ZELON, J. —
Anschutz Entertainment Group (AEG) contracted with Levy Premium Foodservice Limited Partnership to manage the food and beverage services at several entertainment venues located in Southern California. Levy contracted with Canvas Corporation to provide laborers who sold food and beverages at AEG venues. In 2013, several vendors filed a wage and hour class action against AEG, Levy and Canvas for failure to pay minimum wage and willfully misclassifying them as independent contractors in violation of Labor Code section 226.8.
AEG and Levy filed motions for summary judgment arguing in part that they were entitled to summary adjudication of plaintiffs' Labor Code section 226.8 claim because the undisputed evidence showed Canvas was the entity that had classified the vendors as independent contractors. Although the trial court denied the motions for summary judgment, it agreed that plaintiffs could not pursue a section 226.8 claim against AEG or Levy because neither entity had made the alleged misclassification decision.
Plaintiffs filed a petition for writ of mandate and we issued an order to show cause. In their return to the writ, AEG and Levy argued for the first time that even if the trial court erred in interpreting Labor Code section 226.8, we should deny the writ because the statute does not provide a private right of action. We now deny plaintiffs' petition. We conclude that, contrary to the trial court's interpretation, section 226.8 is not limited to employers who make the misclassification decision, but also extends to any employer who is aware that a coemployer has willfully misclassified their joint
AEG and its related entities
In 2013, several former vendors who had been hired by Canvas to sell food at AEG's venues filed a wage and hour class action against AEG, Levy and Canvas, contending that each defendant qualified as their "joint employer." Plaintiffs alleged numerous violations of the Labor Code, including failure to pay minimum wage (Lab. Code, §§ 1194, 1194.2, 1197, 1197.1),
Plaintiffs also sought recovery under section 226.8, which imposes civil penalties on any person or employer who "engage[s] in" the act of "voluntarily and knowingly misclassifying [an] individual as an independent contractor." (§ 226.8, subds. (a) & (i)(4).) Plaintiffs alleged that each defendant had "misclassified [class members] as `independent contractors' rather than employees knowing that the [class members] should lawfully be classified as an `employee.'" Plaintiffs additionally asserted claims under the Labor Code Private Attorneys General Act of 2004 (PAGA) (§ 2698 et seq.) and the unfair competition law (UCL) (Bus. & Prof. Code, § 17200 et seq.) predicated on the defendants' alleged violations of state and federal labor laws.
AEG and Levy (collectively defendants) filed motions for summary judgment, or in the alternative summary adjudication, arguing that they were not the plaintiffs' "joint employer" and therefore could not be held liable for any of the Labor Code violations set forth in the complaint. Defendants contended that the undisputed evidence showed Canvas was solely responsible for hiring and paying plaintiffs, setting their schedules, maintaining their employment records and ensuring they were properly compensated. Defendants further asserted that whatever "limited oversight" they exerted over plaintiffs "fell short of the `control' required to find a joint employment relationship."
Defendants alternatively argued that "even if the court were to find that disputed issues of material fact exist on the joint employer issue," plaintiffs' claim for civil penalties under section 226.8 "fail[ed]" because the statute only applies to the employer who "actually made the decision to classify workers as independent contractors." Defendants contended that, in this case, the evidence demonstrated the decision to classify plaintiffs as independent contractors and to pay them on "a commission basis only" had been "made exclusively by Canvas."
Defendants raised similar arguments regarding plaintiffs' penalty claims for willfully failing to pay wages due upon termination (§ 203), willfully failing to maintain payroll records (§ 1174.5) and knowingly and intentionally failing to provide itemized wage statements (§ 226, subd. (e)). Specifically, defendants argued that plaintiffs had identified no evidence showing AEG or Levy had acted either willfully or intentionally because Canvas was the entity responsible for paying plaintiffs, preparing their wage statements and maintaining their payroll records.
In their opposition, plaintiffs argued that that the terms of the contractual agreements between AEG, Levy and Canvas demonstrated there were triable issues of fact whether defendants qualified as the joint employers of the vendors that Canvas had provided to them. Plaintiffs contended the contracts showed defendants exerted substantial control over the vendors' working conditions, dictating "what [the vendors] s[old], where they [worked], the price [of the products they sold], their appearance, their dress and even what they [could] say when they [we]re selling products."
