California Overtime Law

Victory for Plaintiffs in Wage and Hour Class Action

The recent decision of the Second District Court of Appeal in Harris v. Superior Court (2012) 207 Cal.App.4th 1225 ends a long battle over the classification of thousands of claims adjusters employed by Liberty Mutual Insurance Company. Plenty of money was at stake. In Bell v. Farmers Insurance Exchange (2001) 87 Cal.App.4th 805, plaintiff insurance adjusters recovered in excess of $170 million in unpaid overtime. Accordingly, the parties in Harris had a great deal at stake, which fueled an epic battle. The specific issue at stake was whether insurance adjusters may be classified as exempt from the overtime laws under the so-called “administrative” exemption. This exemption has been the subject of a number of cases in recent years, largely because of what is known as the “administrative/production” dichotomy. In short, that legal theory attempts to distinguish between those employees who are engaged in producing the goods and services of the employer as opposed to those who are employed to run the business. Federal regulation 29 C.F.R. section 541.201 puts it this way:

“To meet the [administrative exemption] requirement, an employee must perform work directly related to assisting with the running or servicing of the business, as distinguished, for example, from working on a manufacturing production line or selling a product in a retail or service establishment.” Id.

Employees engaged in an activity that constitutes the company’s primary purpose are production workers. Martin v. Cooper Elec. Supply Co. (3rd Cir. 1991) 940 F.2d 896, 903. However, there has been a recent trend, in cases where the plaintiffs are white collar workers, to limit or reject out of hand the administrative/production dichotomy. These new cases conclude that the purpose of this analysis is to distinguish between those who work on a factory floor and those who effectively run the business from an office. In today’s service-dominated economy, the theory goes, it is an artificial distinction to differentiate between those who run the business and those who provide the service or product of the business.

In Harris, as in Bell, plaintiffs argued that claims adjusters, by definition, perform duties and provide services which are the essential product of the insurance company. The employers argued that claims adjusters do not produce the employers’ product because employers’ product is the “transference of risk,” not claims adjusting. Round one went to the employers, with the Court of Appeal siding with Liberty Mutual in 2007. On petition to the Supreme Court, plaintiffs emerged victorious. In Harris v. Superior Court (2011) 53 Cal.4th 170, the court held that the Court of Appeal had misapplied the administrative/production dichotomy and remanded the case back to the Court of Appeal for further proceedings consistent with its direction. Grudgingly, the Court of Appeal applied the criteria specified by the Supreme Court and found in favor of plaintiffs.

This case is significant (as is the Supreme Court’s reversal) not only because it reaffirms the viability of wage and hour class actions, but also because it clearly establishes that the administrative/production dichotomy is alive and well in the field of white collar employment: a conclusion that a number of courts have in recent years urged is not the case. Although the plaintiffs here were claims adjusters, the reasoning applies to any office or “white collar” employment.

CALIFORNIA SUPREME COURT RULES BRINKER V. SUPERIOR COURT

CALIFORNIA SUPREME COURT rules against employees and holds that employers have no duty to ensure that employees take meal or rest breaks. This is a huge case and a significant defeat for employees. In its ruling the court held that if a company provides a meal or rest break that meets the statutory requirement of Labor Code section 512 and the interpretive regulations. In its 54-page opinion, the Court concluded that an employer’s obligation is to relieve its employees of all duty during meal periods, leaving the employees at liberty to use the period for whatever purpose they desire, but that an employer need not ensure no work is done.
“The difficulty with the view that an employer must ensure no work is done — i.e., prohibit work — is that it lacks any textual basis in the wage order or statute,” said Justice Kathryn M. Werdegar

“While at one time the (Industrial Welfare Commission)’s wage orders contained language clearly imposing on employers a duty to prevent their employees from working during meal periods, we have found no order in the last half-century continuing that obligation.”

Werdegar continued, “Indeed, the obligation to ensure employees do no work may in some instances be inconsistent with the fundamental employer obligations associated with a meal break: to relieve the employee of all duty and relinquish any employer control over the employee and how he or she spends the time.”

