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Sullivan v. Oracle Corp., 51 Cal. 4th 1191 (2011)

In this case, the California Supreme Court answered three questions certified to it by the United States Court of Appeals for the Ninth Circuit as follows: (1) California’s overtime law applies to work performed in California for a California employer by nonresident workers; (2) the Unfair Competition Law (“UCL”) applies to violations of the overtime…

In Sullivan v. Oracle, No. S170577 (Cal. June 30, 2011), 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)?

On November 18, the California Supreme Court in Pineda v. Bank of America, No. S170758 (Cal. Nov. 18, 2010) (pdf) clarified two issues regarding so-called “waiting time penalties” (i.e., penalties under California Labor Code Section 203 associated with the late payment of final wages upon termination of employment). First, the Court ruled that a three-year statute of limitations applies to such actions, whether or not accompanied by a claim for the underlying late wages. Second, it held that waiting time penalties are not recoverable as restitution under California’s unfair competition law, Business and Professions Code Section 17200 (the “UCL”). While the latter ruling is marginally beneficial to employers by limiting liability under the UCL, the Court’s finding of a three-year statute of limitations for waiting time penalties dramatically expands potential employer liability.