Cal-Peculiarities: How California Employment Law is Different 2022 Edition

114 | 2022 Cal-Peculiarities ©2022 Seyfarth Shaw LLP  www.seyfarth.com In the wage and hour case in question, the plaintiffs’ attorneys estimated that their lodestar (hours worked times hourly billing rate) were about $3 million, but successfully claimed fees in excess of $6 million (one-third of a $19 million gross settlement) . 295 5.13 Unfair Competition Claims 5.13.1 The Unfair Competition Law (UCL) California’s vaguely worded UCL permits lawsuits for any “unlawful, unfair or fraudulent business practice. ” 296 Wage and hour plaintiffs often add a UCL claim to obtain a four-year statute of limitations instead of the three- year statute that applies to Labor Code claims generally. The UCL authorizes only limited remedies: it does not permit damage awards or a remedy of nonrestitutionary disgorgement (e.g., return of profits that an employer has realized through Labor Code violations) . 297 Nor does the UCL authorize recovery of penalties due for untimely payment of termination wage s. 298 The UCL does authorize injunctive relief and any order “necessary to restore to any person in interest any money or property which may have been acquired by means of such unfair competition.” The California Supreme Court thus held that an action seeking restitution for unpaid overtime wages could proceed as a representative action under the UCL, and that UCL’s four-year limitations period applied even though the underlying wage claim was governed by a three-year statute . 299 Plaintiffs have used the UCL to circumvent a defendant employer’s right to jury trial. The Court of Appeal has upheld a trial court’s decision to have a wage and hour claim tried to the court, without a jury, over the defendant’s objection, on the basis that the UCL claim encompassed the traditional wage and hour claims and that the UCL claim is one for equitable relief, for which no jury trial is available. The Supreme Court decided to review this decision (on other grounds), making it unfit to cite as precedential authority . 300 Historically, a UCL action also permitted the plaintiff to seek restitution on a class-wide basis without satisfying the usual requirements of class certification . 301 This rule was amended by Proposition 64, however, discussed below. 5.13.2 Proposition 64 Proposition 64, enacted by a vote of the People of California in November 2004, reformed the UCL by requiring that a private UCL plaintiff must have suffered an “injury in fact” and have lost “money or property” as a result of the challenged business practice, and by requiring that UCL plaintiffs suing on behalf of others must satisfy the requirements for a class action . 302 5.14 The Wage and Hour Class Action Explosion 5.14.1 California peculiarities favoring wage and hour class actions The number of class action lawsuits alleging California Labor Code violations has continued to rise. While just 29 were filed in 2000, 120 were filed in 2005 , 303 a nd they have continued to rise in frequency since, with hundreds pending every year. California employers have faced some 7,000 wage and hour class actions and PAGA actions during the last four years alon e. 304 The following factors make class actions particularly attractive to California wage and hour plaintiffs:  California wage and hour law differs from federal law in important ways, such that an employee who is exempt from federal overtime pay requirements often is not exempt under California law.  California procedural rules facilitate class actions for violations of wage and hour obligations. Federal wage and hour claims, under the FLSA, require an “opt-in” procedure, meaning that collective actions proceed to the extent that employees want to join the suit . 305 C alifornia procedural law, however, does not