In Sullivan v. Oracle Corp., plaintiffs Donald Sullivan, Deanna Evich and Richard Burkow worked as "instructors" for Oracle, a company headquartered in California. While employed by Oracle, Sullivan and Evich resided in Colorado and Burkow resided in Arizona. The three employees worked primarily in their home states, although they worked in California and other states on occasion.

Following a determination that Oracle's "instructors" were non-exempt employees, and thus entitled to overtime, plaintiffs moved forward with claims for overtime pay. The major issue arising with respect to plaintiffs' claims was which state's laws should apply. Plaintiffs argued in favor of California's more favorable overtime laws, while Oracle insisted that the laws of plaintiffs' respective states of residency should apply - i.e., Colorado and Arizona.

Ultimately, the court determined that California's wage laws should apply for the work plaintiffs performed in California. The court reasoned that a decision otherwise would both sacrifice California's public policy with respect to overtime pay and encourage employers to hire lower paid temporary employees from other states. The three instructors were therefore entitled to overtime pay for any work exceeding eight hours in a workday for work performed in California, as required by California law.

Although the court's decision was limited in that it pertained only to overtime laws and work performed for California-based employers, it is likely that lawsuits will follow attempting to expand the court's ruling. For example, out-of-state employers may face claims by employees performing work in California or claims may arise with respect to California's employee-friendly meal break or vacation pay rules when work is performed outside the state.

The decision in Sullivan reminds employers that monitoring hours and keeping detailed, accurate work records is essential, especially when employees work remotely across state lines. It also reiterates that employers must become familiar with other states' wage laws if they intend to send employees on assignment. Lastly, employers should consider other options when sending employees out of state, such as using exempt rather than non-exempt employees.

If your company has questions concerning California's wage and hours laws or the effect of sending employees to work outside of California, the attorneys at Navigato & Battin are here to assist you.