S044234



IN THE SUPREME COURT


STATE OF CALIFORNIA

 

ANDREW LAZAR, [2nd Civil No. B083795]

Plaintiff [Los Angeles Superior Court

and Petitioner, No. BC088634]


vs. [Hon. Daniel Curry, Judge]

SUPERIOR COURT OF CALIFORNIA,

COUNTY OF LOS ANGELES,

et al.,

Respondents,


RYKOFF-SEXTON, INC.,


Defendants and

Real Party in Interest.


______________________________




DECISION OF THE COURT OF APPEAL

SECOND APPELLATE DISTRICT, DIVISION THREE

_____________________________________________



REQUEST BY CALIFORNIA EMPLOYMENT LAWYERS ASSOCIATION

FOR PERMISSION TO FILE AMICUS CURIAE BRIEF AND

AMICUS CURIAE BRIEF IN SUPPORT OF PLAINTIFF

AND PETITIONER ANDREW LAZAR

____________________________________________



JOSEPH POSNER, INC. (SB 62428)

16311 Ventura Blvd., Ste. 555

Encino, California 91436

(818) 990-1340



Attorneys for California Employment Lawyers Association

S044234




IN THE SUPREME COURT


STATE OF CALIFORNIA


ANDREW LAZAR, [2nd Civil No. B083795]


Plaintiff [Los Angeles Superior Court

and Petitioner, No. BC088634]


vs. [Hon. Daniel Curry, Judge]

SUPERIOR COURT OF CALIFORNIA,

COUNTY OF LOS ANGELES,

et al.,



Respondents,



RYKOFF-SEXTON, INC.,



Defendants and

Real Party in Interest.



______________________________



DECISION OF THE COURT OF APPEAL

SECOND APPELLATE DISTRICT, DIVISION THREE

_____________________________________________



REQUEST BY CALIFORNIA EMPLOYMENT LAWYERS ASSOCIATION

FOR PERMISSION TO FILE AMICUS CURIAE BRIEF

IN SUPPORT OF PLAINTIFF

AND PETITIONER ANDREW LAZAR

____________________________________________




TO THE CHIEF JUSTICE OF CALIFORNIA AND THE ASSOCIATE JUSTICES OF THE SUPREME COURT:

The California Employment Lawyers Association (CELA) requests permission to file a brief as amicus curiae in support of plaintiff and petitioner Andrew Lazar. CELA is a statewide organization of attorneys primarily representing plaintiffs in employment termination and discrimination cases.

CELA, through its undersigned attorneys, is familiar with the questions involved in this case and the scope of their presentation and believes that there is necessity for additional argument on the following point:

Plaintiff should be permitted to sue defendant on either a common law or statutory basis or both, in order to enforce the Legislature's prohibition against fraud in the workplace.

If the court accepts this petition, the following brief discusses these arguments in detail.

Respectfully submitted,



JOSEPH POSNER, INC.





By___________________________

JOSEPH POSNER,

Attorney for California Employment

Lawyers Association, Amicus Curiae

S044234




IN THE SUPREME COURT

STATE OF CALIFORNIA



ANDREW LAZAR, [2nd Civil No. B083795]


Plaintiff [Los Angeles Superior Court

and Petitioner, No. BC088634]

vs. [Hon. Daniel Curry, Judge]

SUPERIOR COURT OF CALIFORNIA,

COUNTY OF LOS ANGELES,

et al.,



Respondents,



RYKOFF-SEXTON, INC.,



Defendants and

Real Party in Interest.



______________________________




DECISION OF THE COURT OF APPEAL

SECOND APPELLATE DISTRICT, DIVISION THREE

_____________________________________________


AMICUS CURIAE BRIEF BY CALIFORNIA EMPLOYMENT

LAWYERS ASSOCIATION IN SUPPORT OF PLAINTIFF

AND PETITIONER ANDREW LAZAR

____________________________________________





TO THE HONORABLE CHIEF JUSTICE OF CALIFORNIA AND ASSOCIATE JUSTICES OF THE CALIFORNIA SUPREME COURT:

ARGUMENT

1. A VIOLATION OF LABOR CODE SECTION 970 IS A VIOLATION OF A WELL-ESTABLISHED, FUNDAMENTAL POLICY OF THIS STATE FOR WHICH PLAINTIFF IS ENTITLED TO RECOVER EITHER IN A STATUTORY OR A COMMON LAW ACTION OR BOTH.