Plaintiffs also argued there were triable issues of fact whether defendants were liable for civil penalties under section 226.8. Plaintiffs contended that
Plaintiffs also argued that even if defendants were not aware Canvas had misclassified the vendors, they could nonetheless be held liable under section 226.8 based solely on their status as "joint employers." Plaintiffs theorized that the statute imposed a duty on AEG and Levy to ensure all of their employees were properly classified. Plaintiffs raised similar arguments on their claims for penalties under sections 203, 1174.5 and 226, arguing that each statute imposed a duty on every joint employer to ensure its employees were paid for all wages due immediately upon discharge and received accurate, itemized wage statements.
After a hearing, the trial court denied defendants' motions for summary judgment, but granted summary adjudication on plaintiffs' section 226.8 claim. The trial court concluded there were "triable issues of fact whether Levy and AEG were [plaintiffs'] joint employers" because the contracts between AEG, Levy and Canvas indicated that both defendants exerted control over many aspects of plaintiffs' "working conditions." The court also found there were "triable issues of fact ... as to whether Levy was AEG's agent," explaining that plaintiffs' evidence suggested AEG had "granted Levy the right to represent AEG in its interactions with food service staff and food service suppliers."
The court ruled that because there were triable issues of fact on the issues of "joint employment" and agency, defendants were not entitled to judgment on plaintiffs' claim for unpaid minimum wages. The court further concluded that these findings precluded judgment on plaintiffs' claims under sections 203 (failure to pay all wages due upon discharge), 226, subdivision (e) (failure to provide itemized wage statements) and 1174.5 (failure to maintain accurate
However, the court reached a different conclusion regarding plaintiffs' section 226.8 claim. The court observed that "[u]nlike Labor Code section 203, 226 and 1174.5, Labor Code section 226.8 imposes liability not merely by virtue of employer status, but for engaging in a particular activity ... [:] `willful misclassification of an individual as an independent contractor.'" In the court's view, the Legislature's incorporation of the phrase "engage in" indicated the statute was only intended to apply to employers that committed the "affirmative act of misclassification." The court explained that because plaintiffs had conceded Canvas was the entity that "classified [the] vendors as independent contractors," neither AEG nor Levy could be held liable under section 226.8.
The court acknowledged that plaintiffs had "advanced evidence" showing defendants knew Canvas was "not paying the vendors minimum wage" and that Canvas should have been classifying its workers "as employees, rather than independent contractors," but concluded this evidence did not show AEG or Levy was actually responsible for the initial classification decision.
Plaintiffs filed a petition for writ of mandate seeking an order directing the superior court to set aside the portion of its order granting summary adjudication on the section 226.8 claim. We issued an order to show cause.
As a threshold matter, we consider defendants' assertion that plaintiffs have failed to identify any circumstances that warrant writ review. (See generally United Health Centers of San Joaquin Valley, Inc. v. Superior Court (2014) 229 Cal.App.4th 63, 74 [177 Cal.Rptr.3d 214] ["writ review is deemed extraordinary and appellate courts normally are reluctant to grant it ..."].) Although Code of Civil Procedure section 437c, subdivision (m)(1) specifically permits review of an order granting summary adjudication by way of a petition for writ of mandate, defendants correctly note that "[a]ppealing from a judgment after trial ordinarily provides an adequate remedy at law for a party aggrieved by an order granting summary adjudication." (Rehmani v. Superior Court (2012) 204 Cal.App.4th 945, 949 [139 Cal.Rptr.3d 464] (Rehmani).) However, "[t]he adequacy of an appellate remedy depends on the circumstances of the case, thereby necessarily vesting a large measure of discretion in the appellate court to grant or deny a writ." (Fisherman's Wharf Bay Cruise Corp. v. Superior Court (2003) 114 Cal.App.4th 309, 319 [7 Cal.Rptr.3d 628]
First, "[w]rit review may be proper ... `where a pretrial ruling has summarily disposed of a large portion of the case, while several causes of action remain for trial.' [Citation.]." (Rehmani, supra, 204 Cal.App.4th at pp. 949-950; see Fisherman's Wharf, supra, 114 Cal.App.4th at p. 319.) Here, the trial court dismissed plaintiffs' section 226.8 claim while allowing their other wage and hour claims to move forward. Although the court's order only disposed of a single claim, the potential liability underlying the claim is substantial. Section 226.8 provides for a penalty of between $5,000 and $15,000 for each "individual" who has been willfully misclassified as an independent contract. (See § 226.8, subd. (b).) These penalties increase to between $10,000 and $25,000 per individual if the court determines the employer has "engaged in or is engaging in a pattern or practice of" willfully misclassifying its employees. Plaintiffs estimate that the class consists of approximately 2,100 individuals. The potential liability on their section 226.8 claim is therefore in the range of $10 million to $50 million.
