(CN) - Former Oracle employees can sue the software giant for unpaid overtime on work they performed in California, even though the workers themselves live in different states, the 9th Circuit ruled.
Oracle hired Donald Sullivan, Deanna Evich and Richard Burkow to teach customers how to use its products. By classifying these workers as teachers, the Delaware-based company exempted them from overtime under federal and state labor laws.
Sullivan and Evich lived in Colorado during their years with Oracle, and Burkow lived in Arizona.
In 2003, Oracle teachers filed a federal class action in California suit to recoup overtime earnings. Oracle, which has its principal place of business in the Golden State, settled most of the claims and reclassified all of its workers as overtime eligible by 2004.
This development led Sullivan, Evich and Burkow to file a separate class action seeking overtime wages for out-of-state workers on work they performed in California. These claims had been dismissed without prejudice from the settled class action.
A federal judge dismissed the case, agreeing with Oracle that California's labor laws didn't apply to nonresidents.
Though the 9th Circuit revived the case on appeal, it vacated its decision and certified the issues of the case to the state Supreme Court.
Ultimately, however, the justices also found that out-of-state workers can sue their employer for overtime on work they performed in California.
With these answers, the 9th Circuit again revived workers' claims that Oracle's past conduct violated California's labor code and unfair competition law.
"The contacts creating California interests are clearly sufficient to permit the application of California's Labor Code in this case," Judge William Fletcher wrote for a three-judge panel Monday. "The employer, Oracle, has its headquarters and principal place of business in California; the decision to classify plaintiffs as teachers and to deny them overtime pay was made in California; and the work in question was performed in California."
Oracle had contended that applying state labor laws to the plaintiffs would violate the due process clause of the 14th Amendment and dormant commerce clause of the U.S. Constitution.
The Pasadena-based three-judge panel disagreed, but it did find that the teachers cannot use California labor laws to seek overtime wages on work performed outside of the state.