Just a few days ago, the Fourth District Court issued an opinion holding that 226.7 penalties were "wages."  Now, today, the Second District has held the opposite.

This case makes no reference to the recent National Steel and Shipbuilding case.

For those of you unsure about rules of stare decisis in California, they are different in theory, if not in practice, than federal courts.  Just because a Superior Court feeds into a District Court of Appeal, that court is not bound by the decision of its particular District.  So just because you’re in the Fourth or Second district doesn’t matter in the way that it does if you’re in the District of Nevada and there’s a split of opinion between the Ninth and First Circuits in the federal system.

You can find all of this in Witkin.  Of course, there’s at least something to be said persuasively to the judge that he might get reversed if it goes to her particular higher court.

The Supreme Court will be resolving this.

Conley v. Pacific Gas & Electric Co. - Partial day vacation usage is not “forefeiting” it for exempt employees. DLSE opinion differs. Except for the narrow dig into Suastez, this case is unremarkable.

Hope v. California Youth Authority, 134 Cal. App. 4th 577 (2005) - $1.9M verdict for gay cook. 5 years of failure to act on complaints of discrimination. Except for the amount, this case is unremarkable.

and now for the one I’m the most nervous to report on:

Gentry v. Superior Court (Case No. B169805). This case upheld a class action waiver in an arbitration clause in the employment context on the theory that this fits into an exemption in Discover’s rule about inherently small amounts that would shield employers from any liability because of the potentially large amounts involved in employment cases.

Well, the only case of that kind I’m working on right now doesn’t involve large amounts. Be careful with this, and carefully draft any agreement. I would also suggest that you clarify this rule with any client.

The Fourth District has dropped a bomb on wage and hour law in California.  Labor Code section 226.7 has long been the subject of dispute between plaintiff and defense sides of the bar over whether it is a "penalty" or a "wage."

After years of thin authority suggesting it was a "wage," the DLSE itself, and the First District pushed the tide in the other direction.  Now, the Fourth District has created a split of authority in the state.

This Court holds that it is both a penalty and a wage.  (Relying on the kind of legislative history that is currently deemed irrelevant.)  According to this holding, the four year statute of limitations applies, and restitution is available under the UCL.

What a mess!

File this one under NEVER TRY THIS AT HOME.  Fisher & Phillips latest employment law bulletin documents the "equal opportunity harasser" defense. In a nutshell, the article cites some cases where someone who was equally harassing towards men and women might have an out.

I would never count on this, and probably would never even raise it.  Even suggesting this might exist to employers is irresponsible, and might discourage the simpler, more reasonable step of enforcing existing policies.