Justia California Supreme Court Opinion Summaries

The case involves Gustavo Naranjo and other plaintiffs who worked as guards for Spectrum Security Services, Inc. The plaintiffs alleged that Spectrum violated state regulations governing meal breaks by not providing legally compliant meal breaks and failing to pay an additional hour of pay, known as "premium pay," for each day on which this occurred. The plaintiffs also claimed that Spectrum violated Labor Code sections 201, 202, 203, and 226 by not timely paying owed meal break premiums as wages to employees once they were discharged or resigned, and by not reporting the premium pay it owed as wages on employees’ wage statements.The case has been through multiple stages of litigation. Initially, the trial court granted summary judgment for Spectrum, but this was reversed by the Court of Appeal. On remand, the trial court certified a class for the meal break and related timely payment and wage statement claims and held a trial in three phases. The trial court found that Spectrum had violated sections 203 and 226 by failing to pay and report the missed-break premium pay as wages. However, it issued a split decision on the question of penalties. It ruled in Spectrum’s favor regarding section 203 penalties, finding that Spectrum’s defenses were presented in good faith and were not unreasonable or unsupported by the evidence. But it ruled against Spectrum regarding section 226 penalties, finding that Spectrum was liable for penalties because its failure to report premium pay for missed meal breaks in employees’ wage statements was “knowing and intentional and not inadvertent.”Both sides appealed the trial court’s ruling. The Court of Appeal affirmed the trial court’s holding that Spectrum had violated meal break laws between June 2004 and September 2007. But it reversed the trial court’s holding that Spectrum had violated section 203 and section 226 by failing to timely pay and report the meal break premium pay owed as “wages,” reasoning that the premium pay was instead in the nature of a penalty rather than compensation for work performed.The Supreme Court of California held that if an employer reasonably and in good faith believed it was providing a complete and accurate wage statement in compliance with the requirements of section 226, then it has not knowingly and intentionally failed to comply with the wage statement law. The court affirmed the judgment of the Court of Appeal, which reached the same conclusion. View "Naranjo v. Spectrum Security Services, Inc." on Justia Law

A group of non-convicted individuals detained at the Santa Rita Jail in Alameda County, California, filed a lawsuit against the county and a private contractor, Aramark Correctional Services, LLC. The detainees were working in the jail's kitchen, preparing meals for the jail population and staff under an agreement between the county and Aramark. They were not paid for their labor. The detainees sued for failure to pay minimum wage and overtime.The case was initially heard in a federal district court, which granted in part and denied in part the defendants' motions to dismiss. The court reasoned that while the Penal Code addresses employment and wages of state prisoners, it does not address such matters for pretrial detainees confined in county jails. The court also agreed with the County that government entities are exempt from state overtime laws and therefore granted the County's motion to dismiss the claim for overtime wages. The district court certified for interlocutory appeal the legal question of pretrial detainees’ entitlement to minimum and overtime wages.The Supreme Court of California was asked by the United States Court of Appeals for the Ninth Circuit to decide whether non-convicted incarcerated individuals working in a county jail for a private company have a claim for minimum wage and overtime under California law. The Supreme Court of California concluded that non-convicted incarcerated individuals performing services in county jails for a for-profit company do not have a claim for minimum wages and overtime under Section 1194 of the California Labor Code, even in the absence of a local ordinance prescribing or prohibiting the payment of wages for these individuals. View "Ruelas v. County of Alameda" on Justia Law

This case involves a wage dispute between an employee and his employer. The employee, George Huerta, filed a class action against his employer, CSI Electrical Contractors, seeking payment for unpaid hours worked. The case revolved around the interpretation of the Industrial Welfare Commission's Wage Order No. 16 and the term "hours worked."The Supreme Court of California was asked by the United States Court of Appeals for the Ninth Circuit to answer three questions related to Wage Order No. 16. The first question was whether time spent waiting to exit a security gate on the employer's premises was compensable as "hours worked". The court concluded that it was, as the employer's mandated exit procedure, including vehicle inspection, signified a level of control over the employee.The second question was whether time spent driving between the security gate and employee parking lots while subject to employer-imposed rules was compensable. The court held that it could be compensable as "employer-mandated travel" if the security gate was the first location where the employee's presence was required for an employment-related reason other than accessing the worksite. However, this travel time was not considered "hours worked" as the employer's rules did not imply a requisite level of control.Lastly, the court was asked whether time spent on the employer's premises during an unpaid meal period, when workers were prohibited from leaving but not required to engage in employer-mandated activities, was compensable as "hours worked". The court held that it was, as the employer's prohibition on leaving the premises prevented the employee from engaging in personal activities. The employee could bring an action to enforce the wage order and recover unpaid wages for that time. View "Huerta v. CSI Electrical Contractors" on Justia Law

