California overtime law

In this recent case, Attorney Joseph Ainley, finds a clear precedent set in California overtime law. This case summary describes issues for the interstate work force.

Sullivan v. Oracle Corp. (2011) 51 Cal.4th 1191.

The issue addressed by the California Supreme Court (at the request of the Ninth Circuit) is the applicability of California overtime law to non-resident employees who work both in Californi a and in other states for a California-based employer. The court concluded that the overtime provisions of Labor Code §§ 510, 1194 apply to plaintiffs’ claims for compensation for work performed in California, but not for work performed outside the state. The court also found thatthe violation of the overtime provisions of the Labor Code are predicate acts which give rise to claims under California’s unfair competition law. (B&P Code § 17200, et seq.) The court also noted that violation of the federal Fair Labor Standards Act (29 U.S.C. § 201, et seq.) for work performed in other states does not serve as predicates for claims under California’s unfair competition law. Plaintiffs in this case were three individuals who lived in Colorado and Arizona and who worked for Oracle as “instructors.” Over a three-year period from 2001 to 2004, they collectively worked approximately 200 days in California. The court noted that California’s broadly drafted overtime laws do not make any distinction between residents and non-residents. Rather, Labor Code

§ 1171.5 notes, in particular, that “our employment laws apply to ‘all individuals’employed in this state.” (Id. at 1198) The court unambiguously held that the Unfair Competition Law (UCL) applies to violations of the Labor Code that occur in California. In this regard, the court merely reaffirmed its earlier decision in Cortez v. Purolator Air Filtration Products Co. (2000) 23

Cal.4th 163, 177. As to acts which occur outside the state of California, the court held that the UCL did not apply. However, the court’s analysis was instructive. Plaintiffs contended that since Oracle made the decision in Redwood City not to pay overtime, that event should be considered to have arisen in California and therefore be subject to the UCL. The court rejected that argument, holding that the place of payment was dispositive for determining where the wrongful act took place. Accordingly, if these extra-territorial employees had been paid in California, presumably they would have been beneficiaries of California’s Unfair Competition Law. The only benefit, of course, arising from the UCL is that the statute of limitations is one year longer (four years) than the three-year statute applicable to violations of statute.