Hope for Workers’ Wage Claims for Commute Time

Earlier this month, the California Court of Appeal found that workers may be entitled to pay and reimbursements for time commuting to and from their workplaces. Typically, time commuting is not compensable, but, time commuting that also is in service of the employer or under the employer’s control might be another story.

 

In the class action at issue, Oliver v. Konica Minolta Business Solutions U.S.A., Inc. (CA6 H045069 6/2/20), the California Sixth District Court of Appeal found that triable issues of material fact existed as to whether service technicians can be paid and reimbursed for commuting to and from their non-office locations of the day. The court reversed summary adjudication in favor of the defendant and remanded the case to the trial court for further proceedings. 

The technicians sought wages for time spent commuting to and from the first and last work location and reimbursement for the mileage accrued during such commutes. The technicians rarely drove to an actual branch location for work—instead, they usually began their days by driving from home to the first customer location of the day and ended their days by driving from the last customer location home. The Court held that the key to deciding if the technicians were entitled to be paid for commute time was whether the technicians were “required during the commute to carry a volume of tools and parts” that restricted them from using their time effectively for their own purposes. The technicians drove their personal vehicles containing their employer’s tools and parts to customer sites to make repairs to copiers and other machines. Such tools and parts included a laptop, small vacuum cleaner, a hand cart, a service case containing hand tools, and around 150-250 expensive replacement parts for machines. Although the technicians were not required to carry their employer’s tools at all times and could use “field stocking locations” to store parts between service locations, most technicians carried smaller tools and parts in their cars as “field stocking locations” were either inconvenient or unavailable. Technicians were also required to have at least 25 cubic feet of lockable cargo space in their cars for the tools, which, according to the employer’s “Field Parts Inventory Practice Guide,” should have been “easy to locate” and were subject to random audits. 

 

The trial court found for the defendants, determining that the commute time was not compensable as “hours worked” under Industrial Wage Commission Order No. 4-2001, which defines hours worked as the time which an employee is subject to control of an employer. The trial court also found that the service technicians were not entitled to reimbursement for the mileage under Labor Code § 2802. Labor Code § 2802 requires an employer to reimburse its employees for all duty-related expenses. 

 

The Court of Appeal, relying on Morillion v. Royal Packing Co., found otherwise. See 22 Cal. 4th 575 (2000). In Morillion, the California Supreme Court found that commute time to and from work is generally not compensable, but “compulsory travel time” is required to be compensated. Id. at 587. Under this analysis, the “level of the employer’s control over its employees . . . is determinative.” Id. In other words, if an employee cannot use their commute “time effectively for [their] own purposes,” such as dropping off their children to school or stopping for breakfast before work, the employee is subject to their employer’s control. Id. at 586. Therefore, in this case, if the service technicians were required to carry their employer’s tools and were not able to use their commute time “effectively for [their] own purposes,” then the technicians were subject to the control of their employer and Konica Minolta would have to pay the technicians for their commute-time wages and mileage reimbursement. The Court of Appeal found that this analysis involved two factual disputes that needed to be determined at the trial court: (1) whether service technicians were required to commute with tools and parts in their personal vehicles, and (2) the volume of tools and parts service technicians were required to carry in their vehicles while commuting.

 

The level of control an employer has over its employees is often determinative in wage cases. As Bryan Schwartz Law as written about before here, the Supreme Court in Dynamex Operations West, Inc. v. Superior Court of Los Angeles held that workers in California are presumptively employees of those for whom they labor. See 4 Cal. 5th 903 (2018). Among other factors, they must be free from the control and direction of the hiring entity to be considered an independent contractor in wage and hour cases.

 

With commute times in California being some of the worst in the nation, being properly compensated for time commuting that is under the control and in the service of the employer would make a big difference in workers’ paychecks.

 

Bryan Schwartz Law has written about compensation for commute times and wage and hour issues before. If you believe you are owed wages, please contact Bryan Schwartz Law today.

Victory! U.S. Supreme Court Rules that Employers Cannot Discriminate Against Their Employees for Being LGBT

Today, the Supreme Court ruled that Title VII protections apply to lesbian, gay, bisexual, and transgender workers. Title VII was created in 1964 and prohibits employment discrimination based on race, color, religion, sex, and national origin. After hearing oral arguments for three cases last October, the Court ruled in a 6-3 decision that prohibited discrimination “because of sex” under Title VII also extends to LGBT workers.  This landmark ruling is a huge victory for employees and the LGBT movement. 

Before Monday’s ruling, employees in more than half the states could be fired for being LGBT. The three cases discussed before the Supreme Court involved two gay men and one transgender woman, all of whom were terminated immediately after their employer discovered they were LGBT. Gerald Bostock was an award-winning child welfare advocate in Georgia but was fired after his employer found out he participated in a gay recreational softball league. Donald Zarda, a skydiving instructor in New York, was fired days after mentioning he was gay to a client. Aimee Stephens, a transgender woman working at Harris Funeral Homes in Michigan, was fired after announcing she planned to “live and work full-time as a woman.” 

