Friday, May 3, 2019

California business consultant Cyrus Batchan comments on Troester v. Starbucks Co., addressing whether the de minimis doctrine under the federal Fair Labor Standards Act applies to unpaid wages claims under California labor laws

Cyrus Batchan, California Business Consultant
The factual background of the case is laid out in the opinion: “On August 6, 2012, plaintiff Douglas Troester filed the original complaint in an action in Los Angeles County Superior Court on behalf of himself and a putative class of all nonmanagerial California employees of defendant Starbucks Corporation (Starbucks) who performed store closing tasks from mid-2009 to October 2010. Troester worked for Starbucks as a shift supervisor. Starbucks removed the action to federal district court and moved for summary judgment on the ground that Troester’s uncompensated time was so minimal that Starbucks was not required to compensate him. Troester submitted evidence that during the alleged class period, Starbucks’s computer software required him to clock out on every closing shift before initiating the software’s ‘close store procedure’ on a separate computer terminal in the back office. The close store procedure transmitted daily sales, profit and loss, and store inventory data to Starbucks’s corporate headquarters. After Troester completed this task, he activated the alarm, exited the store, and locked the front door. Troester also submitted evidence that he walked his coworkers to their cars in compliance with Starbucks’s policy. In addition, Troester submitted evidence that he occasionally reopened the store to allow employees to retrieve items they left behind, waited with employees for their rides to arrive, or brought in store patio furniture mistakenly left outside.”

District Court found that over a 17-month period, Troester worked an additional 12 hours and 50 minutes, little over a $100 worth at a minimum wage of $8 per hour. Thus, the district court ruled that de minimis doctrine applied and granted summary judgment in favor of Starbucks.  On appeal, the Ninth Circuit certified the question to the California Supreme Court, whether federal FLSA de minimis doctrine was recognized under California law and whether California wage law had its own de minimis doctrine.

California Supreme Court first concluded that neither California statute nor Industrial Wage Commission wage orders adopted federal de minimis doctrine for California wage claims.  As to whether California law recognizes its own form of de minimis exception to wage laws, the Court noted that “application of a de minimis rule is inappropriate when ‘the law under which this action is prosecuted does care for small things.’”  The Court went on to explain that “the regulatory scheme of which the relevant statutes and wage order provisions are a part is indeed concerned with ‘small things.’”  Therefore, the de minimis rule did not apply to unpaid wage claims in California.
 
The case is Troester v. Starbucks Co., S234969.

*** Cyrus Leon Batchan is a business consultant in Sherman Oaks, California. He has significant “hands on” experience with hospitality businesses. Currently, he is involved in the hospitality businesses Lock & Key, Nightshade, Skylight Nha Trang, and East-West Brewery (as Advisor). Mr. Batchan grew up in a restaurant family and worked every job from dishwasher, cook, delivery driver to bartender. Initially, he managed an investment fund developing real estates all throughout the greater Los Angeles Area. In 2013, he opened Lock & Key, an upscale lounge, in Los Angeles. Most recently, he has been involved in Nightshade, the first restaurant for Top Chef winner Mei Lin along with partner Francis Miranda of N°8. The expansive space, which goes into the former Cerveteca, will feature a pan-Asian menu infused with modern touches and California sensibilities, with Lin herself calling the experience “fine food in a casual setting.” Think fine dining touches and plating with flavor influences from Italy, Japan, and China.



Cyrus Leon Batchan is a business consultant in Sherman Oaks, California, focusing on restaurant and bar businesses. He has significant “hands on” experience with businesses. Cyrus Batchan received a Juris Doctor Degree from the University of San Diego, California. Website: https://cyrusbatchan.us

California business consultant Cyrus Batchan discusses California laws with respect to equal pay and salary history



Cyrus Batchan, California Business Consultant

The California Equal Pay Act has been in force since 1949, prohibiting employers from paying employees who perform the same work different wages based on the employee’s gender.  Despite the law, however, female workers’ wages continue to stagnate behind their male co-workers, estimated at 80% of the male co-workers’ wages.  As such, California legislature has continued to pass legislative initiatives and updates aimed at remedying this disparity.

One law aimed at addressing wage disparity is the prohibition against employers asking applicants about their salary history.  Furthermore, the law also prohibits employers from using salary history in making hiring decisions.  It does not, however, restrict employees from volunteering their salary history without prompting from the employer and the employer considering such history in setting the employee’s salary once volunteered.  Still, such history cannot be the sole factor in disparity between male and female co-workers.

One of the provisions of the California Equal Pay Act received further clarification with a recent legislative update.  The law required employers to provide a pay scale for the position sought to an applicant upon reasonable request.  Previously, the key terms such as “applicant” and “reasonable request” were undefined by the statute.  A recent update has provided definition for these terms.  “Applicant” is defined as “an individual who is seeking employment with the employer and is not currently employed with that employer in any capacity or position.”  “Reasonable request” is defined as a “request made after an applicant has completed an initial interview with the employer.” 

There are certain acceptable reasons for disparity in pay.  For example, employers may pay similarly situated employees differently based on seniority or merit system.  Different pay may also be justified on quantity or quality of work.  There is also the broad catch-all of a “bona fide factor other than sex, race, or ethnicity.”  Employer relying on such bona fide factor would have to show some reasonable basis for disparity in pay based on business necessity.  Also, employers may not prohibit employees from discussing their salary amongst themselves.

With continued focus on pay equality, entrepreneurs will have to ensure their pay structure and hiring practices comply with relevant state and federal requirements, notes Cyrus Batchan.

*** Cyrus Leon Batchan is a business consultant in Sherman Oaks, California. He has significant “hands on” experience with hospitality businesses. Currently, he is involved in the hospitality businesses Lock & Key, Nightshade, Skylight Nha Trang, and East-West Brewery (as Advisor). Mr. Batchan grew up in a restaurant family and worked every job from dishwasher, cook, delivery driver to bartender. Initially, he managed an investment fund developing real estates all throughout the greater Los Angeles Area. In 2013, he opened Lock & Key, an upscale lounge, in Los Angeles. Most recently, he has been involved in Nightshade, the first restaurant for Top Chef winner Mei Lin along with partner Francis Miranda of N°8. The expansive space, which goes into the former Cerveteca, will feature a pan-Asian menu infused with modern touches and California sensibilities, with Lin herself calling the experience “fine food in a casual setting.” Think fine dining touches and plating with flavor influences from Italy, Japan, and China.

 

Cyrus Leon Batchan is a business consultant in Sherman Oaks, California, focusing on restaurant and bar businesses. He has significant “hands on” experience with businesses. Cyrus Batchan received a Juris Doctor Degree from the University of San Diego, California. Website: https://cyrusbatchan.us

California business consultant Cyrus Batchan comments on Troester v. Starbucks Co., addressing whether the de minimis doctrine under the federal Fair Labor Standards Act applies to unpaid wages claims under California labor laws

Cyrus Batchan, California Business Consultant The factual background of the case is laid out in the opinion: “On August 6, 2012, plainti...