California Employment Law Appellate Report - Wage and Hour

California Employment Law Appellate Report - Wage and Hour

Most recent wage and hour cases

In Allison v. Dignity Health,          Cal.App.5th           (Jun. 26, 2025), the Court of Appeal (First Appellate District, Division Four) clarified the criteria for decertification of a class action, particularly concerning what constitutes “new evidence” and the impact of individual issues on class manageability for wage and hour claims.

Read more

Plaintiff Allison, a registered nurse, sued alleging various wage and hour violations. She moved for class certification, seeking meal and rest break subclasses based on allegations that Defendant required employees to wear work-issued communication devices during breaks. The trial court granted certification in part, denying only a “reporting time” subclass. Defendant subsequently moved for decertification, citing conflicting class member declarations, deficiencies in call logs, unreliable survey data, an unworkable trial plan, and “irreconcilable conflicts” between class members. The trial court granted decertification, agreeing with Defendant’s arguments and finding that “individual issues swamp the common issues” based on new evidence. Plaintiffs appealed.

The Court of Appeal affirmed the order decertifying the class. It held that Plaintiffs’ post-certification declarations and statistical analysis constituted “new evidence” under Weinstat v. Dentsply lnternat., Inc. (2010) 180 Cal.App.4th 1213, clarifying that “ ‘newly discovered’ evidence is not limited to newly existing facts” (Occidental Land, Inc. v. Superior Court (1976) 18 Cal.3d 355). The Court of Appeal found no abuse of discretion in the trial court’s disregard of survey data from Plaintiff’s expert, noting Plaintiffs’ failure to address self-selection bias given the low response rate (Duran v. U.S. Bank National Assn. (2018) 19 Cal.App.5th 630). Applying the Donohue v. AMN Services, LLC (2021) 11 Cal.5th 58 burden-shifting framework, the court concluded that Defendant’s evidence of “idiosyncratic reasons for noncompliant meal periods” defeated class treatment. Finally, the Court of Appeal found that Plaintiffs failed to challenge the trial court’s basis for decertifying the rest break subclass, namely its determination that Plaintiffs failed to establish a uniform practice of nurses being on call during breaks or to provide reliable common proof through phone records.

Full opinion

In Palm Springs Promenade, LLC v. Dept. of Industrial Relations,          Cal.App.5th           (Jun. 17, 2025), the Court of Appeal (Fourth Appellate District, Division One) clarified the definition of a “municipal affair” under the “home rule” provision of Cal. Const., art. XI, § 5(a), holding that a development predominantly financed and managed by a private entity does not qualify as such.

Read more

The City of Palm Springs, a charter city, entered a 2011 agreement with Defendant, a private developer, for a downtown property development. The city contributed approximately 25% of the total cost. Pursuant to the former § 7.06.030 of Palm Springs’ Municipal Code, which exempted public projects from the Prevailing Wage Law (PWL), the developer paid construction workers less than the prevailing wage. However, in 2018, the Department of Industrial Relations (DIR) determined the project was subject to the PWL, a determination affirmed after an administrative appeal in 2020. Defendant then sought a writ of mandate, which the trial court denied. Defendant appealed.

The Court of Appeal affirmed the denial of the writ of mandate. As a threshold matter, it concluded that the project met the definition of “public works” under Lab. Code § 1720(a)(1) and was thus subject to the PWL unless superseded by the city’s home rule authority. Applying the framework from State Building & Construction Trades Council of California v. City of Vista (2012) 54 Cal.4th 547, the Court of Appeal found that the project was not a “municipal affair” under Cal. Const., art. XI, § 5(a). This was because the developer, not the city, provided the majority of the project’s funding, selected the contractors, and owned and managed most of the improvements. Consequently, the court did not need to consider the remaining factors outlined in Vista.

Full opinion

In Bradsbery v. Vicar Operating, Inc.,          Cal.App.5th           (Apr. 23, 2025), the Court of Appeal (Second Appellate District, Division Seven) held that revocable, prospective waivers of meal breaks for shifts between 5-6 hours are legally valid. 

Read more

Plaintiffs signed a meal period waiver with Defendant for shifts less than 6 hours, before being assigned shifts, and later filed a class action for missed meal periods. The trial court granted Defendant summary adjudication, determining that Lab. Code § 512 and the IWC wage orders permit prospective blanket waivers. Plaintiffs appealed. 

