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Class Action Against Oracle Revived by 9th Circuit

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By Stephanie Rabiner, Esq. on December 15, 2011 8:47 AM

The 9th Circuit has revived an overtime lawsuit against California-based Oracle Corp., possibly affecting thousands. The Oracle class action seeks to represent a group of nonresident employees who traveled to California to teach customers how to use Oracle products.

They sued, arguing that California's overtime laws applied while they worked in the state. Oracle had been paying an overtime rate consistent with the employees' home states. Those rates are less generous than California's.

The 9th Circuit agreed with the employees, and has ordered further proceedings.

The appellate court actually ruled in favor of the Oracle class action in 2008. But Oracle requested a rehearing en banc. In 2009, the panel withdrew its initial decision and asked the California Supreme Court to clarify state law.

This past June, the California court issued an opinion. It, too, found in favor of the Oracle class action plaintiffs. The justices felt that employers would be encouraged "to import unprotected workers from other states" if California law did not apply to nonresident workers. Therefore, it ruled that California overtime laws apply when any employee works in the state.

The federal appellate court chose to adopt this logic, reviving the class action. It, however, chose not to revive other claims.

The Oracle class action plaintiffs also argued that they were entitled to California overtime rates because Oracle is a California company. In other words, no matter where they worked, they had to be paid under the state's generous minimum wage and overtime laws. This was a bit too much for the court to swallow.

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