California employers saw some significant developements in the area of wage and hour law in 2007.
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2007 California Supreme Court Employment Law Cases In Review
By Christopher W. Olmsted, Esq.
Cal Supremes Permit Payment of Expenses By Enhanced Compensation
Gattuso v. Harte-Hanks Shoppers, Inc., 42 Cal.4th 554 (Nov. 5, 2007)
Some employers would prefer to pay employees a fixed extra amount per month to cover all expenses. Is this permissible? The California Supreme Court recently ruled in a case titled Gattuso v. Harte-Hanks that employers may reimburse employees for expenses by a “lump sum” method instead of by an actual-expenses-incurred method. However, practical application of the new rule may be challenging. See Full Article.
Cal Supreme Court Sets High Standard For Enforcement Of Class Action Waivers
Gentry v. Superior Court, 42 Cal.4th 443 (Aug. 30, 2007)
A long-awaited ruling regarding class action waivers may cause employers to redraft their arbitration agreements. The California Supreme Court ruled that class arbitration waivers in employment agreements, although not contrary to public policy per se, may not be enforced to preclude class arbitration to pursue unwaivable statutory rights to overtime pay, if a trial court determines that class arbitration would be a significantly more effective way of vindicating rights than individual arbitration; factors to be considered include modest size of potential individual recovery, potential for retaliation against members of class, fact that absent members of class may be ill informed about their rights, and other “real world” obstacles to vindication of class members' right to overtime pay through individual arbitration. See our September 2007 Legal Update for the Full Article (page 6).
California Employers Win With New Disability Law Ruling
Green v. State of California, 42 Cal.4th 254 (Oct. 10, 2007)
For one aspect of disability discrimination, the California Supreme Court placed the burden of proof on the employee, rather than the employer. A former stationary engineer at a state correctional facility who had contracted Hepatitis C, presumably from sewer pipes at the facility, and who suffered an unrelated back injury, had the burden of proving, in his California Fair Employment and Housing Act (FEHA) disability discrimination action against the state, that he had the ability to perform the essential duties of his job with or without reasonable accommodation, rather than the state having to prove his inability as an affirmative defense; as under federal Americans with Disabilities Act (ADA), the ability to perform job's duties was an element of the cause of action under FEHA.
Supreme Court Upholds Group Profit Sharing Incentive Plan
Prachasaisoradej v. Ralphs Grocery Co., Inc., 42 Cal.4th 217(Aug. 23, 2007)
Employer's profit-based supplementary incentive compensation plan (ICP), which was designed to reward employees beyond their normal pay for their collective contribution to employer's profits, did not violate statutory wage protection policies insofar as the ICP included employer's expenses such as workers' compensation costs, cash and merchandise shortages, breakage, and third party tort claims in the profit calculation; employer did not illegally shift those costs to employees, but rather, after fully absorbing the expenses at issue, employer simply determined what remained as profits to share with its eligible employees in addition to their normal wages. See our September 2007 Legal Update for the Full Article (page 7).
No Free Lunch From Cal Supremes
Murphy v. Kenneth Cole Prods., 40 Cal. 4th 1094 (2007)
Where a non-exempt employee misses a required meal or rest period, the penalty is one hour of pay at the regular rate. In a significant setback for employers, the California Supreme Court held that the penalty is a wage earned by the employee. The significance? A longer statute of limitations, and much higher collectible damages. The holding extends the statute of limitations from one year to three, or possibly four.
Meal and Rest Period Penalty rules decided in favor of employees, exposing employers to greater liability. See our May 2007 Legal Update for the Full Article.
This article is intended as a brief overview of the law and are not intended to substitute as legal advice. Any questions or concerns regarding any statute or case law should be addressed to a licensed attorney. Copyright © 2007 by Barker Olmsted & Barnier, APLC. San Diego, California. All rights reserved.
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Copyright © 2007 Barker Olmsted & Barnier.
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