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Home Depot U.S.A., Inc v. the Superior Court of

December 22, 2010

HOME DEPOT U.S.A., INC., PETITIONER,
v.
THE SUPERIOR COURT OF LOS ANGELES COUNTY,
RESPONDENT; DEVON HARRIS ET AL., REAL PARTIES IN INTEREST.



ORIGINAL PROCEEDINGS in mandate. Terry Green, Judge. Petition denied. (Los Angeles County Super. Ct. No. BC415774)

The opinion of the court was delivered by: Manella, J.

CERTIFIED FOR PUBLICATION

In the underlying action, real parties in interest sought to recover civil penalties from petitioner Home Depot U.S.A., Inc. (Home Depot) under the Labor Code Private Attorneys General Act of 2004 ((PAGA); Lab. Code, § 2698 et seq.).*fn1 The trial court overruled Home Depot's demurrer to the first amended complaint, which contains a claim under PAGA based on Home Depot's alleged failure to provide seating to its employees pursuant to section 1198 and Wage Order 7-2001 (Cal. Code Regs., tit. 8, § 11070). Home Depot challenges this ruling by petition for writ of mandate or other relief. We conclude that the complaint states a claim under PAGA, and thus deny the petition on its merits.

RELEVANT FACTUAL PROCEDURAL BACKGROUND

On September 11, 2009, real parties in interest Devon Harris and Lawrence Winston filed their first amended complaint, which asserts a single claim under PAGA on behalf of themselves and former and current employees of Home Depot. The complaint alleges that Home Depot operates stores across the nation that sell home improvement products and hardware, including more than 100 stores in California. According to the complaint, although the cashier and counter areas within the California stores contain ample space for seats for employees, Home Depot has not provided such seats, in contravention of section 1198 and Wage Order 7-2001 of the California Industrial Welfare Commission (IWC). Real parties in interest sought civil penalties under PAGA, as specified in section 2699, subdivision (f), as well as reasonable attorney fees and costs (§ 2699, subd. (g)).

Home Depot demurred to the first amended complaint, asserting that section 2699, subdivision (f), provides no remedies for the alleged violations of section 1198 and Wage Order 7-2001. After the trial court overruled the demurrer, Home Depot filed its petition for writ of mandate, prohibition, or other appropriate relief. We issued our order to show cause and temporary stay on July 30, 2010.

DISCUSSION

Home Depot contends that the trial court erred in overruling its demurrer. As explained below, we disagree.

A. Governing Principles

Generally, "[t]he standard of review for an order overruling a demurrer is de novo. The reviewing court accepts as true all facts properly pleaded in the complaint in order to determine whether the demurrer should be overruled. [Citation.]" (Guardian North Bay, Inc. v. Superior Court (2001) 94 Cal.App.4th 963, 971.)

Here, the issues before us hinge on the interpretation of the pertinent statutes and wage order. (Johnson v. Arvin-Edison Water Storage Dist. (2009) 174 Cal.App.4th 729, 734 (Johnson).) Because the parties do not suggest that the statutes or wage order have been interpreted by an agency charged with their enforcement, our inquiry is guided by the established canons of statutory construction. (See Aguilar v. Association for Retarded Citizens (1991) 234 Cal.App.3d 21, 28 (Aguilar).) In construing the statutes and wage order, our fundamental goal is to ascertain the intent underlying their enactment, so as to effectuate their purpose. (Johnson, supra, 174 Cal.App.4th at p. 734; Aguilar, supra, 234 Cal.App.3d at p. 28.) We look first to the language of the statutes and wage order, viewed in context, seeking a reasonable interpretation of their meaning. (Johnson, at pp. 734-735; Aguilar, at pp. 28-29.) We may also consult legislative history and other extrinsic evidence for additional guidance. (Johnson, at p. 734.)

B. Statutory Background

We begin by examining the applicable statutes and wage order. Under the Labor Code, the Labor and Workforce Development Agency (LWDA) and its constituent departments and divisions are authorized to collect civil penalties for specified labor law violations by employers. (Caliber Bodyworks, Inc. v. Superior Court (2005) 134 Cal.App.4th 365, 370.) To enhance the enforcement of the labor laws, the Legislature enacted PAGA in 2003. (Ibid.) In so doing, the Legislature stated: "Adequate financing of essential labor law enforcement functions is necessary to achieve maximum compliance with state labor laws . . . . [¶] . . . [¶] [] Staffing levels for state labor laws enforcement agencies have, in general, declined over the last decade . . . . [¶] [] It is therefore in the public interest to provide that civil penalties for violations of the Labor Code may also be assessed and collected by aggrieved employees acting as private attorneys general . . . ." (Stats. 2003, ch. 906, § 1, p. 5179.)

The central provision of PAGA is section 2699. Subdivision (a) of the statute permits aggrieved employees to recover civil penalties that previously could be collected only by LWDA. (Dunlap v. Superior Court (2006) 142 Cal.App.4th 330, 335.) In addition, to address violations for which no such penalty had been established, subdivision (f) of the statute created "a default penalty and a private right of action" for aggrieved employees. (Caliber Bodyworks, Inc. v. Superior Court, supra, 134 Cal.App.4th at p. 375.) Section 2699 exempts violations of certain Labor Code provisions from its scope, including provisions requiring employers to post specified notices. (§ 2699, subds. (f)(3), (m).) "In general the civil penalties recovered by aggrieved employees are distributed '75 percent to the [LWDA] for enforcement of labor laws and education of employers and employees about their rights and responsibilities under [the Labor Code] . . . and 25 percent to the aggrieved employees.' (§ 2699, subd. (i).)" (Caliber Bodyworks, Inc. v. Superior Court, at p. 375, fn 8.)

Our focus is on subdivision (f) of section 2699, which provides in pertinent part: "For all provisions of this code except those for which a civil penalty is specifically provided, there is established a civil penalty for a violation of these provisions, as follows: [¶] . . . [¶] [] If, at the time of the alleged violation, the person employs one or more employees, the civil penalty is one hundred dollars ($100) for each aggrieved employee per pay period for the ...


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