Jones v. Tracy School District

BIRD, C. J.

I must respectfully, but strongly, dissent. The majority’s conclusion weakens an important statute which gives employees full back pay for wages lost due to discrimination based solely on sex. The majority’s conclusion ensures that in California, contrary to the Legislature’s intent, “equal pay for equal work” will have little or no meaning since this court has weakened the statutory remedy beyond recognition.

No one disputes the fact that appellant suffered discriminatory practices at the hands of her employer for six years. No one denies that appellant was not paid her proper wages for that entire period. Despite these facts, this court has decided to rewrite the statute and deny appellant the back wages that are rightly hers. I cannot condone such an inequitable result nor can I be a party to the wholesale rewriting of the Legislature’s intent.

I

Appellant, Bessie Jones, is a custodian for respondent, Tracy School District. She was hired in 1964, and performed the same duties and received the same pay as her male colleagues. Four years later, unlike her male counterparts, she was reclassified a “custodial matron,” and her pay was reduced although she continued to perform the same duties as the male custodians.

In January 1974, appellant requested that she be reinstated to her former classification and receive the same rate of pay as a “custodian.” She also asked for the pay that was denied her during the previous six-year period of discrimination. Several months later, respondent changed appellant’s classification, but it adamantly refused to pay appellant her back wages resulting from respondent’s discriminatory practices. Appellant then sought and received help from the United States Department of Labor. On June 24, 1974, the Department of Labor informed respondent that it was in violation of the federal Fair Labor Standards Act. The department estimated appellant was owed $1,838 in back wages as a result of respondent’s illegal discrimination over the past six years. Respondent refused to comply and offered appellant $558.30. This offer *113was rejected, and suit was filed on July 8, 1975, under Labor Code section 1197.5.1

The trial court found that respondent had indeed discriminated against appellant for six years, but limited recovery to the actual loss of wages sustained within two years of the filing of the lawsuit. (§ 1197.5, subd. (h).) Appellant was awarded $318.58 in back wages and court costs. Her request for attorney’s fees was denied. This appeal followed.

II

There is no dispute that respondent improperly reclassified appellant so that it could pay her wages below that of the male custodians. There is also no dispute that appellant performed the same work as the male *114custodians but was paid less for it because she was a woman. Respondent’s discriminatory act resulted in six years of “unequal pay for equal work.” No one disputes these facts. The sole issue before this court is whether appellant will receive the full amount of the wages that were unlawfully withheld from her or only those back wages which were wrongfully withheld within two years of the filing of appellant’s complaint.

Section 1197.5, subdivision (a) codifies the principle that an employee is entitled to equal pay for equal work without regard to the employee’s sex. The remaining subdivisions specify the statutory remedies an aggrieved employee may pursue. Subdivision (b) provides that an employer violating the mandate of subdivision (a) is liable to the employee “in the amount of the wages. . . deprived by reason of such violation.” The scope of an aggrieved employee’s remedy is reaffirmed in subdivision (g), which states that the employee is entitled to recover “the balance of such wages” wrongfully withheld. Subdivision (h) requires the worker to commence his or her civil action for back wages within two years after a cause of action accrues.

Respondent construes subdivision (h) to mean that it is liable only for the back wages unlawfully withheld within two years of the commencement of the civil suit. However, respondent overlooks subdivision (b) which embodies the primary remedy available to an injured employee under the statute—the payment of all back wages unlawfully withheld as a result of an employer’s past discriminatory conduct.

The case law is clear. A statute must be read and considered as a whole so as to give effect to all its provisions. (People v. Shirokow (1980) 26 Cal.3d 301, 306-307 [162 Cal.Rptr. 30, 605 P.2d 859]; People ex rel. Younger v. Superior Court (1976) 16 Cal.3d 30, 40 [127 Cal.Rptr. 122, 544 P.2d 1322]; In re Bandmann (1958) 51 Cal.2d 388, 393 [333 P.2d 339]; REA Enterprises v. California Coastal Zone Conservation Com. (1975) 52 Cal.App.3d 596, 610 [125 Cal.Rptr. 201].) If subdivision (h) were interpreted to limit an employer’s liability to only those wages wrongfully withheld within the two-year period prior to commencement of suit, the compensatory objective of subdivisions (b) and (g) would be totally undermined.

