California Minimum Wage is Now $10 Per Hour

Effective January 1, 2016, the minimum wage in California is $10.00 per hour.


The minimum wage applies to adults and minors, tipped and non-tipped employees in California.

If you are a sheepherder, in which case your minimum wage is a monthly salary of $1,777.98.

Employers take note: Wages paid to sheepherders may not be offset by meals or lodging provided by the employer. Instead, there are provisions in IWC Order 14-2007, Sections 10(F), (G) and (H) that apply to sheepherders with respect to monthly meal and lodging benefits required to be provided by the employer.

DIRECTV Prevails in Class Arbitration Waiver SCOTUS Case

Petitioner DIRECTV, Inc., and its customers entered into a service agreement that included a binding arbitration provision with a class-arbitration waiver. It specified that the entire arbitration provision was unenforceable if the “law of your state” made class-arbitration waivers unenforceable. The agreement also declared that the arbi­tration clause was governed by the Federal Arbitration Act. At the time that respondents, California residents, entered into that agree­ment with DIRECTV, California law made class-arbitration waivers unenforceable, see Discover Bank v. Superior Court, 36 Cal. 4th 148, 113 P. 3d 1100. This Court subsequently held in AT&T Mobility LLC v. Concepcion, 563 U. S. 333, however, that California’s Discover Bank rule was pre-empted by the Federal Arbitration Act, 9 U. S. C. § 2.

When respondents sued petitioner, the trial court denied DIRECTV’s request to order the matter to arbitration, and the Cali­fornia Court of Appeal affirmed. The court thought that California law would render class-arbitration waivers unenforceable, so it held the entire arbitration provision was unenforceable under the agree­ment. The fact that the Federal Arbitration Act pre-empted that Cal­ifornia law did not change the result, the court said, because the par­ties were free to refer in the contract to California law as it would have been absent federal pre-emption. The court reasoned that the phrase “law of your state” was both a specific provision that should govern more general provisions and an ambiguous provision that should be construed against the drafter. Therefore, the court held, the parties had in fact included California law as it would have been without federal pre-emption.

Held: Because the California Court of Appeal’s interpretation is preempted by the Federal Arbitration Act, that court must enforce the arbitration agreement. Pp. 5–11.

(a) No one denies that lower courts must follow Concepcion, but that elementary point of law does not resolve the case because the parties are free to choose the law governing an arbitration provision, including California law as it would have been if not pre-empted. The state court interpreted the contract to mean that the parties did so, and the interpretation of a contract is ordinarily a matter of state law to which this Court defers, Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior Univ., 489 U. S. 468, 474. The issue here is not whether the court’s decision is a correct statement of California law but whether it is consistent with the Federal Arbitration Act. Pp. 5–6.

(b) The California court’s interpretation does not place arbitration contracts “on equal footing with all other contracts,” Buckeye Check Cashing, Inc. v. Cardegna, 546 U. S. 440, 443, because California courts would not interpret contracts other than arbitration contracts the same way. Several considerations lead to this conclusion.

First, the phrase “law of your state” is not ambiguous and takes its ordinary meaning: valid state law. Second, California case law—that under “general contract principles,” references to California law in­corporate the California Legislature’s power to change the law retro­actively, Doe v. Harris, 57 Cal. 4th 64, 69–70, 302 P. 3d 598, 601– 602—clarifies any doubt about how to interpret it. Third, because the court nowhere suggests that California courts would reach the same interpretation in any other context, its conclusion appears to re­flect the subject matter, rather than a general principle that would include state statutes invalidated by other federal law. Fourth, the language the court uses to frame the issue focuses only on arbitra­tion. Fifth, the view that state law retains independent force after being authoritatively invalidated is one courts are unlikely to apply in other contexts. Sixth, none of the principles of contract interpreta­tion relied on by the California court suggests that other California courts would reach the same interpretation elsewhere. The court ap­plied the canon that contracts are construed against the drafter, but the lack of any similar case interpreting similar language to include invalid laws indicates that the anti-drafter canon would not lead Cali­fornia courts to reach a similar conclusion in cases not involving arbi­tration. Pp. 6–10.

225 Cal. App. 4th 338, 170 Cal. Rptr. 3d 190, reversed and remanded.

DIRECTV, Inc. v. Imburgia (US 14–462 12/14/15). 6-3; BREYER, J., delivered the opinion of the Court, in which ROBERTS, C. J., and SCALIA, KENNEDY, ALITO, and KAGAN, JJ., joined. THOMAS, J., filed a dissenting opinion. GINSBURG, J., filed a dissenting opinion, in which SOTOMAYOR, J., joined.

Employee Wins on Fair Labor Standards Act/Fair Notice Test

In Rosenfield v. Global Tranz Enterprises (9th Cir. 13-15292 12/14/15), the Ninth Circuit has reversed a district court’s summary judgment in favor of the employer on an employee’s claim under the anti-retaliation provision of the Fair Labor Standards Act. Applying the “fair notice” test for deciding whether the employee had “filed any complaint," the panel considered whether, pursuant to Kasten v. Saint-Gobain Performance Plastics Corp. (2011) 563 U.S. 1, the complaint was “sufficiently clear and detailed for a reasonable employer to understand it, in light of both content and context, as an assertion of rights protected by the statute and a call for their protection.” The Court held that a complaining employee’s position is an important part of the “context” that the fact finder must consider, but the panel declined to formulate or adopt a special bright-line rule to apply when considering whether a manager has “filed any complaint” within the meaning of 29 U.S.C. § 215(a)(3).

Therefore, the panel held that a jury reasonably could find that the employee filed a complaint, and it reversed the district court’s summary judgment and remanded for further proceedings.

For the full opinion in PDF, click this link.

Deducting From Wages for Employee-Caused Damage

Many multi-state employers enact policies that provide that an employee driver is liable for wage deductions for damage caused to his or her company vehicle if it was caused by employee negligence or third party acts while in the employee's possession. This practice is illegal in many states, including California.

In California, employers are prohibited from taking deductions from an employee's wages for damages caused by simply negligence. California law provides that losses caused by an employee's negligence are a normal cost of doing business and must be borne by the employer. The California Division of Labor Standards Enforcement has held that an employer cannot take deductions to compensate for damage caused by an employee's negligence unless they were caused by a dishonest or willful act of the employee, or by an employee's "gross negligence." Gross negligence is defined as conduct that is "aggravated, reckless, and flagrant" with a state of mind "that exercises so slight a degree of care as to exhibit a conscious indifference or 'I don't care attitude' concerning the ultimate consequences of (one's) actions."

It is "a very rare action which will be found to be grossly negligent" and simple motor vehicle accidents will not meet the burden. An employer who makes a deduction while claiming gross negligence does so at great risk, because if the employee is found not to be guilty of gross negligence, the employee is entitled to recover not only his or her wages withheld, but also penalties of up to 30 days pay for the employer's failure to pay wages "without reduction or abatement."

The ability of an employer to deduct amounts from an employee’s wages due to a cash shortage, breakage, or loss of equipment is specifically regulated by the Industrial Welfare Commission Orders and limited by court decisions. (Kerr’s Catering v. Department of Industrial Relations (1962) 57 Cal.2d 319).In addition, there have been several court decisions that significantly restrict an employer’s ability to take an offset against an employee’s wages. Barnhill v. Sanders (1981) 125 Cal.App.3d 1, (Balloon payment on separation of employment to repay employee’s debt to employer is an unlawful deduction even where the employee authorized such payment in writing); CSEA v. State of California (1988) 198 Cal.App.3d 374 (Unlawful to deduct from current payroll for past salary advances that were in error); Hudgins v. Nieman Marcus (1995) 34 Cal.App.4th 1109 (Deductions for unidentified returns from commission sales unlawful.)

