I’d love to draw the conclusion that this is the Second District walking back the malign effects of the one cent recovery rule.  I’d love to draw the conclusion that evidence and word-of-mouth anecdotal evidence about the DLSE meant that civil courts were reconsidering just how much deference to give them, as others have done.Instead, I think this test fails the smell test, and the judges just didn’t like the chutzpah of such a disproportionate fee to recovery ratio.  There’s nothing to indicate that they understand just how commonplace this is, or the litigation it creates.So, in the meantime, I’ll take this as a possible sign of a change in law coming, but I wouldn’t count on it having meaningful effect now. 

WageLaw has an interesting update on Brinker, including a copy of the DIR’s request for publication.They note that:

Proving that it is now little more than a political spoil, Labor Commissioner Angela Bradstreet also sought publication of the opinion, even though it contradicted a long-standing DLSE position (taken when the GOP did not control the DLSE’s policies).  

The DIR has not returned multiple requests for comment on this matter.  The DIR assures me my request has been forwarded to “the appropriate person,” but I’ve heard nothing. 

More on the DLSE.  Murphy v. Check ‘N Go briefly noted.

 

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I was preparing to explore the theorizing that I and other bloggers did in the wake of Genrty that it would have implications for employment contracts in general, when I came across this footnote in the recent Murphy v. Check ‘N Go case.  “Plaintiff requests judicial notice of information on the process for bringing claims before the Labor Commissioner, which is offered to show that this process ‘does not provide the same protections for the employee and is not an adequate substitute for a court proceeding. . . .’” (Slip. Op. at 9-10 n.1)

I’ve noticed a few times where this has come up.  Here, it was a submission by Plaintiff/Appellee.  The California Supreme Court did it in Gentry, the Court of Appeal did it in Sumuel v. ADVO, Inc.  The Court’s have also declined to give any weight to the DLSE’s opinion letters, and disavowed the notion that the DLSE could issue precedent opinions.

A couple of years ago, the Legislature passed a bill (which was vetoed) that would have required the employer to show up at the DLSE hearing instead of skipping them and waiting for their day in court (AB 879 of 2005.)  I was told by a spokesman for the bill’s author that this was to prevent employees from “spinning their wheels” with the Labor Commissioner.

Now, employers generally hate the DLSE and the entire Berman hearing process.  The so-called de novo review has been rendered almost useless for employers because in order to avoid paying the employee’s attorney’s fees, you must negate all of their recovery.  But, the DLSE is, on its face, an even cheaper and more streamlined way to resolve wage hour disputes than the arbitrations many businesses are spending major coin to uphold.  There are no class actions.  There are no punitive damages.  There is almost no discovery.  Lawyers aren’t required.  The rules of evidence are very liberal.

On the other side, employees don’t need a lawyer, get help from the staff, and generally get their money in a matter of weeks, not months or years.  The notion that small recoveries don’t work there are ridiculous.  I’ve been sent to defend claims of around $100! The employee only lost a few hours of paid time off.  On top of that, the waiting time penalties almost always make it a gainful proposition for the employee, who does not end up giving a huge chunk to an attorney.  And guess what? They have really smart, experience, and knowledegable attorneys like Bill Reich who will represent you for free if there’s an appeal.

Yet, no one wants to go there.  No one wants it to do anything or have anything to do with it.   Is this simple interest group stuff and/or turf battle stuff?  (It’s unfair for employer-side attorneys, not cost effective for their clients, cuts into plaintiff’s attorney’s “market share,” and does a judicial function that the courts think/know they’re the best at)  Is that too cynical? or too naive? I’m not sure.

One of the contentions is they can’t handle the extra load.  Last I checked, the courts were bursting at the seems themselves. It seems to me that given the choice, funding the DLSE to handle a higher load is cheaper than doing the same in the courts.  But if we fund up the courts, then are we paying for the DLSE for?

Please leave comments or send me an e-mail if you have any thoughts about this.  I am genuinely confused.

There’s a little more to this than implied by the advance sheets. (First District, No. A115921)

But plaintiffs also claim that such delayed payment, even if not a deduction from salary, violates the fundamental requirement of salaried employment that the employee regularly receive[] each pay period . . . a predetermined amount.” (Part 541.118(a), talics added.) We are not persuaded. No biweekly payroll system for a company of significant size can ensure that paychecks will not sometimes be delayed when an mployee is restored to the regular payroll following a return from disability or other ypes of leave. Such departures from precise regularity are no more antithetical to the concept of salaried compensation than payroll lags incident to an employee changing jobs or receiving a promotion or pay raise would be. As long as an employee in fact receives predetermined salary for each pay period that he or she works, such one-time deviations from the employee’s regular pay schedule do not in themselves destroy the employee’s salaried status.

(Slip. Op. at 8.) In short, the Court of Appeal upheld deductions from salary for a short-term absence plan that caused some delays as not causing a failure of the salary test, but it apparently did so by italicizing one clause instead of the other (i.e., each pay period).

The court also adjusted some of the DLSE’s language for it in their Interpretations Manual. (Slip Op. at 18.) “State required disability insurance benefits do not constitute a ‘bona fide’ sick leave plan” (DLSE Manual 51.6.16.1) means “State required disability insurance benefits do not constitute a ‘bona fide’ sick leave plan when it’s the exclusive plan means of repayment.”

The courts really love to kick the DLSE around, don’t they?

Anyway, I won’t be taking this as license to encourage people to take liberties with the timing of their salary payments.