By Michael Kun and Betsy Johnson
In a much-anticipated decision, the California Supreme Court has expanded the scope of California’s complex wage-hour laws to non-resident employees who perform work in California. While the decision leaves more than a few questions unanswered, it will require a great many employers to review their overtime and other payroll practices. Perhaps just as importantly, it will likely open the door to lawsuits, including class actions, regarding prior overtime and payroll practices.
The case, Sullivan v. Oracle, has had a tortured history. In the case, several Arizona and Colorado residents who were employed as instructors by Oracle, which is headquartered in California, filed suit alleging that they were entitled to overtime under California law on those occasions when they performed services in California. Oracle had treated the instructors as exempt employees and did not pay them overtime. Because the issue was a novel one involving interpretation of California state laws, the federal Ninth Circuit Court of Appeal certified issues for the California State Supreme Court to decide.