Last year saw the National Labor Relations Board (NLRB) take class action waivers head-on, the Department of Labor (DOL) double the salary cutoff for overtime exemptions, the Supreme Court open the door for statistics in class certification, and other novel claims under California law. This presentation addresses changes in the wage and hour landscape and strategies to help companies face them. Areas addressed include: - An update of significant cases under the FLSA - The DOL’s new “white collar” overtime exemptions - The future of arbitration agreements with class action waivers California update: novel claims being asserted and scrutiny over settlements

1. Wage and Hour eLunch
A Year in Review
Presented by: Joan B. Tucker Fife
Emilie C. Woodhead
July 14, 2016

2. Today’s eLunch Presenters
Joan Fife
Partner
San Francisco
jfife@winston.com
Emilie Woodhead
Of Counsel
Los Angeles
ewoodhead@winston.com
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3. Topics
• Federal
• Department of Labor New Overtime Regulations
• Supreme Court Decisions
• Certification Cases
• Arbitration Agreements And Class Action Waivers
• Settlements
• California
• New Theories
• PAGA Cure Provision
• Meal Breaks
• Miscellaneous
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4. Department of Labor New Overtime
Regulations

5. Department of Labor’s Adopted Regulations
• Take effect on December 1, 2016
• Salary standard raised to $913/week, $47,476 annually
• Formerly $445/week, $23,660 annually (last updated in 2004)
• Total annual compensation requirement for highly compensated
employees set at annual equivalent of 90th percentile of full-time
salaried workers nationally $134,004
• Salary threshold automatically updates every three years at 40th
percentile benchmark
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6. Department of Labor’s Adopted Regulations
• White House believes up to 5 million workers will be affected by new
law
• Articles speculate employees converted from salaried to hourly could
end up receiving less pay
• Some disappointed level not raised to $50,000 as was originally
proposed in 2015
• Non-profits, higher education institutions, and tech start-ups have all
publically complained new regulations will have negative impacts
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7. Supreme Court Decisions

8. Tyson Foods v. Bouaphakeo 136 S.Ct. 1036
(Mar. 22, 2016)
• Hourly workers at Iowa pork processing plant filed FLSA collective
action to collect overtime for time spent donning/doffing and walking
to/from work stations
• Plaintiffs won $2,892,378 jury verdict (liquidated damages raised
figure to $5,785,757) in Northern District of Iowa
• Tyson appealed, arguing statistical analysis used to reach damages
amount was improper
• 8th Circuit affirmed trial court’s decision
• U.S. Supreme Court held that statistical evidence could be used for
class certification
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9. Wal-Mart Stores v. Braun (U.S. Apr. 2016)
• Class of 200,000 Wal-Mart workers who alleged they were denied rest
breaks won $188 million jury verdict in 2006 in Pennsylvania state
court
• On appeal to Pennsylvania Supreme Court, Wal-Mart argued state
court conducted trial by “formula,” which is barred by Dukes
• U.S. Supreme Court denied certiorari in April 2016
• Court may have choosen not to grant cert because of its Tyson
decision
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10. Certification Cases

11. Baugh v. CVS Health (E.D. Penn. July 2015)
• Pharmacist brought putative FLSA class action alleging failure to pay
OT to pharmacists who “floated” between workplaces
• Plaintiff asked for an extension of the FLSA 2 year statute of
limitations to three years because of CVS’s willful conduct
• Court found no evidence of willfulness on CVS’s part, and declined to
extend SOL for FLSA claims
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12. Stiller v. Costco (9th Cir.)
• Appeal currently pending before 9th Circuit
• Southern District of California previously decertified class
• Original claims stem from allegations that the plaintiffs were not paid
overtime during closing procedures
• Plaintiffs argue Southern District erred by not considering all factors of
claims and also gave improper dispositive weight to the size of the
proposed class
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13. Howard v. CVS (9th Cir. Jan. 2016)
• 9th Circuit affirmed 2014 decision denying class status to the plaintiffs
• Plaintiffs claimed they were forced to work off-the-clock and were not
properly compensated
• 9th Circuit held the plaintiffs failed to produce enough data to back up
claims
• Evidence showed wide-ranging differences in time worked by the
plaintiffs
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14. Moore v. Coty (C.D. Cal. Dec. 2015)
• Plaintiff designed bottle labels for the defendant’s perfume products
• Plaintiff alleged violations of FLSA, Cal. Labor Code, and UCL for
failure to pay overtime and meal and rest breaks
• Court denied class certification under Rule 23
• Plaintiff failed to show her claims were common to those of the
proposed class, and the plaintiff was an inadequate class
representative because she misleadingly double-billed her time
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15. Arbitration Agreements and Class Action
Waivers

