As employers with operations in California had feared, Governor Gavin Newsom has signed AB 51, which effectively outlaws mandatory arbitration agreements with employees – a new version of a bill that prior Governor Jerry Brown had vetoed repeatedly while he was in office.

The bill not only prohibits mandatory arbitration agreements, but it also outlaws arbitration agreements in which employees must take an affirmative action to escape arbitration, such as opting out.

And as the statute is written in broad terms that extend to waivers of statutory “procedures,” it appears to extend not just to arbitration of an employee’s claims, but also to waivers of jury trials and of class actions.

In short, effective January 1, 2020, an employer may only enter into an arbitration agreement with an employee in California (or a jury trial or class action waiver) if that employee voluntarily and affirmatively chooses to enter into such an agreement.  And the employer may not retaliate against an employee who chooses not to enter into such an agreement.

The analysis of the Senate Rules Committee demonstrates that the legislature was well aware that a bill prohibiting arbitration agreements could be challenged as being preempted by the Federal Arbitration Act (“FAA”).

As the bill’s author stated, “The Supreme Court has never ruled that the FAA applies in the absence of a valid agreement.  AB 51 regulates employer behavior prior to an agreement being reached.  Further, understanding the Courts’ hostile precedence toward policies that outright ban or invalidate arbitration agreements, AB 51 does neither.  Both pre-dispute and post dispute agreements remain allowable and the bill takes no steps to invalidate any arbitration agreement that would otherwise be enforceable under the FAA.  The steps help ensure this bill falls outside the purview of the FAA.”

Despite the attempt to draft a statute that avoids FAA preemption, only time will tell if such a preemption challenge is made and if it is successful.

If it is not enjoined, in whole or in part, the new legislation could have a great impact upon employers with operations in California, and upon pending and threatened litigation.

Thus, in California, it will be important for employers who wish to use arbitration agreements (or jury or class action waivers) to ensure that employees voluntarily and affirmatively elect to enter into such agreements.  This may require some employers to revise their agreements and to implement new practices.

Our colleague Jeffrey H. Ruzal a

Following is an excerpt:

The proposed rulemaking will codify the DOL’s recent guidance that an employer may take a tip credit for any amount of time an employee in a tip-earning occupation performs related non-tipped duties that are performed contemporaneously with, or within a reasonable time immediately before or after, the tipped duties.  The proposed regulations specifically identify a server’s tasks of cleaning and setting tables, toasting bread, making coffee, and occasionally washing dishes or glasses as related non-tipped duties that qualify as time for which a tip credit may be taken.  In addition to these examples, the proposed rulemaking provides that a non-tipped duty is related to a tip-related occupation if the duty is identified as a task of a tip-producing occupation in the Occupational Information Network (O*Net).  This is distinguishable, however, from work unrelated to the tipped occupation, which would then be considered a “dual job” for which a tip credit cannot be taken.

The proposed new rulemaking also reiterates the provision in the Consolidated Appropriations Act of 2018 that prohibits employers, managers, and supervisors from keeping any tips received by employees. …

Read the full article here.

In the fall of 2016, before the Obama administration increases to the minimum salary were set to go into effect (spoiler alert – they didn’t!), we wrote in this space about the challenges facing employers in addressing those expected changes: “Compliance with the New DOL Overtime Exemption Rule May Create Unexpected Challenges for Employers.

As we wrote earlier this week, the current administration’s changes are set to go into effect on January 1, 2020: “U.S. Department of Labor Issues Long-Awaited Final Rule Updating the Compensation Requirements for the FLSA’s Executive, Administrative, and Professional Exemptions.”

While the amounts of the new thresholds may be different than those expected to go into effect three years ago, the challenges are the same.  They are worth considering again – and soon.  January 1, 2020 will be here very, very soon.

