Derum v. Saks & Co.
95 F. Supp. 3d 1221
S.D. Cal.2015Background
- Plaintiff Ilia Derum worked as a sales associate at Saks Off Fifth for ~7 weeks in 2014 and received weekly paper paychecks by mail with detachable pay stubs.
- The paper pay stubs listed end dates for pay periods but did not include the pay-period start (beginning) dates.
- Saks also uploaded electronic wage statements to an Employee Self Service (ESS) portal; those electronic statements did include the beginning pay-period dates.
- Plaintiff never accessed ESS; she believed the mailed stubs and online statements were identical and was not told to check ESS.
- Plaintiff sued under California Labor Code § 226(a) (itemized wage-statement requirements) and PAGA, claiming the paper stubs were noncompliant because they omitted the pay-period start date.
- The parties asked the court to resolve at summary judgment whether providing compliant electronic statements alongside noncompliant mailed stubs satisfies § 226(a) when an employee chose paper paychecks.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether employer violated Cal. Lab. Code § 226(a) by mailing pay stubs that omitted the pay-period start date when electronic statements included it | Mailed stubs lacked required start date; that constitutes a § 226(a)(6) violation | Electronic wage statements satisfy § 226(a) and therefore no violation | Denied summary judgment — factual and legal dispute; court found law unsettled and DLSE guidance supports paper-stub entitlement when employee elects paper paychecks |
| Whether the failure was "knowing and intentional" under § 226(e) (scienter) | Mailing multiple defective stubs by employer shows knowing/intentional failure | Presence of compliant electronic statements shows omission was clerical/oversight, not knowing/intentional | Denied summary judgment — admissions that payroll created/mailed defective stubs create a triable dispute on scienter |
| Whether Plaintiff suffered an injury under § 226(e) (must be unable to "promptly and easily determine" missing info from the statement alone) | Hard-copy stubs alone do not permit determination of start date; thus injury exists | Plaintiff could infer start date (count back seven days) and knew pay schedule from handbook, so no injury | Denied summary judgment — court finds Plaintiff raised a genuine issue that she could not "promptly and easily determine" start date from the stub alone |
| Whether derivative PAGA claim survives if § 226(a) claim fails | PAGA claim rests on § 226 violation | If § 226 fails, PAGA fails | Denied summary judgment — because § 226 claim survives, PAGA claim likewise survives |
Key Cases Cited
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment standard) (establishes materiality and genuine dispute standards)
- Johnson v. Poway Unified Sch. Dist., 658 F.3d 954 (9th Cir.) (view evidence in nonmovant's favor on summary judgment)
- Willner v. Manpower Inc., 35 F. Supp. 3d 1116 (N.D. Cal.) (interpreting "knowing and intentional" under § 226(e))
- Ruelas v. Costco Wholesale Corp., 67 F. Supp. 3d 1137 (N.D. Cal.) (employer satisfied § 226 where compliant separate wage statement was provided)
- McKenzie v. Fed. Express Corp., 765 F. Supp. 2d 1222 (C.D. Cal.) (holding omission of start date violates § 226(a)(6))
- Price v. Starbucks Corp., 192 Cal. App. 4th 1136 (Cal. Ct. App.) (pre-2013 interpretation of injury requirement; simple math may defeat injury claim)