In Prachasaisoradej v. Ralph's Grocery Co., ___ Cal.4th ___ (Aug. 28, 2007), the Supreme Court held 4-3 that the plaintiff employee had not stated a claim for certain alleged Labor Code violations or for violation of the UCL's "unlawful" prong. The majority opinion (by Justice Baxter, with Chief Justice George and Justices Chin and Corrigan concurring) says nothing substantive about the UCL per se, focusing instead on the Labor Code provisions at issue. The opinion begins:
We confront a significant question of California wage law. Defendant Ralphs Grocery Company, Inc. (Ralphs), a supermarket chain, implemented a written incentive compensation plan (ICP or Plan) whereby certain employees of each store were eligible to receive, over and above their regular wages, supplementary sums based upon how the store’s actual Plan-defined profits, if any, for specified periods compared with preset profitability targets. For both target and actual purposes, profits were determined by subtracting store operating expenses from store revenues. Plaintiff claims the Plan’s formula for calculating these supplemental profit-sharing payments thus violated California statutes, rules, and decisions that prohibit an employer from shifting certain of its costs to employees by withholding, deducting, or recouping them from wages or earnings, or otherwise obliging employees to contribute to them.
Slip op. at 1. It concludes:
[W]e hold that Ralphs’ profit-based supplementary ICP, designed to reward employees beyond their normal pay for their collective contribution to store profits, did not violate the wage protection policies of Labor Code sections 221, 400 through 410, or 3751, or Regulation 11070, insofar as the Plan included store expenses such as workers’ compensation costs, cash and merchandise shortages, breakage, and third party tort claims in the profit calculation. The derivative claim of liability under Business and Professions Code section 17200 thus also fails. Accordingly, we will reverse the decision of the Court of Appeal, which reversed the judgment of dismissal entered after the trial court sustained Ralphs’s demurrer to plaintiff’s complaint without leave to amend.
Slip op. at 32.