Lawyers Warn of Pay Stub Litigation Wave
Matthew J. Matern, Daily Journal Cover July 6, 2015 – By Matthew Blake, Daily Journal
California businesses and their lawyers have perennially fretted about the state’s employee-friendly laws, but companies see one recent labor code amendment as beyond pale.
In 2012 Gov. Jerry Brown amended an existing law by creating a presumption of harm each time an hourly employee’s pay stub is missing any of nine required pieces of information, including total hours worked and wages earned in the pay period, the employee’s rate of pay, and the employer’s address and legal title.
While plaintiffs’ lawyers defend the law as a check on evasive employers, the strict liability businesses face is a “technical violation” that “cause no injury to employees”, according to Jennifer Barrera, policy attorney at the California Chamber of Commerce.
Instead, the suites are a “financial windfall to plaintiff attorneys” Barrera said. A case against staffing agency Manpower Inc. settled for $8.7 million in June, and a lawsuit targeting Verizon Wireless Inc. concluded with a $15 million deal for plaintiffs and their lawyers.
Francis J. Ortman, an employment defense attorney at Seyfarth Shaw LLP, said he keeps seeing instances in which a “disgruntled employee will find a plaintiff employment lawyer online and come to their office” for advice on hard to prove claims including wrongful termination or missing wages.
But “rather than shoot the half-court shot” and file a lawsuit alleging a difficult to prove violation, the lawyer asks to see the worker’s pay stub, and, if one of the nine items are missing, “the plaintiffs’ lawyer opts for the slam dunk” and files an almost impossible to disprove pay stub claim.
Ortman represents Applied Aerospace Structures Corp. in a class action over the company’s not providing its address on workers’ pay stubs – a frivolous claim, he said, because every Aerospace employee works at the same Stockton location. Geer v. Applied Aerospace Structures Corp., CU14-3137 (San Joaquin Super. Ct, filed July 18, 2014).
“We wanted to fight the lawsuit but it settled,” Ortman said, with a hearing on final settlement approval scheduled Tuesday in front of Judge Barbara A. Kronlund. “Because of the strict liability statute, we had no defense.”
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