Murphy: It's a Wage

The Supreme Court issued its long-awaited decision in Murphy v. Kennethy Cole Productions this morning, holding that the hour of pay under Labor Code § 226.7 is a wage or premium pay, governed by the longer, three year statute of limitations. We were in the minority of folks asserting that the Supreme Court would eventual hold the pay to be a wage, but although we were not shocked by the result, we were surprised, given some of the questions asked during oral argument, that the opinion was unanimous. The opinion was authored by Justice Moreno. We will post more analysis later today or tomorrow. For now, here is the holding:

We hold that section 226.7’s plain language, the administrative and legislative history, and the compensatory purpose of the remedy compel the conclusion that the “additional hour of pay” is a premium wage, not a penalty. We further hold that the trial court properly exercised its discretion in deciding to consider the additional, but related, wage claims during the de novo trial. The contrary judgment of the Court of Appeal is reversed.

You can read the full text of Murphy here in pdf or Word format.

Comments

[Steve Kane]

Clearly, this is a big victory for plaintiffs' counsel in meal period cases. Aside from the resolution of the wage/penalty issue, the Court continues its policy of strong enforcement of wage and hour laws and regulations, and re-emphasized the rule that wage and hour statutes are to be "broadly construed."

Footnote 7, dealing with the December, 2004 politically engineered reversal by the DLSE of its prior interpretation of the payment under 226.7 as a wage, is very significant. The Court made short work of this "180 degree turn," commenting that even DLSE acknowledged that "the issue became highly politicized" and finding that "[W]hen an agency's construction "'flatly contradicts'" its original interpretation, it is not entitled to "significant deference." In this comment, the Court recognizes that politically appointed agency directors cannot be relied upon to interpret statutes as the Legislature intended, rather than as certain interest groups might desire.

The result could be that launching a political "coup d'etat" in an agency to obtain reversal of existing statutory interpretations may not be an effective strategy in the future.

Plaintiffs' counsel and the amicii in this important case deserve great credit for battling it to a successful conclusion!