Judge: Kristin S. Escalante , Case: 23STCV02218, Date: 2023-06-23 Tentative Ruling
Case Number: 23STCV02218 Hearing Date: June 23, 2023 Dept: 24
NATURE OF PROCEEDINGS: Hearing on Demurrer - without Motion to
Strike to First Amended Complaint of Plaintiff Kenzie Bond
The
above-captioned matters are called for hearing.
The Court has
read the moving, opposing and reply papers in the above-captioned demurrer and
announces its tentative rulings in open Court.
The Demurrer to First Amended Complaint
of Plaintiff Kenzie Bond ID: 086123878783 filed by Defendants Engage! Learning
LLC and Engage Learning, Inc., on 05/24/2023 is SUSTAINED in part, and OVERRULED
in part.
The demurrer to the first and third causes
of action is overruled. The demurrer to the fifth cause of action is sustained
with leave to amend.
Defendants Engage Learning LLC and Engage
Learning, Inc. (collectively “Defendants”) demurer to the first (failure to pay
wages), third (constructive termination), and fifth (failure to provide
accurate wage statements) causes of action in the First Amended Complaint
(“FAC”) of Plaintiff Kenzie Bond (“Plaintiff”)
By
way of background, on February 1, 2023, Plaintiff filed her complaint arising
from her work with Defendants. A month later she filed the operative FAC. In
the FAC, Plaintiff alleged that she began working for Defendants in July 2019
as a “Coach.” (FAC, ¶11.) Defendants sell a fee-based technology platform,
personalized coaching, and support services for educators and public school
nationwide. (FAC, ¶11.) In 2022, Plaintiff accepted Defendants’ offer to become
a K12 Educational Strategist, which entitled her to various commissions based on
her sales (the “Agreement”). (FAC, ¶12.) During her employment Plaintiff
performed in an exemplary manner fulfilling her duties under the Agreement.
However, Defendants failed to pay Plaintiff all her earned wages. (FAC, ¶¶13-15.) Plaintiff repeatedly contacted Defendants regarding the unpaid wages, but Defendant did not address the issue. (FAC, ¶16.) As a result of continuing to be denied her full wages Plaintiff resigned; she wrote Defendants “Due to the continuing withholding of wages and earnings that are rightfully due and owning, engage2learn has left me with no choice—I cannot continue to work and not get paid. My employment is terminated effective immediately. Today will be my last day.” (FAC, ¶16.)
1. First Cause of Action – Failure to Pay Wages
To establish a claim for nonpayment of wages Plaintiff must
prove (1) Plaintiff performed work for Defendant, (2) Defendant owes Plaintiff
wages under the terms of employment; and (3) the amount of unpaid wages. (CACI
2700.) The Labor Code defines wages as “all amounts for labor performed by
employees of every description, whether the amount is fixed or ascertained by
the standard of time, task, piece, commission basis, or other method of
calculation.” (Lab. Code, § 200.)
Plaintiff has stated a claim for failure
to pay wages. She alleges Defendants offered her
a position as a K12 Educational Strategist, which entitled her to various
commissions. (FAC, ¶12.) She fulfilled her duties under the parties’ agreement,
but Defendants failed to pay Plaintiff all her earned wages. (FAC, ¶¶13-15.)
Plaintiff repeatedly contacted Defendants regarding the unpaid wages, but
Defendant did not address the issue. (FAC, ¶16.) As a result Plaintiff was
damaged in an amount in excess of $50,000. (FAC, ¶23.)
Defendant argues there is no “independently recognized cause
of action in California” for failure to pay wages. (Dem., at p. 4:07-09.)
However, Defendant cites no authority for this specific proposition beyond cases
which state generally that a demurrer is appropriate if there is no private
right of action. (Dem. At p. 5:11-22 [citing Mayron v. Google LLC (2020) 54
Cal.App.5th 566, 576].) The Labor Code states that “[n]othing in this article
shall limit the right of any wage claimant to sue directly or through an
assignee for any wages or penalty due him under this article.” (Lab. Code,
§218.) Labor Code section 210 further allows an employee to recover penalties
for failure to pay wages. Defendant also argues that Plaintiff must state the
specific code section she seeks to recover wages under, but cites no authority
that this is a requirement for pleading a claim.
Accordingly, the demurrer to the first cause of action is
overruled.
2.
Third Cause of Action – Constructive Termination
“In order to establish a constructive discharge, an employee
must plead and prove, by the usual preponderance of the evidence standard, that
the employer either intentionally created or knowingly permitted working
conditions that were so intolerable or aggravated at the time of the employee’s
resignation that a reasonable employer would realize that a reasonable person
in the employee’s position would be compelled to resign.” (Turner v.
Anheuser-Busch, Inc. (1994) 7 Cal.4th 1238, 1251.) “The conditions giving rise
to the resignation must be sufficiently extraordinary and egregious to overcome
the normal motivation of a competent, diligent, and reasonable employee to
remain on the job to earn a livelihood and to serve his or her employer.” (Id.
at p. 1246.)
