Employer failed to keep accurate payroll records and timely pay wages, health care workers say
In a recent case, two workers alleged that the employer deducted a half hour from each work day to account for a meal period when employees were in fact disallowed or discouraged from clocking out for meal periods.
The two plaintiffs in the case of Stone et al. v. Alameda Health System worked as a medical assistant and as a licensed vocational nurse for the defendant, the Alameda Health System.
The plaintiffs filed a complaint against the defendant. They alleged seven class action claims:
- failure to provide off-duty meal periods
- failure to provide off-duty rest breaks
- failure to keep accurate payroll records
- failure to give accurate itemized wage statements
- unlawful failure to pay wages
- failure to timely pay wages
- claims under California’s Private Attorney General Act (PAGA)
They also made six individual claims for race discrimination and sex discrimination.
The defendant filed a demurrer. The trial court sustained the demurrer as to all class action claims. For the first six claims, the trial court found that the defendant was a statutorily-created public agency, which was beyond the reach of the sections of California’s Labor Code and the Industrial Welfare Commission wage order that the complaint raised.
Regarding the seventh claim, the trial court said that the PAGA action would also fail. The defendant’s status as a public agency exempted it from paying punitive damages, the trial court said. The plaintiffs appealed.
Healthcare workers’ appeal partly succeeds
The California Court of Appeal for the First District affirmed the trial court’s decision for the fourth claim but reversed it relating to the other claims.
The appellate court first tackled the issue of whether the “sovereign powers” doctrine made the respondent liable for certain Labor Code violations despite the general rule exempting government agencies from such liability. The sovereign powers doctrine applied, the appellate court said.
Second, the appellate court ruled that the defendant was not a “municipal corporation” and was not exempt under section 220(b) of the Labor Code.
The third issue was whether the defendant was an exempt “governmental entity” under section 226(i) of the Labor Code. The appellate court did not exclude the defendant from the category of governmental entities. While the defendant was not a sovereign governmental agency or a municipal corporation, the appellate court found no reason to doubt that it was a governmental entity of some sort.
Lastly, the appellate court held that there were at least some Labor Code violations for which a PAGA action against the defendant could proceed.