CALIFORNIA CLASS ACTION LAW

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Commissioned Employees: Cal. Sup. Ct. Holds Commissions Are Counted in the Pay Period Actually Paid

The California Supreme Court today issued its ruling in Peabody v. Time Warner Cable, Inc., Case No. S204804, __ Cal. 4th __ (July 14, 2014).  Plaintiff Peabody filed a class action suit alleging failure to pay overtime and other wage and hour claims.  As to overtime, Time Warner argued that Peabody fell within California’s “commissioned employee” exemption and was not entitled to overtime pay.  

At the request of the Ninth Circuit, the Court considered whether an employer may attribute commission wages paid in one pay period to other pay periods in order to satisfy the requirements of California’s commissioned sales exemption.  

The court concluded that it may not:

[A]n employer satisfies the minimum earnings prong of the commissioned employee exemption only in those pay periods in which it actually pays the required minimum earnings. An employer may not satisfy the prong by reassigning wages from a different pay period.

Id. at *9.  You can read more about the court’s reasoning here

By CHARLES H. JUNG

 

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Amending Attorneys’ Fees Allegation in Midst of Trial Found Prejudicial

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The Second District held today that it is an abuse of discretion to permit an amendment to a complaint on the fourth day of a five-day trial.  Duchrow v. Forrest, __ Cal. App. 4th __, No. B233736 (2d Dist. Apr. 30, 2013).  The Court found that there was no reason the amendment could not have been made sooner, and that prejudice existed because, among other things, the amendment “changed the damages sought from $44,082.22, as pleaded in the complaint, to $312,260 in attorney fees and $16,851.95 in costs under the Litigation Agreement, plus an additional $27,777.36 in attorney fees and $8,155.13 in accrued interest under the Administrative Agreement, for a total of $365,044.44.”

 

You can read more here.

 

By CHARLES H. JUNG

 

Judge Lucy H. Koh Invalidates 38 “Opt-Out” Forms, Grants Curative Notice, and Orders Defendants to Show Cause Why They Should Not be Sanctioned Pursuant to Rule 11

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Issuing a robust opinion in a putative wage and hour class and FLSA collective action, Judge Lucy H. Koh invalidated opt-out forms solicited by defendants, granted plaintiff’s request for a curative notice at defendants’ expense, and ordered defendants to show cause why they should not be sanctioned pursuant to Rule 11.  Li v. A Perfect Day Franchise, Inc., No. 10-CV-01189-LHK, 2010 WL 3835596 (N.D. Cal. Sept. 29, 2010).  The court concluded that based on the record, it appeared likely that “the opt-out forms submitted by Defendants on September 7, 2010 were fraudulently created after the September 2, 2010 hearing on the underlying motions.”  Id. *11.  The court admonished that “Defendants will not be permitted to defraud this Court by submitting false testimony.” Id. *12.

Background

Named plaintiffs are former workers for A Perfect Day Franchise, Inc., which owns and operates spas. Id. *1. Named plaintiffs describe themselves and the majority of the putative class as being native Chinese speakers, with limited English proficiency and little or no formal education. Id. Plaintiffs claim that they paid for a massage training course offered by an entity related to Perfect Day, the Minjian Hand Healing Institute.  Id. Plaintiffs allege they paid for the course based on promises, contained in advertisements for the training program, that they would be employed by Perfect Day and would earn a minimum income once it was completed, but that these promises were not honored by Perfect Day, and that Perfect Day has miscategorized them as independent contractors rather than employees. Id. Read the rest of this entry »

Eastern District Holds That Stolt-Nielsen Does Not Preempt Gentry

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United States District Court for the Eastern District of California rejected defendant’s argument that Stolt-Nielson preempted Gentry, and the court held that a class-wide arbitration agreement was unenforceable as against an unpaid wage and overtime plaintiff.  Mathias v. Rent-A-Center, Inc., Civ. No. S-10-1476 LKK/KJM, 2010 WL 3715059 (E.D. Cal. Sept. 15, 2010) (slip op.).

Background

Ryan Mathias (“Mathias” or “plaintiff”) was employed by Rent-A-Center, Inc. (“RAC” or “defendant”) as an Assistant Manager, a position that was classified as a non-exempt or hourly position. Id. *1. As a condition of employment, plaintiff executed an arbitration agreement (“Agreement”), which Agreement contained a class action waiver and excluded arbitration private attorney general actions.  Id. Plaintiff filed a class action alleging eight claims arising from his employment with defendant, including claims for unpaid wages and overtime, unpaid rest and meal period premiums, and penalties arising from non-compliant wage statements under the California Labor Code and California Business and Professions Code. Id. Read the rest of this entry »

Judge William Alsup Denies “First-to-File” Transfer of P.F. Chang’s Wage & Hour Class Action

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In Dubee v. P.F. Chang’s China Bistro, Inc., No. C 10-01937 WHA, 2010 WL 3323808 (N.D. Cal. Aug. 23, 2010), a putative wage-and-hour class action, defendant P.F. Chang’s China Bistro, Inc. brought a motion to transfer the action to the Central District of California pursuant to the “first-to-file rule” due to an earlier-filed action pending there, Vasquez v. P.F. Chang’s China Bistro, Inc., No. CV 09-01408 DSF.  Dubee, supra, *1.  Plaintiff opposed, arguing that the first-to-file rule does not apply since the actions are not sufficiently similar. Judge William Alsup of the Northern District of California denied P.F. Chang’s motion. Read the rest of this entry »

Second District Holds That Providing Meal Breaks Means Employers Must Provide Breaks “as a Practical Matter”

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While the California Supreme Court will resolve this issue shortly, in Brookler v. Radioshack Corp., B212893, 2010 WL 3341816 (Cal. Ct. App. 2d Dist. Aug. 26, 2010), an unpublished opinion issued today, the Second District Court of Appeal held that “Unless and until our Supreme Court holds otherwise, we agree with the analysis in Cicairos which held an employer’s obligation under the Labor Code and related wage orders is to do more than simply permit meal breaks in theory; it must also provide them as a practical matter.” Read the rest of this entry »