Some other common payroll deductions often made by employers that are unlawful include:


a. Gratuities.  An employer cannot collect, take, or receive any gratuity or part thereof given or left for an employee, or deduct any amount from wages due an employee on account of a gratuity given or left for an employee.  Labor Code Section 351  However, a restaurant may have a policy allowing for tip pooling/sharing among employees who provide direct table service to customers.

b. Photographs.  If an employer requires a photograph of an applicant or employee, the employer must pay the cost of the photograph. Labor Code Section 401

c. Bond.  If an employer requires a bond of an applicant or employee, the employer must pay the cost of the bond. Labor Code Section 401

d. Uniforms.  If an employer requires that an employee wear a uniform, the employer must pay the cost of the uniform. Labor Code Section 2802,
Industrial Welfare Commission Orders, Section 9.  The term "uniform" includes wearing apparel and accessories of distinctive design and color.

e. Business Expenses.  An employee is entitled to be reimbursed by his or her employer for all expenses or losses incurred in the direct consequence of the discharge of the employee’s work duties. Labor Code Section 2802

f. Medical or Physical Examinations.  An employer may not withhold or deduct from the wages of any employee or require any prospective employee or applicant for employment to pay for any pre-employment medical or physical examination taken as a condition of employment, nor may an employer withhold or deduct from the wages of any employee, or require any employee to pay for any medical or physical examination required by any federal or state law or regulation, or local ordinance. Labor Code Section 222.5


California Fair Pay Act Signed Into Law

SB 358 by Senator Hannah-Beth Jackson (D-Santa Barbara) – Conditions of employment: gender wage differential

Existing law regulates the payment of compensation to employees by employers and prohibits an employer from conditioning employment on requiring an employee to refrain from disclosing the amount of his or her wages, signing a waiver of the right to disclose the amount of those wages, or discriminating against an employee for making such a disclosure.

Existing law generally prohibits an employer from paying an employee at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions. Existing law establishes exceptions to that prohibition where the payment is made pursuant to a seniority system, a merit system, a system which measures earnings by quantity or quality of production, or a differential based on any bona fide factor other than sex. Existing law makes it a misdemeanor for an employer or other person acting either individually or as an officer, agent, or employee of another person to pay or cause to be paid to any employee a wage less than the rate paid to an employee of the opposite sex as required by these provisions, or who reduces the wages of any employee in order to comply with these provisions.

This bill would revise that prohibition to eliminate the requirement that the wage differential be within the same establishment, and instead would prohibit an employer from paying any of its employees at wage rates less than those paid to employees of the opposite sex for substantially similar work, when viewed as a composite of skill, effort, and responsibility, as specified. The bill would revise and recast the exceptions to require the employer to affirmatively demonstrate that a wage differential is based upon one or more specified factors, including a seniority

system, a merit system, a system that measures earnings by quantity or quality of production, or a bona fide factor other than sex, as specified. The bill would also require the employer to demonstrate that each factor relied upon is applied reasonably, and that the one or more factors relied upon account for the entire differential. The bill would prohibit an employer from discharging, or in any manner discriminating or retaliating against, any employee by reason of any action taken by the employee to invoke or assist in any manner the enforcement of these provisions. The bill would authorize an employee who has been discharged or discriminated or retaliated against, in the terms and conditions of his or her employment because the employee engaged in any conduct delineated in these provisions, to recover in a civil action reinstatement and reimbursement for lost wages and work benefits caused by the acts of the employer, including interest thereon, as well as appropriate equitable relief. The bill would prohibit an employer from prohibiting an employee from disclosing the employee’s own wages, discussing the wages of others, inquiring about another employee’s wages, or aiding or encouraging any other employee to exercise his or her rights under these provisions. The bill would also increase the duration of employer recordkeeping requirements from 2 years to 3 years. By changing the definition of a crime, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.


Walsh & Walsh, P.C.
420 Exchange, Suite 270
Irvine, California 92602-1316

California Supreme Court to Review Opinion on Class Action Attorney's Fees

The California Supreme Court has decided to grant review in Laffitte v. Robert Half International (Brennan) (2014) 180 Cal.Rptr.3d 136. The case addresses whether, under Serrano v. Priest (1977) 20 Cal.3d 25, the trial court can anchor its calculation of reasonable attorney's fees in a class action on a percentage of the common fund recovered. The Court of Appeal said yes. You can read the underlying opinion at this link.

The objection was based on eight points: (1) the attorneys’ fee request was excessive; (2) “[m]oney to charity should not be a part of the Court’s attorneys’ fee award calculation”; (3) information necessary for class members to intelligently object to or comment on the proposed settlement was missing from the notice and the pleadings; (4) the clear sailing provision warranted the appointment of a class guardian; (5) the notice to the class was deceptive regarding the responsibility for payment of attorneys’ fees; (6) class counsel and counsel for Robert Half had not filed a report, as required by the amended settlement agreement; (7) the notice did not disclose that unclaimed funds would be donated to a charity of the Robert Half defendants’ choice; and (8) certain other provisions of the settlement were improper.

The plaintiffs' counsel argued that they had sent class notices to 3,996 class members and had received only two objections: an objection from Brennan and an “objection” that was actually a dispute over the amount the individual class member was to receive. The class representatives also filed a motion for attorneys’ fees, costs, and class representative enhancements. The motion requested $6,333,333.33 in attorneys’ fees for class counsel, $127,304.08 in costs, $79,000 in settlement administrator expenses, and $80,000 in class representative enhancement payments. The class representatives explained that class counsel were requesting as attorneys’ fees one-third of the gross settlement, which constituted a common fund for the benefit of class members, and argued that this amount was reasonable and appropriate. Class counsel asserted that their hourly rates and number of hours worked were fair and reasonable and that the successful result, the difficulty of the issues in the case, the quality of their representation, the contingency risk, and the preclusion of other employment justified a lodestar multiplier.

The trial court overruled his objections and approved the settlement, which included an award of attorneys’ fees to class counsel of one-third of the settlement, or approximately $6.3 million. Brennan appeals from the order approving the settlement and entering final judgment, challenging both the class action settlement notice regarding the award of attorneys’ fees and the amount of attorneys’ fees awarded.

The Court of Appeal affirmed.

"As discussed, class counsel received a percentage of the recovery commensurate with percentages awarded in other cases, and the class members received a significant monetary distribution. The clear sailing agreement did not provide for a payment of attorneys’ fees separate and apart from the common fund but provided for a payment of attorneys’ fees out of the fund. Finally, there was no arrangement that fees not awarded would revert to the Robert Half defendants. (See In re Toys “R” Us-Delaware, Inc.—Fair and Accurate Credit Transactions Act (FCTA) Litigation (C.D.Cal. 2014) 295 F.R.D. 438, 458 [“despite the clear sailing provision,” the “absence of a ‘kicker provision’ in the parties’ settlement and the fact that the class is receiving reasonable value reduces the likelihood that plaintiffs and [the defendant] colluded to confer benefits on each other at the expense of class members”]; Larsen v. Trader Joe’s Company (N.D.Cal. 2014) 2014 WL 3404531 at p. 8 [“clear sailing provisions generally do not raise concerns where, as here, the fees are to come from the settlement fund,” as opposed to “where attorneys’ fees are paid on top of the settlement fund”].) In the absence of any of the recognized warning signs of collusion or other evidence of collusion, the inclusion of a clear sailing provision in the settlement agreement did not constitute a breach of fiduciary duty on the part of class counsel."

All seven justices signed the order granting review.

