, they are generally permissible in California. In response, the California Legislature has made repeated efforts to ban such agreements over the years. In the past, many such bills have passed both the state assembly and the state senate and have ended up on the Governor’s desk. However, none of the bills have been enacted into law. Nevertheless, Assemblywoman Lorena Gonzalez from San Diego has introduced Assembly Bill 51 (AB 51) in the current legislative session. This bill is nearly identical to the previous vetoed measures to make mandatory arbitration agreements illegal.
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New DFEH Notice and Certification Related to Medical Leaves and Parental Leaves under California Law
California employers covered by the California Family Rights Act (“CFRA”) and/or the California New Parent Leave Act (“NPLA”) should take note that California’s Department of Fair Employment and Housing (“DFEH”) has issued two new documents that are relevant to the administration of an employee’s leave under these laws.
- Family Care and Medical Leave and Pregnancy Disability Leave Notice.
The DFEH’s new Notice provides notice to employees that under the CFRA they can take up to 12 workweeks within a 12 month period for the birth, adoption, or foster care placement of their child or for their own serious health condition, or that of their child, parent, or spouse, if they meet the eligibility requirements for leave under the statute – which are: more than 12 months of service; 1,250 hours in the 12-month period before the date leave begins; and are employed at a worksite where the employer has 50 or more employees at that worksite or within a 75 mile radius. So far, nothing new right?
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