March 2018 employment law decisions

No meal period liability for staffing agency.

March 21, 2018, First District Court of Appeal, Norma Serrano v. Aerotek, Inc.: Ms. Serrano sued Aerotek, Inc. and Bay Bread, LLC based on their alleged failure to provide meal periods. Aerotek is a staffing agency that placed Ms. Serrano as a temporary employee with its client, Bay Bread. The trial court dismissed the case against Aerotek (summary judgment) after determining that Aerotek satisfied its own duty to provide meal periods. On appeal, Ms. Serrano contended that Aerotek’s own meal period policy is irrelevant because Bay Bread was not aware of it and did not enforce it. The court of appeal found that this contention was at odds with the leading case on meal periods (Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004), which held that an employer is not required to police the taking of meal breaks and that mere knowledge they are not being taken does not establish liability. The appellate court acknowledged that what will suffice to satisfy an employer’s duty to provide meal periods may vary from industry to industry, and that a temporary staffing agency does not meet its duty by merely establishing a compliant meal period policy without regard to a client’s implementation of it. But in this case, the undisputed evidence showed that Aerotek did do more than that: the contract it had with Bay Bread required the client to comply with applicable laws, Aerotek provided its meal period policy to temporary employees and trained them on it during orientation, and the policy required them to notify Aerotek if they believed they were being prevented from taking meal breaks. The First District concluded that Ms. Serrano failed to convince it that anything more is required of staffing agencies when they provide temporary employees to other companies.

Jury instruction for Fire Chief position not required.

March 15, 2018, Fourth District Court of Appeal, George Corley v. San Bernardino County Fire Protection District: Mr. Corley filed a case against his former employer for age discrimination. A jury found in favor of Mr. Corley. On appeal, the District asserted that the trial court erred in denying its request to instruct the jury based on a section of the Firefighters’ Procedural Bill of Rights (Government Code section 3254(c).) The District claimed the instruction was proper because Mr. Corley was provided all of the rights described in the section: written notice with reason(s), including incompatibility of management style or change in administration, for removal from employment and an opportunity for administrative appeal. On appeal, the Fourth District reviewed the legislative history of the Firefighters’ Bill of Rights and found that it was modeled after the Public Safety Officers Procedural Bill of Rights Act. The court of appeal determined that the legislative history of the equivalent section of the Officers Bill of Rights (Government Code section 3304(c)) demonstrates that it was enacted to apply solely to a jurisdiction’s “Chief of Police.” Turning back to the Firefighters’ Bill of Rights, the appellate court noted that the section refers to “a fire chief” without referring to “deputy chiefs,” “assistant chiefs,” “division chiefs” or the like. Also, it provides no definition of the term “fire chief,” as one might expect if the section were meant to apply to any position with the word “chief” in it. The final sentence of the section strongly suggests that the term “fire chief” refers to a single position, namely the “job of fire chief” of a jurisdiction. The Fourth District concluded that interpreting the section of the Firefighters’ Bill of Rights as pertaining solely to a jurisdiction’s “fire chief” harmonizes the meaning of the two closely related statutes. Because it was undisputed that Mr. Corley never held the position of fire chief, the trial court did not err by not giving the requested instruction.

How to calculate the value of a bonus for purposes of overtime pay.

March 5, 2018, California Supreme Court, Hector Alvarado v. Dart Container Corporation of California: Mr. Alvardo alleged that Dart Container Corporation had not properly computed his overtime pay under California law by not including shift differential premiums and bonuses in calculating overtime wages. The trial court dismissed the overtime claim (summary judgment), concluding that there was no valid California law or regulation explaining how to factor a flat sum bonus into an employee’s regular rate of pay for purposes of calculating overtime compensation. The Court of Appeal affirmed. The California Supreme Court granted review to decide how a flat sum bonus earned during a single pay period should be factored into an employee’s regular rate of pay for purposes of calculating the overtime pay. The high court reviewed California’s Wage Orders (found in the Code of Regulations) and Labor Code section 510, which require overtime pay (1.5 or 2 times the employee’s “regular rate of pay”) for work in excess of eight hours in a day, 40 hours in a week, or for any work on a seventh consecutive day. Regular rate of pay includes adjustments to the straight time rate, including shift differentials and the per-hour value of any non-hourly compensation the employee has earned. In this case, Dart paid an attendance bonus for weekend work as incentive pay for completing a full work shift on a day that is unpopular for working (Saturday or Sunday). The high court stated that its task was to decide whether, in calculating the per-hour value of the bonus, the amount of the bonus is divided by (1) the number of hours the employee actually worked during the pay period, including overtime hours; (2) the number of non-overtime hours the employee worked during the pay period; or (3) the number of non-overtime hours that exist in the pay period, regardless of the number of hours the employee actually worked. The Division of Labor Standards Enforcement, California’s agency that administratively enforces overtime and other wage and hour laws, had answered the question in its Manual with option two: “the regular bonus rate is determined by dividing the bonus by the maximum legal regular hours worked during the period to which the bonus applies.” The California Supreme Court found that this determination was void (though not necessarily incorrect); therefore, it was required to independently interpret the law. The high court noted that it was obligated to prefer an interpretation that discourages employers from imposing overtime work and that favors the protection of the employee’s interests. The California Supreme Court found it significant that the bonus was payable even if the employee worked no overtime at all during the relevant pay period. Consequently, it determined that the bonus is properly treated as if it were fully earned by only the non-overtime hours in the pay period, and only non-overtime hours should be considered when calculating the bonus’s per-hour value. The high court rejected calculating the per-hour value of the bonus as if a part-time employee were actually working a full-time schedule, which would dramatically reduce the overtime pay rates and contradict the principle that California’s labor laws must be liberally construed in favor of worker protection. The California Supreme Court concluded—consistent with DLSE’s policy on point—that the divisor for purposes of calculating the per-hour value of Dart’s attendance bonus should be the number of non-overtime hours actually worked in the relevant pay period, not the number of non-overtime hours that exist in the pay period.

Posted by deanroyerlaw