Following principles that federal courts have applied in similar cases under the Fair Labor Standards Act, a California appellate court recently confirmed that employers are not liable under the California Labor Code for off-the-clock work that occurs without the employer’s actual or constructive knowledge. In Jong v. Kaiser Found. Health Plan, Inc., the California Court of Appeal for the First District affirmed the trial court’s grant of summary judgment for the employer, holding that the employee failed to set forth sufficient evidence to demonstrate that the employer actually or constructively knew that the employee worked unrecorded overtime. Read More
Employment class action defendants in California who were hoping for an unequivocal statement that statistical sampling has no place in class actions are likely to be disappointed by today’s ruling in Duran v. U.S. Bank, N.A. The California Supreme Court cautiously left all avenues to certification open, stating that a “[s]tatistical sampling may provide an appropriate means of proving liability and damages in some wage and hour class actions.” (Emphasis added.) But despair not! The bulk of the opinion agreed with the court of appeal in finding the trial court’s methods “profoundly flawed,” recognized the “thorny” issues of proof that arise in misclassification cases, and reaffirmed a court’s obligation to consider the manageability of individual issues in certifying a class action. The Court’s instructions to lower courts and litigants to determine – as an integral part of class certification – whether the case can be manageably tried are likely to aid employers in certification battles to come. Read More
The use of criminal background checks when hiring employees has become even more limited in San Francisco. On August 13, 2014, the recently passed Fair Chance Ordinance (Ordinance) becomes operative requiring employers doing business in San Francisco and employing 20 or more workers, regardless of location, to limit the use of an applicant’s criminal history. Read More
If you have employees in California, you are, no doubt, aware that California laws are constantly changing and have a tendency to sneak up on even the best companies. To help prepare you for the year ahead, here are five important questions employers should ask themselves to test whether they are ready for the key changes in 2014: Read More
As employers welcome a new group of eager interns to their offices this summer, employers may be thinking about the recent wave of class action lawsuits alleging that unpaid internships violate minimum wage and overtime laws. Should these claims be litigated on a classwide basis? Read More
A recent opinion by the Seventh Circuit holds that the standard for certifying a collective action under the FLSA is the same as the standard applied to a class action under Rule 23. In Espenscheid v. DirectSat USA, LLC, No. 12-1943 (7th Cir. Feb. 4, 2013), the court considered decertification by a Western District of Wisconsin District Court of more than 2,000 satellite technicians in an action alleging technicians did not receive overtime and were not compensated for certain hours. In analyzing the standard to apply in evaluating the decertification decision, the court contrasted the opt-in procedure of FLSA collective actions with the opt-out procedure of Rule 23 actions, as well as noted that the FLSA lacks “the kind of detailed procedural provisions found in Rule 23” that set forth the standard for certification. Read More
Employers in California have been watching closely to see how courts will apply the United States Supreme Court’s decision in AT&T Mobility v. Concepcion, 131 S. Ct. 1740 (2011), which held that the Federal Arbitration Act (FAA) preempted state law concerning the enforceability of class action waiver provisions, in which a party waives his or her right to arbitrate claims on a class basis. Read More
On October 10, 2012, the Eighth Circuit in Abshire v. Redland Energy Services, LLC (Case No. 11-3380) confirmed that under the FLSA, employers are allowed to alter the days contained in employees’ workweek to minimize overtime pay as long as the change is intended to be permanent. While this decision is certainly a victory for employers, employers (particularly in California) should nevertheless ensure compliance with state law before making any changes.
Abshire involved claims against employer Redland Energy Services, LLC, a company that drills and services natural gas wells in Arkansas. Most of Redland’s workers worked a regular Monday-to-Friday schedule, and any weekly overtime was calculated on a regular Sunday-to-Saturday week. Redland’s drill operators, however, worked 12-hour shifts on seven consecutive days, from Tuesdays through Mondays, and then received seven days off. Originally, Redland calculated weekly overtime for its drill operators on a Tuesday-to-Monday week. In May 2009, however, Redlands switched to a Sunday-to-Saturday week, thereby making the workweek consistent for all employees. Redland claimed that this switch was made not only to decrease payroll expense by reducing the number of hours that drill operators must be paid at the FLSA-mandated overtime rate, but also to reduce administrative costs because the change would allow the company to calculate the overtime for all of its employees on the same weekly basis. The drill operators alleged that the supposed reduction of administrative costs was merely a pretext, and the effort to reduce the amount of overtime paid was impermissible under the FLSA. Read More
In a victory for pharmaceutical companies, the Ninth Circuit Court of Appeals recently held that plaintiff-appellant pharmaceutical sales representatives (“reps”) were exempt from California law’s overtime requirements. See Menes v. Roche Laboratories, Inc., No. 08-55286 (9th Cir. July 23, 2012) (unpublished) (consolidated with D’Este v. Bayer Corp. and Barnick v. Wyeth).
The Ninth Circuit decision is on the heels of the U.S. Supreme Court’s similar holding that reps are exempt from federal law overtime requirements. Back in June 2012, the U.S. Supreme Court in Christopher v. SmithKline Beecham Corp., No. 11-204 (U.S. June 18, 2012) held that reps were exempt from overtime under the Fair Labor Standards Act’s outside sales exemption. The Supreme Court found reps were exempt as outside salespersons despite laws that prohibit reps from selling pharmaceuticals directly to patients or physicians based on a “common sense” approach to the exemption. It was also a significant victory for employers because the Department of Labor attempted to use amicus briefs to argue that courts must defer to its interpretation of the law—the Supreme Court rejected this practice. See Orrick’s Blog Post about Christopher here.
Unlike Christopher and unlike the district court below, the Ninth Circuit in Menes did not reach the issue of whether reps were exempt under California’s outside sales exemption. Rather the Ninth Circuit held that reps were exempt under California’s administrative exemption, a different exemption, which generally provides that individuals who spend more than 50 percent of their time performing non-manual work directly related to the management policies or general business operations of his employer or customers are exempt.
Orrick represents Roche Laboratories, Inc. Read Law360’s coverage of this case here.
The U.S. Supreme Court granted cert on June 25, 2012 in Genesis Healthcare Corp. v. Symczyk to resolve a federal circuit split on whether an FLSA collective action is mooted when the lone plaintiff receives from defendants an offer of judgment under Federal Rule of Civil Procedure 68 that satisfies the plaintiff’s claims. Under Rule 68, a defendant may offer judgment against it on specified terms. If the offer is accepted, judgment is entered on the terms offered. If the offer is not accepted, plaintiff is liable for post-offer costs if the plaintiff fails to ultimately obtain a judgment more favorable than the offer. Read More