Are meal period premiums part of the "regular rate" in FLSA cases? One District Court says, "No."

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In a LinexLegal.com news article entitled Must Employers Include Meal-Period Premium Payments in the "Regular Rate" Used to Compute the Overtime Owed to Their Employees?, it is reported that, on February 25, 2009, Judge Saundra B. Armstrong of the U.S. District Court for the Northern District of California held that meal-period premiums mandated by California Labor Code Section 226.7 need not be included in the "regular rate" for purposes of calculating an employee's overtime compensation under the federal Fair Labor Standards Act (FLSA), 29 U.S.C. para 201 et seq.   The ruling was issued in the context of a putative state-wide class-action in Rubin v. Wal-Mart Stores, Inc., No. CV 08-4214.

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in brief: UCL Practitioner's post on Kwikset v. Superior Court (Benson) is a must-read

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If you happen to read the UCL Practitioner with any regularity, you know that Kimberly Kralowec is as cool a customer as they come.  That's why I pay careful attention when she let's loose in prose on any appellate decision touching on the UCL and related False Advertising Law.  Her post earlier today on the recent Court of Appeal decision in Kwikset Corp. v. Superior Court (Benson) (Feb. 25, 2009) (Fourth Appellate District, Division Three) is the most critical commentary that I can recall reading (but that criticism is well-justified, I think).  I've commented previously about my own concern that Division Three of the Fourth Appellate District has moved out of step with California's policies that favor consumer protection and resolution of issues with the class action device.  But the most recent Kwikset decision is little more than judicial legislation.  Be sure to check out what the UCL Practitioner has to say about Kwikset.

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Advice on getting the most from Acrobat 9 from the Delaware Employment Law Blog

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Compliments of @acrolaw on Twitter, I was directed to an excellent blog post entitled Making the Switch to Digital: Legal Research.  The article, posted by Delaware Employment Law Blog, includes some good advice about getting the most out of your online research and information management with Adobe Acrobat 9.  While I wouldn't necessarily implement all of the tips for myself, there is certainly some value in creating a pdf repository of authority used in research, particularly if you've ever considered creating a fully indexed e-brief.  I've seen one such brief, with each citation linked to accompanying authority, and its a thing of beauty.

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in brief: Ninth Circuit clarifies the Tosco "substantial predominance" test for corporate operations in Davis v. HSBC Bank Nevada, N.A., et al.

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Ninth Circuit SealIf you spend any time litigating class actions, CAFA almost guarantees that some of that time will be spent in federal court. Thus, the citizenship of the defendant(s) is a significant issue. In Davis v. HSBC Bank Nevada, N.A., et al. (February 26, 2009), the Ninth Circuit interpreted and limited the “substantial predominance” analysis for the “principal place of business” test, as it was described in Tosco Corp. v. Communities for a Better Env't, 236 F.3d 495 (9th Cir. 2001). In brief, the Court held that the “substantial predominance” of activities is tested against national activities, not the next largest state, but a per-capita analysis is not required.

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California Supreme Court grants itself additional time to consider Petition in Brewer v. Premier Golf Properties

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Greatsealcal100On February 23, 2009, the California Supreme Court extended the time for granting or denying review in Brewer v. Premier Golf Properties (2008) 168 Cal. App. 4th 1243. The Complex Litigator’s initial post about Brewer discusses its holding that punitive damages are unavailable for violations of at least some Labor Code provisions.  The Supreme Court now has to and including April 8, 2009 to grant or deny review.

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in brief: Consumers resist bank changes to terms in credit agreements; JP Morgan Chase named in class action

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On January 28, 2009, consumers filed a class action lawsuit against banks JP Morgan Chase and Chase Manhattan Bank for unilateral changes to terms governing credit card agreements.  This class action appears to be one of the early reactions to a wave of bank-imposed changes to terms governing consumer credit accounts.  (Ron Lieber, Credit Card Companies Go to War Against Losses (January 30, 2009) www.nytimes.com; see also, Eileen Ambrose, Banks playing hardball on credit, leaving consumers feeling blindsided, angry (February 24, 2009) www.baltimoresun.com.)  The banking practices mentioned in these articles are happening at other institutions.  Just as commentators predict a wave of employment litigation, I expect that consumer lending issues will balloon this year.

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OFF TOPIC: California's Budget Fiasco

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I haven't used this blog as a general political soapbox, but sometimes things go too far.  California citizens recalled Gray Davis shortly after he announced that the state budget shortfall was likely to exceed $35 billion, on a budget of about $100 billion.  Think about that for a minute.  "Oops, we overspent by a third!"