The New Salary Thresholds

Effective January 1, 2020 the salary threshold for the executive, administrative, and professional exemptions under the federal Fair Labor Standards Act (“FLSA”) will increase from $23,660 ($455 per week) to $35,568 ($684 per week). This increase is but one of the changes that goes into effect on January 1.

The total annual compensation requirement for “highly compensated employees” subject to a minimal duties test will also increase from $100,000 to $107,432.

And employers may use commissions, nondiscretionary bonuses, and other incentive compensation to satisfy up to 10% of the salary requirement, provided that these payments occur no less frequently than annually, and subject to a single “catch-up” payment within one pay period of the close of the year.

On first glance, dealing with the increase in the minimum salaries for white-collar exemptions would not appear to create much of a challenge for employers—they must decide whether to increase employees’ salaries or convert them to non-exempt status. Many employers that have already reviewed the issue and its repercussions would likely disagree with the assessment that this is a simple task. The decisions not only impact the affected employees but also affect the employers’ budgets and compensation structures, potentially creating unwanted salary compressions or forcing employers to adjust the salaries of other employees.

In addition, converting employees to non-exempt status requires an employer to set new hourly rates for the employees. If that is not done carefully, it could result in the employee receiving an unanticipated increase in compensation—perhaps a huge one— or an unexpected decrease in annual compensation.

The Impact on Compensation Structures

For otherwise exempt employees whose compensation already satisfies the new minimum salaries, nothing need be done to comply with the new DOL rule. But that does not mean that those employees will not be affected by the new rule. Employers that raise the salaries of other employees to comply with the new thresholds could create operational or morale issues for those whose salaries are not being adjusted. It is not difficult to conceive of situations where complying with the rule by only addressing the compensation of those who fall below the threshold would result in a lower-level employee leapfrogging over a higher-level employee in terms of compensation, or where it results in unwanted salary compression. Salary shifts could also affect any analysis of whether the new compensation structure adversely affects individuals in protected categories. A female senior manager who is now being paid only several hundred dollars per year more than the lower-level male manager might well raise a concern about gender discrimination if her salary is not also adjusted.

The Impact of Increasing Salaries

For otherwise exempt employees who currently do not earn enough to satisfy the new minimum salary thresholds, employers have two choices: increase the salary to satisfy the new threshold or convert the employee to non-exempt status. Converting employees to non-exempt status can create challenges in attempting to set their hourly rates (addressed separately below).

If, for example, an otherwise exempt employee currently earns a salary of $35,000 per year, the employer may have an easy decision to give the employee a raise of at least $568 to satisfy the new threshold. But many decisions would not be so simple, particularly once they are viewed outside of a vacuum. What about the employee earning $30,000? Should that employee be given a raise of more than $5,000 or should she be converted to non-exempt status? It is not difficult to see how one employer would choose to give an employee a $5,000 raise while another would choose to convert that employee to non-exempt status.

What if the amount of an increase seems small, but it would have a large impact because of the number of employees affected? A salary increase of $5,000 for a single employee to meet the new salary threshold may not have a substantial impact upon many employers. But what if the employer would need to give that $5,000 increase to 500 employees across the country to maintain their exempt status? Suddenly, maintaining the exemption would carry a $2,500,000 price tag. And that is not a one-time cost; it is an annual one that would likely increase as the salary threshold is updated.

The Impact of Reclassifying an Employee as Non-Exempt

If an employer decides to convert an employee to non-exempt status, it faces a new challenge—setting the employee’s hourly rate. Doing that requires much more thought than punching numbers into a calculator.

If the employer “reverse engineers” an hourly rate by just taking the employee’s salary and assuming the employee works 52 weeks a year and 40 hours each week, it will result in the employee earning the same amount as before so long as she does not work any overtime. The employee will earn more than she did before if she works any overtime at all. And if she works a significant amount of overtime, the reclassification to non-exempt status could result in the employee earning significantly more than she earned before as an exempt employee. If she worked 10 hours of overtime a week, she would effectively receive a 37 percent increase in compensation.

