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Archive for July 16, 2014

Time Warner Cable Gets Served by California Supreme Court in Peabody

Chalk one up for the little guy. In Peabody v. Time Warner Cable, Inc. _____ Cal.4th ___ (July 14, 2014), the Supreme Court of California directly addressed “whether an employer may attribute commission wages paid in one pay period to other pay periods in order to satisfy California’s compensation requirements.” (Spoiler alert: the answer is no.)

Between July 2008 and May 2009, Plaintiff Susan Peabody (“Ms. Peabody”) was a commissioned account executive for Time Warner Cable (“Time Warner”) selling advertising on Time Warner’s television channels. Ms. Peabody regularly worked 45-hour weeks for which she was never paid overtime. Excluding commissions, she earned less than the minimum wage during weeks in which she worked more than 48 hours. As a result of Time Warner’s implementation of a new compensation plan in March 2009, she was not paid all commissions owed on her January and February 2009 sales and thus did not meet the pay requirements for a “commissioned employee” exemption during these periods.

Time Warner argued that it should be able to allocate Ms. Peabody’s commissions over the course of a month. (Side note: Isn’t that just so classically Time Warner Cable? “Please be prepared to have your commissions allocated between the days of the 1st and the 31st of this month.”). The Supreme Court did not buy this argument, citing California Labor Code section 204(a)’s clear directives that all wages, including commissions, must be paid “no less frequently than semimonthly.”

Alternatively, Time Warner argued that it should be able to allocate employee commissions according to the pay periods in which the commissions were earned not paid. The Supreme Court rejected this argument as well, choosing to narrowly construe the commission exemption language against the employer in order to protect the employee.

Now if only they would do something about those appointment schedules.

The entire opinion can be found here:

Von Nothdurft Decision a Game Changer for California Resident Managers

Residential apartment managers in California just can’t seem to catch a break. As licensees, they are not afforded the broad legal protections of tenants living at the same property. They are required to be on call 24/7 but are only entitled to compensation for actual hours worked. And they often work far more hours than they are paid for but lack the documentation to prove it.

Until recently, Industrial Wage Order No. 5-2001 (“IWO 5-2001), which regulates the wages, hours, and working conditions of resident managers, was their one saving grace. Under Section 10(C) of the order, an employer cannot credit the value of a resident manager’s apartment “against the minimum wage without a voluntary written agreement between the employer and the employee.”

On June 26, 2014, however, the California Court of Appeal in Von Nothdurft v. Steck, ___ Cal.App.4th ___, significantly weakened this protection. Von Nothdurft is the first state court case certified for publication that addresses what language needs to be included to qualify as a “voluntary written agreement” under IWO 5-2001. The court’s ruling? Far less than previously thought and less than the plain language of the order seems to require.

In Von Nothdurft, Plaintiff Brenda Leigh Von Nothdurft (“Ms. Von Nothdurft”), an apartment manager for a property owned by Defendant John Steck (“Mr. Steck”), signed a management agreement stating her compensation would include “free rent for her apartment.” At the time of the agreement, neither Ms. Von Nothdurft nor Mr. Steck was aware of the requirements of IWO 5-2001.

Ms. Von Nothdurft argued the agreement did not satisfy the requirements of IWO 5-2001 because it did not reference the minimum wage or any apartment rent credit. This interpretation of “voluntary written agreement” was adopted by the Department of Labor Standards and Enforcement (2002 Update of the DLSE Enforcement Policies and Interpretations Manual, at § 45.4.5) and a California federal district court in Brock v. Carrion, Ltd. (E.D. Cal. 2004) 332 F.Supp.2d 1320, 1330 (2004).

The Van Nothdurft court didn’t buy it:

Wage Order 5 does not define the phrase “voluntary written agreement” as used in subdivision 10(C) or otherwise specify that any particular terms must be included in such an agreement to permit a valid lodging credit – it requires only a “voluntary written agreement between the employer and the employee” without qualification. Under its plain terms, no express reference to a credit toward minimum wage, statement that the employee is entitled to minimum wage for every hour worked, or the precise amount to be credited, need be included as long as the parties understand and agree – as they did here by entering into the management agreement – that lodging is to be credited toward the employee’s compensation. Since the wage order’s language is clear, we apply it without further interpretation.

