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On May 10, 2024, the Ninth Circuit decided Yuriria Diaz v. Macy’s West Stores, after the employer appealed the district court’s decision ordering arbitration of both an employee’s individual and non-individual claims under the California Private Attorney Generals Act (PAGA). The Ninth Circuit held that even though the arbitration agreement made no mention of PAGA, an employee’s individual PAGA claim was still subject to arbitration because the parties’ intended to arbitrate all employment disputes between them. However the non-individual PAGA claims were not arbitrable, because the parties did not consent to arbitration of those claims. Continue Reading Ninth Circuit Rules That Only Individual PAGA Claims Can Be Compelled to Arbitration

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

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

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

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

In the aftermath of the Illinois Supreme Court’s Rosenbach decision, Illinois employers have faced a wave of class action litigation filed under the Biometric Information Privacy Act (“BIPA”). Employers hoping for relief from the statute’s private right of action must wait for another day (or another session) as Senate Bill 2134 (“SB 2134”) did not report out of committee by the March 28, 2019 deadline.
Continue Reading The Potential For Stemming BIPA Suits Waits Another Day

Albert Einstein believed “Everything should be made as simple as possible, but not simpler.” The Ninth Circuit seems to agree. In Gilberg v. Cal. Check Cashing Stores, LLC, No. 17-16263, 2019 WL 347027 (Ninth Cir. Jan. 29, 2019), the Ninth Circuit held a single form combining nearly identical federal and state disclosures violates both federal and state laws. Employers who conduct pre-employment background checks must now provide applicants with two separate standalone forms: (1) disclosure and consent under Fair Credit Reporting Act; and (2) disclosure and consent under California’s Investigative Consumer Reporting Agencies Act (or other applicable state law). This decision applies to employees providing services in the Ninth Circuit (California, Arizona, Hawaii, Alaska, Idaho, Montana, Nevada, Oregon and Washington).
Continue Reading Complicating Simplicity: Ninth Circuit Requires Separate Stand-Alone Documents for Employment Background Checks