California Labor and Employment Defense Blog

Employers Shalt Not "Encourage" Employees to Work During Meal Breaks -- Brinker v. Superior Court

Brian Van Vleck — Sat, 21 Apr 2012 18:01:04 -0800

The California Supreme Court's long-awaited decision in Brinker v. Superior Court finally addressed the question of what an employer must do to effectively "provide" a meal break and thereby avoid the one-hour of pay due as premium or penalty pay.

In Brinker the plaintiffs advocated for a rule that merely allowing an employee to work during his meal period must trigger a penalty. The defense bar advocated for a rule that no penalty is owed unless the employer has affirmatively "forced" the employee to work. The Court however went for a middle ground. Under the new rule an employer must take certain affirmative steps (and refrain from others) in order to meet its legal obligation to provide a compliant meal break.

What An Employer Must Do to Avoid A Penalty.

In particular, the employer must have a policy and affirmatively create the actual conditions that will "relieve the employee of all duty" and allow him to engage in any personal business or leave the premises during for the entire 30-minute break period. If an employer takes these afirmative steps in good faith and the employee nevertheless performs work during his break no penalty is owed.

What An Employer Cannot Do Without Paying a Penalty.

Many employers are clearly over-reading Brinker as simply allowing them to propound a policy and then having their workers "waive" their breaks. In reality, Brinker is replete with warnings that this "waiver" defense will be difficult to establish and will be forfeited if the company engages in any practices that have the intent or effect of "undermining" break rights. These forbidden practices include:

"discouraging" or "impeding" workers from taking breaks.
“pressuring employees to perform their duties in ways that omit breaks.”
“creating incentives to forego” breaks.
“otherwise encouraging the skipping of legally protected breaks.”

Courts and parties will have to grapple with the meaning of these terms in individual cases and different industries. But it seems to me that meal break litigation will start to resemble nothing so much as Title VII disparate impact cases -- i.e., the focus of litigation will be on whether facially neutral business practices may have crossed the line into having an impermissible (and perhaps unintended) effect on employee rights.

Brinker v. Superior Court Decision To Be Published Tomorrow

Anthony Zaller — Wed, 11 Apr 2012 11:44:51 -0800

The California Supreme Court announced today that the opinion in Brinker v. Superior Court (Hohnbaum) will be published tomorrow at 10:00 a.m. The opinion will address many issues surrounding meal and rest break requirements under the California Labor Code, such as whether employers need to ensure or simply provide meal breaks, and when breaks should be taken during a shift.

For more information on the decision we will be holding a webinar next Wednesday at 10:00 a.m. PST. Registration information is here.

Keith Oberman sues Al Gore's Current TV for Wrongful Termination -- Olbermann Broadcasting Empire v. Current TV, LLC

Brian Van Vleck — Sun, 08 Apr 2012 07:22:36 -0800

Political commentator Keith Olbermann was recently terminated from Current TV, a start-up political network backed by Al Gore. The well-publicized termination involved allegations of not showing up for work and being generally insufferable.

Olbermann has now filed his own wrongful termination complaint in Los Angeles Superior Court, alleging that Current TV breached the contract first due to its incompetent production of his show. The gist of his theory is captured in the opening paragragh:

After being enticed to leave MSNBC and come to Current with promises of editorial control, freedom from corporate influence, and the professional support to produce a high-caliber political commentary show of the type his viewers have come to expect, Keith Olbermann was disheartened to discover Al Gore, Joel Hyatt, and the management of Current are no more than dilettantes portraying industry executives.

Oddly, while the Complaint is supposedly premised on Current TV's breach of contract, it fails to allege any specific facts establishing the formation of a valid contract, the terms of the contract, or how the alleged conduct (if true) would have been a breach of any particular contract term.

Olbermann's attorneys undoubtedly realize this makes the lawsuit legally defective on its face. So the omissions probably stem from one of two reasons, either: (a) the Parties have struck an agreement to keep the contract out of the public record to avoid embarrassment; or (b) the Complaint is not really intended not as a serious legal pleading but more of a lengthy press release (which is immune from defamation liability as a public filing).

