Lemm v. Ecolab
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Plaintiff appealed from a judgment in favor of his employer, Ecolab, Inc. Plaintiff sued Ecolab under the Private Attorneys General Act (PAGA; Lab. Code, Section 2698 et seq.) alleging Ecolab improperly calculated the overtime due on a nondiscretionary bonus paid to Plaintiff and other similarly situated employees. Ecolab successfully moved for summary judgment on the ground its formulation of the overtime payment comported with the Fair Labor Standards Act of 1938 (FLSA). On appeal, Plaintiff argued California authorities require a different method of calculation and supersede federal authority in this instance because California provides greater protection to employees like him.
The Second Appellate District affirmed. The court explained that having exercised the independent judgment the Supreme Court compels, it is not persuaded Ecolab was required to use the exact formulation presented in the section 49.2.4 example to calculate a percentage-based bonus such as the one Plaintiff received. Ecolab demonstrated Plaintiff would have been paid the same amount whether Ecolab used the section 49.2.4 formula as applied to percentage bonuses or the CFR 778.210 formula, so long as the calculation did not include overtime on overtime.
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