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Pollo Loco Sued Over Labor Issue

Pollo Loco Sued Over Labor Issue

By CHRIS CZIBORR

Orange County Business Journal

In a potential test case for a new California law allowing workers to sue their employers over labor law violations, three managers of El Pollo Loco Inc. charge that they were misclassified as exempt from overtime and are seeking back pay and other compensation.

The managers are suing on behalf of themselves and other general managers and restaurant managers in California. The class-action suit seeks back overtime, meal periods and other penalties. They’re claiming penalties of $50 per underpaid manager for each pay period covering the initial violation, and $100 per underpaid manager for each subsequent pay period.

Cesar Nava, an Oxnard lawyer representing the managers, said the case has nothing to do with SB 796. Others familiar with the litigation, however, said there are ties to the new law and that it could mark the start of a series of lawsuits against businesses.

Officials at Irvine-based El Pollo Loco declined comment on the suit. Assemblyman John Campbell, R-Irvine, said he has spoken with Chief Executive Stephen Carley about the suit. Campbell is trying to repeal SB 796.

Eric Sohlgren, a lawyer with Irvine’s Payne & Fears LLP, which defends businesses on labor and employment issues, said he sees the suit as a possible precedent-setting case for pursuing overtime cases under SB 796.

“The plaintiffs are indirectly attempting to obtain relief under SB 796, which allows an employee to recover labor code penalties on behalf of others,” he said. “In this case, the plaintiffs may use 796 to try to recover penalties. There will probably be a fight in this case about whether the plaintiffs can use SB 796. If a court agrees with the plaintiffs on this point, it could expand the scope of the legislation even further.”

California companies being sued under the law include Thousand Oaks-based Amgen Inc., which faces litigation over the font size used in an employee notice, Warner Bros. Television Production Inc. and Touchstone Television Productions LLC.

State Sen. Joe Dunn, D-Santa Ana, said he wrote the legislation behind SB 796 because he didn’t think the state’s labor enforcement office had the funding to go after employers.

Efforts by Campbell and other Republicans to repeal or alter SB 796 haven’t been successful in the Democrat-controlled Legislature.

Dunn said he’s open to changes short of repeal. Assemblyman Lou Correa, a moderate Democrat who represents Santa Ana and Anaheim, is waiting to see what Dunn does with the bill before taking any action himself, according to a spokesman.

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