Wage Payments - No Personal Liability for Individual Owners, Officers or Managers

After nearly four years, we finally have a determination that officers and directors cannot be held personally liable for a corporate employer’s violation of its duty to pay minimum wages. 

The California Supreme Court issued a unanimous decision in Martinez v. Combs, finding that officers and directors of a corporate employer cannot be held civilly liable for causing the corporation to violate the statutory duty to pay minimum wages where the individual corporate agents acted within the scope of the agency.

Plaintiffs worked as seasonal agricultural workers for Munoz during the 2000 strawberry season. Munoz, with the assistance of its foremen, hired and fired, trained and supervised the employees.  The managers “told them when and where to report to work, when to start, stop and take breaks, provided their tools and equipment, set their wages, paid them, handled their payroll and taxes, and purchased workers’ compensation insurance.”

Apio, Inc. (Apio) and Combs Distribution Co. (Combs) were merchants who purchased the strawberries from Munoz. Corky and Larry Combs were principals in Combs and Juan Ruiz was Combs’ field representative. Munoz filed bankruptcy. Because of that, the plaintiffs sought to recover unpaid minimum wages under Labor Code section 1194against Apio, Combs, its principals and Ruiz.

Plaintiffs argued Industrial Welfare Commission (IWC) Wage Order No. 14-2001 defined each of the defendants (Munoz, Combs, Apio) as employers under Labor Code section 1194. The lower courts rejected this argument and the California Supreme Court agreed.

Stryker Slev Law Group has experience representing employers in various labor and employment situations, including wage issues.