In the Supreme Court of California, the case revolved around the question of whether trial courts have the inherent authority to dismiss a claim under the Labor Code Private Attorneys General Act of 2004 (PAGA) on the grounds of manageability. PAGA permits aggrieved employees to act as private attorneys general to recover civil penalties on behalf of the state for Labor Code violations. In this case, defendant Royalty Carpet Mills, Inc. (Royalty) argued that trial courts should have the power to dismiss PAGA claims if they are deemed unmanageable.The Supreme Court of California held that trial courts do not have the inherent authority to dismiss PAGA claims on manageability grounds. The court emphasized that trial courts do not generally possess a broad inherent authority to dismiss claims, nor is it appropriate for them to dismiss PAGA claims by using class action manageability requirements. The court also affirmed the judgment of the Court of Appeal, which had reached the same conclusion.The court also discussed the facts of the case. Jorge Luis Estrada and Paulina Medina, former employees of Royalty, brought a PAGA claim against the company for alleged violations of Labor Code provisions requiring the provision of meal periods. The trial court certified a class action suit and later decertified it, dismissing the PAGA claim on manageability grounds. The Court of Appeal reversed this decision, which led to Royalty's appeal to the Supreme Court.The Supreme Court stated that while trial courts may use various tools to efficiently manage PAGA claims, striking such claims due to manageability concerns is not among these tools. It also noted that while trial courts and the Labor and Workforce Development Agency (LWDA) share discretion in assessing a civil penalty, the trial court's discretion does not extend to determining which cases can be investigated and enforced, a power reserved for the LWDA.The Supreme Court further rejected the argument that the retrial of the plaintiffs' representative PAGA claim would violate Royalty's right to due process. It stated that while defendants have a due process right to present an affirmative defense, this does not include the right to present the testimony of an unlimited number of individual employees. It also concluded that trial courts lack inherent authority to dismiss a PAGA claim on manageability grounds to protect a defendant's due process rights. However, the court left open the possibility that a defendant could show that a trial court's use of case management techniques so abridged the defendant's right to present a defense that its right to due process was violated.The Supreme Court affirmed the judgment of the Court of Appeal, and remanded the case for further proceedings consistent with its opinion. View "Estrada v. Royalty Carpet Mills, Inc." on Justia Law

The Supreme Court held that an employer's business entity agents can be held directly liable under the California Fair Employment and Housing Act (FEHA), Cal. Gov. Code 12900 et seq., for employment discrimination in appropriate circumstances when the business entity agent has at least five employees and carries out activities regulated by FEHA on behalf of an employer.Plaintiffs, on behalf of themselves and an alleged class, brought this action alleging claims under the FEHA, the Unruh Civil Rights Act, unfair competition law, and the common law right of privacy. Plaintiffs named as a defendant U.S. Healthworks Medical Group (USHW), who was acting as an agent of Plaintiffs' prospective employers. The district court dismissed all claims, concluding, as relevant to this appeal, that the FEHA does not impose liability on the agents of a plaintiff's employer. The federal district court of appeals certified a question of law to the Supreme Court, which answered that FEHA permits a business entity acting as an agent of an employer to be held directly liable as an employer for employment discrimination, in violation of FEHA, when the business entity has at least five employees and carries out FEHA-regulated activities on behalf of an employer. View "Raines v. U.S. Healthworks Medical Group" on Justia Law

