• California Supreme Court to Consider Employee Recovery of Tips and Waiting Time Penalties
  • May 20, 2009 | Author: Felix Shafir
  • Law Firm: Horvitz & Levy LLP - Encino Office
  • Lu v. Hawaiian Gardens Casino

    On Wednesday, April 29, 2009, the California Supreme Court granted review of the Court of Appeal's decision in Lu v. Hawaiian Gardens Casino, Case No. S171442. The California Supreme Court will decide whether Labor Code section 351-which prohibits employers from taking "any gratuity or a part thereof that is paid, given to, or left for an employee by a patron"-creates a private right of action for employees.

    In Lu, a former casino dealer brought a class action challenging the legality of a casino's policy requiring dealers to contribute part of the gratuities they receive as tips to a tip pool for employees who provide service to casino patrons. Plaintiff's class action was based in part on Labor Code section 351. The Court of Appeal affirmed the dismissal of the section 351 claim, holding that section 351 did not afford employees a private right of action to enforce the protections contained in that statute.

    Pineda v. Bank of America

    The California Supreme Court also granted review of the Court of Appeal's decision in Pineda v. Bank of America, Case No. S170758.

    In Pineda, an employee gave his employer two weeks advance notice of his resignation. His employer, however, did not give its employee his final pay until several days after his resignation date. Plaintiff brought a class action asserting claims under both the Labor Code and the Unfair Competition Law (UCL) based on the defendant's failure to timely pay his final wages. The trial court dismissed plaintiff's claims and plaintiff appealed.

    The Court of Appeal held that plaintiff's claim for willful failure to timely pay wages under Labor Code section 203 was barred by the applicable one-year statute of limitations. The Court of Appeal also affirmed the dismissal of plaintiff's UCL claim, which sought to recover the section 203 penalties as restitution, holding that section 203 penalties are not restitutionary payments and thus cannot be recovered under the UCL.