New Forms for California Paid Sick Leave Policies

AB 1522, the Healthy Workplaces, Healthy Families Act of 2014 goes into effect on January 1, 2015 (although paid sick leave accrual does not begin until July 1, 2015). Starting with the new year, employers must comply with AB 1522's notice provisions.

The DLSE has published a new poster template to notify employees of their paid sick leave rights. The notice must be posted in the workplace by January 1, 2015. You can download the poster at this link.

The DLSE has also updated the Labor Code § 2810.5 “Notice to Employee” to include information on employers' paid sick leave policies. This revised "Notice to Employee" must be used starting January 1.

The 5 rules on how to kill a consumer-friendly initiative

My political post of the month: Props 45 and 46 are laws written to protect you and I - the consumer, the common person.. They are opposed by large profitable corporate interests. They are deceiving you into thinking these laws are about something that they are not and if you only watch the TV ads, you're going to vote against these propositions even if you are actually in favor of their goals.


This article explains it brilliantly.

If You Spam Us, and Google Smacks You, Don't Come Asking Us For Help

A fellow named Ener sent us a email last week asking us to remove a spammy comment and link his company,, left on one of our posts in 2010. For whatever reason, our spam filter didn't block it. Now has been penalized by Google and they want our help removing their spam comment. And we are going to do it, just as soon as the time comes when we have nothing better to do than search three year old posts for spammers so that they can get a better listing on Google. #MightNeverHappen

SB 390 Signed

SB 390 (employee wage withholdings, failure to remit) amending Labor Code § 227 concerning employee wage withholdings, has been signed by Governor Brown:

Existing law makes it a crime for an employer to fail to make agreed-upon payments to health and welfare funds, pension funds, or various benefit plans. Existing law provides that the crime be punished as a felony or a misdemeanor, as specified, if the amount unpaid exceeds $500, and as a misdemeanor, if the amount is less than $500.

This bill would make it a crime, as described above, for an employer to fail to remit withholdings from an employee’s wages that were made pursuant to state, local, or federal law. The bill would prescribe how recovered withholdings or court-imposed restitution, if any, are to be forwarded or paid. By broadening the definition of a crime, this bill would impose a state-mandated local program.

© Walsh & Walsh, P.C., wage & hour, employee wage withholdings.

SB 435 Signed

SB 435 (compensation, meal and rest or recovery periods) amending Labor Code § 226.7 concerning meal and rest periods, has been signed by Governor Brown:

Existing law prohibits an employer from requiring an employee to work during any meal or rest period mandated by an order of the Industrial Welfare Commission (IWC) and establishes penalties for an employer’s failure to provide a mandated meal or rest period.

This bill would make that prohibition applicable to a meal or rest or recovery period mandated by applicable statute or applicable regulation, standard, or order of the IWC, the Occupational Safety and Health Standards Board, or the Division of Occupational Safety and Health. The bill would exempt specified employees from the prohibition. The bill would require an employer to pay an employee, for any meal or rest or recovery period mandated by law, one additional hour of pay at the employee’s regular rate of compensation for each workday that the meal or rest or recovery period is not provided. The bill would define “recovery period” for those purposes.

© Walsh & Walsh, P.C., wage & hour, meal periods, rest periods, recovery periods.

SB 168 Signed

SB 168 (farm labor contractors, successors, wages and penalties) has been signed by Governor Brown, adding Labor Code § 1698.9 concerning wages and penalties for farm labor contractors and their successors.

Existing law requires farm labor contractors to be licensed by the Labor Commissioner and to comply with specified employment laws applicable to farm labor contractors. Under existing law, a person who violates farm labor contractor requirements is guilty of a misdemeanor punishable by specified fines, or imprisonment in the county jail for not more than 6 months, or both.

This bill, in addition, would make a farm labor contractor successor to any predecessor farm labor contractor that owed wages or penalties to a former employee of the predecessor, whether the predecessor was a licensee or not, liable for those wages and penalties, if the successor farm labor contractor meets one or more specified criteria. By imposing a new requirement on farm labor contractor successors, the violation of which would be a crime, the bill would impose a state-mandated local program.

© Walsh & Walsh, P.C., wage & hour, penalties, farm workers

Arbitration Denied. Mendez v. Mid-Wilshire Health

Defendant Mid-Wilshire Health Care Center appealed from an order denying its motion to compel arbitration and to stay a wrongful termination action by plaintiff Maribel Mendez. The Court of Appeal holds hold that the arbitration provision in the collective bargaining agreement governing Mendez’s employment does not apply to Mendez’s statutory discrimination claims. Affirmed.

The trial court denied Mid-Wilshire‟s motion to compel arbitration of all of Mendez‟s claims, statutory and common law. Because the collective bargaining agreement did not clearly and unmistakably refer Mendez‟s statutory discrimination claims to arbitration, the trial court properly denied Mid-Wilshire‟s motion to compel arbitration of those claims. With respect to Mendez‟s common law claims, Mid-Wilshire has not presented any legal argument that the trial court‟s denial of Mid-Wilshire‟s motion to compel arbitration of those claims was erroneous. We therefore deem any claim of error forfeited.

The full opinion can be read here in Word or PDF.

© Walsh & Walsh, P.C., arbitration, published opinions

California Supreme Court Narrowly Applies AT&T

In Sonic-Calabasas A, Inc. v. Moreno (2011) 51 Cal.4th 659 (Sonic I), the California Supreme Court held as a categorical rule that it is contrary to public policy and unconscionable for an employer to require an employee, as a condition of employment, to waive the right to a Berman hearing, a dispute resolution forum established by the Legislature to assist employees in recovering wages owed. It further held that the rule prohibiting waiver of a Berman hearing does not discriminate against arbitration agreements and is therefore not preempted by the Federal Arbitration Act, and that, if one of the parties is dissatisfied with the result of the Berman hearing, it can move to arbitrate the wage dispute consistent with the arbitration agreement, just as a dissatisfied party can obtain a trial in court without such an agreement.

The United States Supreme Court granted certiorari, vacated the judgment, and remanded the case for consideration in light of AT&T Mobility LLC v. Concepcion (2011) 563 U.S. __,  131 S.Ct. 1740. In Concepcion, the court clarified the limitations that the FAA imposes on a state’s capacity to enforce its rules of unconscionability on parties to arbitration agreements. In light of Concepcion, the Californa Supreme Court concludes that because compelling the parties to undergo a Berman hearing would impose significant delays in the commencement of arbitration, the approach in Sonic I is inconsistent with the FAA. Accordingly, the FAA preempts any state law categorically prohibiting waiver of a Berman hearing in a predispute arbitration agreement imposed on an employee as a condition of employment.

Nonetheless, state courts may continue to enforce unconscionability rules that do not “interfere[] with fundamental attributes of arbitration.” (Concepcion, supra, 563 U.S. at p. __ [131 S.Ct. at p. 1748].

Although a court may not refuse to enforce an arbitration agreement imposed on an employee as a condition of employment simply because it requires the employee to bypass a Berman hearing, such an agreement may be unconscionable if it is otherwise unreasonably one-sided in favor of the employer.

Furthermore, the Berman statutes confer important benefits on wage claimants by lowering the costs of pursuing their claims and by ensuring that they are able to enforce judgments in their favor. There is no reason why an arbitral forum cannot provide these benefits, and an employee’s surrender of such benefits does not necessarily make the agreement unconscionable. The fundamental fairness of the bargain, as with all contracts, will depend on what benefits the employee received under the agreement’s substantive terms and the totality of circumstances surrounding the formation of the agreement.

The employee in Sonic II contends that the particular arbitration scheme at issue is unconscionable, while the employer contends that its arbitration agreement offers adequate protections and advantages to facilitate the employee’s claim and is not unreasonably one-sided. Because evidence relevant to the unconscionability claim was not developed below, the Supreme Court remands the matter to the trial court to determine whether the present arbitration agreement is unconscionable under the principles set forth in Sonic II.