But calculating the employee’s new hourly rate based on an expectation that she will work more overtime than is realistic would result in the employee earning less than she did before. If, for instance, the employer calculated an hourly rate by assuming that the employee would work 10 hours of overtime each week, and if she worked less than that, she would earn less than she did before—perhaps significantly less. That, of course, could lead to a severe morale issue—or to the unwanted departure of a valued employee.

What About State Laws?

The new salary thresholds apply to federal law.  Many states still have higher thresholds for exempt status – and different criteria – than federal law.  Employers must be mindful of more onerous state and local wage-hour laws in making any decisions pertaining to employee compensation.

EBG’s free wage hour app provides summaries of those federal, state and local laws.  (It will be updated shortly to address the new federal thresholds.) You can download the free app here.

What is considered compensable travel time pursuant to the Fair Labor Standards Act (“FLSA”) is not always clear or intuitive to employers, even for those who usually have a good handle on wage and hour laws. This blog post hopefully will simplify the requirements set forth in the U.S. Department of Labor’s (“DOL”) regulations and interpretive guidance to help clarify when employees must be paid for travel time.

Ordinary Home-to-Work Travel

Likely not a surprise for most employers, employees are not entitled to pay for time that they normally spend commuting between their homes and the work place.

And, keep in mind, this rule applies to employees who report to the same or different work sites.

If, however, a particular work site is well beyond the employee’s typical home-to-work commuting time, e.g. the employee lives five miles from his office, but is asked to commute 50 miles to an alternative work site for a discrete assignment, the employer should consider, for both legal and employee relations reasons, paying for such significantly longer commuting time.

Same Out-of-Town Day Travel

DOL regulations provide for a different rule for out-of-town travel – even if all of the travel and work is accomplished in one day. The regulations provide an example where an employee works in Washington, D.C. during the hours of 9:00 AM to 5:00 PM.

Assume the employee is asked to work on an assignment in New York City for one day, for which he must leave his house at 8:00 AM and arrives in New York City at 12:00 PM whereupon he starts to work. He completes the work at 3:00 PM, and arrives back in Washington, D.C. at 7:00 PM. How much, if any, should this employee be paid for traveling to New York?

The DOL takes the position that this travel cannot be considered normal (and non-compensable) home-to-work commuting, even if it is accomplished in one day. Rather, the DOL provides that such travel must be compensated because it is an integral part of the work to be performed. The regulations provide, however, that employers may deduct the time it took the employee to travel from his home to the train station, airport or bus depot, which is treated as the equivalent to normal home-to-work commuting time.

Travel That Is “All in a Day’s Work”

Employers are required to pay for all work-related travel time spent by employees throughout the course of the work day. This rule specifically applies to employees who travel as part of their principal activity from one job site to another.

Remember, however, that employers may still deduct normal home-to-work commuting, such as the time that an employee spends commuting from the last job site of the day to her home.

Overnight Out-of-Town Travel

Probably the most interesting and least intuitive travel time rule is overnight out-of-town travel. In these cases, the DOL requires employers to compensate employees for travel time that occurs during the employee’s normal work day.

For example, returning to our employee who works from 9:00 AM to 5:00 PM, he must be compensated for only his travel time that coincides with his normal work day.

What is more, this rule applies to any day of the week, even days on which the employee does not normally work. For example, an employee who typically works Mondays through Fridays, but travels for business during her normal working hours on a Saturday or Sunday must be paid for such travel time.

In addition, it is important to note that if an employee is offered public transportation, but requests to drive her own car instead, the employer may count as hours worked either the time spent driving the car or the time she would have had to count as hours worked during working hours if she had used public transportation.

Also, employers need not pay employees on out-of-town trips for their regular meal periods.

Lastly, employees must always be paid for any actual work they perform while traveling.