Of course, this leads the door wide open to abuse. An employer now has only to publish a policy stating that meal breaks are available and then simply not give that break. For example, If you are working on a machine that runs continuously and you cannot leave without a replacement, you have no choice but to keep working. So too, if you are obligated to meet milestones or lose your job, do you work during lunch? You bet you do. Businesses now are free to assume that people will “choose” to work through lunch to meet their target, quota, or milestone. In other words, the entire workforce will become “volunteers” during their lunch period so long as the employer posts a bogus notice “entitling” employees to a lunch break. For employees, this decision imposes a de facto 9 hour work day.

As to when meal periods must be provided, the Court ruled a first meal break generally must fall no later than five hours into an employee’s shift. However, an employer does not need to schedule meal breaks at five-hour intervals throughout the shift.

With respect to breaks, the Court found that employees are entitled to 10 minutes of rest for shifts from three and one-half to six hours in length, and to another 10 minutes rest for shifts from six to 10 hours in length. Rest periods need not be timed in relation to meal periods.

This is very bad news for California workers and a victory for business. This properly, in our opinion, should become a political issue. The Supreme Court has handed a major victory to the capitalist classes and the worker and has essentially created a 9 hour work day. In other words the Court has taken us back 80 years

Duran v. U.S. Bank National Association case

The Duran decision, preceding the Brinker case by 2 months is yet another milestone in the judicial effort to curtail or eliminate the right to recovery of unpaid overtime wages.  Duran was a class action case; the class plaintiffs followed the mechanism by which most class actions have been tried in this State for the past 50 years.  In brief, the Duran Plaintiffs were 260 employees of the Defendant bank who claimed that they were misclassified as exempt from the right to overtime.  At the trial court level, the judge selected 21 Plaintiffs as representative of the class of 260 plaintiffs and certified the class.  (By certifying the class the court in essence said that common issues of fact outweigh individual issues and that the most expeditious way to proceed was to “certify” a class of people who would be represented by the 21 chosen plaintiffs.  Liability would then be determined by the 21 witnesses as representative of the whole class.  In that fashion, the parties would avoid 260 separate trials).  USB challenged the Court’s certification on two grounds. First, USB argued that taking a statistical sampling to represent all of the people in the class was unfair because USB believed that at least a third of the people in the class were not misclassified; and, even if this were legitimate, the statistical methodology was unsound.  Second, USB argued that on the issue of liability, it had the right to present a defense to each and every claimant on hours worked and whether they were exempt.  In short, USB argued that determining liability in a class action could not be determined by use of a sample group.

The appellate court bought USB’s arguments with every bell and whistle attached.  While it did not have the nerve to say that there could be no wage and hour class action claims, it did hold that a defendant has the right to defend against every single claim in a class action.  In a decision stretching to 38 pages and 80 footnotes (a sure sign that a court thinks it is making new law) the court attacked the concept of trial by representative parties; i.e. the class action as it has been known for half a century.  To illustrate its point, the court noted that even if the trial were to take 520 days, as plaintiffs claimed, that was acceptable to protect the defendant.  Further, according to the court a class of 260 is really too small to worry about things like efficiency (“We also note that the class here is comprised of 260 members…it would not have been implausible …to conduct some type of individualized inquiries as to each plaintiff’s entitlement to damages.”).  This is a flat out re-writing of the law.  The whole point of class actions is judicial economy and protection of the class.  To eliminate the class action process with as many as 260 plaintiffs is unprecedented.

Plaintiffs in this case correctly stated that USB’s position, if upheld, would effectively kill off class actions, in wage and hour cases at least, in California.  That is most certainly true and the court does not really try to deny it.  The most it can say is that the “situation is not quite that dire.”  Ah, but it is that dire.  This decision must either be overturned or legislatively annulled; if not, there is a very small chance of any class action case surviving.  At a minimum, every plaintiff may look forward to an appeal.  It worked for UBS, precedent is now out there, and any like minded conservative judge can simply follow the lead.

This case is a true milestone; a de jure throw over of the legislature’s injunction in Code of Civil Procedure section 382 that cases with common issues may be tried as one if common issues prevail.  This decision is nothing more than an attempt to kill off what the big business lobby considers nuisance number 1.  While we are all in favor of job creation and a friendly business environment, we do not believe that extends to a carte blanche to deprive workers of their statutory rights.  Simply put, an individual case for overtime is, to the employer, not something to lose sleep over.  A class action is altogether different and encourages employers to respect the law because the damages can be very high indeed.  When, as here, the judiciary becomes a cheerleader for big business (banks, no less) the incentive to follow the law drops dramatically.  As a weatherman might say: “we are looking at unpaid overtime increasing in the near future.”

