Source: http://www.californiawagelaw.com/wage_law/2007/11/index.html
Timestamp: 2016-02-08 07:58:08
Document Index: 577730141

Matched Legal Cases: ['§ 340', '§ 203', '§ 203', '§ 312', '§ 1771', '§ 2802', '§ 226']

Wage Law: November 2007
Review Granted: Harris
The Supreme Court will review Harris v. Superior Court (Liberty Mutual Insurance) (2007) 154 Cal.App.4th 164, a case involving the administrative exemption as applied to certain insurance company claims adjusters under Wage Order 4-2001. A statement of issues has not yet been posted. We previously discussed the case in a post last August.
The Supreme Court closed and transferred two cases for reconsideration in light of Gentry v. Superior Court (2007) 42 Cal.4th 443. The two cases, both of which were discussed here previously, are Massie v. Ralphs Grocery and Konig v. U-Haul Co. of California.
Massie: Petition for review after the Court of Appeal affirmed orders denying petitions to compel class arbitration in a civil action. The court ordered briefing deferred pending decision in Gentry v. Superior Court (S141502), which presents issues regarding the enforceability of an arbitration provision that prohibits employee class actions in litigation concerning alleged violations of California's wage and hour laws.
The above-entitled matter is transferred to the Court of Appeal, Second Appellate District, Division Seven, with directions to vacate its decision and to reconsider the cause in light of Gentry v. Superior Court (2007) 42 Cal.4th 443. (Cal. Rules of Court, rule 8.528(d).)Konig: Petition for review after the Court of Appeal affirmed an order granting a motion to compel arbitration in a civil action. The court ordered briefing deferred pending decision in Gentry v. Superior Court (S141502), which presents issues regarding the enforceability of an arbitration provision that prohibits employee class actions in litigation concerning alleged violations of California's wage and hour laws.
The above-entitled matter is transferred to the Court of Appeal, Second Appellate District, Division Five, with directions to vacate its decision and to reconsider the cause in light of Gentry v. Superior Court (2007) 42 Cal.4th 443. (Cal. Rules of Court, rule 8.528(d).
[Update] The court did the same in three other cases:
Dunn v. Superior Court (Kroger Co.):Application for stay and petition for review GRANTED. Further action in this matter is deferred pending consideration & disposition of a related issue in Gentry v. Superior Court, S119334 and Murphy v. Kenneth Cole Productions, Inc., S140308 (see Cal. Rules of Court, rule 8.512(d)(2)), or pending further order of the court. Submission of additional briefing pursuant to Cal. Rules of Court, rule 8.520, is deferred pending further order of the court.
The above-entitled matter is transferred to the Court of Appeal, Second Appellate District, Division Two, with directions to vacate its decision and to reconsider the cause in light of Gentry v. Superior Court (2007) 42 Cal.4th 443. (Cal. Rules of Court, rule 8.528(d).)Firchow v. Citibank:Petition for review after the Court of Appeal reversed an order denying a motion to compel arbitration. The court ordered briefing deferred pending decision in Gentry v. Superior Court (S141502), which presents issues regarding the enforceability of an arbitration provision that prohibits employee class actions in litigation concerning alleged violations of California's wage and hour laws.
In light of the decision in Gentry v. Superior Court (2007) 42 Cal.4th 443, review in the above-entitled matter is dismissed. (Cal. Rules of Court, rule 8.528(b)(1).)and Jones v. Citigroup: Petition for review after the Court of Appeal reversed an order denying a motion to compel arbitration in a civil action. The court ordered briefing deferred pending decision in Gentry v. Superior Court (S141502), which presents issues regarding the enforceability of an arbitration provision that prohibits employee class actions in litigation concerning alleged violations of California's wage and hour laws.
The above-entitled matter is transferred to the Court of Appeal, Fourth Appellate District, Division Three, with directions to vacate its decision and to reconsider the cause in light of the decision in Gentry v. Superior Court (2007) 42 Cal.4th 443. (Cal. Rules of Court, rule 8.528(b)(1).)To our knowledge, that means that all Gentry companion cases are now back at the trial courts or Courts of Appeal.
