Not too long ago, Margaret Gillespie defended claims filed against one of her business clients alleging the company had violated California’s labor code by not printing its full legal name on its paystubs.
Her client faced potentially hefty fines under the state’s Private Attorney General Act, or PAGA, a law that has drawn the ire of a slew of employers because of the financial liability it can pose for technical violations such as that one.
“Let’s just say their name was ‘Smith Wholesale South America Inc.’ and what they put on the wage statement was just ‘Smith,’” said Gillespie, a shareholder in the Century City office of Littler Mendelson who spoke in generalities to avoid identifying her client. “It was a name that everybody called it anyway and everybody knew that it was the same entity.”
But now, employers in Los Angeles and throughout the state can find a bit of relief in a recent PAGA amendment that grants businesses 33 days to cure certain technical labor code violations. Gov. Jerry Brown signed the amendment, AB 1506, into law last month, putting the changes in effect immediately.
“Our labor and employment laws are critically important,” said Assemblyman Roger Hernández, D-West Covina, who authored the bill, in a statement. “But it doesn’t do anyone any good for employers to be caught up in litigation over minor or technical paystub violations that are easily fixable. We need to look for opportunities to provide balance between protecting workers’ rights and protecting employers from unnecessary litigation.”
However, the amendment stopped short of addressing other technical violations, such as failing to correctly state on pay stubs all applicable hourly rates and the number of hours for each rate.
Regardless of the labor code violation, PAGA allows aggrieved employees who sue a company – including current and former workers – to collect $100 on behalf of each affected current and former employee for the first violation plus $200 per employee for every violation thereafter.
“Even if you’ve only got five employees and you issue paychecks twice a month, that’s 10 paychecks total per month,” Gillespie said. “That’s 120 paychecks a year so before you know it you’re in five figures.”
Robert Cooper, co-chair of the labor and employment practice group at the downtown L.A. office of Buchalter Nemer, said he has seen PAGA claims filed en masse for several years now and that the new amendment is not likely to reduce that volume by much – if at all.
“It won’t decrease them at all,” Cooper said, “because very few claims rely solely on the two subsections of the labor code (impacted by AB 1506).”
Tech Savvy
About 50 lawyers and technology developers teamed up at UCLA’s School of Law late last month to take part in a weekendlong competition dubbed Code the Deal Hackathon to build an app that could enhance the legal industry.
Six groups presented their ideas to a panel of judges. The winners, who took home $4,000, built a prototype for an app that would allow housing tenants to take a picture of their lease in a program that could flag any provisions that appear abnormal.
This was the first time the event was held in Los Angeles. But Aaron Yowell, an attorney at event co-sponsor Nixon Peabody, said he doesn’t think it will be the last.
“It’s about being thoughtful about how we practice law and figuring out ways to improve our practices and increase the value for clients,” he said. “It’s an opportunity which lawyers don’t get all that often, just to take a step back and think about how they do things.”
Legal Landscape
Michael Dore, a former associate in the downtown L.A. office of Gibson Dunn & Crutcher, has rejoined the firm after serving as a federal prosecutor in the U.S. Attorney’s Office for the Central District of California for five years. Dore is now of counsel based downtown. … Morrison & Foerster has expanded its real estate practice in downtown after hiring Irv Hepner as counsel, Amanda Myers as senior associate and Meagan Froemming as associate. … Century City attorney David J. Pasternak has been sworn in as president of the State Bar of California. … Latham & Watkins has hired Glen Mastroberte as counsel in its entertainment, sports and media practice group in Century City. The firm also promoted downtown associates Douglas H. Burnaford and Michelle L.C. Carpenter to partnerships effective Jan. 1. Additionally, Latham has elected Kenneth D. Askin, Eric Cho, Heather A. Crossner, Mark O. Morris and Aron Potash to counsel effective Jan. 1. … Ryan Leaderman has joined Liner as a partner in the firm’s real estate and land-use practice group in downtown. Liner also hired Tracey Steele as an associate in the firm’s real estate group in Westwood.
Staff reporter Cale Ottens can be reached at [email protected] or (323) 549-5225, ext. 221.