The full opinion in Sonic II can be downloaded here in Word or PDF.

© Walsh & Walsh, P.C., arbitration, published opinions

Ninth Circuit Affirms Denial of Motion to Compel Arbitration

The Ninth Circuit has affirmed a district court’s denial of defendant grocery company’s motion to compel arbitration in an action asserting claims under California labor law on behalf of the plaintiff and a proposed class of other grocery employees. Chavarria v. Ralphs Grocery Store (9th Cir. 11-56673 10/28/13)

Ralph sought to compel arbitration of an individual claim pursuant to its arbitration policy, to which all employees acceded upon submitting applications for employment. The 9th Circuit affirmed the district court’s holding that the arbitration policy was unconscionable under California contract law and therefore unenforceable. It  was procedurally unconscionable because it was a condition of applying for employment and was presented on a “take it or leave it” basis.In addition, its terms were not provided to the plaintiff until three weeks after she had agreed to be bound by it. It was  substantively unconscionable because it was unjustifiably one-sided to such an extent that it “shocked the conscience.” Specifically, the arbitrator selection process would always produce an arbitrator proposed by the defendant in employee-initiated arbitration proceedings; the policy precluded institutional arbitration administrators, which have established rules and procedures to select a neutral arbitrator; and the policy’s arbitrator-fee-apportionment provision would have the effect of pricing employees out of the dispute resolution process.

The decision distinguishes Kilgore v. Key Bank National Ass’n (9th Cir. 2013) 718 F.3d 1052 (the mere risk that plaintiff will face prohibitive costs is too speculative to justify invalidating arbitration agreement), on the ground that the fee provision was not speculative and there were other unconscionable terms.

State law supporting the unconsionability holding was not preempted by the FAA because it applies to contracts generally and did not in practice impact arbitration agreements disproportionately. The Supreme Court’s decision in American Express Corp. v. Italian Colors Restaurant (2013) __ U.S.__, 133 S. Ct. 2304 did not preclude the court from considering the cost that the defendant’s arbitration agreement imposed on employees in order for them to bring a claim.

The matter is remanded for further proceedings.

© Walsh & Walsh, P.C., federal appeals, arbitration

Review Granted - Mendiola v. CPS Security Solutions

The California Supreme Court has granted review in Mendiola v. CPS Security Solutions (2013) 159 Cal.Rptr.3d 159 on the following issues:

Petition for review after the Court of Appeal affirmed in part and reversed in part an order granting a preliminary injunction in a civil action. This case presents the following issue: Are the guards that defendants provide for construction site security entitled to compensation for all nighttime "on call" hours, or may defendants deduct sleep time depending on the structure of the guards' work shifts?

The original opinion can be read here. The Court of Appeal held that

CPS must compensate the trailer guards for the nighttime hours spent on the jobsites during the week, as the trial court ruled. However, in accordance with settled principles of California law, we conclude that CPS is permitted to deduct eight hours for sleep time on those weekend days when the trailer guards are on duty for 24 hours.

The docket can be followed here.

© Walsh & Walsh, P.C., wage & hour, California Supreme Court published opinions, on call hours, off-the-clock claims

SCOTUS Strictly Enforces 9 U.S.C. § 2 - American Express Co. v. Italian Colors Restaurant

In another 5-4 decision, the Supreme Court has again declared its passion the Federal Arbitration Act, and specifically for 9 USC § 2 - Validity, irrevocability, and enforcement of agreements to arbitrate. Section 2 provides:

A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.

In American Express Co. v. Italian Colors Restaurant (2013) __ U.S. __ [No. 12-133) the Supreme Court extended its recent trend of rejecting challenges to the FAA, and arbitration agreements containing class action waivers, holding that a contractual waiver of class arbitration is enforceable under the FAA even where the cost of pursuing individual arbitration claims exceeds the amount in controversy. Although this is not an employment case and the plaintiff was a business entity and not an individual, the holding in American Express Co. v. Italian Colors Restaurant will likely have a substantial impact on employment class action litigation.

Barring a change in the FAA or a change in the majority bloc of justices on the Supreme Court, there may be only three ways left to avoid class action waivers in employee/employer arbitration agreements: disproving the existence of the agreement; invalidating the agreement under state unconscionability law or some other state law that is generally applicable to all contracts, and not just arbitration agreements; or suing under a federal statute that guarantees the plaintiff's right to bring a class action.

You can read the entire opinion in American Express Co. v. Italian Colors Restaurant here in PDF.

Gordon Ramsey's Restaurant Hit With Class Action

Gordon Ramsey's Fat Cow restaurant has been hit with a wage and hour class action in California alleging failure to provide meal breaks, rest breaks, failure to pay minimum wage and proper overtime pay. It also seeks waiting time penalties for former employees who were not paid all wages due upon termination. Ramsey's PR firm released a statement explaining that the claims involve former workers, that the restaurant's "previous management" is at fault, and the practices have been corrected.


Heyen v Safeway - A Primary Purpose Test for Overtime Exemption

The Court of Appeal has applied a primary purpose test to the case of a store manager classified as exempt by her employer, and found that the employee was misclassfied. In Heyen v. Safeway (2013) ___ Cal.App.4th ___, the court was called upon to decide how to characterize time spent on nonexempt tasks when the manager is also simultaneously responsible for management and supervision.

Plaintiff/respondent Linda Heyen is a former assistant manager for defendant/appellant Safeway Inc. (Safeway).  After Safeway terminated her employment, Heyen brought this action to recover unpaid overtime pay, contending Safeway should have classified her as a “nonexempt” employee because she regularly spent more than 50 percent of her work hours doing “nonexempt” tasks such as bagging groceries and stocking shelves.  An advisory jury and the trial court agreed with Heyen and awarded her overtime pay of $26,184.60, plus interest. 

Safeway appeals, contending that the trial court failed to properly account for hours Heyen spent simultaneously performing exempt and nonexempt tasks—i.e., “actively . . . manag[ing] the store while also concurrently performing some checking and bagging of customer grocery purchases.”  Safeway urges that, consistent with federal law, the trial court should have classified as “exempt” all hours during which Heyen simultaneously performed exempt and nonexempt tasks.  Because the court failed to do so, Safeway claims it prejudicially erred, requiring a reversal of the judgment.  

We disagree with Safeway’s analysis as inconsistent with California law.  Hence, we affirm the judgment for Heyen.

Essentially, the argument presented by employers in this sort of situation is to claim that while a manager might be bagging groceries, or sweeping floors or ringing up sales, they also are observing their subordinates, overseeing the general operations of the store and other tasks that fall upon exempt managers, therefore, the time spent sweeping floors should count as time spent on exempt tasks for the purpose of meeting the 50% time test required to prove that the manager is "primarily engaged in duties which meet the test of the exemption" from overtime pay.

In this case, the trial court instructed the jury as follows:

“If a party claims that an employee is engaged in concurrent performance of  an exempt and non-exempt work, you must consider that time to be either an exempt or a non-exempt activity depending on the primary purpose for which the employee undertook the activity at that time.  The nature of the activity can change from time to time.”

So time spent for each task, or each period of multitasking, had to be evaluated either as primarily exempt work, or primarily nonexempt work. If it was primarily nonexempt work, it was nonexempt work even if the manager was simultaneously making sure that nothing was happening that needed a manager's intervention at the time. Applying that standard, the managers were found to be nonexempt.

The opinion contains a very good discussion of the federal regulations on this subject, as well as a discussion of the employer's "reasonable expectations" defense that was found lacking in this particular case. You can download the entire opinion in Heyen v. Safeway here in PDF or Word.

