Category Archives: California Questions

California Wage and Hour Issues, Quirky Question # 128

Quirky Question # 128:

I work for a California employer with nonexempt retail employees who earn commissions on their sales.  We have been sued for failing to provide our employees with meal and rest breaks.  I understand the company may be liable to each employee for one hour of pay when a break was not provided.  The class action complaint against us, however, alleges the one hour of pay is based on each employee’s rate after incorporating his/her earned commissions, and that for days in which a missed meal and rest break occurred, the employee is owed two hours of pay.  Is that correct? Answer→

Wage and Hour Cases in the Ninth Circuit

Wage and hour class actions comprise approximately one third of all class action litigation. The Ninth Circuit Court of Appeals has taken note as during the past six months, a number of significant wage and hour cases were decided by the court. Most of these cases involved class allegations where the court considered issues related to employee classification, off-the-clock work and individual liability. These recent decisions provide guidance to employers defending against these claims, particularly since the court seems to have heightened the scrutiny applied to these class actions.

A. Preemptive Strike on Class Certification Permissible: On July 7, 2009, the Ninth Circuit published In re: Wells Fargo Home Mortgage, 571 F.3d 953 (2009) and Vinole v. Countrywide Home Loans, Inc., 571 F.3d 935 (2009); each favorable for employers defending against wage and hour class actions. In Vinole, the Ninth Circuit affirmed a preemptive decertification motion. Plaintiffs sought to represent a proposed class of Countrywide external home loan consultants whom they alleged were misclassified as “exempt” outside sales employees. Answer→

Use of Surveillance Cameras to Monitor Worksite, Quirky Question # 116

Quirky Question # 116:

I am the owner of a small private company.  I was recently alerted by my secretary that various computers around the office, including some in private offices, have been used late at night to access the internet.  The late-night use has included accessing pornographic websites from a couple of the offices.  I need to discovery who the unauthorized user is, but I cannot afford a security system or security guards.  Can I install a hidden video camera in the offices that have been accessed? Answer→

California Wage and Hour Issues, Quirky Question # 107

Quirky Question # 107:

I keep hearing about companies getting hit with class action lawsuits under California’s tough wage and hour laws.  As I understand it, when a company treats its employees the same under a single policy, it is much more likely to have a class action certified against it.  Our company’s policy is to treat as exempt from overtime its outside sales representatives.

Does this count as a uniform policy, and does it open us up to a lawsuit?  Would we be better off treating some of the sales representatives as exempt and others non-exempt, based on some differences in job duties that already exist or we could implement? Answer→

Vacation Pay Obligations, Quirky Question # 103

Quirky Question # 103:

We recently opened operations in California and are concerned that our current PTO policy does not meet California state standards.  We were caught unawares by the new Massachusetts Supreme Court case on vacation pay and know that the law on vacation policies differs from state to state.  What should we be doing to protect ourselves from employee vacation claims in California? Answer→

Overtime Compensation and “Exempt” Employees, Quirky Question # 89

Quirky Question # 89:

Our company develops software and is based in California with another location in Arizona.  On occasion, our software developers in Arizona come to our California facility to perform some work.  Two of our Arizona based developers have recently complained that while they are in California they should be paid overtime for the work done at our headquarters whenever they work more than 8 hours in a day.  One of the Arizona based employees makes a salary of $60,000 and is classified as exempt.  The other Arizona based employee makes a salary of $77,000 and is also exempt.  Neither one of these employees has worked in California for a whole week; they worked Wednesday through Friday in California four times in a two month period.  They never worked more than 40 hours in a week but both want the company to pay them overtime as if they are a nonexempt employees for the days they worked ten hours.  They both claim that in California they are nonexempt employees and are entitled to overtime.  Must we apply California law to Arizona based employees that work in California so infrequently? Answer→

Recording Phone Calls, Quirky Question # 85

Quirky Question # 85:

We recently heard a rumor that a member of our software engineering staff is planning to leave and start a software company of his own that may compete with us.  Further, we have heard that he is discussing his plans with others outside of our company using the desk phones in our San Francisco office.  We would like to record his conversations to see what he is planning and whether he is using any of our proprietary information or soliciting any of our employees to join him.  Since we own the telephone system, can’t we record or listen in to his calls? Answer→

California Oddities, Quirky Question # 75

Quirky Question # 75:

We are a California employer and were just hit with a lawsuit by a former employee for acts that supposedly took place almost three years ago.  Our former employee alleges that in January 2006, his supervisor asked him to fire three Asian-Americans who work in an otherwise all Caucasian department.  The former employee alleges that he refused to follow his supervisor’s directive and did not fire anyone.  (Incidentally, this was the same supervisor who hired the employee who now is suing us.)

Our former employee also contends that from January 2006 through January 2008, he received very poor performance evaluations from his supervisor, which he attributes to his unwillingness to fire the three Asian-American employees.  Despite his “belief” about the supposed link between his performance reviews and his refusal to fire anyone, he never complained to our Human Resources Department or anyone on our management team.  He claims he had conversations about his supervisor’s behavior with one of his subordinates, an Assistant Manager who reported to him.

In February 2008, he quit without notice.  He immediately filed an administrative complaint with the Department of Fair Employment and Housing (DFEH), alleging race and age discrimination.  The DFEH conducted an investigation which ended in December 2008, and issued a right to sue letter soon thereafter.  We just were served with the Complaint, some three years after the primary incident on which his lawsuit is based.

First, can he file a race discrimination claim even though he is not Asian?  Second isn’t his lawsuit time-barred?  (I thought these types of lawsuits were limited to a one year statute of limitations.)  Finally, given that the employee did not take advantage of our very extensive internal complaint procedures (designed to address precisely these kinds of issues), doesn’t his failure to utilize this internal complaint process bar his claims? Answer→

Joint Employer Liability, Quirky Question # 70

Quirky Question # 70:

Our company frequently hires workers through employment placement agencies – some on a temporary basis, others for more long-term assignments.  The placement company pays them and withholds employment taxes on their behalf.  We sign contacts saying that the workers are independent contractors and we are not their employer.  We recently terminated one of the workers who was pregnant and she is threatening to sue us as well as the employment agency.  Should we be concerned about potential liability under California law? Answer→

California Non-Competes, Quirky Question # 55

Quirky Question # 55:

We have a highly mobile workforce, and we are concerned about our former employees going to work for a competitor, stealing our customers, and raiding our employees.  We are a technology based company and have developed proprietary information that would give our competitors an edge if our former employees were to use or disclose it to them.  We are based in California and understand that it has a very narrow view of non-competition agreements.  It seems very unfair.  If we put provisions into our contracts to try to stop this from happening, what are the chances that the contract will be enforceable?

[Quirky Question # 55 is another one of our California Questions.  As such, I have requested one of my California colleagues to provide the analysis.  The analysis below was written by Karen Wentzel of our Palo Alto office.  As I’ve described previously, Karen is a Stanford Law School grad, who has been practicing employment law for more than 20 years.  Karen’s biography can be found at www.dorsey.com.  Her email address is:  wentzel.karen@dorsey.com.  If you would like to see other analyses provided by Karen, click on the “View by Topic” box to the left of this posting, and scroll down to “California Questions.”  Click on that category and other California questions will be displayed.

If you have any particularly unusual questions pertaining to California law, you can send them either to Karen or me.] Answer→