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Developments in Wage and Hour Law-2014

Hunter PyleSeptember 30, 2014June 29, 2023

[Each year, I participate in an employment/wage and hour law update put on by the Alameda County Bar Association Labor and Employment Committee. This year, I am going to summarize some of the topics that I discussed (or wanted to discuss) in a series of blog posts. This is the first of those posts. I am also planning to cover the following topics in the weeks to come: Class Actions; PAGA Claims; and Arbitration.]

A number of important cases have come down in the year since our last employment/wage and hour law update in September 2013. Workers scored significant victories in a number of areas, including cases involving whether “independent contractors” are actually employees for the purposes of wage and hour law; federal preemption of meal and rest breaks for truck drivers; the inside sales exemption; and reimbursement for expenses related to cell phones. However, the news was not all bad for employers, as courts continued to express skepticism toward off the clock cases and mileage reimbursement cases. Finally, the California Supreme Court has agreed to address several critical issues pertaining to seating cases. Until then, those cases are probably on hold.

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California Supreme Court Holds Fast Food Employee Cannot Sue Franchisor For Sexual Harassment Claims.

Hunter Pyle LawSeptember 9, 2014June 28, 2023

On August 28, 2014, the California Supreme Court ruled that Domino’s Pizza could not be held liable for sexual harassment claims by an employee of a franchisee. The highly anticipated decision came on the eve of Labor Day weekend, dealing a blow to franchisee employees seeking accountability and meaningful compensation from franchisors.

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A Win for Commissioned Salespeople: Peabody v. Time Warner Cable, Inc.

Hunter PyleAugust 15, 2014June 28, 2023

In order to be exempt from the overtime requirements of California law (as well as other wage and hour laws such as those requiring meal and rest breaks), commissioned employees must meet two requirements: [1]

1. They must earn more than one and half times the applicable minimum wage[2] (“the minimum wage test”).

2. They must earn at least half of their wages from commissions.

This test therefore poses the following question: What about employees who, because of their commission structure, earn less than one and a half times the minimum wage in some pay periods? Are employers allowed to average an employee’s wages across pay periods in order to determine whether they meet the minimum wage test?

The California Supreme Court recently addressed this issue. In Peabody v. Time Warner Cable, Inc. the Court held that employers may not consider commission payments in other pay periods in order to meet the minimum wage test of the commissioned employee exemption.

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Let the Franchisor Beware: The NLRB Finds That McDonald’s Is Liable for the Conduct of Its Franchisees

Hunter PyleJuly 31, 2014June 28, 2023

Many of the market leaders in the industries that pay the lowest wages (think of fast-food restaurants and convenience stores) use a common device to limit their liability for unlawful conduct: the franchise. These companies (franchisors) grant franchises to other entities (franchisees) to operate locations in their name. Often the franchisees have limited assets. As a result, employees who challenge illegal labor practices at the franchises are unable to collect any money even when they prevail on their claims.

Some of these market leaders also use the franchise device to deny responsibility for the conduct of their franchise operators. For example, in response to the growing movement to require fast food restaurants to pay their workers a living wage, many of the market leaders have dubiously claimed that they have no control over the wages that their franchisees pay. They are thus seeking to use the franchise as an excuse for washing their hands of culpability for a situation in which women and men who work full time remain mired in poverty.

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SSP Attorney Mana Barari Appointed to State Bar Commission

Hunter PyleJuly 28, 2014June 28, 2023

Hunter Pyle Law is proud to announce that associate attorney Mana Barari has been appointed by the State Bar Board of Trustees to the California Commission on Access to Justice.

The California Commission on Access to Justice was established in 1997 to pursue long-term fundamental improvements in the civil justice system so that it is truly accessible for all, regardless of income, geography, or language ability. The Commission pursues a wide range of projects to fulfill its mission, including funding local legal services programs around the state, helping to establish and expand court-based self-help centers, and the publication of reports focusing attention on possible solutions to access problems.

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Ninth Circuit Clarifies California Labor Law Protections for Truck Drivers in Dilts v. Penske Logistics

Hunter Pyle LawJuly 10, 2014June 28, 2023

California labor laws almost always offer stronger protections than their federal counterparts, which set the minimum baseline for all states. However, for some categories of employees, the California Labor Code protections can be preempted by federal laws- meaning the federal law supersedes the California law. Federal preemption of California laws almost always translates into fewer protections for employees.

Two federal regulatory schemes in particular contain preemption clauses: the Federal Aviation Administration Authorization Act of 1994 (FAAAA), dealing with motor carriers (the trucking industry), and the Airline Deregulation Act of 1978 (ADA), dealing with the air carriers. Both laws bar the application of California laws “relating to the rates, routes, or services” of any air or motor carrier.

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Guidelines from the Northern District Regarding Class Action Settlements

Hunter PyleJuly 10, 2014June 27, 2023

The United States District Court for the Northern District of California has issued a document called “Procedural Guidance for Class Action Settlements” (Guidance). The Guidance is extremely helpful, and offers a glimpse at the prevailing wisdom with respect to settlements of class actions, at least in federal court.

The first section of the Guidance addresses motions for preliminary approval (MPAs), making the following noteworthy points:

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Ayala v. Antelope Valley: When are “Independent Contractors” really Employees?

Hunter PyleJuly 2, 2014June 27, 2023

On June 30, 2014, in Ayala v. Antelope Valley Newspapers, Inc., the California Supreme Court clarified the appropriate test to use when determining whether “independent contractors” are actually employees for the purposes of California’s wage and hour laws. The Court also provided a clear road map that lays out how courts should analyze class actions that raise this issue. These clarifications are welcome, and should help more plaintiffs achieve class certification in similar cases in the future.

The plaintiffs in Ayala deliver daily newspapers to people who subscribe to the Antelope Valley Press. Antelope Valley Newspapers, Inc. (Antelope) classifies these delivery men and women (called carriers) as independent contractors, not employees. As a result, they are deprived of the wage and hour protections to which they would otherwise be entitled.

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An Epic Dissent: Justice Werdegar Nails it in Iskanian

Hunter PyleJune 30, 2014June 27, 2023

The majority opinion in Iskanian has been discussed at length, both here and in every other employment blog that touches on California law. What has been overlooked, however, is the incredibly eloquent and persuasive dissenting (and concurring in part) opinion written by Justice Kathryn Werdegar.

The fundamental points made by Justice Werdegar are that (1) class actions are a form of collective action; (2) Congress has made it clear for eighty years that contracts that strip employees of the right to engage in collective action are illegal; and (3) therefore class action waivers are illegal and unenforceable.

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Ninth Circuit Clarifies Some Issues and Ducks Others Regarding Arbitration Agreements

Hunter PyleJune 30, 2014June 27, 2023

The Court of Appeal for the Ninth Circuit recently issued a pair of decisions that help to clarify the law surrounding arbitration agreements: Davis v. Nordstrom (holding that no particular form of notice is required to modify existing arbitration agreements) and Johnmohammadi v. Bloomingdale’s (opportunity to opt out of arbitration agreements with class action waiver defeats argument that federal labor laws bar such waivers).

In Davis v. Nordstrom, Inc. (9^th Cir.2014) 2014 DJDAR 8019 the court clarified the law with respect to whether and how an employer can modify an existing arbitration agreement so as to prohibit class actions. The plaintiff in Davis had received an employee handbook that required arbitration but permitted class actions. In 2011, Nordstrom revised the arbitration agreement to bar class actions.

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