Calculating Overtime in California - Bonuses

Q: If I make $30 an hour, plus a bonus of 20% of my annual income ($12,480) if I hit my performance goals, what should I be paid when I work overtime? The company is paying $45 an hour as my overtime rate.

A. If  you are an hourly employee who is paid non-discretionary bonus that is tied to performance, the value of that bonus has to be including in the computations of your "regular rate of pay" for overtime purposes. The wage orders provide that the overtime rate must be "one and one-half (1 1/2) times such employee’s regular rate of pay". Your "regular rate" is the compensation you normally earn for the work you perform. The regular rate of pay includes a number of different kinds of remuneration, such as hourly earnings, salary, piecework earnings, and commissions.

Your bonus is included in the regular rate of pay for purposes of calculating overtime if it is a nondiscretionary bonus. A nondiscretionary bonus is included in determining the regular rate of pay for computing overtime when it is based upon hours worked, production or proficiency. Discretionary bonuses or sums paid as gifts at a holiday or other special occasions, such as a reward for good service, which are not measured by or dependent upon hours worked, production or efficiency, are not included for purposes of determining the regular rate of pay.

In your case, the bonus is a nondiscretionary bonus measured by or dependent upon hours worked, production or efficiency. Therefore, if you hit those goals, that bonus must be included in your regular rate of pay. Adding that bonus to your base hourly rate, you have a regular rate of pay that comes to $36 per hour. Your overtime rate should be $54 per hour.

How to File a Report of a Labor Law Violation in California

This very useful page on the DIR's website explains how an employee or former employee can report a labor law violation with the Division of Labor Standards Enforcement's (DLSE) Bureau of Field Enforcement (BOFE) about a variety of wage and hour violations, including violations concerning minimum wage, overtime, failure to give meal and/or rest periods, reimbursement for uniforms, payroll record keeping, cash shortages, child labor laws, failure to carry workers' compensation insurance, wage statement violations, failure to provide break time or locations to express milk and several others.

The list is also a handy short list of issues wage and hour lawyers like us us might use to explore client's options during an intial client interview.

Overtime for Missed Lunches

Q:  If an employer doesn't let the employee take her lunch, doesn't it owe her overtime for that missed lunch break?

A:  California's overtime and meal period laws imposed entirely separate obligations to the employer. A missed meal period does not necessarily mean the employer owes overtime. There are times when that is the case, however. For example, if the employer had the employee clock out for the meal period, but the employer was required to work during the meal period, and also worked 8 hours on the clock that day. In that example, the employee's meal period should count as hours worked, and since the additional time makes the employee's workday exceed 8 hour, and the additional time should be paid at one and a half times the employee's regular rate of pay.

Independent of the overtime issue, however, an employer who causes an employee to miss a required meal period will owe the employee an extra hour of pay at the employee's regular rate, pursuant to Labor Code § 226.7.

Under Labor Code § 512, the employer may not employ an employee for a work period of more than five hours per day without providing the employee with a meal period of not less than thirty minutes, except that if the total work period per day of the employee is no more than six hours, the meal period may be waived by mutual consent of both the employer and employee.

A second meal period of not less than thirty minutes is required if an employee works more than ten hours per day, except that if the total hours worked is no more than 12 hours, the second meal period may be waived by mutual consent of the employer and employee only if the first meal period was not waived.

If the employer requires the employee to remain on premises during the meal period, it must be a paid meal period, whether or not the employee is relieved of all duties during the meal period. Bono Enterprises, In. v. Bradshaw (1995) 32 Cal.App.4th 968.

The NFL Returns to L.A. - For Litigation

This is off-topic, but it amused us, so we share with you this opening paragraph from the published opinion in National Football League et al. v. Fireman's Fund Insurance Co.

The National Football League has returned to Los Angeles, but not, as many Angelenos hope, bearing the gift of a new home team. The league administration and its intellectual property marketing arm have been sued in multiple states by dozens of former players alleging lifelong brain damage from on-field injuries dating back to the 1950's. In this case the plaintiffs, National Football League and NFL Properties LLC, seek a Los Angeles Superior Court declaratory relief judgment regarding the coverage duties of 32 insurance carriers pursuant to some 187 commercial liability policies that were issued over a 50-60 year period. All the same entities are parties to parallel coverage actions filed by some of the insurers in New York state courts at approximately the same time as the California case.

You can download here in PDF or Word.

Bluford v Safeway Stores - Court of Appeal Orders Certification of Wage Statement Class Action

In Bluford v. Safeway Stores, Inc. (2013) __ Cal.App.4th __, the 3rd District considered an appeal from an order denying certification of a class action arising from allegations of improper payroll wage statements. Plaintiff Kenneth Bluford alleges that Safeway violated statutory and regulatory laws requiring it to provide its employees with paid rest periods, earned meal periods, and sufficiently itemized wage statements. The trial court denied the motion to certify a class, ruling that individual issues predominated over common issues on the rest period and meal period claims, and that plaintiff failed to allege a common injury resulting from the inadequate wage statements.The court of appeal reversed and remanded with instructions to enter an order granting the motion for class certification.

Insufficient evidence supports the trial court’s ruling, as common issues predominate over individual issues, and plaintiff in fact alleged a common injury resulting from the wage statements. We order the trial court to grant plaintiff’s motion.

You can download the full opinion in Bluford here in PDF or Word.

No, Samy, the Tips Belong to the Servers

Have you seen the epic meltdown on Chef Gordon Ramsey's show "Kitchen Nightmares" feating Amy's Baking Company? This is quite possibly the greatest public relations failure by a small business that I've ever witnessed. As a wage and hour lawyer, however, I was particularly amazed by the scene where owner Samy Bouzaglo greedily pockets his waitress's tip. Keeping employee tips is a violation of wage and hour law. It doesn't matter than you pay them $8 an hour. Amy's Baking Company was foolish enough to do it with the cameras rolling.

"A tip is the sole property of the tipped employee regardless of whether the employer takes atip credit. The FLSA prohibits any arrangement between the employer and the tipped employee whereby anypart of the tip received becomesthe property of the employer. For example, even where a tipped employeereceives at least $7.25 per hour in wages directly from the employer, the employee may not be required to turnover his or her tips to the employer."

U.S. Department of Labor Wage and Hour Division (Revised March 2011) Fact Sheet #15: Tipped Employees U nder the Fair Labor Standards Act (FLSA)

California law also provides that tips belong to the employees who earned them.Labor Code § 351.

Unfortunately, Samy and Amy Bouzaglo of Amy's Baking Company operate in Scottsdale, Arizona. So we can't represent their employees. That bums us out a bit. We'd even do it pro bono.

To watch the owner steal his workers' tips, just watch here. At 6:12, a customer leaves a $10 tip and Samy pockets it unapologetically and then brags about being a gangster.


He may not just be popping off about the gangster stuff, either. Amy Bouzaglo, fka Amanda Patricia Bossingham, has a felony record.


ACI's 18th National Forum on Wage & Hour Claims and Class Actions

ACI is presenting its 18th National Forum on Wage & Hour Claims and Class Actions on Wage & Hour Claims and Class Actions in May 2013 in New York, NY. The conference takes place at One UN New York on May 31 and 31. Here is a synopsis of the conference:

The wage and hour landscape continues to evolve at a blistering pace, with the potential for damaging claims at an all-time high. That is why it is essential that defense counsel be fully prepared for the coming tidal wave of claims and class actions. Come join your colleagues and clients at the nation’s premier wage and hour defense forum and hone the skills and strategies needed to keep pace with this rapidly changing area of law, defend against new and innovative claims, and prepare for emerging regulations and evolving enforcement priorities.

