Wage Law

We love Chinatown, but it is teeming with employers who oppress their laborers and refuse to pay minimum wage and overtime, or violate other labor laws such as those requiring meal and rest breaks. The latest violator is Dick Lee Pastry, a poorly reviewed restaurant in San Franscisco's Chinatown. Dick Lee Pastry was recently ordered to pay back wages and penalties after forcing employees to work up to 80 hours per week for under $4 per hour. According to the San Francisco Chronicle, Dick Lee Pastry paid $525,000 to settle the wage theft claims. But it wasn't the first, and it won't be the last.

Places with large concentrations of immigrant workers are notorious violators of California wage and hour laws. Sadly, this is even true when the employers are also immigrants, even of the same ethnicity. The more vulnerable the worker, the higher the probability that they are going to be exploited.

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.

You can download the original opinion from the Court of Appeal here in PDF or Word format. Here is the background:

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.

 

Bank of America has agreed to pay $12 million to settle a class action seeking overtime pay for current and former Merrill Lynch sales assistants. The case, filed in U.S. District Court in Manhattan, affects approximately 12,000 workers. The court has not yet approved the settlement.

Review has been granted in the class action waiver case of Franco v. Arakelian Enterprises, Inc. (2012) 149 Cal.Rptr.3d 530 (SC S207760/B232583 review granted 2/13/13) in which the Court of Appeal affirmed an order denying a petition to compel arbitration. The court ordered briefing deferred pending its decision in Iskanian v. CLS Transportation Los Angeles, LLC, S204032 (#12-97), which will address whether AT&T Mobility LLC v. Concepcion (2011) 563 U.S. __ [131 S.Ct. 1740, 179 L.Ed.2d 742] impliedly overruled Gentry v. Superior Court (2007) 42 Cal.4th 443 with respect to contractual class action waivers in the context of non-waivable labor law rights.

Following a January DC Circuit opinion that found the Obama's administration's recess appointments to the NLRB unconstitutional, GOP legislators have put forth a bill that proposes to prohibit the NLRB and the Consumer Financial Protection Bureau from enforcing or implementing decisions and regulations without a confirmed board or director.

According to this Reuters story, the bill, sponsored by senators Mike Johanns, Lamar Alexander and John Cornyn, "has little chance of becoming law", but "adds to pressure on the Obama administration to reach a compromise to keep both agencies operating and determine whether it will appeal the ruling."

"Any decisions or regulations made by the people who have no right to be there are invalid," Johanns, of Nebraska, said in a statement.

Among the decisions called into question is D.R. Horton, Inc., 357 NLRB No. 184 (Jan. 6, 2012), in which the NLRB held that mandatory arbitration agreements requiring all employment disputes to be resolved through individual arbitrations violate Section 8(a)(1) of the National Labor Relations Act because they impair employees' ability to engage in concerted action for mutual aid or protection. Several district court rulings, including some in California, have rejected the NLRB decision in D.R. Horton as inconsistent with the Supreme Court ruling in AT&T Mobility v. Concepcion (2011) 563 U.S. ___, 131 S. Ct. 1740, which held that the FAA required enforcement of an arbitration agreement that included a class action waiver.