Archive for May, 2013|Monthly archive page

Compensation Based Solely Upon Hours, With No Guaranteed Minimum, Is Not a Salary

In Exemptions, Salary on May 18, 2013 at 3:16 am
Daily salary IMG 0077

Daily salary IMG 0077 (Photo credit: Wikipedia)

On Thursday, the Sixth District held that a compensation system based solely on the number of hours worked, with no guaranteed minimum cannot be considered a salary, and therefore cannot serve as the basis for an exempt classification.  Negri v. Koning & Associates, No. H037804, __ Cal. App. 4th __ (6th Dist. May 16, 2013).  California Labor Code § 515(a) requires that to be exempt, the employee must earn a “monthly salary equivalent to no less than two times the state minimum wage for full-time employment.”

Plaintiff is an insurance claims adjuster who was paid $29 per hour with no minimum guarantee.  Slip Op. at 1.  When he worked more than 40 hours in a week, he was still paid at $29 per hour.  He brought a claim for overtime pay, and the trial court issued a defense verdict, concluding that plaintiff was an exempt employee.  Id. at 3.

Defendant argued that plaintiff was properly classified as exempt because plaintiff’s workload was not subject to reduction or variation, and he worked substantially the same number of hours each week of his employment.  In other words, defendant argued that even though it paid plaintiff by the hour, because there was always enough work to occupy him for 60 hours per week, the resulting compensation was a salary because it did not vary.  Defendant further maintained that “some sort of reduction in workload” must actually occur in order for an employee to lose his exemption.

The Court of Appeal disagreed, even though plaintiff always received an unvarying minimum amount of pay in practice:

We recognize that, in practice, defendant always paid plaintiff the equivalent $29 per hour for 40 hours per week so that he, in effect, received an unvarying minimum amount of pay. We also recognize that, as a general matter, an exempt employee may be paid extra for extra work without losing the exemption. (See Kennedy, supra, 410 F.3d at p. 371.) The problem here is that defendant stipulated to the fact that it “never paid [plaintiff] a guaranteed salary”; if he worked fewer claims “he made less money than if he worked more claims.” That is the same thing as saying that plaintiff was not paid “a predetermined amount” that “was not subject to reduction based upon the quantity of work performed.” He was not paid a salary. For that reason, defendant did not prove that the administrative exemption of Wage Order 4 applies in this case.

Slip Op. at 8-9.

Judges & Attorneys

Associate Justice Eugene M. Premo delivered the opinion for the Court, with Presiding Justice Conrad L. Rushing and Associate Justice Franklin D. Elia concurring.

Appeal from judge of the Santa Clara County Superior Court, Hon. Socrates P. Manoukian.

Counsel for Plaintiff/Appellant: Ari Moss, Dennis F. Moss

Counsel for Defendant/Respondent: Michael A. Bishop, N. Kate Jeffries.



Meal and Rest Break Class Can Be Determined on Class-wide Basis

In Certification, Class Actions, Meal and Rest Breaks on May 13, 2013 at 9:15 pm

Coco-park-security-guard (Photo credit: Wikipedia)

On Friday, the Fourth District reversed the denial of a certification of a meal and rest break class of security guards.  Faulkinbury v. Boyd & Associates, Inc., No. G041702, __ Cal. App. 4th. __ (4th Dist. May 10, 2013).  The court reconsidered in light of the California Supreme Court decision in Brinker Restaurant Corp. v. Superior Court, 53 Cal.4th 1004 (2012), and concluded that the primary issue was the legality of certain company policies, which could be determined on a class-wide basis, even if the application of the policies varied by individual. More later.

Judges & Attorneys

Justice Richard D. Fybel delivered the opinion for the court.  Acting Presiding Justice William F. Rylaarsdam and Associate Justice Eileen C. Moore concurred.

Appeal from an order of the Superior Court of Orange County, Gail Andrea Andler, Judge.

Saltzman, Stanley D. Saltzman, Christina A. Humphrey, Craig Pynes; Class Action Litigation Group, Renee L. Barge; Law Office of Lawrence A. Witsoe, Lawrence A. Witsoe; White & Roseman and Leslie Roseman for Plaintiffs and Appellants.

