Third District Court of Appeal says all wage and Labor Code 98.7 retaliation claims MUST be pursued before the Labor Commissioner before suit can be filed


When referring to retaliation claims under Labor Code Section 98.7, the Legislature specifically said that any person who believes he/she has been discriminated against in violation of any law under the jurisdiction of the DLSE “may file a complaint with . . .” the DLSE (within six months of the violation.)  Labor Code Section 98.7(a).

The Legislature further stated, in Section 98.7(f), that “the rights and remedies provided by this section “do not preclude an employee from pursuing any other rights and remedies under any other law.”

Yet, in MacDonald v. State of California, ( decided on August 27, 2013, the Third District Court of Appeal held that plaintiffs pursuing claims where there is an administrative remedy, even if “permissive”, must pursue that remedy before filing a lawsuit.

Specifically, the Court reaffirmed and expanded a rule (not previously expanded this far) in the case of Campbell v. Regents of University of California (2005) 35 Cal.4th 311, 321, that “where an administrative remedy is provided by statute, relief must be sought from the administrative body and this remedy exhausted before the courts will act.”

The plaintiff in MacDonald was pursuing retaliation claims under Labor Code 98.7 (alleging termination for complaining about other employees’ smoking on the job), but filed suit rather than seeking relief from the DLSE.  The trial court sustained the employers’ demurrers (here, the California State Assembly), and the Court of Appeals affirmed, on the sole ground that he had not pursued any administrative remedy.

Thus, even though the language in the statute was permissive (saying “may” not “must”), this Court expanded the language to mean “must”.

Employers facing any wage claims (including meal and rest breaks), and any retaliation claims under 98.7 should, immediately, determine whether the employee first made a claim with the DLSE.  If not, employers are strongly encouraged to bring Motions for Judgment on the Pleadings or Motions for Summary Judgment.