The Court of Appeal affirmed. It found that the plain text of Labor Code § 512 and Wage Order Nos. 4 and 5, allowing meal periods to be “waived by mutual consent,” did not specify the timing or form of the waiver. The court rejected Plaintiffs’ argument that the absence of explicit permission for prospective written waivers meant they were prohibited, citing legislative history indicating the IWC had long considered such waivers protective of both employees and employers. It also noted Plaintiffs did not challenge the conscionability of their waivers. Finally, the court distinguished Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, which did not address the timing or circumstances of waivers, and rejected Plaintiffs’ reliance on an outdated DLSE opinion letter opposing blanket waivers. 

Full opinion

In Krug v. Board of Trustees of the California State University,          Cal.App.5th           (Apr. 3, 2025), the Court of Appeal (Second Appellate District, Division One) held that Lab. Code § 2802 does not require public employers to reimburse employees for work-related expenses. 

Read more

Plaintiff, a professor required to teach remotely due to the COVID-19 pandemic, purchased a replacement computer and printer after Defendant denied him access to campus to retrieve employer-provided equipment. Defendant denied reimbursement, and Plaintiff filed a class action and PAGA claims alleging violation of § 2802. The trial court sustained Defendant’s demurrer, reasoning that § 2802 does not expressly apply to public employers. Plaintiff appealed.

The Court of Appeal affirmed the dismissal of Plaintiff’s claims. Using the framework from Stone v. Alameda Health System (2024) 16 Cal.5th 1040, it analyzed § 2802 within its statutory context, noting that some Labor Code provisions explicitly include public employers while others explicitly exclude them. The court found the explicitly inclusive sections more instructive, largely because of “a concerted legislative effort to expressly refer in Article 2 to public employers when a provision applies to them.” The court extensively reviewed the legislative history of § 2802, finding that its predecessor, 1872 Civil Code § 1969, likely applied only to private employers. It also found that a Department of Finance Report on a bill amending § 2802 did not indicate legislative intent to extend its application to public agencies. Finally, the court noted that no case law had previously applied § 2802 to public employers, despite some cases discussing public employee expenses under the statute.

Full opinion

In Perez v. Rose Hills Company, (9th Cir.)           F.3d           (Mar. 17, 2025), the Court of Appeals for the Ninth Circuit clarified the amount in controversy requirement of the Class Action Fairness Act of 2005 (CAFA).

Read more

Plaintiff brought a class action alleging various wage and hour violations. Defendant removed the case to federal court under CAFA, alleging the amount in controversy exceeded $15 million. The district court found Defendant failed to provide evidence for the amount and remanded the case to state court. The Ninth Circuit granted Defendant permission to appeal.

On appeal, the Ninth Circuit vacated the order remanding the case to state court, following Arias v. Residence Inn by Marriott (9th Cir. 2019) 936 F.3d 920. It held that defendants calculating the amount in controversy under CAFA may rely on “a chain of reasoning that includes assumptions” based solely on the allegations in the complaint. (Id. at 925, internal citations omitted.) The district court should have considered whether Defendant’s calculation was a reasonable interpretation of the complaint, not whether it was supported by evidence. The court distinguished Ibarra v. Manheim Invs., Inc. (9th Cir. 2015) 775 F.3d 1193, where the defendant had to provide evidence because its interpretation of the complaint was found to be unreasonable.

Full opinion

In Arzate v. ACE American Insurance Company,           Cal.App.5th           (Feb. 21, 2025), the Court of Appeal (Second Appellate District, Division One) held that a court order lifting a stay and deeming a defendant’s right to arbitration waived was appealable under the functional equivalent doctrine. 

Read more

Plaintiffs filed a putative class action, alleging various wage and hour violations, and later amended their complaint to include representative PAGA claims. The trial court granted Defendant’s motion to compel arbitration, staying Plaintiff’s remaining PAGA claim. After the deadline for initiating arbitration had passed, Plaintiffs moved to lift the stay, arguing that Defendant was required to initiate arbitration under the parties’ agreement. The trial court agreed, finding that Defendant was in material breach of the arbitration agreement, because it hadn’t filed a demand within the prescribed 30 days. Defendant appealed.

The Court of Appeal reversed the approval of Plaintiff’s motion to lift the stay. As a threshold matter, following Hernandez v. Sohnen Enterprises, Inc. (2024) 102 Cal.App.5th 222, the Court of Appeal determined that the trial court’s order was functionally equivalent to an order denying a motion to compel arbitration, and thus appealable. It also found that, under 9 U.S.C. § 16, Defendants were entitled to appeal from an order refusing a stay. The court examined the parties’ agreement and found that Plaintiff, not Defendant, was required to initiate arbitration. The parties’ dispute centered on the definition of “the party who wants to start the [a]rbitration [p]rocedure.” The court found that, in the context of the entire agreement and its incorporated arbitration rules (which were generally based on the AAA rules), the phrase necessarily referred to Plaintiff.

Full opinion

In Nabors Corporate Services, Inc. v. City of Long Beach,           Cal.App.5th           (Feb. 4, 2025), the Court of Appeal (Second Appellate District, Division Five) held that subcontractors may seek indemnity under Lab. Code § 1781 for arbitration awards in prevailing wage disputes. The court also held that the Legislature did not intend for Lab. Code § 1784 to apply retroactively.

Read more

Plaintiff entered a subcontract with Defendants, but Defendants failed to inform Plaintiff that the subcontracted work was public work subject to prevailing wage laws. Plaintiff’s employees subsequently prevailed in wage arbitrations against Plaintiff. Plaintiff then sued Defendants for indemnity under Lab. Code §§ 1784 and 1781. The trial court sustained Defendants’ demurrer to the § 1784 cause of action without leave to amend, finding that the statute did not apply retroactively. It sustained the demurrer to the the § 1781 cause of action with leave to amend. Plaintiff filed a first amended complaint, but the trial court sustained Defendants’ subsequent demurrer, concluding that § 1781 does not permit losses related to arbitration awards and settlements. Plaintiff appealed.

On appeal, the Court of Appeal affirmed the dismissal of the § 1784 claim but reversed dismissal of the § 1781 claim. Plaintiff argued the trial court erred in interpreting § 1781 to exclude arbitration awards. The Court of Appeal agreed, holding per NTCH-WA, Inc. v. ZTE Corp. (9th Cir. 2019) 921 F.3d 1175 that a judgment confirming an arbitration award has the same force and effect as a court judgment. However, the court rejected Plaintiff’s argument for retroactive application of § 1784, which was enacted after the conduct underlying Plaintiff’s claims. The court reasoned that § 1784 created new rights, not merely clarified existing ones, and that legislative history did not indicate an intent for retroactive application.

Full opinion

In Associated General Contractors v. Dept. of Industrial Relations,           Cal.App.5th           (Jan. 24, 2025), the Court of Appeal (Third Appellate District) held that newly ratified regulations regarding apprentices’ work on public works projects were valid.

Read more

Plaintiffs challenged amendments to 8 CCR § 202 et seq. requiring apprentices employed on public works under Lab. Code § 1777.5 to only perform work within their approved training programs. The trial court denied their petitions, concluding that the amendments fell within the scope of the California Apprenticeship’s authority and were consistent with relevant laws and regulations.

On appeal, the Court of Appeal affirmed. It found that the regulations fell within the Council’s authority under § 3071 and other statutes to address apprentices’ working conditions. The court rejected Plaintiffs’ arguments that the regulations violated Lab. Code §§ 1777.5 and 3086, and conflicted with the Prevailing Wage Law or Shelley-Maloney Act. Notably, the court disapproved the holding in Henson v. C. Overaa & Co. (2015) 238 Cal.App.4th 184, 193 that “an apprentice’s craft or trade is defined by the type of work carried out by the journeymen and other members of the union”, declining to address whether the Council had the authority to interpret a key statutory term in “a manner inconsistent with an intervening judicial opinion.” While the court agreed that the regulations violated the Administrative Procedure Act’s clarity standard, it held that this did not invalidate them.

Full opinion

In Villalva v. Bombardier Mass Transit Corp.,           Cal.App.5th           (Jan. 23, 2025), the Court of Appeal (Fourth Appellate District, Division One) held that Lab. Code § 98.2 (c) does not preclude attorney’s fees and costs for successful wage and hour plaintiffs who initially pursue Berman hearings.

Read more

Plaintiffs, train dispatchers, sued Defendant for unpaid wages. After a Berman hearing where their claims were denied, they prevailed in a bench trial. The trial court awarded them $200,000 in attorney’s fees and costs. Defendant appealed, arguing that § 98.2(c) only authorizes fees against unsuccessful appellants.

The Court of Appeal affirmed the award of fees and costs, following Eicher v. Advanced Business Integrators, Inc. (2007) 151 Cal.App.4th 1363. It rejected Defendant’s argument that the superior court proceeding was a continuation of the administrative remedy, finding it to be an independent “action” or “civil action” under §§ 218.5, 226, and 119. The court distinguished this case from Sampson v. Parking Service 2000 Com, Inc. (2004) 117 Cal.App.4th 212, where the employee prevailed at the Berman hearing and the employer unsuccessfully pursued a trial de novo. It also declined to consider dicta from Sonic-Calabasas A, Inc. v. Moreno (2013) 57 Cal.4th 1109 and OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111 in support of Defendant’s arguments.

