Wage Law

Veto For Minimum Wage Raise, Signature For Paparazzi Lawsuit Bill.

Arnold Schwarzeneggar had a busy week in California, signing and vetoing dozens of measures passed by the California legislature.

Being a man of the people, who cares about the people first and foremost, he was given the chance to allow California to raise its minimum wage, which is currently the lowest among western states. But he vetoed AB 48, a bipartisan bill to increase the minimum wage to slightly less than 15% above its 2002 level over the next two years, with future increases tied to increases in the consumer price index.

On the other hand, in spite of his claim to be a tort reformer, he signed a bill that makes it easier for celebrities to sue aggressive paparazzi for damages. Under AB 381, anyone who commits an assault in order to photograph or record a person can be sued and forced to forfeit all profit he or she makes from the incident.

Perhaps when he calls himself a man of the people, he means only the people who really count.

TGI Friday's Ruling: It's a Wage, Not a Penalty.

This afternoon, Judge Jonathan Cannon ruled on Main Street Restaurant Group, Inc.'s motion to strike portions of the third amended complaint in the TGI Friday's uniform, meal and rest period class action. The motion was primarily focused upon allegations that reach back more than one year from the filing date with respect to meal and rest period pay. The primary ground asserted in support of the motion was that an hour of meal and rest period pay is a penalty, such that claims more than a year old are invalid. The court rejected the defense position and ruled as follows:

ANALYSIS: Most of Defendant’s Motion rests on the proposition the remedies of Labor Code §226.7 are penalties, not wages. As discussed below, Defendant’s proposition is incorrect. This Court is not bound by the DLSE’s interpretation the provisions § 226.7 constitute a penalty rather than a wage. There is very little case law addressing the question as to whether the provisions of § 226.7 should be considered a wage or a penalty.

The Court in Tomlinson v. Indymac Bank F.S.B. (CD Cal. 2005) F.Supp.2d 8991 applied and interpreted California law in considering the issue. The Tomlinson Court stated: “The Court agrees with Plaintiffs that payments under Section 226.7 are restitutionary because they are akin to payment of overtime wages to an employee: both are “earned wages” and thus recoverable under the UCL. See Cortez, 23 Cal.4th at 178, 96 Cal.Rptr.2d 518, 999 P.2d 706. Just as an understaffed company may make the conscious decision to pay its employees time and a half to work overtime, the same understaffed company also can decide to have its employees forego their meal and rest breaks if it compensates them at a higher rate. In both instances, the employee earns the higher wage by working additional time.”

The issues regarding subclass “A” should have been raised at the hearing on certification. The statute of limitations regarding the 3rd cause of action may be addressed by way of summary adjudication.

RULING: The Motion to Strike is denied.

The ruling assures that the class, which was certified earlier this year, will be able to conduct all of the discovery needed to present a full case on the merits of all issues at trial.

Why Didn't California Think Of This?

The domain name www.laborcommissioner.com/ is taken, and it belongs to the Nevada Labor Commissioner's office. We often refer clients with very small cases to the labor commissioner's office, especially when their claims are worth less than the cost of two billable hours and we can't combine their claims with any other workers' claims. That sure would be an easy URL to remember. So there is at least that one advantage that Nevada wage and hour lawyers have over their California colleagues.

Smart & Final Settlement

A class of 13,000 employees won a $22 million settlement against grocery chain Smart & Final, it was announced on Friday. The class-action suit on behalf of 13,000 current and former hourly employees alleged that the retailer did not properly calculate pay for overtime or for rest and meal breaks for six years. "This settlement gives back to the employees the money they earned," said Larry Willis, lead counsel for the plaintiffs and a principal at Callahan McCune & Willis in Tustin.

Luckily for Callahan, McCune & Willis's Smart & Final clients, the firm has been unsuccessful in its attempts to restrict class action rights in the TGI Friday's case, and in particular, its attempt to restrict meal and rest period rights beyond one year. (Callahan McCune & Willis represents the employer in the TGI Friday's case.)

Miles Locker Not Silenced

Miles Locker reportedly still intends to speak at the State Bar Labor & Employment Law Conference at the Disneyland Hotel next month. He is scheduled to speak from 10:30 a.m. noon. Donna Dell, the current Labor Commissioner, is also scheduled to speak at the program. There is no word yet on whether Dell will be suspended for engaging in public speech.