The majority, relying on the two-year record keeping provision of subdivision (d), conclude that the Legislature intended that the *115two-year period within which to commence suit (subd. (h)) is a substantive restriction on the scope of the back-wage remedy provided by the statute.

However, the majority must ignore the legislative history of section 1197.5 to reach this conclusion. From its original enactment in 1949 to 1965, section 1197.5 expressly provided for a 30-day limit on the recovery of back wages. In 1965, the Legislature amended the section in several respects and deleted any reference to a limitation on the period of back wages which can be recovered. Establishment of a two-year record keeping provision does not detract from the fact that if the Legislature intended to continue limiting the period of recoverable back wages it could have done so explicitly as it had done for over fifteen years.

Furthermore, in the majority’s attempt to harmonize the various subdivisions of the section, it focuses on the relationship between subdivisions (h) and (d) and fails to deal with the language in subdivisions (b), (f), and (g) which sets forth a clear intent by the Legislature to provide victims of wage discrimination with complete relief.

The majority’s reliance on another similarly worded statute is also misplaced. Although the federal Fair Labor Standards Act (29 U.S.C. §§ 206(d)(1), 216(b), 255(a)) contains an express statute of limitations, it does not contain wording similar to that in section 1197.5 giving an injured employee the right to recover the “balance” of wages wrongfully deprived.

Finally, the other cases involving recovery of back wages or periodic payments relied on by the majority are easily distinguished since none involved the scope of a remedy for the redress of a violation of a constitutional and a civil right.

As Justice Reynoso pointed out in his dissenting opinion below, “[remedial statutes, such as this, must be construed liberally regarding the social problems meant to be ameliorated and on behalf of the class to be helped. (See Viles v. State of California (1967) 66 Cal.2d 24, 32-33 [56 Cal.Rptr. 666, 423 P.2d 818]; Buck v. City of Eureka (1893) 97 Cal. 135, 137-138 [31 P. 845].) Statistics compiled by the United States Department of Labor confirm that the average income for women is far lower than that of men; in 1956, the median income for women was 63 percent of the income of men. By 1973, the wage discrepancy of *116at least one classification, service workers, was widening; the median salary for women was $4,583, while for men it was $7,937. Thus, women earned only 57 percent of the average income of men. These figures underscore the social evil which Labor Code section 1197.5 seeks to correct.”

In construing a statute, it is presumed that every statutory word, phrase and provision is intended to have meaning and perform a useful function. (Clements v. T. R. Bechtel Co. (1954) 43 Cal.2d 227, 233 [273 P.2d 5].) It is important that the Legislature’s intent, as manifested in the natural meaning of the words adopted, not be overlooked or ignored. (People v. Knowles (1950) 35 Cal.2d 175, 182 [217 P.2d 1].) The administrative agency, charged with implementing and enforcing section 1197.5, has adopted a construction of section 1197.5 which achieves that end.

The Division of Labor Standards Enforcement allows an aggrieved employee, who files a suit within two years of a violation of subdivision (a), to recover “the balance of wages for the entire period of discrimination. ...” (Div. of Labor Stds. Enforcement, Internal Policy/Procedure Memo No. 79-2 (Mar. 9, 1979), italics added.)

In interpreting statutory provisions, administrative regulations issued by the agency vested with the statutory power to implement a particular statute are entitled to great weight and deference. Further, these regulations are normally followed by courts unless they are clearly erroneous. (Judson Steel Corp. v. Workers’ Comp. Appeals Bd. (1978) 22 Cal.3d 658, 668 [150 Cal.Rptr. 250, 586 P.2d 564]; Louis Stores, Inc. v. Department of Alcoholic Beverage Control (1962) 57 Cal.2d 749, 759 [22 Cal.Rptr. 14, 371 P.2d 758]; Coca-Cola Co. v. State Bd. of Equalization (1945) 25 Cal.2d 918, 921 [156 P.2d 1].) In the present case, the division’s guideline provides a reasonable meaning that harmonizes each of the sections. Further, the legislative policy underlying section 1197.5 and the legislative history of the statute support the division’s interpretation.

