Peabody v. Time Warner Cable, Inc., 2012 WL 3538753 (9th Cir. 2012)

Susan J. Peabody was employed as a commissioned salesperson by Time Warner Cable (“TWC”) for approximately 10 months. Peabody’s commissions were based on the revenue generated by advertising that was aired every broadcast month, which lasted four or five weeks. Peabody also received a base salary of $20,000 per year. During her 10 months of employment, Peabody was paid approximately $75,000 in total compensation. In this putative class action, Peabody alleges that her earnings did not exceed one and one-half times the minimum wage at all relevant times because she only received commission payments every four or five weeks. On the other hand, TWC contends that Peabody’s earnings should be calculated based on the broadcast month so that Peabody’s commissions count towards the pay period in which they were earned rather than the pay period in which the commissions were actually paid. Finding no “California case directly on point” and disregarding the DLSE Manual, the U.S. Court of Appeals for the Ninth Circuit certified the following question to be answered by the California Supreme Court pursuant to Cal. Rule of Court 8.548:

To satisfy California’s compensation requirements, whether an employer can average an employee’s commission payments over certain pay periods when it is equitable and reasonable for the employer to do so.