California Appellate Court Rules in Favor of Employers in “Exempt Employee” Sick Leave Case
On August 4, 2025, the California Court of Appeal, Fourth District, Division 1 ruled in favor of an employer on the issue of exemptions for salespeople. In the case of Hirdman v. Charter Communications, LLC, the appellate court determined that “outside” sales people can be properly classified as “exempt employees” for the purposes of California’s paid sick leave laws. Here, our Riverside County employment attorney for employers provides a more comprehensive overview of the case.
Case Review: Hirdman v. Charter Communications, LLC
The Facts
A worker named Bradley Hirdman was employed as an outside salesperson – one who works outside the business location, i.e., not in a showroom or office – for Charter Communications. He was paid on a base hourly rate plus commissions. Charter classified him as an “exempt employee” under California law for overtime and minimum wage purposes. Mr. Hirdman sued Charter under the Private Attorneys General Act (PAGA), arguing that the company misclassified him for sick leave calculation. More specifically, his claim was that the California Labor Code § 246(l) required his employer to calculate his paid sick leave using a “nonexempt employee” method. That means that he would have to be paid sick leave either based on the regular rate of hourly pay that included commissions or using a 90-day look-back of wages and hours. Charter had, instead, applied another method for exempt employees that excluded commissions.
The Key Legal Issue
Many outside sales people in California are paid, at least in part, based on commissions. The key legal issue was whether “exempt employees” under section 246(l)(3) includes outside salespersons classified as exempt under California’s overtime law, or, alternatively, if the term “exempt employees” must be limited to the administrative, executive, or professional exemptions. In other words: does the statutory term “exempt employees,” in the context of sick leave pay calculation, cover outside salespersons who are exempt from overtime?
The Decision of the Appellate Court
The appellate court ruled in favor of the employer and concluded that the statutory language of subsection (l)(3) is clear and unambiguous. The term “exempt employees” in that part of the law applies to all employees exempt from overtime; that includes outside salespersons. The court straightforwardly rejected Mr. Hirdman’s argument to limit “exempt” to only the “white-collar” categories (administrative, executive, professional). The court found the statute does not define “exempt employees,” but California law already treats outside salespersons as exempt under overtime law and, as such, that is sufficient for them to be classified as exempt workers for the purposes of sick leave regulation as well.
Contact Our Riverside County Employment Attorney for Employers Today
At Sloat Law Group, APC, our California employment lawyer for employers has the skills, knowledge, and professional experience that companies and organizations can rely on for sick leave and family leave issues. If you have any questions or concerns about an employment law matter, please do not hesitate to contact us for a completely confidential initial consultation. With an office in Riverside County, we represent employers in the Coachella Valley and throughout all of California.
Source:
caselaw.findlaw.com/court/ca-court-of-appeal/117567545.html