Other Considerations

Please keep in mind that this blog post addresses the legal requirements pertaining to travel time pay; however, employers may always pay for travel that does not necessarily require compensation pursuant to the FLSA and DOL regulations.

Also note that it is important to confirm whether the state or locality within which your traveling employees work does not have different, i.e. more rigorous, travel pay requirements than the FLSA. You should always consult your human resources specialist, internal or external counsel to make sure you are in full compliance with not only federal, but also state and local law requirements.

Lastly, it is always the best practice to provide clear guidelines to your employees in your employee handbook or as a standalone policy so there is no confusion on anyone’s part as to when employees should be compensated for travel time.

For the past four-plus years, the U.S. Department of Labor (“DOL”) has actively pursued revisions to the compensation requirements for the executive, administrative, and professional exemptions to the Fair Labor Standards Act’s overtime requirement.  On September 24, 2019, DOL issued its Final Rule implementing the following changes, effective January 1, 2020:

  • The new general minimum salary for these exemptions increases from the current level of $455 per week ($23,660 per year) to $684 per week ($35,568 per year).
  • The new minimum annual compensation threshold for the highly compensated employee version of these exemptions increases from $100,000 to $107,432.
  • Employers may use commissions, nondiscretionary bonuses, and other incentive compensation to satisfy up to 10% of the salary requirement, provided that these payments occur no less frequently than annually, and subject to a single “catch-up” payment within one pay period of the close of the year.

The current version of these regulations has been in place since 2004.  As we have discussed in earlier posts,* DOL first issued a proposal to update the regulations in July of 2015, with a Final Rule following in May of 2016.  The 2016 Final Rule would have increased the salary requirement to $913 per week ($47,476 per year), raised the highly compensated employee threshold to $134,004 per year, and provided for automatic updates to these levels every three years without further notice-and-comment rulemaking.  Various groups challenged the 2016 Final Rule in court, resulting in an injunction in November of 2016 barring implementation or enforcement of that rule.  That litigation has been on appeal, with the appeal stayed pending further rulemaking by DOL.

In March of 2019, DOL issued a Notice of Proposed Rulemaking suggesting a revised basic salary level of $679 per week ($35,308 per year), a highly compensated employee threshold of $147,414 per year, allowing certain bonuses and other incentive compensation to satisfy up to 10% of the salary requirement, and expressing a commitment to update the regulations every four years.  The Final Rule tracks the March 2019 proposal in most respects, with the general salary requirement increasing slightly in the Final Rule, the highly compensated employee threshold decreasing significantly, and the Final Rule eliminating any commitment to update the regulations on any particular timeframe in the future.  As with the 2016 Final Rule and the March 2019 proposal, the 2019 Final Rule makes no changes to the duties requirements for these exemptions.

In addition, to remove any doubt in the event of litigation over the 2019 Final Rule, DOL has formally rescinded the 2016 Final Rule.  This means that in the event that a judge were to enjoin or to invalidate the compensation standards specified in the new Final Rule, the regulations will revert to their 2004 version, rather than the levels set forth in the 2016 Final Rule.

The Final Rule also contains special salary levels for certain U.S. territories, and it updates the compensation requirements specific to the motion picture production industry.

Interestingly, and emblematic of how easy it is for employers to find themselves on the wrong side of the FLSA, DOL states in the Final Rule that the 10% allowance for non-discretionary bonuses and the like means that an employer can pay a minimum salary of at least $614.70 per week ($31,964.40 per year).  Those numbers, however, represent 90% of a weekly salary of $683 ($35,516 per year), which is $1 per week less than the salary standard adopted in the Final Rule, likely stemming from a failure to update the math during the drafting process.  The correct figures are a minimum salary of $615.60 per week ($32,011.20 per year).  Being off by just 90 cents per week could result in owing an employee thousands of dollars in back overtime (or owing a class of employees millions of dollars).

