• California's "Sue Your Boss" Law is Severely Limited
  • August 27, 2004 | Author: Helene J. Wasserman
  • Law Firm: Ford & Harrison LLP - Los Angeles Office
  • In a move that will provide at least some procedural safeguards for employers who have been hit by and are subject to litigation arising from the passage of the "Labor Code Private Attorneys General Act of 2004," which has been referred to as the "Sue Your Boss" law, on August 11, 2004, California Governor Schwarzenneger has signed into law Senate Bill 1809.

    SB 1809 amends, and in some respects repeals, various aspects of the Labor Code legislation that went into effect January 1, 2004 regarding how and for what Labor Code violations employees may sue their current or former employer. Below are the some significant aspects of SB 1809.

    • Labor Code Section 431, which required that all employers who require applicants to sign employment applications file copies of the application forms with the Division of Labor Standards Enforcement, is repealed.

    • Employees who claim that their employer violated some provision of the Labor Code relating to a posting or notice, or relating to agency reporting or filing requirements, are barred from bringing suit. This relates to all such violations except where the filing or reporting requirement involves mandatory payroll or workplace injury reporting.

    • If an employee believes that one of many of the specifically-delineated Labor Code has been violated, (with exceptions pertaining to violations of California's Occupational Health and Safety Act), there is a procedure that must be followed before the employee can file suit. First, the employee must give written notice by certified mail to the Labor and Workforce Development Agency and the employer of the specific violations, including facts and theories to support the alleged violations. The agency then shall notify the employer and employee that it does not intend to investigate the complaint within 30 days of the postmark of the notice of complaint. If the agency does not do this or does not elect to investigate, the employee may file suit. If the agency intends to investigate and so notifies the employer and the employee, then the agency has 120 days to investigate and determine if a citation should issue. If the agency does not issue a citation, the employee may file suit. If the agency issues a citation, the employee may not file suit. This would apply to most wage and hour matters, including failure to pay wages, meal and rest period violations, overtime compensation, and the like. The significance of this provision is that it requires that the agency at least have the ability to become involved prior to the employee racing out to file a lawsuit in court.

    • If an employee believes that a non-delineated Labor Code violation has occurred, the employee must give written notice, as detailed above, to the Labor and Workforce Development agency and the employer. The employer then has a 33 day period to cure the violation and give written notice of the cure. If the problem has been cured, then the employee cannot file suit. The employer can only avail itself of this provision three times in a 12 month period for the same violation.

    • If an employee believes there to be a violation of certain OSHA provisions, he or she must provide notice to the Division of Occupational Safety and Health and the employer, with a copy to the Labor and Workforce Development Agency, in the same manner as detailed above for non-OSHA violations. If the division issues a citation, the employee may not bring suit. If the division does not issue a citation, the employee may challenge that decision in superior court, which is required to follow the precedents of the Occupational Safety and Health Appeals Board. If the court determines that a citation should have issued and orders the division to issue a citation, the employee may not bring suit.

    • B 1809 will be RETROACTIVE. That means that employers who are currently defending litigation that was brought after January 1, 2004 pursuant to the Labor Code Private Attorneys General Act of 2004, may be entitled to have the action either stayed pending processing through the administrative scheme of the new law, or potentially dismissed, without prejudice, pending the administrative process.

    • Certain penalties that can be assessed by the courts in these types of cases are also delineated.

    These are just the highlights of this important piece of new legislation. As a result of this law, it has just become even more important to be aware when an employee provides notice of a violation. In some cases, an employer may choose to contact the agency and specifically request that the agency get involved and investigate. That way, if there is a violation, it may be handled at the administrative level, and the employer may be able to avoid litigation. And, if the agency finds there to be no violation, while that will enable the employee to file suit, it will be interesting to see how many employees (and how many attorneys) will want to proceed with litigation if the agency has investigated and determined there to be no violation. It is likely that most employees will anticipate that the agency, which is probably overworked as is, will simply let the time to advise of an investigation and the time to conduct an investigation pass, so that the employee has a chance to file suit. Time will tell how great the impact of this legislation will be.