Feb. 19 2009

Ninth Circuit Withdraws Published Decision on Reach of California Wage Laws

Topics: Court Decisions

Last November, the Ninth Circuit issued its decision in Sullivan v. Oracle Corp. and held that non-California residents are covered under California labor laws for any work performed within the state of California.The plaintiffs in the case were instructors who traveled to different states, including California, to train customers on the use of Oracle software. The plaintiffs worked between approximately five and thirty-five days per year in California. The rest of time they worked in other states. The plaintiffs alleged that Oracle misclassified them as exempt and failed to pay them daily and/or weekly overtime. The Ninth Circuit held that California wage and hour law, including its daily overtime requirement, applied to the days and weeks the plaintiffs worked in California.

Earlier this week, the Ninth Circuit withdrew its published decision in the Sullivan v. Oracle case, and instead asked for guidance from the California Supreme Court on the issues presented in the case. The Ninth Circuit certified the following three questions to the California Supreme Court:

1. Does the California Labor Code apply to overtime work performed in California for a California-based employer by out-of-state plaintiffs in the circumstances of this case, such that overtime pay is required for work in excess of eight hours per day or in excess of forty hours per week?

2. Does California Business and Professions Code AASUNsect;17200 apply to the overtime work described in question one?

3. Does AASUNsect; 17200 apply to overtime work performed outside California for a California-based employer by out-of-state plaintiffs in the circumstances of this case if the employer failed to comply with the overtime provisions of the FLSA?

The California Supreme Court has discretion whether or not to accept the request for certification and generally makes this decision within about 90 days. Historically, the California Supreme Court has granted most of the Ninth Circuit's requests for certification. If you have employees who perform only limited work in California and you are concerned about the potential applicability of California wage laws to these employees, you will want to monitor the progress of this case. We will continue to monitor it as well and post any developments.

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About the Editor

Robin Largent represents employers, including major food and retail companies, in all types of employment litigation: wrongful termination, retaliation, breach of contract, wage and hour (California Labor Code) and unfair competition. She also regularly counsels and advises California employers on issues of compliance with California and federal employment laws.
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