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Archive for overtime

CA Appellate Court Admonishes Trial Judges to “Stay Classy” in Certifying Wage and Hour Claims

In Martinez v. Joe’s Crab Shack Holdings (Nov. 10, 2014), the Court of Appeal for the Second District of California reinforced the importance of the class action as a preferred means of adjudicating wage and hour cases. “Litigation by class action has long been recognized as a superior method of resolving wage and hour claims in California, including those seeking redress for unpaid overtime wages.”

In September of 2007, Roberto Martinez filed a class action seeking to represent a class of salaried managerial employees who worked at different Joe’s Crab Shack (JCS) restaurants in California and had been misclassified as exempt employees and denied overtime compensation. In June 2011, Martinez and other former managers moved for certification of a class consisting of “[a]ll persons employed by Defendants in California as a salaried restaurant employee in a [JCS] restaurant at any time since September 7, 2003.”

The plaintiffs presented training and operation manuals demonstrating JCS’ uniform hiring and training practices throughout its stores. Specifically, the operations manual applied to all restaurants and every employee; each restaurant offered the same menu; and all managerial employees were evaluated using the same form and procedure. Plaintiffs also introduced declarations from twenty two (22) current and former salaried, managerial employees who (1) claimed they routinely worked more than the 50-55 hours they were told they would be working and (2) estimated performing hourly employee tasks between 50 percent to 95 percent of the time. Under the executive employee exemption to overtime compensation, an exempt employee must spend at least half of his or her time performing managerial functions.

Though the Appellate Court acknowledged obstacles in certifying certain cases, it ultimately reversed the trial court’s order denying class action status: “[W]e understand from Brinker, Duran and Ayala that classwide relief remains the preferred method of resolving wage and hour claims, even those in which the facts appear to present difficult issues of proof. By refocusing its analysis . . . the trial court may in fact find class analysis a more efficient and effective means of resolving plaintiffs’ overtime claim.”


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: