Recent California Supreme Court Decisions on Unpaid Wages and Retaliation Claims

On August 11, 2005, the California Supreme Court held that none of the officers, directors, and shareholders of a corporation, sued for unpaid overtime wages, can be directly sued as an “employer” even if they “exercised” control over the payment of wages. Reynolds v. Bement, No. S115823, 2005 Cal. LEXIS 8595 (Cal. 2005). The court also rejected a theory that the individual defendants were jointly liable for directing or participating in tortious conduct: a “simple failure to comply with statutory overtime requirements” does not qualify as tortious, the court explained. Finally, the court held that the individual defendants could not be liable for “conspiring” with their corporate employer to withhold wages, because corporate agents acting on the corporation’s behalf are not considered to be co-conspirators. By rejecting the plaintiff’s various theories of liability, the high court upheld the dismissal of the claims against the individual defendants, thereby leaving only the corporate defendants named in the lawsuit. At the same time, however, the court volunteered statements suggesting how there can be personal liability in wage claims brought under different circumstances.