Von Nothdurft v. Steck
173 Cal. Rptr. 3d 827
Cal. Ct. App.2014Background
- Owner John Steck hired tenant Brenda Leigh Von Nothdurft as resident manager under a written "Residential Rental Property Management Agreement" effective Oct. 1, 2009.
- Agreement provided compensation as free rent for a 3‑bedroom unit (stated value $955/mo), $100/mo toward utilities, phone line, and internet.
- Von Nothdurft later filed wage claims alleging Steck failed to pay minimum wage; DLSE awarded Steck a lodging credit of $451.89/mo (maximum allowed under Wage Order 5).
- Parties settled most claims but litigated whether the written agreement satisfied Wage Order No. 5‑2001 §10(C) so Steck could lawfully take the lodging credit.
- Superior Court found the agreement was a voluntary written agreement under Wage Order 5 and allowed the $451.89/mo credit; plaintiff appealed.
- Court of Appeal affirmed, holding the plain language of the wage order requires only a voluntary written agreement to credit lodging and the management agreement met that standard; unconscionability/adhesion arguments failed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the written management agreement satisfied Wage Order No. 5 §10(C) so employer may credit lodging against minimum wage | Agreement was deficient because it did not reference minimum wage, did not record hours, and valued lodging above the wage‑order cap; therefore credit is invalid | Wage Order 5 requires only a "voluntary written agreement" to permit a lodging credit; the parties’ signed management agreement suffices | Held for defendant: the plain language requires only a voluntary written agreement; the management agreement satisfied §10(C) and allowed the $451.89/mo credit |
| Whether the agreement was unconscionable or an adhesion contract, invalidating the lodging credit | Agreement was procedurally and substantively unconscionable because it imposed a $955 valuation and was a take‑it‑or‑leave‑it condition | No evidence of oppression, surprise, or a standardized adhesive form; employee had opportunity to request changes and signed voluntarily | Held for defendant: appellant failed to show procedural unconscionability (no oppression/surprise); unconscionability claim not preserved in settled statement in any event |
Key Cases Cited
- Brewer v. Patel, 20 Cal. App. 4th 1017 (explains Wage Order No. 5 scheme for resident managers and lodging credit context)
- Brinker Restaurant Corp. v. Superior Court, 53 Cal. 4th 1004 (discusses interplay of Labor Code and IWC wage orders and interpretive rules)
- Martinez v. Combs, 49 Cal. 4th 35 (endorses deference to IWC wage orders)
- Ghory v. Al‑Lahham, 209 Cal. App. 3d 1487 (describes requirements for explicit wage agreements in overtime context)
- Pinnacle Museum Tower Assn. v. Pinnacle Market Dev. (US), LLC, 55 Cal. 4th 223 (framework for procedural and substantive unconscionability)
- McCaffrey Group, Inc. v. Superior Court, 224 Cal. App. 4th 1330 (discussion of adhesion and procedural unconscionability factors)
- Brock v. Carrion, Ltd., 332 F. Supp. 2d 1320 (distinguishes application of Labor Code §1182.8 and Wage Order 5 with respect to manager lodging credits)