November 29, 2007 in Class Actions | Permalink
Court of Appeal Says Statute is One Year For Waiting Time Penalties Unless Complaint Also Seeks Underlying Wages
The default statute of limitations for an action to recover a statutory penalty is one year, unless the statute provides otherwise. Code of Civil Procedure § 340 ("Within one year: (a) An action upon a statute for a penalty or forfeiture, if the action is given to an individual, or to an individual and the state, except if the statute imposing it prescribes a different limitation.") Labor Code § 203, the statute for recovering waiting time penalties for failure of an employer to promptly pay an employee's final wages specifies a longer period:“If an employer willfully fails to pay . . . any wages of an employee who is discharged or who quits, the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefor is commenced; but the wages shall not continue for more than 30 days. . . . [¶] Suit may be filed for these penalties at any time before the expiration of the statute of limitations on an action for the wages from which the penalties arise.” So it's pretty clear that an employee suing for waiting time penalties after, say, two years, shouldn't have to worry about those pesky statutes of limitations, right? As Lee Corso would say, "Not so fast, my friend."
In McCoy v. Superior Court (Kimco Staffing Services, Inc.) (2007) __ Cal.App.4th __, Derrick McCoy filed a class action complaint arising from Kimco Staffing's alleged practices of making employees wait for their final paycheck until the next regular payday. The defendant sought to strike parts of the complaint, saying that employees who had only a waiting time penalty claim, and who left Kimco Staffing's employment more than a year before the complaint was filed, should have their claims barred. Orange County Superior Court Judge Stephen Sundvold agreed, and struck portions of the complaint seeking waiting time penalties for late payment of wages. The plaintiff filed a writ petition, claiming that, pursuant to Labor Code § 203, even when an action seeks waiting time penalties only, the statute of limitations should be the same as that which would apply to a claim for wages. That measure, he argued, was four years (applying the four-year statute for unfair competition). The Court of Appeal disagreed, holding thatwhen a suit seeks for only waiting time penalties, the one-year statute under section 340(a) governs.Why? Because Section 203 was enacted to give employees additional time to sue for waiting time penalties when they also bring an action for late wages. "Nothing in the statute otherwise negates the one-year period in section 340(a)."Plaintiff contends the statute of limitations in section 203 applies to any action for penalties, regardless of whether there is also a claim “for the wages from which the penalties arise.” He points to Code of Civil Procedure § 312, which directs: “Civil actions, without exception, can only be commenced within the periods prescribed in this title [setting out the general statutes of limitations], after the cause of action shall have accrued, unless where, in special cases, a different limitation is prescribed by statute.” Plaintiff asserts that section 203 is “one of these ‘special cases’” that contains its own statute of limitations, thereby supplanting section 340. We agree with plaintiff to the extent the period set out in section 203 applies to actions for waiting time penalties sought in conjunction with back wages. But for suits seeking penalties alone, the objective of section 203, the legislative intent, and the common sense meaning of the section’s language persuade us defendant’s interpretation is correct.The opinion is worded fairly strongly, and the court falls barely short of dismissing the plaintiff's arguments as silly. The court gave no weight to dicta in Murphy v. Kenneth Cole Productions, Inc., that appeared to support McCoy's view of Section 203:In reaching its conclusion, the court referred to section 203, noting that the Legislature understood “it could, if it so desired, trigger a one-year statute of limitations by labeling a remedy a penalty.... Knowing that remedies constituting penalties are typically governed by a one-year statute of limitations, the Legislature expressly provided that a suit seeking to enforce the section 203 penalty would be subject to the same threeyear statute of limitations as an action to recover wages. [Citation.]” (Murphy v. Kenneth Cole Productions, Inc., supra, 40 Cal.4th at pp. 1108-1109.) Like the trial judge, we are not persuaded by plaintiff’s claim this dictates the one-year statute does not apply where an employees sues only for waiting time penalties.Because of the holding limiting the claims to one year, the court did not address McCoy's claim that the "expiration of the statute of limitations on an action for the wages from which the penalties arise" is four years under the unfair competition theory. Handicapping this one, we would have found interesting the undecided issue of whether the measure is three years or four, but we wouldn't have given the employer much of a chance on the one-year issue.
