Where will the next California Supreme Court decision on state minimum wage laws come from?

Francis Ford Coppola made three "Godfather" movies. Henry VIII had six wives. Liz Taylor had seven husbands (eight, if you count Richard Burton twice). But one burning question among California employer lawyers these days is whether, with its recent decision in Frlekin v. Apple (the latest in its early 21st century minimum wage pentology), the California Supreme Court is finished, for now, with minimum wage cases?

Since 2000, the court has issued five decisions directly addressing the scope of our state's minimum wage protections. For the most part, these decisions underscore California's commitment to afford workers in this state significantly better protections than they receive under federal law.

The court started the ball rolling in Morillion v. Royal Packaging Co. in 2000, when it ruled that agricultural employees were subject to their employer's "control" during time spent traveling to and from work locations on employer-provided buses. Consequently, such time was compensable as "hours worked" under Industrial Welfare Commission wage orders defining hours worked as time during which an employee is subject to the control of their employer.

There was a significant gap in time until Mendiola v. CPS Security Solutions, Inc. in 2015. In Mendiola, the court ruled that on-call hours at a worksite represented "hours worked" for overtime purposes, and the employer was not entitled to exclude "sleep time" from calculation of hours worked.

Next, in 2018, in Troester v. Starbucks Corp., the court held that California's wage and hour statutes and regulations have not incorporated the de minimis doctrine found in federal Fair Labor Standards Act case law (which allows employers to ignore small increments of work time typically occurring at the beginning and end of employees' workdays). Furthermore, although the court found some historical common law support in California for a de minimis rule, the court declined to apply it to the small increments of uncompensated time Troester had worked. In so doing, the court recognized two important principles: first, that technology has enabled small increments of time to be more easily captured; and second, in a welcomed step, that payment for small increments of time can be critical to working people. See 5 Cal. 5th at 848 ["Troester is seeking payment for 12 hours and 50 minutes of compensable work over a 17-month period, which amounts to $102.67 at a wage of $8 per hour. That is enough to pay a utility bill, buy a week of groceries, or cover a month of bus fares. What Starbucks calls 'de minimis' is not de minimis at all to many ordinary people who work for hourly wages.").

Stoetzl v. California Department of Human Resources in 2019 brought the one reversal employees have suffered in this generation of minimum wage cases. In Stoetzl, the court ruled that although the IWC, in 2001, intended to apply California minimum wage protections to state and other public employees, the Legislature had previously delegated CalHR authority over state employee compensation, which it exercised by binding state employees to lesser federal compensability standards through labor contracts that were approved by the Legislature and through its own administrative guidelines. Consequently, non-supervisory state correctional officers were not entitled to seek compensation under California law for uncompensated time spent within prisons accessing and exiting their posts.

Finally, on Feb. 13, 2020, in Frlekin v. Apple, the court ruled that time spent by employees being subject to personal and bag searches while leaving the workplace is compensable hours worked.

Is the Supreme Court done? Or are new issues likely to present themselves?

The court is far from done. Expect new variants on minimum wage claims to keep appearing.

On April 7, 2020, the court heard oral argument in Oman v. Delta Air Lines, in a case involving airline stewards, where, on a certified question from the 9th U.S. Circuit Court of Appeals, it addressed the central question of whether California minimum wage law applies to all work performed in California for an out-of-state employer by an employee who works in California only episodically and for less than a day at a time. Oman also posed the question of whether pay formulas, which in certain circumstances pay higher pay than minimum wage but do not necessarily pay employees for all hours worked, are permissible under California law. The certified question before the court cited the appellate decisions in Gonzalez v. Downtown LA Motors, LP, 155 Cal. Rptr. 3d 18 (2013), and Armenta v. Osmose, Inc., 37 Cal. Rptr. 3d 460 (2005), both of which reject the "averaging" method permitted by federal law, whereby a federal minimum wage violation exists only if the employee's total pay divided by the total hours worked in a work period falls below the federal minimum wage level of $7.25 per hour.

Oman involves challenging issues without necessarily covering new ground. But it is with the advent of technology and the consequent geographic expansion of the workplace that new issues will likely be presented. To some degree, in its rulings in Troester and Frlekin, the court recognized the effects of technology on the modern California workplace. Troester refused to apply the federal de minimis rule in part because technology makes measurement of small increments of work hours practicable. And in Frlekin, Apple was hoisted with its own petard when it argued that when its employees brought Apple products to work, they did so voluntarily -- the court noted that Apple has argued elsewhere that its products are essential to fully engaging in modern life.

The next wave of cases will likely stretch the boundaries of the rulings described above. Most of the earlier cases turned in large part on the location of the activities -- in Morillion, the confines of the company bus; in Mendiola, the restrictions on the guards leaving the work site; and in Frlekin, the assertion of the employer's right to search the employees and their bags upon exiting from the workplace.

But what about when an employer exerts control of employees outside of the workplace? With some exceptions (e.g., call-back, reporting time and standby pay, travel time under some circumstances), most nonexempt employees' compensable time starts and ends at their physical worksite. With the advent of email and smartphones, however, nonexempt employees can (and often do) access their work emails when off-duty. Some nonexempt employees constantly exchange work-related text or other electronic messages with co-workers and supervisors.

Perhaps we saw a glimpse into the future in Herrera v. Zumiez, Inc., 2020 DJDAR 2419 (9th Cir. March 19, 2020). In Herrera, a case primarily involving reporting time pay for retail employees under Wage Order 7, the panel held that a secondary claim for unpaid minimum wages survived a challenge on the pleadings where plaintiff alleged that (1) she and other employees were required to call their managers thirty minutes to one hour before their call-in shifts, (2) these calls were required three to four times per week and lasted five to 15 minutes, and (3) employees could be disciplined for failing to comply with the call-in shift policy.

With employers under ever-increasing pressure to create flexible workplaces, even nonexempt employees will see the worksite broaden beyond the fixed worksite most have known up to now. This growing phenomenon was apparent even before the dramatic increase in remote working due to the current COVID-19 public emergency. Technology has made it possible. And it is with this expansion, and the disruption brought by technology, that the next generation of minimum wage claims will come. 