Webinar - The Impact of Brinker: Understanding The Supreme Court's Decision On Meal & Rest Breaks

Anthony Zaller — Thu, 05 Apr 2012 22:51:51 -0800

Be among the first in California to understand the complete impact the monumental decision in Brinker v. Superior Court will have on employers. The Court’s decision is expected on April 12, and Anthony Zaller and Daniel Turner will analyze and discuss the impact of the decision. The webinar will explain the decision and what it means for employers and wage and hour class actions, discussing among other items:

Can meal periods be offered to employees, or do they need to be ensured?
When during the shift can meal and rest periods be taken?
What does the Court’s ruling mean for the status of meal and rest break class actions and class certification issues?
What is the impact for cases currently being litigated?

The cost is $150 per connection.

Date: Wednesday, April 18
Time: 10:00 a.m. PST

Click here to register. Existing clients can email us here to have the fee waived.

Unpaid Wages May be Recovered Under PAGA -- Thurman v. Bayshore Transit Management, Inc.

Brian Van Vleck — Thu, 01 Mar 2012 12:34:39 -0800

Since its passage in 2004 the Labor Code Private Attorney General Act of 2004 (aka "PAGA") has been a persistent thorn in the side of the defense bar. The statute created a private right of action to enforce almost every section of the Labor Code and also created new monetary penalties for violations where none had existed before.

What was even worse (fom the Defendant's perspective) is that PAGA authorized a single person to bring a representative action on behalf of an entire group of similarly "aggrieved" employees without having to obtain a formal class certification from the court.

The only mitigating factor was that while PAGA's procedural remedies were sweeping, its substantive remedies were limited to monetary penalties and injunctive relief and did not include the recovery of actual unpaid wages . . . until now.

The Fourth District Court of Appeal decision in Thurman v. Bayshore Transit Management, Inc. has just opened a whole new horizon for PAGA litigation by holding that the statute can serve as a vehicle for wage recovery. (At least as to the wages covered by sections 500-556 of the Code, which includes both meal period premiums and overtime.)

The opinion gets to this result in two steps: First, the Court finds that Labor Code section 558 authorizes the award of a "civil penalty" for violating sections 500-556 that may include "an amount sufficient to recover underpaid wages." Next, the Court finds that this penalty (which would otherwise be enforceable solely by the Labor Commissioner), can be recovered in a private lawsuit under PAGA. And . . . Voilà!

Plaintiffs now have a brand new way to recover unpaid wages on a class-wide basis without class certification.

Seventh Circuit Finds Wal-Mart v. Dukes Does Not Limit Certification of Impact Cases -- McReynolds v. Merrill Lynch

Brian Van Vleck — Tue, 28 Feb 2012 09:33:17 -0800

Judge Posner of the Seventh Circuit produces more than his fair share of insightful analysis in his opinions. A case in point is McReynolds v. Merill Lynch.

The issue was whether Merill Lynch's policy of allowing its advisors to form self-selecting teams resulted in a harmful disparate impact on its black financial advisors. Relying on Wal-Mart v. Dukes, the trial court denied class certification on the ground that the plaintiffs' theory turned on proof of individual acts of discrimination by the individual advisors who allegedly excluded blacks from their internal teams.

Posner's opinion reversed the denial of class cert. In doing so, the Court made some potentially far-reaching points concerning the lessons of Wal-Mart, and the nature of class certification generally.

The crucial point about Wal-Mart is that there was no company-wide policy at issue. Rather, it involved a theory of liability under which individual managers intentionally discriminated against women in violation of the company's policy. Thus,

Wal–Mart holds that if employment discrimination is practiced by the employing company's local managers, exercising discretion granted them by top management (granted them as a matter of necessity, in Wal–Mart's case, because the company has 1.4 million U .S. employees), rather than implementing a uniform policy established by top management to govern the local managers, a class action by more than a million current and former employees is unmanageable; the incidents of discrimination complained of do not present a common issue that could be resolved efficiently in a single proceeding.

