California employment case index

A Tesla yard hostler who moved 53-foot trailers of out-of-state auto parts around the Fremont factory — never crossing a state line — sued for wage-and-hour violations, and Tesla moved to compel individual arbitration. In the published portion of its opinion, the First District holds yard hostlers are FAA section 1 transportation workers exempt from arbitration, and clarifies which wage claims Labor Code section 229 keeps in court.

After 19 years of litigation, a bifurcated bench trial produced a $43 million judgment for ~400 escrow workers who claimed they were misclassified as exempt. The Fifth District reverses on two independent grounds: the trial court could not delegate the entire damages phase to a private referee without the parties’ consent, and the liability-phase trial plan violated Duran by using representative sampling to prove classwide liability while barring the employer from contesting individual exempt status.

A railcar repairman who inspected and repaired freight cars taken out of service in a rail yard brought a wage-and-hour class action and argued his arbitration agreement was exempt as a transportation worker’s contract. The Second District disagrees: he is neither a “railroad employee” nor a “transportation worker” under FAA section 1, because repairing decommissioned cars is too far removed from actual transportation — so his arbitration agreement and class waiver are enforceable.

An EMT sought to certify a 135-worker class alleging the employer left nondiscretionary “EMS Bonuses” out of the regular rate, underpaying overtime and premiums. The Fifth District reverses the denial of class certification: the employer’s gift/discretion defense applied to every EMS Bonus, so it was not a defense “unique” to the named plaintiff.

A former Work Practice Apprentice at the San Francisco Zen Center won a wage award, but the trial court held the First Amendment’s ministerial exception barred his claims. The First District reverses, adopting its companion case Lorenzo: the exception bars only claims that require resolving ecclesiastical questions, and the Center showed none. NOTE: the controlling ministerial-exception issue is now before the California Supreme Court in Lorenzo (S294565), so this opinion is citable for persuasive value only.

An employer must prove a reasonable, good-faith attempt to comply before escaping liquidated damages under Labor Code section 1194.2.

Two veterinary workers signed a standing written waiver of their meal break for shifts of six hours or less — revocable at any time — then sued years later, arguing meal periods can be waived only shift by shift after the right accrues. Division Seven disagreed: section 512 and the wage orders are silent on timing and form, and eighty years of IWC history treats written prospective waivers as employee protection, not evasion. But the holding is expressly conditional: the court reserved unconscionable, coerced, unknowing, and irrevocable waivers, and oral prospective waivers entirely. Bradsbery is a safe harbor for clean waiver programs — and a litigation roadmap against defective ones.

Two Highland Hospital workers sued the public hospital authority running Alameda County’s medical facilities for meal-and-rest violations, unpaid wages, and PAGA penalties. A unanimous Supreme Court ended the case at the definitions: Labor Code section 18’s “person” — the term that controls who is an “employer” under the wage order and who can be penalized under PAGA — affirmatively excludes public entities. Absent express words bringing the government in, break rules and PAGA penalties stop at the public-sector line. The court disapproved Sargent’s contrary rule for statutes carrying their own penalties, declined to decide whether Government Code section 818 independently bars such penalties, and reserved the effect of the 2024 PAGA reform.

The California Supreme Court unanimously upholds Proposition 22 (Bus. & Prof. Code, § 7451), holding that the Legislature’s “plenary” and “unlimited” authority over workers’ compensation under article XIV, section 4 is not exclusive of the people’s reserved initiative power — while expressly reserving the harder questions about Proposition 22’s seven-eighths amendment rule.

In Naranjo II (2024) 15 Cal.5th 1056, the California Supreme Court holds that an employer’s objectively reasonable, good-faith belief that its wage statements complied with the law defeats both Labor Code § 226 penalties (no “knowing and intentional” violation) and § 203 waiting-time penalties (no “willful” failure) — harmonizing the two penalty statutes around a common good-faith defense.

A solar-project electrician queued unpaid at a security gate while guards inspected vehicles, drove miles of access road under strict site rules, and ate lunch confined to a designated area under a CBA calling meal periods “unpaid.” Answering the Ninth Circuit, a unanimous Supreme Court held the exit procedure is compensable “hours worked”; the gate-to-lot drive is compensable only as “employer-mandated travel,” and only if the gate is the first location required for a reason beyond site access; and no collective bargaining agreement can waive the minimum wage for a meal period during which the employer’s confinement forecloses otherwise feasible personal activities.

Estrada v. Royalty Carpet Mills, Inc. (2024) 15 Cal.5th 582 holds that trial courts lack inherent authority to strike a PAGA claim as unmanageable, even if it is complex or time-intensive. Manageability is a class-action requirement that does not apply to PAGA; complexity must be handled through ordinary case-management tools, not dismissal.

Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104 holds that a PAGA plaintiff whose individual claims are compelled to arbitration retains standing as an “aggrieved employee” to litigate the non-individual representative claims in court — California’s answer to the standing question left open by Viking River.

Home Depot’s Kronos system recorded Delmer Camp’s time to the minute — then quarter-hour rounding paid him for 470 fewer minutes than his own timecards showed. The Sixth District reversed summary judgment: under Troester and Donohue, an employer that can capture and has captured exact worktime must pay for all of it, and no California text authorizes rounding that underpays an identifiable employee. The panel invited the Supreme Court to decide whether See’s Candy neutral rounding survives at all — and the Court granted review (S277518), where the case remains pending. Cite it as persuasive only, with the review-granted parenthetical, and re-verify status before filing.

Naranjo v. Spectrum Security Services, Inc. (Naranjo I)Premium pay owed for missed meal and rest breaks under Labor Code section 226.7 constitutes “wages,” so it must be reported on wage statements under section 226 and is subject to waiting-time penalties under section 203 when not timely paid at separation.Naranjo v. Spectrum Security Services, Inc. (2022) […]

Ferra v. Loews Hollywood Hotel, LLC (2021) 11 Cal.5th 858 holds that the meal/rest premium under Labor Code § 226.7(c) must be paid at the “regular rate of compensation,” which is synonymous with the overtime “regular rate of pay” and includes all nondiscretionary payments — not just base hourly wages. The holding is retroactive.

A unanimous California Supreme Court fixes the two-step framework for the duty to protect against third-party harm — special relationship first, the Rowland policy factors only to limit it — the controlling analysis for negligent hiring, supervision, and retention claims against employers.

Donohue v. AMN Services, LLC (2021) 11 Cal.5th 58 holds that employers may not round meal-period time punches, and that time records showing short, late, or missed meal periods raise a rebuttable presumption of a violation — usable even at summary judgment.

Vazquez v. Jan-Pro Franchising International, Inc. (2021) 10 Cal.5th 944 holds that the ABC test adopted in Dynamex applies retroactively — to all cases not yet final when Dynamex was decided — exposing pre-2018 wage-order conduct to the new worker-classification standard.

The Court of Appeal affirms a statewide preliminary injunction against Uber and Lyft, holding the People likely to prevail under prong B of the ABC test (Lab. Code, § 2775) — rideshare driving is within the usual course of the companies’ business — and rejecting the “technology platform” defense as a false dichotomy. (Predates Proposition 22; see Castellanos.)

Frlekin v. Apple Inc. (2020) 8 Cal.5th 1038 holds that time spent waiting for and undergoing mandatory exit bag-and-device searches is compensable “hours worked” under the control clause — even after clocking out, and even though employees could have avoided a search by not bringing a bag. It applies Morillion and rejects the “optional” defense.

Tilly’s required retail workers to phone the store exactly two hours before every on-call shift — under threat of written discipline — and paid nothing if the answer was ‘don’t come in.’ Division Three held, 2–1, that this triggers Wage Order 7 reporting-time pay: ‘reporting for work’ means presenting oneself as ordered, and the employer’s own directions define the manner, whether that is walking through the door, logging on remotely, or making a mandatory call. The holding is deliberately tied to the two-hour call-in regime, the retroactivity question was expressly left open, and Justice Egerton’s partial dissent — built on 18,000 pages of IWC history — supplies the employer playbook. Review was denied; Ward remains the leading California authority on call-in scheduling.

Troester v. Starbucks Corp. (2018) 5 Cal.5th 829 holds that California has not adopted the federal de minimis doctrine: an employer that requires small but regularly recurring off-the-clock work — here, several minutes of closing tasks each shift — must pay for that time and cannot invoke de minimis to avoid it.

Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal.5th 903 adopts the “ABC test” for California wage-order claims: a worker is presumed an employee, and the hiring entity must prove all three prongs — freedom from control, work outside the usual course of business, and an independently established trade — to establish independent-contractor status.

For a flat-sum bonus like the attendance bonus here, the bonus is divided by the number of non-overtime (straight-time) hours the employee actually worked — not by total hours including overtime — to determine the per-hour value added to the regular rate; this yields a higher overtime rate, more protective than the…

Two Nordstrom employees worked stretches of more than six consecutive days, but never seven days inside a single established workweek, and always with at least one short shift. The Ninth Circuit certified three questions, and a unanimous Supreme Court answered all of them on one page: the day-of-rest guarantee runs by the workweek rather than on a rolling seven days, so runs spanning two workweeks are not per se prohibited; the six-hour exemption applies only where the employee never exceeds six hours on any day of that week, because the contrary reading would let a single short shift swallow the rule; and an employer 'causes' a lost day of rest by inducing the employee to forgo it, owing a duty to apprise employees of the right and then maintain absolute neutrality about its exercise.