Section 1197.5 was passed as remedial legislation to redress violations of a worker’s civil and constitutional right to be free from sex discrimination in employment.2 This Labor Code section was passed as part of *117a comprehensive program at the federal and state level to eradicate sex discrimination in the nation’s work force. (See e.g., 42 U.S.C. § 2000e-2 et seq.; Lab. Code, § 1410 et seq.) Under our case law, section 1197.5 should be liberally construed to further its remedial objective and protect members of the class it was intended to assist. (See Viles v. State of California, supra, 66 Cal.2d 24, 32-33; Buck v. City of Eureka, supra, 97 Cal. 135, 137-138; California Grape etc. League v. Industrial Welfare Com. (1969) 268 Cal.App.2d 692, 698 [74 Cal.Rptr. 313].)

The protective purpose of this section becomes all the more evident when its evolution is explored. Since its enactment in 1949, the Legislature has steadily expanded the scope of its protection and the remedies available to injured employees. (See Stats. 1949, ch. 804, § 1, p. 1541; Stats. 1957, ch. 2384, § 1, p. 4130; Stats. 1965, ch. 825, § 1, p. 2417; Stats. 1968, ch. 325, § 1, p. 705; Stats. 1976, ch. 1184, § 3, p. 5288.) For example, the section as initially written and enacted limited the extent of an employee’s back wage recovery. A civil suit had to be commenced within six months of a violation and an employer’s liability was explicitly restricted to only those wages unlawfully withheld within thirty days of any notice from the employee. (Stats. 1949, ch. 804, § 1, p. 1541.) In 1965, the period for commencing a civil action was extended and the 30-day limit on an employer’s liability was eliminated. (Stats. 1965, ch. 825, § 1, p. 2417.) In light of the remaining statutory language which makes an employer liable for the balance of wages wrongfully withheld, the deletion of the 30-day limit on liability suggests an intent on the part of the Legislature to provide complete rather than partial economic redress for wage discrimination.3

*118Since appellant filed this action within two years of a discriminatory wage payment, she is entitled to recover all of the wages earned but wrongfully withheld from her during the period of respondent’s discrimination from 1968 to 1974.

Ill

Next, this court must decide whether section 1197.5 entitles a successful plaintiff to recover attorney’s fees. Appellant contends such entitlement is clear from the language of the entire section and its legislative history. Respondent, on the other hand, maintains that the section grants the trial court discretion in awarding attorney’s fees and since there was no abuse of discretion in denying such an award in this case, the trial court’s ruling should be affirmed.

Subdivision (g) of section 1197.5 provides.that “[a]ny employee receiving less than the wage to which the employee is entitled. . .may recover in a civil action the balance of such wages, including interest thereon, together with the costs of the suit and reasonable attorney’s fees.. .. ” This subdivision provides that an employee “may” recover the “balance of such wages” and “reasonable attorney’s fees.” Consistent with common usage, section 15 provides that in construing provisions of the Labor Code, the use of the word “shall” is mandatory and “may” is permissive. However, as this court recently observed, the use of permissive or mandatory language is indicative but not conclusive of legislative intent. (Morris v. County of Marin (1977) 18 Cal.3d 901, 910, fn. 6 [136 Cal.Rptr. 251, 559 P.2d 606]; Lab. Code, § 5 [this section authorizes an exception to the general rule set out in § 15].) Therefore, when ascertaining legislative intent, the context of the statutory language, as well as other indicia of legislative intent, must be carefully considered.

