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Thursday, April 16, 2015

Mendiola v. CPS: Supreme Court Addresses Compensable Time for Resident Security Guards

In Mendiola v. CPS (2015) 60 Cal.4th 833, a security guard contracted with his employer to reside at a work site to provide 24 hour security services. The employer paid him hourly wages for eight on duty hours per day, paid him for actual time spent investigating disturbances for eight hours of on call time per day, and did not pay him for eight hours of sleep time per day. The plaintiff filed a class action.

The trial court certified the class and granted summary judgment for the guards, finding that their on call time was compensable "hours worked." The Court of Appeal affirmed in part and reversed in part. The Supreme Court granted review, holding that both the guards' on call time and sleep time constituted compensable "hours worked."

First, the Court looked to a multi-factor test to determine whether the guards remained subject to the employer's control during on call time:
The guards here were required to "reside" in their trailers as a condition of employment and spend on-call hours in their trailers or elsewhere at the worksite. They were obliged to respond, immediately and in uniform, if they were contacted by a dispatcher or became aware of suspicious activity. Guards could not easily trade on-call responsibilities. They could only request relief from a dispatcher and wait to see if a reliever was available. If no relief could be secured, as happened on occasion, guards could not leave the worksite. CPS exerted control in a variety of other ways. Even if relieved, guards had to report where they were going, were subject to recall, and could be no more than 30 minutes away from the site. Restrictions were placed on nonemployee visitors, pets, and alcohol use... Additionally, the Court of Appeal correctly determined that the guards' on-call time was spent primarily for the benefit of CPS.
Citing its decision in Morillion v. Royal Packing Co. (2010) 22 Cal.4th 575, the Court rejected the argument that on call time was not compensable because the guards could engage in personal activities during that time. The Court also declined to incorporate a federal regulation, 29 CFR 785.23, into Wage Order 4. The Court noted that federal law sets the floor for employee wage and hour protection, but California is free to adopt broader protections, and Wage Order 4 itself does not indicate an intent to incorporate this regulation.

The Court then held that California law does not permit employers to exclude sleep time from hours worked, except in limited circumstances set forth in the Wage Orders. In so doing, the Court limited to its facts Monzon v. Schaefer Ambulance Service, Inc. (1990) 224 Cal.App.3d 16, a case involving ambulance drivers working 24-hour shifts and disapproved Seymore v. Metson Marine, Inc. (2011) 194 Cal.App.4th 361, a case involving off shore oil rig employees. The Court disregarded what it called "vacillating and contradictory" positions taken on the issue by the DLSE.

The opinion is available here

Monday, March 2, 2015

Court of Appeal Rules on Retroactivity of Whistleblower Statutes

A frequent issue over the last several years has been whether a plaintiff must exhaust administrative remedies under Labor Code section 98.7 by filing a claim with the Labor Commissioner before filing a statutory whistleblower action under Labor Code 1102.5. See, e.g., Campbell v. Regents of University of California (2005) 35 Cal.4th 311; MacDonald v. State of California (8/27/13) depublished 11/27/13.

In 2013, the Legislature addressed the issue by:

Adding section 244(a), which provides: “An individual is not required to exhaust administrative remedies or procedures in order to bring a civil action under any provision of this code, unless that section under which the action is brought expressly requires exhaustion of an administrative remedy. This subdivision shall not be construed to affect the requirements of Section 2699.3.”

Adding section 98.7(g), which states: “In the enforcement of this section, there is no requirement that an individual exhaust administrative remedies or procedures.”

In Satyadi v. West Contra Costa Healthcare District (12/31/14) --- Cal.App.4th ---, the plaintiff, Satyadi, sued the defendants under Labor Code section 1102.5, alleging that they fired her in retaliation for reporting and refusing to participate in allegedly illegal activities. On demurrer, the defendants argued that Satyadi had not exhausted her administrative remedies by filing a complaint with the Labor Commissioner under section 98.7 before bringing her action. The trial court agreed, but the Court of Appeal reversed, concluding that these amendments "merely clarified existing law" and should apply retroactively to Satyadi's case. 

Tuesday, January 6, 2015

Happy New Year!

Happy New Year to all of you. Last year was a terrific one personally and professionally for me. I hope that yours was as well and that 2015 will be even better.

Wednesday, November 26, 2014

In re Walgreen Co. Overtime Cases: Court of Appeal Affirms Denial of Certification in Meal Period Class Action

In In re Walgreen Co. Overtime Cases (10/23/14, pub. 11/13/14) --- Cal.App.4th ---, the plaintiffs sought to certify a class of hourly employees on the theory that Walgreens propounded a lawful meal period policy, but in practice Walgreens failed to provide its employees with compliant meal periods. The trial court denied their motion for class certification, and the Court of Appeal affirmed, holding as follows: 

The trial court held that employers must make meal periods available, but need not ensure that their employees actually take those meal periods. Slip op. at 3-6. The trial court thus predicted the eventual holding in Brinker Restaurant Corp. v. Superior Court (2013) 53 Cal.4th 1004, and used the proper criteria to analyze the motion. 

The evidence on certification demonstrated that Walgreens made meal periods available, but that its employees sometimes decided to skip or delay them. Slip op. at 4. The plaintiffs' evidence to the contrary failed to convince the trial court otherwise. 

The plaintiffs introduced expert witness testimony regarding the rate at which Walgreens' time records showed a missed or late meal period. Slip op. at 6. The trial court properly rejected this evidence because it relied on the faulty assumption that every such instance represented a violation of the meal period requirement. 

