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Court of Appeal of California, Second Appellate District, Division Seven
February 28, 2017, Opinion Filed
[**663] SEGAL, J.—
Are employees paid on commission entitled to separate compensation for rest periods mandated by state law? If so, do employers who keep track of hours worked, including rest periods, violate this requirement by paying employees a guaranteed minimum hourly rate as an advance on commissions earned in later pay periods? We answer both questions in the affirmative, and reverse the trial court's ruling granting summary judgment in favor of the employer.
FACTUAL AND PROCEDURAL BACKGROUND
Ricardo Bermudez Vaquero and Robert Schaefer worked as sales associates for Stoneledge Furniture, LLC, a retail furniture company doing business in California as Ashley Furniture HomeStores. [***2] After termination of their employment, Vaquero and Schaefer filed a class action complaint alleging that Stoneledge's commission pay plan did not comply with California law. The parties largely agree on the relevant facts regarding Stoneledge's employee compensation system.
A. Stoneledge's Compensation System
From 2009 through March 29, 2014 Stoneledge compensated sales associates pursuant to the sales associate commission compensation pay agreement. After a training period during which new employees received $12.01 per hour, Stoneledge paid sales associates on a commission basis. If a sales associate failed to earn “Minimum Pay” of at least $12.01 per hour in commissions in any pay period, Stoneledge paid the associate a “draw” against “future Advanced Commissions.” The commission agreement explained: “The amount of the draw will be deducted from future Advanced [**664] Commissions, but an employee will always receive at least $12.01 per hour for every hour worked.” The commission agreement included a table providing an example of how the draw and advanced commissions system worked, assuming 40 hours of “non-Training Time” in a work week:
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9 Cal. App. 5th 98 *; 214 Cal. Rptr. 3d 661 **; 2017 Cal. App. LEXIS 165 ***; 2017 WL 770635
RICARDO BERMUDEZ VAQUERO et al., Plaintiffs and Appellants, v. STONELEDGE FURNITURE, LLC, Defendant and Respondent.
Subsequent History: Modified by Vaquero v. Stoneledge Furniture LLC, 2017 Cal. App. LEXIS 250 (Cal. App. 2d Dist., Mar. 20, 2017)
Request granted Vaquero v. Stoneledge Furniture, LLC, 2017 Cal. LEXIS 3586 (Cal., Apr. 24, 2017)
Time for Granting or Denying Review Extended Bermudez Vaquero v. Stoneledge Furniture, LLC., 2017 Cal. LEXIS 4172 (Cal., May 26, 2017)
Review denied by Vaquero v. Stoneledge Furniture, LLC, 2017 Cal. LEXIS 4669 (Cal., June 21, 2017)
Prior History: [***1] APPEAL from a judgment of the Superior Court of Los Angeles County, No. BC522676, Elihu Berle, Judge.
Vaquero v. Ashley Furniture Indus., 824 F.3d 1150, 2016 U.S. App. LEXIS 10365 (9th Cir. Cal., June 8, 2016)
Disposition: Reversed and remanded with directions.
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Business & Corporate Compliance, Wage & Hour Laws, Scope & Definitions, Overtime & Work Periods, Administrative Law, Agency Rulemaking, Rule Application & Interpretation, Labor & Employment Law, Scope & Definitions, Governments, Legislation, Interpretation, Civil Procedure, Appeals, Standards of Review, De Novo Review, Summary Judgment, Appellate Review, Standards of Review, Minimum Wage, Courts, Judicial Precedent