Rounding is the practice of capturing time entries on a time clock and converting them to the closest five, ten, or fifteen minute equivalent. For example, both entries at 8:58 and 9:04 may be converted to 9:00 a.m. A recent California Court of Appeal decision, Camp v. Home Depot U.S.A., Inc., calls into question the continued viability of time-rounding policies in California. In 2012, the Court of Appeal held in See’s Candy Shops, Inc. v. Superior Court, 210 Cal. App. 4th 889 (2012), that an employer’s time rounding policy is lawful under California law when the policy is “fair and neutral on its face” and is used in a way that will not result, over a period of time, “in failure to compensate the employees properly for all the time they have actually worked.” As generally applied, the See’s Candy test permitted time clock rounding systems so long as the rounding was to the nearest set increment as opposed to always rounding against the employee. Multiple appellate decisions after See’s Candy cited it favorably in granting summary judgment to the employer.Continue Reading California Court of Appeal Limits the Permissibility of Time Rounding

On October 24, 2022, the Ninth Circuit Court of Appeals issued a decision in Cadena v. Customer Connex LLC, concerning whether the time employees spend booting up and shutting down their computers is compensable under the Fair Labor Standards Act (“FLSA”). Although the case arose out of a call center in Las Vegas, Nevada, where the employees’ principal duties included answering customer phone calls, this case may affect all employers whose employees spend time turning on their computers to work.Continue Reading Time Spent Booting Up Computers May Be Compensable Under the Fair Labor Standards Act

On June 13, 2022, the Ninth Circuit Court of Appeals held in Johnson v. WinCo Foods Holdings, Inc, et al. that class members who were not yet employed by WinCo were not entitled to compensation for the time required to take a pre-employment drug test, nor was WinCo required to cover the travel expenses associated with undergoing the test.Continue Reading Time Is Not Always Money: Ninth Circuit Holds That Pre-Employment Drug Testing Is Not Compensable Under California Law

On June 6, 2022, a unanimous United States Supreme Court issued another key decision interpreting the Federal Arbitration Act (“FAA”) that will have a significant impact on certain employers going

Continue Reading United States Supreme Court Rules Certain Airline Employees Exempt From Federal Arbitration Act

On May 23, 2022, in Naranjo v. Spectrum Security Services, Inc., P.3d (2022), the California Supreme Court issued an important wage-and-hour decision.  In Naranjo, the Court held that meal break premiums that an employer pays to an employee for missed, late, or short meal breaks constitute wages.  Consequently, an employer must report those premium payments on an employee’s wage statement pursuant to Labor Code section 226 and must promptly pay any owed premiums when an employee terminates employment or face waiting time penalties under Labor Code section 203.  Naranjo also concluded that the California Constitution’s default prejudgment interest rate of seven percent applies to calculating the prejudgment interest on claims for meal and rest break premiums.Continue Reading California Supreme Court Holds Meal Period Premiums Are “Wages” and May Trigger Wage Statement and Waiting Time Penalties

On Monday, the Ninth Circuit vacated a judgment for Grubhub, Inc. and against a former food delivery driver, Raef Lawson, who claimed that he was misclassified as an independent contractor when he performed food delivery services.  Lawson had asserted claims for minimum wage, overtime, and expense reimbursement.
Continue Reading Ninth Circuit Reversed Grubhub’s Victory on Independent Contractor Classification in Light of the Retroactive Application of Dynamex

A former Wal-Mart employee had his $102 million dollar verdict overturned in a recent win for California employers.  Roderick Magadia, the former employee, brought a class action and Labor Code Private Attorneys General Act (“PAGA”) complaint against Wal-Mart alleging, in part, that Wal-Mart issued deficient wage statements in violation of Labor Code Section 226.  The alleged defect was prompted by a “Myshare” bonus, a quarterly bonus based on non-discretionary metrics.  Because the bonus was non-discretionary, the law required Wal-Mart to factor the bonus into the “regular rate” of pay used to calculate the overtime premium.  But, since the bonus was earned and paid quarterly while the overtime premium on hourly pay is paid during every two-week pay period, the premium must be recalculated and adjusted with a supplemental payment each quarter.
Continue Reading Sheppard Mullin Helps Overturn $102 Million Dollar Verdict

In a decision of considerable significance in the world of wage and hour litigation, the United States Court of Appeals for the Fifth Circuit significantly departed from conventional standards for assessing conditional certification under Section 216(b) of the Fair Labor Standards Act (“FLSA”).  In Swales v. KLLM Transport Services, Inc., the Fifth Circuit rejected the conditional certification process entirely and drastically altered the procedure for assessing whether potential members of a collective action under the FLSA are “similarly situated.”
Continue Reading Fifth Circuit Shuts Down FLSA Conditional Certification

In Garcia v. Haralambos Beverage Co., the California Court of Appeal embraced the adage “time kills all deals” to conclude that an employer waived its right to arbitrate the wage-hour claims at issue in the case by, among other things, delaying two years to seek arbitration as a last resort and waiting to locate the plaintiffs’ signed arbitration agreements.  By waiving its right to arbitrate, the employer also lost its ability to strike class claims as a result.
Continue Reading Delaying Enforcement of Arbitration Agreements May Lead to Undesirable Consequences

On January 6, 2021, a bipartisan group of New York State lawmakers introduced Assembly Bill 27, the latest version of proposed privacy legislation that would allow consumers to sue companies for improperly using or retaining their biometric data. Better known as the Biometric Privacy Act (the “BPA”), the bill, if enacted, would impose significant compliance requirements for companies handling biometric data. The BPA would make New York State only the second state with a private right of action that includes statutory damages against entities that improperly use or retain biometric data. If the BPA is signed into law, it would likely bring a flood of class action litigation, similar to that seen in Illinois under Illinois’ Biometric Information Privacy Act (the “Illinois BIPA”).
Continue Reading New York Proposes Biometric Privacy Act With Private Right of Action