For many purported class members, the penalty amounts set forth in section 226.8 are likely to exceed the amounts at issue in their individual minimum wage claims. Plaintiffs' evidence indicates that approximately 75 percent of purported class members worked as vendors at three or fewer AEG events and that 90 percent of the class worked 10 or fewer events. For this substantial majority of the putative class members, any recovery on their unpaid minimum wage claims is likely to be less than the penalty that might be recovered under section 226.8. Given these figures, it is reasonable to assume plaintiffs' section 226.8 claim constitutes a "large portion of the case." (Rehmani, supra, 204 Cal.App.4th at pp. 949-950.)
Second, writ review is appropriate to "obviate a duplicative expenditure of resources for the courts and the parties." (Rehmani, supra, 204 Cal.App.4th at p. 950.) If plaintiffs were to prevail against defendants on their surviving wage claims at trial, and we later determined on direct appeal that the trial court improperly dismissed their section 226.8 claim, a second trial would likely be required "on claims that arise out of the same facts and [that] overlap with the issues in those causes of action that have withstood the summary adjudication motion." (Rehmani, at p. 950.) Reviewing the issue now thus serves to avoid the delay and expense of potentially unnecessary litigation and "the attendant waste of judicial resources." (Barrett v. Superior Court (1990) 222 Cal.App.3d 1176, 1183 [272 Cal.Rptr. 304] (Barrett) [writ review appropriate where it will avoid the possibility of a "second trial" and the "attendant waste of judicial resources"]; H. D. Arnaiz, Ltd. v. County of
Finally, writ review is appropriate because "the petition presents a significant issue of first impression." (Pugliese v. Superior Court (2007) 146 Cal.App.4th 1444, 1448 [53 Cal.Rptr.3d 681]; see Barrett, supra, 222 Cal.App.3d at p. 1183 [writ review proper where "the issue presented ... has never been the subject of a published opinion"].) No published California decision has construed section 226.8, which was enacted to address the substantial economic impacts that employee misclassification was having on low wage workers and the state's tax revenue. (Assem. Com. on Labor and Employment, Analysis of Sen. Bill No. 459 (2011-2012 Reg. Sess.) as amended May 27, 2011, p. 3; Assem. Com. on Judiciary, Analysis of Sen. Bill No. 459 (2011-2012 Reg. Sess.) as amended May 27, 2011, pp. 4-5.) Given the importance of these issues, we believe that writ review is proper.
Defendants, however, argue we should decline writ review because plaintiffs still have "existing claims that seek relief for the same alleged violations of Section 226.8." Specifically, defendants argue that plaintiffs' PAGA claim and their UCL claim (Bus. & Prof. Code, § 17200) are both predicated in part on defendants' alleged violation of section 226.8. (See generally Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1143 [131 Cal.Rptr.2d 29, 63 P.3d 937] ["[UCL] `borrows' violations from other laws by making them independently actionable as unfair competitive practices. [Citation.]"]; Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 380 [173 Cal.Rptr.3d 289, 327 P.3d 129] (Iskanian) ["`Under [PAGA], an "aggrieved employee" may bring a civil action personally and on behalf of other current or former employees to recover civil penalties for Labor Code violations.'"].) Defendants contend that because the trial court has not yet dismissed the portion of the UCL and PAGA claims that are based on section 226.8, plaintiffs can still "seek the very same penalties they currently seek to recover in ... an action under section 226.8." Defendants further contend that "[w]hile the trial court may-at some future point-strike plaintiffs' allegations related to Section 226.8 from the [UCL] and [PAGA] causes of action, until then the issue of plaintiffs right to recover under Section 226.8 is simply not ripe for determination. This court should not grant ... extraordinary relief ... based on the speculative prospect of what the trial court might do in the future."