American Conference Institute’s 18th National Forum on Wage & Hour Claims and Class Actions will provide you with an unparalleled opportunity to convene with expert in-house counsel from Walmart, Coca-Cola, Bank of America, Microsoft, Home Depot, U.S. Bank, Dow Jones & Co., American Airlines, Darden Restaurants, Covidien, Cisco Systems, Wells Fargo, Marsh & McLennan, RBS, Kaplan, IBM, The Hartford, DIRECTV, Family Dollar Stores, TIAA-CREF, Reed Elsevier, and AXA Equitable, as well as renowned federal and state judges, top government officials, and leading outside defense counsel from around the nation, who will provide you with expert advice, insider strategies, and comprehensive updates on:
  • Assessing the impact of Wal-Mart v. Dukes and its progeny on FLSA collective actions, Rule 23 class actions, and hybrid cases
  • Obtaining decertification of a class at different stages of the litigation process
  • Overcoming the complexities of managing and defending against multidistrict litigation
  • Managing and defending against the latest claims from the plaintiffs’ bar

We've been to this seminar before, and it was a valuable experience. It's good for a minimum of 7.75 hours of California MCLE credits, plus another 2 hours for each focus session.

The list of topics and speakers is impressive. A complete brochure can be downloaded here. If we're not in trial, we'll see you there.

SCOTUS Hears Argument in American Express v. Italian Colors Restaurant

The U.S. Supreme Court heard oral arguments Wednesday in American Express Co. v. Italian Colors Restaurant, an arbitration class action waiver case from the Second Circuit that could expand or reduce the scope of AT&T Mobility LLC v. Concepcion, 131 S. Ct.1740 (2011). The Circuit Court decision can be read here.

The issue presented on review is:

Whether the Federal Arbitration Act permits courts, invoking the “federal substantive law of arbitrability,” to invalidate arbitration agreements on the ground that they do not permit class arbitration of a federal-law claim.

In Green Tree Financial v. Randolph, 531 U.S. 79, 90 (2000), the SCOTUS implied that plaintiffs shouldn’t have to arbitrate if they could prove that they could not effectively vindicate their federal statutory rights in the arbitral forum. A decade later, in Stolt-Nielsen S.A. v. AnimalFeeds International Corp., 130 S. Ct. 1758 (2010) , the SCOTUS held that the Federal Arbitration Act prohibits arbitrators from imposing class arbitration on parties that have not agreed to such procedures. A year after that, in AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011) , the SCOTUS held that the FAA preempts state laws invalidating commercial arbitration agreements on the ground that they forbid class arbitration. However, AT&T Mobility addressed unconscionability principles under state law, within the scope of Section 2 preemption, so it did not address the vindication of rights doctrine, which is a federal common law doctrine. Now, the SCOTUS addresses this issue in American Express

The Second Circuit held that the American Express class action waiver was unenforceable because its effect would be to prevent the plaintiffs from effectively vindicating their statutory rights plaintiffs, notwithstanding the holdings in Stolt-Nielsen or AT&T Mobility.

It is usually difficult to predict where a majority of justices stand based on the questions they pose during oral argument, but if you enjoy doing so, you can read the transcript here. We suspect that the vote will be 5-3 to overturn the Second Circuit (Justice Sotomayor recused herself because she sat on the Second Circuit panel that issued one of the earlier rulings). If we are right, companies will be able to effectively give themselves contractual immunity from liability for violating even important statutory rights on a large scale, as long as each individual's damages aren't large enough to warrant hiring a lawyer.

Wage Cheats in Chinatown

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.

Review Denied in See’s Candy Shops, Inc. v. Superior Court (Time Rounding)

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.


Review granted, Franco v. Arakelian Enterprises, Inc.

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.

NLRB Labor Appointment Rulings Create Regulatory Uncertainty

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.

ACI's 2012 Wage & Hour Claims and Class Actions Conference in Miami

ACI is presenting its 14th annual National Conference on Wage & Hour Claims and Class Actions in January 2012 in Miami, Florida. The conference takes place at the Hyatt Regency Miami (an excellent place to spend time in January) on Monday, January 30 and Tuesday, January 31, 2012. Here is a synopsis of the conference:

The wage & hour landscape has been turned upside down post-Wal-Mart v. Dukes and AT&T Mobility v. Concepcion. Your colleagues and clients will be in Miami in late January to hone their skills and knowledge needed to succeed in this rapidly expanding and evolving area of law, adapt to emerging regulations and changing enforcement priorities, and respond new and innovative claims.  Join them to ensure that you are prepared to navigate and defend against the leading type of class action in the country.

The sheer number of wage and hour claims and class actions across the country is staggering.  Wage and hour class actions are the leading type of class action nationwide – and by a large margin.  With so many of these cases getting certified and succeeding at trial, compliance and prevention are equally important to trial strategy.   The Obama administration continues to send a strong signal that it is making wage and hour enforcement a priority, and it is clear that preventing, managing, and defending these claims remains a key issue for companies across the nation.

It is with this in mind that ACI has developed its 14th National Forum on Wage and Hour Claims and Class Actions, the nation’s premier forum for in-house counsel, labor and employment attorneys, and class action lawyers.  We have assembled an extraordinary faculty of attorneys from the nation’s top firms, a full panel of distinguished jurists, and in-house counsel from CBS, Bank of America, IBM, Ryder System, Bayer, Citigroup, Canam Steel, Family Dollar Stores, Northrop Grumman, Interval International, Coca Cola, Ally Financial, PSEG, DHL Global Forwarding, Viacom, Paychex, Direct TV, and many others.  Our unparalleled faculty will provide you with expert advice, insider strategies, and comprehensive updates on all of the latest developments, including:

  • Complying with and responding to changing Wage & Hour Federal and State Priorities and Investigations
  • Clarifying the standards and requirements for class certification in light of Wal-Mart v. Dukes
  • Using AT&T Mobility v. Concepcion and arbitrations agreements as a tool to avoid class treatment
  • Determining when employees are “on the clock” and avoiding overtime claims in the digital work world
  • Examining recent rulings by courts and the DOL to ensure proper classification of employees

We've been to this seminar before, and it was a valuable experience. It's good for 12.25 hours of California MCLE credits, plus another 2 hours for each workshop (with workshop B counting toward ethics).

Here's the best part - a discount for our readers:

We've agreed to be one of ACI's media partners for this conference so that our readers can get a $200 discount off the current price tier. Use discount code WLB 200. Register by Thursday (November 17, 2011) for early bird pricing.  Rates increase after November 17 and after January 5. The walk-up price for this conference is $2,295 (additional registration fees apply for the two workshops), but as a Wage Law reader, if you act by November 17, 2011, you can get in for $1,795.

The list of topics and speakers is impressive. A complete brochure can be downloaded here. If we're not in trial, we'll see you there.

2012 Wage & Hour Litigation and Management Conference

Bridgeport Education's 2012 Wage & Hour Litigation and Management Conference will be December 13-14 at the Westin Bonaventure Hotel, located at 404 S. Figueroa St. Los Angeles. We've seen this conference before, both as speakers and as attendees. It's usually very good.

Topics include:

  • Wage & Hour GPS: The Current State of Wage & Hour Management & Practice
  • The Use of PAGA, 17200 SB 459, 469 and other Issues Specific to California Wage & Hour Cases
  • Exemptions: Administrative & Professional & Outside Sales Exemptions
  • Prosecuting group Wage and Hour Claims Outside of the Class Structure
  • Class Action and Future Trends in Wage & Hour Class Actions
  • the Plaintiffs View of the Future of Wage & Hour Litigation
  • Effective Strategies for Pursuing and Using Discovery
  • California & National Seating Wage and Hour Litigation
  • Government Investigations Internal Audits and Update on DOL priorities
  • Effective Strategies for Litigating & Defending Wage & Hour Class Actions at Trial
  • Update on Arbitration Law and The Nuts and Bolts of Arbitrations
  • Settlement Preparation, Strategies & Management
Unfortunately, we don't have a discount code for readers for this one.

