BILL NUMBER: AB 1286	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 27, 2011

INTRODUCED BY   Assembly Member Fuentes

                        FEBRUARY 18, 2011

   An act to add Section  206.8   206.7  to
the Labor Code, relating to employment.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1286, as amended, Fuentes. Wage disputes: waiver of claims.
   Existing law requires that in a dispute over wages due between an
employee and employer, the employer is required to immediately pay to
the employee, without condition, that portion of the wages that is
not in dispute, leaving the employee free to pursue his or her lawful
remedies for the remainder. Existing law also prohibits an employer
from requiring an employee to execute a release of a claim for wages
due as a requirement to pay wages, unless all wages claimed are paid.
 The existing California Rules of Court provide for procedures
for the settlement of class actions. 
   This bill would provide that  when a dispute exists
between an employer and an employee over earned wages that is the
subject of a pending certified or uncertified class action or
representative action, a waiver, release, or settlement is not valid
unless all parties are represented by counsel, a superior court
approves the release as a reasonable and good faith resolution of the
dispute, as defined, or the Division of Labor Standards Enforcement
has negotiated a settlement between the parties. Also, the bill would
provide that if an employer seeks court approval of any release,
waiver, or settlement with an employee while a class or
representative action, as specified, is pending, the employer must
notify plaintiff's counsel in the class or representative action
  unless approval of a settlement or compromise relating
to a claim for earned wages is being sought pursuant to the
California Rules of Court, an employee's waiver or release of such a
wage claim that is based on a provision of the Labor Code or an order
of the Industrial Welfare Commission, or is derivative of such a
claim, and is   covered by a pending certified or
uncertified class action or representative action, shall not be valid
or enforceable if that employee is a class member or a putative
class member in a pending certified or uncertified class action or is
represented or   potentially represented in a
representative action  .
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 206.7 is added to the 
 Labor Code   , to read:  
   206.7.  Unless approval of a settlement or compromise relating to
a claim for earned wages is being sought pursuant to Rule 3.769 of
the California Rules of Court, an employee's waiver or release of
such a wage claim that is based on a provision of this code or an
order of the Industrial Welfare Commission, or is derivative of such
a claim, and is covered by a pending certified or uncertified class
action or representative action, shall not be valid or enforceable if
that employee is a class member or a putative class member in a
pending certified or uncertified class action or is represented or
potentially represented in a representative action.  
  SECTION 1.    Section 206.8 is added to the Labor
Code, to read:
   206.8.  (a) (1) A waiver or release by an employee of a claim for
earned wages that is the subject of a pending certified class action,
uncertified class action, or representative action shall not be
valid or enforceable unless one or more of the following applies:
   (A) All parties are represented by counsel.
   (B) The release has been approved by a superior court as a
reasonable and good faith resolution of the dispute.
   (C) The Division of Labor Standards Enforcement negotiates a
settlement between the parties.
   (2) If the employee is a putative member of a pending class action
or representative action, the release states the pertinent
information of the pending action, including the following:
   (A) The full case name, court location, and case number.
   (B) A description of all claims alleged in each such pending
action.
   (C) The contact information for all attorneys representing each
plaintiff in each such pending action.
   (D) The full potential value of all the claims sought to be
approved for release, waiver, or settlement as compared to the value
being offered in exchange for the release, waiver, or settlement.
   (E) A statement instructing the employee to contact class or
representative counsel in order to be advised of his or her potential
rights.
   (b) An attorney representing an employee in a dispute over earned
wages pursuant to subdivision (a) shall affirm in writing that he or
she has read the release, waiver, or settlement of liability, has
reviewed the facts and circumstances of the dispute, has advised the
employee of his or her rights, and believes that the agreement is a
fair and adequate resolution of the dispute and in the employee's
best interest.
   (c) (1) If an employee seeks court approval of a release of his or
her rights to earned wages pursuant to subdivision (a), the employer
or its agent or representative shall submit a declaration, signed
under penalty of perjury, identifying the full potential value of the
claims sought to be approved for release, waiver, or settlement as
compared to the value being offered in exchange for the release,
waiver, or settlement. Notice and determination of the good faith
resolution shall follow the guidelines set forth in Section 877.6 of
the Code of Civil Procedure, except as provided in paragraph (2).
   (2) At least 45 days before presenting a release, settlement, or
waiver to the putative class member, the employer is required to
notify all parties, including parties to pending class actions
asserting similar claims, putative class counsel, court-appointed
class counsel, and the court of all the terms of the proposed
release, settlement, or waiver and the name and last known residence
address and telephone number of each putative class member to whom
the employer intends to make the offer.
   (d) If an employee purporting to make a release pursuant to
subdivision (a) is not approved by the superior court as set forth
herein, or is not represented by counsel, or the Division of Labor
Standards Enforcement has not negotiated a settlement between the
parties, the release, waiver, or settlement shall not effect a waiver
of the employee's rights to any wage claims with that employer. If
the employee prevails on an action subsequent to signing a release of
liability, all amounts paid by the employer may be a set-off against
the final amount of wages owed if the court determines that the
parties specifically intended to release such claims in the original
agreement. In making this determination, all inferences shall be in
favor of the employee and the burden of proof shall be on the
employer to prove by clear and convincing evidence that the proposed
settlement is fair and reasonable.
   (e) An employee not represented by counsel who waives his or her
rights to unknown future claims pursuant to Section 1542 of the Civil
Code does not waive his or her rights to any wage claims, including
future wage claims.
   (f) If an employer seeks court approval of any release, waiver, or
settlement with a current or former employee or employees while a
class or representative action pursuant to subdivision (a) is
pending, the employer shall notify plaintiff's counsel in the class
or representative action pursuant to subdivision (a) no later than 16
court days prior to the hearing date on the release, waiver, or
settlement. Plaintiff's counsel may file an opposition to the
proposed release, waiver, or settlement no later than nine court days
prior to the hearing. The court may continue the hearing to allow
discovery to be taken regarding the reasonableness of the individual
settlements.