LightGabler, Jonathan Fraser Light and Angela V. Lopez for Defendant and Respondent.


D.C. Circuit Strikes Down NLRB’s Poster Requirement

In NLRB, Poster on May 8, 2013 at 12:52 pm
English: Color logo of the National Labor Rela...

English: Color logo of the National Labor Relations Board, an independent agency of the United States federal government. (Photo credit: Wikipedia)

A panel for the U.S. Court of Appeals for the D.C. Circuit yesterday struck down the NLRB’s rule requiring employers to post an employee rights poster informing employees of their rights under the NLRA to unionize, among other things.  National Association of Manufacturers v. National Labor Relations Board, No. 12-5068, __ F.3d __ (D.C. Cir. May 7, 2013).  The court reasoned that the rule violated employers’ free speech rights and was, therefore, unlawful.  “The right to disseminate another’s speech necessarily includes the right to decide not to disseminate it.”  Slip Op. at 17.

We therefore conclude that the Board’s rule violates § 8(c) because it makes an employer’s failure to post the Board’s notice an unfair labor practice, and because it treats such a failure as evidence of anti-union animus in cases involving, for example, unlawfully motivated firings or refusals to hire—in other words, because it treats such a failure as evidence of an unfair labor practice.19 See Brown & Root, Inc. v. NLRB, 333 F.3d 628, 637–39 & n.7 (5th Cir. 2003).

Slip Op. at 23.  You can read the decision here.


Pair of Interesting Non-Wage Decisions This Week From Second District

In Other Cases of Interest on May 8, 2013 at 11:46 am
Deposition of Mary Walcott, August 3, 1692

Deposition of Mary Walcott, August 3, 1692 (Photo credit: Wikipedia)

The Second District issued a pair of interesting non-wage opinions this week:

  • Yesterday, citing the absence of “subject matter jurisdiction”, the Second District held that that a non-noticing party in a deposition, who does not move for an order in the pending case for a determination of the “reasonable rate” a court reporter may charge, may not bring a subsequent action to obtain restitution or obtain injunctive relief.  The Las Canoas Company, Inc. v. Kramer, No. B238729, __ Cal. App. 4th. __ (2d Dist. May 7, 2013).  The court further concluded that “absent extraordinary circumstances, the court in the action in which the dispute arises is the only court to resolve the issue.” Slip Op. at 4 (emphasis supplied).  You can read more here.
  • On Monday, the Second District reversed a dismissal of a former deputy sheriff.  Shirey v. Los Angeles County Civil Service Commission (Los Angeles County Sheriff’s Department), No. B238355, __ Cal. App. 4th __ (May 6, 2013).  You can read about it here.


Collective Bargaining Exception to California Labor Code Section 227.3 (Right to Immediate Vacation Time Payment Upon Termination) Requires Clear and Unmistakable Waiver

In Labor Code Section 203, Labor Code Section 227.3, Termination Pay (Labor Code section 201), Vacation, Waiting Time Penalties on May 2, 2013 at 4:11 pm
Collective Bargaining Bill Signing

Collective Bargaining Bill Signing (Photo credit: Office of Governor Patrick)

The Second District today issued its ruling in Choate v. Celite Corporation, No. B239160, __ Cal. App. 4th __ (2d Dist. May 2, 2013).  The case involved Labor Code section 227.3, which provides for full payment of vested vacation time upon termination:

Unless otherwise provided by a collective-bargaining agreement, whenever a contract of employment or employer policy provides for paid vacations, and an employee is terminated without having taken off his vested vacation time, all vested vacation shall be paid to him as wages at his final rate in accordance with such contract of employment or employer policy respecting eligibility or time served; provided, however, that an employment contract or employer policy shall not provide for forfeiture of vested vacation time upon termination. . . .

(Emphasis supplied.)

The court rejected an implied waiver standard and held that for the collective bargaining agreement exception to apply, the CBA must clearly and unmistakably waive the right to immediate payment: Read the rest of this entry »