Exempt Employees And Labor Code Section 552

Do Exempt Employees Who Work 7 Days In A Row Have A Claim Under Labor Code § 552?

Many exempt employees do at least some work on each day of a given week.  Rare indeed is the weekend that an individual in any of the following positions will not respond to an occasional email or phone call: law firm associate, consultant, analyst, Big 4 accountant, technology company employee in a relatively senior role like manager, director, or VP.  The list could go on.  What’s important, however, causing an employee to work seven days a week may expose an employer to large penalties under provisions of the California Labor Code that, until recently, have not been the subject of any significant judicial consideration.

The Labor Code Prohibits “Causing” Employees To Work Seven Days In A Row

Labor Code § 551 provides: “Every person employed in any occupation of labor is entitled to one day’s rest therefrom in seven.”  Labor Code § 552 states that: “No employer of labor shall cause his employees to work more than six days in seven.”  An employer that violates these provisions may be sued under Labor Code § 558(a)(2) (penalty of $100/pay period) the Private Attorney General Act (penalty of $200/pay period).

Labor Code § 554 contains a few exceptions to this general rule. In particular, seven days of work is permitted in “cases of emergency … work performed in the protection of life or property … [and] a person employed in an agricultural occupation.”  In some circumstances, it also allows a sort of weekly day-off bank and accrual system that is reviewed on a monthly basis: “when the nature of the employment reasonably requires that the employee work seven or more consecutive days” then an employer may comply by ensuring that “in each calendar month the employee receives days of rest equivalent to one day’s rest in seven.”  Id.

Exempt Employees Are Very Likely Protected By Labor Code § 552

The text of the Labor Code does not provide any exception that permits employers to cause employees who are exempt from overtime or meal and rest periods to work for seven consecutive days.  Although Labor Code § 516 arguably gave authority the Industrial Welfare Commission (IWC) to exempt an employee from Labor Code § 552 but it has not done so.

Indeed, when the IWC’s wage orders do reference Labor Code §§ 551-552 they only restate the Labor Code § 554 provision that employers in certain circumstances can comply with Labor Code § 552 by providing four days of rest per month and that employers have fewer obligations when their employees are covered by collective bargaining agreements.  Thus, the wage orders provide no explicit exclusion for exempt employees.  The exception they do provide for collective bargaining agreements it not applicable to the sort of private sector, exempt jobs listed in the introduction.  And it’s unlikely that a court will find an implied exemption or exclusion exists for employees who are exempt from other sections of the wage orders and Labor Code.  Murphy v. Kenneth Cole Productions, Inc., 56 Cal.Rptr.3d 880, 886 (2007) (“statutes governing conditions of employment are to be construed broadly in favor of protecting employees”).

If We Assume Exempt Employees Are Covered By Labor Code § 552, Then What Questions Remain?

Labor Code §§ 552 and 554 are not models of clarity.  As a result, courts must resolve two key questions before these sections can be applied to exempt employees in the situations listed above.  First, what does it mean for an employer to “cause” an employee to work seven days in a row under Labor Code § 552?  Second, when does a particular position “reasonably require” that the employee work seven days in a row under Labor Code § 554?   Right now, we can only speculate on how courts will interpret these terms because these sections of the Labor Code have, for one reason or another, generated little in the way of published law.

Will Mendoza v. Nordstrom Resolve These Questions?

The Ninth Circuit heard oral arguments in a Labor Code § 552 case last month.  See Mendoza v. Nordstrom, Inc., Case No. 12-57130 (argued December 12, 2014).  Christopher Mendoza was a barista at Nordstrom’s who was paid on an hourly basis.  Nordstrom’s did not dispute that he worked seven consecutive days.  It acknowledged that the company had no policy prohibiting seven days of work and that it did not otherwise make employees aware of their rights under the applicable Labor Code sections.  Nevertheless, the store argued that it had not “caused” Mendoza to work seven consecutive days because Mendoza volunteered to do work these days.

For his part, Mendoza conceded he was scheduled to work for seven consecutive days as a result of his decision to volunteer to do so.  But he claimed his choice was a response to informal pressures from his supervisor and therefore Nordstrom had “caused” him to work the seventh day in violation of Labor Code § 552. See Mendoza v. Nordstrom, Case No. 10-0109 (C.D. Cal. Sept. 21, 2012) (“promotion within Nordstrom [was] contingent upon additional work [and he received] positive feedback on his performance evaluations after working beyond his scheduled hours.”).

The district court agreed with Nordstrom’s position.  It decided that to “cause” (within the meaning of Labor Code § 552) meant the employer had imposed some level of force or coercion, which it found Nordstrom’s had not imposed on Mendoza.  Id. at 14, 18 (Mendoza “desired additional work and actively sought it out” and therefore he “was not forced or coerced into accepting additional shifts [, instead] he reasonably sought additional work to earn more money and maintain his benefits”).

Mendoza Involved Non-Exempt Employees, Volunteering To Work In Non-Emergency Situations

The Ninth Circuit panel was understandably hesitant to rule concerning the meaning of “cause” and other matters.  Instead, the panel suggested that it ought to certify these questions of first impression to the California Supreme Court.  But even if questions are certified to the Supreme Court, there are two reasons why its answer is unlikely to provide a sweeping and conclusive resolution in this area.

