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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Employment Law
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Experience:  20+ Years of Employment Law Experience
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Comp Time for CA Exempt/Salary Employees; NDAs; NonCompetes

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I am an exempt salary employee at a small CA business.

Our employer has stated today, after 10 years of an unwritten "comp time" policy for exempt, salary employees, "it is illegal in CA to have any form of employer-managed comp time policy". They have stated that as exempt, salaried employees, we are expected to work on a project basis "to complete the job" and thus, it could require a limitless # XXXXX hours within the week, with no protection for the employee for "rest time" - unless the employee chooses to take approved vacation days. They have stated if they were to do anything otherwise, it would be illegal per CA law.

Do you know where we can find the legal documentation our employer seems to be referring to?

1a.) When we asked, conversely, "Well, if then on a particular week, if we are indeed 'by project', and there is no work necessary for us on a particular day, if we don't work on that particular day, is this allowed? They said no, that we must be available to work during all business hours (per the employee manual), and we can't "not work" or take a day off simply because there is no work for us on that day, even if we alert our employer of our intended absence, and we must be available & working during posted business hours.

1b.) When we then asked "But since we work at all different shifts, 24/7, weekends, nights, etc. - thus our "40 hour work week" might vary - how can we be bound by the posted business hours (ie, 8:30am-5:30pm M-F)? We were told that those are normal business hours, and even if we work more than 40 hours in a week, we can't (example) come in at 10am on Tuesday because we happen to work 9am-11pm on Monday.

1c.) We asked, "what about listed company holidays in the employee manual...." If we are unable to take that holiday as a paid day off due to required work load, will we be given that holiday on a different day as a replacement? The answer was "only if it is taken during the same pay period, and even if your required work load doesn't allow for that, you void that holiday after the pay period is up."

2.). They have also handed us today a Non-Compete clause, requiring that we sign this. It is my understanding that CA Law does not allow for Non-Complete clause (most especially mid-employment, but generally not at all, with only a few limited exceptions...) I can find extensive listings on this topic, all of which point to this not only being illegal, BUT also being subject to lawsuit penalty if requiring employees to sign a NC in order to maintain employment. >> Any advice on how we should respond?

3.) They have also required us to sign a NEW NDA (Non-Disclosure/Confidentiality). From the research I can find, doing so for an existing employee in CA requires "some" form of compensation ("such as cash, stocks or a bottle of wine") "in order to bind this agreement". This is cited over & over. >> Any other specific insight to this?

Thank you SO MUCH for your time!!
Exempt employees really is a category that favors the employer and not the employee. Your employer is complying now with the letter of the Fair Labor Standards Act in that the exempt employee is not entitled to ANY overtime for hours worked over 40. There is no law that states the employer can or cannot give the exempt employee compensatory time for hours over 40, it is at the discretion of the employer and now it seems as this employer is changing its mind (likely for economic reasons as most companies are feeling the crunch). CA has no law preventing using compensatory time for exempt employees. See: which has a great summary of the laws based on federal and California laws. BotXXXXX XXXXXne here is unless you have a written contract specifying you were to get comp time as an exempt employee, this is at the employer's discretion and they can change that.

1a-1b, the botXXXXX XXXXXne on these is that absent a written contract with the employer to the contrary, the employer has a right to set the rules regarding time and place of performance of work. Thus, the employer can make you show up when it wants, regardless of how much or how little sense it makes to you as an employee. There are no laws preventing the employer from doing any of this, and the employer saying there are laws is just the employer being gutless and not wanting to admit they are doing it because they can and find some need to do it.

1c) Holiday pay is at the discretion of the employer, again unless there is a written contract to the contrary. Employee handbooks in almost all cases do not create any written contract and are merely guides to the employee which can be changed by the employer as it wishes. In fact, most handbooks somewhere in them have a statement that it does not create any binding contractual obligations. So here again, the employer can do what the employer chooses as far as how it manages or schedules holidays. Again, they are following the Fair Labor Standards Act here and CA law does not mandate special holiday pay or pay on holidays not worked.

2. Non-compete clauses are not favored in California and very rarely enforced except for upper level employees. You should respond to this by informing the employer that the non-compete agreement is not valid or lawful and if the employer insists then you call the CA Department of Labor and they will be glad to explain the situation to the employer in terms of penalties and fines.

Specifically tell the employer: "

"When a contract creates an illegal restraint on trade, '[t]here is nothing which the parties to the action could do which would in any way add to its validity. If the contracts upon which the judgment is based are to that extent void, they cannot be ratified either by right, by conduct, or by stipulated judgment.' (Hunter v. Superior Court (1939) 36 Cal.App.2d 100, 113.)" (South Bay Radiology Medical Associates v. Asher (1990) 220 Cal.App.3d1074, 1080.)" Thus, EVEN if an employee is paid money or given something to sign the contract, it is still illegal AND the employee will most likely not be required to repay the money.


Also, an employee or prospective employee cannot legally be terminated or not hired if they refuse to sign a non-compete agreement. As explained in D'Sa v. Playhut, Inc. (2000) -- Cal.App.4th --

3. Your research on the NDA is correct, for existing employees they must provide some "consideration" for signing the agreement beyond just continued employment. This is a little different than the non-compete because there is a legitimate interest to protect for the employer to stop employees from disclosing proprietary information of the employer. If they insist you sign without any consideration other than keeping your job, then document this and sign and if they try to enforce it later it will be found to be invalid and the court will throw the agreement out.

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Customer: replied 7 years ago.
Paul, thank you so much. This has been *incredibly* helpful.

You answered what my suspicions were, and I'm sure you can see why we the employees had some major concerns.

Yes, the company is really following the Fair Labor Standards Act on most of this. They were liberal in their gratuitous offering of the compensatory time in the past and now they are cutting back, so it seems, and are trying to blame changes in the law instead of being forthright and saying they are cutting back because things are tough and they just cannot give you what they used to give you. Best of luck to you on these matters and thank you.