Under California Labor Code section 351, tips are the “sole property” of the employees for whom they are left. As such, “employers” may not “collect, take, or receive” employee tips.
The issue in this case was who is the “employer” for purposes of section 351? At Starbucks, “shift supervisors” shared tips with other baristas. A…
State Court:
In Brinker Restaurant Corp. v. Superior Court (Hohnbaum), a group of hourly non-exempt employees brought a class action against the restaurant employer claiming that the employer failed to comply with meal and rest period obligations and also required employees to work off the clock. The employees specifically claimed that: 1) the employer’s practice of having employees take “early lunches” shortly after starting their shift and then requiring them to work another five to ten hours without receiving another meal period violated Labor Code section 512(a) and the wage orders; 2) they were not provided their rest periods between their second and fourth hour of work, and were not provided the rest period before the first meal period; and 3) they were required to work off the clock when they were clocked out for their meal periods.
The employees argued that the wage and hour violations were amenable for class treatment because the employer’s non-compliance with wage and hour requirements could be determined by time card records and the employer’s policies and practices. The trial court agreed and granted class certification. The employer petitioned for a writ of mandate to the court of appeal. The court of appeal issued an unpublished decision which went up to the California Supreme Court. The Supreme Court vacated the court of appeal’s original decision and transferred the matter back to the court of appeal for reconsideration. It was on reconsideration that the court of appeal concluded that the class certification order from the trial court was erroneous and must be vacated because the trial court failed to properly consider the elements of the employees’ claims in determining whether they are susceptible to class treatment. In discussing the elements of the employees’ claims, the court of appeal handed down the following encouraging pronouncements:
This case concerns the lawfulness of defendant Costco Wholesale Corporation’s formula for computing overtime compensation on semi-annual bonuses paid to hourly employees. The trial court determined that defendants’ bonus overtime formula for the class of employees who qualify for the maximum base bonus (plaintiffs) violates California law, and ordered use of a different formula. The court concluded that defendant’s formula violated neither California nor federal law, and reversed the judgment with directions to enter judgment for defendant.
a. The Base Bonus.
Costco pays a formula-based bonus, based on paid hours, to long-term hourly employees. To be eligible for the bonus, paid in April and October, these employees must: (1) have been paid a specified number of hours for continuous service — 8,000 hours (approximately four years) for those hired before March 15, 2004, and 9,200 hours (approximately 4.6 years) for those hired after that date; (2) generally be at the top of their pay scale; and (3) have been employed by defendant on April 1 for the April bonus and October 1 for the October bonus. The maximum semi-annual base bonus amount is $2,000 for those with less than 10 years of service, $2,500 for those with 10 to 14 years of service, $3,000 for those with 15 to 19 years of service, and $3,500 for those with 20 or more years of service.Continue Reading The Proper Calculation of Overtime Pay on Bonus Compensation: Marin, et al. v. Costco Wholesale Corporation
According to Union proponents, the biggest obstacle to a modern organizing campaign is management delay tactics. In a traditional organizing campaign, union representatives meet with bargaining unit employees (i.e. all the mechanics at a car dealership) and talk with them about union representation. The union then attempts to secure signed authorization cards from the employees. If the union can show that a majority of the employees in the bargaining unit favor union recognition, the employer may voluntarily forego an election and recognize the union. If, however, the employer refuses or the card-check process generates at least 30%, but not majority, employee support, the union may petition the NLRB for a secret ballot election administered by the NLRB. Unions plead for majority card-check rules because they claim that employees suffer at the hands of underhanded management tactics during traditional Board elections. “These delays make it too easy for employers to intimidate and coerce workers, including by dismissing them for organizing. And this in turn diminishes employee interest in unions and thus undercuts the right to collective bargaining they are supposed to enjoy.” However, unions still have the same success rate in traditional elections (approximately 60%) as they did in 1965.
Organized Labor’s pleas were answered when the Employee Free Choice Act (EFCA), which was co-sponsored by then Senator Barack Obama, was introduced. Under the EFCA, unions would no longer have to go through the NLRB traditional election process to gain recognition. Instead, a union must obtain signed authorization cards from a majority of employees in the bargaining unit. Additionally, the EFCA would invoke binding interest arbitration if labor and management cannot agree upon the first contract within nine months. Once in arbitration, a government appointed arbitrator would decide the parties’ obligations in the first contract. Because of the results of the November 2008 national elections, we are likely to see some sort of change in 2009. Barack Obama promised to sign EFCA. Should the EFCA pass, unions estimate that they will be able to organize millions of new workers. Below are some of the more notable features of the EFCA in detail:Continue Reading The Employee Free Choice Act
Traditional labor law in this country has essentially been a non-issue over the past decade. Today unions represent 12% of all American workers (7.4% in the private sector), down from a high of 35% in 1955. However, thanks to the recent dramatic shifts in Washington, this trend may soon be changing. Labor law in the…
