Many software companies routinely classfy their implementation and troubleshooting consultants as exempt employees, not entitle to overtime. The Third District's holding in Eicher v. Advaned Business Integrators, Inc. 151 Cal.App.4th 1363 (2007) illustrates that many of such consultants are likely entitled to overtime compensation and are wrongfully classfied as exempt.
In Eicher, the consultant's duties were typical of a software employee. His work involved spending half of his working time in the office, and the rest of the time on the customers' site. The employee's work involved implementing his employer's software, helping the customers learn how to use it, as well as troubleshooting. The employer argued that the employee fell into the administrative exemption category. The court disagreed. One of the several requirements of administrative exemption is that the employee's work must be "directly related to management policies or general business decisions" as per the IWC wage oreder 4-2001. The court found that since the employee was not engaged in any management policies such as hiring or firing, did not negotiate contracts with customers and did not otherwise affect his employer's operation, his was a "production worker" entitled to overtime.
The employer argued that installation and troubleshooting are exempt administrative duties, relying on Levie v. AT&T Communications, Inc. N.D. Ga. (1990). The court distinguished the claimant in Levie, pointing out that in the latter case the employee, in addition to performing the stated non-exempt duties, also identified impacts of the work on the company's operations, as well as designed and coordinated project teams. The court reiterated that in Eicher, the employee had no such effect on how the company was run.
The above analysis demonstrates that whether a software consultant is entiteled to overtime is a very fact sensitive inquiry, where the court would carefully analyze the specific duties in which an employee is engaged before determining whether the exemption applies.
Recently, I met with a client who I believe had strong wrongful termination claims under FEHA (Fair Employment and Housing Act) as he was terminated shortly after filing a workers compensation claim for his industrial injury, and there was strong evidence that his manager was very unhappy about him requesting reasonable accommodations.
Unfortunately, I was not able to help the aggrieved employee because the statute of limitations has run on all his claims. I was curious to find out why he waited for over 2 years to contact an attorney. His answer was astounding to me - it was because his Union representative told him that he has to wait for the union grievance/arbitration to be completed before he can file an action in court. That was a terrible advice as the contract that governs the employment relationship between the employer and its employees - union members (collective bargaining agreement) only preempts and forces the parties to arbitrate out of court those disputes that CBA covers. The Ninth Circuit Court of Appeals addressed the issue of preemption of FEHA claims by CBA in several cases, one of which is Jimeno v. Mobil Oil Corp. (9th Cir. 1995) 66 F.rd 1514. In that case, the court concluded that the FEHA discrimination / retaliation claims required a pure factual inquiry, not requiring consultating with the collective bargaining agreement. Therefore, the employee's claims for disability discrimination in employment was not preempted.
Orindarily, issues that are covered by, and therefore also pre-empted by CBA, are whether the employee was terminated for "just cause" as well as working condition, wages, time off, and other terms of employment.
I hope this article will be of help those workers who submit a union grievance and will help them protect their rights to file a lawsuit in court.
California Labor Code 226.7, 512 and a number of Wage Orders of IWC (Industrial Welfare Commission) prohibit employers from employing a worker for more than five hours without a meal period of not less than 30 minutes, and from employing an employee for more than ten hours per day without providing a second meal period of not less than 30 minutes.
Section 226.7 and the applicable wage orders also require employers to provide employees ten minutes of net rest time per four hours or major fraction thereof of work, and to pay employees their full wages during those rest periods. Unless the employee is relieved of all duty during the 30-minute meal period and ten-minute rest period, the employee is considered "on duty" and the meal period is counted as time worked under the applicable wage orders.
Under section 226.7(b), and employer who fails to provide a required meal period must, as compensation, pay the employee one hour of pay at the employee's regular rate of compensation for each workday that the meal period was not provided. Similarly, an employer must pay an employee denied a required rest period one hour of pay at the employee's regular rate of pay for each workday that the rest period was not provided.