16. 16

17. Silver-Greenberg, “Beware the Fine Print,” New
York Times, Oct. 31, 2015
• In class actions pushed into arbitration between 2010 and 2014,
judges ruled in favor of companies in four out of five cases
• Use of arbitration clauses has become standard across many
industries
• Growing concern exists regarding lack of oversight and potential pro-
business bias in arbitration
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18. Lewis v. Epic (7th Cir. May 2016)
• Misclassification suit brought by technical writers
• Defendant used arbitration agreement containing class waivers
• 7th Circuit held agreements illegal, joining NLRB’s position
• Decision disagrees with other circuits
• Petition for certiorari to Supreme Court expected
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19. Cellular Sales of Missouri LLC v. NLRB (8th Cir.
June 2016)
• NLRB found Cellular Sales violated NLRA by requiring workers to sign
arbitration agreements, precluding class action claims
• 8th Circuit did not enforce NLRB order because it interfered with right
to protected activity
• Panel agreed with NLRB’s finding that Cellular Sales violated NLRA
by attempting to limit employees’ ability to file charges with the Board
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20. Robinson v. J & K Admin. (5th Cir. Mar. 2016)
• Texas federal court compelled arbitration to determine if workers could
bring class claims for unpaid overtime in arbitration proceeding
• 5th Circuit held a broadly worded arbitration agreement allows
arbitrators to decide if class and collective actions are permissible
under agreement
• Supreme Court declined review
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21. Baltazar v. Forever 21 (Cal. S.C. Mar. 2016)
• Plaintiff alleged she faced sexual harassment and harassment based
on race and challenged arbitration agreement for including an
injunctive relief clause
• California Supreme Court ruled clause was not unconscionable
• Court also rejected the plaintiff’s contentions that not attaching model
arbitration rules was unconscionable
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22. Ling v. P.F. Chang’s China Bistro (Cal. App. 4th
Mar. 2016)
• Arbitrator awarded around $240,000 in costs and attorney’s fees to
P.F. Chang’s following arbitration where plaintiff partially successful
• Court found arbitrator had exceeded his power because award was
contrary to public policy
• Court of Appeal affirmed trial court’s ruling because attorney fees were
improper under section 1194 of Cal. Lab. Code
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23. Harris v. Tap Worldwide (Cal. App. June 2016)
• Plaintiff signed acknowledgment of receipt of arbitration agreement,
but did not sign agreement itself
• Plaintiff alleged defendant violated FEHA and wrongfully terminated
him
• Defendant moved to compel arbitration
• Court of Appeal overturned Superior Court, and compelled arbitration,
even though plaintiff never signed agreement
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24. Settlements

25. In Re: Foot Locker Litigation (E.D. Pa. July 2015)
• Five suits consolidated into single MDL involving around 9,500
employees
• Litigation began in 2007, class certified in 2011, and in July 2015
cases settled for $7.15 million
• Average approximately $750 per employee
• Employees made wide ranging claims from not being compensated for
opening and closing to having their time shaved
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26. Litt v. Western Stone & Metal (N.D. Cal. July
2015)
• $650,000 settlement between jewel retailer and store workers alleging
FLSA OT violations
• 280 California workers and 1100 workers from other states
• Approximately $1,194 on average for California
• Approximately $287 on average for employees in other states
• Settlement reached before class certified
• Western Stone paid various bonuses and incentive pay to nonexempt
employees, but allegedly failed to include value of compensation in
regular rate of pay
• Plaintiffs alleged they were not paid required level of OT pay
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27. Mosqueda v. UniFirst (C.D. Cal Aug. 2015)
• $2.6 Million settlement involving 733 class members
• Approximately $3,500 on average per employee
• Settlement reached before class certified
• Plaintiffs alleged policies involving rounding down time worked, failing
to provide appropriate breaks, and failing to pay wages due at
termination
• Plaintiffs held diverse positions ranging from truck loader to health
physics technician
• Plaintiffs took issue with receiving payment on debit cards, subject to
transaction fees
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28. Sanchez v. Frito-Lay (E.D. Cal. May 2016)
• Plaintiff filed suit on behalf of nonexempt California employees
allegedly subject to policies that denied them OT, compensation for
unused vacation, and breaks
• $600,000 settlement denied on the grounds that plaintiff’s counsel,
“severely compromised any potential recovery before arriving at the
negotiating table”
• Court concerned with unnecessary and unjustified discounting of the
plaintiff’s claims
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29. Taylor v. FedEx Freight (E.D. Cal. May 2016)
• 1,600 California drivers brought state labor law claims alleging
FedEx’s mileage-based payment scheme did not account for non-
driving activities
• $3.75 million settlement reached
• Approximately $2,343 on average per employee
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30. Connell v. CVS Pharmacy (Cal. July 2015)
• 1,600 pharmacists brought three separate class actions alleging CVS
forced employees to work seven days in a row without overtime
• $7.4 million settlement approved
• Class members received on average $2,846
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31. Bickley v. Schneider National (N.D. Cal. Sept.
2015)
• A certified group of 6,000 truck drivers alleged employer violated state
wage and hour laws and failed to provide meal and rest breaks
• Parties reached a $28 million settlement agreement after case had
been earlier certified in 2012
• Class members received on average $3,500
• Allegations related to defendant failing to allocate compensation for
certain work activities such as paying for all miles driven, not providing
meal and rest breaks, and failing to pay accrued vacation
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32. In Re High Tech Employees (N.D. Cal. Sept.
2016)
• Employees alleged Apple, Google, and other tech firms conspired to
depress salaries by 10-15% between 2005-2009
• Class of approximately 64,000 employees certified October 2013
• District Court originally refused to approve $325 million settlement
because it was too low
• District Court approved $415 million settlement
• Approximately $5,860 on average per employee
• Plaintiffs’ counsel requested $81 million but awarded $40 million
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33. Cotter v. Lyft (N.D. Cal. June 2016)
• Court originally rejected $12.25 million settlement because it failed to
properly calculate damages for drivers
• Revised deal for $27 million incorporated data from Lyft about proper
mileage reimbursements for drivers
• Revised deal preliminarily approved
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34. O’Connor v. Uber (N.D. Cal. July 2016)
• Agreement to settle two misclassification class actions for up to $100
million
• Court refused to initially grant preliminary approval, and instead
requested supplemental briefing to clarify inter alia, how parties
conducted calculations
• Supplemental briefing not yet submitted
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35. California

