Bradley Hirdman sued Charter Communications, LLC in October 2019, asserting a single cause of action for civil penalties under PAGA based on alleged violations of sections Labor Code § 246 (failure to pay sick time at the correct rate of pay), 201 to 204 (failure to timely pay wages upon termination), and 2802 (failure to reimburse necessary work-related expenses).

In September 2020, Hirdman filed his first amended complaint against Charter, asserting the same cause of action and clarifying that he sought to represent other commissioned employees in his PAGA action. In February 2023, the parties filed cross-motions for summary adjudication on the issue of Charter’s alleged failure to pay sick time at the correct rate of pay.

The material facts upon which the parties based their cross-motions are undisputed. Charter employed Hirdman as a sales representative, and it classified him as exempt from overtime requirements under the outside salesperson exemption pursuant to Labor Code.§ 1171.

The relevant statute, Labor Code § 246, subdivision (l), provides three methods by which employers may calculate paid sick leave. For “nonexempt employees,” employers must calculate paid sick time either “in the same manner as the regular rate of pay for the workweek in which the employee uses paid sick time” (§ 246, subd. (l)(1)) or “by dividing the employee’s total wages, not including overtime premium pay, by the employee’s total hours worked in the full pay periods of the prior 90 days of employment” (id., subd. (l)(2)). For “exempt employees,” paid sick time “shall be calculated in the same manner as the employer calculates wages for other forms of paid leave time.” (Id., subd. (l)(3).)

The statute does not define “exempt employees” or “nonexempt employees.” The parties asked the trial court to determine, as a matter of law, whether section 246, subdivision (l)(3) applies to employees like Hirdman who are classified as outside salespersons.

Hirdman contended that employers cannot calculate paid sick leave using the method provided in Labor Code section 246, subdivision (l)(3) for outside salespersons because the meaning of “exempt employees” includes only those employees who are exempt under the administrative, executive, or professional exemptions. (Lab. Code, § 515, subd. (a); Cal. Code Regs., tit. 8, § 11040.

In support, Hirdman relied on (1) an analysis of the bill from the Senate Committee on Labor and Industrial Relations, and (2) an October 2016 Division of Labor Standards and Enforcement (DLSE) opinion letter based on that report, which concluded that employees like Hirdman and other outside salespersons paid by commissions must be paid for sick leave per Labor Code section 246, subdivision (l)(1) or (l)(2). Hirdman thus argued that Charter was required to calculate paid sick leave for its outside salespersons using one of the methods in Labor Code section 246, subdivisions (l)(1) and (l)(2), which apply to “nonexempt employees.”

Charter, on the other hand, argued that section 246, subdivision (l)(3) applies to all exempt employees, not just those employees classified as exempt under the administrative, executive, or professional exemptions.

According to Charter, the statutory language was plain and unambiguous, and the trial court should therefore end its inquiry there because the plain meaning of the word “exempt” controls. In other words, “exempt employees” in section 246, subdivision (l)(3) means employees like Hirdman who are exempt under any exemption, including the outside salesperson exemption. Charter thus argued that it correctly calculated paid sick leave for Hirdman and other outside salespersons.

The trial court agreed with Charter and thus granted its motion for summary adjudication, ultimately entering judgment in its favor.

The Court of Appeal affirmed the trial court in the published case of Hirdman v Charter Communications -D084304 (August 2025).

The sole issue for determination on appeal is the meaning of the phrase “exempt employees” as used in section 246, subdivision (l)(3).  “Under the facts of this case, we conclude that the statutory language is unambiguous, and “exempt employees” includes employees like Hirdman who are exempt from overtime wages.”

“In sum, we conclude that the trial court correctly determined that section 246, subdivision (l)(3) applies to outside salespersons like Hirdman and thus did not err in granting summary adjudication in favor of Charter.”