54 Litigating CA Wage & Hour and Labor Code Class Actions (22nd Edition) Seyfarth Shaw LLP | www.seyfarth.com assignment was not a “discharge,” however, then the employee would be limited solely to suing for payment of the wages, interest, and any attorney’s fees accrued in bringing the suit.306 The California Supreme Court in Smith ruled that the end of the one-day assignment resulted in a “discharge” of the employee.307 Smith explained that the term “discharge” was ambiguous: it could mean either “fire” or “release from one’s obligations.” When someone has an assignment of a fixed term or performs a fixed task, the employer “discharges” (i.e., releases) the employee at the end of the term or completion of the task. Smith analyzed the legislative history and concluded that this interpretation—”discharge” as synonymous with “release from one’s obligations”—was more consistent with the overall purpose of the statute and the strong public policy for immediate payment underlying Section 203. Accordingly, the end of a fixed-term assignment that ends the employment relationship between the employer and employee triggers the obligation for immediate payment under Labor Code sections 201-203. 2. Temporary Employment Agencies In 2006, a slew of class actions were filed against temporary agencies, arguing that the end of every temporary assignment is a “discharge” that triggers the right to immediate payment and the application of waiting time penalties. Temporary agencies typically do not pay wages on the date a given assignment ends, but rather send paychecks in regular one- or two-week intervals (except in the rare case where the agency “fires” the temporary employee by giving notice that the individual will not be considered for further work). In one such class action, Elliot v. Spherion Pacific Work, LLC,308 Seyfarth Shaw obtained summary judgment for the defendant temporary agency. The plaintiff was a Spherion temporary worker for over a year, during which time she completed 15 temporary assignments of varying length. She submitted time sheets for work performed each Friday, and was paid by Spherion on the following Friday via direct deposit. Following what turned out to be her last assignment with Spherion, she was paid pursuant to the normal pay schedule, and continued to seek assignments through Spherion for over a month thereafter. The district court held that the plaintiff was not “discharged” each time one of her temporary assignments ended, noting that she remained employed by Spherion and she understood that assignments would be intermittent. Therefore, she was not entitled to waiting time penalties under the Labor Code.309 The Ninth Circuit affirmed the judgment for the employer.310 In 2009, Labor Code section 201.3 resolved this issue, providing: 306 Lab. Code § 218.5 (attorney’s fees recoverable); Lab. Code § 218.6 (pre-judgment interest recoverable from the date payment was owed). 307 Smith v. Superior Court, 39 Cal.4th 77 (2006). 308 572 F. Supp. 2d 1169 (C.D. Cal. 2008), aff’d, 368 Fed. App’x 761 (9th Cir. Feb. 26, 2010). 309 See also Sullivan v. Kelly Servs., Inc., No. C 07-2784 CW, 2008 WL 4891051 (N.D. Cal Nov. 12, 2008) (granting summary judgment in favor of defendant temporary agency on Labor Code Section 201 claim on grounds that plaintiff was not “dismissed” by the agency at the conclusion of a temporary work assignment). 310 Elliot v. Spherion Pacific Work, LLC, 368 Fed. App’x 761 (9th Cir. Feb. 26, 2010).
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