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.

On-Call Scheduling Practice Ruled a Violation of Employees’ Rights

On February 4, 2019, the Court of Appeals for California’s Second District ruled in favor of retail employees in an important decision about on-call work time in Ward v. Tilly’s, Inc., Case No. B280151. This decision is a major victory for on-call employees who have to set aside time for shifts they might not get to work. You can find the opinion here.

The employer, Tilly’s, a clothing and accessories retailer, required their employees to call two hours ahead of some shifts to find out if they were actually needed. These on-call shifts had concrete start and end times, and Tilly’s instructed its employees to plan as if they were definitely going to work the shifts. Some on-call shifts were scheduled immediately after an employee’s regular shift, in which case the employee would learn whether she was needed during her regular shift. Although Tilly’s could reprimand or even fire employees for failing to call in before their on-call shifts, they were not paid for any on-call shifts they did not work, nor were they paid for the two hours between calling in and the start of the on-call shift.

A scheduling scheme like Tilly’s puts workers, especially low-wage workers, in a tough spot. An employee scheduled for a potential shift has to plan her day as if she will work the shift, despite not having the guarantee of compensation. This stressful arrangement means setting up child care or care for aging relatives, pursuing additional employment, rearranging health care appointments and education schedules, or foregoing sleep, personal hygiene, or leisure, even though an employee may not know whether she will be called in to work until just two hours before her potential shift. In essence, Tilly’s required their employees to block out their time for work without the assurance of being paid.

The plaintiff filed a putative class action suit against Tilly’s, challenging this scheduling practice. Tilly’s argued that the lawsuit did not state a cause of action—that everything the employee said Tilly’s did, in Tilly’s view, was legal. The Superior Court in Los Angeles agreed and threw out the case.

The Court of Appeals reversed, ruling that Tilly’s on-call scheduling scheme violated the law, specifically Wage Order 7 (Spanish) (Chinese). The Industrial Welfare Commission has issued 17 Wage Orders, including Wage Order 7, to regulate wages and work conditions for California workers. Wage Order 7 requires employers to pay employees for “[e]ach workday an employee is required to report for work, but is not put to work . . . .” Wage Order 7-2001 (8 Cal. Code Regs § 11070). Tilly’s argued that the phrase “report to work” requires an employee’s physical presence at the workplace when a shift starts.

Not so, said the Court of Appeals. The Court of Appeals drew attention to the unbalanced burdens that Tilly’s on-call scheduling scheme placed on its workers. The scheme benefited Tilly’s immensely: “This permits employers to keep their labors costs low when business is slow, while having workers at the ready when business picks up. It thus creates no incentive for employers to competently anticipate their labor needs and to schedule accordingly.” Ward, Case No. B280151, at *22. In contrast, the scheme “impose[d] tremendous costs on employees. . . . [O]n-call shifts significantly limit employees’ ability to earn income, pursue an education, care for dependent family members, and enjoy recreation time.” Id. at *22. These burdens affect employees not just during their on-call potential shifts, but for the two hours between the phone call and the shift itself. Id. at 22-23. The Court of Appeals held that Wage Order 7 was designed to prevent unfair scheduling practices such as this, and determined that the phrase “report for work” included the act of calling in. Id. at 23, 25. The wage orders covering workers in other industries use the phrase “report to work” in the same way as Wage Order 7.

In conclusion, the Court of Appeals pronounced that “if the employer directs employees to present themselves for work by logging on to a computer remotely, or by appearing at a client’s job site, or by setting out on a trucking route, then the employee ‘reports for work’ by doing those things. And if . . . the employer directs employees to present themselves for work by telephoning the store two hours prior to the start of a shift, then the reporting time requirement is triggered by the telephonic contact.” Id. at 25-26. This conclusion is similar to a California Supreme Court decision that an employer cannot require its employees to keep their pagers and phones on to remain on-call during their rest breaks, which Bryan Schwartz has blogged about before. See Augustus v. ABM Sec. Servs., Inc., 2 Cal.5th 257, 269 (2017).

