Employment Law
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What Counts as "Wages" in the Context of Waiting Time Penalties?
Labor Code §§ 201-203 require an employer to pay all wages owed to an employee who has been discharged or who has quit. If the employer fails to pay an employee all wages owed within the statutorily required time period, § 203 calls for a penalty on the employer equal to one day’s rate of pay for each day the employer fails to pay, for a time period not to exceed 30 days. An employer's liability for waiting-time penalties under Labor Code § 203 flows directly from the violations established above. An employer can easily satisfy the requirement that their failure to pay proper wages upon termination was “willful.” The standard for willful is not high: “[t]he employer’s refusal to pay need not be based on a deliberate evil purpose to defraud workmen of wages which the employer knows to be due.” Rivera v. Rivera, No. 10-CV-01345-LHK, 2011 WL 1878015 at *7 (N.D. Cal. May 17, 2011). A willful failure to pay wages within the meaning of § 203 occurs when an employer intentionally fails to pay wages to an employee when those wages are due. Id.
Preemption and Collective Bargaining Agreements
To survive a motion for judgment on the pleadings, a complaint must state sufficient facts, accepted as true, to state a claim that is plausible on its face. Chavez v. United States, 683 F. 3d 1102, 1108-1109 (9th Cir. 2012). Thus, a defendant is not entitled to judgment on the pleadings if the complaint raises issues of fact which, if proved, would support recovery. General Conference Corp. of Seventh-Day Adventists v. Seventh-Day Adventist Congregational Church, 887 F. 2d 228, 230 (9th Cir. 1989).
Limiting Pre-Certification Communication in a Class Action Lawsuit
“In the context of a class action, it is the court’s authority and duty to exercise control over the class action to protect the rights of all parties, and to prevent abuses which might undermine the proper administration of justice.” (Howard Gunty Profit Sharing Plan v. Superior Court (2001) 88 Cal.App.4th 572, 581 (citing Gulf Oil Co. v. Bernard (1981) 452 U.S. 89, 100–103).)“Communications that misrepresent the status or effect of the pending action, or which may cause confusion, adversely affect the administration of justice.” (Howard Gunty, supra, 88 Cal.App.4th 572at 582.) “Where a trial court identifies a potential for abuse, the court ‘has both the duty and the broad authority to exercise control over a class action and to enter appropriate orders governing the conduct of counsel and parties.’” (Hernandez v. Vitamin Shoppe Industries, Inc. (2009) 174 Cal.App.4th 1441, 1454 (quoting Howard Gunty, supra, 88 Cal.App.4th at 579).
Overtime and Misclassification in California
The test for whether a worker is an independent contractor or an employee is whether the employer has the right to control the manner and means of the worker’s performance. S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341, 349–351. A number of different factors contribute to the extent of control that an employer exercises over its workers: (1) the right to discharge at will, without cause; (2) whether the principal or the worker supplies the instrumentalities, tools, and the place of work for the person doing the work; (3) the length of time for which the services are to be performed; (4) the method of payment, whether by the time or by the job; (5) whether the one performing services is engaged in a distinct occupation or business; and (6) whether or not the work is part of the regular business of the principal. Id.
Certification and Penalties for a Wage & Hour Class Action in California
Labor Code sections 226.7 and 512 in conjunction with Industrial Welfare Commission (“IWC”) Wage Order No. 5 (California Code of Regulations, tit. 8, sec. 11050) require Defendants to authorize and permit meal and rest breaks to their employees. California law prohibits employers from employing an employee for more than five hours without a meal period of at least 30 minutes. “[A]n employer’s obligation is to provide an off duty meal period: an uninterrupted 30–minute period during which the employee is relieved of all duty.” Brinker Rest. Corp. v. Super. Ct. (2012) 53 Cal.4th 1004, 1035. In order for an employee to be relieved of all duty, the employee must be free to leave the workplace premises. Id. at 1036. An employer cannot “impede or discourage [employees] from [taking breaks].” Id. at 1040.Section 226.7 and IWC Wage Order No. 5 also require employers to authorize and permit employees to take 10-minute rest breaks for each four hours of work, or major fraction thereof, and to pay employees their full wages during their rest breaks. A “major fraction of four hours” means greater than two hours. Brinker, supra, 53 Cal.4th at 1029. Unless the employee is relieved of all duty during the 30-minute meal break and 10-minute rest break, the employee is considered “on duty” and the meal or rest break is counted as time worked under the applicable wage orders.