Stoneledge paid furniture sales associates on commission with a guaranteed $12.01 hourly draw that was deducted from later commissions. The Court of Appeal reversed summary judgment for the employer, holding that Wage Order No. 7 requires separate compensation for rest periods and applies equally to commissioned employees, piece-rate employees, or any other system that does not pay for rest breaks. The draws were not compensation at all – at best, interest-free loans.

Augustus v. ABM Security Services, Inc. (2016) 2 Cal.5th 257 holds that a compliant rest period must be free of both duties and employer control: an employer may not require employees to remain “on call” during a rest break, even if interruptions rarely occur.

Answering three questions certified by the Ninth Circuit, the California Supreme Court held that the “nature of the work” under the wage orders' seating provision refers to the tasks an employee performs at a given location – not to the whole job – and that whether the work reasonably permits sitting is an objective, totality-of-the-circumstances question in which employer business judgment and workplace layout are relevant but not dispositive. If the employer contends no suitable seat exists, it bears the burden of proving unavailability.

Mendiola v. CPS Security Solutions, Inc. (2015) 60 Cal.4th 833 holds that security guards’ required on-call time at their worksites was compensable “hours worked” under the control clause, and that California’s Wage Order 4 — unlike federal law — does not permit excluding sleep time from compensable hours on a 24-hour shift.

A franchisor is not ordinarily the employer of its franchisee’s employees and is not vicariously liable for a franchisee-supervisor’s harassment unless the franchisor has retained or assumed general control over the relevant day-to-day aspects of the franchisee’s employment practices; a comprehensive operating system…

A class of 1,500 customer service managers was denied certification because the trial court believed Labor Code section 2802 liability turned on each employee's own cell phone plan and on who actually paid the bill. Division Two reversed and stated the rule in its opening sentence: when employees must use personal cell phones for work-related calls, the employer must reimburse them a reasonable percentage of the bill, whether the plan is limited or unlimited. Whether a third party paid, and whether the employee changed plans, are irrelevant – plan details go to damages, not liability. The disposition is a reversal of a certification denial, not a merits judgment.

An employer satisfies the minimum-earnings prong of the commissioned-employee exemption only in those pay periods in which it actually pays the required minimum earnings; it may not attribute commission wages paid in one pay period to other pay periods to manufacture compliance (59 Cal.4th at p. 664).

For certification, the key question is whether the hiring entity’s right to control the manner and means of the work — the principal test of employment — can be established through common proof (such as the standard contract and uniform policies), not whether each worker was in fact controlled to the same degree; the…

Duran v. U.S. Bank National Assn. (2014) 59 Cal.4th 1 holds that a class-action trial plan using statistical or representative proof must still let the defendant litigate its affirmative defenses. A plan that extrapolated liability for 260 employees from a flawed 21-person sample and barred defense evidence violated due process.

Rest periods must be separately compensated and cannot be folded into a piece-rate or activity-based pay formula; because Safeway’s uniform pay system did not separately pay for rest periods, common issues predominated and the class should have been certified (216 Cal.App.4th at p. 866).

Piece-rate employees are entitled to separate hourly compensation for time spent waiting for repair work or performing other nonrepair tasks directed by the employer during their work shifts; piece-rate earnings cannot be averaged across that nonproductive time to satisfy the minimum-wage obligation (215 Cal.App.4th…

There is no California statute or case law authorizing or prohibiting employee time rounding, so Division One borrowed the federal rule: an employer may round punch times to the nearest tenth of an hour if the policy is fair and neutral on its face and, as applied, does not fail over time to compensate employees for the time they actually worked. The posture is narrow – a writ vacating summary adjudication on two of the employer's affirmative defenses, with the court expressly leaving open whether either side will prevail. The plaintiff's expert lost the case by treating the employer's separate grace-period policy as if it were rounding. Whether neutral rounding survives at all is now pending before the California Supreme Court in Camp v. Home Depot, S277518.

Neither Labor Code section 1194 nor section 218.5 authorizes an award of attorney fees to a party that prevails on a section 226.7 claim; such claims are not actions for the nonpayment of minimum wages or overtime (§1194) and are not the kind of nonpayment-of-wages action that triggers §218.5 fee-shifting, so each…

Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004 is California’s foundational meal-and-rest decision: an employer must provide a duty-free meal period but need not ensure no work is done; it sets the meal-timing and rest-period rules and confirms that courts may resolve merits questions enmeshed with class certification.

