Noori v. Countrywide Payroll & HR Solutions, Inc.

43 Cal.App.5th 957

257 Cal.Rptr.3d 102

Mohammed NOORI, Plaintiff and Appellant,

v.COUNTRYWIDE PAYROLL & HR SOLUTIONS, INC., Defendant and Respondent.

C084800

Court of Appeal, Third District, California.

Filed December 26, 2019

Robert J. Wasserman, Vladimir J. Kozina and Mayall Hurley P.C., Stockton, for Plaintiff and Appellant.

Chamberlin & Keaster LLP, Robert W. Keaster, Encino, and David M. Berke for Defendant and Respondent.

MURRAY, J.

The Legislature has enacted statutory requirements concerning itemized wage statements employers must provide employees along with their paychecks. In this case, Plaintiff Mohammed Noori sued his former employer, defendant Countrywide Payroll & HR Solutions, Inc., for violations of those statutory requirements. He alleged, inter alia, that Countrywide violated Labor Code section 226, subdivision (a)¹ by (1) providing wage statements bearing the acronym "CSSG" in violation of the requirement to include the "name ... of the legal entity that is the employer"; and (2) failing to maintain copies of accurate itemized wage statements.² Noori also sought to bring those claims under the Private Attorneys General Act (PAGA). The trial court granted Countrywide’s demurrer to the first amended complaint without leave to amend.

On appeal, Noori contends the trial court erred in finding (1) the wage statements provided to Noori, as a matter of law, complied with section 226, subdivision (a)(8) ’s requirement to include the employer’s name; (2) Countrywide maintained copies of wage statements as required by section 226, subdivision (a) ; and (3) Noori failed to satisfy the notice requirement for bringing a claim under PAGA.

We conclude the amended complaint states a claim under section 226, subdivision (a)(8) for failure to provide the employer’s name. Noori’s allegation that Countrywide’s wage statements bore only the acronym "CSSG," an abbreviation of a fictitious business name, adequately supports this claim. We also conclude Noori satisfied the notice requirement for bringing that claim under PAGA. Accordingly, we reverse the trial court’s orders as to those two causes of action.

As to the failure to maintain copies of accurate itemized wage statements claim, we affirm the trial court’s order granting the demurrer without leave to amend because Noori’s complaint fails to assert facts supporting the injury element.

FACTUAL AND PROCEDURAL BACKGROUND

The First Amended Complaint

Following a successful demurrer, Noori filed an amended complaint alleging Countrywide violated section 226, subdivision (a) by (1) failing to furnish "accurate itemized wage statements" (the "failure to furnish claim"); and (2) failing to maintain copies of accurate itemized wage statements (the "failure to maintain claim"). He also sought class certification, as well as to bring the claims under PAGA (§ 2698).

The Failure to Furnish Claim

As to his first claim, Noori alleged that in 2015, he began working for Countrywide. Countrywide furnished him wage statements that listed the employer of record as "CSSG." Noori alleged that based on research, CSSG stood for "Countrywide Staffing Solutions Group," which is not a name listed with the California Secretary of state, but is a fictitious business name for defendant Countrywide Payroll & HR Solutions, Inc. "at least in some States."³ He further alleged that, based on research, Countrywide Staffing Solutions Group, Inc. operates under the fictitious business name of "Countrywide HR" or "CWHR" in California.

Noori alleged the wage statements violated section 226, subdivision (a)(8) by failing to show the name of his employer.⁴ He further alleged that he and other employees "suffered injury as a result of Defendant’s knowing and intentional failure to comply with Labor Code section 226(a)." He maintained that he and other employees were injured, under section 226 subdivision (e)(2), because they were unable to "promptly and easily determine ‘the name ... of the legal entity’ " from the furnished statements.

The Failure to Maintain Claim

As to his second claim, Noori alleged that prior to his suit, he wrote to Countrywide, requesting copies of his "payroll records, personnel records and personnel file." Countrywide, in response, provided records that failed to show the employer’s name and address. Based on this, he alleged that Countrywide violated section 226 subdivision (a) ’s requirement to maintain a copy of accurate itemized wage statements.

The Private Attorney General Act Allegations

Seeking to also bring the above claims under PAGA, Noori alleged that he satisfied PAGA’s statutory notice requirement by sending a letter to Countrywide and the Labor and Workforce Development Agency notifying them of the specific Labor Code provisions violated and facts and theories in support. Noori then brought suit after the agency did not provide notice that it intended to sue.

