The UCL Practitioner
Tuesday, January 04, 2005
"Unfair Competition Law Does Not Apply to Employees"
Today's Daily Journal has this practice article on the UCL and employment law. The authors argue that "[a]fter Proposition 64, ... Unfair Competition Law plaintiffs must have suffered a competitive injury, such as is suffered by a business or consumer, not simply a monetary loss." (Emphasis added.) I don't see anything in Prop. 64 that supports that conclusion. Before and after Prop. 64, if an employee suffers loss of money or property as a result of an employer's "unfair," "fraudulent," or "unlawful" conduct, there is no reason why the employee cannot seek relief under the UCL. The argument about "competitive" harm existed before Prop. 64 and has been roundly rejected in employment cases (including Cortez, for example). If Prop. 64 changes the definition of "unfair" or "fraudulent" conduct by limiting it to "competitive" harm, as the authors of this article suggest, then it is a substantive amendment that cannot be applied retroactively to pending cases. Comments, anyone?
Employees were not excluded from bringing UCL claims before Prop. 64, see, e.g., Sav-on Drug Stores, Inc. v. Superior Court, 34 Cal. 4th 319 (2004), and there is nothing in Prop. 64 to suggest that they are excluded now.

Under the revised section 17204 (the new standing requirement), a person may only pursue an action for relief under the UCL if he or she has “suffered injury in fact and has lost money or property as a result of such unfair competition.” However, the definition of "unfair competition" remains unchanged. Any act that was previously unfair, fraudulent (the UCL standard), or unlawful remains so after the passage of Prop. 64.

The practice article from the Daily Journal is an example of over-reaching by the defense bar. With the successful passage of Prop. 64, the next step would be to defang the UCL by limiting it to a form of anti-trust legislation, not a consumer protection law. The ballot materials emphasize that the consumer protection purpose of the UCL is not changed by Prop. 64.

I agree that there is no legitimate basis for the conclustion reached by the authors of this "practice article". I supply the quotations to indicate that the article strikes me as wishful thinking, not a useful tool for employment and UCL litigation.
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