California PAGA Suit Snares Staffing Firm Beacon Hill

Boston-based Beacon Hill Staffing has been named as a defendant (Complaint attached below) in one of the many lawsuits being filed under California's Private Attorney General Act, commonly referred to as PAGA. Also named is Beacon Hill's client, RELX, Inc., formerly known as Reed Elsevier. The Plaintiff, Nia Gilbert, alleges that she worked for the "legal solutions" business of the Client, likely the Nexis/Lexis division of RELX.

As previously reported in SLN, the PAGA law deputizes California employees as paid bounty hunters, awarding cash generated by Labor Code penalties imposed against their employers. Employees file on behalf of themselves and every similarly situated worker in the company. There are three recipients of the bounty: (1) the employee, who receives 35% of the penalties imposed; (2) the State of California, which receives 65% of the proceeds; and (3) the attorneys for the employee, who recover substantial fee awards from the employer on top of the penalties. No other state in the nation has anything close to such a punitive environment for employers.

The exposure is enhanced by the way in which California law creates a multiplier effect whenever a PAGA claim is brought, as illustrated by this case. And it matters not if the violation is trivial. The Complaint against Beacon Hill alleges the following violations of law, each of which potentially comes with its own set of penalties:

DEFENDANT requires PLAINTIFF to work while clocked out during what is supposed to be PLAINTIFF's off-duty meal break.

PLAINTIFF was from time to time inte1rupted by work assignments while clocked out for what should have been PLAINTIFF's off-duty meal break.

DEFENDANT, as a matter of established company policy and procedure, administers a uniform practice of rounding the actual time worked and recorded by PLAINTIFF... always to the benefit of DEFENDANT.

DEFENDANT engages in the practice of requiring PLAINTIFF and the AGGRIEVED EMPLOYEES to perform work off the clock in that DEFENDANT ... required these employees to submit to mandatory temperature checks and symptom questionnaires for COVID-19 screening.

Defendant [utilized] a non-discretionary incentive program [that] provided employees paid on an hourly basis with incentive compensation when the employees met the various performance goals .... However, when calculating the regular rate of pay in order to pay overtime and meal and rest break premiums to PLAINTIFF and the AGGRIEVED EMPLOYEES, DEFENDANT failed to include the incentive compensation as part of the employees' "regular rate of pay" for purposes of calculating overtime pay and meal and rest break premium pay.

As a result of their rigorous work schedules, PLAINTIFF and the AGGRIEVED EMPLOYEES were from time to time unable to take thirty (30) minute off duty meal breaks and were not fully relieved of duty for their meal periods.

PLAINTIFF and the AGGRIEVED EMPLOYEES were required from time to time to perform work as ordered by DEFENDANT for more than five (5) hours during some shifts without receiving a meal break.

Further, DEFENDANT from time to time failed to provide PLAINTIFF and AGGRIEVED EMPLOYEES with a second off-duty meal period for some workdays in which these employees were required by DEFENDANT to work ten (10) hours of work.

DEFENDANT also engaged in the practice of rounding the meal period times to avoid paying penalties to PLAINTIFF and the AGGRIEVED EMPLOYEES.

PLAINTIFF and the AGGRIEVED EMPLOYEES were also required from time to time to work in excess of four (4) hours without being provided ten minute rest periods.

Further, these employees were denied their first rest periods of at least ten (I 0) minutes for some shifts worked of at least two (2)o four (4) hours from time to time, a first and second rest period of at least ten (10) minutes or some shifts worked of between six (6) and eight (8) hours from time to time, and a first, second and third rest period of at least ten (10) minutes for some shifts worked often (10)hours or more from time to time.

Employers cannot impose controls that prohibit an employee from taking a brief walk - five minutes out, five minutes back. Here, DEFENDANT's policy restricted PLAINTIFF and the AGGRIEVED EMPLOYEES from unconstrained walks and is unlawful based on DEFENDANT's rule which states PLAINTIFF and the AGGRIEVED EMPLOYEES cannot leave the work premises during their rest period.

From time to time, DEFENDANT also failed to provide PLAINTIFF and the AGGRIEVED EMPLOYEES with complete and accurate wage statements which failed to show, among other things, the correct gross and net wages earned. DEFENDANT from time to time failed to pay PLAINTIFF and the AGGRIEVED EMPLOYEES within seven (7) days of the close of the payroll period in accordance with Cal. Lab. Code § 204(d), including but not limited to the "Hourly" regular wage payments.

DEFENDANT underpaid sick pay wages to PLAINTIFF and the AGGRIEVED EMPLOYEES by failing to pay such wages at the regular rate of pay in violation of Cal. Lab. Code Section 246. Specifically, PLAINTIFF and other non-exempt employees earn non-discretionary remuneration, including, but not limited to, incentives, shift differential pay, and bonuses. Rather than pay sick pay at the regular rate of pay, DEFENDANT underpays sick pay to PLAINTIFF and the AGGRIEVED EMPLOYEES at their base rates of pay.

DEFENDANT violated Cal. Lab. Code Section 246 by failing to pay sick pay
21 at the regular rate of pay. PLAINTIFF and the AGGRIEVED EMPLOYEES routinely earned non-discretionary incentive wages which increased their regular rate of pay. However, when sick pay was paid, it was paid at the base rate of pay for PLAINTIFF and the AGGRIEVED EMPLOYEES, as opposed to the correct, higher regular rate of pay, as required under Cal. Lab. Code Section 246.

As a pattern and practice, DEFENDANT regularly failed to pay PLAINTIFF and the AGGRIEVED EMPLOYEES their c01Tect wages and accordingly owe waiting time penalties pursuant to Cal. Lab. Code Section 203.

Etc. Read the attached Complaint if you want to see more. As a practical matter, it is virtually impossible for any employer to strictly comply with all of California's requirements on a daily basis. Even if an employer is innocent with regard to many of the charges, the cost to defend such a shotgun claim is massive, with typical defense lawyers charging hourly fees in the $750 range. Did I mention that these wage-related claims are not covered by the typical Employment Practices Liability policy?

As reported earlier in SLN, the recent "reforms" to the PAGA law do not promise much relief, amounting only to some modest potential mitigation of the massive exposure.