California's
Labor Code "Bounty Hunter
Act" Gets Amended
August 9, 2004
Summary
On January 1, 2004, the
Labor Code Private Attorney General Act (Labor Code section
2699) was enacted,
authorizing individual employees to sue and collect
monetary penalties from their employers based on any violation of the
California Labor Code, no matter how small or technical, all
without any need to show
that the employee was actually harmed by the violation. This law became
popularly known as the "Bounty Hunter Act" because employees were
entitled to collect 25% of the recovered penalties. Plaintiffs'
attorneys bringing these claims could also recover their attorneys' fees
and costs,
making these suits attractive.
Last week, as part of the
budget compromise signed by the Governor, SB 1809 was signed
into law, amending
the Bounty Hunter Act. The new law, which
took effect immediately, is intended to protect businesses from shakedown lawsuits,
and to scale back some of the provisions of the original law. Specifically,
SB 1809 requires that before filing a lawsuit, a potential plaintiff must first
file a written complaint with the Division of Labor Standards Enforcement (DLSE)
and provide written notice and a period to allow the employer to cure any alleged
violations. This new amendment also eliminates employeesâ ability
to sue for certain technical provisions of the Labor Code and gives
Courts more leeway in determining penalties.
Details
SB 1809 contains the following amendments to
Labor Code Section 2699:
- An employee can no longer sue under
the Labor Code Private
Attorney General Act for violations of posting, notice
and filing requirements, except
where the filing or reporting requirement involves mandatory payroll
or workplace injury reporting.
- Courts now have the discretion to review and
adjust any penalties assessed under the Labor Code Private
Attorney General Act.
- An employee may file a lawsuit only after first
complying with specified procedural and administrative requirements,
including providing detailed written notice (by certified
mail) to the DLSE and the employer of the specific provisions
of
the Labor Code alleged to have been violated.
- Employees may only commence suit 30 calendar
days after receiving a notice from the DLSE that they do
not intend to investigate the alleged violation.
- Courts must review and approve all settlement
agreements which seek to settle claims brought under the
Labor Code Private Attorney General Act.
- Any employee alleging a violation of
health and safety laws must first give notice to the Division
of
Occupational Safety and Health (Cal/OSHA), with the specific
facts and theories
supporting the alleged violation. Cal/OSHA will then
have an opportunity to inspect and investigate the alleged
violation. If Cal/OSHA issues a citation, the employee
may not commence a civil action. If Cal/OSHA fails to
inspect or investigate, then the employer may cure the alleged
violation within 33 calendar days of the date of the notice. If
the alleged violation is not cured within the 33-day period,
only then may an employee commence a civil action.
- A plaintiff in an existing lawsuit may, as a
matter of right, amend his or her compliant to add a cause
of action arising under the Labor Code Private Attorney General
Act within 60 days of complying with the procedural and administrative
requirements.
What This Means
The best way for employers to defeat claims
under the Labor Code Private Attorney General Act is to continue
to undertake substantial, effective measures to
bring their businesses into full compliance with the California Labor Code.
Of course, many employers may believe that their businesses are already in
full compliance with every provision of the Labor Code. However, the
California Labor Code has literally hundreds of provisions that present traps
for unwary employers.
For example, is every non-exempt employee in
your company receiving meal and rest periods in accordance
with the standards under the
Labor Code and
the
applicable Wage Orders? Do you provide an itemized statement in employees
paychecks of the total hours worked, all deductions made, and a breakout
of all applicable hourly rates for all work performed during the pay period? Have
you sent your employment application to the DLSE? These are just a few
examples of regularly scrutinized statutory violations.
Employers should
be on the lookout for written notices of potential Labor
Code violations, especially when the violations deal with health and
safety issues. Quick
action in curing a potential violation may limit a plaintiffâs
ability to bring a claim.
We will be presenting a comprehensive review
of SB 1809, and all of the
other important new laws, including a discussion of their practical
applications for employers, during our fall seminar "Workplace
Law 2005" on
October 28, 2004. See the announcement below for more information
and to register for the seminar.
This E-Update was authored by Lonny
Zilberman. If you have any questions
about this E-Update, please contact the author or any PPS&C attorney
at (619) 237-5200.
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