By contrast, a different analysis applies where the plaintiffs are challenging the (intentional or unintentional) effect of a class-wide policy. As the Court explained with the following hypothetical example:

Suppose a police department authorizes each police officer to select an officer junior to him to be his partner. And suppose it turns out that male police officers never select female officers as their partners and white officers never select black officers as their partners. There would be no intentional discrimination at the departmental level, but the practice of allowing police officers to choose their partners could be challenged as enabling sexual and racial discrimination—as having in the jargon of discrimination law a “disparate impact” on a protected group—and if a discriminatory effect was proved, then to avoid an adverse judgment the department would have to prove that the policy was essential to the department's mission. [Citations.] That case would not be controlled by Wal–Mart (although there is an undoubted resemblance), in which employment decisions were delegated to local managers; it would be an employment decision by top management.

The main take-away point for class certification is significant because it applies to the entire spectrum of putative class claims, including wage and hour claims: individual intent cannot be determined on a class-wide basis but the impact of a policy can be determined on a class-wide basis, even if its impact is partly due to the intentional acts of individuals.

NLRB Holds Class Arbitration Waivers Are an Unenforceable "Unfair Labor Practice" -- D.R. Horton, 357 NLRB No. 184

Brian Van Vleck — Mon, 13 Feb 2012 09:50:00 -0800

The National Labor Relations Board (NLRB) has now weighed into the fray concerning the enforceability of class arbitration waivers. Its January 3, 2012 decision in D.R. Horton, 357 NLRB No. 184, the Board held that class arbitration waivers are unenforceable under the federal National Labor Relations Act (“NLRA”).

The Right to Bring Class-Wide Claims is a Form of “Protected Concerted Activity” under Section 7 of the NLRB.

As the Board’s decision explains, Section 7 of the NLRA expressly protects the rights of employees to engage in “concerted activity” for purposes of “mutual aid or protection.” Over 80 years of decisional law, the scope of this “mutual aid or protection” clause has been broadly interpreted to include just about any effort by more than one employee to raise complaints or improve working conditions. In addition, “the Board has consistently held that concerted legal action addressing wages, hours or working conditions is protected by Section 7.”

The Board then made the short analytical leap to conclude that class litigation is a form of protected concerted activity, holding that:

When multiple named-employee-plaintiffs initiate the action, their activity is clearly concerted. In addition, the Board has long held that concerted activity includes conduct by a single employee if he or she “seek[s] to initiate or to induce or to prepare for group action.” [Citation] Clearly, an individual who files a class or collective action regarding wages, hours or working conditions, whether in court or before an arbitrator, seeks to initiate or induce group action and is engaged in conduct protected by Section 7.

These forms of collective efforts to redress workplace wrongs or improve workplace conditions are at the core of what Congress intended to protect by adopting the broad language of Section 7. Such conduct is not peripheral but central to the Act's purposes. After all, if the Respondent's employees struck in order to induce the Respondent to comply with the FLSA, that form of concerted activity would clearly have been protected. See NLRB v. Washington Aluminum Co., 370 U.S. 9 (1962). Surely an Act expressly stating that “industrial strife” can be “avoided or substantially minimized if employers, employees, and labor organizations each recognize under law one another's legitimate rights in their relations with one another,” equally protects the concerted pursuit of workplace grievances in court or arbitration. To hold otherwise, the Supreme Court recognized in Eastex [Inc. v. NLRB, 437 U.S. 556 (1978)],“could ‘frustrate the policy of the Act to protect the right of workers to act together to better their working conditions.”’437 U.S. at 567 (quoting Washington Aluminum , 370 U.S. at 14).

By extension requiring employees to forego collective legal action is an “unfair labor practice” under Section 8(a)(1) of the Act, which prohibits any restraint or interference with Section 7 rights.

At this point it is probably worth pointing out that (contrary to a misconception among many employers and employees), NLRB Section 7 rights are not limited to union members or union organizing activities. Rather, these rights extend to virtually all non-managerial employees regardless of union affiliation. Thus, the prohibition on waiving class litigation or arbitration rights under D.R. Horton, applies equally to union and non-union workforces alike.

Section 7 of The NLRB Trumps The Policy Concerns AT&T Mobility v. Concepcion.

In AT&T Mobility v. Concepcion, the U.S. Supreme Court upheld the enforceability of a class action waiver contained in a consumer arbitration agreement. However, as the NLRA was enacted after the FAA and is more specific in its protections it would necessarily trump the FAA and the holding in Concepcion.

