Welcome to California: If you Work in California You are Entitled to the Protection of California’s Right to Overtime and other Wage Laws Regardless of Where you Reside

I’m not so sure why so much attention has been paid to Sullivan v. Oracle, other than the case has been up and down and all around the court system. See, e.g., Sullivan v. Oracle, 51 Cal.4th 1191 (2011); Sullivan v. Oracle, 662 F.3d 1265 (9th Cir. 2011). The recent holdings (by the Ninth Circuit and California Supreme Court) that – if you work in the great State of California – you are entitled to the protections of California law including overtime and the prohibition against unfair business practices, seems rather ho-hum when you think about it.

I’m not sure what Oracle was thinking when it invited employees from other states to enjoy the sunshine in California, but then left them out in the cold when it came to the basic rights of our overtime law while working on our turf. If the courts permitted that type of conduct, wouldn’t we just be encouraging employers to import cheap labor from Montana and Utah to do our work here in California? Talk about creating sweatshops right here in the golden state.

Let’s look at Oracle’s bold practices and inability to learn a lesson. Year after year, Oracle hired “instructors” to train customers on its products. Some of these instructors lived and worked in California; some lived and worked in other states; and some lived in other states but worked part of the time in California. Oracle classified these employees as “teachers,” to make sure that these folks were exempt from overtime laws. Voila -employees worked overtime for no extra pay.

However, the employees had a better idea. They filed a class action and demanded overtime. Consequently, Oracle saw a bit of the light, and started paying its California instructors overtime under California law. Then, Oracle saw a bit more of the light, and started paying its instructors of other states overtime under federal law (the Fair Labor Standards Act, or “FLSA”)for their time spent working in states other than California. Oracle held fast on its position for paying employees from other states overtime for their time spent working in California: no overtime for this! Non-California residents thus sued for the time they spent working in California, claiming they were entitled to the protection of California law while working in California, even if they were non-residents.

What did Oracle gain for holding out on this last issue? Hopefully a good lesson that it should have settled all its claims earlier on, rather than engaging in a torturous route through the entire court system including the California Supreme Court and the federal district and appeals court.

Both the California Supreme Court, in Sullivan v. Oracle, 51 Cal.4th 1191 (2011), and the Ninth Circuit, in Sullivan v. Oracle, 662 F.3d 1265 (9th Cir. 2011), ruled for the employees. They held that California law protects employees working in California regardless of the employees’ residences in other states, and that this included the protection of California’s Unfair Business Practices Act, Ca. B & P. Section 17200 et seq.

This case demonstrates that litigating a simple issue to death is not always the wisest idea!

Jody LeWitter

April 4, 2012

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