Full opinion

In E.M.D. Sales, Inc. v. Carrera, No. 23-217, the U.S. Supreme Court held 9-0 that the preponderance standard applies when an employer seeks to prove an employee is exempt from minimum wage and overtime under the FLSA.

Read more

Plaintiffs, a group of sales representatives for a food distributor, sued for unpaid overtime. Defendant argued that the outside sales exemption applied to Plaintiffs, but the District Court ruled that Defendant failed to prove so under the clear-and-convincing-evidence standard. Defendant appealed, but the Fourth Circuit affirmed.

On certiorari, the Supreme Court reversed and remanded, noting that all other circuits had applied the preponderance standard. The Court clarified that the preponderance standard is the default in civil cases, and none of the exceptions applied here. It explained that the FLSA does not specify a burden of proof for exemptions, this case did not involve a constitutional right, and there was no “unusually coercive” government action at issue. Citing Price Waterhouse v. Hopkins (1989) 490 U.S. 228, the Court also reasoned that if the clear-and-convincing-evidence standard is not required in Title VII cases, it should not be required in FLSA cases. Finally, the Court held that whether a right is waivable (in this case the right to overtime and minimum wage under the FLSA) does not determine the standard of proof.

Full opinion

In Markel v. Union of Orthodox Jewish Congregations of America, (9th Cir.)           F.3d           (Dec. 30, 2024), the Court of Appeals for the Ninth Circuit held that the ministerial exception barred a mashgiach’s (kosher supervisor) claims for unpaid overtime and fraud.

Read more

Plaintiff, responsible for overseeing the kosher certification of grape products, sued Defendant, alleging unpaid overtime and fraudulent denial of a promised promotion and raise. The district court granted Defendant summary judgment, finding that Defendant was a religious organization and Plaintiff a minister for the purpose of satisfying the ministerial exception. Plaintiff appealed.

On appeal, the Ninth Circuit affirmed. Applying the functional test from Hosanna-Tabor Evangelical Lutheran Church & Sch. v. EEOC, 565 U.S. 171 (2012), and Our Lady of Guadalupe Sch. v. Morrissey-Berru, 591 U.S. 644 (2020), the court found that Defendant qualified as a religious institution despite its commercial activities. It further found that Plaintiff, a mashgiach responsible for ensuring kosher compliance, functioned as a minister because he performed vital religious duties requiring specific religious qualifications. Consequently, the ministerial exception barred his overtime and fraud claims. The court distinguished Bollard v. California Province of the Soc’y of Jesus (9th Cir. 1999) 196 F.3d 940, finding Plaintiff’s claims, unlike the harassment claim in Bollard, directly implicated the employment terms protected by the exception.

Full opinion

In Chavez v. California Collision,           Cal.App.5th           (Dec. 12, 2024), the Court of Appeal (First Appellate District, Division Three), held that Lab. Code §§ 1194 and 218.5 preclude cost awards to defendants under Code Civ. Proc. § 998.

Read more

Plaintiffs, three auto shop workers, sued Defendants for various wage and hour violations. Two of the plaintiffs agreed to settle, while the third plaintiff (Zarate) did not. At trial, the jury found for Zarate on two causes of action (failure to pay overtime and failure to provide rest breaks) but awarded less than the amount Defendant had offered for settlement. The trial court awarded costs to Defendants under Code Civ. Proc. § 998 while granting Plaintiffs’ motion for attorney’s fees only in part. Plaintiffs appealed.

The Court of Appeal affirmed in part and reversed in part. Plaintiffs argued that the trial court’s amended February 2023 judgment, which merely added a costs and fees award, was its “comprehensive final judgment,” not its September 2022 judgment. The Court of Appeal disagreed, citing Torres v. City of San Diego (2007) 154 Cal.App.4th 214, 222 in its finding that Plaintiffs’ challenge to the trial court’s interlocutory rulings was not timely. The court also found no error in the trial court’s partial award of attorney’s fees because Plaintiff’s counsel failed to properly segregate time entries, and the trial court was not required to follow the Laffey matrix or apply a lodestar multiplier. However, the Court of Appeal reversed the trial court’s award of costs to Defendants, agreeing with Plaintiffs that, under Cruz v. Fusion Buffet, Inc. (2020) 57 Cal.App.5th 221, Lab. Code §§ 1194 and 218.5 displace Code Civ. Proc. § 998. Section 1194 “makes no mention of prevailing employers” (Plancich v. United Parcel Service, Inc. (2011) 198 Cal.App.4th 308, 313, internal citations omitted), while Section 218.5 requires a finding of bad faith.

