California District Court Finds Employment Agreement Provision to Shorten Time to Bring FLSA and California Labor Law Claim was Unconscionable – Los Angeles Wage & Hour Claims Attorneys Blumenthal, Nordrehaug & Bhowmik

by Norman B. Blumenthal on May 24, 2013

GavelThe U.S. District Court of the Northern District of California has granted a plaintiff partial summary judgment after finding that the provision in the employment agreement which shortened the time the plaintiff could bring an employment claim under the Fair Labor Standards Act (FLSA) and California Labor Law Claim was unconscionable.

The plaintiff was employed by Goodwill.  While his duties did not essentially change during the three years he was employed, plaintiff was hired as an hourly employee, then later switched to salary pay.  Further, though the plaintiff worked more than 40 hours, he was never paid for hours “worked off the clock” or any overtime hours.  When the plaintiff complained, Goodwill terminated his employment.  The plaintiff sued Goodwill for 1) failure to pay overtime compensation under California law and the FLSA; 2) failure to pay unpaid and owed wages in violation of California Labor Code § 203; 3) unlawful business practices under California Business and Professions Code § 17200; and 4) retaliatory termination for complaining about unpaid overtime.   Goodwill asserted that the plaintiff’s claims were barred by a signed employment agreement which essentially stated that the plaintiff had to bring any employment claims within six months after he was terminated.

The plaintiff moved for partial summary judgment arguing that the employment agreement, which Goodwill asserts barred his claims, was unconscionable.  In the alternative, the plaintiff claimed the employment agreement was void under California Labor Code § 206.5, which invalidates waivers and releases when wages are due to an employee.  Specifically, the plaintiff argued that he was not given time to review the agreement, that he was not allowed to negotiate the terms, and that he was already owed wages at the time the form was given to him to sign.

Goodwill argued that the contract was enforceable because it was the policy Goodwill applied to all employees and because California law recognized the rights of parties to shorten statutes of limitations by contract.

Because Goodwill did not respond to the plaintiff’s assertions as required by Federal Rule of Civil Procedure 56(c) and (e), nor show why the responsive facts were unavailable under Rule 56(d), the court granted the plaintiff’s motion.

Blumenthal, Nordrehaug & Bhowmik is an experienced California employment law firm with offices located in San Diego, San Francisco and Los Angeles. The firm dedicates its practice to contingency fee employment law work for issues involving misclassification as a salaried worker exempt from overtime, failure to pay vacation wages, misclassification as an independent contractor, off-the-clock work, wrongful termination, discrimination and other California labor laws.

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