There is no indication in the record that defendants have ever moved to strike the portion of the UCL and PAGA claims that are predicated on section 226.8. It is not "speculative" to conclude the court would grant such a motion or that the court will eventually strike such claims. Under the trial court's
Moreover, defendants have failed to explain how plaintiffs could recover "the very same penalties they currently seek to recover" through a UCL or PAGA claim. In a suit under the UCL, a private plaintiff's remedies are "limited to injunctive relief and restitution." (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 179 [83 Cal.Rptr.2d 548, 973 P.2d 527].) Labor Code penalties are generally not recoverable as a form of UCL restitution. (See Pineda v. Bank of America, N.A. (2010) 50 Cal.4th 1389, 1401-1402 [117 Cal.Rptr.3d 377, 241 P.3d 870] [§ 203 penalties not recoverable under the UCL].) Under the PAGA, 75 percent of any penalty the plaintiffs recover would go to the State. (See Iskanian, supra, 59 Cal.4th at p. 380.) Thus, while the UCL and the PAGA claims might provide plaintiffs some form of remedy for a violation of section 226.8, those remedies are qualitatively different than the penalties they might recover in a direct action to enforce section 226.8.
"Code of Civil Procedure section 437c, subdivision (f)(1), allows a party to move for summary adjudication `as to one or more causes of action within an action ... if that party contends that the cause of action has no merit ....' `A motion for summary adjudication may be made by itself or as an alternative to a motion for summary judgment and shall proceed in all procedural respects as a motion for summary judgment.' (Code Civ. Proc. § 437c, subd. (f)(2).) Accordingly, `[a] summary adjudication motion is subject to the same rules and procedures as a summary judgment motion.' [Citation.]
"`A defendant making the motion for summary adjudication has the initial burden of showing that the cause of action lacks merit because one or more elements of the cause of action cannot be established or there is a complete defense to that cause of action. [Citations.] If the defendant fails to make this initial showing, it is unnecessary to examine the plaintiff's opposing evidence and the motion must be denied. However, if the moving papers establish a prima facie showing that justifies a judgment in the defendant's favor, the burden then shifts to the plaintiff to make a prima facie showing of the existence of a triable material factual issue.' [Citation.] `A prima facie showing is one that is sufficient to support the position of the party in question.' [Citation.]
Plaintiffs argue the trial court erred in concluding that section 226.8 only applies to employers who make the actual decision to misclassify employees as independent contractors. The court found that although there were triable issues of fact whether defendants were plaintiffs' joint employers and whether they knew Canvas had misclassified its vendors, defendants could not be held liable under section 226.8 because plaintiffs conceded Canvas had made the classification decision.
Plaintiffs assert that the plain language of section 226.8 demonstrates the Legislature did not intend to limit the statute to employers who actually make the misclassification decision. Rather, according to plaintiffs, the statutory language is broad enough to encompass joint employers who knowingly acquiesce in a cojoint employer's decision to misclassify their joint employees.
Plaintiffs also argue that joint employers may be penalized under section 226.8 even if they had no knowledge that a coemployer misclassified their joint employees. Under this alternative theory, defendants would be liable under section 226.8 based solely on their status as joint employers of individuals who were willfully misclassified by Canvas.
The first issue we must decide is whether the trial court erred in concluding that the unlawful conduct described in section 226.8, subdivision (a)(1) is limited to employers who make the decision to misclassify workers or whether liability may extend to employers who know that a cojoint employer has willfully misclassified their joint employees and fail to remedy the misclassification.
The trial court found that the inclusion of the words "engage in" demonstrated a legislative intent to limit the statute to employers who made the actual decision to misclassify. In effect, the court equated the term "engage in" with the term "commit," concluding that section 226.8, subdivision (a)(1) was limited to employers who commit the act of willful misclassification. The ordinary definitions of "commit" and "engage," however, are not equivalent. (See Bounds v. Superior Court (2014) 229 Cal.App.4th 468, 480 [177 Cal.Rptr.3d 320] ["In interpreting the words in a statute, we must give them
If the Legislature had only intended to penalize employers who made the misclassification decision it could have simply made it unlawful for an employer to willfully misclassify an individual as an independent contractor. Alternatively, it could have made it unlawful to commit the act of willful misclassification. By choosing to use words with a broader connotation — prohibiting employers from "engaging in" the act of willful misclassification — we presume the Legislature intended to penalize a broader class of employers that includes those who, through their acts or omissions, have knowingly participated or involved themselves in the willful misclassification decision. As applicable here, a joint employer who knowingly acquiesces in a cojoint employer's decision to willfully misclassify their joint employees has necessarily "involved" itself in that misclassification decision.
