DEFENDANT’S SUPPLEMENTAL BRIEF 

CASE NO. 4:17-CV-00446-HSG KAW

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MORGAN, LEWIS &

BOCKIUS LLP 

ATTORNEYS AT LAW

COSTA MESA

MORGAN, LEWIS & BOCKIUS LLP

Barbara J. Miller, Bar No. 167223 

Sarah J. Allen, Bar No. 306286 

600 Anton Blvd., Suite 1800 

Costa Mesa, CA 92626 

Tel: 949.399.7000 

Fax: 949.399.7001 

barbara.miller@morganlewis.com 

sarah.allen@morganlewis.com 

MORGAN, LEWIS & BOCKIUS LLP 

Shannon B. Nakabayashi, Bar No. 215469 

One Market, Spear Street Tower 

San Francisco, CA 94105 

Tel: 415.442.1000 

Fax: 415.442.1001 

shannon.nakabayashi@morganlewis.com 

Attorneys for Defendant 

BEST BUY STORES, L.P. 

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

STARVONA HARRIS and JONATHAN 

STRICKLAND individually and on behalf of 

those similarly situated, 

Plaintiff, 

vs. 

BEST BUY STORES, L.P., a limited 

partnership, 

Defendants. 

Case No. 4:17-cv-00446-HSG-KAW

DEFENDANT BEST BUY STORES, 

L.P.’S SUPPLEMENTAL BRIEF PER 

THE COURT’S JANUARY 10, 2018 

ORDER 

Date: January 18, 2018 

Time: 2:00 p.m. 

Dept.: Courtroom 2 (4th Floor) 

Judge: Hon. Haywood S. Gilliam, Jr. 

Case 4:17-cv-00446-HSG Document 114 Filed 01/16/18 Page 1 of 4
DB2/ 32608770.1 

1 DEFENDANT’S SUPPLEMENTAL BRIEF 

CASE NO. 4:17-CV-00446-HSG KAW

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MORGAN, LEWIS &

BOCKIUS LLP 

ATTORNEYS AT LAW

COSTA MESA

Pursuant to the Court’s January 10, 2018 Order (Docket # 112), Defendant Best Buy Stores, 

L.P. (“BB”) submits this Supplemental Brief. 

A. The Holding of Douglas Has Limited Applicability, but Supports Defendant 

Currently pending before the Court are BB’s Motion to Dismiss (Dkt. #58); Motion for 

Summary Judgment (“MSJ”) (Dkt. # 91) and Plaintiffs’ Motion for Class Certification. Dkt #85. BB 

is not clear that the Ninth Circuit’s decision in Douglas has relevance to any of the Motions. In 

Douglas, “[t]he issue presented is a pure question of statutory interpretation – when gauging 

compliance with the FLSA’s minimum wage provision, it is permissible to use the workweek [as 

opposed to “work hour”] as the unit of measure?” Douglas, 875 F. 3d at 886. The Ninth Circuit, 

following the “sound reason” of other circuits, and well as guidance from the Department of Labor 

(“DOL”), confirmed the “per workweek” approach. Id. at 888-89. 

Plaintiffs current lawsuit does not involve the Fair Labor Standards Act (“FLSA”)’s minimum 

wage provisions. Plaintiffs have no FLSA or minimum wage claim. Plaintiffs allege BB failed to pay 

overtime in violation of the California Labor Code and seek ancillary penalties under the California 

Labor Code for inaccurate wage statements and late payments. See Second Amended Complaint, Dkt 

# 55. The legal issues before the Court involve whether two different methods of calculating 

overtime arrive at the same result as a mathematical certainty. Douglas’ holding relates to properly 

determining whether employees received minimum wage in a workweek. Douglas, 875 F. 3d at 887. 

Douglas does support BB’s position that the regular rate should be calculated weekly – not 

monthly – as asserted by Plaintiffs’ expert. See Breshears Suppl. Expert Decl. ¶¶25-26 (Dkt #96-6, 

Ex. A). The Ninth Circuit noted that the DOL has long endorsed the “workweek” as the “standard 

basis” on which “determinations of ... compliance with the wage payment requirements of the 

FLSA are made.” 875 F. 3d at at 889 (emphasis added). Thus, the case confirms that overtime 

calculations must be made on a workweek basis. This means that the STI bonus at issue needs to be 

allocated to the workweek, and whether any additional overtime is owed is a workweek calculation. 

Thus, because Strickland received an overtime premium on a meal break premium that was not 

statutorily required during the only week at issue for him that credits against statutory overtime owed 

pursuant to 29 U.S.C. Section 207(h)(2), he cannot be owed anything. 

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2 DEFENDANT’S SUPPLEMENTAL BRIEF 

CASE NO. 4:17-CV-00446-HSG KAW

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BOCKIUS LLP 

ATTORNEYS AT LAW

COSTA MESA

B. The Legal Theories Distinguished in Douglas Have No Relevance to this Case. 

The arguments distinguished by Douglas are not at issue in this case. Douglas questions the 

district court for reasoning that “a contract could determine compliance with the FLSA.” Douglas,

875 at 889 (disagreeing with the district court’s “contract measuring rod approach.”) However, the 

court was referring to the FLSA’s minimum wage provisions. By contrast, this case involves the 

amount of incentive bonuses which clearly have a contractual component. See Dkt. 91, pp. 16-17 

(discussing 29 CFR §778.210). Second, the Douglas’ Court’s rejection of “equitable offsets” does 

not impact this case, as BB makes no equitable offset argument. Here, BB has correctly argues the 

FLSA, specifically 29 U.S.C. §207 (h)(2), expressly allows certain types of non-statutory premium 

payments to be credited towards statutory overtime owed. (“Extra compensation paid as described ... 

subsection (e) shall be creditable toward overtime compensation payable pursuant to this section.”); 

see also 29 C.F.R. § 778.202(a) (“[i]f the payment of such contract overtime compensation is in fact 

contingent upon the employee’s having worked in excess of 8 hours in a day . . . the extra premium 

compensation paid for the excess hours ... may be credited toward statutory overtime payments 

pursuant to section 7(h) of the Act.”)1 A statutory credit is not an equitable offset and therefore 

Douglas has no application to BB’s argument. 

