Wage and Hour Litigation in California

THE FAIR LABOR STANDARDS ACT (FLSA)
AND CALIFORNIA WAGE AND HOUR LITIGATION

Defending a FLSA or California Wage & Hour Lawsuit or “Collective Action”

By: Steven R. Bangerter, Bangerter Frazier Group, PC

California employers face numerous lawsuits under the FLSA, 29 U.S.C. §§ 201-219, and comparable state law claims. The FLSA prescribes standards for minimum wage and overtime pay for non-exempt employees. Like many employment laws, the FLSA prohibits retaliation against employees that engage in protected activity in asserting their FLSA rights including complaints of unpaid overtime. The California Labor Code provides separate rights for employees similar to the FLSA. This area of the law is commonly referred to as “Wage and Hour” litigation.

Wage & Hour lawsuits, filed under the FLSA and/or California Labor Code, often involve claims for failure to pay overtime or minimum wage and improper employee exemption classification. For example, certain executive, administrative, professional and other employees paid on a salary basis may be exempt from the FLSA and/or California Labor Code. However, these and other exemptions have specific requirements applied to the particular circumstances of each employee, her responsibilities and the actual duties performed. The fact that an employee is paid on a salary basis does not automatically exempt that employee from coverage.

Meal and rest break, waiting time, time-rounding, itemized wage statement, and record keeping claims are prevalent in California. California Private Attorneys General Act (PAGA) and unfair business act claims under California Business and Professions Code § 17200 are also common in California Wage & Hour lawsuits.

Many Wage & Hour lawsuits assert a “collective” or “representative” action. These cases are filed by a plaintiff individually, and on behalf of all other similarly situated current and former employees. Employees that prevail may recover “liquidated” or double the damages for certain claims under the FLSA.

Bangerter Frazier Group understands that Wage & Hour is an evolving and prolific area of the law that is burdensome for employers. This update summarizes some of the issues raised in Wage & Hour lawsuits, identifies strategies to defend such claims, and presents possible solutions for responding to the popular “Collective Action”. The lawyers of Bangerter Frazier Group have represented many companies sued for Wage & Hour individual and collective actions. We strive to provide our clients current, efficient and effective strategies for preventing and defending these claims.

Surge of Wage & Hour Lawsuits

Thousands of wage and hour lawsuits are filed each year in the United States.
Over 8,000 Wage & Hour lawsuits were filed in federal court in 2014. State courts have also experienced high volumes of Wage & Hour cases recently, especially in California.

Evolving Procedures

In response to the flood of Wage & Hour cases, some courts have implemented specialized scheduling orders to closely oversee, advance and urge settlement in these cases. Judges may require employees to file a verified summary of the time worked and the amount of wages they allege were unpaid. Employers may file responses to the employees’ claims and some courts require the parties to attend an in-person settlement conference. Courts have become more inclined to dismiss lawsuits early that contain only conclusory or “bare bones” allegations and do not assert specific facts to support the employees’ claims.

Conditional Certification and Notice to Putative Class Members

Plaintiffs routinely seek to conditionally certify their case as a “collective action” and have the court order notice to all current and former employees who are similarly situated to the plaintiff. Significantly, the court has discretion to deny collective action status and class notice and to decertify a collective action. See Till v. Saks Inc., 2013 U.S. Dist. LEXIS 145842, 32-33 (N.D. Cal. 2013) (granting motion to decertify conditional FLSA class due to the “substantially different employment experiences among the [class]”); Hernandez v. United Auto Credit Corp., 2010 U.S. Dist. LEXIS 40209 (N.D. Cal. 2010)(FLSA collective action denied). Bangerter Frazier Group vigorously defends employers during the certification and notice process.

Defending a Wage & Hour Lawsuit

Once served with a Wage & Hour lawsuit, it is important to immediately identify available defenses, determine if any of the alleged violations exist, and to consider remedying those claims voluntarily when practical. Some of the defenses available in Wage & Hour cases include the statute of limitations, the “good faith defense,” employee exemptions, and certain exclusions, exceptions, and credits.

The good faith defense can bar liquidated damages where the employer acted in good faith and with reasonable grounds to believe it was not violating the law. See 29 U.S.C. § 260. Certain employees are exempt from coverage. Common FLSA exemptions exist for certain executive, professional, administrative, computer professionals, farm-workers and outside sales employees, among others. Employers must closely scrutinize the exact terms and conditions of a particular exemption in light of the employee’s actual duties when asserting an exemption defense.

Mootness

An employer may attempt to “moot” a case resulting in dismissal. An employer can make an unconditional offer of complete relief to the plaintiff. This may eliminate the employee’s claim resulting in dismissal of the case for lack of jurisdiction. See the United States Supreme Court’s decision in Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523, 1526 (2013). If successful, mootness should bar or greatly minimize liability for the employee’s attorney’s fees, which is what often drives and determines these cases.

Claim Prevention

California businesses can and should conduct periodic audits of their pay practices to identify potential Wage & Hour issues. Employers should also understand and train managers and human resources personnel on the current state of the law and keep accurate records of their payroll and pay practices. Lastly, employers should always treat employees fairly and consistently when it comes to pay practices.

Bangerter Frazier Group

Bangerter Frazier Group represents companies sued for Wage & Hour matters including Collective Actions. We provide our clients current and persuasive strategies for preventing and defending workplace claims. To learn more about Bangerter Frazier Group and its attorneys please call us at (866) 769-6742 to schedule your free consultation.
Steven R. Bangerter is the founding partner of Bangerter Frazier Group. Mr. Bangerter has over 22 years of legal experience and has defended numerous employment law matters.

This article covers Wage and Hour Litigation in California.