Key California Employment Law Cases: July 2017

by Payne & Fears
Contact

This month’s key California employment law cases involve wage and hour (payment of wages) and civil procedure (class and representative actions).

Wage and Hour - Payment of Wages: Minnick v. Auto. Creations, Inc., 2017 WL 3203265 (Cal. Ct. App. July 28, 2017)

Summary: Vacation policy, which required one-year waiting period before vacation time could be earned and accrued, did not violate prohibition against forfeiture of wages upon termination.

Facts: Plaintiff Minnick sued his former joint employers, defendants Automobile Creations, Inc. and Dynamic Auto Images, Inc., alleging their vacation policy violated California law because it required employees who worked for less than one year to forfeit vested vacation pay upon termination.  Plaintiff brought the action individually and on behalf of all similarly situated employees, and sought penalties under the California Private Attorneys General Act of 2004.  Plaintiff alleged that defendants’ vacation policy, which provided that employees do not begin to earn and accrue vacation time until after their first year, violated state law because it required employees who worked for less than one year to forfeit vested vacation pay.  Defendants demurred to plaintiff’s second amended complaint because he was terminated during his first year and thus did not have any vested or accrued vacation pay.  The trial court sustained defendants’ demurrer without leave to amend.

Court’s Decision: The California Court of Appeal affirmed.  First, an employer may provide a waiting period before an employee becomes eligible to earn vacation, and if the employer’s policy is clearly stated, the waiting period policy is enforceable.  Second, such a policy does not contract around the rule against forfeiture of wages.  An employer may lawfully decide it will not provide vacation and, by logical extension, can decide it will not provide paid vacation until after a specified waiting period.  Here, defendants’ vacation policy clearly provided for a waiting period and reasonably informed employees that their vacation accrual began after the completion of their first year.  Plaintiff could not create an ambiguity in the policy by construing a single sentence out of context that an employee is entitled to one week of vacation after a year of service.

Practical Implications:  With the expansion of paid sick leave and other time off benefits, many employers are implementing waiting periods for employees to accrue paid vacation.  A waiting period is lawful if the policy is clear and unambiguous.  The vacation policy should explicitly state that vacation time is not earned and does not begin to accrue until after the waiting period is completed.  

Civil Procedure - Class and Representative Actions: Williams v. Superior Ct., 3 Cal. 5th 531, 220 Cal. Rptr. 3d 472 (2017)

Summary: Plaintiff in PAGA action can discover contact information of other employees without good cause or compelling interest, while privacy interests and burden to employer can be factors affecting scope of discovery.

Facts: Plaintiff employee brought a putative class action against defendant employer, Marshalls, under the California Private Attorneys General Act (“PAGA”) alleging statewide wage and hour violations.  During discovery, plaintiff sought contact information for all California employees.  When defendant resisted, plaintiff filed a motion to compel production of the information.  The trial court granted the motion as to the store where plaintiff worked, but denied it as to every other California store, conditioning any renewed motion for discovery on plaintiff sitting for a deposition and showing some merit to his claims.  Plaintiff petitioned the California Court of Appeal to compel the trial court to vacate its discovery order.  The court of appeal denied the writ, finding that plaintiff failed to set forth specific facts showing good cause justifying the discovery.

Court’s Decision: The California Supreme Court reversed, holding that in the absence of privilege, the right to discovery is broad and to be construed liberally so that parties may ascertain the strength of their cases at trial and the truth may be determined.  First, a PAGA plaintiff’s request for information about other statewide employees cannot be overbroad or irrelevant because PAGA permits an aggrieved employee to recover on their behalf.  Nothing in the characteristics of a PAGA suit, which is essentially a qui tam action filed on behalf of the state to assist it with labor law enforcement, affords a basis for restricting discovery more narrowly.  Even in non-PAGA class actions, the contact information of those a plaintiff purports to represent is routinely discoverable as an essential prerequisite to effectively seeking group relief.  Second, defendant made no showing of the burden disclosure would impose, and the statutory scheme imposes no good cause requirement for seeking information by interrogatory.  Finally, the right to privacy is subject to a shifting standard depending on the nature of the information sought.  Courts should consider whether a legally recognized privacy interest exists, the existence of a reasonable expectation of privacy in the circumstances, and the seriousness of any invasion of the privacy.  The privacy interests of other employees can be addressed with a protective order or by conditioning discovery on a notice to putative class members with an opportunity to opt out from disclosure.

Practical Implications:  Limiting broad discovery in PAGA actions now will be much more difficult for employers, as an employee working in one location has a path to discover information about all other employees working in California.  This will significantly increase the cost of defending PAGA actions and the risk that a plaintiff’s lawyer will be able to contact employees about how they are paid.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Payne & Fears | Attorney Advertising

Written by:

Payne & Fears
Contact
more
less

Payne & Fears on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.