If your employer has asked you to call in before scheduled shifts to determine if you are needed to work, please contact Bryan Schwartz Law today. Click here for more information about Bryan Schwartz Law.

California Supreme Court Offers Clear Statement: A Rest Period Must Be a Period of Rest

In the final week of 2016, the California Supreme Court handed a victory to workers across the State by clarifying that employers may not require hourly employees to remain on call during mandatory 10-minute rest periods. The Court grounded its decision in the history of the rest-period requirement, statutory interpretation, and common sense, leading to its conclusion that “A rest period, in short, must be a period of rest.”

The case before the Court, Augustus v. ABM Security Services, Inc., involved security guards who were required to keep their pagers and radios on during rest periods and remain ready to respond to calls when needs arose. The security guards won a $90 million victory in the trial court on summary judgment – based on the employer’s admission that it did not relieve guards of all duties during rest periods - but the Court of Appeal reversed. In doing so, the appellate court concluded that state law does not require off-duty rest periods, and furthermore, that “being on call” is not performing work.

Augustus follows a 2012 decision of the state’s high court, Brinker Restaurant Corp. v. Superior Court, which concluded that employees must be relieved of all duties during statutorily required 30-minute meal periods. Now, Augustus confirms that employers must treat meal and rest periods the same way.

In an opinion written by Justice Cuéllar and joined by four Justices, the Court used the dictionary definitions of “rest” – the “cessation of work, exertion, or activity” or “freedom from activity and labor” – as an indication of the legislative intent behind the rest-period requirement. Justice Cuéllar traced the history of the provision, from an Industrial Wage Commission wage order in the 1930s to California Labor Code § 226.7, enacted in 2000. The Court noted indications that the Legislature had intended for meal and rest periods to be treated the same, and further that specific provisions which authorize on-duty rest periods (such as one involving caregivers at 24-hour residential care facilities) would make no sense if any employee can be required to be on duty during a rest period. The Court also looked to guidance from the Division of Labor Standards Enforcement which had determined that rest periods must be duty-free.

The majority also took care to assuage concerns that off-duty rest periods would be too onerous for employers, noting that an employer can call an employee back to work mid-break if there is an urgent need, so long as the employee gets an additional rest break within the prescribed timeframe or the employer pays the employee a premium for the missed break.

In a concurring and dissenting opinion, Justice Kruger agreed that rest periods must be off-duty, but quibbled with the premise that being “on call” is work. She would have remanded the case to the trial court for further consideration of whether this particular on-call policy unreasonably interfered with the security guards rest breaks.

Rather than let this determination devolve into a fact-bound, mushy standard as to what kinds of on-call policies unreasonably interfere with a 10-minute rest break, the Court created a bright-line rule. The Court acknowledged that, as a practical matter, a 10-minute break is exceedingly short and that any interference by the employer is likely to compromise the employee’s ability to briefly rest. The Court further noted that many employees may need to use those ten minutes to  take care of personal matters, such as pumping breast milk or making a phone call to arrange child care. In short, the Court has put employers in California on notice that rest means rest, making it much easier for employees to challenge employer policies that fail to conform to the law.

If you believe that your employer has failed to provide you with off-duty rest periods as required by California law, please contact Bryan Schwartz Law.

Ninth Circuit Allows CA Wage and Hour Class Action to Move Forward, Affirming the District Court's Grant of Class Certification

The Ninth Circuit recently affirmed the District Court’s certification of a wage and hour class action against Stoneledge Furniture, a wholly owned subsidiary of Ashley Furniture Industries. 

Stoneledge Furniture operates 14 retail furniture stores in California and employs about 600 sales associates, who primarily sell furniture and accessories to Stoneledge’s customers. Stoneledge paid its sales associates on commission.

Plaintiff Ricardo Vaquero, a former sales associate of Stoneledge, asserts that Stoneledge violates California’s minimum wage and hour laws because it requires sales associates to do many tasks unrelated to sales.   Vaquero alleges that Stoneledge requires sales associates to clean the store, attend meetings, and carry furniture.   According to Vaquero, Stoneledge does not pay its sales associates for such work, beyond what they earn in commissions, and this policy violates California wage and hour laws.