As a result, the D.R. Horton decision essentially holds that collective or class claims by employees must be carved out of any general rule upholding waivers in other contexts. As the Board explained:

[T]he holding in this case covers only one type of contract, that between an employer and its covered employees, in contrast to the broad rule adopted by the California Supreme Court at issue in AT&T Mobility. Accordingly, any intrusion on the policies underlying the FAA is similarly limited.

The Board’s interpretation of the NLRA is not, strictly speaking, binding on court or arbitration proceedings. However, it is very likely to be followed by any court or arbitrator tasked with deciding whether a class arbitration agreement is enforceable. Unless overturned on appeal, the D.R. Horton case thus appears to be a nearly fatal blow to employer attempts to enforce arbitration waivers.

California Supreme Court Decision in Brinker Delayed

Brian Van Vleck — Wed, 21 Dec 2011 09:02:58 -0800

The California Supreme Court may generally take as long as it likes to decide a case. The only semi-firm deadline is created by California Rule of Court 8.524(h)(1), providing that a case is deemed "submitted" upon completion of oral argument, and the Constitutional requirement to decide a matter within 90 days of submission (See Cal. Const. Article IV, Sec. 9).

The completion of oral arguments in Brinker v. Superior Court on November 9, 2011 thus stoked expectations that the blockbuster meal break and class action issues raised in the case were finally on the verge of resolution after more than three years on the Supreme Court's docket.

But not so fast . . . the Supreme Court has now ordered further briefing and has vacated the "submitted" status of the case. Under this latest order the case will be deemed "resubmitted" on January 13, 2012. This gives the court until at least April 12, 2012 to issue its decision.

This delay is frustrating for all the courts, attorneys, and parties who are awaiting some clarity on these thorny legal issues.

However, I do find it interesting that the further briefing ordered by the court concerns the extent to which its ultimate decision may apply prospectively only. To me this suggests that: (a) The Court's decision will not merely uphold the (pro-employer) decision below; and (b) The opinion will set forth a new and detailed quasi-legislative standard for determining whether an employer has successfully provided timely and realistic meal and rest breaks to its employees.

Another Bad Law from Sacramento - AB 887 and "Gender Expression" Discrimination

Brian Van Vleck — Mon, 10 Oct 2011 21:13:40 -0800

Each year California enacts some very bad employment-related laws. By “bad” I don’t mean that they are necessarily bad policy. What I mean is that they are so poorly drafted that the policy itself is unintelligible.

One of this year’s “bad” laws is AB 887, which prohibits discrimination based on “a person’s gender-related appearance and behavior whether or not stereotypically associated with the person’s assigned sex at birth.”

What can it possibly mean for one’s appearance or behavior to be “gender related?” Webster’s defines “gender” as “the behavioral, cultural, or psychological traits typically associated with one sex.” So the dictionary definition suggests that acting in a manner typically associated with one’s sex is now protected. Thus, acting like an aggressive macho jerk would be protected if you are a man, or dressing in frilly pink ribbons and batting your eyelashes would be protected if you are a woman.

But then the statute doubles back on itself by providing that “gender-related” also means anything that is “not stereotypically associated” with the person’s sex. Thus “gender-related” is defined as anything associated with a person’s biological sex or anything that is not associated with the person’s biological sex. The statute thus prohibits discrimination based on everything that is either “x,” or “not x.” It is literally meaningless as drafted.

I know nothing about the Legislative history of this bill. Perhaps it was intended to prevent discrimination against transsexuals or transvestites. But if that was the purpose why didn't the Legislature just say so.

California Supreme Court Likely to Issue Ruling in Brinker Restaurant v. Superior Court Soon

Anthony Zaller — Tue, 04 Oct 2011 15:39:36 -0800

Today, the California Supreme Court set oral argument in Brinker Restaurant v. Superior Court (Hohnbaum) to take place on November 8, 2011. The Court typically provides a ruling on cases within 90 days of oral argument, so I expect a ruling very early in 2012.

This case is the much anticipated ruling on whether employers need to “ensure” meal breaks or merely make the breaks available to employees. The Supreme Court explains, "This case presents issues concerning the proper interpretation of California's statutes and regulations governing an employer's duty to provide meal and rest breaks to hourly workers." Click here for a detailed analysis of the lower court’s ruling and the different issues that the Supreme Court may address.

We will continue to provide case updates routinely as the decision nears.

