The California Court of Appeal ruled in Seviour-Iloff v. LaPaille1 that employees could pursue Labor Code-based claims against executives of their employer, personally. The court found that Labor Code section 558.1 provides a private right of action for employees to pursue claims against their employer or “a person acting on behalf of an employer” who violates the Labor Code. The court further found that section 558.1 does not provide courts with discretion as to whether to impose individual liability.
Labor Code section 558.1 states that “[a]ny employer or other person acting on behalf of an employer, who violates, or causes to be violated, any provision regulating minimum wages or hours and days of work in any order of the Industrial Welfare Commission…may be held liable as the employer for such violation,” and defines “other person acting on behalf of an employer” as “an owner, director, officer, or managing agent of the employer.” Labor Code section 558.1 (emphasis added).
The plaintiffs in Seviour-Iloff v. LaPaille alleged they were employed by Bridgeville Properties, Inc. (BPI) because they entered into an agreement to live rent-free in a BPI-owned rental unit in exchange for performing various tasks around the properties. The plaintiffs filed a wage claim with the Division of Labor Standards Enforcement (DLSE), and the labor commissioner concluded that the plaintiffs were owed back wages and that BPI CEO LaPaille was personally liable under section 558.1. BPI and...
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