Can You Sue for Wrongful Termination After a Mandatory Polygraph Test in California?

In McDoniel v. Kavry Management, LLC, the California Court of Appeals addressed a first-impression question with big ripple effects for workplace investigations: can an employer’s violation of California’s ban on mandatory polygraph testing support a wrongful termination claim based on public policy? The court said yes, holding that Labor Code section 432.2 can serve as the public policy foundation for a wrongful termination lawsuit when an employee is fired after a coerced polygraph test. The decision is a sharp reminder that “internal investigation” does not mean “anything goes,” especially when employee privacy rights are at stake.

Case: McDoniel v. Kavry Management, LLC

Court: California Court of Appeals

Case No.: D084660 (Superior Court No. CIVDS1926005)

The Plaintiff: McDoniel v. Kavry Management

Steven McDoniel is the plaintiff in this case. He worked as an assistant grower at Kavry Management, LLC, a licensed marijuana cultivation facility. After the theft, which occurred shortly after he was hired, McDoniel was directed to participate in a polygraph administered by the company’s owner. McDoniel alleged that the test was treated as mandatory; he was not given proper written notice of his statutory right to refuse, and he was terminated after allegedly failing the polygraph.

Who Are the Defendants in the Case?

Kavry Management, LLC is the defendant in the case.

Kavry is described as a licensed marijuana cultivation business. In this lawsuit, Kavry was accused of requiring employees to submit to polygraph testing as part of an internal response to theft and then using the results to justify termination, allegedly without complying with the notice-and-consent protections required by California law.

A Brief History of the McDoniel v. Kavry Management Case

After being terminated, McDoniel filed suit against Kavry, asserting claims including wrongful termination in violation of public policy. The case went to trial, and a jury found Kavry liable for violating Labor Code section 432.2. The jury awarded McDoniel $100,000 in non-economic damages.

Kavry appealed. On appeal, the court upheld the jury’s finding and damages award, concluding there was substantial evidence the polygraph was mandatory for continued employment and that proper notice of rights was not provided. However, the Court of Appeal reversed an attorney fee award based on the timing and applicability of the fee statute relied on by the trial court.

The Main Question in the Case: McDoniel v. Kavry Management

Can an employer’s violation of California Labor Code section 432.2, which prohibits mandatory polygraph testing and requires notice of the right to refuse, serve as the public policy basis for a wrongful termination claim when an employee is fired after a polygraph exam tied to continued employment?

The Allegations: McDoniel v. Kavry Management

The case description includes several key allegations:

1. Polygraph testing was treated as mandatory.

After theft of cash and marijuana products, Kavry allegedly arranged for a polygraph examiner to test employees, including McDoniel. The process was allegedly presented as something employees were instructed to participate in, not a voluntary option.

2. The employer provided no written notice of statutory rights.

McDoniel alleged he did not receive written notice explaining his rights under Labor Code section 432.2, including the right to refuse the polygraph without retaliation or termination.

3. The employee was terminated based on the polygraph outcome.

McDoniel alleged he “failed” the polygraph and was terminated as a result, which he claimed was unlawful when the test itself was coerced and not handled in compliance with the statute.

4. The worker was wrongfully terminated in violation of public policy.

The plaintiff argued that Labor Code section 432.2 expresses a strong public policy protecting employee privacy and preventing coercive polygraph practices, and that his firing in connection with that unlawful process supported the wrongful termination claim.

What the Court of Appeal Decided

Based on the verified summary you provided, the Court of Appeal made three core determinations:

* Labor Code section 432.2 can support a wrongful termination claim based on a violation of public policy, including in cases where an employee is terminated after a mandatory polygraph test.

* There was substantial evidence supporting the jury’s conclusion that the exam was mandatory for continued employment and that Kavry did not provide proper notice of the right to refuse.

* The court upheld the jury’s $100,000 noneconomic damages award, but reversed the attorney fee award because the fee statute at issue did not apply retroactively to McDoniel’s employment timeline.

Key Takeaways for Employees

If your employer asks you to take a polygraph test, your rights may depend on the specifics of your situation, but this case highlights a few practical realities in California:

* Employees may have legal protections if a polygraph is presented as a condition of keeping their job.

* When the statute applies, written notice of rights is not optional.

* If an employee gets fired because they were forced to take a coerced polygraph test, they might have a valid wrongful termination claim under public policy protections.

FAQ: McDoniel v. Kavry Management

Q: What does Labor Code section 432.2 prohibit?

A: It generally prohibits employers from requiring employees or applicants to take a polygraph test as a condition of employment or continued employment and includes notice-related protections.

Q: What does “wrongful termination in violation of public policy” mean?

A: It is a claim alleging an employee was fired for reasons that violate an important public policy expressed in law, such as statutes designed to protect workers from coercive or abusive practices.

Q: Why did the court say this was an “issue of first impression”?

A: Because the Court of Appeal treated the question of whether a section 432.2 violation could support this specific type of wrongful termination claim as a new legal question not previously decided in that way.

