Prachasaisoradej

We confront a significant question of California wage law. Defendant Ralphs Grocery Company, Inc. (Ralphs), a supermarket chain, implemented a written incentive compensation plan (ICP or Plan) whereby certain employees of each store were eligible to receive, over and above their regular wages, supplementary sums based upon how the store’s actual Plan-defined profits, if any, for specified periods compared with preset profitability targets. For both target and actual purposes, profits were determined by subtracting store operating expenses from store revenues. Plaintiff claims the Plan’s formula for calculating these supplemental profit-sharing payments thus violated California statutes, rules, and decisions that prohibit an employer from shifting certain of its costs to employees by withholding, deducting, or recouping them from wages or earnings, or otherwise obliging employees to contribute to them.

Labor Code section 221 1 provides that, except for deductions expressly authorized by state or federal law (see § 224), an employer may not “collect or receive from an employee any part of wages theretofore paid.” Section 3751, subdivision (a) prohibits an employer from…

This is a case of statutory interpretation. Labor Code section 3751 1 prohibits employers from directly or indirectly passing all or any part of their workers’ compensation costs back to, their employees through deductions from their employees’ compensation. Ralphs Grocery Company, Inc.’s compensation plan does just that. Whatever this court’s views concerning the reasonableness and desirability of such plans, judicial notions of policy are irrelevant if the Legislature’s policy decision, as embodied in the text of the statute, compels a different result. It does so here. Accordingly, I respectfully dissent.

I

As this case is before us on demurrer, we must accept as true all well-pleaded allegations in plaintiff Eddy Korkiat Prachasaisoradej ’ s second amended complaint (complaint).

Prachasaisoradej is a Ralphs Grocery Company, Inc. (Ralphs), employee. He sued Ralphs under the unfair competition law for adopting an employee compensation plan that, according to the complaint, made compensation partially contingent on, inter alia, (1) Ralphs’s workers’ compensation costs, and (2) cash and merchandise shortages. Prachasaisoradej contended the compensation plan violates section…

We confront a significant question of California wage law. Defendant Ralphs Grocery Company, Inc. (Ralphs), a supermarket chain, implemented a written incentive compensation plan (ICP or Plan) whereby certain employees of each store were eligible to receive, over and above their regular wages, supplementary sums based upon how the store's actual Plan-defined profits, if any, for specified periods compared with preset profitability targets. For both target and actual purposes, profits were determined by subtracting store operating expenses from store revenues. Plaintiff claims the Plan's formula for calculating these supplemental profit-sharing payments thus violated California statutes, rules, and decisions that prohibit an employer from shifting certain of its costs to employees by withholding, deducting, or recouping them from wages or earnings, or otherwise obliging employees to contribute to them.

Labor Code section 221 [1] provides that, except for deductions expressly authorized by state or federal law (see § 224), an employer may not "collect or receive from an employee any part of wages theretofore paid." Section 3751, subdivision (a) prohibits an employer…