Under the Class Action Fairness Act  of  2005,  28  U.S.C.  § 1332(d)(2), Defendants removed the case to federal court, and Vaquero moved to be named a class representative.   He asked to represent four subclasses, three of which were derivative of the  first:    (1)  a  class  of  all  California  sales  associates employed from August 24, 2008, to the present who were paid less than minimum wage for non-sales time worked; (2) sales associates who were not provided with itemized wage statements; (3) former sales associates who were not paid all wages due at separation; and (4) sales associates who were  subject  to  unlawful  business  practices.

The district court granted class certification for all of the classes except for the third subclass. 

Defendant Ashley Furniture moved to appeal the district court’s decision to certify the remaining subclasses pursuant to Federal Rule of Civil Procedure 23(f). The sole issue before the court is whether the district court properly granted class certification.

Defendants argued that Vaquero failed to meet the requirements of Rule23(a), alleging that Plaintiffs failed to establish commonality and predominance of class claims among the class.  Defendants also asserted that class certification altered the parties’ substantive rights in violation of the Rules Enabling Act, 28 U.S.C. § 2072(b).

 

Defendants relied on Wal-Mart Stores, Inc. v. Dukes, arguing that commonality did not exist among the class.  However, the court disagreed, distinguishing Dukes from the present case.  Dukes involved a class action against Walmart for sex discrimination, alleging that the corporate culture and the retailer’s delegation of promotion decision to individual managers denied a class of female employees equal pay and promotional opportunities in violation of Title VII.  The Supreme Court held that subjective decision by many managers in different locations could not be considered a common injury across a class of more than one million plaintiffs.

 

Unlike in Dukes, the Ninth Circuit found that the class in Vaquero had commonality because the class all had the common contention that Defendant’s compensation structure violated California’s minimum wage laws for all such employees, a relatively small number of class members who all generally performed the same work.

 

Defendants also argued that Vaquero’s class failed to establish predominance, asserting that predominance cannot be reached when damage calculations cannot be performed on a class-wide basis. Defendant’s based their argument on Comcast Corp. v. Behrend, an antitrust case where the Supreme Court reviewed certification of a class of consumers that offered a complex damages model to show how customers were subject to anti-competitive pricing.

 

The Ninth Circuit has interpreted Comcast to mean that plaintiffs must be able to show that damages resulted from the Defendant’s conduct in order to establish predominance.  The Ninth Circuit found that Vaquero easily established predominance because the class alleges that Defendant’s consciously chosen compensation policy deprived the class of earnings in violation of California minimum wage laws.  The court also held that the Vaquero class’s inability to prove individual damages cannot alone defeat class certification and held that the permissibility of using representative or statistical models to establish damages turns not on the form a proceeding takes—be it a class or individual action—but on the degree to which the evidence is reliable in proving or disapproving the elements of the cause of action.

 

Defendants also argued—relying heavily again on Dukes—that allowing the class to use representative evidence to prove damages would inevitably change the substantive rights of the parties by preventing Defendants from individually cross-examining and challenging each class member’s claim.  In Dukes, the Supreme Court rejected plaintiffs’ trial plan to determine damages through statistical sampling because Wal-Mart would lose the right to litigate its statutory defenses to individual claims.

However, the Ninth Circuit found Ashley Furniture’s reliance on Dukes misplaced.  The court found that Defendants’ concerns about damages were hypothetical at this stage of the litigation and that the district court’s grant of class certification did not expand Vaquero’s substantive rights or those of the class. The court explained that Defendants could challenge the viability of Vaquero’s evidence at a later stage of the proceedings and that it was immature to decide at the stage of class certification.

California Supreme Court Clarifies that Most Employers Must Provide Employees with Seats for Tasks that May Reasonably Performed While Sitting

On Monday, the California Supreme Court provided much-needed guidance on a little-known state regulation that requires employers to provide employees with “suitable seats” when reasonable. The Supreme Court’s opinion in Kilby v. CVS Pharmacy, Inc. clarified that whether an employer must provide a seat depends on the individual tasks the employee regularly performs and whether any of those tasks may reasonably be performed while sitting, not whether the majority of tasks performed by the employee could be performed seated. It further clarified that employees who regularly work standing must be provided with a seat during breaks.

