California Employment Law Update : Labor and Employment Lawyers & Attorneys : Proskauer Rose Law Firm : Wage & Hour Laws, Disability, Workplace Safety

Earlier this year, California Governor Jerry Brown signed into law AB 469 (pdf), entitled the “Wage Theft Prevention Act of 2011,” which adds Section 2810.5 to the Labor Code and requires employers to furnish to non-exempt employees, at the time of hiring, a notice specifying (among other things) the employee’s rate or rates of pay and the basis on which the employee’s wages are to be calculated. While the California Labor Commissioner had indicated that it would issue a notice template and guidance to employers by mid-December, it has yet to provide any such guidance.  While employers wait for the Commissioner to act, Proskauer has prepared a notice form that companies can utilize in the interim. Proskauer attorneys have extensive experience in this area, as the firm has long assisted its clients in complying with similar requirements under New York state law.  For further information on compliance with the California or New York statutes, please contact Enzo Der Boghossian at ederboghossian@proskauer.com (California) or Fred Leffler at fleffler@proskauer.com (New York).

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The California Supreme Court announced today that it will hear oral arguments in the landmark wage-and-hour case Brinker Restaurant v. Superior Court on November 8 in San Francisco. In Brinker, the Court will decide whether employers must merely provide meal and rest breaks to their employees or actually ensure that breaks are taken, as well as the related issue of whether such claims are generally amenable to class treatment or whether they require individualized inquiries that make class treatment inappropriate. The outcome of the Court's decision is likely to have a significant impact on the exposure of large employers to wage-and-hour class action lawsuits. As the Court has 90 days from the date of oral argument to issue its opinion, the much anticipated decision is scheduled to be handed down no later than Monday, February 6, 2012. We will continue to follow the run up to the decision as new events unfold.

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In Ellis v. Costco Wholesale Corp., 2011 U.S. App. LEXIS 19060 (9th Cir. Sept. 16, 2011), the Ninth Circuit reviewed the standards for class certification in an employment class action following the U.S. Supreme Court’s decision in Dukes v. Walmart. In Ellis,three named plaintiffs sought injunctive relief, compensatory damages, and backpay on behalf of a nationwide class of female employees who the plaintiffs claimed had been denied promotion because of their gender. The district court granted class certification. In reviewing the certification order, the court provided guidance for class action litigation in the Ninth Circuit following Walmart.

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The plaintiff was an Australian citizen working as an associate attorney for the law firm of O'Melveny & Myers LLP on a work visa. In October 2009, Paramount extended to her a conditional offer of employment to serve as its Vice President, IT Legal, the offer being contingent upon the completion of a background investigation to Paramount’s satisfaction and the successful transfer of her work visa. The conditional offer indicated that a separate employment agreement would follow. When the plaintiff countersigned the conditional offer letter in late October, she told Paramount, for the first time, that she would not be able to start work until January 2010 because of a previously undisclosed secondment to a client of O'Melveny and because she needed to travel to Australia during the first week of January.

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In a 2-1 decision, the California Court of Appeal held that representative actions under California’s Private Attorney General Act (PAGA) may not be waived in mandatory, pre-dispute employment arbitration agreements. (Brown v. Ralphs Grocery Co., Cal. Ct. App., No. B222689 [pdf]). This decision comes as something of a surprise in light of the U.S. Supreme Court’s recent ruling in AT&T Mobility, LLC v. Concepcion (2011) 563 U.S. __, 131 S. Ct. 1740 [pdf], which held that the Federal Arbitration Act (FAA) preempts state law and that class-action waiver provisions in California consumer arbitration agreements are generally enforceable (see prior blog post).

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In Sullivan v. Oracle, No. S170577 (Cal. June 30, 2011) (pdf), the California Supreme Court today resolved three important questions posed by the federal Court of Appeals for the Ninth Circuit regarding California law:

(1) Does the California Labor Code apply to overtime work performed in California for a California-based employer by out-of-state plaintiffs, such that overtime pay is required for work in excess of eight hours per day or in excess of forty hours per week?