Bell v Cox, Vacation Pay, Class Actions, Attorneys’ Fees

Truck driver Oscar Bell and others filed a class action complaint against H.F. Cox, Inc. alleging wage and hour violations.  The trial court summarily adjudicated three counts in favor of Cox, a jury found in favor of Cox on another count and the trial court found that plaintiffs were exempt from federal overtime compensation requirements. The court awarded Cox attorneys fees on certain claims. Plaintiffs appealed.

In Bell v. H.F. Cox, Inc. (2012) 209 Cal.App.4th 62. The Court of Appeal held that (1) summary adjudication was proper as to the count for failure to pay promised vacation benefits to current employees but improper as to the count for failure to pay vacation benefits due upon termination of employment; (2) the denial of plaintiffs’ motion to exclude witnesses from testifying at trial was proper; (3) the finding that plaintiffs were exempt from federal overtime compensation requirements pursuant to the motor carrier exemption was proper; (4) plaintiffs have shown no instructional error; and (5) the attorney fee award to Cox as the prevailing party was improper and must be reversed.

The most interesting part of the holding is that employers may now safely promulgate policies that give current employees vacation pay at a specified rate that is different that their normal rate of pay. Left open to interpretation is whether a non-union worker's unused vacation pay upon termination can be paid at the lower, specified vacation rate rather than the employee's ordinary rate of pay, given Labor Code § 227.3:

"Unless otherwise provided by a collective-bargainingagreement, whenever a contract of employment or employer policyprovides for paid vacations, and an employee is terminated withouthaving taken off his vested vacation time, all vested vacation shallbe paid to him as wages at his final rate in accordance with suchcontract of employment or employer policy respecting eligibility ortime served..."

A petition for rehearing was denied. No petitition for review was filed and the remittitur has been issued.

A prior appeal involving the same parties was published and then depublished in 2008. Our post on that action can be found here.

The full opinion can be found here in PDF or Word format.

Witnesses Wanted for Class Action Against Hyatt Andaz

We are currently investigating employment policies at Hyatt Andaz hotels in California, in connection with a potential class action lawsuit. If you worked at as a housekeeper for Hyatt Andaz within the past four years in California, we would like to talk to you. All inquiries will be held in strictest confidence. Our investigation concerns wage and hour law issues, including off-the-clock work, meal periods, rest periods and related claims. We welcome your inquiries or assistance whether or not you are interested participating in any pending litigation or pursuing a lawsuit on your own behalf.

You can contact us at (714) 544-6609, or by email at [email protected].

Walsh & Walsh, P.C. represents California employees in claims involving all kinds of wage and hour violations, including failure to pay wages, misclassification or miscalculation of overtime pay, meal period and rest period violations, unpaid commissions, retroactive pay rate restructuring, unauthorized payroll deductions, compelled patronage, uniform violations, unreimbursed employee expenses and similar claims.

Governor Brown Signs AB 2675

AB 2675 has been signed into law, amending Labor Code § 2751 regarding written commission agreements.

Existing law requires that whenever an employer enters into a contract of employment with an employee for services to be rendered within California, and the contemplated method of payment of the employee involves commissions, the contract must be in writing and must set forth the method by which the commissions are to be computed and paid. This bill would exempt from this requirement temporary, variable incentive payments that increase, but do not decrease, payment under the written contract.

You can read the full text of the bill here in PDF.

Governor Brown Signs AB 1855

AB 1855 has been signed into law, amending Labor Code § 2810.

Existing law prohibits a person or entity from entering into a contract or agreement for labor or services with specified types of contractors if the person or entity knows or should know that the contract or agreement does not include funds sufficient to allow the contractor to comply with all applicable local, state, and federal laws or regulations governing the labor or services to be provided. AB 1855 applies these provisions to warehouse contractors, as well.

Existing law provides for a rebuttable presumption affecting the burden of proof that there has been no violation of this requirement of sufficient funding if specified conditions are met, including that the contract or agreement be in writing. The California Public Records Act requires state and local agencies to make public records available for inspection, subject to specified criteria, and with specified exceptions. AB 1855 require sthat upon the request of the Labor Commissioner, the person entering into the written agreement or contract must provide to the Labor Commissioner a copy of the provisions of the contract or agreement, and any other documentation, as provided. The bill would exempt any documents received by the Labor Commissioner pursuant to this requirement from the California Public Records Act.

You can read the full text of the bill here in PDF.

Governor Brown Signs AB 1744

AB 1744 has been signed into law. Current law under Labor Code § 226 requires every employer, semimonthly or at the time of each payment of wages, to furnish each employee with an accurate itemized statement in writing showing certain information including hours worked, pay rates, deductions and similar information. Current law provides that a knowing and intentional violation of this provision is a misdemeanor. AB 1744 adds a requirement for temporary services employers to include the rate of pay and the total hours worked for each assignment, with certain specified exceptions. Temporary services employers must also include the physical address of the main office, the mailing address if different from the physical address of the main office, and the telephone number of the legal entity for whom the employee will perform work.

The law becomes effective July 1, 2013. It will incorporate changes to Labor Code § 226 under SB 1255 and AB 2674, and shall be chaptered last among those three bills.

You can read the full text of the bill here in PDF.

Governor Brown Signs AB 2674

AB 2674 has been signed into law, amending the recordkeeping and inspection provisions under Labor Code § 226 and reducing the violations of these provisions from a misdemeanor to an infraction.

Existing law requires that every employer, semimonthly or at the time of each payment of wages, furnish to each of his or her employees, either as a detachable part of the check, draft, or voucher paying the employee’s wages, or separately when wages are paid by personal check or cash, an accurate itemized statement in writing showing specified items. Existing law requires an employer to keep a copy of the statement and the record of deductions on file for at least 3 years at the place of employment or at a central location within the State of California. This bill would provide that the term “copy,” for purposes of these provisions, includes a duplicate of the itemized statement provided to an employee or a computer-generated record that accurately shows all of the information that existing law requires to be included in the itemized statement.

Under existing law, an employee has the right to inspect the personnel records that his or her employer maintains relating to the employee’s performance or to any grievance concerning the employee. This bill would require an employer to maintain personnel records for a specified period of time and to provide a current or former employee, or his or her representative, an opportunity to inspect and receive a copy of those records within a specified period of time, except during the pendency of a lawsuit filed by the employee or former employer relating to a personnel matter. The bill would provide that an employer is not required to comply with more than 50 requests for a copy of the above-described records filed by a representative or representatives of employees in one calendar month. The bill would provide that the above provisions shall not apply with respect to an employee covered by a valid collective bargaining agreement if the agreement provides, among other things, for a procedure for inspection and copying of personnel records. In the event an employer violates these provisions, the bill would permit a current or former employee or the Labor Commissioner to recover a penalty of $750 from the employer, and would further permit a current or former employee to obtain injunctive relief and attorney’s fees.

Under existing law, an employer who fails to permit an employee to inspect the employee’s personnel records is guilty of a misdemeanor punishable by a fine or imprisonment, as specified. This bill would, instead, provide that a violation of the above provisions requiring that personnel records be made available for inspection constitutes an infraction.

You can read the full text of the bill here in PDF.

International Labor and Employment Conference in NYC October 29-30th

ACI is hosting another International Labor and Employment Conference in New York City on October 29-30th, 2012.

