Lynne Wang and two other plaintiffs, on behalf of a class of other news writers, filed a lawsuit against Chinese Daily News Inc., or CDN, alleging that they had worked more than eight hours per day and 40 hours per week without overtime compensation in violation of the Fair Labor Standards Act and the California Labor Code. The plaintiffs also alleged that they were denied meal and rest breaks, among other violations of state law. Finally, the plaintiffs claimed that CDN’s actions violated California’s Business & Professions Code Section 17200, which allows for recovery for “any unlawful, unfair or fraudulent business act or practice.”
The U.S. District Court for the Central District of California granted summary judgment in favor of the plaintiffs on the issue of whether they were exempt from overtime pay requirements. After a jury trial, the plaintiffs were awarded more than $2.5 million in damages for overtime and meal and rest period violations. The trial court also ordered CDN to pay additional damages, penalties and interest that brought the total to more than $5 million. CDN appealed, contending that the news writers were exempt from overtime pay requirements.
The U.S. Court of Appeals for the 9th Circuit in San Francisco affirmed the trial court’s judgment. With respect to the exempt status of the reporters, the court held that because CDN reporters typically wrote several stories each day, “the intense pace at which CDN’s reporters work precludes them from engaging in sophisticated analysis” such that they did not satisfy the requirements of the “creative professional” exemption. It also found that CDN was liable for violating California’s Business & Professions Code Section 17200. Wang v. Chinese Daily News Inc., 9th Cir. No. 08-56740 (Sept. 27, 2010).
Impact: Employers should carefully review overtime pay exemptions found in the federal and state overtime laws because incorrect classifications may result in substantial liability not only under those laws, but also under related state laws involving unlawful business acts or practices.
Workforce Management, December 2010, p. 10 -- Subscribe Now!