Banda v. Verizon: Class Alleging Wage Statement Violations Certified

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More than 11,000 Verizon employees are now part of a certified class alleging that Verizon failed to comply with specific requirements set forth in California’s Pay Stub Law (Cal. Lab. Code § 226). The case is Banda v. Verizon California Inc., No. BC434587 (L.A. Super. Ct. Sept. 4, 2012) (order granting motion for class certification) (available here).

Superior Court Judge Charles F. Palmer rejected Verizon’s argument — commonly made by defendants facing class actions alleging wage statement violations — that the “injury” required by Labor Code section 226(e) rendered individual questions of injury predominant. Judge Palmer held that because “injury” as used in Section 226(e) is coextensive with the deprivation of a legal right, and the plaintiffs alleged that they had been uniformly deprived of the right to statutorily compliant pay stubs, individualized inquiries would not be substantially implicated. Additionally, Judge Palmer interpreted the statute as mandating that the nine pieces of information specifically required by Section 226(a)(1)-(9) be provided by the employer, thus rejecting Verizon’s contention that employees could find the missing information by doing simple math.

Section 226 requires that wage statements (commonly known as pay stubs) issued to California’s hourly workers show gross wages (Cal. Lab. Code § 226(a)(1)); total hours worked (§ 226(a)(2)); piece-rate units (§ 226(a)(3)); deductions (§ 226(a)(4)); net wages (§ 226(a)(5)); pay period beginning and ending dates (§ 226(a)(6)); employee’s name (§ 226(a)(7)); employer’s legal name (§ 226(a)(8)); and all hourly rates (§ 226(a)(9)). Filed in April of 2010, Banda alleged that the Verizon pay stubs issued to him and fellow employees failed to show the beginning dates of pay periods, hourly rates, and the number of hours worked at each hourly rate. The now-certified class is comprised of Verizon hourly employees who worked for the company in California between April 2009 and May 2011.

Because of the systematic nature of wage statements, few workplace violations are better suited to class treatment. The “injury” argument rejected in Banda has historically been the chief impediment to certification. To clarify that the Legislature’s intention as to the Section 226(e) “injury” language is consistent with Judge Palmer’s reading of it, the Legislature’s current term has been debating amendments to Section 226 that would effectively foreclose other defendants from relying on this argument in the future.