Litigating California Wage & Hour and Labor Code Class Actions

significantly, any order that “may be necessary to restore to any person in interest any
money or property . . . which may have been acquired by means of such unfair
competition”—i.e., restitution.
The California Supreme Court held that restitution included ordering an employer who
failed to pay premium overtime pay required by statute to disgorge the premium pay to the
affected employees, 278 an exercise functionally equivalent to paying damages for a
statutory overtime claim under the Labor Code. California courts have subsequently
clarified, however, that equitable relief does not include forcing the defendant to go beyond
returning money wrongfully withheld from the plaintiff by disgorging additional profits the
employer earned as a result of its unfair practices. 279
There were three primary advantages a plaintiff would gain by joining a UCL claim to a
wage and hour suit. First, because the restitutionary remedy under the UCL was similar to
a damages remedy for a wage law violation, a companion UCL claim effectively expanded
the statute of limitations on a Labor Code wage claim 280 from three years to four years, the
length of the UCL’s statute of limitations. 281 Second, a UCL claim provided a potential
vehicle for plaintiffs to secure class relief without satisfying the procedural burdens of class
certification. 282 Third, a plaintiff who lacked traditional standing to sue because he or she
was never impacted by an alleged wage and hour or Labor Code violation could
nonetheless sue as a “private attorney general” on behalf of those employees who were
impacted by the violation. 283
B. Reform of the Law—Passage of Proposition 64
On November 2, 2004, California voters passed Proposition 64 (“Prop 64”), which amended
two of the three broadest aspects of the UCL—i.e., the near-universal standing requirement
277
278
279
280
281
282
283
The UCL cannot be used, for instance, to recover waiting time penalties, precisely because the damage awards are
penalties and not compensation. Pineda v. Bank of America, N.A., 170 Cal. App. 4th 388 (2009), review granted, 207
P.3d 1 (2009). The UCL also cannot be used to recover attorneys’ fees; these may be recovered only in cases where
the UCL is used to “borrow” other laws that specifically provide for recovery of attorneys’ fees. People ex rel. City of
Santa Monica v. Gabriel, 186 Cal. App. 4th 882 (2010).
Cortez v. Purolator Air Filtration Prods. Co., 23 Cal. 4th 163, 177-78 (2000).
Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1152 (2003); see also Feitelberg v. Credit Suisse First
Boston, LLC, 134 Cal. App. 4th 997 (2005) (non-restitutionary disgorgement of profits unavailable under UCL even
where case has been certified as a class action).
Labor Code penalties, however, are not recoverable under the UCL, because they do not constitute restitution. See,
e.g., Pineda v. Bank of America, 50 Cal. 4th 1389, 1401-2 (2010) (Labor Code section 203 waiting time penalties are
not recoverable under the UCL).
Cortez, 23 Cal. 4th at 179.
Kraus v. Trinity Mgmt. Servs., Inc., 23 Cal. 4th 116 (2000).
Stop Youth Addiction v. Lucky Stores, Inc., 17 Cal. 4th 553 (1998) (purported anti-smoking public interest advocacy
organization had standing under UCL to sue Lucky Stores for allegedly selling cigarettes to minors).
Seyfarth Shaw LLP | www.seyfarth.com Litigating California Wage & Hour Class Actions (12th Edition) 64