The Lazar case is on all fours with Finch v. Brenda Raceway Corporation, 22 Cal. App. 4th 547 (1994), which held that an employer which violates Labor Code Section 970 violates a fundamental public policy of this state. Finch emphasized the Legislature's concern with protecting employees from misrepresentation by providing both civil and criminal penalties. 22 Cal. App. 4th at 554.

Rojo v. Kliger, 52 Cal. 3d 65 (1990) tells us that an employment plaintiff should be able to go forward with as many legal theories as the facts support. Thus, in order to carry out and enforce public policy, Mr. Lazar should be able to proceed both on his statutory claim under Labor Code Section 970, and on his common law claim based upon the same facts under Tameny v. Atlantic Richfield, 27 Cal. 3d 167 (1980). Any problems in recovery can be handled by appropriate choice, deduction or offset. Cf. Marshall v. Brown, 141 Cal. App. 3d 408, 420 (1983), construing the parallel provisions of Labor Code Sections 1050-1054 and the common law tort of defamation.

Section 970 is not the only legislative prohibition against employer fraud. Other statutes protect employees from similar misconduct. For example, Hudgins v. Neiman-Marcus Group, 34 Cal. App. 4th 1109 (1995) invalidated a fraudulent wage payment scheme. Neiman-Marcus pays its retail sales persons on commission. The sales persons receive a draw against earned commissions in order to insure receipt of a minimum monthly income. Each sale is supposed to be recorded on a sales slip with the identification number of the sales person who made the sale. If a customer brings back the merchandise later for return - and the company has a very liberal return policy, 34 Cal. App. 4th at 1123, fn. 12 - and if the company accepts the returned merchandise and credits the customer's account, the company also backcharges the commission previously paid against the sales person's latest wage check. As long as the employee makes at least the minimum wage, the backcharge policy is legal under Labor Code Sections 221-223 and 400-410.

But not all of the items which Neiman-Marcus takes in return can be traced back to the sales person who sold them. Frequently customers come in to return merchandise without a sales slip, or else the slip is mangled or garbled, or for some other reason the company computers cannot trace the return back to the individual who sold it. Other times, the merchandise is accepted for return long after the sales person who sold it has left the employ of the company, thus rendering any backcharge impossible. In other situations the merchandise is damaged beyond repair. And in some events, the store accepts back merchandise that has been stolen, so there never has been any sales record.

Alarmed by the growing number of these unidentified returns, Neiman-Marcus decided to make its current employees the insurers of its losses. The company adopted a policy whereby each sales person was backcharged a percentage of the total losses on the unidentified returns. In plain English, this meant that the conscientious employees had to pay the cost of company neglect or customer crookedness.

That idea didn't sit too well with Hudgins, who sued in September, 1987 claiming that the unidentified returns policy violated Labor Code Section 221 and Business and Professions Code Section 17200. 34 Cal. App. 4th at 1126. The Court of Appeal had no trouble deciding that Neiman-Marcus' policies were illegal and constituted fraud and deceit:

"Section 221 and related provisions in Sections 222 through 223 were enacted in 1937 in response to secret deductions or 'kickbacks' that made it appear as if an employer was paying wages in accordance with an applicable contract or statute, whereas, in fact, the employer was paying less. (Kerr's Catering, supra, 57 Cal. 2d at pp. 328-329). Those sections are, thus, declarative of a strong public policy against fraud and deceit in the employment relationship. (Ibid.) Even where fraud is not involved, however, the Legislature has recognized the employee's dependence on wages for the necessities of life and has, consequently, disapproved of unanticipated or unpredictable deductions because they impose a special hardship on employees...".

