Wage & Hour Counsel : Wage & Hour Lawyer & Attorney : Littler Mendelson Law Firm : Employment Law, Labor Relations

By William Hays Weissman

In Arnold v. Mutual of Omaha Insurance Company, a California appellate court issued a published decision holding that insurance agents are not employees under the California Labor Code. This appears to be the first time the court has addressed the status of insurance agents.

The plaintiff filed a putative class action asserting that she was misclassified as an independent contractor and therefore denied reimbursement of business related expenses under Labor Code section 2802, and was not paid all wages in a timely fashion. She also asserted that failure to pay business expenses constituted an unfair business practice.

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The Department of Labor’s Wage and Hour Division has issued three new fact sheets on unlawful retaliation. One fact sheet discusses retaliation under the Fair Labor Standards Act (FLSA). The FLSA makes it a violation for any person to “discharge or in any other manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to this Act, or has testified or is about to testify in any such proceeding, or has served or is about to serve on an industry committee.” To learn more about the FLSA fact sheet and its implications for employers, please continue reading at Littler's Washington D.C. Employment Law Update.

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By Alison S. Hightower

In a long-awaited decision, the California Supreme Court unanimously gave California employers a holiday present in an opinion that follows the majority of federal courts in finding that insurance claims adjusters are exempt administrative employees.

At issue in Harris v. Superior Court was the exempt status of a certified class of Liberty Mutual insurance claims adjusters who the California Court of Appeal found did not satisfy the requirements of the administrative exemption as a matter of law. Under California law exempt administrative employees must receive a minimum compensation of not less than two times the minimum wage, and also (1) perform office or non-manual work “directly related to management policies or general business operations of his/her employer or his/her employer’s customers,” and (2) “customarily and regularly exercise discretion and independent judgment.”

The administrative exemption has been one of the most hotly-contested and litigated of California’s overtime exemptions. This decision provides more clarity on the application of the exemption, and the role of the “administrative/production worker dichotomy” as an analytical tool in assessing exempt status.

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By Steven Kaplan

On December 23, 2011, the U.S. Court of Appeals for the Fourth Circuit in Kunda v. C.R. Bard, Inc. held that employers in Maryland may have their employees execute employment agreements with a choice of law provision other than Maryland, so long as the other jurisdiction has a “substantial relationship” to the parties and the application of the law would not be contrary to a fundamental Maryland public policy. This case settles the issue, at least for now, of whether an employee who works in Maryland has a fundamental right to sue for wages under the Maryland Wage Payment and Collection Law (“MWPCL”) – generally a law favorable to employees.

In Kunda, the plaintiff fervently argued that the MWPCL, not New Jersey’s wage payment and collection law, should apply to her employment agreement because the MWPCL constitutes a fundamental Maryland public policy. The Fourth Circuit disagreed. Citing to two other Maryland laws that contain express language concerning whether those laws contain a strong public policy, the court noted that “by contrast, the MWPCL contains no express language of legislative intent that the law is a fundamental Maryland public policy.”

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UPDATE: On the morning of January 3, 2012, the Labor Commissioner changed the FAQs on this notice requirement to clarify that the notice does not need to be given to current employees except under certain circumstances. The Labor Commissioner did so by simply deleting the following sentence formerly in the answer to FAQ 2: “The notice should be given to all current employees and then to all new employees at the time of hire.”

By Christopher Cobey

The California Labor Commissioner posted its template wage notice form required by Labor Code section 2810.5 of the California Wage Theft Protection Act (WTPA), and accompanying FAQs. Beginning January 1, 2012, the form must be provided to certain newly hired employees, and at least certain current employees whose specified employment information changes on or after January 1. The Labor Commissioner’s FAQ 2 takes the position that the notice must be provided to "all current [covered] employees," although section 2810.5’s language does not explicitly require such notice.

The form requires more information than is specified in section 2810.5. The new law authorizes the Labor Commissioner to include “any other information the Labor Commissioner deems material and necessary,” so employers should complete all information included on the form.

