Pineda v. Bank of America, 50 Cal. 4th 1389 (2010)

Although plaintiff Jorge A. Pineda gave two weeks’ notice of his resignation from Bank of America, the bank did not pay him his final wages on his last day of employment, as required by Cal. Labor Code § 202, but instead paid him four days late. In this putative class action, Pineda sued for waiting-time penalties under section 203 and also sought restitution of the unpaid penalties under the Unfair Competition Law (the “UCL”). The trial court dismissed the action on the grounds that it was barred by a one-year statute of limitations and that section 203 penalties are not recoverable as restitution under the UCL. The court of appeal affirmed dismissal, but the California Supreme Court reversed, holding that a three-year statute of limitations applies even though plaintiff was seeking only penalties and not payment of any unpaid wages. However, the Supreme Court affirmed dismissal of the UCL claim on the ground that an employee may not recover section 203 penalties as restitution under the UCL because those penalties are not designed to compensate employees for work performed (as wages are), but instead are intended to punish employers who fail to pay such wages.