Now, with a budget that has exploded to around $140 billion, I'm hearing that I may face higher sales taxes, higher gas taxes, and higher income taxes because we are still $40 billion in the red.  Wait, weren't we $40 billion in the red in 2003, when we did the unprecedented and recalled a governor?

The only adjectives that come to mind for the leadership of this state (and are fit to print in a family publication) are "criminal," "pathetic," "inexcusable."  Leaders lead.  Under that standard, Sacramento hasn't had leadership for a long time.  Thank you for driving my child's future in this beautiful state off a cliff in your exuberant desire to shovel money you don't have and don't own into the hands of your various pet projects and respective backers.  This defines ultra vires activity.  It should be criminal, and every legislator that voted for any of these budgets should be personally liable for the shortfall.  How could you let this happen?  How could we let this happen?  I guess apathy gets what it deserves, which is nothing.

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Labor Code section 206.5 may be the focus of forthcoming opinion in Fourth Appellate District

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Greatsealcal100I’m told that the Fourth Appellate District, Division Three, has an interesting opinion on the way in the next couple of weeks. According to Wage Law via Twitter (@wagelaw), Chindarah et al. v. Pick Up Stix, Inc. et al. is going to have something interesting to say about Labor Code section 206.5. @wagelaw suggests that the decision is due this week, and the docket nominally supports that contention, noting that the decision is “due” on February 19, 2009. However, at least some of the Courts of Appeal around the state interpret the 90-day deadline on the issuance of opinions in submitted matters to mean that the case must be decided by the end of the month in which the decision is due (when the Court reports on whether it has resolved all pending matters under penalty of nonpayment of Justices’ salaries). I don’t know if this interpretation is universal across the state, but, if it applies here, the decision could issue any time before the end of the month. And don’t forget that, in rare circumstances, the Court can essentially vacate the submission and resubmit the matter if the press of other business makes issuance of an opinion by its orginal due date impossible.

Section 206.5 fascinates me.  Maybe "fascinates" is a bit strong.  In any event, there is little in the way of decisional law about this Labor Code section, which states:

“(a) An employer shall not require the execution of a release of a claim or right on account of wages due, or to become due, or made as an advance on wages to be earned, unless payment of those wages has been made. A release required or executed in violation of the provisions of this section shall be null and void as between the employer and the employee. Violation of this section by the employer is a misdemeanor.

(b) For purposes of this section, "execution of a release" includes requiring an employee, as a condition of being paid, to execute a statement of the hours he or she worked during a pay period which the employer knows to be false.

Subdivision (b) is new, so the opinion can’t address that provision. That leaves subdivision (a). In the world of wage and hour class actions, the only time I ever ran across this section was when an employer was picking off class members by making them sign a release to get an offered payment. I believed that the releases obtained were void, but I never had the opportunity to test that belief. I’m very curious to see if that is the issue that has been presented in Chindarah. Of course, there is no guarantee of publication, but, as a matter of first impression (while I wildly speculate about the issues on appeal), one has to believe that publication would be certain.

And to digress for a moment, Twitter is definitely building momentum as a source for breaking news (amongst the nonsense about what somebody has decided to eat for dinner). You can read my recent posts in the sidebar on this blog or see whose posts I am following on Twitter by going to http://twitter.com/hsleviant (@hsleviant, in Twitter-ese).  If you start by reading posts from legal news sources, you may find that you can build a customized legal news amalgamation that suits your interests very precisely.

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It's been a bad week to work at Big Law

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Above the Law has been diligently covering what it charming refers to as the Valentine's Day Massacre of 2009, a substantial collection of layoff announcements at major firms.  Show compassion for your displaced brethren.  I do know how they feel.

It does make me wonder, though, about what's going to happen in the area of complex litigation and class actions.  There seems to be a uniform sentiment that the weak economy will lead to more litigation, especially in the employment class action realm (and employment claims generally).  If businesses are paying less for lawyers, and have less money to allocate towards negotiated class settlements, will more of these cases speed through to trial?  [This is where regular readers can express their opinions in the comment section, striking up a lively dialog.  No, really.]  We're also going to see a knowledge gap at big firms, if we have a multi-year discontinuity in hiring.

UPDATE:  More news coverage at JDJournal.

UPDATE 2:  The Recorder, via Law.com reports that several other shoes have yet to drop.

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California Supreme Court lets two appellate court decisions stand

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Mentioned by UCL Practitioner and Wage Law (note their new domain of www.californiawagelaw.com), this week the California Supreme Court denied review in Harper v. 24 Hour Fitness, Inc. (2008) 167 Cal.App.4th 966 (reversing an order order decertifying UCL and FAL claims) and denied a request to depublish Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116 (holding that trial court must independently review adequacy of class aciton settlement value).

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