Our conclusion that section 226.8 extends to a joint employer who has knowledge its employees have been misclassified by a coemployer is consistent with the objectives of the statutes. The Senate Floor analyses of Senate Bill No. 459 (2011-2012 Reg. Sess.), which added section 226.8 (see Stats. 2011, ch. 706, § 1), makes clear that the statute was intended to act as a broad "deterrent" against the practice of "employee misclassification." (Sen. Rules Com., Office of Sen. Floor Analyses, Unfinished Business, Analysis of Sen. Bill No. 459 (2011-2012) as amended Sept. 2, 2011, p. 5.) The Senate Floor analysis explained that increasing "abuse of independent contractor[]" status posed a "serious threat to workers' rights" and had created an "unfair playing field for all the responsible employers who continue to honor their lawful obligation to their employers." (Ibid.) Analyses prepared by the Assembly Committees on Labor and Employment and the Judiciary expounded on the "societal consequences" of worker "misclassification," explaining that the practice had resulted in the widespread denial of "[s]tandard employee protections" and "loss of state tax income." (Assem. Com. on Labor and Employment, Analysis of Sen. Bill No. 459 (2010-2011 Reg. Sess.) as amended May 27, 2011, p. 3; Assem. Com. on Judiciary, Analysis of Sen. Bill No. 459 (2010-2011 Reg. Sess.) as amended May 27, 2011, pp. 4-5.)
Senate Bill No. 459 (2011-2012 Reg. Sess.) also added section 2753 (see Stats. 2011, ch. 706, § 2), which provides that any person who, "for money or
Considered as a whole, the history of Senate Bill No. 459 (2011-2012 Reg. Sess.) demonstrates the Legislature intended to deter employers and their advisors from knowingly utilizing misclassification to avoid the extra costs and worker protections associated with employee status. Interpreting section 226.8 to exclude employers who know their own employees have been misclassified by a joint employer, but choose not to address the situation, would conflict with the Legislature's broad objectives.
We next address plaintiffs' assertion that defendants may be penalized under section 226.8 even if they had no knowledge that Canvas willfully misclassified their joint employees. Plaintiffs essentially contend that a joint employer may be penalized under the statute based solely on the fact that a coemployer willfully misclassified their joint employees. Plaintiffs offer two theories in support of their argument. The first theory is based on the text of section 226.8; the second is based on principles of joint and several liability.
Plaintiffs alternatively argue that a joint employer of an individual who has been misclassified by a coemployer is subject to section 226.8 penalties based on principles of agency and joint and several liability. Plaintiffs assert that under California law, "[w]here multiple entities employ a common workforce, they are generally jointly held liable for the ... unlawful treatment of their employees, just as if they were each other's agents." They further contend if the Legislature had intended to "depart from this usual rule of joint and several liability" it would have added "express language prohibiting joint and several liability for violations of Section 226.8."
We are aware of no authority suggesting that, under California law, joint employers are generally treated "as if they were each other's agents" or that joint employers are normally held jointly liable for Labor Code violation committed by a coemployer.
Other sections of the Labor Code demonstrate that when the Legislature intends to impose joint and several liability for Labor Code violations committed by a third party, it is capable of stating as much. As summarized above, section 2753, added by the same Senate bill that added section 226.8, provides that any person who, for "money or other valuable consideration," knowingly advises an employer to misclassify an employee "shall be jointly and severally liable with the employer if the individual is found not to be an independent contractor." Thus, section 2753 expressly creates joint liability for paid consultants who engage in the proscribed conduct. Similarly, under section 2810.3, which became effective January 1, 2015, any business entity that obtains workers from a labor contractor "shall share with [the] labor contractor all civil legal responsibility and civil liability for" paying the wages of any workers supplied by the labor contractor. Thus, even if the business entity is not the wage claimant's employer, and therefore owes no duty to pay wages under section 1194, the entity is nonetheless liable because section 2810.3 imposes joint liability.
Section 226.8, in contrast, contains no language suggesting that a joint employer shall be jointly liable for, or share in the civil liability of, a cojoint employer's voluntary and knowing misclassification of a joint employee. In the absence of any such language, we cannot presume that the Legislature intended joint and several liability to apply. Instead, we must presume the Legislature intended to impose the civil penalties set forth in section 226.8, subdivisions (b) and (c) on employers who actually "engage in" the voluntary and knowing misclassification of an employee.