Wal-Mart: We're Not Anti-Union

Wal-Mart CEO H. Lee Scott Jr. "Gosh, I don't think of us as being anti-union." And, gosh, he probably doesn't think of John Kerry as being anti-Bush, either. Perspective can be a strange thing sometimes.

Of course, as long as Wal-Mart keeps unions out of its employee break rooms (like they've managed to keep employee breaks out of their employee break rooms), then unions are the world's biggest company's best friend. Unions keep Wal-Mart's competitors honest when it comes to employee compensation, and that gives Wal-Mart yet another competitive advantage. Maybe that's what he meant.

The Hidden Cost of Wal-Mart Jobs

Not to pick on one company, but everywhere we turn, we are finding bad press on Wal-Mart, in particular, with its wage and hour practices. The evidence has been gathered, and this August 2004 report shows that Wal-Mart workers make so little, they are a drain on the economy and public assistance programs. To our knowledge, Wal-Mart has been unable to refute the report data, but merely contends that it doesn't have to pay any more than it can squeeze from the free market. But with all those full-time Wal-Mart workers on the public dole, perhaps the minimum wage is way too low. Or perhaps we need to have a two-tiered minimum wage, with fully grown adults earning much more than Wal-Mart currently pays.

New Class Action Tactic Against Wal-Mart

Last week, fifteen employees in six countries filed a class-action lawsuit in Los Angeles against Wal-Mart Stores, Inc., claiming that the retailer disregards sweatshop conditions at its suppliers' toy and clothing factories in Bangladesh, Swaziland, Indonesia, China and Nicaragua. The plaintiffs allege that they were paid below minimum wage, forced to work unpaid overtime and beaten by their bosses.

One of the interesting twists is an unfair competition element in the lawsuit in which four California workers, including union employees of Ralph's and Safeway grocery stores who assert that Wal-Mart's entry into Southern California while using sweatshop labor and products forced their employers to reduce pay and benefits to remain competitive.Suddenly, California wage and hour law is big news in places like Calcutta, the U.K., and, of course, Bentonville, Arkansas.

The plaintiffs are represented by noted employee rights lawyer Dan Stormer. For further details, you can read the plaintiffs' press release or download a copy of the complaint.

Wal-Mart Break Trial Begins

The first major meal period trial in California got underway yesterday in Alameda County Superior Court. The plaintiffs gave their opening statements in Savaglio v. Wal-Mart Stores, Inc., a case involving about 116,000 former and current Wal-Mart Stores Inc. workers. The jury was told that Wal-Mart systematically and illegally denied workers lunch breaks. Savaglio was previously known as one of the more widely reported trial decisions characterizing meal break pay as a wage, rather than a penalty.

"Wal-Mart tried to make its profits and excuse its violations on the backs of the working poor," plaintiff's attorney Furth told the jury. "I will prove the reason they did this was for the God Almighty dollar," Furth added in his opening statement. Wal-Mart deferred its opening statement until after the plaintiffs' case is concluded.

Under California law, employees who work more than five hours must be given a 30-minute, unpaid lunch break. If the employee does not get the break, and does not voluntarily and without coercion or intimidation, waive the break, the employer is required to pay the employee an additional hour of pay. Breaks cannot be waived for shifts in excess of six hours.

The Wal-Mart lawsuit affects former and current employees in California from 2001 to 2005. Wal-Mart is asserting a statute of limitations, as well as claiming that most workers waived their breaks. uring discovery, Wal-Mart produced internal audits that reflected what they called "a chronic problem" with the meal breaks. A significant verdict against Wal-Mart could significantly affect settlements of the dozens of similar cases currently pending in California.

The case is entitled Andrea Savaglio v Wal-Mart Stores Inc., C-835687, Alameda County Superior Court, Oakland, California.

Schwarzenegger To Run Again

Arnold Schwarzenegger confirmed an open secret Friday, telling supporters that he's running for re-election next year — an early announcement designed to re-energize his sagging political momentum. We're now searching for an organization to support. If they call themselves anything remotely similar to "Republicans Against Schwarzenegger," they can count on our money and time.