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AUGUST 2004
"SUE YOUR BOSS" LAW REFORMS EFFECTIVE IMMEDIATELY
On August 11, 2004 Senate Bill 1809 was signed providing California employers with some relief from the"Sue Your
Boss Law". The original law (SB 796) (effective on January 1, 2004) allowed employees to sue their employers for
alleged violations of the Labor Code and bypass the State Workforce Development Agency. SB 796 created a penalty
for every Labor Code violation that did not already have one. The Court could also award attorneys fees. As a result
of this law, many frivolous lawsuits were filed. The reform law now restricts employees from suing their employer
and gives the Court discretion to award lesser penalties. It also creates procedural steps to be followed before an
employee can bring a private civil action.
Two Significant Revisions Effective Retroactively to January 1, 2004
Employees may not file a lawsuit for certain minor Labor Code violations involving posting, notice, agency
reporting, or filing requirements, except where the filing or reporting requirement involves mandatory payroll
or workplace injury reporting.
A Court must review and approve penalties assessed in connection with any settlement agreement resulting
from any lawsuit brought under this law.
Employees Must Satisfy Reporting Procedures
In reference to approximately 150 Labor Code Sections governing wages, hours and employment conditions, prior to
bringing suit, the employee must:
First provide written notice of the specific code section alleged to have been violated, to both the
Labor and Workforce Development Agency (Agency) and the employer providing a chance for the
Agency to investigate the claim.
If the Agency decides not to investigate the claim, or after investigating it, decides not to cite the
employer, the employee may then file a lawsuit. If the Agency cites the employer, no employee
lawsuit can be filed.
Health and Safety Violations
With respect to violations of health and safety laws (Cal OSHA), aggrieved employees must now:
Give written notice to the employer and the State Division of Occupational Safety and Health (DOSH)
of the specific provision alleged to have been violated;
If DOSH investigates and issues a citation, no civil action may be brought by the employee. If DOSH
fails to issue a citation within a specified time, the employee may seek court review of that decision.
If DOSH fails to investigate, the employee may also proceed with a private action (as explained
below).
All Other Labor Code Violations
With respect to all other violations of the Labor Code, the aggrieved employee must:
Give written notice to the Agency and the employer of the alleged violation. The employer then has
33 days to cure the alleged violation. If the violation is cured, the employee may not file a lawsuit.
If the employee does not believe that the alleged violation has been cured, the employee may ask the
Agency to review the actions taken by the employer. The employee may only bring a civil action if
the Agency fails to respond or determines that the violation has not been cured.
If the Agency determines that the violation has been cured, and the employee disagrees with that
conclusion, the employee may challenge that determination in court.
Greater Judicial Discretion
The original law allowed employees to recover specific penalty amounts expressly set forth in the Labor Code -
including up to $5,000 or more and provided that employees could recover $100 for each aggrieved employee per pay
period for the initial violation of those sections and $200 for each aggrieved employee per pay period for each
subsequent violation. The reformed law authorizes a court to award a lesser amount than the maximum civil penalty
amount allowed if to do so otherwise would result in an award that is "unjust, arbitrary and oppressive, or
confiscatory." The courts are also required to approve any proposed settlements.
Retaliation Provision Added
The amendments also add an anti-retaliation protection for employees that makes it unlawful for any employer
to take any action against an employee for initiating any action, sending any notice, or participating in a charge or
lawsuit under this law.
What should You Do:
Even with the reforms and amendments to the Sue Your Boss law, employers still face significant penalties
for a number of Labor Code violations, including many wage-and-hour violations. Employers should:
Conduct an audit of the wage-and-hour practices, payroll practices, and other similar policies and
procedures
Train managers, supervisors and employers responsible for human resource functions on the
requirements for compliance with wage and hour regulations.
Maintain accurate, complete and detailed personnel files, time and payroll records.
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SUE YOUR BOSS REFORMS |
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This information is intended to provide guidance in the area of employment law and is provided as a service of the Firm. While every effort
has been made to ensure the accuracy of the information contained in this bulletin, it is not intended to serve as "legal advice". If additional
information or assistance is needed on any of the topics contained in this informational package or any other matter, please feel free to
contact Cynthia Elkins for further information. All rights reserved. ©2005.
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