The California Labor Law File: Two Wins for the Plaintiffs

San Francisco, CATwo recent events involving California labor law and other state and federal statutes translate to good news for employees having been stiffed by their employer for overtime pay, or employees suffering from the weight and unfairness of misclassification.

With the latter, a California Supreme Court decision upholding the ruling of a lower appellate court in Ayala v. Antelope Valley Newspapers is said to make things a whole lot easier for misclassified employees to obtain class certification within a California labor lawsuit.

As reflected in court documents, newspaper carriers (Ayala) employed by the defendant publisher had been classified by the employer as independent contractors, rather than employees. As such, the employees were denied various wage and hour protections due them as employees, protections they would not normally qualify for as independent contractors.

The trial court denied the plaintiff’s petition for class certification, ruling there was insufficient common ground amongst the various carriers to support the plaintiffs’ motion. The plaintiffs appealed and won support for their cause from the California Court of Appeals, with the California Supreme Court agreeing with the lower appellate court after review of the case had been granted.

Many employers will attempt to skirt around the requirement to pay overtime and other benefits due employees by incorrectly classifying them as independent contractors when, in fact, they are employees of the company. Employers will also attempt to avoid paying overtime by misclassifying an employee - or the job the employee is performing - as exempt from overtime, when in fact the employee qualifies for overtime. A common tactic is to classify an employee as performing a management function, for which there is generally no overtime payable, when in fact the employee performs little or no management work and carries no real responsibility as a manager.

In another California labor code file, the proprietors of LinkedIn have agreed to pay about $6 million in back wages and damages following an investigation by the US Department of Labor (DOL).

According to the Los Angeles Times (8/4/14), LinkedIn was found to be in violation of overtime and record-keeping provisions according to the Fair Labor Standards Act (FLSA) following an investigation by the Wage and Hour Division. It was found that employees were not compensated for all hours worked, including work performed off the clock. This, in violation of California labor employment law and other statutes under the FLSA.

There was no lawsuit. It was reported that LinkedIn had already taken steps to remedy the situation by the time the DOL confronted LinkedIn of its findings, and the latter has been described as cooperating fully with the DOL in remedying the issue for the various employees involved.

“This company has shown a great deal of integrity by fully cooperating with investigators and stepping up to the plate without hesitation to help make workers whole,” said David Weil, administrator of the Wage and Hour Division. For its part, LinkedIn said in a statement that the error was “a function of not having the right tools in place for a small subset of our sales force to track hours properly.”

About 359 current and former employees in California, Illinois, Nebraska and New York will receive nearly $6 million in back wages and damages. The breakdown is about $3.3 million in back wages, and about $2.5 million in damages for the California and labor law violation.