Breaking News -- Brinker Set for Oral Argument

Brian Van Vleck — Tue, 04 Oct 2011 15:27:06 -0800

According to the automated notice from the California Supreme Court, oral argument in Brinker v. Superior Court (Hornbaum) has been set for November 8, 2011. This means the Court's long-awaited opinion (which will presumably clarify the standards for providing meal periods for employees) will likely be issued some time early next year.

Does Wal-Mart v. Dukes Impact California Wage and Hour Claims -- U.S. Supreme Court Vacates Certification Order in Chinese Daily News v. Wang

Brian Van Vleck — Tue, 04 Oct 2011 07:10:46 -0800

The U.S. Supreme Court yesterday vacated the Ninth Circuit decision in Chinese Daily News v. Wang, which had upheld class certification of various California Labor Code claims. The Supreme Court makes no substantive analysis of the opinion but merely directed that it be remanded back to the Ninth Circuit "for further consideration in light of Wal-Mart Stores, Inc. v. Dukes."

Some may see this as a vindication of the view that Dukes is a "game changer" for certification of wage and hour claims. But I tend to disagree.

The unusual aspect of the Chinese Daily News decision was that it had based certification of the plaintiffs' monetary wage claims under both Rule 23(b)(2) (applicable to equitable claims) and Rule 23(b)(3) (applicable to damage claims). Dukes however rejected the use of Rule 23(b)(2) for certifying monetary claims. So it is understandable that the case was vacated and remanded.

The vast majority of wage claims, however, are certified exclusively under Rule 23(b)(3). And Dukes did not change the standard applicable to that prong of the rule. Consequently, I predict that the Ninth Circuit will merely decide on remand that certification in the Chinese Daily News case was independently proper under Rule 23(b)(3).

For example, in the recent Second Circuit opinion of Shahriar v. Smith & Wollensky Restaurant Group, the Court upheld class certification of wage claims under Rule 23(b)(3) without finding the need to even mention Dukes.

In short, at this point there is really no reason to believe that Dukes will have any significant impact on class certification of California wage and hour claims.

In Granting Class Certification District Courts "Must" Consider the Merits of the Claims -- Ellis v. Costco Wholesale Corp.

Brian Van Vleck — Sat, 17 Sep 2011 07:45:12 -0800

In Ellis v. Costco Wholesale Corp., the district court certified a nation-wide class of female Costco employees in what amounted to a carbon copy of the Dukes case against Wal-Mart. The Ninth Circuit was therefore required to re-evaluate the certification decision in light of the Supreme Court's ruling in Dukes.

The result was a mixed bag that affirmed as to some certification findings but vacated and remanded as to others. The most significant (in my opinion) aspect of the ruling is the Ninth Circuit's express directive to weigh the merits of the class-wide discrimination claims on remand as part of the certification decision:

[T]he merits of the class members’ substantive claims are often highly relevant when determining whether to certify a class. More importantly, it is not correct to say a district court may consider the merits to the extent that they overlap with class certification issues; rather, a district court must consider the merits if they overlap with the Rule 23(a) requirements.

This seems to be the culmination of long terms trend to break down the distinction between the procedural certification decision and the assessment of the merits of the case. This emphasis on the merits may make certification more difficult in some cases. However, it further reinforces the certification decision as the "big event" that not only decides whether the case may proceed as a class action but also suggests that the court is favorably disposed toward the merits.

First California Court Pushes Back Against AT&T Mobility v. Concepcion -- Brown v. Ralphs Grocery Company

Brian Van Vleck — Wed, 13 Jul 2011 10:00:47 -0800

The U.S. Supreme Court decision in AT&T Mobility v. Concepcion held that the Federal Arbitration Act preempts California's rule against waiving class action rights in consumer arbitration contracts. As we previously posted, if the reasoning of Concepcion were extended to the arbitration of employment claims it would overrule a vast body of well settled California law.

It was thus inevitable that California state courts would begin pushing back on this federal takeover of state contract and arbitration law. And Brown v. Ralphs Grocery Company may be the first shot in that campaign.