In sum, plaintiffs have identified no authority for the proposition that a joint employer may be held liable for Labor Code violations committed by a
Based on our interpretation of section 226.8, subdivision (a)(1), we conclude the trial court did err in granting defendants summary adjudication based solely on plaintiffs' concession that Canvas was the employer that actually misclassified the putative class members as independent contractors. We reject, however, plaintiffs' further suggestion that defendants may be subject to section 226.8 penalties based solely on their status as joint employers of workers who were misclassified by a coemployer.
Defendants argue that even if we conclude the trial court's summary adjudication order was predicated on an erroneous interpretation of section 226.8, we should nonetheless deny plaintiffs' petition based on an alternative ground that was not raised in the trial court proceedings: that section 226.8 does not provide a private right of action to enforce the statute through a direct claim.
Preliminarily, we must determine whether it is proper to consider this issue in light of defendants' failure to raise it below. We generally will not consider an argument "raised in an appeal from a grant of summary judgment ... if it was not raised below and requires consideration of new factual questions.' [Citation.]" (Winchester Mystery House, LLC v. Global Asylum, Inc. (2012) 210 Cal.App.4th 579, 594 [148 Cal.Rptr.3d 412] (Winchester); see Uriarte v. United States Pipe & Foundry Co. (1996) 51 Cal.App.4th 780, 790-791 [59 Cal.Rptr.2d 332]; Folberg, supra, 104 Cal.App.3d at p. 140.) We may, however, consider a newly raised issue "when [it] involves purely a legal question which rests on an uncontraverted record which could not have been altered by the presentation of additional evidence." (In re Marriage of Broderick (1989) 209 Cal.App.3d 489, 501 [257 Cal.Rptr. 397]; see Moerman v. State of California (1993) 17 Cal.App.4th 452, 460 [21 Cal.Rptr.2d 329] [when reviewing summary judgment ruling, appellate court may "consider an issue not raised below when it involves purely a question of law"]; Winchester, supra, 210 Cal.App.4th at p. 594 [on review of summary judgment motion, court may consider newly raised issue involving "a question of law on undisputed facts"].) Even under such circumstances, we
Whether section 226.8 provides plaintiffs a private right of action is a pure question of law that does not turn on disputed facts or evidence. (Shamsian v. Department of Conservation (2006) 136 Cal.App.4th 621, 631 [39 Cal.Rptr.3d 62] ["whether [statute] ... supports a private right of action is a question of statutory interpretation and of law for the court"].) Moreover, this issue of law has been fully-briefed by both parties.
"A violation of a state statute does not necessarily give rise to a private cause of action. [Citation.] Instead, whether a party has a right to sue depends on whether the Legislature has `manifested an intent to create such a private cause of action' under the statute. [Citations.] Such legislative intent, if any, is revealed through the language of the statute and its legislative history." (Lu v. Hawaiian Gardens Casino, Inc. (2010) 50 Cal.4th 592, 596 [113 Cal.Rptr.3d 498, 236 P.3d 346] (Lu).) "[W]e consider the statute's language first, as it is the best indicator of whether a private right to sue exists." (Id. at p. 603.) "A statute may contain `"clear, understandable, unmistakable terms,"' which strongly and directly indicate that the Legislature intended to create a private cause of action. [Citation.] For instance, the statute may expressly state that a person has or is liable [sic] for a cause of action for a particular violation. [Citations.] Or, more commonly, a statute may refer to a remedy or means of enforcing its substantive provisions, i.e., by way of an action. [Citations.]." (Id. at p. 597, fn. omitted.) If the statute "does not include explicit language regarding a private cause of action, [but contains] provisions [that] create some ambiguity, [courts may] look ... to legislative history for greater insight." (Id. at p. 598.)
Section 226.8 contains no language indicating that the Legislature intended to create a private right of action to enforce or collect the penalties set forth in the statute. Subdivision (a) describes the prohibited conduct, making it unlawful for an employer to engage in the act of willful misclassification. Subdivision (b) provides that "[i]f the [LWDA] or a court issues a determination a person or employer has engaged" in willful misclassification, "the person or employer shall be subject to a civil penalty of not less than [$5,000] and not more than [$15,000] for each violation, in addition to any other penalties or fines permitted by law." Subdivision (c) contains identical language, but increases penalties to not less than $10,000 and not more than $25,000 for each violation if the LWDA or a court issues a determination the "employer has engaged in or is engaging in a pattern or practice of these violations."