Labor code and your paycheck stub

LABOR CODE SECTION 226: THE INFORMATION THAT MUST BE INCLUDED ON YOUR PAYCHECK OR PAYSTUB

California law requires nine (9) specific pieces of information to be included on the paycheck or paystub of every employee. Failure to comply with each and every requirement of this code section (Labor code section 226) is a misdemeanor.  The employer is liable for $50 for the first violation, and $100 per pay period for each violation thereafter up to a total per employee of $4,000. Individually, the claim may not be large but collectively it can be very large indeed. (Note that if you have a claim for unpaid overtime or break time, you likely also have a claim for pay stub violations. For hourly employees, the overtime hours you worked but were not paid for almost always are missing from your pay record -i.e. you worked 55 hours but were told to put down 40 hours because the company doesn’t pay overtime, your overtime wasn’t approved etc.-  That is an inaccurate record and therefore a pay stub violation.)  Frequently, employers put the wrong address or no address.  Small businesses sometimes provide no information on the pay stub or pay out of a personal account with no record at all.  If you sue and win you get your damages plus attorneys fees and costs. If you lose your case, the employer does not get attorneys fees but can recover costs (filing fees etc.).  The following is the text of the statute(with minor changes)

Every employer shall, semimonthly or at the time of each payment of wages, furnish each of his or her employees, either as a detachable part of the check, draft, or voucher paying the employee’s wages, or separately when wages are paid by personal check or cash, an accurate itemized statement in writing showing

“(1) gross wages earned;

(2) total hours worked by the employee, except for any employee whose compensation is solely based on a salary and who is exempt from payment of overtime; [this is a critical requirement; if you worked 50 hours you deserve to be paid for 50 hours. False documentation of hours worked provides penalties in addition to the overtime monies owed].

(3) the number of piece-rate units earned and any applicable piece rate if the employee is paid on a piece-rate basis;

(4) all deductions, provided that all deductions made on written orders of the employee may be combined and shown as one item;

(5) net wages earned;

(6) the inclusive dates of the period for which the employee is paid;

(7) the name of the employee and his or her social security number, except that by January 1, 2008, only the last four digits of his or her social security number or an employee identification number other than a social security number may be shown on the itemized statement;

(8) the name and address of the legal entity that is the employer, [this is very important] and

(9) all applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate by the employee.

The deductions made from payments of wages shall be recorded in ink or other indelible form, properly dated, showing the month, day, and year, and a copy of the statement or a record of the deductions shall be kept on file by the employer for at least three years at the place of employment or at a central location within the State of California.”

Be sure to check your paystub for compliance with California law.  Aside from the statutory damages it’s a good idea to know who your employer actually is and what type of business they are (corporation, partnership, and so forth). In addition, violations are potent tools to gain leverage in other disputes you may have with your employer.

Your employer MUST show you your payroll records within 21 days of your request. (Labor Code section 226 (c),(f),and (g). If the employer does not show you the records within that time you may sue to compel the employer to produce them to you.  Again, if you win, you get attorneys fees and costs.  If you lose the employer does not get attorneys’ fees. (Note: if your request is in writing and is dated, whether by certified mail or by an email, losing this claim if records are not produced would be almost impossible.) Cross refer: Right to inspection of personnel file.

HOW TO CALCULATE YOUR OVERTIME WAGES

Overtime is paid either for any hours worked over 8 on any given day during a week, or for all hours worked over 40 in one workweek which is defined as any consecutive 7 day period. You can receive overtime which is calculated per week for work in excess of 8 hours in any or all of the 7 days in a week, or the total number of hours worked over 40 in any 7 day period. It is usually to your advantage to calculate on a per day rather than a per week basis but not always. The following is how to calculate your overtime.

1. First, determine your hourly rate. If you are an hourly employee, that is obviously your hourly wage. If you are a salaried employee or are paid a combination of salary, commission, or piecework, Labor Code Section 515 provides a simple formula. Take your total pre-tax annual wages, divide that by 52 and divide again by 40. Because a workweek is by law 40 hours, the product of that equation is the hourly rate.

