Employee May Not Sue Employer’s Payroll Company for Wage and Hour Violations

On February 7, 2019, the California Supreme Court in Goonewardene v. ADP reversed a decision of a court of appeal that had permitted an employee to sue the payroll company her employer used to pay its employees. The plaintiff alleged that the earnings statements provided to her by ADP never contained a breakdown of her regular, overtime or double overtime hours, and did not reflect data regarding meal and rest breaks in violation of the Unfair Competition Law. The Supreme Court rejected the appellate court’s reliance on theories of third-part beneficiary, negligence and negligent misrepresentation, and ordered ADP dismissed from the lawsuit. The high court’s decision in Goonewardene does not affect an employer’s obligation to include all required information on an employee’s pay stub.