Full opinion

In Bath v. State of California,           Cal.App.5th           (Oct. 14, 2024), the Court of Appeal (First Appellate District, Division Two) held that a public employee’s right to compensation, upon completion of their work, ripens into a contractual right that can be pursued independently of Labor Code claims and potentially notwithstanding provisions of an MOU.

Read more

Plaintiffs, non-exempt hourly dental professionals working at a state prison, sued the State for unpaid wages related to pre- and post-shift activities, including security procedures and travel time. The trial court sustained the State’s demurrer, finding that the federal Portal-to-Portal Act, incorporated into the parties’ MOU, barred such claims. Plaintiffs appealed.

The Court of Appeal reversed in part and remanded. It held that the trial court erred in resolving factual issues about the employees’ duties at the demurrer stage. Notably, the court relied on Stoetzl v. Department of Human Resources (2019) 7 Cal.5th 718 to hold that while an MOU might preclude Labor Code claims, it did not extinguish the employees’ independent contractual right to be paid for completed work. This right, the court explained, matures into a contractual obligation upon performance, allowing employees to pursue a breach of contract claim for unpaid wages. However, the court agreed with the State that Stoetzl barred plaintiffs’ claims under Lab. Code §§ 1182.11, 1182.12, and 1194. It also rejected plaintiffs’ claim under § 222, holding that the statute does not apply to public employees.

Full opinion

In Silloway v. City and County of San Francisco, (9th Cir.)           F.3d           (Sep. 12, 2024), the Court of Appeals for the Ninth Circuit held that courts must analyze how employees are actually paid to determine whether they are compensated on a salary basis, looking beyond employment contracts.

Read more

Plaintiffs, staff nurses for the City and County of San Francisco, frequently worked overtime but did not receive overtime pay. They filed separate lawsuits alleging FLSA violations. The district court certified the first suit as a collective action and treated both cases as related. Relying on a city ordinance referring to staff nurses as “salaried employees,” the district court granted Defendant summary judgment. Plaintiffs appealed.

On appeal, the Ninth Circuit reversed and remanded. It noted that a 2004 revision to the FLSA shifted the focus of the salary basis test from the employment agreement to the employee’s actual pay. While 29 C.F.R. § 541.710 permits public employers to make partial-day salary deductions for personal time off, the court found evidence of improper deductions in Defendant’s pay practices, suggesting that Defendant may not have guaranteed Plaintiffs the opportunity to work hours corresponding to their full-time equivalences. The court held that having a process for corrections did not excuse Defendant from liability under 29 C.F.R. § 541.603(c) because the discrepancies may not have been isolated or inadvertent.

Full opinion

In Kennedy v. Las Vegas Sands Corp, (9th Cir.)           F.3d           (Aug. 2, 2024), the Court of Appeals for the Ninth Circuit held that a group of five corporate jet pilots was exempt from overtime under the FLSA.

Read more

The pilots were required to be on call even when no flights were scheduled, though they could engage in personal activities during this time. They sued for unpaid overtime, claiming they were misclassified as exempt employees. The district court ruled for Defendant, finding the pilots were properly classified and their on-call time was not compensable. Plaintiffs appealed.

On appeal, the Ninth Circuit affirmed. It held that the pilots were exempt because their work involved significant mental complexity and discretion, distinguishing them from manual laborers. Citing 29 C.F.R. § 541.300 and § 541.301, the court found that the pilots’ duties required them to make discretionary decisions and use specialized knowledge. Applying the two-factor test from Owens v. Loc. No. 169, Ass’n of W. Pulp and Paper Workers (9th Cir. 1992) 971 F.2d 347, 350, the court also held that the pilots’ on-call time was not “time worked” because it was virtually indistinguishable from free time and the parties’ agreement did not suggest it was compensable. The court rejected Plaintiffs’ challenge to the Owens test, which would have effectively required compensation for all on-call time.

Full opinion

In Stone v. Alameda Health System,           Cal.5th           (Aug. 1, 2024), the California Supreme Court held that public employers are generally exempt from Labor Code provisions and are not subject to PAGA suits for civil penalties.

Read more

Plaintiffs, employees of a public hospital, sued the hospital for various Labor Code wage and hour violations and sought civil penalties under PAGA. The trial court sustained the hospital’s demurrer, but the Court of Appeal reversed in part. Defendant filed a petition for review, and the California Supreme Court granted, reversing and remanding.