With an increasing number of American-based companies becoming multinational, international labor and employment law has become more important than ever. American Conference Institute’s International Labor & Employment Law conference will provide attendees with advice and insights from leaders in the field. Topics to be covered include:

  • Structuring global HR policies in compliance with local laws
  • Extraterritorial application of US laws
  • Cross border litigation and arbitration of employment matters
  • Supply chain management, mergers and the transfer of undertaking
  • Managing expatriates
  • Compensation, benefits, social security, discipline, tax and immigration issues
  • Unconventional employment relationships
  • Internationally Independent contractor issues
  • Working with EU unions and works councils
  • Ensuring data transfer policies and breach notification comply with varying standards
  • Conducting employee terminations abroad without increasing risks of litigation or sanctions
  • Terminating employees with cause/no cause
  • Issues relating to ‘garden leave’
  • Analyzing emerging sexual harassment laws and discrimination laws in the EU and beyond
  • Assessing the roles of regulatory and enforcement agencies in other countries
  • Immigration issues - bringing foreign professionals to work in the U.S. and vice versa
  • Best practices for risk management and training for foreign nationals working in the U.S.
  • Payroll and taxation issues
  • Negotiating and drafting employment agreements
  • Understanding TUPE rights in mergers and acquisitions
Email us at [email protected] for discount codes.

Governor Brown Signs AB 2103

AB 2103 has been signed into law, boosting California overtime laws that were weakened by the Court of Appeal in Arechiga v. Dolores Press, Inc. (2011) 192 Cal.App.4th 567. Arechiga disregarded the language of Labor Code § 515(d) to validate private agreements for a fixed salary, including regular and overtime pay, for non-exempt employees. AB 2103 clarifies that "payment of a fixed salary to a nonexempt employee shall be deemed to provide compensation only for the employee's regular, nonovertime hours, notwithstanding any private agreement to the contrary."

You can read the full text of the bill here in PDF.

You can read the Arechiga v. Dolores Press, Inc. opinion here.

Witnesses Wanted for Five Guys Wage and Hour Class Action

We are currently investigating employment policies at Five Guys burger locations in California in connection with a potential class action lawsuit. If you worked at a Five Guys within the past four years in California, we would like to talk to you. All inquiries will be held in strictest confidence. If you are a current employee, we only want to speak to you if you are an hourly associate or a salaried assistant manager. If you are a former employee of Five Guys, we are interested in speaking to you even if your as manager or you worked at the corporate office. Our investigation concerns wage and hour law issues, including overtime, meal periods, rest periods and clothing purchase policies. We welcome your inquiries or assistance whether or not you are interested participating in any pending litigation or pursuing a lawsuit on your own behalf.

You can contact us at (714) 544-6609, or by email at [email protected].

Walsh & Walsh, P.C. wage and hour lawyers represent California employees in claims involving all kinds of wage and hour violations, including failure to pay wages, misclassification or miscalculation of overtime pay, meal period and rest period violations, unpaid commissions, retroactive pay rate restructuring, unauthorized payroll deductions, compelled patronage, uniform violations, unreimbursed employee expenses and similar claims.

Governor Brown Signs SB 1255

SB 1255 has been signed into law. Labor Code § 226 has teeth again, as SB 1255 restores and clarifies the itemized wage statement requirements of the Labor Code after several court decisions weakened the statute's worker protections. This bill provides that an employee is deemed to suffer injury if the employer fails to provide accurate and complete information and the employee cannot promptly and easily determine from the wage statement alone all of the information required by the statute: the amount of the gross or net wages paid to the employee during the pay period, deductions made from the gross wages to determine the net wages paid to the employee during the pay period, the name and address of the employer or legal entity that secured the services of the employer, and the name of the employee and only the last 4 digits of the social security number or employee identification number.

You can read the full text of the bill here in PDF.

If You Think Arbitration is Fair, Read This Opinion Excerpt




CLIFFORD J. WATTS, III, Respondent. 

No. 5:11cv48.

United States District Court, W.D. North Carolina, Charlotte Division.

March 9, 2012.

Clifford John Watts, Respondent, represented by Matthew Kyle Rogers.

Wells Fargo Advisors, LLC, Claimant, represented by Charles E. Raynal, IV, Parker Poe Adams & Bernstein, LLP, Matthew Hilton Mall, Parker Poe Adams & Bernstein LLP, Brady James Hermann,, Michaels, Ward & Rabinovitz, LLP, Pro Hac Vice & Deborah Gale Evans,, Michaels, Ward & Rabinovitz, LLP, Pro Hac Vice.



MAX O. COGBURN, Jr., District Judge.


Review and confirmation of the arbitration process by the federal courts has reached the point that when this court observed, in a hearing on the claimant bank's motion to confirm an arbitration award, that the court could refuse to enforce an illegal contract, counsel for the claimant bank immediately challenged the court's statement. Hrg. Tr. 71, docket no. 33. As counsel's open challenge to the court's review authority makes clear, arbitration under the Federal Arbitration Act is a process that, although retaining the appearance of constitutionality by involving the courts in confirming an award, does not even attempt to retain the appearance of fairness.1 In the hearing before this court on the claimant bank's motion to confirm an arbitration award, counsel for the claimant bank noted that the bank handles hundreds of arbitrations a year and that counsel herself handles 30 to 40 a year and that she, by the way, has never lost a single case. Tr. 52 ("I've never lost one and I've never not gotten attorney's fees. I always win these cases.") (emphasis added). Now there's a level playing field.


Because of its constant and prolific participation in FAA arbitration, the claimant bank enjoys a clear advantage over the individual employee or customer. That is, the arbitration company or arbiter knows that the bank will participate in hundreds of arbitrations a year, whereas an individual employee or customer may participate in arbitration only once in their lifetime, if ever. The bank will know from experience, then, which arbiters are the most likely to favor the bank; therefore, the bank will naturally choose that arbiter to arbitrate the bank's case. The individual, on the other hand, has very limited knowledge of the arbiter. Couple that with the proposition that the arbiter's mistakes of facts or law are not reviewable by the courts and the result is a process in which, as in this case, counsel for the bank can remain undefeated 30 or 40 times a year. Tr. 52.


Counsel's argument that the parties voluntarily agreed to arbitration and that the process saves money is also disingenuous. Since financial institutions and large employers have virtually all of the available lending capital and a large number of the jobs, individuals have no recourse but to agree to an arbitration clause. Further, since the individuals seldom win and are forced to reimburse costs and attorney fees, the only ones saving money are large institutions like the claimant.


Had the contract in this case been an illegal one, this court would have refused to confirm the award. However, as the contract is not illegal, the court has reviewed the award under current applicable law and finds that the bank is entitled to have its award confirmed. The court will not, however, confirm the award of attorney's fees for the reasons stated below.

Witnesses Wanted For Class Action Against the Salvation Army

We are currently investigating employment policies at the Salvation Army in California, in connection with an imminent class action lawsuit. If you worked at a California location of the Salvation Army within the past five years in California, we would like to talk to you. All inquiries will be held in strictest confidence. Our investigation concerns wage and hour law issues, including overtime, off-the-clock work, meal periods, rest periods and related claims. We welcome your inquiries or assistance whether or not you are interested participating in any pending litigation or pursuing a lawsuit on your own behalf.

You can contact us at (714) 544-6609, or by email at [email protected].

Walsh & Walsh, P.C. represents California employees in claims involving all kinds of wage and hour violations, including failure to pay wages, misclassification or miscalculation of overtime pay, meal period and rest period violations, unpaid commissions, retroactive pay rate restructuring, unauthorized payroll deductions, compelled patronage, uniform violations, unreimbursed employee expenses and similar claims.