Example 1. Jack made a straight salary of $52,647.00 a year as an internet technician. Dividing by 52 gives a weekly salary of $1012.44. Divide again by 40 to get an hourly rate of $ 25.41. This is the baseline to use when multiplying for overtime.

Example 2. Jack is now working at inside sales. His total compensation is $59,563, $40,000 of this is his base draw, and $19,563 is the commission he earned selling internet services. Again, this figure is divided by 52 producing a weekly rate of $1145.44. Divided by 40, Jack’s hourly rate is now $28.63.

2. Next, calculate the total hours worked over the course of one work week which is defined by statute as 40 hours over any period of seven consecutive days regardless of the starting day. (Labor Code Section 515(d)). Subtract 40 from this amount and you have the overtime worked. Labor Code Section 510 requires that any hour worked over 40 in a week be compensated at a rate of not less than 1.5 times the ordinary hourly rate.

Example 1: Bob works 5 days in one week, putting in three 8 hour days and two 10 hour days. Bob has worked 44 hours and so is entitled to 4 hours of overtime at 1.5 times his hourly rate.

Example 2: Bob works 6 days in one week, putting in 7 hours each day. His total hours worked are 42. Although he did not work more than 8 hours in one day, Bob is still entitled to 2 hours of overtime.

If the number of hours left after subtracting 40 is greater than 0 then the only step left is to ensure that you have the proper hourly overtime multiplier. The first 4 hours of overtime per day (8-12 hours) must be paid at 1.5 times the hourly rate. After 12 hours, they are computed at 2 times the hourly rate.

Example 1: Jack puts in a 60 hour week. Subtract 40 hours to find Jack’s overtime of 20 hours. Jack’s hourly rate is $25.00 an hour. If Jack worked three 14 hour days and three 9 hour days he would be entitled to 6 hours at $50 an hour (double time) and 14 hours at $37.50 (time and a half). Jack’s base pay is $1,000. His overtime is $825. However, if Jack’s overtime were calculated on a weekly rather than a daily basis he would only have 20 hours of overtime for a total of $750.

3. If the number of hours worked in a workweek is less than 40 (> 0) you are still entitled to overtime on a daily basis.

Example 1: Work is slow for Sheila with the recession and she is only able to work one day during the week. Business is good that day and Sheila works 14 hours at $30.00 an hour. She has no work for the rest of the week. Sheila is entitled to 4 hours at $45 and 2 hours at $60 for a weekly total of $300.

Example 2 : Jeff earns $10 an hour and works 16 hours a day for 5 days for 80 hours total during the week. Jeff is entitled to 20 hours at 1.5 times his hourly rate and 20 hours at 2 times his hourly rate, $700. If Jeff’s overtime were computed on a weekly basis he would earn only $600.
If you have not been paid overtime you can demand payment according to either method. You cannot however add the two (this is called pyramiding and is effectively double counting). It is usually, but not always more profitable to add your time on a daily basis. Because the unit of calculation is the week you can choose the most profitable method for each week that you are owed overtime.

Choppy Seas: California Supremes sink Bell II while NLRB tacks left

To call wage and hour law in California unsettled is like saying Mike Tyson was a pretty good boxer.  Two recent decisions, one by the National Labor Relations Board (NLRB) and one by the California Supreme Court  illustrate the lack of any consistency in decisions and the political tensions between left and right.  Perhaps more than any other field of employment law, wage and hour litigation is overtly political.  Conservatives and evangelicals view meal and break time claims as “Extortion cases” while other more moderate views consider the right to overtime as a fundamental legislative barrier to barrier to worker exploitation.  The two views took new twist and turns in the NLRB decision D.R. Horton, Inc. Case No. 12-CA-25764( January 3, 2012) and the California Supreme Court Decision in Harris v. Liberty Mutual, SI56555 (December 29, 2011).  In Horton, the NLRB ruled that workers could not be forced to waive their right to bring class actions by means of compulsory arbitration agreements which explicitly require arbitration and forbid class actions either before a court or in arbitration.  Conversely, the California Supreme Court essentially reversed its landmark ruling in Bell v. Farmers Ins. Exchange (2001) 87 Cal. App. 4th 805 in finding that insurance adjusters working for Liberty Mutual were exempt employees.  In so doing, our local Supremes effectively subordinated California law to Federal regulation; an act of judicial capitulation that will likely have profound consequences.  An analysis of the se two decisions and links to them follow.