Q: What damages were awarded in this case?

A: The jury gave the plaintiff $100,000 in non-economic damages, which the Court of Appeals agreed with, but the Court of Appeals also reversed the decision on the separate attorney fee award because of some timing and applicability issues.

Q: Does a failed polygraph automatically justify termination?

A: This case shows how relying on polygraph tests can be risky legally, especially when people feel like they have to take them or when their rights aren’t protected enough.

If you believe your employer required a polygraph test as a condition of continued employment, failed to provide the required notice of your rights, or terminated you for refusing a coercive workplace practice, the employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP can help. Contact one of our offices in Los Angeles, San Diego, San Francisco, Sacramento, Riverside, or Chicago today to learn how to hold your employer accountable.

Did the County of Orange Retaliate Against a Prosecutor for Defending Coworkers From Harassment?

In Tracy Miller v. County of Orange, a jury found that a longtime Orange County prosecutor was pushed out of her job after she stood up for female colleagues who reported incidents of sexual harassment at work.

Case: Tracy Miller v. County of Orange

Court: San Diego County Superior Court

Case No.: 30-2022-01262015-cu-oe-cjc

The Plaintiff: Miller v. County of Orange

Tracy Miller is the plaintiff in this case and a former Orange County prosecutor who served for more than two decades. According to the verified case summary, Miller advocated for several female colleagues after they came forward regarding alleged sexual harassment by one of their male supervisors. According to Miller’s complaint, after she stepped in to offer support, hostility in the workplace escalated until she was eventually forced out. The jury unanimously agreed that her departure was not entirely voluntary and ruled in her favor on retaliation and constructive discharge-related theories.

Who Are the Defendants in the Case?

The defendant is the County of Orange. As a public employer, the County of Orange oversees departments and supervisory structures that can shape workplace culture, reporting channels, and discipline decisions. In this case, the County was accused of allowing a retaliatory environment to develop after Miller supported coworkers who raised harassment concerns, and of taking or enabling actions that contributed to Miller being pushed out of her position.

Miller v. County of Orange: Considering a Brief History of the Case

• Miller filed her case in San Diego County Superior Court under Case No. 30-2022-01262015-cu-oe-cjc.

• The dispute went to a jury trial.

• The jury awarded Miller over $3 million in damages.

• The award included compensation for economic loss, emotional distress, and punitive damages.

• The jury’s decision reflected their assessment that the conduct at issue warranted both compensation and deterrence.

The Main Question in the Case

When an employee speaks up to defend coworkers from sexual harassment, do California’s workplace protections prohibit an employer from retaliating against that employee?

The Allegations: Miller v. County of Orange

The original complaint included numerous allegations of labor law violations:

1. Retaliation (Triggered by Advocacy)

2. Hostility Escalating to Pressure to Leave

3. Retaliation and Constructive Discharge

The jury awarded damages for economic losses, emotional distress, and punitive damages, indicating that it found the conduct sufficiently harmful to justify both compensation and punishment.

Understanding Retaliation Under California Law

California employees who report harassment or discrimination, participate in investigations, or support coworkers exposed to these situations are protected by the Fair Employment and Housing Act (FEHA). In other words, the law’s protection is not limited to the person directly targeted. An employee who acts as an ally, witness, or advocate can also be protected from retaliation. In some cases, acts of workplace retaliation are fairly obvious (termination, demotion, etc.) Howeverr, retaliation can also show itself in more of a slow squeeze that could include: isolation, sudden negative performance evaluations, undesirable reassignments, exclusion from meetings, hostility from company leadership, etc.

The Miller verdict highlights the legal risks employers face when an employee’s advocacy is met with punishment rather than protection.

How Juries Can Calculate Damages in Retaliation and Constructive Discharge Cases

The verdict described in this case included three common categories of damages seen in retaliation matters:

1. Economic Damages: lost wages (past and future), lost benefits, diminished earning capacity, etc.

2. Emotional Distress Damages: stress, anxiety, emotional damages, etc.

3. Punitive damages: Applicable in cases involving particularly harmful activity.

Different types of damages are awarded in different cases, depending on the details of each case and the court's findings. More than one type of “damage” can apply to a single case.

Key Takeaways for Employees

If you believe you are being retaliated against for reporting harassment or supporting a coworker who reported it, take action to protect yourself. Document the situation carefully, including a timeline of complaints, who you spoke with, and what they said, what changed afterward, etc. Save any emails, texts, schedules, reviews, or meeting notes that are applicable. Then turn to an expert for legal advice as soon as possible. When it comes to retaliation, the entire case can pivot on documentation and timing. Early guidance during the case can help protect your case and your legal options.

FAQ: Miller v. County of Orange

Q: Are retaliation protections limited to the person being harassed?

A: No. California law can also protect employees who report harassment, support harassed coworkers, or participate in workplace harassment investigations, even if they were not directly targeted.

Q: What is constructive discharge?

