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

On September 9, 2009, the California Supreme Court declined to review an appellate court order reversing an $86 million trial award against Starbucks. As discussed in detail in our earlier blog entry, in Jou Chau v. Starbucks Corporation, the court of appeal reversed the trial court's award to a certified class of Starbucks "baristas" who had challenged Starbucks’ tip policy on the ground that certain service employees, known as “shift supervisors,” had improperly shared in the customer tips left in a collective tip box. Since a denial of review by the California Supreme Court is done without comment, it is hard to predict what this means for other tip pooling cases. However, it is important to remember that the appellate court made a clear distinction between a collective tip box and service companies that pool tips. According to the appellate court, the Starbucks policy passed muster because (1) “shift supervisors” were part of the “team” of employees who provided service to the customers (along with baristas) and (2) a collective tip box was used.

 This blog entry was authored by Matthew Marca.

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On August 21, 2009, the Massachusetts Supreme Judicial Court unanimously ruled that a worker who has been misclassified as an independent contractor may seek damages from his former employer even if the employer establishes that the worker would have been paid less had he been classified as an employee.

The plaintiff in Somers v. Converged Access , 454 Mass. 582 (2009) worked for a software company as a quality assurance engineer. He was classified as an independent contractor and, as a result, did not receive overtime, vacation pay, or benefits. The company paid him at a rate of $65 per hour. The plaintiff initially agreed to work for a sixty-day term. He later agreed to a ninety-day extension of that term.

The plaintiff subsequently applied for a permanent quality assurance engineer position. After the company did not select him for the position, the plaintiff brought suit claiming, among other things, that he had been misclassified as an independent contractor.

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An important new opinion letter from the California Division of Labor Standards Enforcement (DLSE), issued on August 19, 2009, conforms California’s approach to furloughing salaried “white collar” exempt employees with the federal approach. The opinion approved an employer’s request to reduce its exempt employees’ scheduled work days from five to four days per week, along with a corresponding reduction in salary. This approach was designed to address the employer’s significant but temporary economic difficulties, with the expectation that as soon as business conditions permitted, the employer would restore the full five-day work schedule and the full salaries of its exempt employees. This opinion withdraws a prior DLSE opinion that had concluded that federal and California law “precludes an employer from reducing the salary of an exempt employee during a period when a company operates a shortened workweek due to economic conditions.” DLSE Opinion 2002.03.12 at p. 5. 

For an in-depth discussion and guidance on this development, see Littler ASAP, DLSE Agrees California’s Partial-Week Furlough Options Are Coextensive With Federal Law. 

This blog entry was authored by Dan Thieme and Alison Hightower

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