The California legislature played an active role in 2015 by enacting new rules and amendments in many employment areas. The following covers some of the key highlights, some of which became effective on January 1, 2016.
Just in time for Women’s History Month, California State Senator and Chair of the California Legislative Women’s Caucus, Hannah-Beth Jackson, introduced Senate Bill 358 (SB 358), which seeks to narrow the gender pay gap in California. Citing best supporting actress Patricia Arquette’s recent Oscar acceptance speech where she called for, “wage equality once and for all and equal rights for women,” Senator Jackson hopes to turn that rallying cry into concrete legislation in California.
In Aleksick v. 7-Eleven, Inc., California’s Fourth District Court of Appeal provided a stark reminder that claims brought under California’s Unfair Competition Law (“UCL”) must specifically invoke an underlying law or public policy in order to be properly pled. The plaintiff in Aleksick alleged that 7-Eleven, which provides payroll services to its franchisees, used a payroll system that improperly converted partial hours worked from minutes to hundredths of an hour. According to the plaintiff, this practice of “truncating” hours shorted employees a few seconds of time for every converted partial hour and thereby violated the UCL, which prohibits “any unlawful, unfair or fraudulent business act or practice.” The plaintiff’s complaint, however, did not specify any underlying Labor Code section as a basis for plaintiff’s UCL claim.
The court affirmed the trial court’s grant of summary judgment for 7-Eleven on two grounds. First, the court held that the plaintiff’s complaint failed to specifically allege a statutory predicate for the UCL claim of “unlawfulness,” and that plaintiff’s failure in this regard constituted a forfeiture of her UCL claim. Second, the court held that, even absent forfeiture of the UCL claim, the claim necessarily failed against 7-Eleven because 7-Eleven was not the plaintiff’s employer. Rather, under both the applicable Wage Order and the common law, the individual franchisee was the plaintiff’s employer. As the court observed, only the employer has the duty to pay wages. Thus, the plaintiff could not assert a UCL claim against 7-Eleven, whether based on an assertion of “unfair” or “unlawful” business practices.
Aleksick is a helpful decision for employers because it reinforces a pleading rule that is not always followed by plaintiffs’ attorneys: complaints alleging UCL claims must specifically invoke the statutory or public policy bases underlying the UCL claims. It also could cause plaintiffs’ attorneys to think twice before naming franchisors in lawsuits involving allegations of unpaid wages.