Courts may not treat the administrative/production worker dichotomy as a dispositive test for the administrative exemption; the exemption must be analyzed under the language of the applicable IWC wage order and governing regulations, considering the actual work performed, rather than a rigid dichotomy.

Three Oracle instructors living in Colorado and Arizona worked a limited number of days in California for their California-headquartered employer. Answering certified questions from the Ninth Circuit, the California Supreme Court held that the Labor Code's overtime provisions apply to work performed in this state regardless of residence, and that those violations support a UCL claim – but that the UCL does not reach FLSA violations occurring in other states on these stipulated facts. The court confined its holding to overtime and to entire days and weeks worked in California.

Section 203(b) contains a single, three-year limitations period governing all actions for section 203 penalties, regardless of whether the penalty claim is accompanied by a claim for unpaid final wages; and the penalties may be recovered even though the underlying wages were eventually paid.

Martinez v. Combs (2010) 49 Cal.4th 35 holds that the IWC wage orders’ own definitions govern who is an “employer” for minimum-wage claims: to “employ” means (a) to exercise control over wages, hours, or working conditions, (b) to suffer or permit to work, or (c) to engage in a common-law employment relationship. The produce merchants were not the workers’ employers.

Citigroup let employees take part of their annual compensation as discounted restricted stock vesting only after two years; an employee who resigned early forfeited both the shares and the pay used to buy them. The California Supreme Court affirmed summary judgment for the company, holding that no earned wages remained unpaid on resignation. The decision agrees that restricted stock is a wage – so it turns on when incentive compensation is earned, not on characterization – and expressly refuses to extend Suastez's pro rata vacation-vesting rule to voluntary incentive programs.

Harte-Hanks paid outside sales representatives higher salaries and commission rates than inside representatives and treated the difference as reimbursement for their automobile expenses. The California Supreme Court held the practice permissible in principle, but only where the employer establishes a means to identify which portion of overall compensation is intended as reimbursement and that portion fully covers expenses actually and necessarily incurred. Section 2804 bars any agreement that waives full reimbursement – a holding that unravelled the trial court's denial of class certification.

The section 226.7 meal/rest payment is a wage (premium pay), not a penalty, and is therefore governed by the three-year statute of limitations applicable to wage claims rather than the one-year period for penalties.

“Discharge” under sections 201 and 203 includes not only firing but also releasing an employee upon completion of the particular job assignment or time duration for which he or she was hired; final wages are then immediately due, and a willful failure to pay triggers waiting-time penalties.

California does not permit wage averaging: the minimum-wage standard applies to each hour worked, and an employer must pay at least the minimum wage for every compensable hour; it cannot use higher pay for some hours to offset unpaid or sub-minimum hours.

Sav-On Drug Stores v. Superior Court (2004) 34 Cal.4th 319 holds that wage-and-hour class certification is reviewed for abuse of discretion and turns on whether the plaintiffs’ theory of recovery is amenable to common proof — not on the existence of individual issues or the ultimate merits. The Court reinstated certification of a manager-misclassification class.

Morillion v. Royal Packing Co. (2000) 22 Cal.4th 575 holds that the wage order’s “subject to the control of an employer” and “suffered or permitted to work” clauses are independent: an employee under the employer’s control is paid even when not working. Compulsory travel on employer-mandated buses is compensable “hours worked,” and the federal Portal-to-Portal Act does not govern California law.

The outside-salesperson exemption is determined by a fact-specific inquiry into how the employee actually spends his or her time, not merely the employer’s job description or expectations; California uses its own quantitative standard (more than half the time engaged in outside sales) rather than importing the federal…

The DLSE’s interpretive policies constitute regulations and are void because they were not adopted under the Administrative Procedure Act (the “underground regulation” rule); nevertheless, the agency properly exercised enforcement jurisdiction, and the IWC wage orders apply to the work at issue, so the trial court…

S.G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341 sets California’s multifactor control test for employee vs. independent-contractor status — the right to control the manner and means of the work, plus secondary factors, applied in light of the statute’s protective purpose. It still governs the Assembly Bill 5 exemptions after Dynamex.

A worker fired nine months into his vacation year was denied every day of accrued vacation pay because his employer's policy made eligibility turn on still being employed on his anniversary date – a rule it had applied to roughly 300 departing employees. A unanimous Supreme Court held the policy could not defeat the right. Vacation pay is not a gratuity but deferred wages earned by the year's labor, so a proportionate right to it vests as the work is performed, exactly as pension rights vest on acceptance of employment. An anniversary requirement is at most a condition subsequent, and Labor Code section 227.3 forbids an employer policy from turning that condition into a forfeiture of what has already been earned.