Despite the standing-desk trend amongst office workers, for workers who spend most of their shifts on their feet, sitting down for part of the workday reduces fatigue and promotes overall health. The Supreme Court’s interpretation of the seating requirement thus forces employers to evaluate the physical conditions of their employees’ workspaces through the lens of safety and health.

The U.S. Court of Appeals for the Ninth Circuit had requested guidance from the California Supreme Court to resolve two cases which implicated the seating requirement: one involving cashiers at CVS Pharmacy and another involving tellers at JPMorgan Chase Bank. The requirement is contained within the Industrial Welfare Commission’s wage orders, which regulate wages, hours, and working conditions for various job categories. (It impacts most workers in California, with the exception of those regulated by wage orders covering agricultural, construction, drilling, logging, and mining jobs, which have different seating rules.)

The California Supreme Court first traced the history of the seating provision, which dates to a 1911 law requiring that female employees in the mercantile industry be allowed to sit during breaks. A few years later, the Industrial Welfare Commission incorporated seating requirements for women and children into the various wage orders, including a requirement that garment and laundering workers be permitted to work while sitting. Seating requirements evolved over the following decades, and became applicable to employees regardless of gender in the early 1970s. In its current form, the relevant seating provision states:

14. SEATS

(A) All working employees shall be provided with suitable seats when the nature of the work reasonably permits the use of seats.

(B) When employees are not engaged in the active duties of their employment and the nature of the work requires standing, an adequate number of suitable seats shall be placed in reasonable proximity to the work area and employees shall be permitted to use such seats when it does not interfere with the performance of their duties.

In interpreting the seating requirement, the Court rejected the employers’ position that “the  nature of the work” language calls for a review of all tasks performed by an employee throughout the day to categorize work into “sitting jobs” and “standing jobs.” The Court explained: “There is no principled reason for denying an employee a seat when he spends a substantial part of his workday at a single location performing tasks that could reasonably be done while seated, merely because his job duties include other tasks that must be done standing.” However, the Court also rejected the employees’ argument that if a single job task could be performed sitting, a seat must be provided.

The Court was instead persuaded by guidance from the Division of Labor Standards Enforcement which cautioned that the all-or-nothing approach obscures what tasks a worker actually performs (and their duration) and ignores the central purpose of the wage orders to provide a minimum level of protection for workers. But the Court also noted that, contrary to the argument advanced by the employees, the reasonableness standard in the provision means that a seat likely need not be provided where seated tasks comprise very little of the workday.

The Court’s standard thus requires an examination of all relevant factors and a balancing of the employee’s need for a seat against the impact on the employer’s business. Relevant considerations would include whether tasks in a given location could be performed sitting, whether sitting would significantly interfere with other standing tasks, and the impact on overall job performance. The Court further explained that the inquiry is an objective one and an employer’s mere preference for standing work is irrelevant.

Finally, the Court explained that sections 14(A) and 14(B) are not mutually exclusive and that both may apply to the same employee during different parts of the workday. For instance, an employee who performs both seated and standing work may be entitled to a seat during breaks in addition to while performing seated tasks.

The Supreme Court’s guidance is significant because employees who suffer violations of the seating requirement may be able to file an action under the Private Attorneys General Act of 2004 (PAGA). PAGA provides a cause of action for workers to enforce Labor Code violations in court on behalf of themselves and other aggrieved employees. In the context of the seating requirement, employers who fail to provide seats when it is reasonable to do so could be on the hook for penalties starting at $100 for each aggrieved employee per pay period. See Home Depot U.S.A., Inc. v. Superior Court (2010) 191 Cal.App.4th 210, 218; see also Cal. Labor Code § 2699(f)(2). Given that risk, many employers will likely find it more cost-effective to simply buy more chairs.

If you believe that your employer has unreasonably denied you access to seating while performing work or during breaks, please contact Bryan Schwartz Law.