California Supreme Court Rules that State Overtime Rules Apply to Out –Of-State Employees Who Work in California

In today’s global economy, a company may well employ staff who work in several states or even in different countries.  One legal issue that arises in such circumstances is whether California’s overtime laws apply to such out-of-state employees – i.e., persons who are domiciled elsewhere but work in California only part of the time.

In Sullivan v. Oracle Corporation, the state Supreme Court ruled that California’s overtime laws do apply to such persons, and that a violation of such laws can serve as a predicate for an “unfair business practice” claim under section 17200 of the state’s Business & Professions Code. (The court also ruled that a parallel violation of the federal Fair Labor Standards Act may not serve as a predicate to an action under section 17200.)

These questions were answered in response to a reference from the Ninth Circuit federal court of appeals, which has pending  a case that was brought against Oracle Corporation, which for years utilized “instructors” to train customers in the use of the company’s software, but did not pay them overtime because the company though they were exempt.  The employees resided in other states and only worked part of the time in California (the three named representative plaintiffs worked in California for 74 days, 110 days and 20 days, respectively, during the three year period in question.)

For your convenience, a copy of this important ruling is attached.

We regularly advise employers, unions, and individual employees about issues that arise in the workplace. Feel free to give us a call if you have questions or issues in this area.