No matter who your audience is for a prevailing wage case, two particular concerns exist which cannot be forgotten. One, do not bore your fact finder. Two, make sure your evidence will come into evidence.
Exhibits in prevailing wage trials must include a myriad of data about errant or correct payrolls depending on whom you represent. The employee’s paystubs must be marked as exhibits. It is also likely certified payroll records will have to be introduced. The employee’s time sheets will be necessary. Large printouts, recaps, and cumulative totals of hours worked along with rates and craft classifications are written records the fact finder must see. If handwritten time keeping records exist they must be exhibits. All of this means a whole lot of paper, a whole lot of numbers that must be added, and not necessarily the most exciting material for a judicial fact finder or jury. This type of evidence has a high likelihood to be overly charted, or charted in an objectionable manner leading to inadmissibility in superior court.
Although business records are an exception to the hearsay rule under California Evidence Code Section 1271, they are neither automatically authentic nor accurate. Attempting to authenticate payroll data from a computerized time keeping system is not always a walk in the park. The person seeking to authenticate the process needs to have been employed at the time the records were created. Later human resource personnel are not knowledgeable of what happened earlier in time, and may not have any knowledge whether or how the electronic time keeping system can be overridden. Certified payrolls certified by somebody no longer at the company are also problematic for the employer if the certifier is not present in court to verify they conducted due diligence in certifying the records. Plaintiffs encounter problems by assuming merely because a record was produced in a document demand it is admissible and accurate. If agreements as to authenticity cannot be made, or should not be made because the information is not trustworthy, care must be given to how the piles of records establishing the prevailing wage issues can be admitted.
Some lawyers believe they can solve the entire paper mess involved in a wage and hour case by hiring an expert to come up with a spiffy chart. If the expert is not able to point back to the morass of documents the charts were based on, at least a lay jury is likely to believe the charts are a lot of hype without support.
Inevitably an expert is needed to review the record keeping documents and pay records. The expert should have an actual financial background. A CPA is best although some lawyers might use economists. An economist’s job is not routinely to make various spreadsheets to analyze potential paystub errors and compute whether the correct wage was paid . A CPA has special skills in creating financial spreadsheets. They have particular training and experience in payrolls and financial audits. Particular skills, training, and experience outside the realm of common experience is what expert testimony is about under California Evidence Code Section 801. Economists who are not CPAs do not necessarily have auditing experience. CPAs do not have statistical experience. Statistical knowledge and experience is required in class actions. Choosing the right expert is important.
It is particularly ill advised to have an attorney or any person without special training in payroll, accounting methods, numeric charts, or a math background attempt to serve as an expert for the purpose of exposing the prevailing wage errors or sanctifying the employer’s practices. This author has had direct experience with arbitrators and judges estopping persons without these backgrounds from being qualified as experts whom can make the calculations and charts necessary. Even if the expert is not wholly estopped from testifying, be ready for extensive cross-examination about the expert’s lack of background in payroll, accounting methods, numeric charts, and mathematics.
Calculations and charts are necessary because it is unrealistic to believe the fact finder will examine each paystub and supporting document to calculate damages, or determine whether there is a violation. Some arbitrators might, but do not count on it nor the correct conclusion coming from anybody forced to determine liability or damages by examining every single document that supports your side’s conclusion. The mere physical space, time factor, and ability to create spreadsheets to determine how much is due or not due for every pay period are well beyond almost every fact finder. Before trial paralegals, associate level attorneys, and the reviewing partner may spend in excess of forty hours making preliminary calculations on Excel. Lower level accounting staff in an expert’s office will easily spend 5-20 hours on such charts in a single plaintiff case.Merely having Excel spreadsheets is not enough. All sorts of summary charts for different categories are needed.
Prevailing wage cases are rarely tried. Employers do not want to enter a courtroom being accused of defrauding the government, or receiving government money and not complying with contractual terms to pay prevailing wages. Many employee lawyers believe wage and hour trials are dull, of if they are class action lawyers they lack trial experience. For these reasons, neither side seems to have down how to try these cases. Many misassumptions tend to be made on both sides.
Good luck if your expert did not make the computations himself. Unless the expert regularly does these sorts of charts in their business (which they do not because they are litigation created and the expert should not be admitting their actual business is being an expert) a real trial lawyer will attack the process as an expert relying on mathematically questionable data. Even if the challenge is not accepted, and the expert is allowed to testify based on the charts he did not create the expert’s credibility is lost before a lay jury already suspicious of potential paid testimony.
Common misassumptions, other than those already described, include lawyers being unclear who decides whether penalties should be found, who decides the amounts of penalties, whether judges are simply better for wage and hour cases, and whether Business and Professions Code 17200 issues must be separately tried by the judge finding liability and computing damages. Juries can and do determine the existence of penalties under the California Labor Code. They can also determine the amount. Many judges want the jury to make findings whether unfair and competitive practices occurred, and then they will set the amount of restitution (really damages). Alternatively there can be an advisory jury on 17200 issues.
Prevailing wage adjudications can also happen at the Department of Industrial Relations/Department of Labor level. The author of this article unfortunately does not participate in administrative hearings so those hearings are beyond the scope of this article. Having reviewed the conclusions of administrative hearings, the pros are they usually result in small recoveries for unrepresented claimants. Whether they are quicker than superior court litigation is an open question. Superior court litigation can result in fast settlements with counsel, or mediated settlements. Matters seriously pursued at the administrative level generally take time. Given the disparate results between represented actions in arbitration or court versus administrative hearings employers should jump at the opportunity to settle for a few thousand at an administrative hearing.
Karl Gerber has practiced labor and employment law since 1993 during which time he has handled many prevailing wage lawsuits including class actions and individual cases on behalf of employees. He is licensed in California, District of Columbia, Massachusetts and Texas. He has first-chaired 46 binding arbitrations and trials. As the leader or partner of his firm he has monitored and assisted with at least double that number of labor and employment arbitrations, trials, and administrative hearings. He has served as an expert in plaintiff’s employment law in virtually every state of the union, and run a prolific employee rights practice where he has screened between 300-1,500 new case inquiries a month since at least 2008. Karl Gerber presently maintains offices in Bakersfield, downtown Los Angles, Gardena, Oxnard, Riverside, Sacramento, San Diego, San Francisco, San Jose, Sherman Oaks, and Tustin. He can be reached at 1-877-525-0700, or through worklawyerca.com.