Fenwick Employment Brief - March 13, 2012


In this issue:

Attack On Outside Sales Exemption Could Not Be Litigated As Class Action; Individual Supervisor May Be Liable For Fmla Violation; NLRB New Poster Regulation Upheld In Part; New FMLA Regulations Expand Scope Of Military Leave; Meal And Rest Break Penalties Reduced For Employer’s Good Faith Efforts To Comply; Employer Must Be Allowed To Present Evidence That Psychologist Was Unlicensed; Employer Must Provide Copy Of Arbitration Forum Rules Or Where Rules Can Be Found; Migraine Caused By Good Faith Personnel Action Not Compensable Injury Under Workers Compensation Act; $168 Million Jury Award To Hospital Employee For Alleged Sexual Harassment; Inability To Work More Than Eight Hours A Day Or 40 Hours A Week Not ADA Disability; SOX Not Applicable To Employee Of Privately-Owned Employer That Contracts With SOX-Covered Company; and, Decision To Deny Bonus Not Reviewable.

Excerpt From: Attack On Outside Sales Exemption Could Not Be Litigated As Class Action.

Offering hope that the tide may be turning against overtime class actions, in Duran v. U.S. Bank, a California court of appeal rejected a $15 million award in favor of employees and decertified a class of bank employees. In Duran, the court had certified a class of 260 business banking officers. Each employee worked with one to four bank branches selling financial services to the bank’s small business customers. The plaintiffs alleged that the bank failed to pay them for overtime hours. The bank urged that the employees were exempt outside sales personnel. In California, the outside sales exemption requires the employee to work “more than half the working time away from the employer’s place of business,” selling the employer’s products or services. The trial court decided the case by randomly selecting 20 of the 260 employees to testify about their work. The bank was not allowed to present testimony of other employees who signed declarations that they worked the majority of time outside the office. The trial court ruled that all the employees were nonexempt. Reversing the decision, the appellate court held that such a random selection of witnesses and “trial by formula” violated the bank’s right to due process to present evidence that many of the class members were properly classified as exempt. Decertifying the class, the court ruled that the bank must be allowed to present evidence of its exemption defense against each individual claimant. The decision reflects the increased willingness of courts to require individualized assessment of each employee’s exempt status and to not allow class-wide determination of liability.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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