Metropolitan News-Enterprise


Wednesday, August 30, 2006


Page 1


Worker May Sue Without Exhausting Administrative Remedies—C.A.


By a MetNews Staff Writer


Statutory penalties for labor law violations recoverable by an employee prior to the adoption of the Labor Code Private Attorneys General Act are not subject to the act’s exhaustion of administrative remedies requirements, this district’s Court of Appeal has ruled.

Div. Three Monday directed Los Angeles Superior Court Judge Judith C. Chirlin to vacate her order granting Bank of America’s motion to strike portions of Omar Dunlap’s complaint for Labor Code violations, and to enter a new order denying the motion.

Dunlap, a former bank employee, filed a class action alleging the bank violated Labor Code requirements that it immediately pay an employee’s wages upon discharge or resignation, pay wages at least semi-monthly, provide mandated meal or rest periods, and properly keep employee records, and other claims.

The bank filed a motion to strike the portions of the complaint relating to these claims on the ground that Dunlap failed to exhaust his administrative remedies as required by the PAG act. The motion was directed at specific language in the complaint relating to Dunlap’s claims for statutory penalties.

Civil Penalties

Dunlap argued the exhaustion requirements of the PAG act do not apply to lawsuits brought directly under Labor Code Sec.218, enacted in 1937. Dunlap pointed out that the PAG act lists the Labor Code sections which are subject to the exhaustion requirements, and Sec. 218 is not on the list.

Sec. 218 allows an employee to sue directly to recover wages or penalties due the employee under Article 1, Sec. 200 et seq., of the Labor Code. The PAG act, Sec. 2698 et seq., was adopted in 2004 to empower aggrieved employees, acting as private attorneys general, to seek civil penalties for Labor Code violations which previously could be assessed only by state agencies. Before bringing an action under the act, an employee must exhaust administrative remedies set forth therein.

Chirlin granted the bank’s motion to strike, agreeing with the bank that Dunlap’s interpretation “would make [the act] effectively meaningless. No private litigant would ever bring an action under [the act]. . . . They would always explain [Sec.] 218 was . . . the tool they were using.”

But, quoting case law, Presiding Justice Joan Dempsey Klein, writing for the Court of Appeal, said:

“One must ‘distinguish between a request for statutory penalties provided by the Labor Code for employer wage-and-hour violations, which were recoverable directly by employees well before the [PAG] Act became part of the Labor Code, and a demand for ‘civil penalties,’ previously enforceable only by the State’s labor law enforcement agencies.’”

Klein concluded:

“Dunlap’s . . . [claims] did not seek any penalties which previously were recoverable only by . . . [a state agency]. The only penalties being sought . . . were various statutory penalties, which penalties already were recoverable by employees under the Labor Code prior to the adoption of the PAG Act. Therefore, Dunlap was not required to comply with the PAG Act’s administrative prerequisites to filing suit before pursuing statutory penalties . . . .”

Local Counsel

Justices H. Walter Croskey and Patti S. Kitching concurred in the opinion.      

Mark Yablonovich, Marc Primo and Shawn Westrick of Initiative Legal Group represented Dunlap. M. Kirby C. Wilcox, Stephen P. Sonnenberg and Christopher M. Bissonnette of Paul, Hastings, Janofsky & Walker represented the bank.

The case is Dunlap v. Superior Court (Bank of America, N.A.), 06 S.O.S. 4586.


Copyright 2006, Metropolitan News Company