July 8, 2006 California Supreme Court Defines "Discharge"

Summary

The California Supreme Court this afternoon issued its opinion in Smith v. Superior Court (L’Oreal), in which it ruled that an employee whose limited or temporary assignment concludes has been “discharged” under the California Labor Code, and is therefore entitled to the immediate payment of all owed wages.

Details

Amanza Smith was a hair model who was hired for a one-day assignment. When she did not receive her paycheck at the very end of that one-day assignment, she sued her employer (L’Oreal) asserting a variety of claims based on California law’s requirement that employees be paid immediately upon “discharge.” L’Oreal argued that she had not, in fact, been “discharged” at all, but rather her assignment had concluded as per their original agreement, and therefore was not obligated to immediately pay Ms. Smith on the same day that her assignment had ended.

The Court of Appeal agreed with L’Oreal, but Ms. Smith appealed. This afternoon, the California Supreme Court, in an opinion that may be found here, reversed the Court of Appeal and gave a broad definition to “discharge.” According to the California Supreme Court, a “discharge” not only includes those situations where an employer fires an employee, but also those situations when “an employer releases an employee after completion of the specific job assignment or time duration for which the employee was hired.”

What This Means

This opinion could be particularly important for those employers or staffing agencies who employ significant numbers of temporary, limited-duration or even day workers, because according to the Supreme Court, each of those employees must be paid at the conclusion of his or her assignment, not in the next regularly-scheduled payroll – an administrative burden to be sure. What is less clear from the opinion is how temporary employees who have a reasonable expectation of being sent on another assignment in the next day or series of days, should be paid, or how staffing agencies should handle situations where employees are abruptly removed from the job site by the client. But until further developments occur, a cautious reading of the opinion should probably lead risk-adverse employers to tread carefully in this area.

This E-Update was authored by Joe Connaughton. For more information, please contact Mr. Connaughton or any Paul, Plevin attorney at 619-237-5200.

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