On January 22, 2013, the United States District Court for the Central District of California came down in favor of Palay Law Firm’s clients on a motion for summary adjudication of Ecolab Inc.’s primary defense in an overtime class action. The case, Ladore v. Ecolab, concerns Ecolab’s misclassification of a class of about 380 pest elimination specialists as exempt from California’s overtime laws.
Ecolab has treated (and to our knowledge, continues to treat) these California workers as exempt from overtime. Ecolab has relied on the overtime exemption for carriers of “hazardous materials.” This “haz/mat” exemption, which is found in California’s IWC Wage Orders, makes an employee exempt from California overtime law if that person’s hours of service are regulated under state or federal transportation laws. Ecolab argued that California law regulates the hours of service of drivers carrying hazardous materials in trucks weighing less than 26,000 pounds and which are not required to have haz/mat placards. Ecolab claimed that anyone who carries so-called “materials of trade” in their work truck would be exempt from California overtime law. Materials of trade are materials carried by workers for the performance of their job, like, for example, a plumber who carries drain de-clogger or a painter who carries paint and paint thinner. Ecolab claimed that its pest elimination specialists, who carry limited amounts of pesticides and similar products in their sub-10,000-pound work trucks that do not require placards, fit into this exemption.
The parties brought cross motions for summary judgment on the question of whether the haz/mat exemption applies to Ecolab’s California-based pest elimination specialists. The court has now held that the exemption does not apply as a matter of law. The court analyzed the statutory and regulatory framework and concluded that “the common sense reading of the relevant regulatory scheme limits application of the Haz/Mat exemption to “drivers” whose primary duty is driving. The class members at issue do not fall within such a definition.”
The court’s decision is important in a number of respects. Had Ecolab’s position been supported by the court, plaintiffs argued that it would have exposed the single greatest loophole in California overtime law. Plaintiffs argued that employers could give their employees a material of trade (like a can of paint thinner), have them drive around the block, and claim that they were exempt from overtime as carriers of hazardous materials. Also, there are hundreds of Ecolab employees in California who are potentially affected by this ruling. The ruling is a victory for workers’ rights in California and we are proud to be a part of it.