First, the standard for “causing” an employee to work may vary based on whether the employee is exempt or non-exempt.  In particular, the informal pressures on advancement and job retention that were cited in Mendoza may weigh more strongly on exempt employees who have clearly defined promotional tracks within a company.

Further, it may be easier to “cause” a remotely-available, exempt employee to work (i.e. by sending an email or making a phone call that requests a response) than it is to formally schedule a non-exempt employee who must be physically present in order to work.

Similarly, Mendoza presents a starker contrast between working and not working because it involves someone showing up for a scheduled, eight-hour shift.  The Supreme Court likely will not address the shades of grey that could appear when an exempt employee spends half-an-hour responding to an email from home but otherwise takes the rest of the day off.  In that instance, employers might argue for a de minimis exception to the statute and/or claim they did not “cause” the labor because there was no explicit deadline for an email response (even if the employee alleges the existence of an implicit agreement requiring the work to have been completed on the seventh day).

The other reason that Mendoza will not put these questions to rest is that its facts do not provide much opportunity for a court to interpret Labor Code § 554’s exception for jobs that “reasonably require” seven consecutive days work.  While everyone needs their coffee from time-to-time, it’s far-fetched that a barista station within a mall absolutely must be manned seven days a week.  But, arguments of urgent need under Labor Code § 554 might fare better when made by law firms and banks facing urgent deadlines or companies that can cite scheduled rollouts of products.

To What Damages Is A Company That Violates Labor Code § 552 Exposed?

Certainly, a violation of Labor Code § 552 allows employees to recover per-pay period penalties under two provisions of the Labor Code.  Labor Code § 558 allows employees to recover $100/pay period and Labor Code § 2699.5, separately, provides a $200/pay period penalty as well as recovery of reasonable attorneys’ fees and costs.  Both of these sections have one-year statutes of limitations.

These penalties-based claims seem particularly amenable to class treatment for a few reasons.  First, as in the Brinker and Benton cases, employees may cite an employer’s failure to have a policy prohibiting employees from working seven consecutive days or ensuring four days off per month, as prima facie evidence of a violation.  See Benton v. Telecom Network Specialists, Inc., 220 Cal. App. 4th 701 (2013); Brinker Restaurant Corp. v. Superior Court, 53 Cal.4th 1004 (2012).  Indeed, the plaintiffs’ counsel in the Mendoza case made this analogy a number of times during the oral arguments.

Second, to the extent that informal pressures attendant to upward advancement (or even not getting fired) can “cause” an employee to work a seventh day, then these pressures very likely affect large groups of employees.  Third, whether a given job “reasonably requires” an employee to sometimes work seven days in a row is not likely to present the sort of individualized issue that precludes class certification.

Are There Any Other Potential Claims?

Depending on their circumstances, employees may be able to recover more than penalties.  Three specific claims come to mind.  First, a company’s repeated violation of Labor Code § 552 could give rise to an individual claim for wrongful termination in violation of public policy.  That is, if an employee was terminated for not putting in sufficient effort (i.e. not working seven days in a row as the employer requested) then the motivation for employer’s termination decision would, arguably, have been in contravention of an established state policy.

Second, a class of employees who did not receive promotions and/or were terminated by an employer who routinely required seven days of work, might make a similar wrongful termination claim.  They could also allege causes of action for underpaid wages under Labor Code § 558.  In addition, and based on the facts of the employer’s policy, there could be a claim that the policy had a disparate impact on persons of a particular gender or other protected characteristics.

Finally, for the same reasons that employees can recover unpaid wages under the Unfair Competition Law (UCL) they might be able to recover the days of rest that their employer took for them.  Cortez v. Purolator Air Filtration Products, 96 Cal.Rptr.2d 518, 528 (2000) (“the concept of restoration or restitution, as used in the UCL, is not limited only to the return of money or property that was once in the possession of that person … earned wages that are due and payable pursuant to section 200 et seq. of the Labor Code are as much the property of the employee who has given his or her labor to the employer in exchange for that property as is property a person surrenders through an unfair business practice”).

That is, the UCL authorizes a restitution as a remedy.  A “restitution order against a defendant thus requires both that money or property have been lost by a plaintiff, on the one hand, and that it have been acquired by a defendant, on the other.”  Kwikset Corp. v. Superior Court, 51 Cal. 4th 310, 336 (2011).  Thus, the claim here would be that under Labor Code § 552 employees were due to receive a seventh day off from work.  They surrendered this day off to their employer in violation of applicable law and, under the UCL, it should be restored to them in the form of a compensating day off (or something similar).

Although there is no decision on point and any decision at the trial court level would be subject to significant appellate risk, liability under the UCL would be a game changing result.  The UCL’s four-year statute of limitations would quadruple the one-year limitations that would otherwise apply under the Labor Code.  And the UCL would also provide an additional remedy based on something other than per-pay period penalties.

Conclusion

The appellate opinion(s) that result from Mendoza v. Nordstrom, Inc. may provide a better idea regarding the viability of some of these theories.  But day-of-work litigation under Labor Code § 552 is very likely here to stay in one form or another since both exempt and non-exempt employees will likely be able to allege violations on both class and individual bases.  Thus, if you regularly work seven or more days a week and would like to discuss your employer’s particular policy or lack thereof, then please contact Sebastian Miller.

Disclaimer: All materials have been prepared for general information purposes only to permit you to learn more about Sebastian Miller Law, P.C, its services and experience.  The information presented is not legal advice, is not to be acted on as such, may not be current and is subject to change without notice.

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