Recent court rulings that have found for employers in wage statement cases may have bucked a trend, but it remains to be seen how such decisions could impact the amount of legal action filed.
It should make plaintiffs’ attorneys who believe a long, complex case will prompt a settlement, regardless of the merit of the claims, think twice before filing actions, Maryann Marino, Southern California regional director of California Citizens Against Lawsuit Abuse (CALA), told the Northern California Record by email.
“It’s refreshing that the courts are willing to take the time to consider the details of an employer’s pay arrangements and explain why and how those meet applicable requirements,” Marino said. “Many courts are often so eager to ensure that a plaintiff has every opportunity to present a complete claim that the harm to a business defending them is not redressed.”
Marino said that in these difficult financial times — with prices rising in seemingly every sector — it’s important to consider that consumers actually pay for the vast amount of legal expense associated with such claims.
“Class action lawsuits about the sufficiency of payroll practices are filed almost every day, and are rarely dismissed with little time or expense — it is easy to understand why many businesses close, or settle the claims, particularly at a time when many are still struggling to recover from the COVID downturn, even though they might well win at trial,” Marino said. “How many other employers with practices just like this paid costly settlements simply because they were a fraction of the total legal expense they’d incur for access to justice?”
Because a motion relating to a possible appeal has already been filed in one of the cases, it’s too early to ascertain its impact on other wage statement claims, Marino said.
“Though we hope it will prompt plaintiffs’ attorneys to more carefully consider whether a business’ payroll arrangements actually meet applicable requirements before filing civil actions,” Marino said.
And for defendant businesses, it’s hoped the more favorable rulings trend continues, Marino said.
“The nearly 1,000 pages of California’s Labor Codes certainly do not make it easy for small mom and pop shop types to always be in compliance,” Marino said. “It also doesn’t make it easy for larger businesses either, there are just too many requirements to be aware of and comply with. If an employee isn’t actually harmed, then why should an employer be subject to huge wage and hour lawsuits?”
Marino noted there may be more than one way to display information on a paycheck stub and still comply with the law.
“In fact, in some cases the methods an employer uses may actually be easier to understand for an employee in that company, because of the unique practices and arrangements used at that location,” Marino said.
It remains critical for businesses to pay attention to wage statements and ensure they are in compliance, Marino said.