The Future of Workers’ Rights

On April 1, 2022, workers voted convincingly to form a labor union at Amazon’s facility in Staten Island, New York. Amazon’s fight against unionization met its match, defeated not by well-funded external labor unions, but by a low-budget, independent group, the Amazon Labor Union (ALU). The ALU spent $120,000 on the campaign, raised through GoFundMe, defeating the trillion+-dollar Amazon empire’s push to suppress worker organizing. The company spent $4.3 million in 2021 alone on anti-union consultants to help keep its 1.1 million workers disorganized and disempowered.

The workers voted 2,654 to 2,131 in favor of creating the ALU, the first-ever Amazon union. The darkhorse victory grew out of the determination, courage and conviction demonstrated by Christian Smalls and Derrick Palmer, who had worked at the facility, and whose authenticity resonated during the 11-month-long union campaign. In the spring of 2020, after learning organizing efforts were underway in their New York City warehouses, Amazon launched a smear campaign against the organizing lead, Smalls. Amazon General Counsel David Zapolsky questioned Small’s street-casual demeanor and called him “not smart, or articulate” – unfounded stereotypes which reveal thinly-veiled racism exhibited by the Amazon executive team. Amazon attempted to silence Smalls by firing him in 2020 after he led a walkout to protest COVID-related health and safety issues.

The termination sparked something in Smalls, and he and his partner, Derrick Palmer, began their union campaign in earnest in early 2021. Concurrently, Amazon ran two major campaigns against unionizing efforts in Alabama and New York City. Amazon paid anti-union consultants $3,200 per day, each, to host mandatory meetings for captive audiences of employees, and one-on-one meetings with workers to turn them against the union organizing efforts. The mandatory meetings were typically led by Amazon managers who delivered scripted anti-union speeches and slideshows, but the efforts backfired, when contrasted with Smalls’ grassroots approach.

Smalls organized workers by waiting at a Staten Island MTA bus stop that brings workers to and from the LDJ5 Amazon sorting center and the JFK8 fulfillment center. Smalls would wait at the MTA bus stop for hours at a time, days on end – even after being arrested and accused of trespassing and resisting arrest on Amazon property. The bus stop outside the warehouse became a place of refuge for workers to enjoy Palmer’s homemade baked ziti, empanadas, and West African rice dishes alongside a makeshift bonfire to warm colleagues waiting for the bus in the cold. Meantime, Smalls and his team used unconventional organizing methods such as Twitter and TikTok to raise money, recruit legal representation, and gain supporters.

The momentous victory of the ALU is especially important in the light of the drastic decline in union membership in the U.S., which fell from 20% in 1983 to 10.3% in 2021. Early unions’ intentions were to raise wages obtain basic worker protections, and level the playing field. In fact, many of today’s employment laws would not exist had workers not unionized. However, despite these great ideals, anti-union campaigns and the unfortunate reproduction of bias within some unions have been barriers to progress. Gradually, as unions became more institutionalized, many workers began to feel suspicious of them. Amazon warehouse workers in Staten Island, the majority of whom are young, Black, Latino, working class and urban, may not have felt that established unions spoke for them.

Smalls, a 33-year-old Black man operating independently, and his ALU, stepped into this void. When asked about traditional unions, Smalls said he felt that established unions were “disconnected” from innovative styles of organizing. To emphasize his point, Smalls camped out at the MTA bus stop for 10 months as union president. The ALU’s innovative use of scrappy resources such as social media, the MTA bus stop, and makeshift advertisements made with tape and cardboard, may be revealing a new era in workers’ rights. In the envisioned new era, leadership takes nontraditional forms, where union presidents come from diverse backgrounds and socioeconomic statuses, and organizing methods are no longer restricted to well-staffed offices and dues-financed operations. Smalls, with his collection of tattoos, gold grills, and former career as a rap singer, may be the future of labor unions in America, an outsider to mainstream power structures driven only by his passion to make people’s working conditions better. 

Undoubtedly, advocating for your rights in the workplace is a terrifying endeavor, especially against a giant like Amazon, but by harnessing the strength of community, Smalls was not alone. What Smalls and his team have shown is that this source of strength, plus some clever grassroots labor organizing, can fell giants.

Bryan Schwartz Law stands unwaveringly with workers in advocating for their rights. When such rights are violated, Bryan Schwartz Law will empower workers to fight back. If you feel that your employer has compromised your rights in the workplace, including your right to concerted action with your co-workers, reach out to us here.

New (Watered-Down) Overtime Pay Rule Announced By Department of Labor

This week, the U.S. Department of Labor announced a final rule that starting January 1, 2020, 1.3 million more American workers will be eligible for overtime pay under the Fair Labor Standards Act (FLSA). The final rule expands the definition of who “non-exempt” workers are, i.e. workers who are subject to minimum wage and overtime pay requirements. “Exempt” workers are exempt from minimum wage and overtime pay requirements. Exempt workers include, for example, those meeting the tests (including the salary-basis test) for the white-collar exemptions as executive, administrative, or professional employees.