You can download the full text of McCoy v. Superior Court here in pdf or word format.
November 28, 2007 in Published Opinions | Permalink
Truck Drivers Not Entitled to Prevailing Wage For Hauling From Public Works Projects
The California Prevailing Wage Law mandates the payment of prevailing wages to workers employed in the execution of a contract for public works. Labor Code § 1771. In Williams v. SnSands Corporation (2007) __ Cal.App.4th __, Fred H. Williams, an employee truck driver for S&S Trucking (SnSands Corporation), sued for unpaid wages for hauling materials to, and off-hauling materials from, a public works construction project. The trial court applied prevailing wage standards and awarded Williams $76,853.27 in prevailing wages for his off-hauling work. The Court of Appeal reversed.S&S Trucking’s off-hauling of the generic materials to a locale bearing no relation to the public works project site, as described in the two scenarios, was no more an integral part of the process of the public works project than the delivery of generic materials to the public works site by a bona fide material supplier. In the absence of evidence that, either by contract or custom, the off-hauling described in scenarios C and D was “‘an integrated aspect of the “flow” process of construction,’” (Sansone, supra, 55 Cal.App.3d at p. 444, quoting Green, 12 supra, 128 N.W.2d at p. 7), the prevailing wage statute was not applicable to the offhauling performed by Williams. For the next 60 days or so, you can download Williams v. SnSands Corporation in pdf or word format.
November 26, 2007 in Published Opinions | Permalink
Savaglio v. Wal-Mart Still Not Briefed
We overheard someone (not a speaker) at a recent seminar opining that Wal-Mart settled its California meal period case for a fraction of the amount of the jury verdict. Not true. The appeal is still pending, and just a few days ago, Wal-Mart received yet another extension of time to file its opening brief. Savaglio filed an opening brief on the plaintiffs' appeal on August 24, 2007. Wal-Mart's brief is due on Christmas Eve.
November 21, 2007 in Class Actions | Permalink
Avoid Plagiarism When Quoting From The Vacated Opinion in Murphy v. Kenneth Cole
Anyone who litigates exempt misclassification cases is familiar with the issue of concurrent duties. Plaintiff's lawyers like to argue a head-and-hands analysis, which essentially urges the court to pay attention to what the hands are doing. A manager who is wiping up spilled soda while simultaneously observing that his employees are not stripping off their mandatory work uniforms, beating customers with sticks and leaving work early isn't really doing management tasks while his hands grip the mop, notwithstanding his eyes darting across the store every few seconds. Employer's lawyers focus on concurrent duties, suggesting that a manager who wears many "hats" is engaged in management activities whenever one of those "hats" is a manager's hat.
One of the best published opinions regarding the executive exemption was Murphy v. Kenneth Cole Productions, Inc. (2005) 134 Cal.App.4th 728. In it, the First District Court of Appeal wrote a seven page analysis, at pages 7-14 of the slip opinion, under the sections entitled Overtime Compensation and Exempt Employees, Governing Regulations – Executive Exemption, Authority to Hire or Fire, Exercises Discretion and Independent Judgment, and Primarily Engaged in Exempt Duties. The analysis is great, and it includes one of our favorite lines ever written in any such analysis:"Murphy was a nominal coxswain who performed most of the time as an oarsman alongside the rest of the crew."Once the Supreme Court granted review of Murphy, under the California Rules of Court, it became improper to cite the Court of Appeal's opinion. The Supreme Court did not address the exempt/non-exempt issue on review, so it all that wonderful language just disappeared into the dustbin. Or did it?
