Court of Appeal clarifies “exempt employees” under Lab. Code § 246(l)(3): Hirdman v. Charter Communications, LLC

In Hirdman v. Charter Communications, LLC (2025) 113 Cal.App.5th 376, the Court of Appeal (Fourth Appellate District, Division One) affirmed that the term “exempt employees” in Lab. Code § 246(l)(3) includes outside salespersons and is not limited to those in administrative, executive, or professional roles.

Plaintiff, a sales representative, sued under PAGA alleging several Labor Code violations, including a claim under § 246 for failure to pay sick time at the correct rate. The parties filed cross-motions for summary adjudication on this claim. Plaintiff argued that “exempt employees” in § 246(l)(3) referred only to administrative, executive, or professional exemptions, citing a Senate committee analysis and a DLSE opinion letter. Defendant countered that the plain meaning of “exempt” should control, which would include outside salespersons like Plaintiff. The trial court granted Defendant’s motion and entered judgment after Plaintiff removed all other claims. Plaintiff appealed.

The Court of Appeal affirmed the judgment. It agreed with Defendant that the statutory language of § 246(l)(3) was unambiguous, and therefore the trial court correctly did not consider legislative history or other extrinsic materials. Following Ruiz v. Podolsky (2010) 50 Cal.4th 838 and others, the court held that “exempt employees” is a term of art within the statute, and if the Legislature had intended a narrower definition, it would have explicitly done so. The court rejected Plaintiff’s argument that a specific carve-out in § 246(b)(2) should apply throughout the entire statute, finding that the use of different phrases within the same § indicated a deliberate intent not to exclude outside salespersons from § 246(l)(3). Regarding the DLSE letter cited by Plaintiff, the court cited Nee v. Unumprovident Corp. (2006) 140 Cal.App.4th 442, 451, for the principle that courts may disregard agency opinions that are not part of a long-standing, formal interpretation of a statute.

Full opinion

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