California Federal Judge Rejects Settlement Agreement Due to Term Contradictions

Five Guys LLC has agreed to pay $1.2 million to settle a class action lawsuit accusing the restaurant chain of violating California wage and hour laws and consumer reporting laws. However, Five Guy’s ability to settle the case was delayed for a second time when a federal judge refused to approve the settlement. The judge stated that the Plaintiff failed to provide an accurate description of the settlement terms and conditions.


This case is a reminder to employers that class action lawsuits can take years to settle and result in huge expenses. As the old saying goes, an ounce of prevention is worth a pound of cure; the best way to avoid costly drawn out wage-and-hour lawsuits is to ensure thorough compliance with California and federal wage and hour laws. If you have any questions about class action settlements, or your company’s wage-and-hour compliance in general, contact the experts at The Saqui Law Group.


Staffing Company Settles Wage & Hour Class Action for $10M

After a contentious eight-year legal battle, Express Services, Inc. (Express), a California staffing company, settled a wage and hour class action for ten (10) million dollars. The plaintiff in Stoddart v. Express Services, Inc., was a former forklift driver who alleged that Express systemically violated wage and hour laws by failing to pay overtime or provide rest and meal breaks. The plaintiff argued that, among other things, the company frequently sent short-staffed workgroups to businesses, which resulted in employees not being able to take duty-free rest or meal breaks.


This case serves as a reminder that, under California law, an employer must provide non-exempt employees with duty-free rest and meal periods. In general, an employer satisfies this obligation when it relieves employees of all duties, relinquishes control, and does not impede or discourage employees from taking rest or meal breaks. If you have any questions regarding your company’s rest and meal break policy, contact the experts at The Saqui Law Group.


SB 1159: Update to Record-Keeping and Reporting Requirements for Employers

Senate Bill No. 1159 (“SB 1159”), approved by the Governor on September 17, 2020, creates a presumption that certain employees who contract COVID-19 have done so at work and are eligible for workers’ compensation benefits. See our previous e-Blast on SB 1159 here.

Significantly, SB 1159, creates a new class of employees who can qualify for the presumption by testing positive during an outbreak if the employer has five (5) or more employees. This means that employers will now be required to implement record-keeping and reporting measures as indicated in Labor Code Section 3212.88. Specifically, employers who know or reasonably should have known that an employee tested positive, must report this information to their workers' compensation claims administrator in writing via electronic mail or fax within three business days.

The notice must state the following:

  1. An employee tested positive (no personal information is needed unless a claim is filed);
  2. The date of the positive test (date when test was taken);
  3. The address of the employment site of the employee who tested positive for the previous 14 days; and
  4. The highest number of employees at the worksite(s) in the 45 days prior to the last date worked.

If any misleading or false information is provided, a civil penalty of up to $10,000 may be imposed. Additional information and guidance on employer reporting requirements under SB 1159 can be found here.


Employers need to keep diligent records to properly determine whether an outbreak has occurred to comply with SB 1159 and other COVID-19 related laws and regulations. If you have any questions about compliance with these requirements, contact the experts at The Saqui Law Group.


AB 3075 Expands Successor Liability for Labor Code Judgments

Assembly Bill (AB) 3075, signed by Governor Newsom on September 30th, 2020 amends Section 200.3 of the Labor Code to allow employees to collect wage and hour judgments from certain successor businesses/employers that take over operations when the former employers have failed to pay the judgment debts.

The new law defines the term “successor” to cover the following scenarios:

  • Any business that uses substantially the same facilities or substantially the same workforce to offer substantially the same services as the judgment debtor.
  • Any business that employs as a managing agent any person who directly controlled the wages, hours, or working conditions of the affected workforce of the judgment debtor.
  • Any business in the same industry that has an owner, partner, officer, or director who is an immediate family member of any owner, partner, officer, or director of the judgment debtor.

The purpose of this bill is to prevent business owners who violated the Labor Code from escaping liability by getting rid of their prior business only to form a new one. The new law requires the secretary of state to implement these changes by January 1, 2022.


Successorship liability can present legal pitfalls for unsuspecting business owners. If you have questions about potential successorship liability for your company, contact the Saqui Law Group.


California Appeals Court Orders Ride-Sharing Companies to Reclassify Drivers

A California appeals court upheld an order requiring Uber and Lyft to reclassify their drivers as employees rather than independent contractors. The ruling will not have an immediate impact because it does not take effect for at least 30 days, well after the November 3rd vote on Proposition 22 (“Prop 22”).

Prop 22 is an exemption that would classify drivers as independent contractors, exempting employers from providing benefits to certain drivers. If Prop 22 is passed, Uber and Lyft drivers would remain classified as independent contractors and would not qualify for common employment benefits like overtime, sick leave, unemployment, and workers compensation.


The Gig Economy is a category of work that is still largely undefined and constantly evolving, but independent contractor misclassification claims remains a hotbed of litigation for employers. If you have questions about whether individuals providing services to your company are employees or independent contractors, contact the Saqui Law Group.

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