We were arguing one of the appeals in our class actions a few months back when we saw another lawyer in another case stammer a bit when arguing a point on which his brief had relied heavily upon a case that had since been ordered reviewed. "Argue the rationale," the Justice told him. "You need not cite the case." So certainly one can argue the points raised in the Murphy opinion. But should you mention where you got that analysis?
There was an interesting discussion a few weeks ago on the Volokh Conspiracy regarding an attorney named Peter Cannon, who was sanctioned by a court in Iowa for plagiarizing in his briefs from a law review article that he did not mention. The case is In re Burghoff (S.D. Iowa Aug. 21). The U.S. Bankruptcy Court had this to say about Mr. Cannon using another person's analysis without attribution:It is a violation of the Iowa Rules of Professional Conduct for an attorney to "engage in conduct involving dishonesty, fraud, deceit, or misrepresentation." Iowa Rules of Prof'l Conduct R. 32:8.4. Plagiarism, which is "[t]he deliberate and knowing presentation of another person's original ideas or creative expressions as one's own," Black's Law Dictionary (8th ed. 2004), is a form of misrepresentation. Iowa Supreme Court Bd. of Prof'l Ethics & Conduct v. Lane, 642 N.W.2d 296, 300 (2002); accord In re Lamberis, 443 N.E.2d 549 (Ill. 1982) (finding plagiarism constitutes deceit under Illinois Code of Professional Responsibility); cf. United States v. Jackson, 64 F.3d 1213, 1219 n.2 (8th Cir. 1995) (disapproving of a brief that "directly track[ed]" a circuit court opinion which the attorney did not cite).... Mr. Cannon's acts of plagiarism burden the Court, undercut his client's cause, and generate criticism of the legal profession. Moreover, parroting a scholarly article in this way is not an effective type of advocacy. See Frith, 325 N.E. 2d at 189. More fundamentally, Mr. Cannon's disregard for the true authors' property rights in their ideas reveals a lack of integrity that reflects poorly on the legal profession. Lane, 642 N.W.2d at 300; Lamberis, 443 N.E.2d at 551. The egregiousness of Mr. Cannon's conduct requires an appropriate sanction....Although one cannot "cite" was Murphy v. Kenneth Cole Productions, Inc. (2005) 134 Cal.App.4th 728, one certainly is free to borrow heavily from its analysis, and if one does so, wouldn't the obligation to attribute require at least letting the court know that you were using the words of the First District Court of Appeal, albeit from an opinion which is no longer citeable, but which was not reversed? After all, you wouldn't want to suffer the fate of Peter Cannon. You aren't trying to deceive the court through a blatant act of plagiarism. You just want to argue you point as eloquently as the First District Court of Appeal put it in 2005. Right?
November 20, 2007 in Tactics | Permalink
Senate Bill 812 (Correa): Pharmacist alternative workweeks.Existing law generally requires premium overtime rates of pay for work in excess of 8 hours in a day and work in excess of 40 hours in a workweek with specified exceptions, including where the employer and employees have agreed to an alternative workweek pursuant to specified procedures. The Industrial Welfare Commission, pursuant to constitutionally authorized delegated powers from the Legislature, has established regulations, denominated wage orders, governing wages, hours, and working conditions in various industries. Pharmacists, depending on the nature of their work, may be regulated by Wage Order 7, relating to the mercantile industry, or Wage Order 4, relating to professional, technical, clerical, mechanical, and similar occupations, including employees in the health care industry. Although both wage orders permit the adoption of alternative workweek schedules by agreement for those employees performing work in those industries, Wage Order 7 requires that any such agreement provide not less than 2 consecutive days off within a workweek, whereas, Wage Order 4 has no such restriction. This bill would provide that pharmacists engaged in the practice of pharmacy who are employed in the mercantile industry, pursuant to Wage Order 7, shall be permitted to adopt alternative workweek schedules allowed by Wage Order 4, including alternative workweeks that can be adopted by employees working in the health care industry. Senate Bill 929 (Codgill): Computer programmer exemptions / Prevailing wage determinations.Existing law provides that 8 hours of labor constitutes a day's work. Under existing law, any work in excess of 8 hours in one workday and any work in excess of 40 hours in any one