Metropolitan News-Enterprise


Friday, February 17, 2017


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State High Court Agrees to Decide Whether Underpaid Worker Can Sue ADP


By a MetNews Staff Writer


The California Supreme Court has agreed to decide whether a worker who claims her employer failed to pay her all of her wages, and then fired her when she complained about it, can sue the company that processed the employer’s payroll.

The justices, at their weekly conference in San Francisco Wednesday, unanimously granted review in Goonewardene v. ADP, LLC (2016) 5 Cal. App. 5th 154. Div. Four of this district’s Court of Appeal ruled in November that Sharmalee  Goonewardene can sue the payroll processor for breach of contract, negligent misrepresentation and negligence, but that claims of wrongful termination, employment discrimination, and violations of the Labor Code were properly dismissed because ADP was not her employer or a joint employer.

The plaintiff sued her employer, Altour International, in April 2012. She alleged that the travel company didn’t pay the overtime she had earned and denied her meal and rest breaks, and discriminated against her based on her Sinhalese ethnicity and Sri Lankan nationality.

In an amended pleading filed in March 2015, she added an Unfair Competition Law claim against ADP, saying it failed to provide her with required documentation. She subsequently attempted, unsuccessfully, to add additional claims against ADP by amendment.

Los Angeles Superior Court Judge William Barry eventually sustained demurrers by both defendants and dismissed the action.

The Court of Appeal, however, in an opinion by Justice Nora Manella, said the last proposed amended complaint stated causes of action against ADP for negligently performing payroll services for the plaintiff’s benefit in an inaccurate and negligent manner.

The proposed pleading, Manella noted, accuses ADP of having provided statements that failed to contain a breakdown of her hours according to whether she was entitled to straight pay, time-and-a-half, or double time, and did not reflect whether she received meal and rest breaks. She also noted that she did not receive double time compensation when her timecards reflected that she was entitled to it.

If the plaintiff can prove the facts alleged, Manella said, she is entitled to damages for breach of contract predicated on a third party beneficiary theory. The justice also concluded that she can recover for negligent misrepresentation if she can show that her wage statements “contained positive inaccurate assertions that ADP could not reasonably have believed to be true.”

If, as the plaintiff alleges, she only sought additional compensation from her employer after she realized the discrepancies between her own records and those generated by ADP, Manella said, that is sufficient to plead the justifiable reliance element of a negligent misrepresentation claim.

Goonewardene also has pled a professional negligence claim based on breach of a duty of care owed to her as a “creditor beneficiary” of the arrangement between her employer and ADP, the justice said.


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