In Horton, the NLRB considered whether the defendant employer violated the National Labor Relations Act (NLRA)by requiring all workers, as a condition of employment,  to waive the right to file class actions for wages and other benefits whether at arbitration or in court. The Board found that such coerced agreements violate section 7 of the NLRA, which gives employees the right to act together for mutual aid or protection.  The Court rejected the claim by the Defendant that the agreement –in the context of employees subject to the NLRA – did not violate the Federal Arbitration Act (FAA) which tends to make all employment-related arbitration provisions, no matter how onerous or one-sided–  enforceable.  The Board clearly found that the employees had the right to bring “employment-related claims on a classwide or collective basis in court or before an arbitrator.” Slip. op at 3.

In Horton, Plaintiffs sought relief under the Fair Labor Standards Act (FLSA) for unpaid overtime.  The key to the decision is that the prohibition against class actions violated the right to “collective action” under the NLRA.  Plaintiffs’ counsel wisely chose to challenge the anti class action clause under the NLRB rather than argue a right under the FLSA to collective action or to try to persuade a court that the agreement was unconscionable.  The reason for this round about route is the United States Supreme Court (SCOTUS).  This court, in its majority conservative makeup embraces vigorously any limitation on collective action and virtually rubber stamps restrictive arbitration agreements.  In particular, SCOTUS is a huge fan of the Federal Arbitration Act (FAA) and routinely strikes down States’s efforts (usually by California) to moderate the use and misuse of arbitration agreements.  Recently, in a much criticized case, AT&T Mobility v. Concepcion, 131 S.Ct. 1740 (2011), the Court struck down a decision of the California Supremos in Discover Bank v. Superior Court (2005) 30 Cal.Rptr.3d 76 which has applied California’s judge made unconscionability test to arbitration clauses.  According to SCOTUS, the FAA is the supreme law of the land and no consumer contract (including employment) is ever likely to be unconscionable by barring class actions and by mandating arbitration.  Plaintiffs in Horton recognized the roadblock and made a very neat end-run around it through the NLRA.  However, the battle is not over: next stop is either the 11th Circuit or the D.C. Circuit and then most likely the supremes once again.  If Scalia and Thomas still hold the whip hand then all the work may have been in vain.

But while the Feds moved to the center, a chastened California Supreme Court headed right. Harris v. Liberty Mutual (supra) is a major disappointment to the Plaintiff’s bar.  In 2001 the Bell decision allowed white collar functionaries –people with no real power and very limited independence – to receive overtime benefits.  The industry in question –insurance – re-tooled and went back for a do-over.  This time they won.  This case is troubling for two reasons.  First, it follows the lead of Federal courts which have limited the principles of the “Administrative Exemption” to the traditional factory setting and have rejected overtime claims unless the employee(s) have been engaged in some form of manual labor (c.f. United Parcel Service v. Superior Court (2011) Cal. App.4th 57. ).  Second, it follows Federal regulation where that regulation is more restrictive than state regulation or case law.  It has long been the most basic principle of construction that Federal regulation, in the overtime context, is followed or is persuasive, only where it is more beneficial to the employee than the State variant.  While California looks to federal regulation for guidance, it does so only where the regulation is consistent with, or is more protective of, the worker than California law.  The courts are bound to follow whichever law or regulation  provides the greatest protection.  Aguilar v. Association for Retarded Citizens (1991) 234 Cal. App. 3d 21, 34-5.  Where a federal regulation limits or reduces the protections offered under California’s statutes and wage orders, the federal rule or regulation is disregarded.  E.g.  Department of Labor Standards Enforcement (DLSE) rule 51.1.5.1 (“DLSE will disregard the language of 29 CFR §541.107 and rely upon the language of 29 CFR §541.207 to define the term ‘discretion and independent judgment’ in each of the exempt classifications.”)  In short, while federal regulations can provide guidance to California courts, that guidance is no longer persuasive (or even relevant) where California statutes, regulations, or public policy differ from the federal by providing greater protections: “Federal regulations are of little if any assistance in construing state regulations which provide greater protections to workers.” Morillion v. Royal Packing Co. (2002) 22 Cal. 4th 575, 593-94.

