On May 16th, 2012, in People ex. Rel. Harris v. Sunset Car Wash LLC (California Courts of Appeal – 2nd District, No. B233915), the court held that a successor business can be held liable for a predecessor's business wage law violations when the successor company operates in the same location with similar services.
Successor and Predecessor Legal Definition
In Harris, the plaintiffs were employees who successfully sued the predecessor car wash for wage law violations. After achieving this victory, the plaintiffs then set off to find the successor business liable under Labor Code section 2066. The defendant (successor business) argued that the term "successor" should only be defined by reference to case law and established definitions.
The appellate court affirmed the trial court's finding and denied the defendant's argument. The appellate court held that where a definition is unambiguous on its face, there is no reason to look to other sources to ascertain varying definitions. Because the defendant's car wash operated in the same location and provided the same basic services, the court determined that it met the definition of "successor."
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