The legislative history of subdivision (g) strongly suggests that the Legislature sought to augment the remedies available to an aggrieved employee by mandating the award of attorney’s fees. Prior to 1976, section 1197.5 had no provision for an award of attorney’s fees.4 (See also fn. 1, ante.) Among the amendments to section 1197.5 introduced in the Senate on April 17, 1975, was a proposed amendment to subdivision (g) *119to authorize the award of attorney’s fees.5 The language of that amendment, as well as the analysis in the Senate Industrial Relations Committee and the Legislative Counsel’s Digest, indicated that the subdivision as amended mandated the award of attorney’s fees, while permitting the award of court costs. (Sen. Industrial Relations Com., Analysis of Sen. Bill No. 1051 (Apr. 17, 1975) p. 3; Leg. Counsel’s Dig. of Sen. Bill No. 1051 (1975-1976 Reg. Sess.).)6

When the Assembly subsequently considered the amendments to section 1197.5, a substantive provision was added to subdivision (g) to expand an injured employee’s remedies to include the right to recover prejudgment interest on any unpaid wages. Simultaneously, the Assembly amended the entire section to simplify and shorten it. In this process, subdivision (g) was condensed from two sentences to its present wording and enacted into law.

In simplifying the language of subdivision (g), the Assembly deleted the express mandate for attorney’s fees by eliminating the word “shall.” However, there is no evidence that the Assembly’s modification of the Senate amendments was intended to delete the injured employee’s important right to attorney’s fees.7 Rather, the Legislative Counsel’s *120Digest analysis of Assembly amendments indicated an intent to expand and strengthen the remedies provided in section 1197.5 by requiring the award of court costs as well as attorney’s fees. Further, despite the change in phraseology in subdivision (g), the Legislative Counsel’s analysis continued to indicate that the award of attorney’s fees was considered mandatory: “This bill would require the court in such civil suits to award attorney’s fees and suit costs to the employee.” (Leg. Counsel’s Dig. of Sen. Bill No. 1051 as amended in Assembly (1975-1976 Reg. Sess.) (italics added).)8

The use of the word “may” in subdivision (g) is readily explainable without recourse to respondent’s contention that the award of attorney’s fees is discretionary. Subdivision (g) specifies one of three avenues of relief created by section 1197.5 for an aggrieved employee.9 First, subdivision (e) provides that the employee “may” pursue an administrative remedy by filing a complaint with the Division of Labor Standards Enforcement. Second, subdivision (f) provides that the division “may” commence and prosecute a civil action on the employee’s behalf, unless otherwise requested by the employee. Third, subdivision (g) provides that an aggrieved employee “may” directly file a civil action without first pursuing an administrative remedy. (Bass v. Great Western Sav. & Loan Assn. (1976) 58 Cal.App.3d 770, 773 [130 Cal.Rptr. 123].) Examined in the context of the entire section, the use of the word “may” in subdivision (g) indicates that the remedy provided is but one of several options that an aggrieved employee may pursue. The Legislature did not intend to vest the trial court with discretion in awarding attorney’s fees by adopting that subdivision.

*121This construction of subdivision (g) is reinforced by the provisions of subdivision (b). The latter provides that an employee subject to wage discrimination, prohibited by subdivision (a) of section 1197.5, is entitled to recover the differential in wages with interest. (See fn. 1, ante.) The subdivision is drafted in terms which mandate the recovery of interest once a violation of the section is shown. However, under respondent’s construction of subdivision (g) there would be no mandatory award of interest because the grant of discretion to award attorney’s fees would necessarily extend to the award of interest. This inconsistency is obviated if “may” in subdivision (g) is construed as merely offering an aggrieved employee the option of seeking back wages through a civil action.

The strong policy argument in favor of making an award of attorney’s fees in the employment context suggests that the Legislature intended to make the award of such fees mandatory. Given the economic disparity between employer and employee and the high costs of litigation, a prospective defendant in an employment discrimination suit can more readily engage in protracted litigation. If an employee must bear his or her own attorney’s fees and costs, this factor may deter the employee from pursuing a meritorious claim. This would fall most heavily on those workers from the lower end of the income scale, who would be pursuing relatively small claims.10 Surely, the Legislature did not intend such a result.

