While California is mired in a $25 billion budget deficit, and companies are leaving for greener, business-friendlier pastures like Arizona, Texas, Georgia and North Carolina, the California Supreme Court is doing its best to pile on the regulatory burdens that hurt this state’s ability to compete on a national and global scale. In Sullivan v. Oracle Corporation, the California Supreme Court held that non-resident employees who perform work in this state, even for periods as short as a single day, are protected by California’s overtime laws. As a result of this decision, we recommend that out-of-state employers seriously consider allowing only employees who are exempt under the California standards (which are more difficult for employers to meet than the exemption standards under the federal Fair Labor Standards Act) to travel to the state on business.

The three plaintiffs were instructors for California-based Oracle, but they lived and usually worked in the states of Arizona and Colorado. However, they periodically came to California to provide instruction to the company’s customers in use of the company’s products. At one time, Oracle had classified all of its instructors as exempt from overtime but later reclassified them as non-exempt and settled a wage-hour class action. The three plaintiffs had been dismissed from the class action because they were not residents of California.