In another blow to California employers, a California appellate court recently broadened the liability risk employers face for class action lawsuits.
The California Industrial Welfare Commission's Wage Orders regulate standard working conditions such as overtime, breaks, and minimum wage. Employee lawsuits have historically focused on these run-of the-mill provisions. But, in a November 2010 ruling, the California Court of Appeal for the Second District dealt a body blow to employers by ruling that an obscure regulation, "suitable seating," constituted a valid claim under California law.
In Bright v. 99 Cents Only Stores, the plaintiff brought a class action suit on behalf of hundreds of current and former employees under the California Private Attorneys General Act of 2004 ("PAGA"). She alleged that the employer failed to provide cashiers with suitable seats, in violation of IWC Wage Order 7, ยง 14. After a Los Angeles Superior Court judge held that the plaintiff could not sue under PAGA for the seating violation, the plaintiff appealed. The Court of Appeal determined that suitable seating is a "standard condition of labor" under Wage Order 7, and that consequently, the employee could use PAGA to enforce compliance. Under PAGA, an employee can collect penalties on behalf of current and former employees.
Last week, the California Court of Appeal reviewed another lawsuit filed by the Bright plaintiff attorneys. In Home Depot v. Superior Court, the plaintiff again alleged, on behalf of a class, that a retail employer had failed to provide its employees with suitable seating. As in Bright, the Court ruled that retail store employees denied suitable seating may seek penalties against their employers pursuant to California's Private Attorneys General Act.
Until Bright, no appellate court had allowed a PAGA claim based on "suitable seating." While the penalties are of minor concern when one employee complains, if an employee sues on a class-wide basis, as the plaintiff did in Bright, massive liability could result. The case also illustrates the lengths to which plaintiff-side attorneys will search California law -- leaving no obscure regulation unexamined -- in order to find grounds to bring a class action lawsuit. Employers, therefore, must heed the warning of Bright, and comply with all aspects of the wage hour laws, even obscure regulations such as "suitable seating." For example, other wage order provisions address temperature, change rooms, and elevators. At minimum, employers must comprehensively review their policies and procedures, rectify any outstanding issues, and train their managers to report potential wage hour violations.