34 Cal. App. 4th at 1118-1119, emphasis added.

The court was particularly critical of the company's policy of making the innocent pay for the sins of the guilty:

"As to identified returns, the sale is reversed and the individual sales associate is required to return the commission because his or her sale was rescinded. However, to the extent the employer deducts for unidentified returns resulting from other employees' 'abuse', the conscientious sales associate is required to return a portion of commissions he or she has legitimately earned from completed sales in order to compensate Neiman-Marcus for commissions paid on sales other employees did not complete - amounts that would otherwise be a business loss the conscientious sales associate has done nothing to cause. This policy of punishing all employees for the sins of a few cannot survive scrutiny under California law."

34 Cal. App. 4th at 1122-1123, emphasis in the original.

Significantly, the court also said that Neiman-Marcus wage policies violated not only the Labor Code but also Business and Professions Code Section 17200, which prohibits business practices which are unlawful, unfair or fraudulent:

"More specifically for our purposes, business practices that violate the California Labor Code have also been held to violate Business and Professions Code Section 17200. (People v. Los Angeles Palm, Inc., supra, 121 Cal. App. 3d at p. 33 (crediting tips of restaurant employees against their minimum wage, violates both Section 351 and Bus. & Prof. C. Section 17200); United Farm Workers of America v. Superior Court (1975) 47 Cal. App. 3d 334, 344-345 (120 Cal. Rptr. 904).) Thus, although it is not clear how much it advances his cause, appellant is also entitled to judgment that the Neiman-Marcus unidentified returns policy violates Business and Professions Code Section 17200."

34 Cal. App. 4th at 1126-1127.(1)

If violating the Labor Code's wage payment provisions - provisions which carry with them the possibility of criminal prosecution under Labor Code Section 216 - are unlawful, unfair or fraudulent and so violate Bus. & Prof. C. 17200, by like reasoning so should a Labor Code Section 970 violation, which also carries with it criminal sanctions.(2)

The Legislature has spoken out against fraud in the workplace not once but many times. For this reason, Mr. Lazar should be permitted the full range of both statutory and common law remedies against his ex-employer in order to enforce public policy. The Court of Appeal's decision allowing Mr. Lazar to pursue his common law claim was correct and should be upheld.



CONCLUSION

Curious is the position of Rykoff-Sexton in this case. In Cooper v. Rykoff-Sexton, 24 Cal. App. 4th 614 (1994), Rykoff-Sexton argued vigorously against supposed resume fraud by a ten year employee. Yet when the shoe is on the other foot - when it is Rykoff-Sexton which has supposedly done the lying - then this alleged corporate wrongdoer wants to get off scott-free. Perhaps the company has never heard the ancient adage about those who live in glass houses. But maybe it is time that this court pull up the shades and let some light shine in.

For these reasons, CELA respectfully submits that the Court of Appeal's decision should be upheld.

Respectfully submitted,



JOSEPH POSNER, INC.





By___________________________

JOSEPH POSNER,

Attorney for California Employment

Lawyers Association, Amicus Curiae

Proof of service to:



Martin C. Washton, Esq.

Jeffrey F. Webb, Esq.

Gibson, Dunn & Crutcher

333 South Grand Avenue

Los Angeles, CA 90071



Ross & Morrison

9440 Santa Monica Blvd.

Ste. 515

Beverly Hills, CA 90210



Schulman & Miller

9440 Santa Monica Blvd.

Ste. 515

Beverly Hills, CA 90210



Hon. Daniel Curry

Los Angeles Superior Court

111 North Hill Street

Los Angeles, CA 90012



Clerk, Court of Appeal

Second Appellate District, Division Three

300 South Spring Street, 2nd Floor

North Tower

Los Angeles, CA 90013



William G. Hoerger, Esq.

California Rural Legal Assistance Inc.

631 Howard Street, Ste. 300

San Francisco, CA 94105



Luis Jaramillo, Esq.

California Rural Legal Assistance Inc.

3 Williams Road

Salinas, CA 93905



William Quackenbush, Esq.

1700 El Camino Real

Suite 408

San Mateo, CA 94402



Paul Grossman, Esq.

Paul, Hastings, et al.