DOL estimates that these changes will cause approximately 1.2 million workers who are currently exempt to become overtime-eligible if their employers do not increase their compensation to satisfy these new requirements, and that the modest increase in the highly compensated employee threshold will affect roughly 101,800 employees.

With these new standards going into effect on January 1, 2020, it is important for employers to begin their planning now to ensure compliance by the effective date.  Although a number of advocacy groups have stated an intention to challenge this Final Rule in court, our expectation is that these new standards will become effective at the start of the new year.

In addition, employers must remain mindful of any requirements under state law that may affect overtime eligibility.  A number of jurisdictions, for example, do not recognize the highly compensated employee concept, while some states require higher salary levels than those in the FLSA regulations.

As always, you should consult your wage and hour counsel to ensure compliance with these new regulatory requirements.  It will be particularly important to think through carefully how to avoid costly errors when relying on the allowance for bonuses, commissions, and other incentive compensation.

 


*See our previous posts on the FLSA overtime regulations:

There may soon be a fair number of big rig trucks for sale in California, as well as computers, desks and other material investments of persons who determine that they may no longer offer their services as independent contractors and must shut down their small businesses, a potential repercussion of new legislation intended to restrict the use of independent contractor status in the state.

Whether those and other practical consequences of the hurried passage of the new law were considered by the California legislature is unclear.

But the eleventh-hour exemptions that were extended to some industries – and denied to others – suggests that the impact of the new statute may not have been given as much thought as it could have been.  And perhaps – just perhaps – the statute will be tweaked further and more exemptions will be recognized.

We are writing, of course, about AB 5, which codifies and expands the “ABC test” set forth in Dynamex Operations West, Inc. v. Superior Court for determining whether workers in California should be classified as employees or as independent contractors.  On September 18, 2019, California Governor Gavin Newsom signed the bill, which now will go into effect on January 1, 2020.

In the days and hours before it was passed, a number of groups lobbied for exemptions from AB 5. More than a few professions were exempted from the final version of the statute, most notably for lawyers, human resources administrators, doctors, psychologists, dentists, podiatrists, insurance agents, stock brokers, accountants, engineers, veterinarians, direct sellers, real estate agents, hairstylists, barbers, aestheticians, commercial fishermen, marketing professionals, travel agents, graphic designers, grant writers, fine artists and payment processing agents.  Those positions are not subject to the “ABC test,” but instead will be subject to what has long been known as the “Borello test,” established in S.G. Borello & Sons, Inc. v. Dept. of Industrial Relations.

But other groups or industries were not successful in lobbying for last-minute exemptions and are still covered by AB 5, including independent truckers, physical therapists, manicurists, exotic dancers and musicians – and gig economy workers.

Generally speaking, it is more difficult to establish that an individual is an independent contractor under the “ABC test” than under the “Borello test.” To satisfy the “ABC test,” the hiring entity must establish each of the following three factors:

(A) that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; and

(B) that the worker performs work that is outside the usual course of the hiring entity’s business; and

(C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.

Practically speaking, factor (B) will likely be the most difficult for a company to establish.  Without it, an individual will be considered the company’s employee, not an independent contractor.

At the very least, AB 5 is going to create headaches for many small businesses and persons who wish to have the flexibility of working as independent contractors, some of whom can be expected to lobby for exemptions to AB 5 – and for companies that use their services.

Noting that more lobbying for exemptions was likely, a columnist for The Los Angeles Times proposed something more drastic:  “[T]he entire law should be rewritten with more realistic definitions of ‘independent contractor’ and ‘employee.’ Democrats and labor overreached.”

Only time will tell which groups or industries successfully lobby for additional exemptions from AB 5 or whether the legislature indeed will revise it.

In the meantime, in light of AB 5 and Dynamex, companies in industries that have not already successfully lobbied for exemptions should take a close look at persons they may treat as independent contractors to determine whether such a classification would be supported by the “ABC test.”

