"This decision keeps what is already an onerous liability scenario from growing even further out of proportion to the wrong committed."
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Wage & Hour Update
Appellate Court Rules
No Punitive Damages
For California Wage & Hour Violations
By Christopher W. Olmsted
Violations of California’s wage and hour laws are costly. Aside from liability for unpaid wages, the Labor Code imposes cumulative penalties, interest and attorney fees. But what about punitive damages? Can a jury award Labor Code penalties plus punitive damages on top? A California appellate court in San Diego recently addressed this question in a case captioned Brewer v. Premier Golf Properties.
Christine Brewer, a longtime waitress employed at the Cottonwood Golf Club Restaurant in San Diego, quit her job in March 2005. Then she sued the Club, alleging a cause of action for age discrimination (Gov. Code, § 12940), as well as Labor Code violations for missed meal and rest breaks (Lab. Code § 226.7).
The matter went to trial, and Ms. Brewer lost the age discrimination claim. However, the jury returned verdicts in favor of Ms. Brewer on most of her pleaded Labor Code violations, and awarded damages totaling less than $1,000 for unpaid regular and overtime wages. The judgment also included approximately $6,000 for unpaid meal and rest break wages, $4,000 as "pay stub penalties," and $15,300 for "minimum wage" penalties (Labor Code § 1197.1).
On top of that, the jury awarded $195,000 as punitive damages for violation of the Labor Code.
Cottonwood Gold Club appealed, arguing that punitive damages may not be awarded in connection with Labor Code violations for minimum wage, pay stub violation, and meal and rest period violations. The Fourth Appellate District agreed, and rejecting the award.
Essentially, the court reasoned that the Labor Code already provides for penalties, which were awarded to Brewer. There is no legal basis for allowing punitive damages in addition to the statutory penalties. Moreover, the underlying legal rights between an employer and employee are contractual in nature; contract rights do not give rise to punitive damages.
Obviously this is a victory for employers. Wage and hour violations are costly and certainly employers should endeavor to comply with all state and federal laws and regulations. This decision, however, keeps what is already an onerous liability scenario from growing even further out of proportion to the wrong committed.
More Legal Update articles.
Download entire February 2009 Legal Update in PDF format.
This article is intended as a brief overview of the law and are not intended to substitute as legal advice. Any questions or concerns regarding any statute or case law should be addressed to a licensed attorney. Copyright © 2009 by Barker Olmsted & Barnier, APLC. San Diego, California. All rights reserved.
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