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

After a decade of ups and downs on the question of federal preemption, the Ninth Circuit Court of Appeals has upheld the Federal Motor Carrier Safety Administration’s (“FMSCA”) decision to preempt California’s meal and rest break rules.  The long-awaited decision in IBT v. FMCSA upholds the FMSCA’s December 2018 determination that drivers, who are involved in interstate commerce and subject to federal hours-of-service regulations, are exempt from California’s stringent meal and rest break rules because they are “incompatible” with federal regulations.  “The FMCSA reached this conclusion because California required more breaks, more often and with less flexibility as to timing,” the Court’s three-judge panel said in its January 15 opinion.
Continue Reading The Ninth Circuit Puts the Brakes on Truckers’ California Meal and Rest Break Claims

On January 1, 2021, various new and amended employment laws will go into effect in California. Below is a summary of some of these laws that employers should make themselves aware of heading into the new year.  All laws discussed in this post go into effect on January 1, 2021, unless otherwise noted.
Continue Reading New Employment Laws to Look Out for in 2021

As we have previously reported, California law utilizes the “ABC” test to determine if workers are employees or independent contractors for purposes of the Labor Code, the Unemployment Insurance Code, and the wage orders of the Industrial Welfare Commission.
Continue Reading Expanding Independent Contractors in California: New Law Awaits Governor’s Signature

As class actions brought under Illinois’ Biometric Information Privacy Act (“BIPA”) proceed through litigation, defendants have made a variety of arguments attempting to push courts to define the limits of the somewhat vague statute. The Illinois Supreme Court’s 2019 decision in Rosenbach v. Six Flags Entertainment Corp. was the first opinion to provide interpretive guidance of BIPA, and specifically, what type of injury is required for a person to have standing to bring a private right of action under the statute. (We explain BIPA and the Rosenbach opinion here.)
Continue Reading Is BIPA Preempted? – Illinois Appellate Court Considers Workers’ Compensation Exclusivity Question

On September 18 2019, Governor Gavin Newsom signed into law AB-5, which codified the California Supreme Court’s Dynamex v. Superior Court decision.  In Dynamex, the California Supreme Court adopted the so-called “ABC” test to determine coverage under the Industrial Welfare Commission (“IWC”) Wage Orders.  AB-5 expands the application of the ABC test to the entire California Labor Code and will take effect on January 1, 2020.
Continue Reading It’s Official: Newsom Expands The Definition of “Employee” Under California Law

On September 5, 2019, the Washington Supreme Court issued a huge win for all non-agricultural employers who pay commission or piece-rate pay to their employees in Washington state. In a 6-3 decision, the Washington Supreme Court held in Sampson v. Knight Transportation (No. 96264-2) that a non-agricultural piece-rate employer complies with the Washington Minimum Wage Act when an employee’s total earnings in given workweek divided by the employee’s total hours worked in the same workweek exceeds the applicable minimum wage rate. While this conclusion may seem obvious, the Washington Supreme Court in 2018 rejected the same workweek averaging method for agricultural workers. Carranza v. Dovex Fruit Co., 190 Wn. 2d 612 (2018) held that the Washington Minimum Wage Act (“MWA”) requires agricultural workers earning piece-rate pay to be separately compensated on an hourly basis for all “activities outside of piece-rate [] work.” The question in Sampson was whether the holding in Carranza should be extended to non-agricultural piece-rate employers. Relying on a regulation promulgated over 40 years ago by the Washington Department of Labor & Industries (“DLI”), the Washington Supreme Court held that Carranza’s separate compensation rule is confined to the narrow context of agricultural employment.
Continue Reading Peace for Piece-Rate Employers in Washington

Following the launch of the so-called “MeToo” movement, the California Legislature (controlled by a Democratic supermajority) has aggressively churned out new bills that further strengthen the ability for workers to sue their employers and increase the already-significant regulatory burden on these companies. This fall, the California Legislature is geared to send three significant bills to Governor Gavin Newsom that all California employers should carefully follow.
Continue Reading Three Major Workplace Bills to Land on Gov. Gavin Newsom’s Desk