Benefits and Requirements for Class Certification
Labor Code §§ 226.7 and 512 and the applicable wage orders require Defendants to authorize and permit meal and rest periods to their employees. California law prohibits employers from employing an employee for more than five hours without a meal period of at least 30 minutes, and from employing an employee more than ten hours per day without providing the employee with a second meal period of not less than 30 minutes. “[A]n employer’s obligation is to provide an off duty meal period: an uninterrupted 30–minute period during which the employee is relieved of all duty.” Brinker Rest. Corp. v. Super. Ct., 53 Cal. 4th 1004, 1035 (2012). “An employer must relieve the employee of all duty for the designated period.” Id. at 1034. An employer cannot “impede or discourage [employees] from [taking breaks].” Id. at 1040. Section 226.7 and applicable wage orders also require employers to authorize and permit employees to take 10-minute rest periods for each four hours or major fraction thereof of work, and to pay employees their full wages during their rest periods. “[A]s a general matter,” one rest break should fall on either side of the meal break.” Id. at 1032. Unless the employee is relieved of all duty during the 30-minute meal period and 10-minute rest period, the employee is considered “on duty” and the meal or rest period is counted as time worked under the applicable wage orders. When an employer fails to provide a rest or meal period in accordance with the applicable wage orders, the employer must pay the employee one additional hour of pay at the employee’s regular rate of pay for each workday that a required rest period is not provided, and one additional hour of pay for each work day that a compliant meal period is not provided. Labor Code § 226.7.
Demurrers to Class Allegations
“A demurrer to class allegations may be sustained without leave to amend only if it is clear there is no reasonable possibility that the plaintiffs could establish a community of interest among the potential class members and that individual issues predominate over common questions of law and fact.” Gutierrez, supra, 118 Cal.App.4th at 975 (citing Blakemore v. Superior Court (2005) 129 Cal.App.4th 36, 53) (internal quotations omitted). “If there is a reasonable possibility the plaintiffs can plead a prima facie community of interest among class members, the preferred course is to defer decision on the propriety of the class action until an evidentiary hearing has been held on the appropriateness of class litigation.” Id. “Judicial policy in California has long discouraged trial courts from determining class sufficiency at the pleading stage and directed that this issue be determined by a motion for class certification. In order to effect this judicial policy, the California Supreme Court has mandated that a candidate complaint for class action consideration, if at all possible, be allowed to survive the pleading stages of litigation.” Id. (citing Tarkington, supra, 172 Cal.App.4th at 1510).
Essential Job Functions and Failure to Accommodate
The Fair Employment and Housing Act (“FEHA”) requires that an employer provide reasonable accommodations that allow an employee to perform the essential functions of their job. Gov. Code §12940(m). Where a failure to accommodate was a “substantial factor” in causing the exacerbation of a workplace injury, the employer may recover damages for that exacerbation. See Huffman v. Interstate Brands Corp. (2004) 121 Cal.App.4th 679, 698-699; Fussell v. Timec Company, Inc. (2014) 2014 WL 810917 at *9-13; Bagatti v. Department of Rehabilitation(2002) 97 Cal.App.4th 344, 356-358.
The Fair Labor Standards Act and Class Action Suits in California
There are many public policy considerations that favor the use of class actions in the employment context in California. First, individual awards in employment cases tend to be modest so the availability of a class action claim plays an important function by permitting employees a relatively inexpensive way to resolve their disputes. Additionally, class actions allow many employees, who may not otherwise file an individual suit due to fear of retaliation, to safely have their day in court as a member of the class. Class actions also serve to inform and protect employees who, for one reason or another, may not otherwise become aware that their rights are even being violated.Meal and rest break claims are specifically suited to class treatment. See Brinker Rest. Corp., 53 Cal.4th at 1033 (certifying a California class with meal and rest break claims).
California Employer Duties and Employee Rights
California Labor Code section 510 requires employers to pay overtime compensation for hours worked over 8 per day and 40 per week. An employer may avoid paying overtime for hours worked over 8 per day by adopting a valid Alternative Workweek Schedule ("AWS"). The procedures for adopting a valid AWS are set forth in Labor Code § 511 and the relevant Industrial Welfare Commission (“IWC”) Wage Order No. 4 at California Code of Regulations, title 8, § 11040, subd. 3(B). Among other things, the law requires an employer to hold a secret ballot election regarding the AWS amongst its employees and to file the results of the election with the State. Prior to the election, the employer must issue a written notification to the affected employees, explaining the election process and the effects of the AWS on the employees’ work schedule and compensation.