Wage and Hour Defense Blog

By Michael Kun and Betsy Johnson

In a much-anticipated decision, the California Supreme Court has expanded the scope of California’s complex wage-hour laws to non-resident employees who perform work in California.  While the decision leaves more than a few questions unanswered, it will require a great many employers to review their overtime and other payroll practices.  Perhaps just as importantly, it will likely open the door to lawsuits, including class actions, regarding  prior overtime and payroll practices.

The case, Sullivan v. Oracle, has had a tortured history.  In the ...

By Rhea G. Mariano and Betsy Johnson

The issue of whether California law requires employers to ensure that employees take meal periods or to merely make meal periods available is hotly contested and regularly litigated.  The issue is currently before the California Supreme Court in Brinker Restaurant v. Superior Court (review granted Oct. 22, 2008 (Brinker) and Brinkley v. Public Storage (review granted Jan. 14, 2009 (Brinkley)). 

While employers await the California Supreme Court’s decision in Brinker and Brinkley, on May 10, 2011, the California Court of Appeal, Second ...

By Michael Kun

Employers who do business in California are already well aware of the wage-hour class actions that have besieged employers in virtually every industry.   Class claims for misclassification of employees as exempt employees or independent contractors first began to be filed more than a decade ago, and continue to be filed on a daily basis.  Claims for alleged work off-the-clock and missed meal and rest periods by non-exempt employees generally began later, but continue to be filed at an alarming rate.

Now we can add to those cases a new wave of California class actions ...

The United States District Court for the Northern District of California has denied certification of a class action against Joe's Crab Shack restaurants on claims that employees worked off-the-clock, were denied meal and rest breaks, and were required to purchase t-shirts to wear at work.  Because the case was handled by our EpsteinBeckerGreen colleagues Michael Kun and Aaron Olsen, we do not believe it is appropriate to comment on the decision or its implications.  If you would like to read the decision, a copy may be found here.

by Michael Kun

The California Supreme Court has announced what can only be considered a major victory for hospitality employers in California.

California Labor Code section 351 probibits employers from taking any tip that customers may leave for employees.  Many hospitality employers have long used tip-sharing policies, whereby tips left by customers are divided among those involved in service.  In recent years, those tip-pooling practices have been challenged under section 351 as part of the wave of wage-hour class actions brought against California hospitality employers.  

by Michael Kun

    The California wage-hour epidemic has entered its second decade.

    While there is little on the horizon to suggest that these cases are about to come to an end, there are a few glimmers of hope now. 

    The first glimmer of hope comes from a case that has been pending before the California Supreme Court since 2008.  California employers continue to await a ruling on meal and rest breaks from the California Supreme Court in Brinker.  A ruling that breaks need only be "made available," not "ensured," may not put an end to meal and rest break class actions, but it should slow them down ...

by Betsy Johnson

On November 23, 2009, the Chief Counsel of the California Division of Labor Standards Enforcement ("DLSE") issued an Opinion Letter on behalf of the Labor Commissioner, Angela Bradstreet, in which the DLSE modified its enforcement stance on the issue of making deductions from exempt employee accrued vacation to cover partial-day absences. In the Opinion Letter, the DLSE opined that there is nothing in California law that would prevent an employer from implementing a policy that provides for hour-for-hour deductions from accrued vacation leave for partial-day ...

Often, employers ask their outside labor counsel to review job descriptions or other material to provide an opinion on whether a job, or group of jobs, should be classified as exempt from overtime requirements.  Such efforts would seemingly be a classic example of a privileged attorney client communication made for the purpose of providing legal advice.

In a recent case out of California state court, however, this answer was not so clear at the trial and appellate level, who both required the employer to hand over a redacted version of such a letter in a class action overtime suit.  The ...

On July 27, 2009, the U.S. Court of Appeals for the Ninth Circuit held that a corporation's managers can be held personally liable under the Fair Labor Standards Act ("FLSA") for wages that the corporation failed to pay to employees prior to the employer's filing for bankruptcy. This opinion serves as a cautionary reminder of the risks managers potentially face when a corporation files for bankruptcy and has failed to pay its employees for all wages earned prior to the filing.

In Boucher v. Shaw, ---- F. 3d ----, 2009 WL 2217517 (9th Cir. 2009), former ...

By Michael Kun and Matthew A. Goodin

California employers are celebrating a new California Supreme Court decision that effectively prevents unions from filing suit under the Labor Code Private Attorneys General Act ("PAGA") and the Unfair Competition Law ("UCL").

 There is no reason to celebrate.

What appears to be a major victory for employers is, in fact, no victory at all once one considers the practicalities of litigation.

On June 29, 2009, the same day that it issued its highly anticipated opinion in Arias v. Supreme Court, holding that employees need not bring representative ...

By Michael S. Kun and Aaron Olsen

You probably remember the scene in Jaws when Roy Scheider's character first sees the shark that he and his crew have been pursuing.

And you probably remember what he says: "We need a bigger boat."

Well, after the California Supreme Court's latest ruling, California employers may need a bigger boat.

Already besieged by wage-and-hour class actions, California employers now need to brace themselves for a new wave of representative actions under California’s Private Attorneys General Act ("PAGA") after the California Supreme Court has made it ...

by Michael Kun

How quickly can $87 million go up in smoke?

Pretty darned quickly, especially if you are referring to the $87 million that was awarded to plaintiffs and their attorneys in a tip-pooling class action against Starbucks in San Diego.

In Chau v. Starbucks (CA4/1 D053491 6/2/09), Jou Chau, a former Starbucks barista, brought a class action against Starbucks challenging the Company's policy that permits certain service employees, known as shift supervisors, to share in tips that customers place in a collective tip box.
If you've ever been to a Starbucks, you know exactly where ...

 By Michael Kun

     The wage hour class action epidemic that has plagued California employers for the last decade or so appears to have no end.

    If anyone tells you otherwise, they are not paying enough attention. 

    And if they tell you the California Supreme Court is about to put an end to the epidemic, they are mistaken about that, too. 

    The California Supreme Court couldn't put an end to it even if it wanted to, at least not with the issues now before it.  And who is to say that they want to do that anyway?

    As in recent years, employers and their counsel are awaiting several important rulings from the ...

by Michael Kun and Kathryn McGuigan

In recent years, the alleged misclassification of employees under California's wage and hour laws has been a hotly contested issue and the subject of a great many class actions. Faced with several appeals pending before it, the Ninth Circuit has now sought guidance from the California Supreme Court on the outside salesperson and administrative exemption tests as they apply to pharmaceutical sales representatives. Such guidance should prove invaluable to employers in the industry, and to parties to these claims.

In D’Este v. Bayer ...