The mandatory award of attorney’s fees to a successful plaintiff encourages the litigation of meritorious wage discrimination suits. This *122increases the effectiveness of the civil suit as a tool to combat employment discrimination. That was the intent of the Legislature when it enacted these sections. Therefore, attorney’s fees should have been awarded under subdivision (g).

IV

The trial court erred when it denied appellant recovery for the full amount of the back wages which had been withheld from her due to respondent’s discriminatory practices. Further, in keeping with the Legislature’s intent in enacting section 1197.5, subdivision (g), appellant’s attorney’s fees should have been awarded to her. The orders of the trial court should be reversed.

Appellant’s petition for a rehearing was denied June 25, 1980, and the opinion was modified to read as printed above.

Section 1197.5 presently provides, in pertinent part: “(a) No employer shall pay any individual in the employer’s employ at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions....

“(b) Any employer who violates subdivision (a) is liable to the employee affected in the amount of the wages, and interest thereon, of which such employee is deprived by reason of such violation.
“(c) The provisions of this section shall be administered and enforced by the Division of Labor Standards Enforcement. ... Acceptance of payment of sum or sums made by an employer and approved by the division shall constitute a waiver on the part of the employee of the employee’s cause of action under subdivision (g).
it
“(e) Any employee may file a complaint with the division that the wages paid are less than the wages to which the employee is entitled under subdivision (a).... The division shall take all proceedings necessary to enforce the payment of any sums found to be due and unpaid to such employees.
“(f) The department or division may commence and prosecute, unless otherwise requested by the employee or affected group of employees, a civil action on behalf of the employee and on behalf of a similarly affected group of employees to recover unpaid wages under subdivision (a), and in addition to such wages shall be entitled to recover costs of suit....
“(g) Any employee receiving less than the wage to which the employee is entitled under this section may recover in a civil action the balance of such wages, including interest thereon, together with the costs of the suit and reasonable attorney’s fees, notwithstanding any agreement to work for a lesser wage.
“(h) A civil action to recover wages under subdivision (a) may be commenced no later than two years after the cause of action occurs.”

The majority fail to consider the fact that section 1197.5 did not provide for the award of attorney’s fees when appellant initiated this action. During the pendency of this action, subdivision (g) was amended to its present form to authorize the award of such fees. This action must be governed by the section as amended. (Cf. Woodland Hills Residents Assn., Inc. v. City Council (1979) 23 Cal.3d 917, 931-932 [154 Cal.Rptr. 503, 593 P.2d 200].)

All further references are to the Labor Code, unless otherwise indicated.

ArticIe I, section 8 of the California Constitution provides that “[a] person may not be disqualified from entering or pursuing a business, profession, vocation, or employment because of sex....”

*117Further, the Legislature has determined that the right to be free of employment discrimination on the basis of sex is a civil right enjoyed by every citizen of this state. Section 1412 provides: “The opportunity to seek, obtain and hold employment without discrimination because of.. .sex.. .is hereby recognized as and declared to be a civil right.”

In section 1411, the Legislature has declared that “the public policy of this state [is] that it is necessary to protect and safeguard the right and opportunity of all persons to seek, obtain, and hold employment without discrimination or abridgement on account of.. .sex....”

In cases of economic injury, the general rule is ‘“that when a wrong has been done, and the law gives a remedy, the compensation shall be equal to the injury. The latter is the standard by which the former is to be measured. The injured party is to be placed, as near as may be, in the situation he would have occupied if the wrong had not been committed.’” (Albemarle Paper Co. v. Moody (1975) 422 U.S. 405, 418-419 [45 L.Ed.2d 280, 297, 95 S.Ct. 2362].)

That section provided: “(g) Any employee receiving less than the wage to which he is entitled under this section may recover in a civil action the balance of such wages, together with the costs of suit, notwithstanding any agreement to work for a lesser wage.”

