In October, the 4th District Court of Appeal issued its published opinion in See’s Candy Shops, Inc. v. Superior Court (Silva) (2012) __ Cal.App.4th __, permitting employers to round employees' time to the nearest tenth of an hour, provided that the rounding method "will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked." The employee petitioned the California Supreme Court for review, and alternatively sought to depublish the opinion. The Supreme Court has denied both petitions. See’s Candy Shops, Inc. will remain good law in California.
Pamela Silva brought a wage - and - hour class action complaint against her former employer, See' s Candy Shops, Inc. After certifying a class of current and former California employees, the trial court granted Silva' s summary adjudication motion on four of See' s Candy's affirmative defenses and entered an order dismissing the four defense . In a writ petition, See's Candy challenged the dismissal of two of the affirmative defenses. These defenses pertained to See's Candy's timekeeping policy that rounds employee punch in/out times to the nearest one-tenth of an hour.
After the Court of Appeal denied the petition, the California Supreme Court granted See's Candy's petition for review and ordered the Court of Appeal to vacate its prior order and issue an order to show cause and hear the matter. After briefing (including several amicus briefs) and argument, the Court of Appeal concluded that the trial court had erred in granting summary adjudication on the two affirmative defenses pertaining to the rounding policy:
Relying on the DOL rounding standard, we have concluded that the rule in California is that an employer is entitled to use the nearest-tenth rounding policy if the rounding policy is fair and neutral on its face and "it is used in such a manner that it will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked." (29 C.F.R. § 785.48; see DLSE Manual, supra, §§ 47.1, 47.2.) Applying this legal standard, we turn to address whether the parties met their summary adjudication burdens with respect to the 39th and 40th affirmative defenses alleging that See's Candy's nearest-tenth rounding policy was consistent with California law.
The ruling leaves open the issue of which party will prevail on these issues at trial. If the rounding policy can be proven to have resulted in a loss to employees, the workers will prevail. If not, the employer will prevail.