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The state Supreme Court ruled unanimously Thursday that corporate officers and agents cannot be sued by individual employees for unpaid overtime wages. But in a separate concurring opinion, Justice Carlos Moreno urged the state Legislature to take “a leaf from federal law” and someday authorize such suits. “The abuse of the corporate form to avoid paying overtime wages is well documented,” he wrote, “as is the identity of the workers who are most often the victims of this abuse” — low-paid employees, “often non-English-speaking immigrants in the garment, restaurant, electronics and agricultural industries.” The underlying suit was filed in Los Angeles by Steven Reynolds, a shop manager at several Earl Scheib Inc. automobile painting outlets. He sued on behalf of himself and others for unpaid overtime wages, claiming that the company’s president, Christian Bement, and other officers, directors and shareholders had direct control over wages and working conditions. The Supreme Court disagreed. “Under the common law, corporate agents acting within the scope of their agency are not personally liable for the corporate employer’s failure to pay its employees’ wages,” Justice Kathryn Mickle Werdegar wrote. “This is true regardless of whether a corporation’s failure to pay such wages, in particular circumstances, breaches only its employment contract or also breaches a tort duty of care.” Had the Legislature wanted to expose corporate agents to liability under the state Labor Code, she continued, “it would have manifested its intent more clearly than by mere silence.” In his concurrence, Moreno, a former federal judge, noted that the Fair Labor Standards Act has long given workers the right to recover unpaid overtime wages from corporate officers in “some limited circumstances.” “Federal courts apply a standard that looks, not simply at the corporate form,” he wrote, “but the underlying economic reality of whose hand is on the tiller when it comes to payment (or non-payment) of overtime wages.” The state Legislature, he argued, could easily follow suit. “I urge the Legislature to do so.” The ruling is Reynolds v. Bement, 05 C.D.O.S. 7104.

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