Class-actions, representative actions under the Private Attorneys General Act, and individual wage and hour cases persist as employees continue to challenge workplace polices.  As all employers with California employees are (or should be) acutely aware, even the slightest failure to comply with the Labor Code could result in significant exposure, not only for back pay and statutory penalties, but also for civil penalties, attorney fees, and court costs. Simply put, the California State Legislature does not tolerate deviations from the Labor Code.

One such Labor Code requirement pertains to overtime compensation.  Under Labor Code § 510(a)(1), any work in excess of 8 hours in one day shall be compensated at the overtime rate of time and a half.  Under §§ 510(a)(1) and 511, however, employees can accept an employer proposal for an alternative workweek schedule provided a certain procedure is followed. Specifically:

• Upon the proposal of any employer; and

• With approval in a secret ballot election by at least two-thirds of affected employees;

• Employees may adopt a regularly scheduled alternative workweek;

• Under such a regularly scheduled alternative workweek, affected employees may work for no longer than 10 hours per day within a 40-hour workweek without the payment to affected employees of an overtime rate of compensation.

In Hamilton v. Wal-Mart Stores Inc., 5:17-cv-01415 (C.D. Cal.), an alternative workweek schedule was put to the test before an eight-person jury in a wage and hour class action pending in federal court.

The trial concerned claims by two former Wal-Mart hourly employees, on behalf of themselves and other current and former hourly employees at a Wal-Mart e-commerce fulfillment center in Chino, California. Plaintiffs Chelsea Hamilton and Alyssa Hernandez and certain other hourly employees worked what is called an alternative work schedule, where, rather than working five days a week for eight hours per day, employees instead worked either three days a week for 11.25 hours a day, or four days a week for 10 hours a day. On an alternative work schedule employees are paid their regular rate—and not an overtime rate—for the hours worked between 8 and 10 hours in a day.

Plaintiffs claimed that the election process regarding this alternative work schedule was improper, so the employees working the alternative work schedule should have been paid at an overtime rate for hours over 8 per day. Wal-Mart disagreed and contended that workers participating in the election were given the option to vote for or against the alternative work schedule, and that a majority of those workers voted to adopt the alternative work schedule.

On April 12, 2019, nine days after trial began on April 3, and after deliberating less than four hours, the jury found that Wal-Mart provided a sufficient number of employees the chance to vote for an alternative workweek schedule and properly disclosed the ambits of the same. Anytime an empaneled jury defeats a wage and hour class claim, California employers should take notice.

Hamilton was far from a complete win for Wal-Mart, however. The same jury also awarded in excess of $6 million to the class in an unrelated claim that Wal-Mart failed to provide uninterrupted, 30-minute meal breaks. See Troester v. Starbucks Corp., 5 Cal.5th 829, 839 (2018) (“in furtherance of that purpose, we liberally construe the Labor Code and wage orders to favor the protection of employees.”). 

Hamilton thus stands as a stark reminder that employers must be mindful of any workplace policy or practice which may discourage employees from taking an uninterrupted, 30-minute meal break. Brinker Restaurant Corp. v. Superior Court, 53 Cal.4th 1004, 1038-40 (2012). Also, the Hamilton verdict will likely be appealed by one or both parties.

Issues concerning workplace policies require detailed consideration of applicable laws. Employers should consult with experienced wage and hour attorneys before, during and after workplace policies are adopted or changed. This is best practices to ensure compliance with California’s complex landscape of evolving wage and hour laws.

We at Albright, Yee & Schmit, APC, are committed to providing our clients with effective and up-to-date advice regarding wage and hour practices. Contact us for a consultation today.

Albright, Yee & Schmit, APC
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