Brown ducks the big issue of whether Concepcion effective overruled the California Supreme Court's decision in Gentry v. Superior Court, which generally prohibits class action waivers in employment arbitrations. But Brown nevertheless creates a firebreak against the spread of the Concepcion rule to the employment context. It did this by holding that Concepcion does not allow the enforcement of an arbitration provision that waives the right of an employee to pursue a representative action on behalf of similarly situated employees under the Labor Code Private Attorney General Act, or "PAGA."

What is significant about the Brown Court's analysis, however, is that it utterly ignores the policy concerns stated in Concepcion regarding the need to enforce arbitration agreements exactly as written. Instead, it bases its conclusion on the public policies favoring the enforcement of PAGA on a representative basis. As the Court explained:

The purpose of the PAGA is not to recover damages or restitution, but to create a means of “deputizing” citizens as private attorneys general to enforce the Labor Code. Here, the relief is in large part for the benefit of the general public rather than the party bringing the action. And, a representative action has significant institutional advantages over a single claimant arbitration. The representative action is a means for public enforcement of the labor laws. Thus, assuming it is authorized, a single-claimant arbitration under the PAGA for individual penalties will not result in the penalties contemplated under the PAGA to punish and deter employer practices that violate the rights of numerous employees under the Labor Code. That plaintiff and other employees might be able to bring individual claims for Labor Code violations in separate arbitrations does not serve the purpose of the PAGA, even if an individual claim has collateral estoppel effects. Other employees would still have to assert their claims in individual proceedings. In short, representative actions under the PAGA do not conflict with the purposes of the FAA. If the FAA preempted state law as to the unenforceability of the PAGA rep-resentative action waivers, the benefits of private attorney general actions to enforce state labor laws would, in large part, be nullified.

All of this policy analysis is equally applicable to non-PAGA class actions. Indeed, this is almost the identical reasoning employed by the California Supreme Court in Gentry. Thus, notwithstanding its stated reservation of the issue, Brown has to be read as a strongly suggesting that Gentry is still good law in California and that Concepcion should be limited as closely as possible to its facts -- i.e., as applying only in the consumer context.

Shades of O.J. -- Casey Anthony Verdict May Affect Settlement Negotiations In Jury Cases

Brian Van Vleck — Wed, 06 Jul 2011 11:24:25 -0800

For years it was a common refrain for mediators and attorneys in L.A. to persuade clients to settle before trial with statements to the effect that "remember, your case will be decided by the same jury pool that decided O.J. Simpson wasn't guilty -- no matter how good you think your case is absolutely anything can happen in a jury trial."

It wasn't a Los Angeles jury this time but it appears that Casey Anthoy may be the new poster child for jury irrationality. In fact, O.J. prosecutor Marcia Clark thinks the Casey aquittal is even worse. I think she may be right.

Court Clarifies Pay Stub Requirements -- McKenzie v. FedEx

Brian Van Vleck — Tue, 05 Jul 2011 09:24:34 -0800

The federal district court decision in McKenzie v. FedEx, provided some useful guidance to employers and employees regarding what information must be included in pay statements under Labor Code section 226(a). For example, in fulfilling the requirement to show "all hours worked," a wage statement doesn't necessarily have to contain a separate line item listing that number. However, the wage statement must contain sufficient information for an employee to easily add up the total hours from the other lines.

In McKenzie, the court granted summary judgment to the employee on the ground that FedEx's "idiosyncratic" wage statements were not self-explanatory and therefore failed the test.

[T]he total regular and overtime hours listed in FedEx's wage statements, when added together, do not sum up to the total hours worked by the employee during the pertinent time period. Without additional information regarding the wage statement, an employee cannot simply “arrive at the sum of hours worked.” Evidence of this can be seen in the sample wage statement provided by FedEx for McKenzie's pay period ending on March 21, 2009. When the total overtime categories and the regular rate hours listed in that document are added together, the sum of these figures is 58.24, which represents a total of 40 regular hours and 18.24 overtime hours. However, because information provided by FedEx (and not disclosed on the wage statement itself) explains that the overtime hours are always listed twice, the sum of all of the figures on the wage statement during the relevant period is actually 49.12, not 58.24. Thus, the Morgan rationale, which contemplates that an employee can determine his or her total hours worked by summing up the figures on a wage statement without need to reference any other time records or other documents, does not apply to FedEx's somewhat idiosyncratic wage statement. Accordingly, the Court finds that FedEx violated Section 226(a)(2) by failing to state the “total hours worked by [an] employee” in its wage statements.