The plaintiffs introduced emails among Walgreens management regarding missed meal periods, but the emails showed the "significant importance Walgreens attached to the meal break issue and the efforts of Walgreens to provide meal breaks to all employees." Slip op. at 7-8. Rather than showing Walgreens pressuring employees to skip meal periods, the emails showed Walgreens pressuring its management to ensure that meal periods were taken. 

Finally, the plaintiffs introduced employee declarations stating that meal periods were not made available. Slip op. at 8-10. The declarations were unreliable, and numerous employees recanted them in deposition, raising questions about how counsel created them in the first place. 

The opinion is available here.  

Monday, November 24, 2014

Martinez v. Joe’s Crab Shack Holdings: Court Reverses Order Denying Class Certification in Misclassification Action

In Martinez v. Joe's Crab Shack (2013) 221 Cal.App.4th 1148 (discussed here) the plaintiffs alleged that the defendants misclassified its salaried managers and assistant managers as exempt from California’s overtime requirements. The trial court denied certification, finding that the plaintiffs failed to establish typicality, adequacy of representation, predominance of common questions, and superiority of the class action mechanism. After the Court of Appeal reversed, the California Supreme Court granted review and remanded in light of its opinion in Duran v. US Bank N.A. (2014) 59 Cal.4th 1 (2014). On remand, the Court of Appeal once again reversed the trial court's decision, holding as follows: 

The trial court erred in finding that the plaintiffs’ claims were not typical of the class and that the plaintiffs would not be adequate class representatives because the plaintiffs' claims would be "vulnerable to the defense that each of them performed exempt tasks more than 50% of their work time." Slip op. at 12-13. Nor did the antagonism "voiced by general managers, who overwhelmingly opposed the litigation," necessarily indicate inadequacy of representation. On remand, the trial court could exercise its discretion to  create a general managers subclass or to exclude general managers entirely from the class. Slip op. at 13-14. 

"The theory of liability in this litigation—that, by classifying all managerial employees as exempt, [defendant] violated mandatory overtime wage laws—is, to paraphrase Brinker, 'by nature a common question eminently suited for class treatment.'" Slip op. at 18. Although such a theory of liability "has the potential to generate individual issues," considerations such as the employer's realistic expectations and the actual overall requirements of the job are "likely to prove susceptible of common proof." Slip op. at 20. Courts in such actions must analyze these common questions, rather than focusing on whether a particular employee was engaged in an exempt or non-exempt task at a given time. Slip op. at 21. Statistical sampling may prove helpful in analyzing these common questions, provided that the use of such sampling "accords the employer an opportunity to prove its affirmative defenses." Slip op. at 22. 

The Court concluded by recognizing that a number of appellate decisions have affirmed trial court decisions denying certification in misclassification actions. 
However, we understand from Brinker, Duran and Ayala that classwide relief remains the preferred method of resolving wage and hour claims, even those in which the facts appear to present difficult issues of proof. By refocusing its analysis on the policies and practices of the employer and the effect those policies and practices have on the putative class, as well as narrowing the class if appropriate, the trial court may in fact find class analysis a more efficient and effective means of resolving plaintiffs’ overtime claim.
Slip op. at 23. 

The opinion is available here

Thursday, November 6, 2014

LACBA Presents "Employment Law Nuts & Bolts" Program 11/15

The Los Angeles County Bar Association is presenting "Employment Law Nuts & Bolts: Discrimination, Harassment, Retaliation and Wage and Hour Law" on Saturday, November 15, 2014, at Loyola Law School in Los Angeles. The program runs from 9:00 am until 12:15 pm.

The program will focus on teaching the law to new attorneys, those in practice less than five years, or those with more experience outside of the employment law field who wish to gain a better understanding of employment law.

The first panel will cover federal and state wage and hour law. I am moderating, with Lauren Teukolsky presenting the employee's perspective and Leslie Abbott presenting the employer's perspective. 

For the second panel, Heather Appleton, Eric Schwettmann, and Art Silbergeld will cover discrimination, harassment, and retaliation. 

More information and registration are available here

Wednesday, November 5, 2014

Dynamex Operations West v. Superior Court: Who Is An Employer? (Revisited)

In Martinez v. Combs (2010) 49 Cal.4th 35 (discussed here), the California Supreme Court held that the broad, three pronged definition of "employer" found in the IWC Wage Orders applies in minimum wages actions brought under Labor Code section 1194. The question after Martinez was whether the Wage Order definition of "employer" would apply in all wage and hour actions or whether courts would continue to look at the multi-factor test found in cases such as S.G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341.

Dynamex Operations West, Inc. v. Superior Court (Lee) (10/15/14) --- Cal.App.4th --- addresses these issues.

The plaintiffs in Dynamex filed a class action, alleging that the defendant violated a range of wage and hour laws by classifying them as independent contractors, rather than employees. The defendant petitioned for a writ of mandate after the trial court denied its motion to decertify the class. It argued that the Borello "right to control" test applied, and that individual issues under that test would predominate over common issues. 

The Court of Appeal granted the petition in part, holding that the Wage Order definition of "employer" applies to those claims that fall within the scope of the Wage Order. Slip op. at 12-16. As to claims that fall outside the scope of the Wage Order, the multi-factor test discussed in Borello applies.

The real question becomes this: How do you know whether a claim falls within the scope of the Wage Order? For minimum wage and overtime claims, the answer seems clear. For other types of claims, such as the Labor Code section 2802 reimbursement claim in Dynamex, not so much. One can only assume that this particular issue will require greater clarification.

Incidentally, the Court also held that use of the Wage Order definition is not limited to determining whether an entity is a joint employer. Slip op. at 16, n. 14. 
Rather, it applies in any Wage Order claim in which one's employment status is at issue. This resolves a debate that I had with a number of people after Martinez came down. 

The opinion is available here.