A: Constructive discharge refers to situations where working conditions are made so intolerable that any reasonable worker would feel forced to resign. In other words, legally speaking, the resignation is considered a termination.

Q: What are the common types of “damages” seen in wrongful termination cases?

A: Common types of damages can include economic losses (wages and benefits), emotional distress damages, and, in more serious cases, even punitive damages.

Q: Why are punitive damages significant?

A: Punitive damages are designed to multitask. They both punish past action and prevent future, repeated action. Their presence often suggests a jury believed the employer’s conduct was particularly serious or harmful.

Q: What should an employee do if they suspect retaliation is happening?

A: Document key events, keep copies of relevant communications and evaluations, and speak with an employment attorney as early as possible to understand deadlines and options.

If you believe you were retaliated against for reporting harassment, supporting a coworker who spoke up, or participating in a workplace investigation, the employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP can help. Contact one of our offices in Los Angeles, San Diego, San Francisco, Sacramento, Riverside, or Chicago today to learn how to hold your employer accountable.

Did Home Depot Use a “Midnight Workday” to Short Overnight Workers on Overtime?

In Bell v. Home Depot U.S.A., Inc., two employees brought a class action alleging Home Depot designed its defined “workday” to reduce overtime owed to workers on overnight shifts.

Case: Bell v. Home Depot U.S.A., Inc.

Court: Sacramento County Superior Court

Case No.: 2:12-cv-02499-JAM-CKD

The Plaintiff: Bell v. Home Depot

Sandy Bell and Martin Gama are the named plaintiffs who filed this class action against Home Depot. The plaintiffs are former Home Depot employees who worked overnight shifts in California. Both workers were hourly, non-exempt Home Depot employees alleging that when their shifts crossed midnight and exceeded eight total hours, Home Depot’s timekeeping system treated the shift as split into two workdays, resulting in overtime they claim they should have received but did not.

Who Are the Defendants in the Case?

Home Depot U.S.A., Inc. is the defendant in the lawsuit.

Home Depot is a national home improvement retailer with stores throughout California and the United States. In this case, the plaintiffs alleged that Home Depot controlled the payroll and timekeeping policies that defined the “workday” and that those policies affected overtime calculations for overnight employees when their shifts crossed midnight.

A Brief History of the Bell v. Home Depot Case

The lawsuit was filed in 2012 in the California state court. It was later moved to federal court and consolidated with a related case, Henry v. Home Depot U.S.A., Inc., which raised similar overtime concerns for employees working shifts that extended past midnight.

The plaintiffs’ claims ultimately hinged on the central allegation that Home Depot’s policies resulted in inadequate overtime compensation for overnight shifts.

The Main Question in the Case

Can an employer avoid overtime pay obligations by defining a “workday” to split a continuous shift into two consecutive calendar days? When employees work a single overnight shift that crosses midnight and the total hours exceed eight, splitting the shift into separate parts reduces overtime pay. The court must consider whether this practice violates California wage-and-hour laws and related protections.

The Allegations: Bell v. Home Depot

Home Depot faces numerous allegations in the recent overtime pay lawsuit. Generally speaking, the plaintiffs argue that Home Depot’s time-keeping system’s definition of a “workday” as the period between 12 am and 11:59 pm on a given calendar day violated labor laws.

Home Depot’s Definition of a “Workday:” Plaintiffs argue that Home Depot applied that definition in a way that reduced or avoided overtime owed for overnight shifts.

Overnight Shift Splitting: The plaintiffs claimed that when employees worked a continuous overnight shift (crossing midnight), Home Depot allegedly treated the hours after midnight as belonging to a new workday, even though the shift remained an uninterrupted work period.

Company Avoided Overtime Pay for Single Shifts Exceeding Eight Hours: California law generally requires overtime pay (time-and-a-half) for hours worked beyond eight in a single workday (and double time for hours exceeding twelve in a workday). Plaintiffs in the case alleged Home Depot’s workday definition allowed the company to pay straight time for hours that, in the context of one continuous shift, should have triggered overtime pay.

Class-wide Impact Supported by Centralized Time Records: The plaintiffs alleged that Home Depot’s timekeeping data could be used to identify class members and evaluate claims in accordance with uniform policies and consistent records.

Why Overnight Overtime Cases Often Focus on the “Workday”

Overtime claims are not always about what an employee did. Sometimes they’re about how the employer counted their time on the clock. When a company’s timekeeping system breaks one continuous overnight shift into two shifts, workers will see a decrease in the number of overtime-eligible hours.

In order to determine liability, the court focused on Home Depot’s intent. The court had to consider whether Home Depot had a legitimate business purpose for its workday designation, or whether it was a method of avoiding overtime pay.

For employees who clock in and out on the same calendar day, this type of workday definition would not typically pose a problem, but it can be significantly detrimental to workers with overnight shifts that cross midnight. The definition itself can result in hours that would otherwise be eligible for overtime pay no longer qualifying.