And persons who have their own small businesses and operate as independent contractors should do the same.  Some who have operated independently for years may conclude that they can no longer do so.  Some, such as owner-operators of trucks, may conclude that they now must shut down their businesses and sell off their assets, including trucks that they invested hundreds of thousands of dollars on.

The U.S. Department of Labor’s Wage and Hour Division (“WHD”) continues to issue guidance at a rapid pace, releasing a new opinion letter regarding the retail or service establishment overtime exemption under the Fair Labor Standards Act (“FLSA”).  The letter brings clarity to a recurring issue affecting retailers.

FLSA Section 7(i) Exemption

As background, FLSA Section 7(i) exempts a retail or service establishment employee from the FLSA’s overtime pay requirements if (i) the employee’s regular rate of pay exceeds 1.5 times the federal minimum wage for any week in which the employer seeks to claim the exemption and (ii) more than half of the employee’s compensation “for a representative period (not less than one month)” represents commissions on goods and services.  29 U.S.C. § 207(i).  In Opinion Letter FLSA2019-13, the WHD provided guidance on the representative period requirement, addressing whether four weekly pay periods or two bi-weekly pay periods, or alternatively, six consecutive weekly pay periods or three bi-weekly pay periods constitute a valid representative period.

As the WHD observed, the implementing regulations provide no guidance on the meaning of the phrase “not less than one month” other than the self-evident statement that the period cannot “be less than 1 month.”  29 C.F.R. § 779.417(c).  Accordingly, the WHD proceeded to interpret this language, guided by the Supreme Court’s holding in Encino Motorcars, LLC v. Navarro that FLSA exemptions receive a fair and appropriate reading.  Relying on Supreme Court and other case law, the WHD posited that a fair reading of a “month” is a “calendar month”—i.e., the period of time from a given day of a particular month in the calendar to the corresponding day of the following month.  Under this interpretation, the WHD concluded that four weekly pay periods or two bi-weekly pay periods are not a calendar month because, with the exception of February, “four weeks from any given date of one month will necessarily fall short of the corresponding date of the next month,” but that six consecutive weekly pay periods or three bi-weekly pay periods would satisfy the calendar month requirement.  The WHD also cautioned that a six-week period may not be “representative”—a separate requirement for the Section 7(i) exemption—and declined to analyze whether the period at issue was sufficiently “representative.”

Consistent with our previous blogs on WHD’s opinion letters, employers should review these letters carefully and consult with experienced counsel with any questions.

We have frequently written about California’s Private Attorneys General Act (“PAGA”), a unique statute that allows private individuals to file suit seeking “civil penalties” on behalf of themselves and other “aggrieved employees.”

The only remedy available to employees in actions brought under PAGA is a civil penalty.  That is significant because civil penalties are unlike the remedies available in conventional lawsuits that are not brought under PAGA; such non-PAGA remedies can include allegedly unpaid overtime, vacation pay, or meal and rest period premiums.

Less than two years ago in Lawson v. ZB, N.A., 18 Cal. App. 5th 705 (2017), the California Court of Appeal held that one of the sections under the California Labor Code – section 558(a) – would also allow the recovery of certain types of unpaid wages that could be recovered under PAGA.  That decision greatly expanded the scope of exposure that employers would face when defending lawsuits brought under PAGA.  Not incidentally, it increased the potential exposure in PAGA actions and, as a result, the settlement value of those cases.

Fortunately for employers, the defendant in Lawson petitioned the California Supreme Court to review that decision, and the Court agreed to do so.

On September 12, 2019, the California Supreme Court issued its opinion in Lawson, holding that the Court of Appeal was wrong.  The California Supreme Court held that a PAGA plaintiff may not recover the amount of allegedly unpaid wages.  Instead, the only remedy available is the civil penalty, the amount of which can vary based on the type of violation.  For purposes of section 558, that would be either a $50 or $100 penalty per employee for each pay period in which there was a certain type of violation.

