Edgeworth Client Prevails in California Lawsuit Alleging Improper Payment of Overtime

Edgeworth Economics Partner Dr. Nathan D. Woods was retained by Ecolab, Inc. in a California lawsuit alleging improper payment of overtime. At issue, Plaintiff alleged that the way in which Ecolab calculated and paid monthly bonuses did not comply with overtime requirements under California law.

Plaintiff worked for Ecolab as a Route Sales Manager, in which he provided service and training to food service and hospitality customers in his territory. Ecolab paid Plaintiff an hourly rate and a monthly bonus that was calculated as a percentage of the total wages earned, which included his overtime and double time wages. Plaintiff alleged that the bonus should have been separately incorporated into the regular rate of pay. The Defendant maintained that because the bonus was paid a percentage of total wages, including overtime and double time, it simultaneously paid the overtime required on the bonus.

Dr. Woods submitted an expert report and testified at deposition to demonstrate and explain how the manner in which the bonus payments were calculated and paid by Ecolab was equivalent to the method outlined by the California Division of Labor Standards Enforcement (DLSE). 

In its ruling, the Superior Court of California, County of Los Angeles granted Ecolab’s Motion for Summary Adjudication, stating, “[u]ltimately, Defendant’s position makes logical sense. Simply put, a requirement for an employer to pay overtime on a percentage bonus that already includes overtime pay makes the employer pay ‘overtime on overtime.’”