In this case, the court focused on the company's intent, emphasizing that Home Depot’s liability turned on whether the workday designation had a legitimate business purpose or was intended to evade overtime obligations. The existence of detailed timekeeping records was also important because it could help determine who fell within the class definitions and how any unpaid overtime might be calculated.

Class definitions and covered time periods:

The case involves certified classes tied to overnight shifts crossing midnight:

Bell certified class (hourly-paid supervisors):

All persons who worked for Home Depot in California as a non-exempt, hourly-paid supervisor from August 14, 2009 through June 1, 2016, who worked at least one overnight shift that crossed midnight of more than eight hours, and who, as a result, were not paid overtime for the hours worked over eight hours during such overnight shift.

Henry certified class (hourly/non-exempt positions):

All persons employed by Home Depot in hourly or non-exempt positions in California from September 18, 2010 through May 3, 2016, who worked a shift past midnight where the total hours for that shift exceeded eight hours.

The class is described as including approximately 20,000 individuals who worked more than eight hours and past midnight.

Settlement: Preliminary Approval Granted

The plaintiffs filed an unopposed motion requesting preliminary approval of the class and PAGA settlements, approval of the class notice, and appointment of a settlement administrator.

Under the settlement agreement described, the parties agreed to a gross settlement amount of $3,350,000. The settlement is described as non-reversionary, meaning that no portion of the settlement returns to Home Depot if it is not paid out. The court reviewed the factors applied to class settlements (under Federal Rule of Civil Procedure 23) before granting the unopposed motion for preliminary approval. This preliminary approval stage typically allows notice to be sent to class members and sets the case on the path toward a final approval request.

FAQ: Bell v. Home Depot

Q: Why does it matter if a shift crosses midnight?

A: When a shift crosses midnight, the beginning of one continuous shift is one “day,” while the second portion is on a different “day.” Depending on which timekeeping system the company uses and how the system defines a “workday,” this could prevent workers from receiving overtime pay for eligible hours simply because, according to the record, the single, continuous shift was split into 2 separate workdays.

Q: What overtime rule are the plaintiffs relying on?

A: The allegations rely on California’s daily overtime requirements, including time-and-a-half after eight hours in a workday and double time after twelve hours in a workday, along with weekly overtime concepts.

Q: What is the main allegation about Home Depot’s “workday” definition?

A: The plaintiffs alleged Home Depot’s midnight-to-midnight workday definition split a single overnight shift into two calendar days in a way that reduced or avoided overtime pay for hours worked beyond eight in a continuous overnight shift.

Q: What are Labor Code sections 203 and 226 generally about?

A: Section 203 is commonly associated with waiting time penalties for certain final pay issues, and Section 226 generally relates to wage statement requirements. In this case, the remaining claims included alleged violations of these provisions along with related wage-and-hour claims.

Q: What does “preliminary approval” of a class settlement mean?

A: Granting preliminary approval occurs in the early stages when the court considers whether or not a proposed settlement agreement is generally fair enough to notify class members. After notice is sent to class members, the court reviews any objections before granting final approval.

If you believe your employer’s timekeeping policies caused you to miss overtime pay, shorted you on wages earned during overnight shifts, or resulted in inaccurate wage statements or final pay issues, the employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP can help. Contact one of our offices in Los Angeles, San Diego, San Francisco, Sacramento, Riverside, or Chicago today to learn how to hold your employer accountable.

Did Wells Fargo Misclassify Senior Premier Bankers and Deny Overtime Pay?

A group of Wells Fargo employees filed a lawsuit alleging the bank misclassified Senior Premier Bankers as exempt from overtime requirements, even though their work largely involved routine customer service and sales tasks.

Case: Sabrina Perez v. Wells Fargo Bank, N.A.

Court: U.S. District Court, Central District of California

Case No.: 2:24-cv-04077

The Plaintiff: Perez v. Wells Fargo

Sabrina Perez is one of the named plaintiffs seeking to represent a broader group of Wells Fargo employees who held Senior Premier Banker-related roles. In the complaint, the plaintiffs describe the Senior Premier Banker position as focused on day-to-day branch banking work. The plaintiffs allege that, despite performing routine, sales-oriented tasks, they were classified as exempt employees and therefore did not qualify for overtime pay.

Who Are the Defendants in the Case?

The defendant in the lawsuit is Wells Fargo Bank, N.A.

Wells Fargo is a national banking institution that operates retail branches nationwide. According to the plaintiffs, Wells Fargo’s handling of staffing levels, job expectations, time demands, and classification decisions for their Senior Premier Bankers roles resulted in unpaid overtime and wage-and-hour violations.

A Brief History of the Perez v. Wells Fargo Case

The Perez v. Wells Fargo case began when five Wells Fargo employees filed suit in the U.S. District Court for the Central District of California, hoping to represent a class of Senior Premier Bankers. The lawsuit listed FLSA claims and related state-law wage-and-hour claims.

