By Ronald Miller, J.D. Employees who asserted that several employers violated the California Labor Code with respect to the requirement that workers be provided with rest breaks may pursue their claims that the companies violated this provision by locating resting facilities in remote locations, ruled a federal district court in California. Contrary to the employers’ contention, payments made under Section 226.7 were properly considered as wages, so the employees could bring a derivative claim under Section 204. However, the court dismissed their claim under the UCL, since wages awarded for failure to provide rest breaks under Section 226.7 would not be earned in order to pursue restitution for purposes of the UCL (Parson v. Golden State FC, LLC, May 2, 2016, Tigar, J.). The plaintiffs were warehouse workers who sought to represent a putative class of employees who worked at warehouses for various employers. According to the employees the employers’ business operations are governed by Wage Order 7 of the California Department of Industrial Relations (DIR). The wage order applies to employers in the mercantile industry and requires "net ten minute" rest breaks "at about the middle point of each work period lasting four hours or major fraction thereof." That is, employers must provide "ten minutes of actual paid rest time." Resting facilities. However, the employees alleged that the employers located designated resting facilities at locations that were remote from their work areas such that they failed to provide suitable facilities. Specifically, the employees asserted that they had to walk 2-3 minutes each way to get to restroom facilities, so that about half of the rest time was taken up walking to and from the resting area. Because this practice violated the "net ten minute break rule," the employees claimed that each affected employee was owed one hour of additional pay, and the employers were subject to civil penalties. The employer moved to dismiss three of the five claims raised by the complaint. The crux of the employees’ claims revolved around the employers’ alleged failure to provide proper rest breaks for which they sought wage premiums. The employers alleged that the employees’ claim under California Labor Code section 204 should be dismissed because there is no private right of action for an alleged Section 204 violation, and also because wage premiums awarded under Section 226.7 are not "wages for labor performed." They also asserted that the employees’ claim under Section 203 should be dismissed because that provision does not allow recovery for "wages" obtained as a premium or penalty. Finally, they asserted that the employees’ UCL claim should be dismissed because the UCL provides only restitution, not damages. Private right of action. As an initial matter, because the employees did not argue regarding their claim under Section 203, the court granted the employer’s motion as to that claim. Next, it turned to consider the employees’ claim under Section 204. Section 204 establishes that wages must generally be paid on a semi-monthly schedule. The remedy for a violation of Section 204 is found under Section 210, which provides for civil penalties. Here, the employers argued that there was no private right of action for a Section 204 violation. Although the employees acknowledged that there was no private right of action under Section 204, they asserted that they were bringing these claims under the PAGA, which allowed the recovery of penalties owed to the Labor and Workforce Development Agency. Still, the employers contended that the employees were not seeking wages for "labor performed," but sought "premiums" for failure to provide rest breaks under Section 226.7. After conducting its own review of available case law, the court concluded that payments under Section 226.7 were properly considered as wages. Accordingly, it ruled that the employees could bring a derivative claim under Section 204. Although an employee who successfully brings a Section 226.7 claim is challenging a failure to provide rest breaks, the remedy for that failure is additional wages. Nothing in the California Supreme Court’s rulings in Kirby v. Immoos Fire Prot., Inc., and Murphy v. Kenneth Cole Prods., Inc., suggests that wages awarded under Section 226.7 be treated any differently than other wages earned by the employee. Accordingly, there is no reason to assume that the employee should not be entitled to the same protections for these wages than any others. Thus, the court concluded that the payments awarded under Section 226.7 were properly classified as wages for the purpose of Section 204. Accordingly, the employers’ motion to dismiss the Section 204 claim was denied. UCL claims. However, the employers were granted their motion to dismiss the UCL claim. The employees sought injunctive relief requiring that the employers amend their business practices to comply with the "net ten rest break rule," and to make payment of statutory wages where the break rules were violated. However, the employers contended that the UCL claim must be stricken because the provision provides only for injunctive relief and restitution, and "damages are not recoverable." Here, the employees alleged that the employers owed each affected employee for each improper rest break one hour of additional pay and civil penalties. It is these two forms of relief that the employers contend cannot be recovered under the UCL. The court concluded that in this instance wages do not constitute restitution for purposes of the UCL. Much like under Section 203(a), wages awarded for failure to provide rest breaks under Section 226.7 would not be earned by the "employee who has given his or her labor to the employer in exchange for that property." Thus, the employers’ motion to dismiss the employees’ UCL claim with respect to wages or penalties owed was granted.
Interested in submitting an article?
Submit your information to us today!Learn More