(March 3, 2011) The California Supreme Court has decided it will not review a 2nd District Court of Appeal decision allowing a lawsuit to proceed against an employer for violating a rule contained in the Wage Orders.
In a January 27 letter, the California Chamber of Commerce and five other employer groups asked the California Supreme Court to review the 2nd District Court of Appeal decision in Bright v. 99¢ Only Stores, 189 Cal.App.4th 1472 (2010).
The request for review was made on the grounds that the Bright ruling, when coupled with a similar decision in Harris v. Home Depot U.S.A., Inc., exposes all California employers to severe penalties, in addition to costly litigation, based on obscure provisions contained in California’s Wage Orders.
What the Supreme Court’s decision not to review Bright means for employers is that the Bright case remains law, as of now, and employers must abide by the appellate court’s ruling.
In Bright, a retail cashier claimed to have been denied a chair while working. The plaintiff claimed that the failure to provide suitable seating also violated Labor Code Section 1198, and based upon this claim, sought penalties under the Private Attorney General Act (PAGA).
In its ruling, the appellate court extended PAGA to create fallback penalties for all Wage Order working conditions, even though the Industrial Welfare Commission (IWC) had limited wage order penalties to the “underpayment of wages” and not to working conditions.
PAGA establishes civil penalties of $100 per employee, per pay period for the first violation and $200 for each subsequent violation. The act also allows “representative actions” on behalf of similarly situated coworkers.
Under Bright’s extension of PAGA, a retail employer with 40 employees, biweekly pay periods, and five technical violations per pay period, could accrue $204,000 in penalties per year, in addition to potential liability for attorneys’ fees.
Wage Order Wizard
CalChamber offers a free Wage Order Wizard to help employers determine which Wage Order applies to their workplace.
Other products and services for CalChamber members, available at www.calchamberstore.com, provide more detail about compliance.
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Staff Contact: Erika Frank