On September 4, 2025, the plaintiffs filed a motion seeking preliminary approval of a proposed settlement.

What Is the Main Question in the Case?

Did Wells Fargo improperly classify Senior Premier Bankers and related roles as exempt from overtime requirements? And if so, did the exempt classification, in combination with the working conditions described in the lawsuit, lead to unpaid overtime and related wage-and-hour violations, including meal and rest break violations, and civil penalties under PAGA?

The Allegations: Perez v. Wells Fargo

The lawsuit includes numerous allegations, including:

1. Misclassification as exempt: The plaintiffs allege that Senior Premier Bankers were classified as exempt from overtime requirements, even though their duties allegedly included routine customer service tasks, such as opening and closing accounts and selling banking products, which the plaintiffs claim do not qualify for an exemption.

2. Unpaid overtime: The plaintiffs claim that Wells Fargo allegedly understaffed branches, forcing Senior Premier Bankers to work more than 40 hours per week. Despite the long workweeks, the plaintiffs allege they did not receive overtime pay for those extra hours.

3. Related wage-and-hour violations: In addition to overtime claims, the plaintiffs allege related violations, including failures tied to meal and rest breaks.

4. PAGA penalties claim: A Senior Premier Banker also filed a claim seeking civil penalties under California’s Private Attorneys General Act (PAGA). The lawsuit describes PAGA as a mechanism that allows employees to seek penalties for certain California Labor Code violations on their own behalf, on behalf of other employees, and on behalf of the State of California.

As with any civil case, these are allegations. The court has to evaluate the claims through motion practice, evidence, and applicable legal standards, or through the settlement approval process if the case resolves before trial.

Why Misclassification Cases Can Become High-Stakes Wage-and-Hour Disputes

Overtime exemptions are not based solely on job titles. In many misclassification lawsuits, the key issue becomes what employees actually did in practice during the workday. When an employer classifies a role as exempt, employees generally do not receive overtime even if they regularly work more than 40 hours per week. If a court later determines that the role did not meet the legal tests for exemption, the alleged unpaid overtime can become the central damage claim.

Misclassification cases often involve additional allegations, particularly when plaintiffs assert that the same policies and staffing decisions that led to an unhealthy workload also resulted in meal and rest break violations.

Proposed $48.5 Million Settlement to Resolve Claims

Wells Fargo agreed to resolve the claims with a $48,500,000 settlement. The plaintiffs requested preliminary approval in September 2025. If approved, the settlement would cover payments to approximately 4,230 class members (as well as covering attorneys’ fees, costs, etc.)

The settlement is described as covering certain job titles, including Premier Bankers, Premier Bankers 2, and/or Senior Branch Premier Bankers, who were employed at Wells Fargo during specified time periods.

If preliminary approval is granted, eligible participants would typically receive notice (often by mail and email) explaining what the settlement covers, how payments are calculated, and the options available.

FAQ: Perez v. Wells Fargo

Q: What does it mean to be “misclassified as exempt”?

A: It generally means an employer treated a role as exempt from overtime requirements, even though the employee alleges their pay structure and job duties did not meet the legal standards for an exemption.

Q: What job duties do the plaintiffs say Senior Premier Bankers performed?

A: The lawsuit alleges their work included routine customer service tasks, such as opening and closing accounts, and selling banking products.

Q: Why does understaffing matter in an overtime lawsuit?

A: The plaintiffs allege that understaffing contributed to longer workweeks, which can be important to claims that employees regularly worked more than 40 hours and should have received overtime pay.

Q: What is PAGA, and why is it included here?

A: PAGA refers to California’s Private Attorneys General Act, which the lawsuit describes as allowing employees to pursue civil penalties for certain Labor Code violations on behalf of themselves, other employees, and the State of California.

Q: Does a proposed settlement mean Wells Fargo admitted wrongdoing?

A: Not necessarily. Settlements can resolve claims without an admission of liability, and courts still review proposed class settlements through preliminary and final approval processes.

Q: How will workers know if they’re included in the settlement?

A: If the court grants preliminary approval, eligible participants typically receive notice (often by mail and email) with information about eligibility, estimated payments, deadlines, and options.

If you believe you were misclassified as exempt, worked more than 40 hours without overtime pay, or were denied legally required meal and rest breaks, the employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP can help. Contact one of our offices in Los Angeles, San Diego, San Francisco, Sacramento, Riverside, or Chicago today to learn how to hold your employer accountable.

Did Honda and Adecco Short Hourly Workers on PPE and Overtime?

A newly filed federal lawsuit alleges that American Honda Motor Co., Inc. and Adecco USA, Inc. required hourly workers to put on and remove required PPE off the clock, and then calculated overtime in a way that allegedly failed to include certain nondiscretionary bonuses in the “regular rate.” The case is in its earliest phase. At this point, these are allegations only, and the court has not made findings.

Case: Mayes v. American Honda Motor Co., Inc., et al.

