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

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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By Karin Cogbill

In the first significant ruling of its kind, the Los Angeles Superior Court in Bright v. 99¢ Only Stores granted the defendant’s motion to strike the plaintiff’s representative Private Attorneys General Act (PAGA) allegations. The plaintiff, Eugina Bright, filed a complaint against 99¢ Only Stores in June 2009 alleging that the store failed to provide her, and all other cashiers, with suitable seating. In October 2009, the court granted the store’s demurrer prohibiting the plaintiff from pursing a suitable seating claim through PAGA (California Labor Code §§ 2698 et seq.). In November 2010, the court of appeal reversed and remanded the case.

Back at the trial court, the plaintiff represented that she intended to seek class certification for her PAGA claim; yet she ultimately failed to move for certification. Instead, the store proactively moved to strike the plaintiff’s representative allegations in order to prevent her from seeking to recover penalties on behalf of all other alleged “aggrieved” employees. The store first argued that the plaintiff was an inadequate representative of its other cashiers. The store submitted declarations from 376 of its cashiers, all of whom indicated they disagreed with the plaintiff’s demand that they be provided seats, and the plaintiff failed to provide even a single rebuttal declaration. The store also noted the plaintiff’s independent interests in recovering lost wages and her failure to reach out to even a single “aggrieved” employee she sought to represent.

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As previously discussed, Colorado proposed increasing its minimum wage rate for 2012. On December 9, 2011, after holding hearings and soliciting comments on the proposed increase, the Colorado Department of Labor & Employment announced the minimum wage rate employees must be paid, effective January 1, 2012: the minimum wage increases 28 cents per hour, from $7.36 to $7.64 per hour; the rate paid to tipped employees also increases 28 cents per hour, from $4.34 to $4.62 per hour.

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By Christopher Kaczmarek and Joseph Lazazzero

The First Circuit Court of Appeals recently held that banquet sales managers qualified for the administrative exemption to the Fair Labor Standards Act (FLSA). The court reached this holding in the case of Hines v. State Room, Inc. even though the banquet sales managers were bound by a price schedule established by their employer and therefore had virtually no authority to make financial decisions.

In this case, the banquet sales managers were responsible for contacting potential clients, assisting clients in selecting the appropriate venue, and designing a function so as to meet the client’s objectives and budgetary constraints. The “vast majority” of their work involved “unscripted conversations” with current and potential customers regarding the details of the event.

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By Alison Andolena

On November 16, 2011, the New Jersey Appellate Division affirmed a finding that registered nurses who were paid on an hourly basis were exempt from the overtime requirements of the New Jersey Wage and Hour Law (“NJWHL”), even though the regulation applicable at the time only extended the “professional” exemption to employees compensated on a “salary or fee basis.”

In Anderson v. Phoenix Health Care, Inc., the court explained that while the regulation specifically provides that exempt professionals must be paid on a salary or fee basis, for the past 40 years the New Jersey Division of Wage and Hour Compliance’s enforcement policy had been “consistently administered” to extend the exemption to professionals paid on an hourly basis so long as their total weekly compensation exceeded the minimum set forth in the regulation. Deferring to the Division’s longstanding interpretation, the court stated that a change to such a longstanding policy must come from an amendment of the regulation or through the legislative process. In addition, the court found that the good faith exception would have applied even if the exemption was held not to apply to hourly-paid nurses. 

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