Referencing Wage Order No. 5 (Cal. Code Regs., tit. 8, § 11050) and Labor Code § 18, the court held that public employers are not considered “employers” under the Labor Code because the statute excludes government entities from the definition of “person.” The court found legislative intent to exclude government employers based on their explicit inclusion in certain Labor Code provisions, the history of the Industrial Welfare Commission, and numerous case law examples. The court rejected Plaintiffs’ reliance on the sovereign powers doctrine, holding per Wells v. One2One Learning Foundation (2006) 39 Cal.4th 1164, that the doctrine applies only when legislative intent is unclear. Citing Division of Labor Law Enforcement v. El Camino Hosp. Dist. (1970) 8 Cal.App.3d Supp. 30, the court adopted a broad definition of “municipal corporation,” exempting the hospital from wage payment provisions. The court also found no indication that the Legislature intended public employers to be subject to PAGA suits.

Full opinion

In Castellanos, et al. v. State of California, et al.,           Cal.5th           (Jul. 29, 2024), the California Supreme Court rejected a challenge to Proposition 22, holding that Bus. & Prof. Code § 7451 does not conflict with the legislature’s broad power to regulate workers’ compensation.

Read more

Plaintiffs challenged several provisions of Proposition 22, including § 7451, arguing that they were invalid and not severable. The trial court agreed, but the Court of Appeal reversed. 

On review, limiting the issue to the constitutionality of § 7451, the California Supreme Court affirmed. Relying on Independent Energy Producers Association v. McPherson (2006) 38 Cal.4th 1020 and Mathews v. Workmen’s Compensation Appeals Board (1972) 6 Cal.3d 719, it held that the Legislature’s plenary power over workers’ compensation is not exclusive and that the people can also legislate on such matters through the initiative process. The court declined to rule on whether § 7465, together with article II, § 10(c), conflict with article XIV, § 4, reserving that issue for a case directly challenging legislation providing workers’ compensation to app-based drivers. It rejected Plaintiffs’ argument that Assembly Bill No. 1766 presented such a challenge.

Full opinion

In Ruelas v. County of Alameda et al., (9th Cir.)           F.3d           (Jul. 26, 2024), the Court of Appeals for the Ninth Circuit, following a ruling by the California Supreme Court, held that nonconvicted county inmates working for a private company are not entitled to Labor Code protections.

Read more

The Ninth Circuit had previously certified to the California Supreme Court the question of whether these inmates were covered by the Labor Code. The Supreme Court answered in the negative in an opinion issued on April 22, 2024. Accordingly, the Ninth Circuit reversed the district court’s order denying Defendant’s motion to dismiss the inmates’ Labor Code claims.

Full opinion

In Cadena v. Customer Connexx LLC, (9th Cir.)           F.3d           (Jul. 11, 2024), the Court of Appeals for the Ninth Circuit held that the de minimis doctrine applies to overtime claims under the Fair Labor Standards Act (FLSA), with the employer bearing the burden of proof.

Read more

Defendant required Plaintiffs to start their computers and open timekeeping software before clocking in, and to log out and shut down their computers after clocking out. Plaintiffs filed a class action alleging unpaid overtime for this time. The district court granted summary judgment for Defendant, but the Ninth Circuit reversed, holding that the time was “integral and indispensable” to the job. On remand, the district court again granted summary judgment, finding the time de minimis. Plaintiffs appealed again. 

The Ninth Circuit again reversed and remanded. It held that Sandifer v. U.S. Steel Corp. (2014) 571 U.S. 220 did not invalidate the de minimis doctrine. Applying the test from Lindow v. United States (9th Cir. 1984) 738 F.2d 1057, the court found factual issues remained regarding whether the time was de minimis, with the burden on Defendant to prove it was. Citing Rutti v. Lojack Corp. (9th Cir. 2010) 596 F.3d 1057 and Peterson v. Nelnet Diversified Solutions, LLC (10th Cir. 2021) 15 F.4th 1033, the court found a factual issue also remained as to whether Defendant allowed compensation for off-the-clock work. 

Full opinion

In Lusardi Construction Co v. Dept of Industrial Relations,           Cal.App.5th           (June 26, 2024), the Court of Appeal (Fourth Appellate District, Division One) held that a prime contractor’s knowledge of its subcontractor’s Labor Code violations was sufficient to establish liability under the former Labor Code § 1777.5.