(2) Does California’s unfair competition law (UCL), Business and Professions Code section 17200, apply to the overtime work described in question one?

(3) Does section 17200 apply to overtime work performed outside California for a California-based employer by out-of-state plaintiffs in the circumstances of this case if the employer failed to comply with the overtime provisions of the federal Fair Labor Standards Act (FLSA)?

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In Wal-Mart Stores, Inc. v. Dukes, No. 10-277 (U.S. June 20, 2011), the Supreme Court vacated class certification of a gender discrimination lawsuit brought by 1.5 million current and former Wal-Mart employees because the plaintiffs failed to identify a specific, company-wide policy or practice of discrimination. Additionally, the Court held unanimously that the employees’ backpay claims could not be certified as a class action because Wal-Mart was entitled to individual proceedings so that it could present defenses as to each claim.

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On Wednesday, June 22, from 12:00 to 1:00 p.m., Anthony Oncidi of Proskauer and plaintiff-side attorney, Andrew Friedman of Helmer Friedman LLP, will summarize the latest developments and discuss the practical implications of this year’s most significant employment decisions. Among other developments, attendees will hear about the new U.S. Supreme Court rulings regarding the “cat’s paw” liability theory (Staub v. Proctor Hosp., 131 S. Ct. 1186 (2011)), third-party retaliation claims (Thompson v. North Am. Stainless, LP, 131 S. Ct. 863 (2011)), whether state limitations on arbitration agreements are preempted by federal law (AT&T Mobility v. Concepcion, 2011 WL 1561956 (2011)), and whether an employee who complained orally about a FLSA violation is protected from retaliation (Kasten v. Saint-Gobain Performance Plastics Corp., 131 S. Ct. 1325 (2011)). And, of course, our panelists will cover the latest developments in the ongoing deluge of wage-and-hour cases including new cases holding that the “explicit mutual wage doctrine” barred a janitor’s claim for additional unpaid overtime (Arechiga v. Dolores Press, Inc., 192 Cal. App. 4th 567 (2011). They also will discuss how employees who misuse their employer's computer system to set up a competing business may be in violation of the federal Computer Fraud and Abuse Act (U.S. v. Nosal, 2011 WL 1585600 (9th Cir. 2011)) and the latest from the California courts on whether an allegedly "bi-polar" employee who threatened co-workers can assert a disability discrimination claim once she's been fired (Willis v. Superior Court, 194 Cal. App. 4th 312 (2011)).

The presentation will earn attendees 1 hour of participatory CLE credit. To register, see 2011 Employment Law Update: A Mid-Year Review of Recent Developments or go to http://www.legalspan.com/calbar/catalog.asp and select Tele-Seminars and Webinars.

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In a case possibly signaling a new direction in California wage and hour law, a California appellate court ruled Friday that a class of car dealers fell within the commissioned salesperson exemption to California overtime laws despite receiving flat fee commissions instead of commissions calculated as a percentage of the price of the cars sold.

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With California’s unemployment rate among the highest in the nation, employers doing business in the state are particularly sensitive to new legislation that would further increase the burdens on businesses and hamper economic growth. With these concerns in mind, the California Chamber of Commerce has released its annual list of "Job Killer Bills," which consists this year of 28 proposed laws that would impose even more costly workplace and employee benefit mandates, economic development barriers, expensive regulatory burdens and inflated liability costs. Included in the list are statutes that would automatically index the California minimum wage to the rate of inflation, increase taxes on small businesses, expand the scope of employee leaves, and limit employer use of consumer credit reports. The Chamber of Commerce hopes its list will bring greater awareness to the myriad challenges California employers face: "We simply cannot allow California to continue to be ranked as having one of the worst business climates in the country," said Allan Zarember, President and CEO of the California Chamber of Commerce.

The 2011 "job killer" bill list is available here.

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