The Court’s decision was surprising to most, as Justice Gorsuch, appointed by President Trump, wrote for the Court. Justice Gorsuch was joined by Republican-appointee Chief Justice John Roberts and Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor, and Elena Kagan. The majority found that Title VII’s “because of sex” was originally enacted with protections for LGBT employees in mind. Further, even if an employer’s ultimate goal is to discriminate against its employees on the basis of sexual orientation, the employer intentionally treats an employee worse based on that individual’s sex along the way. For example, if two identical employees are attracted to men, and the employer fires the male employee for no other reason other than the fact he is attracted to men, the employer discriminates against him for traits it tolerates in its female employee. The Court found that this is simply discrimination based on sex, with Justice Gorsuch stating that this analysis “involve(s) no more than the straight-forward application of legal terms with plain and settled meanings.” 

Justice Gorsuch’s decision was surprising because of who appointed him—but, to the vast majority of Americans identifying with both political parties, it is clear that LGBT people in the workplace should not suffer discrimination because of their sexual orientation, i.e., because of sex. In fact, according to The New York Times, 90% of Democrats and 74% of Republicans believe it should be illegal for employees to be fired based on sexual orientation. Similarly, 86% of Democrats and 69% of Republicans believe it should be illegal for employees to be fired for being transgender.

Justice Samuel Alito and Clarence Thomas joined in a dissent out of touch with what the American public has long believed, arguing that the Court was wrongly stepping into the shoes of legislators. Justice Alito stated that if Congress wanted Title VII to include protections for the LGBT population, it would have amended the statute to explicitly include “sexual orientation” or “gender identity.” Meanwhile, in a separate dissent, Justice Kavanaugh focused primarily on statutory interpretation and argued that the majority failed to analyze appropriately the “ordinary meaning” of Title VII. 

The Court’s decision resolved a split among federal circuit courts, with the Eleventh Circuit previously holding that sexual-orientation-based claims were not actionable under Title VII but the Second, Sixth, and Seventh Circuit reaching the contrary decision. In Bostock’s case, the Eleventh Circuit upheld the district court’s dismissal of Bostock’s complaint due to a previous panel holding that found Title VII did not apply to sexual orientation claims, holding that “under [the] prior panel precedent rule, we cannot overrule a prior panel’s holding, regardless of whether we think it was wrong.” The prior panel had explained, “[d]ischarge for homosexuality is not prohibited by Title VII,” highlighting that no Supreme Court decision had ever “squarely address[ed] whether sexual orientation discrimination is prohibited by Title VII.” Evans v. Georgia Reg'l Hosp., 850 F.3d 1248, 1255-56 (11th Cir. 2017) (citing Blum v. Gulf Oil Corp., 597 F.2d 936, 938 (5th Cir. 1979)). Similarly, the district court in Stephen’s case stated that “neither transgender status nor gender identity are protected classes under Title VII.” E.E.O.C. v. R.G. & G.R. Harris Funeral Homes, 201 F. Supp. 3d 837, 861 (E.D. Mich. 2016). In his dissent in Zarda v. Altitude Express, Inc., the Second Circuit case finding that sexual-orientation-based claims were actionable under Title VII, Judge Gerard E. Lynch stated, “I would be delighted to awake one morning and learn that Congress had just passed legislation adding sexual orientation to the list of grounds of employment discrimination prohibited under Title VII[, but when] I actually woke up[, I] realized that I must have been still asleep and dreaming. Because we all know that Congress did no such thing.” 883 F.3d 100, 137 (2d Cir. 2018). With the Supreme Court’s decision today, we can wake up knowing that we all have the right to be protected against employment discrimination under Title VII.

In his opinion, Justice Gorsuch wrote that “it is impossible to discriminate against a person for being homosexual or transgender without discriminating against that individual based on sex.” We agree. To the tireless activists—including Mr. Zarda and Ms. Stephens, both of whom passed away before this decision could be published—and decades of LGBT activism that led to this momentous decision today, we thank you and look forward to ensuring employers adhere to this ruling in the years to come.

Bryan Schwartz Law celebrates today’s important decision. The firm has written about Title VII many times before. If you believe you were discriminated against on the basis of sex, please contact Bryan Schwartz Law today.

Are You Employed in Retail? The Administration is Threatening Your Overtime Pay

Recently, the U.S. Department of Labor (“DOL”) issued a final rule that would seek to deprive large numbers of employees overtime wages. The Administration’s action eliminates helpful guidance about the types of employees who are not considered to work in “retail” and would presumably be entitled to overtime under the federal Fair Labor Standards Act (“FLSA”). Employees considered “exempt” from the FLSA do not benefit from its minimum wage and overtime pay requirements. Exempt workers usually include executive, administrative, or professional employees who meet the tests—including the salary-based test—for the exemption. “Retail” workers may also be considered exempt and be paid on a commission-only basis. For nearly 60 years, the DOL had a list of industries presumably excluded from “retail” as having no “retail concept” – like banking. The Administration’s action would seek to short-change these hundreds of thousands or millions of workers of their overtime.