Interestingly, the court in Brock read the same “plain” language to reach the opposite conclusion: “Consistent with the statutory language, the DLSE requires that the written agreement explicitly reference that such credits are being applied toward the minimum wage obligation of the employer.” Brock v. Carrion, Ltd. (2004) 332 F. Supp. 2d 1320, 1330.

The interpretation adopted by the DLSE and the Brock court is the far more sensible one. Under IWO 5-2001, a voluntary written agreement is a condition precedent to validly crediting the employee’s lodging against the minimum wage (“…lodging may not be credited against the minimum wage without…”). This language clearly implies that the agreement must in some way relate to the employer’s minimum wage obligation.

Under Von Nothdurft, an agreement between employer and employee having nothing to do with the employment relationship would qualify as a “voluntary written agreement” as long as it was in writing and signed by the parties. The holding defies common sense and undermines the very purpose of the wage order—to inform the resident employee of her rights under the Labor Code and to protect those rights.

The Ten Commandments for Pursuing Your Employment Claims

Think you’ve been wronged by your current or former employer but don’t know how to proceed? Let these ten commandments be your guide.

DO: 

I.     Consult with an Employment Attorney.

We’re everywhere—you can’t miss us. We pay good money to get on your radar, so don’t feel like you’re imposing on our time or good nature. And if you are imposing? Well, that’s our problem, not yours.

DON’T:

II.    Pay Money for an Initial Consultation.

Now this is not a hard and fast rule. There are many competent and ethical employment attorneys who charge for initial consultations and are perfectly justified in doing so. There are also, however, many competent and ethical employment attorneys who don’t charge for initial consultations. Why buy the cow when you can get the milk for free?

DO:

III.    Consult with Another Employment Attorney.

It never hurts to get a second opinion, or a third, or a fourth, especially if they’re free. If every law firm you speak to wants to set up a meeting to sign you up as a client, you know you’re in business. Conversely, if you’re repeatedly told that you have no case, you have a pretty good idea where you stand.

DON’T:

IV.    Consult with Any Attorney.    

In a world where resources are scarce, employment lawyers are plentiful, especially in Los Angeles. If you have an employment law issue, you want to make sure you are advised by someone with employment law experience. If a lawyer’s website does not include employment as an area of practice, there’s a pretty good chance he or she is not well versed in that area of law.

DON’T:

V.     Contact an Attorney From the Workplace.

This seems rather obvious when you think about it. The problem is employees often don’t think about it. Many employers have policies explicitly authorizing the monitoring of employees’ company emails and internet search history. The same is true of phone calls made from work telephones. Even without these policies, you cannot assume such communications will remain confidential. If you don’t have a cell phone, wait until you get home to make the call. If you need to send an email from work, make sure you use a personal email account and do it during a break and out of the reach of prying ears.

DO:

VI.    Give Yourself Sufficient Time to Review the Retainer Agreement.

So you’ve met with the Law Offices of Employmentson and Laborstein, APC, and have a good vibe about them. They’re interested in representing you and give you their standard retainer agreement. Before signing anything, read the agreement! This is more ostensibly obvious advice too many clients ignore. Do not feel pressured into signing anything you have not fully reviewed. If you need more time, ask for it.

DON’T:

VII.   Sign the Retainer Until All Your Questions Have Been Answered.

A common side effect of being a lawyer is writing like one. If there is a provision in a retainer agreement that does not make sense to you, ask the attorney to explain it to you. It’s quite possible he or she does not understand it either. A retainer agreement is a legally-binding contract. Once you enter into the agreement, you are bound by its terms. It’s critically important that you understand, and are comfortable with, everything in the contract.

DO:

VIII.   Everything Your Lawyer Tells You to Do When You’re Told to Do It.

A good attorney will zealously fight for you, but you need to do your part. Make yourself an asset to your case, not another problem your lawyer has to contend with.

DON’T:

IX.    Withhold Relevant Information From Your Attorney.

A corollary to the Eighth Commandment and a cardinal sin. You might be tempted to withhold information which you believe is harmful to your case or personally embarrassing. Don’t! An informed lawyer with advance knowledge can minimize the damage and/or avoid uncomfortable revelations about you. A blindsided and unprepared lawyer will lose face in front of opposing counsel and lose faith in you.

DO:

X.     Follow These Commandments As They Have Been Told Unto You.

Uncomfortable with the religious undertones? Just think of them as helpful suggestions.