December 3, 2008

Brewer v. Premier Golf Properties: California Court of Appeal Reverses Punitive Damages Award in Wage & Hour Case

When it rains, it pours. While the blogosphere was already buzzing about today's oral argument in Williams III (see below), the California Court of Appeal (Fourth District, Division One) issued a significant punitive damages decision of its own, dealing with the availability of punitive damages for alleged violations of the California statutes and regulations governing meal and rest breaks, minimum wages, and pay stubs. My colleague Felix Shafir provides this summary:

In Brewer v. Premier Golf Properties, a former waitress sued her employer for, among other things, denying her meal and rest breaks mandated by law, failing to pay her wages for the hours she worked, and not providing her with accurate itemized wage statements. A jury found in her favor on these allegations and awarded the plaintiff $195,000 in punitive damages (among other relief). The Court of Appeal reversed the punitive damages award based on two rationales. First, the court held that the “new right-exclusive remedy” rule (whose effect on punitive damages awards we blogged about several months ago - - here here and here) precluded an award of punitive damages. As the court explained, under that rule, “‘[w]here a statute creates new rights and obligations not previously existing in the common law, the express statutory remedy is deemed to be the exclusive remedy for statutory violations, unless it is deemed inadequate.’” The court determined that the Labor Code statutes regulating pay stubs and minimum wages, as well as the statute and regulations governing meal and rest breaks, created new rights that did not previously exist in the common law. The court then held that those statutes provided the express and exclusive remedy for violations of meal/rest break, minimum wage, and pay stub laws.

The court also held punitive damages would be unavailable in the case even if the Labor Code statutory scheme did not provide the exclusive remedy. The court explained that punitive damages “are ordinarily recoverable only in ‘an action for the breach of an obligation not arising from contract.’” Applying this rule, the court decided that “the Labor Code provisions governing meal and rest breaks, minimum wages, and accurate pay stubs constitute statutory obligations imposed only when the parties have entered into an employment contract and are obligations arising from the employment contract,” and thus held that punitive damages could not be recovered for violations of these provisions.

UPDATE: The Complex Litigator weighs in on Brewer. And Wage Law too.