More specifically, pursuant to Section 7(i) of the FLSA, certain employees paid primarily on commission in the retail and service industries have long been considered exempt from overtime benefits. To qualify for this exemption, the employee must have been employed by a “retail or service establishment,” which the DOL consistently interpreted as an establishment with a “retail concept.” Such establishments typically “sell[] goods or services to the general public,” “serve[] the everyday needs of the community,” “[are] at the very end of the stream of distribution,” dispose their products and skills “in small quantities,” and “do[] not take part in the manufacturing process.” Implementing this interpretation, the DOL maintained lists of establishments that could not claim the overtime exemption: (1) those that the DOL viewed as having “no retail concept” and were always ineligible to claim the exemption (such as banks, certain dry cleaners, tax preparers, laundries, roofing companies, and travel agencies), and (2) those that “may be recognized as retail” but were potentially ineligible for the exemption on a case-by-case basis (such as auto repair shops, hotels, barber shops, scalp-treatment establishments, taxidermists, and crematoriums).

The DOL’s new rule eliminates these lists that provided helpful guidance for more than half a century of what types of establishments could claim the overtime exemption. Employers that previously fit into these categories may now try to assert that they have a retail concept and may qualify for the overtime exemption.  According to the Administration, this rule provides greater simplicity and flexibility to retail industry employers because the DOL will now apply the same “retail concept” analysis to all businesses. 

We disagree. This rule may be used by employers to attempt to justify paying their workers on commission without overtime, which means employees working longer hours with less pay. Retail workers already have a low median annual income of about $29,000 according the U.S. Bureau of Labor Statistics and are subject to wage and hour abuses. The new rule simply adds confusion around long-standing FLSA guidance for employers and employees about who can and cannot qualify for overtime provisions. The DOL made this decision without a notice and comment period, stating that no such period is required since both lists were interpretive regulations originally issued without notice and comment in 1961. Some attorneys question the propriety of the DOL’s decision. 

Courts may disregard this rule change. The DOL’s interpretations and lists are not binding on courts but can serve as guidance and, in the past, have been afforded some deference. However, when the Administration casts aside tried-and-true guidance to support the political agenda of the moment, seemingly without undergoing any rigorous process or study, such a move will be entitled to no deference under Perez v. Mortgage Bankers Association. 135 S.Ct. 1199, 1208 n.4 (2015) (highlighting that an agency’s interpretation that conflicts with a prior interpretation of a regulation is entitled to considerably less deference than a consistently held agency view). Workers’ rights advocates anticipate that when the Administration changes – hopefully soon – helpful guidance will be restored distinguishing true retail from many other industries that would opportunistically try to claim an exemption where none should exist.

Bryan Schwartz Law has written about the Trump Administration’s antipathy toward workers, DOL shifts, and overtime before and remains committed to protecting workers’ wages. If you were denied overtime pay you believe you were owed, contact Bryan Schwartz Law today.

White Silence is Violence

Ahmaud Arbery. Breonna Taylor. Christian Cooper. George Floyd. David McAtee.

The lasting power of white supremacy is once again on full display. All of us – especially those benefiting from a legacy of white privilege – have an obligation to end this reign of terror. As civil rights lawyers, we at Bryan Schwartz Law feel a special duty to respond.

Our work as lawyers hinges on a core belief in the rule of law and the power of the law to organize society in a way that protects and provides for its people. The events of the past weeks are a painful reminder that the rule of law is not evenly applied. Yesterday, the president ordered police to tear gas protestors at the White House so that he could get a photo holding a bible in front of a church (whose bishop, by the way, was not warned of nor condoned his visit). When police and other government actors contribute to the abrogation of vital protections (like our First Amendment freedoms of speech, association, and assembly, and anti-discrimination laws) or selectively enforce laws as a way to subjugate people, we as lawyers have an obligation to step in and push our legal system to correct course.

That includes intervening in every sphere of life where white supremacy is present, including employment. While California is home to some of the most progressive employment laws in the nation, there is also a seemingly endless stream of cases of Black employees being denigrated and abused in the workplace, one of which is our class-action race discrimination and harassment case against Tesla.

When clients first come to us, their faith in the law has generally been shaken. They have been wronged; their rights have been violated. It is a special duty and honor to be able to say, we hear you, we are with you, we will stand beside you, and we will fight for you.

And so today we say: Black Lives Matter and fight white supremacy. The struggle for racial justice is real and it is long. We will continue to lend our talents and treasures to the struggle to defeat racism in all its forms.