May 10 Labor & Employment Law Update

Written by: Crystal M. O'Brien, Esq.

Federal Update: Employers Must Avoid [Unintentional] Gender Discrimination

Headlining in national news much too often is retail giant Walmart with yet another claim that it is unfairly compensating employees based on gender.  In Dukes v. Walmart, the 9th Circuit determined in an April 26, 2010 decision that a class action could move forward with its claims because class representatives were able to show that consistent company policies resulted in lower wages among female workers, in addition to women having to wait longer to be promoted than their male counterparts.  Critical to the Court’s decision was whether the class was too large and how can there be a common thread connecting each woman’s case with a common theme of “typical” discrimination as complained of by the parties bringing the lawsuit.  The Court was persuaded that historical evidence could show “common” and “typical” examples of gender discrimination and review of specific workplace practices and testimony of key women would satisfy procedural requirements for evaluating this lawsuit which could potentially impact the lives of millions of former and current female employees of Walmart.  What will ultimately happen with the claims that may now be presented remains to be seen.  The lesson gleaned, however, is that employers must regularly audit their payroll records and management structures to assure that opportunities to earn and advance are evenly distributed among all genders, races, and classes of individuals. 

To read the decision in full, click here.

California Update: Are Managers Always Exempt Employees?

In Arenas v. El Torito Restaurants, Inc., numerous managers of the restaurant chain claimed that they regularly spend more than one-half of their day performing cleaning services as opposed to furthering the management goals of the company.  For this reason, they claim that they are not “exempt” from overtime laws and are owed back-pay and related damages.  However, this argument did not persuade a California appellate court.  So in an April 6, 2010 decision, the 2nd Appellate District issued a decision clarifying why El Torito managers were not able to pursue back-pay claims on a class basis.  In other words, individual claims of the various managers must be proven on a case-by-case basis.  This is because a review of the managers’ claims demonstrated that each case was too unique so as to be grouped with the others and there was not sufficient commonality of duties to demonstrate a business practice that resulted in a misclassification.  (To read the full opinion, click here.)

The classification dilemma of “exempt vs. non-exempt” continues and will likely always be a legal “hot bed” because there are no clear-cut rules.  We at MMC strongly encourage all employers to always err on the side of caution and classify employees as non-exempt whenever it is not entirely clear that an employee is performing more independent analysis or managerial work than administrative or task-oriented work.  You are always welcome to discuss matters like these with our friendly, knowledgeable staff.  Our Human Resources Department is available from 9 to 6 p.m. at (800) 899-MMCI (6624).

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