Susan Peabody v. Time Warner Cable, Inc.
689 F.3d 1134
9th Cir.2012Background
- Peabody worked as a commissioned Account Executive for Time Warner Cable from July 2008 to May 2009, with a $20,000 annual salary and commissions based on monthly revenue.
- Peabody generally worked about 45 hours per week and was paid biweekly; pay stubs did not show hours worked.
- Dispute concerns how commissions are allocated across pay periods to meet California compensation requirements for the exemption for commissions under Wage Order 4-2001 § 3(D).
- Peabody argued commissions must meet the minimum wage threshold within each workweek and be paid in the corresponding pay period; Time Warner argued to count commissions by broadcast month.
- There is no controlling California precedent on commission allocation for exemption; DLSE Manual and federal FLSA interpretations are invoked as persuasive authorities but not controlling.
- The Ninth Circuit certified a question to the California Supreme Court to determine whether an employer can average commissions over certain pay periods when equitable and reasonable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can commissions be averaged over pay periods to satisfy the exemption? | Peabody: must meet per-week requirement for exemption. | TWC: commissions counted by broadcast month; averages satisfy exemption. | Certified question; no ruling on merits. |
| Should commission allocation be based on weekly pay periods or broadcast month? | Peabody argues per-week allocation is required. | Time Warner argues allocation by broadcast month. | Certified question; no ruling on merits. |
| Does the exemption apply given minimum wage thresholds under the relevant weeks? | Peabody contends thresholds not met in some pay periods. | TWC contends overall calculation meets threshold when using month-based allocation. | Certified question; no ruling on merits. |
| Whether the wage statements provision (Labor Code 226(a)) applies to exempt employees? | Peabody's position on exemptions impacting statements. | TWC argues exemption may affect obligations under 226(a). | Certified question; no ruling on merits. |
| Whether late wage payments under Labor Code 203 are implicated by the exemption dispute? | Peabody seeks penalties for unpaid wages on quitting/late payments. | TWC disputes penalties under exemption framework. | Certified question; no ruling on merits. |
Key Cases Cited
- Tidewater Marine W., Inc. v. Bradshaw, 927 P.2d 296 (Cal. 1996) (DLSE Manual void for APA noncompliance; interpretive authority discussed)
- Morillion v. Royal Packing Co., 995 P.2d 139 (Cal. 2000) (DLSE Manual reliance questionable; federal authority considered persuasive)
- Gomez v. Lincare, Inc., 93 Cal. Rptr. 3d 388 (Cal. Ct. App. 2009) (DLSE interpretation-cited as instructive, not controlling)
- In re United Parcel Serv. Wage & Hour Cases, 118 Cal. Rptr. 3d 834 (Cal. Ct. App. 2010) (Federal FLSA interpretations used as persuasive authority for wage-order issues)
- Arechiga v. Dolores Press, Inc., 192 Cal. App. 4th 567 (Cal. Ct. App. 2011) (Salary presumption and 40-hour workweek considerations discussed)