The amendment to subdivision (g) as introduced provided: “(g) Any employee receiving less than the wage to which he is entitled under this section may recover in a civil action the balance of such wages, together with the costs of suit, notwithstanding any agreement to work for a lesser wage. The court in any such action shall, in addition to any judgment awarded to the plaintiff, allow a reasonable attorney’s fee to be paid by the defendant.”

The Senate Industrial Relations Committee analysis of the proposed amendment indicated that “[t]he court would be required to award the plaintiff in an action under the equal pay provision a reasonable attorney’s fee.” The Legislative Counsel’s Digest analysis similarly provided that “[tjhis bill would require the court in.. .civil suits to award attorney’s fees to the employee.”

On the contrary, the general thrust of the amendments adopted by the Assembly was to provide greater protections and remedies for injured employees. This objective is borne out by the Legislative Analyst’s summary of the adopted revisions: “1. Permits the division to inspect payrolls and other employment records despite lack of a complaint.... [¶] 2. Allows the division for the first time to bring class action suits in certain cases to enforce these provisions. [¶] 3. Allows any person who has been discriminated against for testifying in any action by the division under this program to bring civil suit or administrative action for recovery of damages. [¶] 4. Requires the division to keep confidential the name of any complaining party. [¶] 5. Extends from 180 days to two years the period in which civil action may be brought. ... [¶] 6. Deletes the provision giving the claimant the burden of proof in any civil action regarding sex discrimination.” (Leg. Analyst’s Analysis of Sen. Bill No. 1051 as amended in the Assembly May 24, 1976 (1975-1976 Reg. Sess.).)

In considering the legislative significance of the revised language of subdivision (g), it is important to recognize that the mere change in phraseology incident to a revision or amendment of a statute does not result in a change of meaning absent a clear intent to make such a change. (Mosk v. Superior Court (1979) 25 Cal.3d 474, 493 [159 Cal.Rptr. 494, 601 P.2d 1030]; Hammond v. McDonald (1942) 49 Cal.App.2d 671, 681 [122 P.2d 332].)

Subdivisions (e) through (g) provide: “(e) Any employee may file a complaint with the division that the wages paid are less than the wages to which the employee is entitled under subdivision (a).... The division shall take all proceedings necessary to enforce the payment of any sums found to be due and unpaid to such employees.

“(f) The department or division may commence and prosecute, unless otherwise requested by the employee or affected group of employees, a civil action on behalf of the employee and on behalf of a similarly affected group of employees to recover unpaid wages under subdivision (a), and in addition to such wages shall be entitled to recover costs of suit....
“(g) Any employee receiving less than the wage to which the employee is entitled under this section may recover in a civil action the balance of such wages, including *121interest thereon, together with the costs of the suit and reasonable attorney’s fees, notwithstanding any agreement to work for a lesser wage.”

lt is unlikely that the Legislature intended to withhold attorney’s fees as a means of encouraging an administrative resolution of these claims. Indeed, the amendment to section 1197.5 was in part a response to evidence presented to the Legislature by the Joint Committee on Legal Equality which underscored the internal pressures in administrative agencies which tend to undermine the expeditious processing of employment discrimination complaints. (Joint Rep. on Legal Equality, Women and the California Labor Code (Oct. 16, 1975).) A statement made by the California Fair Labor Practice Commission points up this problem: “The difficulties of dealing with [an] expanded caseload are many indeed. A backlog of uninvestigated cases has built up, and is growing in size as incoming cases mount. We estimate that on backlogged cases it will take us nearly a year from date of filing before we are able to assign a consultant to open an investigation. Unhappily, this is disadvantageous to the complainant. But Commission consultants now carry over 100 open cases a year, compared to a consultant caseload of less than 50 about eight years ago, and under present budget limitations the man-and-woman-power is simply not available to handle matters as quickly as they should be handled to obtain the best resolution.” (Id., at p. 5, appen. A-113.)