(November 18, 2009) The California Chamber of Commerce is urging the 9th Circuit Court of Appeal to reverse a district court ruling that could result in numerous more wage-and-hour lawsuits against California employers.
The CalChamber is arguing that the district court ruling fails to follow the plain language of the law and disregards the long-standing California requirement that exemption determinations be made based on an analysis of employees’ individual job duties.
The CalChamber has joined the U.S. Chamber of Commerce and the Employers Group in filing a friend-of-the-court brief in a case that if left standing could result in a flood of wage-and-hour class action lawsuits alleging that large groups of employees have been misclassified as exempt from overtime requirements, Jason Campbell and Sarah Sobek v. PricewaterhouseCoopers LLP.
Read the brief.
Professional service firms and other employers in almost every industry in California have been subjected to an increasing amount of litigation, both class actions and individual lawsuits, challenging the exempt status of countless numbers of employees. Since 2005, California employers have been sued in more than 2,000 wage-and-hour class action lawsuits, with the number of lawsuits increasing each year, according to Courthousenews.com.
The district court ruled as a matter of law that a class of accounting professionals, who had not yet obtained their Certified Public Accountant (CPA) licenses from the State of California, were precluded from meeting the criteria for exemption from California overtime requirements set forth in the Professional Exemption and the Administrative Exemption of California Wage Order 4-2001.
CalChamber believes that the district court took the unprecedented step of disregarding the plain language of the wage order on which California employers have relied for so long, and fashioned an entirely new meaning of the administrative and professional exemptions.
CalChamber argues in its brief that the district court’s ruling could be extended to serve as the basis for any suit claiming that unlicensed employees working in any of the other professions enumerated in the wage order were improperly classified as exempt.
The ruling also could serve as the basis for any argument that any employee treated as qualified for the administrative exemption was misclassified. As a result, thousands of California employers could be subject to these types of claims if the district court’s ruling is allowed to stand.
Although California employers do not dispute their obligation to pay overtime wages to employees whose job duties render them non-exempt, it makes little sense to uphold a district court ruling when upholding the decision would dramatically increase California employers’ exposure to wage-and-hour class action lawsuits and the extremely high cost of defending them.
Read the brief.
Staff Contact: Erika Frank