• Court of Appeal Holds That Punitive Damages Cannot Be Recovered for Violations of California Laws Governing Meal and Rest Breaks, Minimum Wages, and Pay Stubs
  • January 27, 2009 | Authors: Lisa Perrochet; Felix Shafir
  • Law Firm: Horvitz & Levy LLP - Encino Office
  • In Brewer v. Premier Golf Partners (Dec. 3, 2008, D050686), the Court of Appeal held that punitive damages were not available for violations of the California laws that govern meal and rest breaks, minimum wages, and pay stubs.

    The plaintiff in Brewer asserted that her former employer denied her meal and rest breaks, failed to pay her wages for the hours she worked, and did not provide her with accurate itemized wage statements. A jury concluded that the defendant paid the plaintiff less than the minimum wage, paid her less than the legal overtime compensation, did not provide her with meal periods and rest breaks on several hundred occasions, and knowingly and intentionally failed to accurately set out the total hours the plaintiff worked on her itemized wage statements. The jury awarded the plaintiff $195,000 in punitive damages (among other relief).

    The Court of Appeal reversed the punitive damages award based on two rationales. First, the court held that the so-called "new right-exclusive remedy" rule precluded an award of punitive damages. As the court explained, "'[w]here a statute creates new rights and obligations not previously existing in the common law, the express statutory remedy is deemed to be the exclusive remedy for statutory violations, unless it is inadequate.'" The court determined that the Labor Code statutes regulating pay stubs and minimum wages as well as the statutes and regulations governing meal and rest breaks created new rights that did not previously exist in the common law. The court then held that those statutes provided the express and exclusive remedy for violations of meal/rest break, minimum wage, and pay stub laws.

    The court also held punitive damages would be unavailable in the case even if the Labor Code statutory scheme did not provide the exclusive remedy. The court explained that punitive damages "are ordinarily recoverable only in 'an action for the breach of an obligation not arising from contract.'" Applying this rule, the court decided that "the Labor Code provisions governing meal and rest breaks, minimum wages, and accurate pay stubs constitute statutory obligations imposed only when the parties have entered into an employment contract and are obligations arising from the employment contract," and thus held that punitive damages could not be recovered for violations of these provisions.