Duane Morris Private Attorneys General Act Review – 2024

Relying on the state DLSE Manual, the plaintiff attempted to establish that Ecolab’s method of computation failed to comport with California authority, and maintained that the trial court had erred by relying on federal law to analyze his state law claims. Id. The Court of Appeal disagreed. It found that under 29 C.F.R § 778.210, Ecolab’s simultaneous payment of overtime compensation due on the monthly bonus by way of a percentage increase satisfied the overtime provisions under federal law. Id. at 173. The Court of Appeal also determined that, while California law generally would be applied over federal authority – particularly in the case of employment, where California state laws provide more protection to employees – it did not find the federal authority was contradictory to California law, nor did it feel obligated to interpret state law in a way that would give an employee a windfall by requiring payment of “overtime on overtime.” Id. With respect to Ecolab’s motion for judgment on the pleadings, the Court of Appeal declared the issue moot. Id. at 178. Unbeknownst to the Court of Appeal, the plaintiff had filed a second PAGA action against Ecolab alleging the same claims for reporting time and split shift wage violations. Id. at 178. Ecolab successfully petitioned to compel the individual reporting time and split shift wage claims to arbitration. Id. at 179. As a result, the Court of Appeal determined that the plaintiff’s appeal of the trial court’s decision for judgment on the pleadings was moot, as the Court of Appeal did not have the authority to disturb the decision to compel the claims to arbitration. Id. As such, the Court of Appeal affirmed the trial court’s ruling granting the Ecolab’s motion for summary adjudication. In Wood, et al. v. Kaiser Foundation Hospital, 88 Cal.App.5th (Cal. App. 2023), in a case of first impression, the Court of Appeal held that California’s sick pay statute is enforceable through a PAGA action. Employees in California do not have a private right of action under the state’s sick leave law. The Court of Appeal in Wood , however, was not convinced that this limitation precludes employees from using PAGA to enforce the sick pay law. Accordingly, employees now have a means to enforce California’s sick leave law — through PAGA. Finally, the decision in Arce, et al. v. Ensign Group, Inc., 96 Cal.App.5th 622 (Cal. App. 2023), is a concern for any employer facing a PAGA action. The employer there initially prevailed on summary judgment in the trial court on grounds the plaintiff had not suffered any meal or rest period violation during the PAGA period. The Court of Appeal reversed. It reasoned that § 203 of the Labor Code - which requires California employers to timely pay all final wages - served to revive the untimely claims because if the plaintiff had suffered any failure to pay wages during the entire term of her employment, such wages were due to her in her final paycheck which had issue during the limitation period. The Arce case has significant ramifications for PAGA actions where an employer may be seeking to prevail in individual arbitration so as to then defeat a stayed non-individual PAGA action pending in court. Under Arce , if the plaintiff suffered any single failure to pay wages at any time that was not corrected and paid at the time of termination, the plaintiff is aggrieved. VIII. Notable California Federal Court Rulings The defendant in Alvarez, et al. v. Sheraton Operating Corporation , 2023 U.S. App. LEXIS 6022 (9th Cir. Mar. 14, 2023) , a putative wage and hour class action and PAGA case, waited eight months to file a motion to compel arbitration, and filed a motion to dismiss and participated in discovery before doing so. It argued there was no waiver of the right to arbitration because defense counsel had been confused about the plaintiff’s signature page to the arbitration agreement, believing it at first to be a signature page to a collective bargaining agreement and only realizing it was actually tied to the arbitration agreement during discovery. The district court was dubious of this proffered rationale and wondered why, if true, the defendant asserted FAA preemption in its answer. Additionally, the district court criticized defense counsel for not providing to the court the collective bargaining agreement that “supposedly” confused them, and criticized the defendant for not clarifying earlier to its counsel that there was a signed arbitration agreement. Id . at *2. As a result, it denied the motion to compel arbitration. The defendant appealed. In a short memorandum disposition, the Ninth Circuit affirmed the denial of the motion to compel by concluding that the employer waived the right to arbitration.

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