June 25, 2019

June 24, 2019

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How An $80 Mistake Led To $2,250 In Damages And More Than $86,000 In Attorney's Fees

Section 202(a) of the California Labor Code requires an employer to pay all wages within 72 hours when an employee resigns without notice.  In one recent case, the employer sent the requisite check on time, and the amount stated in numerals on the check was correct.  The amount written out in words was $80 less.  This meant that the employer had shorted the employee by $80.  (See Cal. Comm. Code § 3114 ("If an instrument contains contradictory terms, typewritten terms prevail over printed terms, handwritten terms prevail over both, and words prevail over numbers.")).  By the time that the erstwhile employer sorted things out, that $80 error resulted in $2,250 in penalties (9 days late at the employee's daily wage of $250 per day).

The employer was also found liable to its departed employee for attorney fees in the amount of $86,160 plus the fees the employee's counsel for the appeal in an amount to be determined.  The employer will also bear the costs of its own lawyers whose fees are not likely to be less than those of its former employee's lawyer.  Thus, I wouldn't be surprised if the fees and costs in the case top $200,000. One can only stand amazed at the inefficiency of a system that spends several hundred thousand dollars to determine a dispute involving approximately two thousand dollars.  The case is  Nishiki v. Danko Meredith, APC, 2018 Cal. App. LEXIS 676.

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About this Author

Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm

Keith Paul Bishop is a partner in Allen Matkins' Corporate and Securities practice group, and works out of the Orange County office. He represents clients in a wide range of corporate transactions, including public and private securities offerings of debt and equity, mergers and acquisitions, proxy contests and tender offers, corporate governance matters and federal and state securities laws (including the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Act), investment adviser, financial services regulation, and California administrative law. He regularly advises clients...