Metson Marine Revisited: Employer May Not Use Workweek that Artificially Avoids Paying Overtime Compensation

I should have posted this a while back. In Seymore v. Metson Marine, Inc. (2/28/11) 193 Cal.App.4th 64, the Court held: (1) employees who worked 14-day shifts from Tuesday to Tuesday on boats could recover seventh day overtime compensation on both the seventh and 14th days of each consecutive 14-day work period, even though the employer's designated workweek was Monday at 12:01 am to Sunday at midnight; (2) twelve-hour, off-duty, standby periods were considered “hours worked” for purposes of compensability; and (3) the employer could exclude eight hour sleeping periods from compensation owed.

The Court granted the employer's petition for rehearing to address the argument that the court should follow federal law interpreting the meaning of “workweek” under the federal Fair Labor Standards Act of 1938 (FLSA). The Court agreed that federal authority is persuasive, but rejected the employer's argument that it could designate a Monday-to-Sunday workweek when its employees actually worked Tuesday to Tuesday.

Contrary to Metson's suggestion, however, these authorities do not stand for the proposition that an employer's authority to designate a workweek is unlimited. Under both federal and state labor laws, it is clear that an employer may not designate its workweek in a manner that is designed primarily to evade overtime compensation. The federal regulation states explicitly that the workweek may not be “designed to evade the overtime requirements of the [Fair Labor Standards] Act.” (29 C.F.R. § 778.105.) Similarly, the DLSE Enforcement Policies and Interpretations Manual repeats that the workweek cannot be changed if “designed to evade overtime obligations.” (DLSE, Enforcement Policies and Interpretations Manual, supra, at p. 48–1.) “The bottom line is this: An employer may not engage in a subterfuge or artifice designed to evade the overtime laws.” (Huntington Memorial Hospital v. Superior Court (2005) 131 Cal.App.4th 893, 910.) 

Seymore v. Metson Marine, Inc. (4/14/11) 194 Cal.App.4th 361, 370.  

The opinion is available here.