Friday, November 12, 2010

Second District Holds That Employer Subject to PAGA Penalties For Failure to Provide “Suitable Seating”: Bright v. 99¢ Only Stores

On November 12, 2010, the Second District (Division 5), in Bright v. 99¢ Only Stores, __ Cal.App. 4th __ (2010), overturned a trial court order dismissing a PAGA claim predicated upon Wage Order 7’s “suitable seating” requirement. The requirement, which is codified under various wage orders within subpart 14, states as follows:
(A) All working employees shall be provided with suitable seats when the nature of the work reasonably permits the use of seats.
(B) When employees are not engaged in the active duties of their employment and the nature of the work requires standing, an adequate number of suitable seats shall be placed in reasonable proximity to the work area and employees shall be permitted to use such seats when it does not interfere with the performance of their duties.
See 8 CCR 11070(14).

The trial court concluded that the plaintiff’s PAGA claim was non-viable, asserting that “suitable seating” was not required under the language of the Wage Order, and that PAGA penalties were not recoverable insofar as subpart 20 of the Wage Order provided penalties, which were restricted to instances where the employee was underpaid. Slip Opinion, at 4. The Court of Appeal reversed.

First, the Court rejected the argument that the “suitable seating” provision, which the employer claimed was phrased in permissive terms, was not a requirement under the Wage Order. As reasoned by the Court, everything detailed in the Wage Order, as part of an “order” enacted by the IWC pursuant to Labor Code 1198, is mandatory:
Under 99¢ Only Stores’ theory, because the mandatory provisions are not expressed in prohibitory language, they are merely suggestions, a conclusion we reject as not in keeping with the remedial purpose of the statute. “[The suitable seating provision] is not permissive. It is a part of an order which states what employers ‘shall’ do. It is implied that failing to do what the provision orders is prohibited. To interpret the Wage Orders as not prohibiting, and therefore allowing, any work condition unless the provision is phrased in the negative, i.e., using the word ‘not,’ would be contrary to common sense.” (Kilby v. CVS Pharmacy, Inc. (S.D.Cal. 2010) __ F.Supp.3d __ [2010 U.S.Dist.Lexis 86515, *7].) Moreover, if the mandatory conditions are not required by law, they could not be enforced, yet violations are enforceable in both criminal actions and injunctive proceedings. (See §§ 1199, 1194.5.) Further, compliance with the mandatory conditions of labor is required by section 1185, which provides that orders fixing standard conditions of labor are “valid and operative.”
Slip Opinion, at 6-7.

Second, the Court rejected the employer’s argument that the penalties provision of subpart 20 of the Wage Order governed. See id, at 8-10. The Court reasoned that subpart 20 – which was a generalized penalty provision – did not provide an “exclusive penalty” for violation of the suitable seating under subpart 14. Id., at 9-10. As a result, PAGA’s default penalty provision under Labor Code 2699(f) applied, permitting for the recovery of a penalty amount of $100 for initial violations, and subsequent penalties in the amount of $200 per pay period.

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