workweek and the first 8 hours worked on the 7th day of work in any one workweek is required to be compensated at the rate of no less than 11/2 times the regular rate of pay for an employee. Existing law exempts a professional employee in the computer software field from this overtime compensation requirement if the employee is primarily engaged in work that is intellectual or creative, the employee's hourly rate of pay is not less than $41, and the employee meets other requirements. This bill would decrease the hourly rate of pay requirement for this exemption to not less than $36. Existing law generally requires contractors and subcontractors performing work on public works, as defined, costing over $1,000 to pay to their workers the general prevailing rate of per diem wages, including these wage rates for holiday and overtime work, in the locality in which the public work is performed. Existing law provides that per diem wages includes both hourly wage rates and employer payments for employee benefits, as specified. Existing law requires the Director of Industrial Relations to determine per diem wages by referencing collective bargaining agreements, wage rates for federal public works, and, in certain instances, data from the labor organizations and employers associations, as specified. If the director determines that the general prevailing rate of per diem wages is the rate established by a collective bargaining agreement, and that collective bargaining agreement contains definite and predetermined changes during its term that will affect the rate adopted by the director, existing law requires the director to incorporate those changes into his or her prevailing wage determination. This bill would authorize contractors and subcontractors, whenever the director's prevailing wage determination contains a predetermined change but does not specify how the change will be allocated between hourly wages and employer payments for benefits, to allocate payments equal to that change to either hourly wages or benefits for a specified time period, as provided. This bill would also provide that, if the allocation of a predetermined change is subsequently altered by the parties pursuant to the collective bargaining agreement that was the basis of the prevailing wage determination, a contractor or subcontractor may allocate payments of not less than the amount of the definite and predetermined change in accordance with either the originally published allocation or the allocation as altered in the collective bargaining agreement.That's your California wage and hour law legislative year-end in review.
Jon-Erik Storm asks, Why Does Everyone Diss the DLSE?I was preparing to explore the theorizing that I and other bloggers did in the wake of Genrty that it would have implications for employment contracts in general, when I came across this footnote in the recent Murphy v. Check ‘N Go case. “Plaintiff requests judicial notice of information on the process for bringing claims before the Labor Commissioner, which is offered to show that this process ‘does not provide the same protections for the employee and is not an adequate substitute for a court proceeding. . . .’” (Slip. Op. at 9-10 n.1)...There are so many reasons: they are slow; they do not apply uniform standards; they are not taken seriously by defendants; they change policies depending upon the whim of the governor; they often don't follow the law; they lack the resources to effectively resolve large volumes of cases; they pass regulations without following appropriate protocols; they file amicus briefs against you even if they represented you when you won at trial.
Plus, they have the day off today, and we don't.
November 12, 2007 in Political | Permalink
Robinson Ford Sales: Another Class Certification Denial Reversed
In September, the Fourth Appellate District reversed an order denying class certification in Lewis v. Robinson Ford Sales, Inc., a case involving negative equity financing under the Automobile Sales Finance Act, Consumer Legal Remedies Act, and Unfair Competition Law. The matter was ordered remanded with directions to enter an order certifying the class. Last month, the court granted a half dozen requests to publish the opinion.
The plaintiff alleged that the dealership inflated prices due by including deficiency balances on previous automobile loans without adequate written disclosure. The plaintiff's position was that mandatory disclosures regarding purchase price should be treated like strict liability claims for certification purposes, and individualized proof of reliance or harm was not required to establish liability.
