Ninth Circuit Win for Walmart Provides Clarity for Employers

| Jun 15, 2021 | Business Litigation |

 

As discussed recently on this blog, rest periods are often a fraught issue for employers. Hand-in-hand with this issue are wage statement claims, which are also often heavily litigated in class actions. With the recently discussed ruling employers were given clarity on certain practices for rest periods. The Ninth Circuit has now done similar for wage statements.

In a significant win for Walmart the Ninth Circuit ruled in favor of the company, reversing a lower court ruling that awarded plaintiffs over $100 million. The lawsuit was based on, among other issues, allegations that Walmart had committed wage statement violations. The plaintiffs argued Walmart violated California’s wage statement law by failing to provide adequate information regarding the applicable rates of pay and hours worked on its wage statements.

The wage statement issue revolved around employees who received non-discretionary bonuses over several pay periods where they worked overtime. The district court ruled that California Labor Code § 226 required Walmart’s wage statements to show the “hourly rates” and “hours worked” associated with the overtime adjustment and bonus pay.

The Ninth Circuit found this to be an error. Walmart’s overtime bonus pay was found to be an after-the-fact adjustment to compensation based on the preceding six pay periods of work during which the bonus was earned. Walmart was not required to list the rates and hours worked because there was no hourly rate in effect during the pay period for which the wage statement was provided.

While the law in this area can be tricky to navigate, it is essential to see what types of actions and policies are permissible for employers and which run afoul of the law. Here, the Ninth Circuit provided some clarity for employers in navigating class action claims regarding wage statements.

With the constant changes that can impact a business, an experienced legal team can help navigate a difficult time for businesses, particularly with the ever-changing landscape for companies during the current crisis.