Friday, August 3, 2018
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Court of Appeal:
72-Hour Period for Paying Employee Who Quits Not Triggered by After-Hours Notice
By a MetNews Staff Writer
A law firm office manager/paralegal who quit via email on a Friday after business hours and was sent a check on the following Tuesday was not entitled to waiting time penalties under California labor law which sets a 72-hour limit on making payment, the First District Court of Appeal has held.
She was, however, entitled to fees for the nine-day period between her notification to the firm of an error on her final check and its remittance of a check in the correct amount, Div. Four said in an opinion by San Francisco Superior Court Judge Ethan P. Schulman, sitting on assignment.
The office manager, Taryn Nishiki, had unused vacation time coming when she sent the email, demanding payment.
California Labor Code §202 requires employers to pay all owed wages to an at-will employee within 72 hours of that employee quitting without notice. The Labor Code also provides, in §203, that the employee is entitled to waiting time penalties for willful violations of that rule equal to his or her daily wage per day that the payment is late, up to 30 days.
Law Firm Appeals
Nishiki was successful in her claim for 17 days of waiting time penalties with the California Labor Commissioner’s Office, though her attempt to claim rest break violations was not availing. The law firm, Danko Meredith, APC of Redwood Shores, appealed to the San Mateo Superior Court.
The trial court, in a trial de novo, also found the former employee entitled to 17 days of waiting time penalties, and awarded her attorney fees pursuant to Labor Code §98.2. The length of the waiting period was based on the date the firm had sent the first check, bearing the clerical error, to the time when it sent a corrected check.
The first check had indicated the correct amount owed Nishiki in numerals as $2,880.31, but it indicated “Two thousand eight hundred and 31/100” as the spelled-out amount, $80 less than the correct amount.
Theory Rejected
Rejecting Nishiki’s contention that the 72-hour period for paying her commenced upon her after-hours email on a Friday, Schulman wrote:
“There is no evidence her employers were working or reading their business email after business hours on Friday, November 14, and thus no basis to conclude they actually received her resignation on that date. If Nishiki’s position is correct, her accrued wages were due on Monday, May 18— the first business day after her after-hours email. The result would be that, rather than having 72 hours to calculate and pay Nishiki’s wages, defendant might have only the length of a single work day.”
Because of the presumption that the Legislature did not intend to produce unreasonable results and that depriving employers of a real chance to calculate and pay owed wages would be unreasonable, Schulman concluded that the first check had been timely issued, regardless of whether the 72 hours had started running on Saturday, when the firm had actually read the email, or the next business day.
Schulman’s opinion rejects the law firm’s argument that, because the error on the first check was not willful, Nishiki was not entitled to any waiting time penalties. While the error in making out the check was not willful, he said, the failure to replace it immediately was.
The appeals court affirmed the award of attorney fees in its entirety. The trial court had awarded Nishiki the entire number of hours her attorney had worked, at what it found was a reasonable rate, boosted by a one-and-half multiplier, for a total of $86,160.
Danko Meredith contested this award, noting that Nishiki had asked for far more in damages than she won, and that the denial of her rest period claim meant she had only secured a partial victory. The firm cited to cases where courts had reduced attorney fee awards because the prevailing party had only had partial success.
Schulman rejected those cases’ applicability to §98.2, writing:
“Defendant’s reliance on this principle is unavailing. The authorities on which it relies were ‘conventional, prevailing party’ cases…, considering statutes that authorized an award of attorney fees to the prevailing party….They did not implicate the legislative intent in enacting section 98.2—a one-way provision allowing attorney fees only against a party who appeals an administrative award, in order to discourage such trial court actions.”
The case is Nishiki v. Danko Meredith, APC, 2018 S.O.S. 3784.
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