Assembly Bill 2095 seeks to limit frivolous litigation regarding itemized wage statements for alleged technical violations that have not injured the employee by awarding attorney fees to an employer who can prove the litigation was filed in bad faith.
Labor Code Section 226 sets forth eight categories of information that must be included in an itemized wage statement provided to the employee. The intent and purpose of this information is to notify the employee of who his/her employer is and how the wages were calculated. Failing to include required information in the wage statement can subject the employer to litigation.
Despite the good intentions of this section, there has been a recent trend by plaintiffs’ attorneys to abuse it and file litigation for “ticky tack” violations that do not result in any harm to the employee.
A notable example of this abuse is Elliot v. Spherion Pacific Work, LLC, 210 WL 675574 (2010), in which an employee alleged a cause of action under Labor Code Section 226 because the employer used a truncated name on the wage statement. Specifically, the employer’s name on the wage statement was “Spherion Pacific Work, LLC,” instead of Spherion’s legal name, “Spherion Pacific Workforce, LLC.”
The employee did not allege that this truncated version of the employer’s name misled her, confused her, or caused her any injury. Although the court ultimately dismissed the lawsuit, the employer incurred unnecessary legal costs and attorney fees to have the case dismissed.
AB 2095 seeks to discourage such bad faith litigation by awarding an employer attorney fees if the lawsuit is proven to be frivolous, unreasonable or without foundation.
Although AB 2095 will not eliminate all cases that lack merit, it will certainly dissuade the filing of some frivolous cases. Any reduction of bad faith litigation will allow employers to devote more financial resources to growing their business and growing their
workforce.
AB 2095 recently passed the Assembly Labor and Employment Committee 6-1. We hope that’s a sign that it will eventually become law.
The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.
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