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

The California Court of Appeal recently confirmed the right of an employer to secure a release from claims for unpaid overtime where there exists a bona fide dispute over whether overtime wages were actually due. In Chindarah v. Pick Up Stix, Inc., two former employees of Pick Up Stix brought a proposed class action lawsuit against their former employer asserting claims for unpaid overtime, alleging they were misclassified as exempt from overtime pay. The employer was able to obtain settlements with over two hundred putative class members in exchange for their execution of a general release, wherein the employee acknowledged that he or she spent more than 50% of their time performing managerial duties and released Pick Up Stix from all claims for unpaid overtime and any other Labor Code violations during the relevant time period. Thereafter, the plaintiffs challenged the validity of these releases and argued that the settlement agreements violated Labor Code section 206.5, which provides: "An employer shall not require the execution of a release of a claim or right on account of wages due, or to become due, or made as an advance on wages to be earned, unless payment of those wages has been made. A release required or executed in violation of the provisions of this section shall be null and void as between the employer and the employee."
 

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We recently reported a significant California Court of Appeals decision, marking what appears to be turning point in the development of California's Labor Code Private Attorney General Act ("PAGA"). In Deleon v. Verizon Wireless, the Second District Court of appeal addressed several unsettled PAGA issues. The Court's analysis has far-reaching consequences with respect to several issues, including (i) the settlement of individual and class-wide PAGA claims, (ii) the status of an "aggrieved employee" as a plaintiff, and (iii) the nature of PAGA representative actions.

On February 23, 2009, the plaintiff's in Deleon filed for review by the California Supreme Court. Employers are advised to monitor the Supreme Court's actions in this case, particularly those currently litigating purported PAGA claims. Unless and until the Supreme Court grants review, however, Deleon may still be cited as good law. For a more thorough analysis of the impact of the Deleon decision, see the Littler ASAP "Bounty Hunters" Lose Their State "Badge" as Court of Appeal Clarifies Several PAGA Issues.

This blog entry was authored by Vincent J. Mersich.
 

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Ten years after it was first enacted, and as part of the resolution of California's budget crisis, California Labor Code section 511 authorizing the use of an alternative workweek was amended for the first time (AB X2 5) last week.

The bill itself was a model of expedited lawmaking - its creation, passage, and signing took less than ten days. AB X2 5 was introduced in the Assembly as a budget trailer bill on February 11, modified to its final form on February 14, and passed finally by the Senate on February 19, with the Governor signing it the next day. The bill was never reviewed by any budget or legislative policy committee.

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California Labor Code section 1776 requires public works contractors and subcontractors to maintain payroll records showing the name, address, social security number, work classification, straight-time and overtime hours worked each day and week, and the actual per diem wages paid to workmen employed on a public works project, and to verify under penalty of perjury in a written declaration the accuracy of such payroll records. These certified payroll records must be prepared on forms provided by the Division of Labor Standards Enforcement or may consist of printouts of payroll data that are maintained as computer records, provided the printouts contain the same information as the forms provided by the Division of Labor Standards Enforcement. Certified payroll records must be made available for inspection and/or furnished to employees and their authorized representative, members of the public, the awarding body, Labor Compliance Programs, the Division of Labor Standards Enforcement and the Division of Apprenticeship Standards of the California Department of Industrial Relations upon request, and generally within 10 days from the date of the request.

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On January 12, 2009, the Bureau of Labor and Industries (BOLI) clarified meal and rest period requirements in situations where providing a 30-minute uninterrupted meal period is not feasible.

The revised rule (OAR 839-020-0050) still requires the same basic 30-minute, unpaid meal period in which the employee is relieved of all duties for shifts longer than six hours, but also states that an employer need not provide an employee with a 30-minute uninterrupted meal period if it can demonstrate that:

• Failure to provide a meal period was caused by unforeseeable equipment failures, acts of nature or other exceptional and unanticipated circumstances that only rarely and temporarily preclude the provision of a meal period;
• Industry practice or custom has established a paid meal period of less than 30 minutes (but no less than 20 minutes) during which the employee is relieved of all duties; or
• Providing a 30-minute, unpaid meal period where the employee is relieved of all duties would impose and undue hardship on the operation of the employer's business.

