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Thai v. International Business Machines Corp. (CA1/5 A165390 7/11/23) COVID-19 Stay-at-Home Order | Employee Expenses 

On March 19, 2020, in response to the COVID-19 pandemic, California Governor Gavin Newsom issued an order requiring residents to stay at home except as needed to maintain operations in critical sectors.  (Governor’s Exec. Order No. N-33-20 (Mar. 19, 2020)) (E.O. N-33-20). At that time, lead plaintiff Paul Thai was employed by defendant and respondent International Business Machines Corporation (IBM), which directed its employees to continue working at home.

Plaintiffs seek penalties against IBM under California’s Private Attorneys General Act (PAGA; Labor Code § 2699 et seq.) for alleged violations of section 2802, subdivision (a) (section 2802(a)), which requires an employer to reimburse an employee “for all necessary expenditures . . . incurred by the employee in direct consequence of the discharge of his or her duties.”  Plaintiffs contend IBM failed to reimburse Mr. Thai and other employees for the expenses necessarily incurred to perform their work duties from home.  The trial court sustained IBM’s demurrer, concluding the Governor’s order was an intervening cause of the work-from-home expenses that absolved IBM of liability under section 2802.  Because the court’s conclusion is inconsistent with the statutory language, we reverse.