High Court Ruling on Wage Case Seen as Anti-Business

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While the ramifications aren’t fully clear, the California Supreme Court’s ruling in a recent wage and hour case is a significant setback for business.


As part of its unanimous decision in Murphy vs. Kenneth Cole Productions, the court ruled that employees can sue their companies for up to three years of lost wages in meal and rest period cases; previously no standard existed but many courts limited wage awards to one year.


“It clarifies a big argument between employers and employees,” said John Quisenberry of the Quisenberry Law Firm, which specializes in wage and hour cases. “The decision triples the amount of damages compared to what the employers were insisting was the rule.”


Institution-side lawyers were less than pleased with the ruling.


“It’s an anti-business, anti-employer decision,” said Labor Attorney Robert Naeve of Morrison & Foerster LLP. “If we needed another way to make it difficult to conduct business in California, the Supreme Court just provided it.”


Employers are required to give employees a 30-minute break after five hours worked, and more breaks as the shift wears on. California Labor Code section 512 and California’s Industrial Welfare Commission require employers to provide meal and rest periods during the workday. Labor Code section 226.7 requires employers to pay one additional hour to employees who have not taken these meal or rest periods.


The Supreme Court case hinged on whether the time in question constituted a wage for the worker, or a penalty for the employer, in addition to how far back employees could sue their employers for lost time.


Following the court’s decision, if disputed time is determined to be a wage, employees can sue their bosses for up to three years of back pay. If the court determines the time is a penalty for the employer, the statute of limitation will be one year.


“The Supreme Court’s decision recognizes the state’s strong public policy in favor of hard-working employees,” Quisenberry said. “The Court was unanimous, as it also was in its earlier decision (involving Sav-on drugstores) that upheld workers’ rights to pursue a class action against their employer to recover unpaid overtime wages. Together, these two decisions tell employers to bring their labor practices in line with the laws or suffer the economic consequences.”


Quisenberry said this decision was unlikely to increase the volume of cases filed, because there’s already at least one filed every day in California.


“I have a hard time imagining there being any more than this,” he said.


Morrison & Foerster advised that in light of the decision, employers should post applicable wage orders in the workplace, consider preparing written policies relating to rest periods, train supervisors to enforce them, maintain records of these breaks, and consider voluntarily paying workers who haven’t taken breaks.



White Collar

Kirkland & Ellis LLP recently buoyed its Los Angeles commercial white collar practice group with the hiring of two former assistant U.S. Attorneys, Mark Holscher, formerly of O’Melveny & Myers LLP, and Jeffrey Sinek, from Thelen Reid Brown Raysman & Steiner LLP.


The two men were law school roommates and are close friends (Sinek was Holscher’s best man), but they both said that the move was about the trial opportunities and Kirkland’s high profile as one of the nation’s largest firms.


“It’s a very exciting opportunity to be at one of the top litigation firms in the country,” Holscher said. “I loved O’Melveny; it’s a great firm, but they have such a big white collar practice, they’ll hardly miss a beat.”


Sinek and Holscher will be the only white-collar attorneys on the West Coast for Kirkland, at least to start.


“It was a great opportunity for Mark and me to work together and a great opportunity to work at a firm that has a much more significant national footprint,” Sinek said. “That’s important to the kind of work I do.”



Around Town

Guy Halgren was re-elected chairman at Sheppard Mullin Richter & Hampton LLP. He was first elected in 2001. Mary Carter Andrues will join Howrey LLP as a partner in Los Angeles effective June 4. She’s currently chief of the public corruption and civil rights section in the U.S. Attorney’s Office in the Central District of California. Stephen Farkas joined Kirkpatrick and Lockhart Preston Ellis Gates LLP in Los Angeles as an associate in the toxic tort division. He comes from Walsworth, Franklin, Bevins & McCall in Orange. Christopher J. Rizza has joined McGuireWoods LLP as an associate in the firm’s real estate department. He was previously a project manager for Watson & Associates in Seal Beach.



Staff reporter Emily Bryson York can be reached at (323) 549-5225, ext. 235, or at

[email protected]

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