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By Brian Dixon

In Aleman v. Airtouch Cellular, a California Court of Appeal ruled on December 21, 2011 that one class representative was not entitled to additional reporting pay or split shift premiums and a second class representative could not pursue such claims because she had signed a release in exchange for enhanced severance compensation. The court did, however, reverse the award of attorneys’ fees to the employer.

The first class representative was scheduled for store meetings which occurred once or twice a month before the store opened. The meetings were scheduled at least four days in advance and were scheduled to be an hour to an hour-and-a-half in length. The class representative always worked for at least one half of the meeting time.

The first class representative sought reporting time pay under the provision of the California Wage Orders that states: “Every work day an employee is required to report for work and does report but is not put to work or is furnished less than half said employee’s usual or scheduled day’s work, the employee shall be paid for half the usual or scheduled day’s work, but in no event for less than two (2) hours nor more than four (4) hours, at the employee’s regular rate of pay, which shall not be less than the minimum wage.”

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By Jim Hart

On December 13, 2011, the Ninth Circuit Court of Appeals reconsidered the case, Sullivan v. Oracle Corp., after the California Supreme Court had decided several certified questions of law. The Ninth Circuit had previously delayed ruling, and instead asked the California Supreme Court to decide three questions of California law, including whether a company with its principal place of business in California was required to pay out-of-state employees temporarily working in California according to California’s daily overtime rules. The California Supreme Court took up the issue, and according to the Ninth Circuit, “[t]he California Supreme Court agreed with the answers we had given in our original opinion to these three questions” – that Oracle was required to pay daily overtime to its instructors temporarily working in California. The Ninth Circuit took up the case again after the California Supreme Court’s ruling, and considered several constitutional arguments raised by Oracle. Oracle argued that applying California’s daily overtime rules to out-of-state employees temporarily in the state violates the Due Process Clause of the Fourteenth Amendment and the Dormant Commerce Clause of the United States Constitution. The Ninth Circuit rejected these arguments and remanded the case to the district court.
 

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By Milton Castro

In a recent “off-the-clock” case, the Seventh Circuit Court of Appeals affirmed an Indiana district court decision and held that the time an employee spends before his or her shift in preparation for the shift is not compensable – even if such time is in excess of 10 minutes and to the significant benefit of the employer – if the employer does not know or have reason to know that the employee is regularly working this off-the-clock time.

In the case, Plaintiff Susan Kellar alleged that she regularly arrived at Defendant Summit Seating Inc.’s (“Summit”) worksite between 15 and 45 minutes before the start of her shift. According to the plaintiff, she would then typically spend:

• 5 minutes unlocking doors, turning on lights, turning on equipment, and punching into the time clock;
• 5 minutes preparing coffee for herself and the rest of the employees;
• 5-10 minutes (or longer) gathering material and distributing it to her subordinates’ workstations; and
• 5 minutes taking a coffee / smoking break.

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On December 15, 2011, the Department of Labor’s Wage and Hour Division (WHD) issued its much-anticipated proposed rule that could make more than a million domestic caregivers eligible to receive minimum wage and overtime pay under the Fair Labor Standards Act (FLSA). According to the WHD, the home healthcare industry has changed since the FLSA regulations governing home care employees were enacted more than 35 years ago. To that end, the proposal seeks to revise the FLSA’s companionship and live-in worker regulations to limit the types of duties that render a home caregiver exempt from FLSA requirements, clarify the type of activities and duties that may be considered “incidental” to the provision of companionship services, amend the recordkeeping requirements for live-in domestic workers, and specify that the exemption is limited to care givers employed by the individual, family or household using the services only. Third-party employers, including in-home staffing agencies, would not be entitled to claim the exemption even if the worker is jointly employed by the third party and the family/household. To learn more about the proposed rule and its implications for employers, please continue reading at Littler's Washington D.C. Employment Law Update.

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