Pineda v. Bank of America: Cal. Supremes Clarify Waiting Time Penalty Issues

I expressed surprise when the California Supreme Court granted review in Pineda v. Bank of America to determine, among other things, whether Labor Code Section 203 waiting time penalties could be recovered in an action under the Unfair Competition Law (UCL). It seemed clear to me that such penalties were not subject to restitution under the UCL. The Court issued its decision last week, confirming this analysis. Pineda v. Bank of America (November 18, 2010) --- Cal.Rptr.3d ----, 2010 WL 4643834.

Maybe I should not have been so surprised that the Court decided to review the case. The other issue in Pineda is this:

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?

Slip op. at 1. This question was complicated by McCoy v. Superior Court (Kimco)(2007) 157 Cal.App.4th 225, which injected a fair amount of confusion into the pretty clear limitations language in Section 203:

Suit may be filed 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.

Fortunately, the Court cleared up this confusion by holding: "section 203(b) contains a single, three-year limitations period governing all actions for section 203 penalties irrespective of whether an employee's claim for penalties is accompanied by a claim for unpaid final wages." Slip op. at 5. The Court thus disapproved of McCoy.

I think the Court got it right on both counts. The opinion is available here.