Bloomberg Law Quotes Lauren Teukolsky on California Supreme Court Ruling on Wage Statement Penalties

​Earlier this month, Bloomberg Law quoted Lauren Teukolsky in an article about the California Supreme Court’s recent ruling in Naranjo v. Spectrum Security Services.  The case involved a security guard who was provided with on-duty meal breaks.  After Spectrum fired him for leaving his post for a meal break, Naranjo sued for missed meal break premiums.  He sought an hour of premium pay for each day he missed a break.  After many years of litigation, the California Supreme Court held in a 2022 decision that Naranjo was permitted to seek penalties under Labor Code 226, which requires employers to provide accurate pay stubs listing all wages earned in a pay period.  Spectrum’s failure to list premium pay for missed breaks could entitle Naranjo to 226 penalties if Spectrum’s violation was “knowing and intentional.”

In the most recent California Supreme Court decision, issued on May 7, 2024, the Court held that Spectrum’s violations were not “knowing and intentional” because it reasonably believed in good faith that it had a defense to the requirement to pay missed meal premiums. 

The Court held that “if an employer reasonably and in good faith believed it was providing a complete and accurate wage statement in compliance with the requirements of section 226, then it has not knowingly and intentionally failed to comply with the wage statement law.” Going forward, employees will likely need to prove one of three things to recover 226 penalties: (1) the employer’s failure to report wages or hours on a pay stub was made in bad faith; (2) the employer’s defense was objectively unreasonable; or (3) the employer’s defense was unsupported by any evidence. 

In the Bloomberg Law article, Ms. Teukolsky discusses the significance of the ruling for California’s workers:

“The ruling isn’t ‘a death sentence’ for the ability of workers to recoup California wage and hour penalties, but it does place ‘a slightly higher burden on plaintiffs who want to recover those penalties,’ said Pasadena-based employee-side attorney Lauren Teukolsky.”
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The article continues:

“’I don’t think it signals a shift in thinking among the California Supreme Court,’ Teukolsky said. ‘I view it as an incremental change in the standards that govern the imposition of penalties under California law. It’s not a sea change.’

Bloomberg Law’s article also includes thoughts from Ms. Teukolsky on how plaintiff-side employment attorneys will need to adapt to the Court’s ruling. Naranjo’s potential impact on PAGA claims is also discussed. 

Ms. Teukolsky has represented workers for over two decades and her commentary on the latest developments in employment law is regularly featured by major publications such as Law360, Law.com, and the Los Angeles Times. Most recently, Ms. Teukolsky was quoted in a February Bloomberg Law article on the Ninth Circuit’s opinion in Johnson v. Lowe’s Home Centers, LLC.
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To read Bloomberg Law’s article in its entirety, click here. To get in touch with our office, click here. 

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