On one end of the Labor Code section 226 spectrum are the defendants who assert that the "injury" requirement of section 226 is met only when an employee suffers a broken leg as a result of the defective wage statement (this would occur when the statement is printed on stone and delivered by dropping it from a substantial height above the employee, whose legs are restrained in a horizontal position to ensure impact). On the other end of the spectrum are the few optimistic plaintiff-side firms that argue that any violation of Labor Code section 226(a) requirements is an infringement of a legal right sufficient to entitle the employee to, at minimum, statutory penalty damages.
Jaimez v. DAIOHS USA, Inc., et al., 181 Cal. App. 4th 1286 (February 8, 2010), which is the current standard in California, splits the difference at the very minimal injury level. Specifically, Jaimez holds: "While there must be some injury in order to recover damages, a very modest showing will suffice." Jaimez went on to state that '''this lawsuit, and the difficulty and expense [Jaimez has] encountered in attempting to reconstruct time and pay records,' may well be 'further evidence of the injury' he has suffered." In other words, it takes something, but not much.
Today, in Morgan v. United Retail (July 19, 2010), the Court of Appeal (Second Appellate District, Division Seven) added guidance as to what constitutes valid construction of section 226 requirements, or at least one small part of section 226. Quickly summarizing the entire opinion, the Court said:
On behalf of a class of current and former non-exempt employees, Morgan alleged that United Retail's wage statements failed to comply with section 226, subdivision (a) because they listed the total number of regular hours and the total number of overtime hours worked by the employee, but did not list the sum of the regular and overtime hours worked in a separate line. The trial court granted summary adjudication in favor of United Retail on the section 226 claim. We conclude that the trial court properly granted summary adjudication because United Retail's wage statements complied with the statutory requirements of section 226 by “showing . . . total hours worked.” (§ 226, subd. (a)(2).) We accordingly affirm.
Slip op., at 2. The Court of Appeal actually went out of its way to analyze the obligations imposed by section 226(a)(2):
Apart from the summary conclusion in Rubin, however, none of the published cases or DLSE opinion letters directly address whether the “total hours worked” component of section 226 may be satisfied by separately listing the total regular hours and the total overtime hours worked during the pay period. (§ 226, subd. (a)(2).) Section 226 itself does not define the terms “showing” or “total hours worked” anywhere in the statute. Yet in construing statutes, we must be mindful that “words are to be given their plain and commonsense meaning.” (Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1103.) In other words, we are not free to “give the words an effect different from the plain and direct import of the terms used.” (California Fed. Savings & Loan Assn. v. City of Los Angeles (1995) 11 Cal.4th 342, 349.)
Slip op., at 11. After much analysis, the Court concluded that summary judgment was correctly granted: "Consistent with the language of section 226 and the DLSE's May 17, 2002 opinion letter, United Retail's wage statements listed 'the precise, actual number of hours worked' by the employee at each hourly rate of pay in effect during the pay period." Slip op., at 12. You can't fault this panel for the work they did, construing statutory language, examining DLSE materials, looking at a wage statement exemplar on the DLSE's website, and analyzing the import of 1984 and 2000 legislation affecting section 226.
Other courts have been drawing their own lines around section 226 claims. In an unpublished opinion, the Ninth Circuit, in Villacres v. ABM Industries Incorporated (June 17, 2010) (D.C. Case No. 2:07-cv-05327-VAP-OP), while not tackling the extent of injury required to satisfy section 226, was clear that the "intrusion upon the legally protected right" is not, in its view, sufficient to state a claim:
Villacres argued that violations of section 226(a) in and of themselves are injuries sufficient to make section 226(e) relief available to him and his proposed class. This is not how California courts typically have defined “injury.” See Steketee v. Lintz, Williams & Rothberg, 38 Cal. 3d 46, 54 (1985) (“‘Wrongful act’ and ‘injury’ are not synonymous. The word ‘injury’ signifies both the negligent cause and the damaging effect of the alleged wrongful act and not the act itself.”)(citations omitted); Lueter v. California, 115 Cal. Rptr. 2d 68, 81 (Cal. Ct. App. 2002) (“Although the words ‘injury’ and ‘damage’ often are used interchangeably, a distinction may be made. ‘Injury’ refers to the fact of harm suffered by the plaintiff due to the defendant’s conduct. ‘Damages’ refers to the monetary sum that the plaintiff may be awarded as compensation for injury.”). We have no reason to believe that the California Supreme Court would interpret section 226(e) differently. The district court did not err when it held that section 226(e) relief was unavailable to Villacres and his proposed class.
Memorandum, at 3. It is interesting to note, however, that this panel's construction of the term "injury" is at odds with another Ninth Circuit panel's view on injury, expressed days later. In Edwards v. First American Title Insurance (9th Cir. June 21, 2010), the Ninth Circuit, in a published opinion, found that "injury" existed in a RESPA case, despite the absence of an overcharge: "Because the statutory text does not limit liability to instances in which a plaintiff is overcharged, we hold that Plaintiff has established an injury sufficient to satisfy Article III. Slip op., at 9095. Applying that same analysis to a 226 claim, once could see that same Edwards panel concluding that the violation of a protected right under 226 causes the necessary "injury" and the alternative damage clause (greater of actual damage or statutory damages) is triggered when no "actual" damage exists.
So the Ninth Circuit has figured out what it thinks the California Supreme Court would do were it faced with the injury issue raised by section 226.
Until the California Supreme Court decides to tell us what it thinks about any of this, we'll have to settle for Jaimez, Morgan, and the Ninth Circuit's prognostications.