Court: U.S. District Court, Central District of California

Case No.: 2:25-cv-11253

The Plaintiff: Mayes v. American Honda

Fareed Mayes, the plaintiff, is a former hourly employee of American Honda.

The Defendants: Mayes v. American Honda

The defendants in the case are American Honda Motor Co., Inc. and Adecco USA, Inc.

Case History: Mayes v. American Honda

According to the public docket, the case was filed on November 24, 2025, in the Central District of California as an FLSA matter. The docket reflects the complaint and initial filing paperwork, which is typical at the start of a federal wage-and-hour lawsuit.

The Main Question in the Case:

If hourly workers must put on required protective gear before clocking in and remove it after clocking out, is that time “work” that must be paid and counted toward overtime? And if workers receive certain attendance or shutdown bonuses, must those bonuses be included when calculating the “regular rate” for overtime?

The Allegations: Mayes v. American Honda

Based on published reporting summarizing the filing, the lawsuit’s core allegations include:

Unpaid PPE time (donning/doffing): Workers allegedly had to don company-required gear at the worksite before clocking in, and remove it after clocking out. The claimed time is roughly 10–15 minutes pre-shift and 10–15 minutes post-shift, which the lawsuit frames as off-the-clock work that should be compensable.

Pressure through policies: The suit alleges attendance/adherence policies effectively pushed workers to complete PPE-related steps off the clock.

Overtime “regular rate” issue: The lawsuit also challenges overtime calculations, alleging the companies did not include certain nondiscretionary bonuses (described as “Shutdown” and “Monthly Attendance” bonuses) when computing the regular rate used for overtime.

Scope and format of the case: The action is described as a proposed FLSA collective action and also a Rule 23 class action for related state-law theories (as reported).

Why “PPE Time” Can Become a Real Legal Fight:

Federal wage-and-hour law has a whole vocabulary for this: “principal activities,” “integral and indispensable,” and what counts as “preliminary/postliminary” time.

The Supreme Court has held that some pre-shift and post-shift activities can be compensable when they’re tightly connected to an employee’s principal work activities.

At the same time, the Court has also emphasized limits, rejecting compensation for activities that are not “integral and indispensable” to the job’s core productive work (even if the employer requires them).

There’s also a union-contract carveout in some workplaces (29 U.S.C. § 203(o)) that can affect whether “changing clothes” time is paid, depending on the facts and whether a collective bargaining agreement applies.

FAQ: Mayes v. American Honda

Q: What is “donning and doffing” time?

A: It’s the time spent putting on (donning) and taking off (doffing) required gear such as uniforms or safety equipment, often around the start and end of a shift.

Q: Does the FLSA always require employers to pay for PPE time?

A: Not always. Whether it’s compensable can depend on whether the activity is considered integral and indispensable to the employee’s principal work, and on other legal and workplace factors.

Q: What’s the “integral and indispensable” test?

A: It’s a standard the Supreme Court has used to determine whether certain pre- or post-shift activities are part of the employee’s principal activities and therefore potentially compensable

Q: What is the “regular rate,” and why does it matter for overtime?

A: Overtime is generally calculated based on an employee’s regular rate of pay. Certain forms of compensation must be included in that regular rate, which can increase overtime owed.

Q: Do nondiscretionary bonuses affect overtime calculations?

A: Often, yes. The U.S. Department of Labor explains that nondiscretionary bonuses are generally included in the regular rate unless a specific exclusion applies.

Q: Has the court decided whether Honda or Adecco did anything wrong here?

A: No. The case was filed on November 24, 2025, and at this stage the public record reflects initial filings. Allegations are not findings.

If you believe you were required to perform off-the-clock work, were not paid for all time worked, or your overtime rate didn’t reflect all required compensation, the employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP can help. Contact one of our offices in Los Angeles, San Diego, San Francisco, Sacramento, Riverside, or Chicago today to learn how to hold your employer accountable.

California Court Clarifies Limits in Pacific Gas & Electric Wrongful Termination Case

In a recent decision that will shape how employment lawsuits are litigated in California, the Court of Appeal for the First Appellate District clarified that employees cannot recover damages for defamation when the alleged defamatory statements are tied directly to the same conduct underlying a wrongful termination claim. The case, Hearn v. Pacific Gas & Electric Co., 108 Cal. App. 5th 301 (2025) is a good example of how overlapping tort claims are evaluated during wrongful termination cases.

Case: Todd Hearn v. Pacific Gas & Electric Co.

Court: California Court of Appeals, First Appellate District, Division Three

Case No.: 108 Cal. App. 5th 301 (2025)

Get to Know the Plaintiff in the Case, Todd Hearn:

Todd Hearn, the plaintiff in the case, was an experienced lineman for Pacific Gas & Electric Company (PG&E). Hearn was suspended and later terminated from his lineman position after the company conducted an internal investigation into alleged timekeeping and GPS record discrepancies indicating Hearn's reported work hours were inaccurate. According to the company’s investigation, there were inconsistencies between Hearn’s reported work hours and the GPS location data of his vehicle.