The Court also found that FedEx's wage statements violated Section 226(a)(6) because they listed only the end date and not the start date of the covered pay period, and violated Section 226(a)(9) because they failed to separately list the applicable overtime rate of pay. The Court further held that these violations would trigger penalties on behalf of all similarly situated employees under the Private Attorney General Act of 2004 ("PAGA"), regardless of whether the employees had suffered any specific injury.

It is surprising how many employers, even large employers like FedEx, will incorrectly assume that the design and content of their pay stubs is a trivial issue. In reality, the Labor Code recognizes that supplying employees with the information necessary to review their own wages and hours for legal compliance is a crucial part of the overall enforcement scheme.

As a result, Labor Code Section 226(a) requires the issuance of accurate, itemized wage statements that contain the specific categories of information spelled out in the Labor Code. The good news for employers is that Section 226(a) sets up clear, bright-line requirements which should be easy to follow. The bad news is that Section 226(e) and PAGA impose penalties for issuing defective statements. And due to the typically uniform nature of a wage statement program these penalties claims are likely to be assessed on behalf of every employee who ever received a statement.

California Wage Laws Apply to Non-California Residents Working Temporarily In The State -- Sullivan v. Oracle

Brian Van Vleck — Thu, 30 Jun 2011 12:01:38 -0800

As the "global economy" becomes more fluid it is increasingly common for employees to cross borders for short-term assignments. This can lead to confusion concerning the proper calculation of wages for these assignments -- e.g., should it be based on the law where the work is performed, or where the employee lives?

In Sullivan v. Oracle the California Supreme Court has clarified that California's overtime rules apply to anyone performing work within the state, regardless of their state of residency or how long they may be working in California.

Although the Court's ruling is technically limited to overtime rules the same analysis would necessarily also apply to most other Labor Code protections. Thus, employers and workers alike should assume that the provisions of the Labor Code will generally govern any work performed in California.

In a secondary part of the decision the Court also held that plaintiffs could not use California's unfair competition law ("UCL") to recover overtime payments which were earned under federal law in another state. That would be stretching the long arm of California law a bit too far.

2(b) or Not 2(b)?: Dukes v. Wal-Mart Closes the Gap Between Class Certification under Rule 23(b)(2) and (b)(3)

Brian Van Vleck — Fri, 24 Jun 2011 09:46:58 -0800

As widely reported, the U.S. Supreme Court held in Dukes v. Wal-Mart that the Title VII gender discrimination claims of 1.5 million employees were far too diverse to be decided on a class-wide basis. While the result is hardly surprising, the opinion is notable because it substantially revises the standards applicable to class certification under Rule 23(b)(2).

(b)(2) vs. (b)(3)

To briefly summarize, Rule 23 is the statute governing class certification in federal court. Subsection (b)(2) of the Rule provides an easier path to certification where a class is seeking mainly equitable or injunctive relief. By contrast, claims for money damages must normally be certified under subsection (b)(3), which requires additional proof that common issues "predominate" over individual issues and that a class action is the "superior" method of deciding the claims.

As originally enacted, Title VII provided only for equitable remedies (back pay and front pay were available but were deemed to be equitable substitutes for reinstatement). For many years Title VII claims were thus commonly certified under the relaxed standard of Rule 23(b)(2). This became much less common however after Title VII was amended in 1991 to allow for emotional distress and punitive damage awards.

Rule 23(b)(2) after Dukes.

The district court's certification order in Duke's v. Wal-Mart was thus a bit of an anomaly because it allowed certification under the easier 23(b)(2) standard even though the plaintiffs were claiming literally billions in damages.

In rejecting the lower court's certification analysis the Supreme Court effectively closed what some might characterize as the "loophole" of using 23(b)(2) to certify Title VII damage claims. The Court did this in two ways. First, the Court held that (b)(2) certification should be unavailable in almost all claims that include monetary relief. Second, even to the extent subsection (b)(2) is available the Court took away its main attraction by requiring plaintiffs to meet a standard of "commonality" that is effectively the same as the "predominance" test required by (b)(3).