Section 226.8, subdivision (g)(3) states that the "Labor Commissioner" (statutorily defined as the chief of the LWDA's Division of Labor Standards Enforcement (DLSE)
Thus, the only specific language regarding enforcement of section 226.8 appears in subdivision (g), which authorizes the Labor Commissioner to enforce the statute "pursuant to Section 98 or in a civil suit." If the commissioner proceeds under section 98 and determines a violation has occurred, he or she "may issue a citation to assess penalties." (§ 226.8, subd. (g)(2).) If the commissioner elects to enforce the statute "in a civil suit" (§ 226.8, subd. (g)(3)), the penalties would be assessed through a court order. There is no language suggesting a private plaintiff may bring a direct action under section 226.8 action or that a misclassified employee may collect the penalties described within the statute.
In our analysis, we explained that the Labor Code generally provides two distinct categories of "penalties": "statutory penalties ... for employer wage-and-hour violations [that are] recoverable directly by employees" and "`civil penalties'" that are "enforceable only by the state's labor law enforcement agencies" or through a PAGA action. (Caliber, supra, 134 Cal.App.4th at p. 377.) We concluded that PAGA's prefiling procedural requirements only apply when the claimant is attempting "to collect civil penalties for Labor Code violations previously only available in enforcement actions initiated by the state's labor law enforcement agencies" (134 Cal.App.4th at p. 374); the prefiling requirements do not apply to claims for "statutory penalties" that were "recoverable directly by employees" prior to PAGA's enactment (134 Cal.App.4th at p. 377).
Plaintiffs contend that even if we conclude section 226.8 lacks any language demonstrating a legislative intent to establish a private right of action, section 218 provides an independent basis for private enforcement of section 226.8. Section 218 states, in relevant part: "[N]othing in this article shall limit the right of any wage claimant to sue directly or through an assignee for any wages or penalty due him under this article." Plaintiffs contend this section provides a private right of action for any penalty set forth in the article in which section 218 appears — article 1 of chapter 1 of part 1, of division 2 of the Labor Code (§§ 200-244). They further contend that because section 226.8 falls within that article, section 218 necessarily provides a private right of action to enforce the statute.
The petition is denied. The parties shall bear their own costs on the petition.
Perluss, P. J., and Iwasaki, J.,
In any event, the Senate Judiciary Committee's statements are not, standing alone, sufficient to establish a private right of action. Although earlier drafts of section 226.8, proposed during a prior session, did include an explicit private right of action for employees who had suffered actual harm (see Sen. Bill No. 622 (2007-2008 Reg. Sess.) as amended May 3, 2007, § 1 ["[n]othing in this section shall prohibit an employee who has suffered actual harm ... from bringing an action on behalf of himself ... to recover the penalties established in subdivision (b) and (c)"]), the version of section 226.8 set forth in Senate Bill No. 459 (2011-2012 Reg. Sess.) contains no language that could be reasonably interpreted in the manner suggested by the Senate Judiciary Committee's analysis. "[C]ommittee reports, often drafted by unelected staffers, cannot alter a statute's plain language. [Citation.] [The statute's] `actually language prevails, not the committee's report.' [Citation.]" (People v. Johnson (2015) 60 Cal.4th 966, 992 [184 Cal.Rptr.3d 612, 343 P.3d 808].)
The Senate Judiciary Committee's analysis also conflicts with the remainder of the legislative history. Six other legislative committees prepared an analysis of Senate Bill No. 459 (2011-2012 Reg. Sess.); none of those analyses contain any indication that section 226.8 was intended to provide a private cause of action. (See Sen. Rules Com., Office of Sen. Floor Analyses, Unfinished Business, Analysis of Sen. Bill No. 459 (2010-2011 Reg. Sess.) as amended Sept. 2, 2011; Sen. Com. on Labor and Industrial Relations, Analysis of Sen. Bill No. 459 (2011-2012 Reg. Sess.) as amended Mar. 23, 2011; Sen. Appropriations Com., Fiscal Summary of Sen. Bill No. 459 (2011-2012 Reg. Sess.) as amended Mar. 23, 2011; Assem. Com. on Labor and Employment, Analysis of Sen. Bill No. 459 (2010-2011 Reg. Sess.) as amended May 27, 2011; Assem. Com. on Judiciary, Analysis of Sen. Bill No. 459 (2010-2011 Reg. Sess.), as amended May 27, 2011; Assem. Com. on Appropriations, Analysis of Sen. Bill No. 459 (2010-2011 Reg. Sess.) as amended Aug. 15, 2011.)