The trial court applied incorrect standards, focusing on what the defendant characterized as individualized fraud and reliance issues. However, the claims were amenable to certification, with common questions of law and fact, because the statutory violations could be determined by examining the face of the defendant's own records; common law fraud, requiring specific findings of causation and reliance, was not an issue because CRLA claims do not require individualized proof of causation of injury from a deceptive practice. Moreover, individualized issues pertaining to potential punitive damages were not a ground for denial of certification. It was premature for the trial court to consider that issue because the merits had not been determined, but in any event, is has long been the law in California that a plaintiff seeking punitive damages is not barred from pursuing class certification. Legal and factual issues that go to remedies simply cannot outweigh the common issues related to liability when deciding certification.
A petition for rehearing was denied today. You can download the full text of is Lewis v. Robinson Ford Sales, Inc. here in pdf or word format.
November 09, 2007 in Class Actions | Permalink
DIR's Depublication Request Denied in Corrales
The Supreme Court has denied the Labor Commissioner's request to depublish the opinion in Corrales v. Bradstreet. From a non-political, legal standpoint, we thought it was a silly request, since the heart of the opinion would apply to the DIR in future cases whether or not the opinion was published, but we're sure there were political reasons why the administration and/or its favorite campaign donors wanted the opinion gone. We discussed the opinion a few months ago in a post entitled, simply enough, Corrales v. Bradstreet.
November 08, 2007 in Class Actions, Published Opinions | Permalink
Kim Kralowec liveblogged the recent Class Actions in Alameda County: Advanced Seminar:Many thanks to the Alameda County Bar Association, Judges Freedman and Sabraw, and Messrs. Obbard and Stemmler for allowing me to bring this to my readers. Press the "refresh" button periodically for updates to this post throughout the evening. I'm told that the program will begin at approximately 6:00 p.m.And then she shared her detailed notes from the seminar. The post is long and includes a lot of the best information conveyed at the seminar. It might be the single best legal blog post we've ever read. While we were busy with fire-related hassles and the wrap-up of three fairly sizable class action settlements, our blog was quasi-dormant for half of October, or we'd have posted this link a week ago. We're posting two-a-days to get caught up, because there has been much to talk about lately.
November 07, 2007 in Class Actions | Permalink
Depublication Request Denied for Benson v. Kwikset
Last week, the Supreme Court denied a request to depublish the opinion in Benson v. Kwikset. This was another of the many cases involving Proposition 64, and how to handle requests to amend to substitute new suitable plaintiffs in 17200 cases for which the plaintiff lost standing after the ballot initiative was passed. The 4th District held:In accordance with Branick, we will remand the case to the trial court to consider whether plaintiff should be permitted to amend the complaint to plead facts satisfying the standing requirements under the revised statute. If so, the trial court shall conduct further proceedings limited to a determination of whether plaintiff can prove he has standing and can maintain this lawsuit as a representative action. In the event plaintiff does so successfully, the original judgment shall be reimposed and the balance of our opinion shall stand as resolution of the issues previously raised by the parties.Benson presented an interesting twist because a judgment had been entered before Prop 64 passed.
November 06, 2007 in Class Actions, Published Opinions | Permalink
The Supreme Court has denied Circuit City's petition for rehearing in Gentry v. Superior Court. The three dissenting justices voted in favor of granting rehearing.
November 05, 2007 in Class Actions, Published Opinions | Permalink
Supreme Court Reverses Gattuso
Labor Code § 2802 requires employers to indemnify employees for necessary expenditures incurred in discharge of their duties. What if an employer doesn't want to be bothered with that requirement, and instead, "ballparks" the usual costs and increases its workers' wages accordingly? In October 2005, in Gattuso v. Harte-Hanks Shoppers, Inc., the Second District Court of Appeal held that Section 2802 does not preclude employers from paying increased salaries or commissions "in lieu of" reimbursement for actual expenses, at least with respect to the expenses at issue in that case (automobile expenses). The Supreme Court granted review on the following issue:Petition for review after the Court of Appeal affirmed orders in a civil action denying class certification. This case includes the following issue: May an employer comply with its duty under Labor Code section 2802 to indemnify its employees for expenses they necessarily incur in the discharge of their duties by paying the employees increased wages or commissions instead of reimbursing them for their actual expenses?So, can the employer do this? The answer is, yes, but only if they do it carefully and they don't save underpay the employees by doing it that way.Labor Code section 2802, subdivision (a), requires an employer to indemnify its employees for expenses they necessarily incur in the discharge of their duties. May an employer satisfy this statutory obligation by paying employees increased wages or commissions instead of separately reimbursing them for their actual expenses?
