©2023 Seyfarth Shaw LLP www.seyfarth.com 2023 Cal-Peculiarities | 259 employer and the staffing company were in privity with one another for purposes of the wage and hour claim, and the client company was an agent of the staffing company with respect to the staffing company’s payment of wages to its employees who worked at the client company.480 During 2020, the Court of Appeal introduced further mischief into joint-employer litigation by disagreeing with Castillo and permitting a nurse—a staffing agency employee who had sued and settled with the staffing agency— to then sue the worksite employer (a hospital) on the same claims. 481 The agreement settling the first lawsuit had not named the worksite employer as a released party, but the second lawsuit still should have been barred under the traditional doctrine of res judicata, or claim preclusion, as had been held in Castillo. The Court of Appeal, affirming the trial court, held that the settlement in the first suit did not bar the nurse’s second suit, because the staffing agency and the hospital were not in privity, and because the hospital was not a released party under the settlement agreement. A strong dissenting opinion pointed out that “Castillo at least has the virtue of stating clear rules on which parties on all sides can easily rely going forward. I do not find Castillo to be so plainly wrong as to justify creating a split of authority in this area.”482 This case is now on review by the Supreme Court, which is expected to rule in 2022. Successor employers. Under a law effective in 2021, a successor to any judgment debtor is liable for any wages, damages, and penalties owed to judgment debtor’s former workforce pursuant to a final judgment.483 7.22 Restrictions on Scheduling and Work Quotas 7.22.1 One day of rest every seven days California generally entitles employees to a day of rest every seven days, except where the hours of work do not exceed 30 hours in one week or six hours in one day.484 This statutory requirement was in place, without litigious contention, since 1937. But then the PAGA statute, in 2004, created opportunities for plaintiffs’ counsel to seek civil penalties for a wide variety of Labor Code violations. Thus it was that former Nordstrom employees, invoking PAGA, sued the department store company for having employers work on a seventh day, without the employees’ written consent. This paternalistic theory of employer liability would hurt employees who, for their own reasons—wanting more money, satisfying personal scheduling preferences—want to work on the seventh day. When a federal district court dismissed their claim, the plaintiffs appealed to the Ninth Circuit. The Ninth Circuit wrestled with the following questions concerning how to interpret the relevant Labor Code provisions: First, what are the seven days: the employer’s regular workweek, or any group of consecutive seven days? Second, does the exemption from the day-in-rest requirement apply when an employee works fewer than six hours in any one day of the seven days, or does the exemption apply only when an employee works fewer than six hours in each day during the seven days? Third, when the statute prohibits an employer to “cause” employees to miss a day of rest, does “cause” mean force, coerce, pressure, schedule, encourage, reward, permit, or something else? In 2017, the California Supreme Court, on a referral from the Ninth Circuit, answered the three questions, in Mendoza v. Nordstrom, Inc. First, as to the question of “which seven days?,” Mendoza determined that employees are entitled to at least one day of rest during each workweek, and not during a rolling period of any seven consecutive days.485 Second, as to the exemption for employees working shifts of six or fewer hours, Mendoza held that the exemption applies only to those employees who never exceed six hours of work on any day of the workweek or more than 30 hours in a week.486 Third, as to what it means for an employer to “cause” an employee to work a seventh day, Mendoza held that an employer may not induce an employee to forgo a protected day of rest, but the employer may permit or allow the employee to do so.487
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