Countrywide’s Demurrer

Countrywide demurred to the amended complaint arguing neither of the first two causes of action stated a claim. As to the failure to furnish claim, Countrywide argued each wage statement identified the employer as CSSG, an acronym for Countrywide Staffing Solutions Group, a fictious business name of Countrywide. Countrywide maintained that the use of a fictious business name is proper, and it need not state its complete name. And, in any event, the checks attached to the wage statement provided the complete name.

As to the failure to maintain claim, Countrywide argued inter alia that Noori could not allege damages. It contended that unlike a claim for a failure to furnish statutorily compliant wage statements — where injury is deemed from the failure to provide certain information — a record-keeping claim requires an allegation of actual injury.

Countrywide also asked that the PAGA claims be struck for failure to provide proper notice.

The Trial Court’s Ruling on the Demurrer

The trial court sustained the demurrer. It found the first amended complaint failed to allege a section 226 subdivision (a)(8) violation because "CSSG" satisfied the statutory name requirement as a matter of law. It noted that truncated names have been held to suffice, and unlike cases where a subdivision (a)(8) violation had been found, Countrywide’s wage statements included both a name and an address.⁵ And because "CSSG" had not violated section 226, subdivision (a)(8), the failure to maintain claim — itself grounded on the failure to state the employer’s name — also failed.

The court noted those failures rendered the PAGA claims moot. It nevertheless ruled that, as to the PAGA claims, Noori had failed to provide proper notice.

DISCUSSION

I. The Failure to Furnish Wage Statement Information Claim

A. The Parties’ Contentions

Noori challenges the trial court’s ruling that Countrywide’s wage statements complied with section 226, subdivision (a)(8) as a matter of law. Noori correctly argues that no authority holds a mere acronym for an out-of-state fictitious business name complies with the requirement to state the "name ... of the legal entity that is the employer."

Countrywide responds that the wage statement properly identified its name using a shortened version of its fictitious business name. According to Countrywide, section 226 requires neither the employer’s complete name nor its legal name. And substantial compliance should suffice to satisfy the statute.

We agree with Noori that the acronym here was insufficient.

B. Analysis

Section 226, subdivision (a)(8) requires employers to give employees, as a detachable part of their paychecks, "an accurate itemized statement." ( § 226, subd. (a).⁶ )

The wage statement must contain certain information, including "the name and address of the legal entity that is the employer." ( § 226, subd. (a).) An employee suffering injury as a result of an employer’s knowing and intentional failure to comply with subdivision (a) is entitled to recover statutory damages, court costs and attorney’s fees; injunctive relief is also available. ( § 226, subds. (e)(1), (h).)

What’s in a name? Section 226 does not expressly require that the name registered with the California Secretary of State be included on the wage statement. ( Mejia v. Farmland Mutual Insurance Company (E.D. Cal., June 26, 2018, No. 2:17-CV-00570-TLN-KJN), 2018 WL 3198006, at *5 ( Mejia ).) Nor must the company’s complete name be included. Instead, section 226 subdivision (a)(8) only requires the employer to state "the name and address of the legal entity that is the employer ."⁷ (See Elliot v. Spherion Pacific Work, LLC (C.D. Cal. 2008) 572 F.Supp.2d 1169, 1180 ( Elliot ).) It does not expressly require that the employer state its complete or registered name. ( Id. at p. 1179.) "If the legislature had intended to require an employer to show its complete [or registered] name on wage statements, it would have stated so ...." ( Id . at p. 1180.) "[T]he specificity required in the remainder of section 226(a) —requiring, for example, various subcategories of information relating to pay rates, hours worked, and deductions—demonstrates that, when the [L]egislature drafted this statute, it well knew how to require highly detailed information on wage statements." ( Id . at pp. 1170-1180.)

Further, as both parties note, minor truncations of an employer’s name have been found to comply with the statute. (See Elliot, supra, 572 F.Supp.2d at p. 1179 [referring to "Spherion Pacific Work, LLC" instead of "Spherion Pacific Workforce , LLC" did not violate statute (italics added) ]; Mejia, supra, 2018 WL 3198006, at *5 [referring to "Farmland Mutual Insurance Co." rather than the registered name "Farmland Mutual Insurance Company ," did not violate statute (Italics added) ].)

Similarly, fictious business names can satisfy the statute. (See Savea v. YRC Inc. (2019) 34 Cal.App.5th 173, 180, 246 Cal.Rptr.3d 56 [using California registered fictitious business name "YRC Freight" instead of the legal corporate name "YRC Inc." did not violate statute]; ...