C. Douglas Emphasizes Reliance on DOL Guidance. 

Douglas stresses the importance of adhering to the DOL’s guidance. See Douglas, 875 F. 3d 

at 886 (“Courts have overwhelmingly followed the agency’s guidance.”) As the Court is aware, in 

Harris I, BB argued that prior DOL Opinion Letters created confusion. Starvonna Harris v. Best Buy 

129 USC § 207 (h) states in full: (h) Credit toward minimum wage or overtime compensation of amounts 

excluded from regular rate: (1) Except as provided in paragraph (2), sums excluded from the regular rate pursuant 

to subsection (e) shall not be creditable toward wages required under section 206 of this title or overtime 

compensation required under this section. (2) Extra compensation paid as described in paragraphs (5), (6), and (7) of 

subsection (e) shall be creditable toward overtime compensation payable pursuant to this section. 

29 C.F.R. § 778.202(a) states: 

(a) Hours in excess of 8 per day or statutory weekly standard. Many employment contracts provide for the 

payment of overtime compensation for hours worked in excess of 8 per day or 40 per week. Under some contracts 

such overtime compensation is fixed at one and one-half times the base rate; under others the overtime rate may be 

greater or less than one and one-half times the base rate. If the payment of such contract overtime compensation is in 

fact contingent upon the employee's having worked in excess of 8 hours in a day or in excess of the number of hours 

in the workweek specified in section 7(a) of the Act as the weekly maximum, the extra premium compensation paid 

for the excess hours is excludable from the regular rate under section 7(e)(5) and may be credited toward statutory 

overtime payments pursuant to section 7(h) of the Act. 

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CASE NO. 4:17-CV-00446-HSG KAW

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MORGAN, LEWIS &

BOCKIUS LLP 

ATTORNEYS AT LAW

COSTA MESA

Stores, Case No. 15-cv-00657-HSG (“Harris I”), BB’s Reply in Support of its Motion for Summary 

Judgment, Dkt # 71, p. 6: 17-7:8. The opinion letters (since withdrawn) appearing to construe 29 

CFR 778.210 as an “exclusion” from the regular rate. BB argued: 

29 CFR 778.210 does not, however, involve an exclusion from the regular rate at all; it simply 

explains that a bonus that is includable in the regular rate will simultaneously pay both straight 

time and overtime owed where the same percentage is applied equally to both straight time 

earnings and the overtime on those straight time earnings as an arithmetic fact. Thus, DOL 

opinion letters that treat § 778.210 as a regular rate exclusion and therefore improperly 

incorporate the “all remuneration” language of 29 USC § 207(e) clearly misconstrue the plain 

language of the controlling regulation.... 

Harris I, Dkt # 71, p. 7: 2-7. This Court thereafter denied BB’s MSJ in Harris I in part on the ground 

that it disagreed with BB’s interpretation of the Opinion Letters, and based its denial of the summary 

judgment motion on those Opinion Letters. Harris v. Best Buy Stores, L.P., No. 15-CV-00657-HSG, 

2016 WL 4073327, at *5 (N.D. Cal. Aug. 1, 2016). 

On January 5, 2018, however, the DOL withdrew the 1973 Opinion Letter on which this 

Court relied on denying summary judgment, stating it “does not accurately describe an employer’s 

obligation with regard to non-discretionary bonus payments or the treatment of payments properly 

excludable under section 7(e).” The DOL reissued a withdrawn opinion letter which states: 

[U]nder section 778.210, a bonus paid as a predetermined percentage of an employee’s straight 

time and overtime compensation increases the straight-time and overtime earnings by the same 

percentage, and thereby includes proper overtime-premium compensation without need for 

additional computation. Where a bonus is computed in this manner, the employee receives 

proper overtime compensation as an arithmetic fact. See 29 C.F.R. § 778.503. 

It is our opinion that a bonus program such as you describe satisfies the conditions set forth in 

section 778.210 because the same predetermined percentage would be applied to the 

employee’s straight time and overtime wages. ... Wage and Hour Opinion Letter WH-241 is 

withdrawn to the extent that it is inconsistent with section 778.210 and the cited opinion letters. 

As argued in BB’s MSJ and in Harris I, BB has properly calculated the Plaintiffs’ regular rate. 

The Opinion Letters previously relied upon by the Plaintiffs, and subsequently the Court, represent an 

incorrect and non-citable view of law. As in Douglas, Plaintiffs’ overtime claims should be dismissed. 

Dated: January 16, 2018 MORGAN, LEWIS & BOCKIUS LLP 

BY /S/ BARBARA J. MILLER 

BARBARA J. MILLER 

Attorneys for Defendant 

BEST BUY STORES, L.P.

Case 4:17-cv-00446-HSG Document 114 Filed 01/16/18 Page 4 of 4