Governor Signs SB 462 Which Clarifies Fee Shifiting for Wage Claims

Wage list

Wage list (Photo credit: Wikipedia)

ImageSB 462 (Author: Senator Bill Monning): Conforming  Attorneys’ Fees in unpaid wage cases so the winning employer must show the losing employee’s bad faith to recover attorneys’ fees :

Monday, August 26, 2013:  Today Governor Brown signed into law this important law which clarifies fee shifting for unpaid wage claims and makes fee shifting of attorneys’ fees for wage claims brought under Labor Code §218.5 consistent with Federal law and the rest of the Labor Code. (except for one other outlier fee award statute).

This new law  fixes what was an anomaly with attorneys’ fees awards for wage and hour actions under Labor Code §218.5.  Previously, if a California employee lost  his/her action to recover unpaid wages or benefits, she or he could be out the unpaid wages and also be liable for the winning employer’s attorneys’ fees.  This is because Labor Code §218.5 provided for attorneys’ fees to the “prevailing party”, not the “prevailing employee”, so “party” included the prevailing employer.   This law ignored the reality that in many if not most cases, the wealth gap between employer and employee made the employer far more likely to be able to afford paying both sides’ attorneys fees, while this possibility, which could financially ruin an employee, was a powerful deterrent to filing many legitimate wage theft claims.

No longer can employers flaunt wage laws, essentially bully their unpaid employees and unfairly compete with their law abiding competitors–with the unintended help of Labor Code §218.5‘s former two-way fee shifting.

In my practice I have seen the chilling effect the risk of having to pay a $500+/hour attorneys’ fee bill has on a wage earner earning a fraction of that who decides the risk is too big to take, so abandons a valid wage claim.

The new law only allows a prevailing employee to recover attorneys’ fees, unless a prevailing employer can show the employee brought the action in  “bad faith”.   Since this has long been the norm with most other fee award statutes, there is lots of authority on what is “bad faith”.

The question arises: is this law retroactive?  Please feel free to comment on this, below.

You can read the bill’s full text here:

Marjorie Wallace is a California licensed employment lawyer.  The information contained in this blog is for educational purposes only and does not create an attorney-client relationship between the writer and any reader or constitute legal advice to anyone reading it. 

The Startling Facts about the Gender Wage Gap

June 10, 2013 was the 50th anniversary for the Equal Pay Act. 29 USC §206(d). 

Despite the media hype about wives making more than their husbands, 50 years after its passage, there continues to be a very significant wage gap between men and women in the same jobs.  The Institute for Women’s Policy Research (the “IWPR”) , tracks the wage gap every year and publishes annual updated fact sheets.  For 2012, the IPWR found the wage gap actually got wider from the previous year as women’s median weekly pay rate declined from 82.0 percent of men’s in 2011 to only 80.9 of men’s median weekly pay in 2012. While women: 1) make up nearly half of the workforce, 2) are the equal or main breadwinner in 4 out of 10 families and 3) have more college and graduate degrees than men, on average they earn only 77 cents for every dollar men earn.  This is a 23 cents wage gap which amounts to billions of dollars every year and hundreds of thousands, if not millions of dollars less pay over the earning life of an individual woman worker.  At the recent Equal Rights Advocates fundraiser luncheon on June 13, 2013 in San Francisco, guests were shown a dramatic movie short documenting the enormous loss of income unequal pay represents over the life of several young girls and what they could buy with all that lost income.  The Real Cost of the Wage Gap.   

The IWPR found a wage gap in virtually every occupation where earnings data is available to compare men’s and women’s earnings.    It concluded that at the current rate of slow increase in women’s pay, it will take almost another 50 years–until 2057 to reach pay equity for women.      

Women of color are even worse off: on average they earn only 62 cents for every dollar a man earns doing the same job.  The Real Cost of the Wage Gap


Word to the Wise: Don’t Secretly Record Your Boss!

Imagine this:

Work is very stressful.  Your boss always has anger management issues, but now is having family issues at home, making her even angrier and more out of control.  Sadly, you are her current victim to bully.   She constantly belittles you, calls you “lazy”, says your performance has taken a dramatic shift downward, tries to pass her mistakes as yours and threatens to “kick your ass out of here” on a regular basis. She is very crafty about the name calling and humiliation routine–she always gets you alone in her office, with the door shut and then and only then, lets loose with the nasties.  So it is a classic “he said she said” scenario. 

 As if this wasn’t enough, now she is threatening to “make you pay big time” if you won’t cover up that you accidently discovered your supposedly happily married boss in a boozy threesome in her hotel room at the recent out of town professional conference you and she attended.  Everyday she corners you and threatens to get you fired if anyone finds out about it.

You have had it.    After a sleepless night obsessing about what to do, you decide to use your mobile phone to secretly record her and turn her in.  You might even decide to contact a lawyer and see about suing her for harassment and hostile work environment.  Thanks to the miracle of modern technology, you will have evidence of her bullying and will have the upper hand to get her fired or at least transferred to Texas. Sweet! 

I hate to break it to you, you are not alone in thinking up this plan, but if you call me and tell me about your-boss-the-bully and how you are going to get him/her by secretly recording him/her, I will tell you what I am writing now:  “this is a lousy plan.”  Don’t do it!  File this one under: “Two wrongs do not make a right.”  Go straight to Plan B, please. 

You may be crestfallen to learn that in California, you, the “victim” cannot use technology to protect yourself from an abusive boss by secretly recording the bully.   Not only that, but under California law, secretly recording your boss or anyone without consent: 1) is a misdemeanor with a possible $2500 fine or jail time, 2) you can be sued by your bully boss for the greater of $5000 or 3 times actual damages and 3) you won’t be able to use the secret recording as evidence of your boss’ abuse.

Is this activist courts run amok, you ask.  No, it is due to Penal Code Section 632, which applies to recordings of “confidential” communications without consent and its sibling statute, Penal Code Section 632.7, which applies to communications involving cell phones or cordless phones, without any requirement of confidentiality.  These laws are designed to protect the right of individual privacy in electronic communications. 

There have been a number of recent federal court decisions involving consumers suing when their customer service phone calls were recorded without their consent.  There appears to be uncertainty as to what is a “confidential communication” under Penal Code 632 and what is  a reasonable expectation of privacy.  Since there is no confidential communication requirement in the cell phone statute (Penal Code 632.7), this doesn’t come into play.  But there is uncertainty as to whether the content of the phone conversation is relevant to whether there is a violation for recording it without consent.  For an excellent review of the cases, see this from DLA Piper :

Given all the uncertainty, it is just not worth taking a chance that the way you secretly record your boss will be ok.  I suggest you use the old fashioned “paper trail” instead.  Send confirming emails to your boss after each abusive encounter.  In doing so you run the risk of being retaliated against by your boss, but at least you have a legal paper trail documenting the history of your interactions with your boss which can be used to establish that the consequential retaliation was in fact a retaliatory act.  Try very hard to objectively recount the conversation  and not interject your emotionally clad descriptions of your boss.  Consider making a written compliant to HR and even the  Department of Fair Employment and Housing (DFEH) .   Also, try your best to not be alone with your boss when your boss heaps abuse on you.  That way there are witnesses.  They may well be afraid of retaliation if they support your version of the facts, but by the time you need their testimony, they may have moved on to another employer and are chomping at the bit to spill the beans on your boss’s bullying. 

One last word to the wise:  Do not record your attorney without his or her consent!

The information contained in this blog is for educational purposes only and does not create an attorney-client relationship or confidentiality between the reader and the author. The Law Office of Marjorie A. Wallace does not provide legal services without a written agreement between it and the client.