Firm obtains groundbreaking ruling on individual liability for wage and hour violations

March 26, 2012-- PE&G attorneys Nick Carlin and Cari Cohorn secured a groundbreaking ruling that corporate officers can be personally liable for penalties arising from wage and hour violations. In an ongoing class arbitration over those issues, the arbitrator accepted the firm's theory that, notwithstanding California law holding that corporate officers are not "employers" and therefore cannot be held personally liable for the corporation's failure to provide meal and rest breaks or to pay overtime (or for related violations of the Labor Code), the Labor Code allowed aggrieved employees to recover civil penalties from officers who cause wage and hour violations. The firm argued that the Labor Code imposes penalties against any "person" who causes a wage and hour violation, and that related provisions of the Code create a private right of action allowing the employees themselves (rather than a state agency) to enforce the statute and collect the penalties. Although no California appellate court has ruled on this theory of recovery, the arbitrator held that the claims were viable, and denied the individual defendants' motion to dismiss the claims against them.