The rule is a watered-down version of an Obama Administration proposal, which would have expanded overtime pay to around 4 million workers by raising the maximum salary for which non-exempt workers are entitled to overtime pay to $47,000 a year for full-time work, a highly-compensated employee (“HCE”) exemption level of $147,000, and (perhaps most importantly) tying future increases to the cost of living. That proposal was met by fierce opposition from various business groups, who teamed up with some Republican-controlled states to take the Obama Administration to court, resulting in the rule being blocked by a conservative federal judge in 2017.

Here are the main changes the new rule makes:

·         raises the “standard salary level” to qualify for a white-collar exemption from the current level of $455 per week (equivalent to $23,660 per year for a full-year worker) to $684 per week (equivalent to $35,568 per year for a full-year worker);

·         raises the total annual compensation level for “HCEs from the current level of $100,000 to $107,432 per year;

·         allows employers to use nondiscretionary bonuses and incentive payments (including commissions) that are paid at least annually to satisfy up to 10 percent of the standard salary level; and

·         revises the special salary levels for workers in U.S. territories and in the motion picture industry.

What the new rule does not do is tie the standard salary level to the rate of inflation. Adjusted for inflation, the $23,660/year would rise to a current minimum salary level for non-exempt status of $55,000/year. By also allowing employers to take nondiscretionary bonuses and commissions into account in determining how much employees make and therefore if they’re eligible for overtime pay, the rule immediately undercuts the impact of the relatively small increase provided to the standard salary level. That 10% caveat creates room for confusion and discretion on the part of employers that could adversely affect the very workers the rule is supposedly designed to help. The $107,432/year level for HCEs is also laughably low for many parts of the country where such a salary is much closer to the average.

After 15 years of no updates to overtime pay eligibility, any update is welcome. But once again, the Trump Administration does far less than is needed (and far less than was approved by the prior Administration) to help vulnerable workers. The bottom line: If you make less than $35,568 a year for full-time work, starting next year, you’re more likely to be entitled to overtime pay. But, your employer can count up to 10% of your earnings from things like bonuses and commissions to determine if you qualify for overtime. Note that this new rule doesn’t affect the “outside sales exemption.”

Bryan Schwartz Law has written about overtime issues before here. If you believe you were denied overtime pay you were owed, 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.

Pass the Gravy, But Don't Hold the Wages

Tomorrow, many Americans will prepare their Thanksgiving feast from a box of assembled ingredients, opting to skip the crowded grocery store frenzy by ordering their Thanksgiving meal from a meal kit delivery service. However, customers may be left with a bad taste in their mouths to learn that many of the workers that assemble their meals are being subjected to unsafe, unlawful working conditions and unfairly compensated for their work. 

That is the subject of a recent class action lawsuit filed in Northern California against Blue Apron, claiming that Blue Apron failed to pay workers overtime and failed to provide them with mandatory meal and rest breaks.

Meal kit delivery services are growing in popularity, and there are number of brands to choose from like Blue Apron, Martha and Marley Spoon, HelloFresh, or Sun Basket. Forbes reports the trend for these online meal-kit delivery services will continue, forecasting online sales of meal kits to top $10 billion by 2020, up from about $1 billion in 2015. These meal kit delivery services have capitalized on their success by reinventing dinner, making it easy and accessible for cooks of all skill levels. 

However, there is one group of people who have plenty of complaints about this new industry: the workers. 

Blue Apron employs over 1000 employees at their warehouse center in Richmond, California where nearly 8 million meal kits are assembled each month. Even under fair conditions, the job is difficult. Blue Apron workers assemble the perishable meal kit boxes inside warehouses kept at a temperature below 40 degrees. According to an investigative report by Buzzfeed, Blue Apron employees reported working 12 hour shifts, five to six days each week on the assembly line in order to meet production deadlines. 

On October 5, 2018, a class action lawsuit was filed against Blue Apron in the Alameda County Superior Court, alleging that Blue Apron failed to properly pay its workers, failed to provide its workers with meal and rest breaks, and failed to provide workers with accurate itemized wage statements. The lawsuit covers all Blue Apron hourly employees that work/worked in California from October 5, 2014 to the present. Plaintiff and the putative class are represented by the Turley & Mara Law Firm, APLC. The case was removed to the United States District Court for the Northern District of California on November 19, 2018 (Fairley v. Blue Apron, Inc., Case No. 3:18-cv-07000).

If you believe you have been subjected to employment discrimination, unfair pay or unsafe working conditions, please contact Bryan Schwartz Law today. 

