An ever astute reader has directed my attention to the fact that the Court of Appeal (Second Appellate District, Division Six) today issued a modification of its June 23, 2010 Opinion in Baker v. American Horticulture Supply, Inc. (June 23, 2010) as mod. (July 21, 2010). The modification, which is focused entirely on the "willful" definition used in Labor Code section 203, appears to respond to contentions raised in a petition for rehearing. The majority of the text of the modification is as follows:
The application here of the ordinary definition of "willful" is supported by the judicial construction of Labor Code section 203, subdivision (a), which provides in relevant part: "If an employer willfully fails to pay . . . 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.) "The settled meaning of 'willful,' as used in section 203, is that an employer has intentionally failed or refused to perform an act which was required to be done. [Citations.] '[T]he employer's refusal to pay need not be based on a deliberate evil purpose to defraud workmen of wages which the employer knows to be due.' [Citations.]" (Amaral v. Cintas Corp. No. 2 (2008) 163 Cal.App.4th 1157, 1201.)
Slip op. (mod.), at 1-2.
We reject respondent's contention in its petition for rehearing that "conduct violating the Act is willful only if the manufacturer, jobber or distributor knows of its obligations but intentionally declines to fulfill them." The knowledge requirement would be difficult to prove and would encourage manufacturers to remain ignorant of their obligations under the Act. This would frustrate the legislative intent to provide "unique protection" to independent wholesale sales representatives. (§ 1738.10.) But a manufacturer's failure to comply with the Act would not be willful if the manufacturer proved that its failure was "the result of a good faith and reasonable belief the facts imposing the statutory obligation were not present." (Kwan v. Mercedes-Benz of North America, Inc. (1994) 23 Cal.App.4th 174, 185.) For example, a failure to comply would not be willful if the manufacturer reasonably and in good faith believed that a person did not qualify as a "wholesale sales representative" within the meaning of the Act. This interpretation "will not vitiate the intended deterrent effect of the [treble damages provision]." (Ibid.)
Slip op. (mod.), at 2.
The courts, however, have recognized that a finding of "willfulness" within the meaning of Labor Code section 203 may be negated by a reasonable, good faith belief in a legal defense to a wage claim. (Amaral v. Cintas Corp. No. 2, supra, 163 Cal.App.4th at p. 1201; Armenta v. Osmose, Inc. (2005) 135 Cal.App.4th 314, 325; Barnhill v. Robert Saunders & Co. (1981) 125 Cal.App.3d 1, 8-9; see also Cal. Code Regs., tit. 8, § 13520.) Accordingly, we conclude that a finding of a willful failure "to pay commissions as provided in the written contract" (§ 1738.15) may be negated by a reasonable, good faith belief in a legal defense to a commissions claim.
Slip op. (mod.), at 2, n. 7. The key here is the Court's rejection of a standard that would allow willfulness only when an employer "knows of its obligations but intentionally declines to fulfill them." An employee does not have to show that the employer had any awareness of is actual obligations; it is enough to show that the employer acted but should have acted otherwise.