Hearn argued that the company investigated his reported hours in retaliation after he complained about unsafe working conditions. After his termination, he filed a civil lawsuit asserting multiple claims:

• Retaliation under Labor Code § 1102.5 (whistleblower retaliation),

• Retaliation for complaints about unsafe conditions under Labor Code § 6310,

• Wrongful termination in violation of public policy, and

• Defamation based on the allegedly false information circulated during the investigation.

Both the retaliation and defamation claims proceeded to trial.

Get to Know the Defendant: Pacific Gas & Electric Company

Pacific Gas & Electric Company (PG&E) is one of California’s largest public utilities providers. In response to Hearn's allegations, the company insisted that the investigation was legitimate and adhered to company protocol. PG&E denied retaliatory motive allegations and argued that its managers acted within the scope of their employment when they reported and documented the alleged timekeeping discrepancies. At trial, the jury sided with PG&E on the retaliation claim but found in favor of Hearn on the defamation claim, awarding him damages for harm allegedly caused by statements in the internal investigation report. PG&E appealed the defamation verdict, arguing that Hearn’s defamation claim was derivative of his wrongful termination claim and therefore barred under California law.

A History of the Case: Appeal and Reversal

On appeal, the jury’s defamation award was reversed, with the California Court of Appeals ruling that an employee cannot obtain separate tort damages for defamation when the claim arises from the same conduct or injury as a wrongful termination claim.

The Court’s reasoning emphasized two key principles:

• Defamation claims must be based on conduct distinct from the termination itself.

• Damages for defamation cannot be identical to those resulting from the termination.

Because the alleged defamatory statements—contained in internal investigative reports—were created as part of the disciplinary and termination process, the Court held that Hearn’s defamation claim was not independent from his termination. The Court concluded that Hearn could not “recover damages for wrongful termination by recasting his claim as one for defamation.” He had not demonstrated any reputational harm beyond the financial and emotional damages associated with losing his job.

The Main Question Being Considered: Can Termination-Related Statements Support a Defamation Claim?

The central issue in Hearn v. PG&E was whether an employee can pursue a defamation claim when the allegedly defamatory statements are part of the termination process. The Court’s answer: No—unless the statements or damages are distinct from the termination itself. So communications or reports created during internal investigations (such as disciplinary findings or HR summaries) are generally protected when they directly relate to an employee’s termination. However, defamatory statements made after termination or outside the scope of an internal investigation may still give rise to valid claims.

Why This Case Matters to California Workers and Employers

The Hearn decision provides critical clarity for both sides of employment disputes.

For Employees: The case underscores the importance of identifying distinct harms when bringing multiple claims. If all alleged damages stem from termination itself, courts may reject related defamation claims as duplicative.

For Employers: The ruling in the case reinforces that internal investigation communications (when made in good faith and within the scope of employment) are generally protected from defamation liability. However, companies should use caution as statements made outside disciplinary channels or shared with individuals not directly involved in the investigation could still expose employers to risk.

The case ultimately strengthens existing legal protections for fair internal investigations while confirming limits on overlapping tort recovery in employment cases.

FAQ: Hearn v. Pacific Gas & Electric Co.

Q: What did the Court of Appeal decide in Hearn v. PG&E?

A: The Court ruled that employees cannot recover defamation damages when the alleged defamatory statements are part of the same conduct underlying a wrongful termination claim.

Q: Why did the Court reverse the jury’s verdict?

A: The Court found that Hearn’s alleged reputational harm was not distinct from his loss of employment. The investigative reports that formed the basis of his defamation claim were created as part of the termination process itself.

Q: What does this mean for California employees bringing multiple claims?

A: Employees must show that each claim—such as defamation, retaliation, or wrongful termination—is based on separate conduct or results in distinct damages. Otherwise, the claims may be deemed duplicative.

Q: How can employers use this decision in future cases?

A: Employers can cite Hearn v. PG&E to defend against defamation claims tied to internal investigations, provided those communications were limited to individuals with a legitimate business reason to receive them.

If you believe you were wrongfully terminated or defamed during a workplace investigation, the experienced employment law attorneys at Blumenthal Nordrehaug Bhowmik DeBlouw LLP can help. Contact our offices in Los Angeles, San Diego, San Francisco, Sacramento, Riverside, or Chicago today to schedule a free consultation and learn more about your rights under California labor law.

$1.2 Million Settlement Resolves Betacom Wage and Hour Allegations

A recent class action settlement against telecommunications companies Betacom Holdings Inc. and Betacom Inc. brings closure to a multi-year wage and hour dispute involving more than 600 field employees. The lawsuit claimed Betacom failed to pay overtime wages in compliance with state and federal labor laws. The companies have now agreed to a $1.2 million settlement that resolves those allegations without admitting liability.

