"California Workers Gain Longer Back-Pay Window"

Today's Daily Journal reports here (subscription) on Murphy v. Kenneth Cole Productions, Inc., ___ Cal.4th ___ (Apr. 16, 2007), in which the Supreme Court unanimously held that "the remedy provided in Labor Code section 226.7 constitutes a wage or premium pay and is governed by a three-year statute of limitations." Slip op. at 1. And in an article called "California Justices Give Employees a Break on Wage Claims," today's Recorder reports that some management-side lawyers called the ruling "shocking." I don't think anyone publicly predicted the precise alignment of votes and reasoning that resulted in yesterday's ruling. Time permitting, I will have more on the decision later today.

Comments

[Sean McLoughlin]

This decision is shocking to anyone who expects cogent or intellectually honest legal reasoning from our State's highest court. The absence of any dissent calling out the opinion's flawed logic or likely conseqences is even more disheartening.

Riddle me this, if the result they reached is so clearly dictated by the statutory language? A $10/hour non-exempt employee working an 8 hour shift takes his 30 minute duty free meal period 5:05 hours into his shift (i.e. five minutes past when the Wage Order says it must be given). Under 226.7 the worker has a claim to an extra $10, even though he has been paid for all his time and has received his meal break. How is that $10 either compensation or wages? How is it not a penalty, the intent of which is to punish noncompliance with a regulation? And if the Legislature so clearly intended for the worker to be able to reach back three (really four as we all know) years, why didn't they simple do what they did in Section 203 and write in a specific statute of limitations that is different from the presumed 1 year SOL for penalties?

[michael walsh]

I can answer that: the decision makes perfect sense unless you enter the debate with the underlying assumption that there is no rational reason for the regulations, and denying an employee the full benefits of the regulations causes no real harm. Even in your extremely atypical example, there is a compensable harm. Having worked not only as a lawyer, but also as a plumber's apprentice, wire stripper, busboy, waiter, roofer and short order cook, I can tell you that there are many jobs in which working more than five hours without being able to eat is a huge burden. That burden is compensable. The legislature, in its wisdom, decided the fair compensation is an amount equal to one hour's worth of the harmed employee's labor. The compensation is for providing labor during a time period when the employee is entitled to be providing none. Thus, the money is required to be given in exchange for the employee's labor, and is based upon the value of that labor. Hence, under Labor Code section 200, it falls within the extremely broad definition of a wage.

Shocking? There was nothing remotely shocking about the decision. In fact, for the first two or three years the law was in effect, even the defense bar didn't believe that the hour of pay was a penalty. Only after a few judges started to buy what was then a novel and almost fringe argument, did the defense bar start buying into the position. The argument is now back to where it was in 2001, 2002, 2003. Worthless.