California Developments

California Court of Appeal Rules that Advanced Sales Commissions May Be Recovered By the Employer

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Coins and Hourglass

On July 10, 2012, a California court of appeal held that an employer’s practice and policy of charging back advanced sales commissions following a canceled service agreement does not violate California law. The Court held that these advanced commissions are not wages; thus they do not come within the ambit of California Code of Civil Procedure section 223 which prohibits the secret payment of lower wages and exposes the employer to PAGA penalties. READ MORE →

California Court of Appeal Says No to Class Certification of Independent Contractors

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3 Minutes to 12:00

The California Court of Appeal has affirmed a trial court’s order denying class certification on the alleged misclassification of independent contractors. The Court of Appeal provides a lengthy analysis of ascertainability and predominance of common issues of law and fact under California’s class action laws.  READ MORE →

Can You Enforce Your Non-Compete Clause?

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People Walking

Employers should take a closer look at non-compete clauses in their employment agreements following the Central District of California’s decision earlier this month in Arkley v. Aon Risk Services Companies, Inc., (Case No. 2:12-cv-01966-DSF-RZ).  Arkley invalidated a non-compete clause in an employment contract under California law even though the contract contained a choice of law clause selecting Illinois law, which upholds such clauses. READ MORE →

CA Court Holds Employment Arbitration Agreement Waiving Class and Representative Actions Enforceable

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Gavel and Hundred-Dollar Bill

In Iskanian v. CLS Transportation Los Angeles, LLC, (Cal. Ct. App. June 4, 2012), the California Court of Appeal for the Second Appellate District affirmed a decision to compel individual arbitration of wage-and-hour claims pursuant to an employment agreement that contained class and representative action waivers, holding that the U.S. Supreme Court’s decision in AT&T Mobility LLC v. Concepcion was controlling. READ MORE →

New Decision Rejects D.R. Horton Reasoning

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A new ruling from the Northern District of California, Morvant v. P.F. Chang’s Bistro, Inc. (May 7, 2012), confirms the enforceability of class action waivers despite contrary California law and the National Labor Relations Board’s opinion in D.R. Horton. READ MORE →

California Supreme Court Concludes No Attorney’s Fees For Meal and Rest Break Suits

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California’s highest court held that a party who prevails on a claim for an alleged failure to provide meal or rest breaks is not entitled to attorney’s fees under either Section 1194 or Section 218.5 of the California Labor Code. Kirby v. Immoos Fire Protection, Inc., Cal. Sup. Ct. S185827 (April 30, 2012). Section 1194 is a “one-way fee-shifting statute” that authorizes an award for attorney’s fees only to employees who prevail on minimum wage or overtime claims. By contrast, Section 218.5 is a “two-way fee-shifting statute” that authorizes either an employee or an employer to recover attorney’s fees as a prevailing party in an action brought for the nonpayment of wages.

The court concluded that neither of those sections is applicable to claims for unpaid meal or rest breaks as such claims do not fit under the terms “minimum wage” or “overtime” specified in Section 1194, or the terms “nonpayment of wages” used in Section 218.5. Thus, employers cannot recover attorney’s fees for failed meal and rest break actions. On the other hand, neither can employees. Reading this decision in the context of the California Supreme Court’s April 12, 2012 Brinker decision, plaintiffs’ lawyers may be more cautious as to which meal and rest break claims they pursue as they will not be entitled to recover attorney’s fees as a result of those in which they prevail.

The Affordable Care Act and Lactation Breaks

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As the nation awaits the Supreme Court’s opinion on the constitutionality of its individual health insurance mandate, some lesser-known provisions of the “Patient Protection & Affordable Care Act” (a.k.a. “Obamacare”) have received short shrift.  For instance, the Affordable Care Act also amended the Fair Labor Standards Act (“FLSA”) and requires employers to provide nursing employees with “a reasonable amount of break time to express milk as frequently as needed” for up to one year after a child’s birth.  The law also requires all employers subject to FLSA to provide employees with a private place to express milk that is not a bathroom.

While at first blush, this law sounds rather broad, it contains several limitations: READ MORE →

Brinker‘s Effect on California Meal and Rest Periods

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Coins and Hourglass

In a highly anticipated decision largely hailed as a victory for employers, the California Supreme Court, in Brinker v. Superior Court, No. S166350 (Cal. April 12, 2012), clarified employers’ obligations to provide meal and rest periods under California law and provided guidance regarding class certification issues in wage-and-hour litigation. On the most contentious of the issues raised in Brinker—the nature of an employer’s duty to provide meal periods under California law—the court held that an employer’s obligation is simply to relieve the employee of all duty for the designated period, with the employee free to use the time for whatever purpose he or she desires, but the employer need not ensure that no work is done. Thus, if an employer relieves an employee of all duty, but the employee continues to work, the court held that the employer will not be liable for premium pay. The court cautioned, however, that an employer may not undermine a formal policy of providing meal periods by coercing employees to skip breaks, creating incentives for employees to forego breaks, or otherwise encouraging employees not to take legally protected breaks. READ MORE →