36. New Theories??
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37. PAGA Cure Provision
• Governor Brown signed AB 1506 October 2, 2015 to address
increasing PAGA litigation
• Bill took effect immediately
• Allows employer 33 days from postmark of notice to cure certain
violations
• Only applies to wage statement claims regarding beginning and end
date or name and address violations
• Cure is achieved by providing affected employees compliant wage
statements from three years prior to notice and making required
changes to future wage statements
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38. PAGA Cure Provision
• Some hoped cure period would be longer and allow more violations to
be curable
• No ability to cure violations involving gross wages earned, total hours
worked, piece rate and piece rate units earned, all deductions, net
wages earned, and all applicable hourly rates and the number of
hours worked at each rate
• Employer can only use cure provision once in 12 month period
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39. Meal Breaks
• Safeway v. Superior Court of Los Angeles Cty (Sup. Ct. Ca. July
2015), review denied (Oct. 21, 2015)
• Employees asserted putative class claims for violations of the Labor Code
involving non-payment for missed meal breaks
• Court permitted uniform record of non-payment to warrant class
certification, finding it implausible that thousands of employees never
missed a meal break
• Defendants unsuccessfully argued that the plaintiffs did not allege there was
a policy of denying meal breaks
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40. Meal Breaks
• Taco Bell Wage and Hour Actions (E.D. Cal. Mar. 2016)
• 134,000 workers alleged several claims including a policy of paying 30
minutes of wages when an employee skipped a meal break
• Fresno jury agreed with employees’ state law claims regarding underpay for
missed meal breaks, awarding class $496,000
• Jury denied several other state law claims including failure to provide meal
breaks from 2003-2013
• Case on appeal to the 9th Circuit
• Plaintiffs requested $7.3 million in attorney fees
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41. Miscellaneous

42. Tip Offsets
• Steele v. Leasing Enterprises (5th Cir. June 2016)
• Employees brought FLSA suit because restaurant chain took 3.25% of tips
received via credit card
• District Court and 5th Circuit both found this offset exceeded restaurant’s
direct costs to convert tips to cash and ruled for employees
• Court held liquidated damages were not available because restaurant had
good faith belief in compliance with FLSA
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43. Is Document Review “the Practice of Law”?
• A question in recent cases involving contract attorneys performing
document reviews and subsequently making claims for OT under
FLSA
• Law firms have countered that these attorneys are engaged in practice
of law and therefore exempt
• Henig v. Quinn Emanuel (S.D.N.Y. Dec. 2015)
• Contract attorneys not eligible for overtime when they solely do document
review because coding documents required professional judgment
• Lola v. Skadden (2d Cir. July 2015)
• Document review is not per se practice of law under the FLSA
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44. Thank You
Joan Fife
Partner
San Francisco
jfife@winston.com
Emilie Woodhead
Of Counsel
Los Angeles
ewoodhead@winston.com
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