Appellate Court Hits Tipped Workers

On September 6, 2017, the Ninth Circuit in Marsh v. J. Alexander’s LLC, No. 15-15791 (9th Cir. 2017) dealt a blow to tipped workers. The Court rejected U.S. Department of Labor (DOL) regulatory guidance that would have strengthened tipped workers’ claims to full minimum wage for the hours spent working outside the scope of tipped work. Currently, unlike California law (which rejects such a notion), the federal Fair Labor Standards Act (FLSA) allows employers to reduce a tipped worker’s wages based on what that worker earns in tips, thereby passing the payment of wages to the customer. This wage reduction for employers is called a “tip-credit.” The DOL’s interpretation of this provision would have made it so that the tip-credit would not apply to the hours an employee spent doing non-tipped work. In other words, when a waiter spends time cleaning, taking out trash, folding napkins and other non-tipped work, the DOL interpretation would have considered this type of work a “dual job,” separate from the employee’s tipped work, for which the worker is entitled to receive full minimum wage. The Ninth Circuit disagreed with the DOL’s interpretation, a decision further disempowering low-wage workers.

Tip-credit Explained

The FLSA generally requires employers to pay a cash wage of $7.25 per hour to their employees. 29 U.S.C. § 206(a)(1)(c). But where an “employee engage[s] in an occupation in which he customarily and regularly receives more than $30 a month in tips,” id. § 203(t), his or her employer may pay a reduced cash wage and claim the employee’s tips as a credit towards the $7.25 per hour minimum, id. § 203(m).

As part of the DOL’s clarification of the statutory phrase “more than $30 a month in tips,” the DOL promulgated the “dual jobs” regulation, which maintains that an employee can be “employed in a dual job.”. 29 C.F.R. § 531.56(e). The regulation provides that if the employee is engaged in one occupation in which “he customarily and regularly receives at least $30 a month in tips,” and is also engaged in a second occupation in which the employee does not receive the required amount of tips, then the employer can take a tip credit only for the first occupation. Id. To further clarify enforcement, the DOL provided guidelines in its Field Operations Handbook (“FOH”), of 29 C.F.R. 531.56(e) to interpret the regulation.

The FOH provides that “an employer may not take a tip credit for the time that a tipped employee spends on work that is not related to the tipped occupation.” FOH § 30d00(f) (2016). For example, the FOH states that “maintenance work (e.g., cleaning bathrooms and washing windows) are not related to the tipped occupation of a server; such jobs are nontipped occupations.” Id. As such, the FOH would support the conclusion that the employee is effectively employed in “dual jobs.” The Ninth Circuit, however, takes issue with this interpretation.

The Ninth Circuit points out that the DOL regulation itself provides two examples of situations where an employee is not employed in dual jobs: (1) “a waitress who spends part of her time cleaning and setting tables, toasting bread, making coffee and occasionally washing dishes or glasses”; and (2) a “counterman who also prepares his own short orders or who, as part of a group of countermen, takes a turn as a short order cook for the group.” 29 C.F.R. § 531.56(e). These examples appear to come at odds with the FOH, especially applied to the facts in Marsh.

Marsh Challenge to Tip Credit Application to Non-Tipped Work

In Marsh, plaintiffs argued in reliance on the DOL guidance that certain job-related duties that were not tipped work should be excluded from the FLSA tip credit, and plaintiffs should be paid the minimum wage for the time engaged in these distinct duties. Marsh, No. 15-15791 at 15. Plaintiffs contended that the defendant employer should pay its servers minimum wage – without a reduction for tips - when the servers engaged in duties such as stocking food, taking out trash, sweeping floors, wiping down tables and walls, or other tasks that require no customer interaction. Id.

The Ninth Circuit court disagreed and held that the FOH was not entitled to deference because the “dual jobs” regulation is unambiguous. See Auer v. Robbins, 519 U.S. 452, 462 (1997) (holding that courts should consider agency guidance in cases where the regulation is ambiguous); see also Chase Bank USA, N.A. v. McCoy, 562 U.S. 195, 208 (2011). Looking back to the FLSA and the “dual jobs” regulation, the court determined that the dual jobs regulation interprets § 203(t)’s reference to employees “engaged in an occupation” to mean employed in a “job,” not performing an activity. See 29 C.F.R. § 531.56(e) (emphasis added). Furthermore, citing Abramski v. United States (2014), the Court wrote that “nothing in the FLSA’s ‘context, structure, history, [or] purpose’ suggests that Congress intended to use the term ‘occupation’ in § 203(t) to mean discrete duties performed over the course of the day.” Abramski v. United States, 134 S. Ct. 2259, 2267 (2014). Based on the regulation, the Ninth Circuit determined that plaintiffs could not state a claim by alleging that their discrete tasks or duties comprised a dual job.

The Future for Tipped Workers

Marsh illustrates the continuing controversy around the tip-credit provision, including its discriminatory effects and how it continues to push costs of labor onto the consumer. In its interpretation of the tip credit, the Marsh Court limits the ability of the minimum wage to protect the well-being of low-wage service workers, perpetuating a system that has grown the ranks of the working poor. For employees living hand-to-mouth, being paid at least the minimum wage may be the difference between making rent and eviction, eating and starving, providing for children or having them under the care of the state.