The effects of Dukes should be felt primarily in Title VII cases. California wage and hour class actions are virtually never certified solely under Rule(b)(2), so the impact on these cases should be minimal.

California Court Requires Evidence of Same-Sex Harasser's Sexual Orientation -- Kelley v. The Conoco Companies

Brian Van Vleck — Sun, 12 Jun 2011 11:41:09 -0800

It is well-settled that an employee may state a claim for sexual harassment even if the harasser is the same gender as the victim. But it is still mandatory to prove that the harassing conduct was directed at the victim "because of" his or her gender.

Courts have been fairly willing to infer that any sexually charged comments from a man to a woman are based on her sex. But when one (presumably heterosexual) man uses sexually charged comments to harass or intimidate another man courts have been much less likely to find that the conduct was "based on sex."

In Kelley v. The Conoco Companies, for example, the Fifth District Court of Appeal recently dealt with a same-sex harassment claim arising out of an incident on a construction site. The plaintiff's foreman started out criticizing his technique for tying re bar and then proceeded to unleashed a slew of gay-sex themed comments about how he was going to make the plaintiff his "bitch," etc. I won't repeat all the graphic comments, but if your into that kind of thing you can see them here.

Despite the sexual nature of the comments, the Court upheld the grant of summary judgment on the ground that the Plaintiff had presented no evidence that the comments were "based on sex." As the Court explained:

The statements made to Kelley were crude, offensive and demeaning, as it was evident that they were intended to be. No evidence, however, was presented from which a reasonable trier of fact could conclude that they were an expression of actual sexual desire or intent by [the harasser], or that they resulted from Kelley's actual or perceived sexual orientation. The mere fact that words may have sexual content or connotations, or discuss sex is not sufficient to establish sexual harassment. While the use of vulgar or sexually disparaging language may be relevant to show discrimination, it is not necessarily sufficient, by itself, to establish actionable conduct.

The Court went on to hold that in a same-sex harassment case a plaintiff must present "evidence that an alleged harasser was acting from genuine sexual interest" in order to raise "an inference of discrimination because of sex."

The Court's ruling seems problematic in several regards. First, I don't see why the Court is so certain that a reasonable jury could not question the sexuality of a male who told another man he wanted to have sex with him.

Second, to avoid summary judgment the Court's rule would apparently require plaintiffs to do pre-trial discovery and present evidence on the "genuine sexual interests" of the harasser. One can only imagine the problems this rule will cause in practice. Will plaintiffs be required to do discovery on a harasser's past sexual partners? Will alleged harassers be required to undergo court ordered mental exams to ferret out evidence of repressed homosexual tendencies?

The Kelley Court also acknowledges that it creates a split with the Second District's 2006 opinion in Singleton v. United States Gypsum Company, which held that no evidence of a same-sex harasser's homosexuality is required. Thus, this is an issue that may well be headed to the California Supreme Court.

Department of Labor Releases Smartphone Application for Tracking Employee Work Hours

Brian Van Vleck — Sat, 11 Jun 2011 22:06:00 -0800

Employers are required by law to keep records of all hours worked by their non-exempt employees. However, when the employer either fails to keep records or there is a dispute over the exempt status of an employee the lack of contemporaneous time entries can greatly complicated the dispute.

In an effort to alleviate this problem, the federal Department of Labor has released a free, downloadable smart phone app that employees can use to track their time and create their own, independent time sheets. Here is the text of the DOL announcement:

The U.S. Department of Labor today announced the launch of its first application for smartphones, a timesheet to help employees independently track the hours they work and determine the wages they are owed. Available in English and Spanish, users conveniently can track regular work hours, break time and any overtime hours for one or more employers. This new technology is significant because, instead of relying on their employers’ records, workers now can keep their own records. This information could prove invaluable during a Wage and Hour Division investigation when an employer has failed to maintain accurate employment records.

The free app is currently compatible with the iPhone and iPod Touch. The Labor Department will explore updates that could enable similar versions for other smartphone platforms, such as Android and BlackBerry, and other pay features not currently provided for, such as tips, commissions, bonuses, deductions, holiday pay, pay for weekends, shift differentials and pay for regular days of rest.

I have not had a chance to try it out yet, but this seems like a very useful tool for employees and employers alike, especially for employee working in the field where timeclocks or paper timesheets are not practical.