Unfortunately, Harris seems to ignore this well settled precedent and rely exclusively on restrictive Federal interpretations.  The clear implication of this case is that the California Supreme Court will be looking east for direction rather than leading the way as it has done in years past.  Harris has to be chalked up as a major victory for those who feel that the right to overtime is “extortion”. Choppy seas indeed.

Board finds that certain mandatory arbitration agreements violate federal labor law

See the case document: Frances Harris v. The Superior Court of Los Angeles County

Joseph H Ainley on Overtime Benefits

The Law Offices of Joseph H. Ainley provide services to cover all of your employment-related legal needs. The bulk of our practice is devoted to litigation in cases, for example, where the employee has been wrongfully terminated, or an individual or a group of people have been denied overtime benefits. We also offer employment counsel. Frequently, employees face a situation at work which potentially has profound consequences for them, but they are unsure how best to act. In this context, one issue that is repeatedly of concern is where an employee is offered a severance package in exchange for a release of claims that they employee may have against his or her former employer. In this situation, legal counsel can be invaluable in maximizing the amount of any severance package.  Some of the specific areas in which we are pleased to offer services are the following:

Overtime Benefits

The right to overtime is fundamental in California. Many people erroneously believe that only hourly employees are entitled to overtime. This is not true. The presumption for all employees, whether salaried or hourly employees, is that they are entitled to overtime. Labor Code ß 510 guarantees every employee the right to overtime for hours worked in excess of eight per day or forty per week unless the employee falls into a special exemption from application of that right.

For hourly employees, the right to overtime, in all but a few circumstances (notably, certain highly paid computer professionals), hourly workers are entitled to overtime at the rate of 1.5 times their hourly rate for each hour of overtime worked. With salaried employees, the right to overtime is presumed to exist unless the employee falls within a specific exception. The three primary exceptions are known as the ìmanagerial,î ìadministrative,î and ìprofessionalî exemptions. For each of these exceptions, the law imposes multi-step tests. ____________ employee is exempt from the overtime requirements or is entitled to overtime benefits. The law is construed strongly in favor of the employee. It is the employerís burden to prove that a salaried employee is not entitled to overtime because he or she is exempt as an executive, administrative or professional person.

It is beyond the scope of this brief outline to describe in detail the exemptions. As a general rule, however, the less authority, independence and education you have, the more likely it is that you do not fall within an overtime exemption. Unlike federal law, California imposes a strict quantitative standard for determining the right to overtime. If an employee spends more than 51% of his her time engaged in activities which do not meet the test of exemption, then he or she is entitled to overtime. In all cases, a job description is irrelevant to the determination of overtime. What you do, not what your employer says you will do, determines your right to overtime. Ainley Law has a great deal of experience in this field and has had the good fortune to represent clients on the cutting edge of overtime issues. Overtime is an increasingly important issue in todayís workplace as companies attempt to leverage greater profits from a smaller workforce. As you may have noticed, publicly traded companies are reporting record profits, while the unemployment rate has increased. Healthy companies are laying off employees, and across the board, companies are trying to extract more labor from fewer workers. Inevitably, this has resulted in a dramatic increase in overtime violations. Many people are afraid to step forward and raise the issue for fear of losing their job. Any communication with our law firm, however, is in strictest confidence, and we encourage you to come forward if you believe that you may be entitled to overtime benefits and are not receiving them.

Joseph H. Ainley on Harassment

The Law Offices of Joseph H. Ainley provide services to cover all of your employment-related legal needs. The bulk of our practice is devoted to litigation in cases, for example, where the employee has been wrongfully terminated, or an individual or a group of people have been denied overtime benefits. We also offer employment counsel. Frequently, employees face a situation at work which potentially has profound consequences for them, but they are unsure how best to act. In this context, one issue that is repeatedly of concern is where an employee is offered a severance package in exchange for a release of claims that they employee may have against his or her former employer. In this situation, legal counsel can be invaluable in maximizing the amount of any severance package.  Some of the specific areas in which we are pleased to offer services are the following:

Harassment

It is unlawful for an employer to harass an employee on the basis of that employeeís age, race, gender, orientation, or mental or physical disability. Except in the special case of sexual harassment (discussed below), unlawful harassment is unlawful when the conduct rises to such a level that it creates a ìhostile work environmentî for the employee. Thus, for example, somebody who is harassed because of his or her gender may hold the employer liable for such harassment if the actions rise to the level of creating a hostile work environment. There is no set test for this, and the level of harassment necessary to create a cause of action ranges from one or two serious incidents to a multitude of small incidents that, taken together, create a hostile working environment.

