California Labor & Employment Law Blog

By Candice Boyd

In Barbosa v. IMPCO Technologies, Inc., a California court held that public policy protects an employee from being terminated for making a mistaken but good faith claim to overtime compensation.

Manuel Barbosa worked at IMPCO Technologies, Inc. as a "cell leader" supervising up to eight other carburetor assemblers.  Barbosa was paid by the hour and sometimes he and the other employees worked overtime.  Barbosa testified that in June 2007, two of the employees in his cell told him they were missing two hours of overtime.  After their discussion, Barbosa thought he was missing two hours of overtime.  Barbosa told the payroll administrator that he and a few other employees had worked overtime.  Barbosa also told the payroll administrator that the time clock was wrong and perhaps that was the reason why the employees failed to receive their overtime pay.  IMPCO had occasional problems with a prior time clock system, but had recently installed a new one with no issues.  The payroll administrator spoke to the human resources manager who ran a report that established that Barbosa and the other employees could not have worked the overtime that Barbosa claimed.  Soon thereafter, Barbosa was called to a meeting with his supervisor, the payroll administrator, the human resources manager, and the operations manager. Barbosa was asked if he was sure he and the other employees worked overtime.  Barbosa responded affirmatively.  The operations manager showed Barbosa the report and Barbosa said he was confused and apologized.  Barbosa offered to pay back the overtime pay.  Barbosa was terminated on June 19, 2007, for falsifying time records.  The overtime money was eventually taken back from the employees.

At trial, IMPCO moved for nonsuit.  The court graned the nonsuit stating that, "I will accept plaintiff's version.  It still comes down to a question of law.  Good faith belief turns out to be wrong; termination thereafter of an at-will employee.  I don't see that there's a public policy that requires the employer to then make a determination whether this was good faith, not good faith, and require[s] the employer then to continue to employ this employee, who from [its] perspective made an unjustified claim for monies."

The Court of Appeal recognized that the duty to pay overtime wages is a well-established fundamental public policy affecting the broad public interest.  The Court of Appeal determined just as an employee's good faith but mistaken belief is protected from employer retaliation in the whistleblowing context, it follows that the same result should occur when an employee exercises his statutory right to overtime wages out of a reasonable good faith belief he is entitled to it, notwithstanding the later discovery that he is wrong.

In reaching its conclusion, the Court of Appeal noted that Barbosa's mistaken belief was reasonable and in good faith because under the previous time clock system, mistakes in timekeeping had been made; the new system had been in place less than a month; Barbosa's co-workers convinced him the overtime was unpaid, and he in turn convinced his supervisor; and Barbosa testifed he was confused.  As a result, the Court of Appeal found that Barbosa had presented sufficient evidence to have his case submitted to a jury.

You may read the entire case here.