Read more

In 2014, Plaintiff hired a subcontractor for a public school construction project. In 2015, the DLSE assessed penalties on Plaintiff, finding the subcontractor failed to employ apprentices and violated § 1777.5. An administrative panel found Plaintiff knew of the violations and was liable. Plaintiff sought a writ of mandate, alleging abuse of discretion and denial of due process. The trial court denied the petition, and Plaintiff appealed.

On appeal, the Court of Appeal affirmed. It found substantial evidence supported Plaintiff’s knowledge of the violations and rejected Plaintiff’s argument that knowledge alone was insufficient for liability under § 1777.7(d). The court also rejected Plaintiff’s due process claim, finding the DLSE notices adequately informed Plaintiff of potential joint and several liability. The absence of a witness at trial did not violate due process because Plaintiff failed to enforce its subpoena or request a continuance.

Full opinion

In Naranjo v. Spectrum Security Services, Inc.,           (May 7, 2024), the Supreme Court held that an employer’s good faith belief it provided accurate wage statements precludes penalties under Labor Code § 226 for “knowing and willful” omissions.

Read more

Plaintiff filed a class action alleging Defendant failed to provide compliant meal breaks, pay owed premiums, and report those premiums on wage statements. The trial court found violations of Lab. Code §§ 203 and 226 but awarded penalties only under § 226. Both parties appealed.

On appeal, the Court of Appeal held that Defendant did not violate either section because meal break premiums are penalties, not wages. The California Supreme Court reversed, holding that missed-break premiums are wages and must be included on wage statements. On remand, the Court of Appeal held that the trial court’s finding of good faith under § 203 precluded penalties under § 226. The California Supreme Court affirmed, finding that the Labor Code considers good faith a defense to penalties for both nonpayment and nonreporting of wages. The court reasoned that imposing § 226 penalties in this case, where the law was unsettled at the time of the violations, would unfairly penalize the employer for failing to predict how legal issues would be resolved years later.

Full opinion

In Ruelas v. County of Alameda et al.,           Cal.5th           (Apr. 23, 2024), the California Supreme Court held that nonconvicted county inmates working for a private company in a county jail are not entitled to minimum wage or overtime.

Read more

Plaintiffs were pretrial detainees who worked without pay for a private contractor in a county jail’s kitchen. They sued in federal court, asserting various claims, including minimum wage and overtime violations. The district court certified the wage issue for interlocutory appeal, and the Ninth Circuit certified the question to the California Supreme Court.

On review, the California Supreme Court held that Pen. Code § 4019.3, which addresses inmate labor programs, applies to all county inmates, including pretrial detainees. Therefore, these inmates are not covered by the Labor Code’s minimum wage and overtime provisions. The court rejected Plaintiffs’ arguments that § 4019.3 should not apply to public-private work programs and that the statute could coexist with minimum wage protections.  It also held that the wage requirements of the Prison Inmate Labor Initiative of 1990 do not apply to county jail inmates.

Full opinion

In Shah v. Skillz Inc.,           Cal.App.5th           (Apr. 10, 2024), the Court of Appeal (First Appellate District, Division Five) held that damages for lost stock options may be calculated based on “equitable considerations” rather than the date of breach, and that stock options are not wages under the Labor Code.

Read more

Defendant terminated Plaintiff for cause in 2018, voiding his stock options. Plaintiff sued Defendant for breach of contract, breach of implied covenant, wrongful termination, retaliation, and conversion, alleging he was terminated in retaliation for “asserting his rights to his vested benefits.” The trial court dismissed Plaintiff’s tort claims, ruling that the voided stock options were not “wages,” but a jury found Defendant liable for breach of contract and awarded Plaintiff approximately $11.5 million. The court conditionally granted Defendant’s motions for JNOV and a new trial, contingent on Plaintiff accepting a $4.3 million remittitur. Plaintiff accepted, Defendant appealed, and Plaintiff cross-appealed.

On appeal, the court held that “under both California and Delaware law, damages for lost stock options in a breach of contract action may be measured from a date other than the date of breach based on equitable considerations.” It upheld the trial court’s remittitur, finding the jury verdict excessive. However, the court found the trial court erred in excluding damages for breach of a performance grant and entered a new judgment for $6.7 million.  Finally, the court affirmed dismissal of the tort claims, holding, per International Business Machines Corp. v. Bajorek (9th Cir. 1999) 191 F.3d 1033, 1039, that “stock options are not wages because they ‘are not’ ‘amounts.’”

