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California Workers Win on Back Pay

The California Supreme Court has unanimously ruled that workers have at least three years to sue employers for back pay when they fail to provide meal and rest periods required by law, giving momentum to wage and hour lawsuits that have been filed at...

LOS ANGELES — The California Supreme Court has unanimously ruled that workers have at least three years to sue employers for back pay when they fail to provide meal and rest periods required by law, giving momentum to wage and hour lawsuits that have been filed at an unprecedented level in the state’s courts.

In a case filed by a former store manager against Kenneth Cole Productions Inc., the court clarified whether employers had to pay a wage or a penalty. In determining employers must pay a wage, the decision reversed a judgment by the California Court of Appeal, which said the payment was a penalty subject to a one-year statute of limitations. This latest decision affects a wide range of industries, including retail, manufacturing and restaurants.

The plaintiff, John Paul Murphy, worked as a Kenneth Cole store manager from June 2000 until June 2002. He received a weekly salary and handled human resources paperwork, processed markdowns and performed other duties, according to court documents. Murphy regularly worked 9- and 10-hour days and was only able to take an uninterrupted meal period about once every two weeks. He rarely had the opportunity for a rest period. In October 2002, four months after leaving Kenneth Cole, Murphy filed a wage claim with the California Labor Commissioner’s office, which issued a decision in Murphy’s favor in July 2003.

A spokeswoman for New York-based Kenneth Cole declined comment.

Greg Weisman, chairman of apparel practices at law firm Silver & Freedman in Los Angeles, said the typical problem that retailers face is misclassifying their managers as exempt employees when they end up stocking inventory, working on the sales floor or handling other duties associated with nonexempt employees who are entitled to overtime. The court ruling on Monday applies only to nonexempt employees.

“For the retail industry, it means that they have to be more careful about monitoring strict compliance of the complicated morass of wage and hour laws in California,” Weisman said. “It’s yet again proven [California] to be a difficult place to do business.”