Plaintiff
has alleged a claim for constructive termination. She alleges she fulfilled the
obligations of her position per the parties’ Agreement, but Defendant refused
to pay her all of her earned wages. (FAC, ¶¶13-15.) When Plaintiff contacted
Defendants about this, they did not address the issue. (FAC, ¶16.) As a result
of continuing to be denied her full wages Plaintiff resigned; she wrote
Defendants “Due to the continuing withholding of wages and earnings that are
rightfully due and owning, engage2learn has left me with no choice—I cannot
continue to work and not get paid. My employment is terminated effective
immediately. Today will be my last day.” (FAC, ¶16.)
The
crux of the parties’ dispute on this cause of action appears to turn on whether
failure to pay the entirety of wages amounts to extraordinary and egregious
action sufficient for a constructive termination claim. Defendant likens the
allegations to a dispute over wages owed and argues a dispute about a pay
reduction is not grounds for a constructive discharge claim. However, when considering
demurrers, courts read the allegations liberally and in context. (Schultz v.
Harney (1994) 27 Cal.App.4th 1611, 1622 (Schultz), as modified on denial of
reh’g (Sept. 29, 1994).) Here, the allegations do not support Defendants’ analysis.
Plaintiff does not allege the parties had a wage dispute, but that the parties’
Agreement obligated Defendants to provide Plaintiff certain wages and they
refused to do so. (FAC, ¶¶13-15.) Defendants do not cite case law that an
employer’s refusal to pay duly owed wages is insufficient for a constructive
termination claim at the pleading stage.
Accordingly,
the demurrer as to cause of action three is overruled.
3.
Fifth Cause of Action – Failure to Provide Accurate Wage Statements
Labor Code section 226 (‘Section
226”) states “[a]n employer, semimonthly or at the time of each payment of
wages, shall furnish to his or her employee, either as a detachable part of the
check, draft, or voucher paying the employee’s wages, or separately if wages
are paid by personal check or cash, an accurate itemized statement. . .” (Lab.
Code, §226, subd. (a).) An employee who sufferings “injury as a result of a
knowing and intentional failure by an employer to comply with subdivision (a)
is entitled to recover the greater of all actual damages or fifty dollars ($50)
for the initial pay period in which a violation occurs and one hundred dollars
($100) per employee for each violation in a subsequent pay period, not to
exceed an aggregate penalty of four thousand dollars ($4,000). . .” (Lab. Code,
Subd., (e)(1).) Additionally, any employer who violates Section 226 is subject
to civil penalties. (Lab. Code, §226.3.)
To state a claim under Section 266
subdivision (e), Plaintiff must show “(1) a violation of § 226(a); (2) the violation
of § 226(a) was knowing and intentional; and (3) an injury suffered as a result
of the violation of § 226(a).” (Reinhardt v. Gemini Motor Transp. (E.D. Cal.
2012) 879 F. Supp. 2d 1138, 1141 [referencing Price v. Starbucks Corp. (2011)
192 Cal.App.4th 1136, 1142-43].) Plaintiff must establish an “actual injury”
from the failure to furnish timely and accurate wage statements. (See Jaimez v.
Daiohs USA, Inc. (2010) 181 Cal.App.4th 1286, 1306.) “The injury requirement in
section 226, subdivision (e), cannot be satisfied simply because one of the
nine itemized requirements in section 226, subdivision (a) is missing from a
wage statement.” (Price, supra, 192 Cal.App.4th at p. 1142.) “[T]he deprivation
of that information, standing alone is not a cognizable injury.” (Id. at p.
1143 [internal quotation omitted].)
Plaintiff has not alleged a claim
here. Plaintiff alleges Defendants knowingly and intentionally failed to
provide her with accurate wage statements showing her earnings. (FAC, ¶34.) She
does not allege any harm or injury from the failure to provide the accurate
wage statements. Defendants argues the allegations lack any factual detail and
are legal conclusions. The court agrees Plaintiff has not sufficiently alleged
an injury. Plaintiff’s cursory allegation amounts only to an allegation that Defendants
deprived her of wage information, which alone is not sufficient. (See Price,
supra, 192 Cal.App.4th at p. 1143.) An injury can include the “possibility of
not being paid overtime, employee confusion over whether they received all
wages owed them, difficulty and expense involved in reconstructing pay records,
and forcing employees to make mathematical computations to analyze whether the
wages paid in fact compensated them for all hours worked.” (Jaimez, supra, 181
Cal.App.4th at p. 1306.) “While there must be some injury in order to recover
damages, a very modest showing will suffice.” (Ibid.) Plaintiff’s opposition
argument that she is presumed to have suffered an injury by the failure to
provide accurate statements is unsupported by case law.
Accordingly, the demurrer is
sustained with leave to amend as to cause of action five.
Moving party is directed to give notice.