The Supreme Court held that an aggrieved employee who has been compelled to arbitrate claims under the Private Attorneys General Act of 2004 (PAGA), Cal. Lab. Code 2698 et seq., that are "premised on Labor Code violations actually sustained by" Plaintiff maintains statutory standing to pursue PAGA claims arising out of events involving other employees in court.The Supreme Court reversed the judgment of the court of appeals holding that the trial court properly found, among other things, that PAGA claims are not subject to arbitration, holding (1) to have PAGA standing, a plaintiff must be an "aggrieved employee" - i.e., one who was employed by the alleged violator and against whom one or more of the alleged violations was committed; and (2) when a plaintiff brings a PAGA action composed of both individual and non-individual claims, "an order compelling arbitration of the individual claims does not strip the plaintiff of standing to proceed as an aggrieved employee to litigate claims on behalf of other employees under PAGA." View "Adolph v. Uber Technologies, Inc." on Justia Law

The Supreme Court held that the exclusivity provisions of the California Workers' Compensation Act (WCA), Cal. Lab. Code 3200 et seq., do not bar an employee's spouse's negligence claim against the employer when the spouse is injured by transmission of the COVID-19 virus but that an employer does not owe a duty of care under California law to prevent the spread of COVID-19 to employees' household members.The Supreme Court answered two questions of California law certified from the United States Court of Appeals for the Ninth Circuit regarding the scope of an employer's liability when an employee's spouse is injured by transmission of the COVID-19 virus as follows: (1) the exclusivity provisions of the WCA do not bar a non-employee's recovery for injuries that are not legally dependent upon an injury suffered by the employee; and (2) employers do not owe a tort-based duty to non-employees to prevent the spread of COVID-19. View "Kuciemba v. Victory Woodworks, Inc." on Justia Law

The Supreme Court held that a report of unlawful activities made to an employer or agency that already knew about the violation is a protected "disclosure" within the meaning of Cal. Labor Code 1102.5(b).Employer fired Employee after Employee complained about unpaid wages she was owed, threatened to report her to immigration authorities, and told her never to return to the establishment. The Labor Commissioner sued Employer for violations of section 1102.5, but the trial court ruled against Labor Commissioner on the claim because Employee reported her complaints to Employer rather than a government agency. The court of appeal affirmed. The Supreme Court reversed, holding that Employee made a disclosure protected by section 1102.5(b). View "People ex rel. Garcia-Brower v. Kolla's, Inc." on Justia Law

The Supreme Court affirmed the judgment of the court of appeal affirming the judgment of the trial court against a hospital based on violations of the Labor Code and the Unfair Competition Law, holding that the lower court correctly found that claim preclusion did not bar this suit.A nurse sued the staffing agency that arranged for her to work at at a hospital based on violations of the Labor Code and the Unfair Competition Law. The parties settled. Thereafter, the nurse sued the hospital based on the same alleged violations. The hospital argued that the first judgment precluded the nurse from bringing the second suit. The trial court concluded that the hospital was not in privity with the staffing agency for claim preclusion purposes. The Supreme Court affirmed, holding that the hospital was not entitled to benefit from claim preclusion. View "Grande v. Eisenhower Medical Center" on Justia Law

The Supreme Court held that the additional hour of pay an employer must pay an employee if the employer unlawfully makes the employee work during all or part of a meal or rest period constitutes "wages" that must be reported on statutorily-required wage statements during employment and paid within statutory deadlines when an employee leaves the job.Plaintiff, who was suspended from his job as a guard after leaving his post to take a meal break. Plaintiff filed a putative class action on behalf of employees of Defendant seeking an additional hour of pay, so-called "premium pay," for each day on which Defendant failed to provide employees a legally-compliant meal break. The trial court determined that Defendant had violated the meal break laws for a certain period and that a failure to pay meal break premiums could support claims under the wage statement and timely payment statutes. The court of appeal reversed in part. The Supreme Court remanded the case, holding (1) the court of appeal erred in concluding that extra pay for missed breaks does not constitute "wages" to be reported on wage statements during employment; and (2) the seven percent default rate of prejudgment interest set by the state Constitution applies to amounts due for failure to provide meal and rest breaks. View "Naranjo v. Spectrum Security Services, Inc." on Justia Law