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Wood v. Kaiser Foundation Hospitals (CA4/1 D079528 2/24/23) Healthy Workplaces, Healthy Families Act | Lab. Code § 248.59(e) Statutory Interpretation

By February 25, 2023Healthy Families Act

California Paid Sick Leave Attorney The judiciary’s responsibility to interpret statutes often places courts in the position of trying to decide how the Legislature would have resolved an issue we strongly suspect it never actually considered.  We endeavor, as best we can, to be prognosticators.  Sometimes, however, our role in statutory interpretation is more that of a detective.  The Legislature included a provision or used a particular term in a statute, and it is our job to uncover what it had in mind when it employed those words.  In this case we function largely as detectives, hopefully more like Sherlock Holmes than Inspector Clouseau.   California’s Healthy Workplaces, Healthy Families Act of 2014 (the Act) (Labor Code, § 245 et seq.) generally requires employers to provide eligible employees with at least three paid sick days per year.  The Labor Commissioner and the Attorney General are charged with enforcing this law.  Violators may be assessed compensatory as well as liquidated damages, plus civil penalties.  (§ 248.5.)

The last clause of section 248.5, subdivision (e) is the focus of this appeal.  It provides that “any person or entity enforcing this article on behalf of the public as provided for under applicable state law shall, upon prevailing, be entitled only to equitable, injunctive, or restitutionary relief . . . .”  (Ibid.)  It would seem fairly obvious that the Legislature had something specific in mind when it used the phrase, “enforcing this article on behalf of the public as provided for under applicable state law.”  It was envisioning some kind of enforcement action.  But what was it?  In particular, did the Legislature mean to include—and thus restrict—actions by aggrieved employees to recover civil penalties under the Labor Code Private Attorney General Act of 2004 (PAGA) (§ 2698 et seq.) as defendant Kaiser Foundation Hospitals (Kaiser) contends?  Or instead, as plaintiff Ana Wood argues, did the Legislature have in mind an entirely different statutory scheme, the Unfair Competition Law (UCL) (Bus. & Prof. Code, § 17200 et seq.)?

The procedural setting of this case perfectly frames the issue as one of statutory interpretation.  Wood filed a PAGA action against her former employer Kaiser seeking penalties for alleged violations of the Act.  The trial court sustained Kaiser’s demurrer without leave to amend, determining that a PAGA action is one brought “on behalf of the public” and since it seeks only civil penalties, is prohibited by section 248.5, subdivision (e).

Following our independent review, we reach a different conclusion.  As we explain, the statute’s text and history provide compelling evidence that the phrase “on behalf of the public as provided under applicable state law” in section 248.5, subdivision (e) was intended to refer to actions prosecuted under the UCL—not PAGA.  Accordingly, we reverse the judgment of dismissal.