Cal Labor Law Dispute Questions

Hi. An employee who I fired in September of 2002 filed a complaint with the California Labor Board for back over time pay and for 92.38 per day for 30 days in penalties.

The employees name is Jody. She was hired as a salary employee at $1300.00 per month. In July 2002, I increased her managerial responsibilities and made her in charge of making executive decisions for the company, hiring, firing, training, and having reviews for all employees. Her new salary was $2000 per month.

The day after I fired Jody, all other 3 employees came in and gave notice to quit. Ultimately, I was able to salvage one employee throughout this process. A couple of weeks later, she informed me that Jody had made the employees fear me and that they had several meetings without my involvement talking about how I was not paying them correctly and informing all employees to document all hours and save the paperwork as they would file a formal complaint together. I had regular monthly meetings with Jody and never once did any of these concerns come up.

After this experience, I hired an outside consultant, Nvard Simonyan, to review my pay policies and to let me know if I was in fact doing things illegally. She informed me that the employees were salaried non-exempt employees due to their job responsibilities and I was responsible for overtime. Regarding Jody, she said that she became an exempt salaried employee in July/ August 2002 when her responsibilities moved to a predominantly managers role.

Once we resolved this, I had checks issued to all employees for the correct dollar amounts to pay for all overtime. For Jody, we adjusted her base pay from July 2002 - September 2002 to the $2,340 monthly required for an exempt salaried employee.

Recently, I received this complaint from the Labor Board and Jody asking for overtime from July 2002 - September 2002. Further, Jody is disputing the time I paid her for asking for about 30 minutes additional overtime pay per day. Some days are greater. When Jody handed in her timesheets, I had many conversations regarding them having to take lunches. I did not care if they ate at their desks just that they were to take a 30 minute lunch daily. I did not micromanage and let the employees take breaks as needed. Many times they would walk across the street to get a coffee or food during the middle of the day. Jody NEVER documented her lunches. I wrote about the lunches on her time sheets and discussed them with her.

A side note, Jody's car broke down and she started coming into the office at 4:30am when her start time was at 7:00am. I did not notice her coming in early as I came in at 7:30am daily. When I saw her timesheet, I asked her about it and she told me that it was the only way she could get to work as that is the time her boyfriend could drop her off. I let her know her start time was never to be altered and was at 7:00am. I lent her my car for a week and a half after that so that she could manage during this timeframe. All of this is documented on my copy of the timesheets.

Question 1: What about Jody's claim for overtime pay from July 2002- September 2002?
Question 2: What about her word against mine for the lunches daily? She is claiming she never took a lunch!
Question 3: What about the timesheet where she clocked in at 4:30am for the entire week and is claiming huge amounts of overtime?
Question 4: What about the differences in our timesheets as she kept a copy and turned one into me? We discussed challenges I had and documented it on my copy. I never thought of asking for her copy back. Even if I did, she may have made two copies etc. How could I protect myself better here?
Question 5: Do I have any legal remedy from a trouble employee like this? She caused my entire team to quit. She was supposed to inform me of challenges in the office and never once mentioned this. Do I have any rights?
Question 6: Is there anything else I should consider here?

Thank you!