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UPDATE: On February 17, 2009, the Ninth Circuit withdrew its decision in Sullivan v. Oracle and remanded the case back to the California Supreme Court for reconsideration.  The Ninth Circuit asked the California Supreme Court to consider the following issues:

First, does the California Labor Code apply to overtime work performed in California for a California-based employer by out-of-state plaintiffs in the circumstances of this case, such that overtime pay is required for work in excess of eight hours per day or in excess of forty hours per week?

Second, does California Business and Professions Code section 17200 apply to the overtime work described in question one?

Third, does section 17200 apply to overtime work performed outside California for a California-based employer by out-of-state plaintiffs in the circumstances of this case if the employer failed to comply with the overtime provisions of the FLSA?

This blog update was authored by Jim Hart.
 

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The Missouri Department of Labor and Industrial Relations has promulgated new regulations to address the 2008 amendments to the Missouri Minimum Wage Law. The new regulations follow a series of changes over the last several years to Missouri law concerning employee compensation. In November 2006, Missouri voters amended the Missouri Minimum Wage law by ballot initiative. See Mo. Rev. Stat. § 290.500 et seq. The amended law, effective January 1, 2007, increased Missouri’s minimum wage and provided for future increases (under its schedule, Missouri’s minimum wage increased to $7.05 January 1, 2009). The ballot initiative changed the law in other important, and possibly unintended ways, including use of language that resulted in rejection of most FLSA exemptions and alternative compliance calculations that had previously been followed in Missouri for decades. In Spring 2008, the Missouri legislature amended the Minimum Wage law to reintroduce certain principles of the FLSA. The Missouri Department of Labor and Industrial Relations published regulations in September 2008, effective March 30, 2009, that address the amendments to the Missouri statute. Except as otherwise specified, the Missouri Department of Labor expressly adopts interpretations of the FLSA; federal regulations are incorporated into the new Missouri regulations by reference. 8 CSR 30-4.010. The Missouri regulations also include a new rule concerning the handling of administrative complaints and notice requirements. 8 CSR 30-4.060.

This blog entry was authored by KIMBERLY YATES.
 

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On Tuesday, February 10, 2009, Rep. Cathy McMorris Rodgers (R-WA) reintroduced the Family-Friendly Workplace Act (H.R. 933), a bill that would amend the Fair Labor Standards Act (FLSA) to permit private-sector employees to chose compensatory leave in lieu of cash wages for overtime hours worked. This “comp time” option has long been available to public sector employees, and has proven to be very popular. Continue reading on Littler's Washington DC Employment Law Update blog.

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The Eleventh Circuit Court of Appeals rules that the “outside sales” exemption to the FLSA overtime requirements was properly applied to an executive for a title insurance company whose primary duty was conducting “promotional work” with the company’s clients, even though the employee did not finalize sales herself. According to the court, the executive, who was credited with sales through commission-based compensation, was conducting “sales in some sense.”

For more information about this development, see Littler's ASAP "Eleventh Circuit Holds Title Insurance Executive Who Conducts 'Promotional Work' Exempt Under the FLSA 'Outside Sales' Exemption" by Angelo Spinola and Matthew Laflin.

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On January 21, 2009, the City of Phoenix obtained summary judgment in a collective action brought by approximately 600 police officers claiming millions in unpaid work. What were the officers claiming? That the City should have compensated them for time spent putting on and taking off police uniforms and gear. In the matter of Dager et al. v. City of Phoenix, Case No. 2:06-cv-01412-PHX-JWS, the U.S. District Court for the District of Arizona ruled that the City did not have an obligation to pay its police officers for the time spent donning and doffing (i.e., putting on and taking off ) their police uniforms and gear. Specifically, Judge John Sedwick held that under Ninth Circuit precedent and the persuasive guidelines of the U.S. Department of Labor, only those employees actually required to change at work could claim that the time spent donning and doffing was compensable. The evidence in the case showed that the City allowed officers to change at home or at the station, depending on their own preference, and that a significant number of officers, including some of the claimants, regularly changed into their uniforms and/or gear at home. The court also held that, although the City's police department required officers to wear certain specified uniforms and protective gear, the uniform itself was not 'necessary" to the performance of police work (as the term necessary is defined under applicable regulations and case law).

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