Case: Lmar Lay v. Betacom Holdings, Inc. and Betacom Incorporated

Court: United States District Court for the Western District of Washington at Seattle

Case No.: 2:24-cv-01195

The Plaintiff: Lmar Lay

Lmar Lay, a former field employee, brought the lawsuit on behalf of a proposed class of Betacom field workers who were allegedly denied full overtime pay. The complaint claimed that Betacom required field employees to work long hours—including through unpaid meal periods—without properly compensating them for overtime. Lay alleged that the company failed to include certain earnings and bonuses in employees’ “regular rate of pay,” resulting in lower overtime rates than the law allows. The lawsuit also alleged violations of both federal and state labor laws.

The Defendants: Betacom Holdings, Inc. and Betacom Incorporated

The defendants in the case are Betacom Holdings Inc. and Betacom Inc., telecommunications infrastructure companies providing construction, installation, and maintenance for major wireless network towers. The lawsuit centered on allegations that Betacom’s field employees, who perform demanding on-site technical and maintenance work, were improperly compensated for overtime hours worked. Betacom denied all wrongdoing, but in order to avoid further litigation, the company did agree to settle. The class includes Betacom employees (for either defendant) between August 6, 2021 through August 8, 2025.

A History of the Case: Overtime Claims and Settlement Approval

After extensive negotiations, the parties reached a $1.2 million settlement to resolve the wage and hour claims. According to the settlement agreement, Betacom’s payroll records identified 617 eligible class members who may claim payments.

The total settlement fund covers:

• Settlement administration costs: Up to $15,000

• Attorneys’ fees: $480,000

• Attorneys’ expenses: Up to $19,000

• Service award to lead plaintiff: Up to $10,000

• Net settlement available to class members: Approximately $676,000

Each class member’s share will be determined pro rata, based on the number of overtime workweeks and their individual pay rate. On average, payouts are expected to range between several hundred and several thousand dollars.

Under the agreement, half of each payment will be treated as W-2 wages (subject to payroll taxes) and half as 1099 income. Eligible employees must file a claim with the settlement administrator by December 17, 2025, to receive payment. Uncashed checks after 120 days will be turned over to the Washington Unclaimed Property Fund. The settlement resolves all claims under federal and state wage laws (including the Fair Labor Standards Act (FLSA) and the Massachusetts Wage Act). It also provides Betacom with a full release moving forward.

The Main Question Being Considered: Were Overtime Hours Fully Compensated?

At the heart of Lay v. Betacom was a common problem in wage and hour litigation—whether field employees were fully paid for all hours worked, including time spent working through meal periods or performing tasks outside scheduled shifts. Federal and state laws require overtime pay for all hours worked over 40 in a week (and daily overtime in some states) at 1.5 times the employee’s regular rate of pay. Employers must also include bonuses, incentives, and other forms of pay when calculating that rate.

According to the lawsuit, Betacom's pay practices under-reported employee overtime hours and excluded some forms of compensation from the calculation used to determine the employee's "standard rate of pay", which both reduced the employees' total wage payment. Betacom denied these allegations, but in agreeing to the settlement, will provide direct compensation for affected workers and reaffirms the importance of accurate timekeeping and wage calculations going forward.

Why This Case Matters to California and Washington Workers

Although the Lay v. Betacom case was filed in Washington, its implications extend across state lines. Both Washington and California impose strict wage and hour standards designed to protect employees from unpaid overtime and off-the-clock work. Field technicians, installers, and other employees who travel or work irregular hours are especially vulnerable to wage errors when companies rely on automated time systems or classify meal breaks as unpaid; even when work continues during those periods. This settlement reinforces that overtime compliance is not optional. Employers must track all hours worked, compensate for all required overtime, and ensure pay rates reflect every form of compensation earned.

FAQ: Lay v. Betacom Holdings, Inc. and Betacom Incorporated

Q: What laws were at issue in this case?

A: The lawsuit alleged violations of the Fair Labor Standards Act (FLSA) and applicable state wage laws, claiming Betacom failed to pay employees for all overtime hours worked and miscalculated overtime rates.

Q: Who is included in the class settlement?

A: The class covers 617 field employees who worked for Betacom Holdings Inc. or Betacom Inc. between August 6, 2021, and August 8, 2025.

Q: How much will Betacome employees with eligible wage and hour claims get from the settlement?

A: The total settlement in the case is $1.2 million, with approximately $676,000 allocated to class members after fees and costs. Average payments are expected to be around $1,000–$5,000 per class member. The exact amount depends on each person’s overtime hours and pay rate.

Q: What is the deadline to file a claim?

A: Eligible employees must submit a claim by December 17, 2025. Claims can be filed online or by mail through the settlement administrator, CPT Group Inc.

If your employer fails to provide accurate overtime pay or properly include all forms of compensation in your pay calculations, Blumenthal Nordrehaug Bhowmik DeBlouw LLP can help. Contact our experienced employment law attorneys at our offices in Los Angeles, San Diego, San Francisco, Sacramento, Riverside, or Chicago today to schedule a free consultation and learn more about how labor laws protect your rights on the job.