Ask any California wage-and-hour expert and he or she will tell you an inviolate principle about wages paid to employees: Under no circumstances can an employer recover those wages actually earned. Right? Not so fast.
California’s First District Court of Appeal recently affirmed a damages award to an employer of salary and benefits paid to an employee who breached his fiduciary duties by secretly competing with his employer. The largely unnoticed case of Service Employees International Union, Local 250 v. Colcord , 160 Cal.App.4th 362 (2008), is the first California case in which wages earned by a disloyal employee for even faithfully completed transactions were recovered as damages . The import of this decision for employers and employees alike is profound.
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