550 South Flower St., 23rd Fl.

Los Angeles, CA 90071





Donald Butler,

President/CEO

The Employers Group

1150 South Olive St., Ste. 2300

Los Angeles, CA 90015









Courtesy copies to:



Fred Ashley, Esq.

30131 Town Center Drive

Suite 205

Laguna Nigel, CA 92677



Carla Barboza, Esq.

660 S. Figueroa St., Ste. 1700

Los Angeles, CA 90017



Nancy Bornn, Esq.

1411 5th Street, Ste. 200

Santa Monica, CA 90401



Mary Dryovage, Esq.

340 Pine Street

Suite 501

San Francisco, CA 94104





Ellen Lake, Esq.

4230 Lakeshore Avenue

Oakland, California 94610





Gary Laturno, Esq.

9255 Towne Center Drive

Suite 520

San Diego, California 92121





Barbara Lawless, Esq.

600 Montgomery Street

33rd Floor

San Francisco, CA 94111





Dolores Leal, Esq.

6300 Wilshire Blvd.

Suite 1500

Los Angeles, CA 90048





John McCarthy, Esq.

401 Harvard Avenue

Claremont, CA 91711



Cliff Palefsky, Esq.

535 Pacific Avenue

San Francisco, CA 94133



Steven Pingel, Esq.

3020 Old Ranch Pkwy, Ste. 320

Seal Beach, CA 90740



Joseph Posner, Esq.

16311 Ventura Boulevard

Suite 555

Encino, CA 91436



James P. Stoneman, Esq.

100 W. Foothill Blvd.

Claremont, CA 91711



Terisa Chaw

NELA

600 Harrison St., Ste. 535

San Francisco, CA 94107



Chris Bello

912 Ordway St.

Albany, CA 94706

TABLE OF CONTENTS



Page



Table of Authorities ii



REQUEST BY CALIFORNIA EMPLOYMENT LAWYERS ASSOCIATION

FOR PERMISSION TO FILE AMICUS CURIAE BRIEF

IN SUPPORT OF PLAINTIFF

AND PETITIONER ANDREW LAZAR 1





AMICUS CURIAE BRIEF BY CALIFORNIA EMPLOYMENT

LAWYERS ASSOCIATION IN SUPPORT OF PLAINTIFF

AND PETITIONER ANDREW LAZAR 3



ARGUMENT 3



1. A VIOLATION OF LABOR CODE SECTION 970

IS A VIOLATION OF A WELL-ESTABLISHED,

FUNDAMENTAL POLICY OF THIS STATE FOR WHICH

PLAINTIFF IS ENTITLED TO RECOVER EITHER IN

A STATUTORY OR A COMMON LAW ACTION OR BOTH. 3



Conclusion 8



TABLE OF AUTHORITIES



Case Page



Finch v. Brenda Raceway Corporation,
22 Cal. App. 4th 547 (1994) 4

Tameny v. Atlantic Richfield,
27 Cal. 3d 167 (1980) 4

Cooper v. Rykoff-Sexton,
24 Cal. App. 4th 614 (1994) 8

Gould v. Maryland Sound Industries,
31 Cal. App. 4th 1137 (1995) 8

Hudgins v. Neiman-Marcus Group,
34 Cal. App. 4th 1109 (1995) 4

Manufacturers Life Ins. Co. v. Superior Court,
____ Cal. 4th ____, 95 Daily Journal DAR 7060
(June 1, 1995) 8

Marshall v. Brown,
141 Cal. App. 3d 408, 420 (1983) 4

Rojo v. Kliger,
52 Cal. 3d 65 (1990) 4







Other Authorities



Business and Professions Code Section 17200 6

Labor Code Section 216 8

Labor Code Section 221 6

Labor Code Section 970 4

1. See also Manufacturers Life Ins. Co. v. Superior Court, ____ Cal. 4th ____, 95 Daily Journal DAR 7060 (June 1, 1995), applying Bus. & Prof. C. 17200 to insurance companies.

2. See also Gould v. Maryland Sound Industries, 31 Cal. App. 4th 1137 (1995), citing criminal sanctions to support its holding that the plaintiff could recover on a public policy basis for objecting to various Labor Code violations.