Sexual Harassment

This is by far the most common, and there are two types of sexual harassment: (1) Hostile workplace harassment, and (2) quid pro quo sexual harassment. In the first case, as with any other form of harassment, this becomes actionable when the harassment rises to a level that creates a hostile working environment. Again, this can consist of one single event, or a series of relatively minor events. Whether or not the activity rises to the level of ìharassmentî is determined on a case-by-case basis. At Ainley Law, we are expert at determining whether or not any specific set of circumstances rises to the level needed to prevail on a claim of sexual harassment based on hostile work environment.

The second type of sexual harassment, quid pro quo harassment, is harassment in which the employer requires an employee to submit to some form of sexual demand in exchange for an employment-related benefit, including continued employment.

Cases of sexual harassment are highly fact-specific and require a great deal of sensitivity and care in how they are handled. The plaintiff in a sexual harassment lawsuit also enjoys special protections against intrusion into her private life. For example, her prior relationships, history, proclivities, and interests are off limits during discovery, whereas similar questions may be legitimate in other types of cases.

Attorney Joseph Ainley discusses UPS v. Superior Court

This case illustrates the importance of gauging correctly the zeitgeist of the times.  Here, the court illustrates a theme that is becoming more and more common: a hostile attitude towards overtime claims where the workers are relatively well paid and who do not perform manual labor.  We believe that the case is poorly decided and the court mis-applies the law in an almost willful way.  Nevertheless, it will stand as good law and this attitude must be considered when putting the pieces of a case together.  Attorney Joseph Ainley, like most good employment lawyers looks at the facts of each case but also to the subtext, the story within the story, that each case presents.

 United Parcel Service, Inc v. Superior Court (Allen), 192 Cal.App.4th 1043 (2011).

The question presented in this case was how many hours of pay should be awarded to employees who are unlawfully denied rest and meal periods during their shifts.  The relevant statute is Labor Code § 226.7, which provides:

“(a) No employer shall require any employee to work during any meal or rest period mandated by an applicable order of the Industrial Wage Commission.  (b) If an employer fails to provide an employee a meal period or rest period in accordance with an applicable order of the Industrial Welfare Commission, the employer shall pay the employee one additional hour of pay at the employee’s regular rate of compensation for each work day that the meal or rest period is not provided.”

The issue was whether the employee is entitled to one hour of pay where both the break and meal periods are missed or, whether the employee is entitled to one hour of pay for each of the breaks denied.  Relying on Marlo v. United Parcel Service, Inc. (CD Cal., May 5, 2009, CV03-04336 DDP (RZx) 209 U.S. Dist. Lexis 41948), the court held that an employee is entitled to one hour for each rest break and meal break, up to two hours per day.  (In its decision, the court noted an interesting historical fact that the Industrial Welfare Commission has mandated meal and rest periods since 1916, nearly 31 years before the federal government required such breaks to be given.)

A remaining ambiguity from this case is whether there is an upper limit of two hours of premium pay regardless of how many meal breaks and/or rest breaks are missed.  In the case of a 12-hour or longer shift, two meal breaks are required, along with at least three rest periods.  By the court’s analysis, Labor Code § 226.7 provides “up to” two premium payments per work day, and the language of the decision suggests that two hours of premium pay is the upper limit.  It reads:  “We believe it is more reasonable to construe the statute as permitting up to two premium payments per work day – one for failure to provide one or more meal periods, and another for failure to provide one or more rest periods.” Id. at 1053.  This language tends to suggest that the court views two hours of premium payment as the upper limit of the wage penalty.  This case should be read in conjunction with Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1103, which holds that the penalties of Labor Code § 226.7 that extend for three years backwards in time – as opposed to one year for an ordinary penalty – and that the wage to be paid by the employer is the employer’s “regular rate of pay” rather than time and a half or double time.

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.