Pineda v. Bank of America, N.A.

241 P.3d 870, 50 Cal. 4th 1389, 117 Cal. Rptr. 3d 377, 16 Wage & Hour Cas.2d (BNA) 1650, 2010 Cal. LEXIS 11678
CourtCalifornia Supreme Court
DecidedNovember 18, 2010
DocketS170758
StatusPublished
Cited by129 cases

This text of 241 P.3d 870 (Pineda v. Bank of America, N.A.) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pineda v. Bank of America, N.A., 241 P.3d 870, 50 Cal. 4th 1389, 117 Cal. Rptr. 3d 377, 16 Wage & Hour Cas.2d (BNA) 1650, 2010 Cal. LEXIS 11678 (Cal. 2010).

Opinion

Opinion

MORENO, J.

When an employee is terminated or resigns from his or her employment, final wages are generally due and payable immediately. (Lab. *1393 Code, §§ 201, 202.) 1 Section 203 provides that, if an employer willfully fails to timely pay final wages, “the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefor is commenced; but the wages shall not continue for more than 30 days.” (§ 203, subd. (a), italics added (hereafter section 203(a)).) A one-year statute of limitations typically governs actions to recover penalties (Code Civ. Proc., § 340, subd. (a)), but section 203 further provides that an employee may sue for “these penalties at any time before the expiration of the statute of limitations on an action for the wages from which the penalties arise.” (§ 203, subd. (b) (hereafter section 203(b)); see Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1109 [56 Cal.Rptr.3d 880, 155 P.3d 284] (Murphy) [“[T]he Legislature expressly provided that a suit seeking to enforce the section 203 penalty would be subject to the same . . . statute of limitations as an action to recover wages.”].)

This case asks us to resolve two issues: First, does a different statute of limitations apply when an employee seeks to recover only section 203 penalties (because, as in this case, final wages were paid—albeit belatedly— prior to the filing of the action), as opposed to when an employee seeks both final wages and penalties? Second, are section 203 penalties recoverable as restitution under California’s unfair competition law (UCL) (Bus. & Prof. Code, § 17200 et seq.)? Our answer to both questions is “no.” Section 203(b) sets forth a single limitations period governing all actions to recover section 203 penalties regardless of whether an employee seeks both unpaid wages and penalties or penalties alone. Further, section 203 penalties are not recoverable as restitution under the UCL because employees have no ownership interest in the funds. We accordingly reverse the Court of Appeal’s contrary judgment and remand for further proceedings.

Facts and Background

Plaintiff Jorge A. Pineda was employed by defendant Bank of America, N.A. 2 He gave two weeks’ notice of his resignation, which occurred on May 11, 2006. Defendant did not pay plaintiff his final wages on his last day, as required under section 202, but instead paid him on May 15, four days late.

Plaintiff filed this action on October 22, 2007, seeking to represent a class of former Bank of America employees whose final wages were untimely paid. The complaint asserts two causes of action. The first alleges defendant failed to timely pay plaintiff and class members final wages as required by section *1394 201 (applying to employees who are terminated) or section 202 (applying to employees who quit) and seeks penalties pursuant to section 203. Plaintiff’s second cause of action alleges defendant’s failure to timely pay final wages violates the UCL, and seeks restitution of unpaid section 203 penalties.

The trial court granted defendant’s motion for judgment on the pleadings. It concluded that a one-year statute of limitations (Code Civ. Proc., § 340, subd. (a)) applies when, as in this case, an employee files an action seeking only section 203 penalties (as opposed to an action seeking unpaid wages and § 203 penalties); thus, the trial court concluded, the time for plaintiff to file his action had expired. The trial court also concluded that section 203 penalties are not recoverable as restitution under the UCL. The trial court denied plaintiff leave to amend to substitute a new plaintiff in the first cause of action. The Court of Appeal affirmed in all respects. We granted plaintiff’s petition for review. 3

Discussion

I. Section 203(b) Governs All Actions for Section 203 Penalties

We first independently review the Court of Appeal’s construction of section 203. (Imperial Merchant Services, Inc. v. Hunt (2009) 47 Cal.4th 381, 387 [97 Cal.Rptr.3d 464, 212 P.3d 736].) In doing so, “it is well settled that we must look first to the words of the statute, ‘because they generally provide the most reliable indicator of legislative intent.’ [Citation.] If the statutory language is clear and unambiguous our inquiry ends. ‘If there is no ambiguity in the language, we presume the Legislature meant what it said and the plain meaning of the statute governs.’ [Citations.] In reading statutes, we are mindful that words are to be given their plain and commonsense meaning. [Citation.]” (Murphy, supra, 40 Cal.4th at p. 1103.) Thus, we “avoid a construction that would produce absurd consequences, which we presume the Legislature did not intend. [Citations.]” (People v. Mendoza (2000) 23 Cal.4th 896, 908 [98 Cal.Rptr.2d 431,4 P.3d 265].) “We have also recognized that statutes governing conditions of employment are to be construed broadly in favor of protecting employees. [Citations.]” (Murphy, at p. 1103; cf. Smith v. Superior Court (2006) 39 Cal.4th 77, 82 [45 Cal.Rptr.3d 394, 137 P.3d 218] (Smith) [purpose of § 203 is to compel prompt wage payment upon separation from employment].) We therefore begin our inquiry by reviewing the pertinent statutory language. While section 203 is obviously our primary focus, resolving this issue requires that we also be mindful of the statute’s interplay with several relevant provisions located in the Code of Civil Procedure.

*1395 Section 203(a) provides: “If an employer willfully fails to pay, without abatement or reduction, in accordance with Sections 201, 201.3, 201.5, 202, and 205.5, any wages of an employee who is discharged or who quits, the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefor is commenced; but the wages shall not continue for more than 30 days.” (Italics added.) Code of Civil Procedure section 340, subdivision (a) provides that a one-year statute of limitations applies to “[a]n action upon a statute for a penalty or forfeiture . . . .” (Italics added.) Thus, if section 203(a) comprised the entire statute, a suit to recover its provided-for penalties would undoubtedly have to be filed within one year of the accrual of the cause of action.

However, Code of Civil Procedure section 312 acknowledges the Legislature can, if it so chooses, prescribe a different statute of limitations to govern specific civil actions. 4

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Estate of McMahon CA1/1
California Court of Appeal, 2025
People v. Murphy
California Court of Appeal, 2025
People v. Parker
California Court of Appeal, 2025
In re Brissette
California Court of Appeal, 2025
Midcoast ECO v. Cal. Coastal Commission CA1/3
California Court of Appeal, 2024
Di Martini v. Superior Court
California Court of Appeal, 2024
Flores v. Medicali Holdings CA2/3
California Court of Appeal, 2023
Robinson v. Super. Ct.
California Court of Appeal, 2023
Huynh v. Jabil Inc.
N.D. California, 2023
Meyer v. Sheh
California Court of Appeal, 2022

Cite This Page — Counsel Stack

Bluebook (online)
241 P.3d 870, 50 Cal. 4th 1389, 117 Cal. Rptr. 3d 377, 16 Wage & Hour Cas.2d (BNA) 1650, 2010 Cal. LEXIS 11678, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pineda-v-bank-of-america-na-cal-2010.