Ninth Circuit and California Supreme Court Hold California Labor Code Applies to Nonresidents Working in California
In Sullivan v. Oracle, the United States Court of Appeals for the Ninth Circuit reversed the granting of summary judgment by the district court, holding that the California Labor Code appliesy to nonresidents who perform work in California. California wage and hour laws are generally provide more protection for workers than federal laws; for instance, the minimum wage in California is $8.00 per hour while the national minimum wage is $7.25 per hour.
Oracle is a Delaware corporation with its primary place of business in California, best known for its database management software. The three plaintiffs are “instructors” – to use Oracle’s term – who lived outside of California but trained customers in California and other states on how to use Oracle software. They allege Oracle misclassified them as “teachers,” a class of workers exempt from the generous overtime provisions of the California Labor Code.
The Ninth Circuit initially held in favor of the plaintiffs, but ultimately sought the opinion of the California Supreme Court in answering the following question of state law:
Does the California Labor Code apply to overtime work performed in California for a California-based employer by out-of-state plaintiffs in the circumstances of this case, such that overtime pay is required for work in excess of eight hours per day or in excess of forty hours per week?
Concurring with the Ninth Circuit, the California Supreme Court answered yes, holding that nonresidents who work in California are entitled to overtime pay pursuant to the California Labor Code.