We conclude that an employer may satisfy its statutory reimbursement obligation by paying employees enhanced compensation in the form of increases in base salary or increases in commission rates, or both, provided there is a means or method to apportion the enhanced compensation to determine what amount is being paid for labor performed and what amount is reimbursement for business expenses. As we will explain, our conclusion differs somewhat from that reached by the trial court and the Court of Appeal, and the differences affect the analysis of another issue presented here, whether the trial court abused its discretion in denying class certification. Accordingly, we reverse the Court of Appeal’s judgment and remand the matter to that court for further proceedings consistent with our opinion.In essence, the court held that section 2802 does not prohibit an employer’s use of a lump-sum method to reimburse employees for work-related expenses, as long as (1) the amount paid is sufficient to actually fully reimburse employees for the expenses they necessarily incur, and (2) the reimbursement is accounted for separately from their regular income. Regarding the first point, an employee must be permitted to challenge the lump-sum payment as being insufficient under section 2802, by comparing the payment with the amount that would be payable under either the actual expense method or the mileage reimbursement method. If the comparison reveals that the lump sum is inadequate, the employer must make up the difference.
As to the second point, an employer is not prohibited from combining wages and business expense reimbursements in a single enhanced employee compensation payment or from discharging its section 2802 business expense reimbursement obligation through an increase in salary or in commission rates, but the employer must provide some method or formula to identify the amount of the combined employee compensation payment that is intended to provide expense reimbursement. That method or formula must afford the employee (and state and federal officials) the ability to differentiate between wages and expense reimbursements. And a lump sum reimbursement formula does not violate Labor Code § 226, per se.
In light of the court's interpretation of section 2802, the trial court's denial of class certification was also reversed, and the case is to be remanded to the trial court for reconsideration of the class cert issues in light of the Supreme Court's ruling.Harte-Hanks has taken the position that as to the members of this proposed class, it fulfilled its reimbursement obligation under section 2802 by paying them higher commission rates and higher base salaries than it paid to inside sales representatives. As we explained in the previous section, the validity of this claim will turn on the resolution of these questions: (1) Did Harte-Hanks adopt a practice or policy of reimbursing outside sales representatives for automobile expenses by paying them higher commission rates and base salaries than it paid to inside sales representatives? (2) If so, did it establish a method to apportion the enhanced compensation payments between compensation for labor performed and expense reimbursement? (3) If so, was the amount paid for expense reimbursement sufficient to fully reimburse the employees for the automobile expenses they reasonably and necessarily incurred? Neither the trial court nor the Court of Appeal framed the class certification issue in that way, and so neither court considered whether these inquiries are capable of resolution on a class-wide basis. Accordingly, the class certification issue is to be reconsidered upon remand. We previously discussed the case here: "Supreme Court Appears Ready to Reverse Gattuso."The court appears likely to hold that, to comply with this obligation by increasing compensation to cover expenses, there must be a specific allocation between expense reimbursement and other compensation; and in a dispute, the employer should be required to prove that the amount allocated to expenses exceeds the amount of actual expenses. Any other outcome would essentially permit employers to evade the legislature's objective under Section 2802 in almost any situation where the wages paid exceed the sum of an employee's expenses plus minimum wage. Harte-Hanks Shoppers, Inc.'s plan also unfairly saddled employees with additional tax obligations, since the reimbursements would have been fully taxable, but the expenses would have been subject to the two percent floor, and not available to all filers.Once again, our friends in the audience brought us accurate information. Thanks, all.