Murphy v. Kenneth Cole Productions, Inc., 134 Cal. App. 4th 728 (2005)

Former store manager John Paul Murphy sued Kenneth Cole Productions, Inc. (KCP), a small, upscale retail clothing store, for violations of the wage and hour law, asserting that he was improperly classified as an exempt employee. After resigning his employment, Murphy filed a complaint with the Labor Commissioner. The Labor Commissioner awarded Murphy $26,667.22 in unpaid overtime, $2,863.99 in interest and a waiting time penalty of $7,177.50 ($239.25 x 30 days). After KCP appealed, Murphy (by then represented by the Hastings College of the Law Civil Justice Clinic) filed a “notice of claims,” adding claims for unpaid meal and rest periods, pay-stub violations and interest and attorney’s fees. The trial court awarded Murphy unpaid overtime ($28,412.56), payments for missed meal and rest periods ($17,431.77) and pay stub violations ($1,650), waiting time penalties ($7,895.40) and prejudgment interest plus attorney’s fees in the amount of $62,171.40. The Court of Appeal affirmed the lower court’s judgment that Murphy was a non-exempt employee (and, thus, entitled to overtime) in that he spent “far less than half of his time engaged in managerial duties.” However, the Court reversed the judgment to the extent it included an award for missed meal and rest periods and for pay-stub violations because such claims had not been raised before the Labor Commissioner. Further, the Court held that the payment for a meal/rest period violation is a penalty not a wage and, therefore, is subject to a one-year statute of limitations. Compare Tomlinson v. Indymac Bank, F.S.B., 359 F. Supp. 2d 891 (C.D. Cal. 2005).