The Lawson decision is a welcome development for all California employers.  The potential exposure in PAGA cases – and the pressure to settle given that exposure – has greatly decreased.

A number of years ago – 20 perhaps – someone shared with me a study that was conducted by a major university where participants were asked which professions they most distrust.

My recollection is that it was conducted at Duke University, but I could be wrong.  (I do remember distinctly that there were 998 participants in the survey, which still seems like a peculiar number to me.  They couldn’t find two more people?)

In any event, one spot from the top of the list of most distrusted professions (or the bottom, depending on your perspective) was used car salespersons.  Yes, I know, a cliché.

The top spot (or the bottom) was reserved for lawyers.

Not all lawyers, mind you, but a particular group – plaintiffs’ class action lawyers, who the study’s participants felt took too much money out of the pockets of the people they supposedly represented, making millions while class members often got pennies.

I was told of this survey before I really started focusing on class action defense myself, but I have never forgotten it.

And let me say this – as with many things in life, it is unfair to paint with too broad a brush.  I’ve had the pleasure of dealing with more than a few plaintiffs’ employment class action lawyers who are passionate believers in the positions they take on behalf of employees, who work hard for their clients, who appear to be driven by their commitment to their clients, etc., etc., etc.

But, like any employment class action defense lawyer, I have seen too many of these cases driven not by the facts of the case or by what is best for the employees, but by what is best for their attorneys.  And, in particular, I’ve seen how these cases are often driven by an effort to maximize their own attorneys’ fees recovery.

Settle a class action for $10 million, and the plaintiffs’ attorneys may get as much as $4 million for themselves, even if they did little more than file a lawsuit and attend a mediation.

And it’s not uncommon to hear a lawyer announce at a mediation of a wage-hour class action, “I need to get $2 million for myself out of any settlement.”

Then the parties and the mediator decide whether to work backwards to negotiate a settlement where that lawyer could get that $2 million.

Or $1 million.

Or $750,000.

Whatever the number that the plaintiff’s counsel is insisting on getting in fees, putting the focus on their fees before the merits of the case or the recovery to class members is the tail wagging the dog.

All of this leads me to share some unusual comments made by a highly respected federal judge in California several weeks ago.  Or, at least, a paraphrased summary of her comments.  (I do not want to embarrass the judge by mentioning her name, but she is a fine and thoughtful judge who has overseen some significant cases in the state and has issued some opinions that are favorable to employees.)

In a case in which the judge denied class certification of the plaintiffs’ wage-hour claims, the plaintiff still had similar claims pending under California’s unique Private Attorneys General Act (“PAGA”) – representative claims, but technically not “class claims.”  (PAGA claims, and the issues with them, are another subject for another day.)

Rather than go to trial over those small claims, the parties reached a very small resolution of them.  As part of it, plaintiff’s counsel sought fees for themselves that were significantly more than what the employees themselves would recover. (I won’t mention plaintiff’s counsel by name either as I have had a few cases against them and genuinely like them.)

While other judges might rubber-stamp such a small settlement just to get it off their docket, the judge in this case rejected the proposed settlement.

Here is roughly what she said (I’m relying on my notes):

I’m not doing this. I’m not going to approve this. I’m tired of it. These wage-hour class actions are the worst.  They’re all about attorneys’ fees.  They have nothing to do with the case or with the employees.  They have nothing to do with justice.  It’s just attorneys’ fees.  When I go on retired status, I’m going to tell them I won’t accept any of these wage-hour cases for that reason.  And I don’t think I’m the only judge who is getting tired of this.  I think you’re going to see more and more judges who aren’t going to put up with this.

Again, that’s based on my notes.  She said more that I didn’t jot down (or where I can’t decipher my own handwriting).

Maybe she was just expressing her own frustration. And maybe she is alone.

But maybe she’s right.

And maybe we will see some developments from the bench that will shift the focus of these cases away from the attorneys’ fees and back to the disputes themselves.