Full opinion

In Silva v. Medic Ambulance Service, Inc.,           Cal.App.5th           (Apr. 8, 2024), the Court of Appeal (First Appellate District, Division One) upheld the retroactive application of the Emergency Ambulance Employee Safety and Preparedness Act (EAESPA) (Lab. Code § 880 et seq.)

Read more

In 2017, Plaintiff filed a class action alleging defendant violated Lab. Code § 226.7 by requiring ambulance drivers to remain on call during rest breaks. EAESPA subsequently took effect, requiring ambulance workers to “remain reachable” during all shifts, including breaks.  Relying on Calleros v. Rural Metro of San Diego, Inc. (2020) 58 Cal.App.5th 660, which affirmed EAESPA’s retroactive provision, the trial court granted Defendant’s motion for judgment on the pleadings and a motion for sanctions.

Plaintiff appealed, arguing that Calleros was decided improperly. While Defendant contended that EAESPA merely clarified existing law, the Court of Appeal followed the Calleros precedent and directly addressed the constitutionality of EAESPA’s retroactivity. Applying the factors from In re Marriage of Bouquet (1976) 16 Cal.3d 583, 592, the court analyzed whether retroactive application was permissible. It concluded that retroactivity was justified because EAESPA advances an important state interest, and Plaintiff failed to demonstrate sufficient detrimental reliance under Bouquet to render it unconstitutional. Consequently, the Court of Appeal affirmed the judgment on the pleadings based on EAESPA’s valid retroactive effect. It also upheld the $2,000 sanctions award against Plaintiff’s counsel for unreasonably contesting settled law.

Full opinion

In Gramajo v. Joe’s Pizza on Sunset, Inc.,           Cal.App.5th           (Mar. 27, 2024), the Court of Appeal (Second Appellate District, Division Eight) held that employees who prevail in actions for unpaid minimum wage and overtime are entitled to reasonable litigation costs under Lab. Code § 1194 (a) “irrespective of the amount recovered.”

Read more

Plaintiff sued Defendant for failing to pay approximately $15,000 in minimum wage and overtime wages and $11,000 in unreimbursed expenses. The trial court awarded Plaintiff approximately $7,500 in unpaid wages but found no evidence to support his expense claim. Plaintiff sought $300,000 in attorney’s fees and $27,000 in costs, but the trial court denied both motions under Code Civ. Proc. § 1033(a), finding he had “acted in bad faith by artificially inflating his damages figure and including equity claims he never intended to pursue.” 

Plaintiff appealed, arguing he was entitled to reasonable litigation costs under Lab. Code § 1194 (a). The Court of Appeal concurred, holding that Lab. Code § 1194 (a) and Code Civ. Proc. § 1033 (a) are irreconcilable but that the former should control because “that statute is more recently enacted and more specific.” Defendant, relying on Chavez v. City of Los Angeles (2010) 47 Cal.4th 970, argued that the absence of a Code Civ. Proc. § 1033(a) carveout for FEHA cases precluded a similar exemption for wage and hour cases. The court disagreed, finding in Lab. Code § 1194 (a) “no analogous standard” to FEHA’s discretionary fee provision, and remanded to the trial court to determine reasonable fees and costs. 

Full opinion

In Huerta v. CSI Electrical Contractors (2024) 15 Cal.5th 908, the California Supreme Court clarified the definition of “hours worked” under IWC wage order No. 16-2001.

Read more

Plaintiff, who worked at Defendant’s solar power facility, underwent mandatory security inspections at a gate several miles from his worksite and had to follow strict rules when driving between the gate and the parking lot. He also had to spend his unpaid meal periods in a designated area on defendant’s premises. He filed a class action seeking payment for unpaid hours worked. The trial court granted class certification but later granted summary judgment for Defendant. On appeal, the Ninth Circuit certified three questions to the California Supreme Court regarding the meaning of “hours worked.”

In its review, the California Supreme Court relied heavily on Frlekin v. Apple Inc. (2020) 8 Cal.5th 1038 and analyzed relevant provisions of Wage Order No. 16 and Labor Code section 512. The court held: (1) Time spent on an employer’s premises awaiting and undergoing mandatory exit procedures is “hours worked” ; (2) Time spent traveling between a security gate and parking lot is “hours worked” if the employer requires the employee’s presence at the gate for a reason other than accessing the worksite. Enforcing ordinary workplace rules during this travel does not, by itself, make it “hours worked” ; and (3) Meal periods provided through a collective bargaining agreement are compensable at least at minimum wage if the employee cannot leave the premises and is prevented from engaging in personal activities.

Full opinion

Scroll to Top