Wage Law

Confined Space had a post yesterday about the woes of workers and residents still suffering from the aftermath of Hurricane Katrina. After 15 years of construction litigation and a heavy influence of wage and hour work in the field, we are never shocked by what we see and hear. This came close, though:
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With the promise of work and high pay, high numbers of undocumented immigrants have flocked to New Orleans and Mississippi. Unfortunately, on top of the dirty and dangerous work, the AP's Justin Pritchard reports that many complain of not being paid after weeks of work.

A pattern is emerging as the cleanup of Mississippi's Gulf Coast morphs into its multibillion-dollar reconstruction: Come payday, untold numbers of Hispanic immigrant laborers are being stiffed. Sometimes, the boss simply vanishes. Other workers wait on promises that soon, someone in a complex hierarchy of contractors will provide the funds to pay them.

Nonpayment of wages is a violation of federal labor law, but these workers — thousands of them, channeled into teams that corral debris, swaddle punctured roofs in blue tarps and gut rain-ravaged homes — are especially vulnerable because many are here illegally.

Many of the firms that aren't paying are subcontracting from KBR, a firm owned by Vice President Dick Cheney's former company, Halliburton.

The worst problems seem to be in Mississippi, although it's hard to gauge accurately, as the state doesn't even have a labor department, it's not against the Mississippi law to not pay workers, and any complaints are forwarded to the federal Department of Labor. The only option workers have is to file a claim with the federal government or take their employer to court, options that few, if any, immigrant workers will take advantage of. In fact, despite widespread complaints of non-payment of wages, Mississippi prosecutors have not received a single complaint.

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There is no labor department and there are no labor laws in Mississippi. That must be a great place for business. Next time I hear a defense lawyer complain that his client (that is being sued by my client for violating California law) is going to be leaving California soon because of its labor laws, I'll hand him a brochure about Mississippi.

A Department of Labor inspector general report released two weeks ago acknowledged that Wal-Mart Stores Inc. received "significant concessions" from the U.S. Department of Labor's Wage and Hour Division when the department and Wal-Mart signed a settlement agreement resolving a dispute over child labor violations. At the beginning of this year, Wal-Mart agreed to pay a fine of $135,540 for child labor violations involving 85 children operating hazardous equipment at stores in several states between 1998 and 2002. The deal included an unprecedented right for the company to receive 15 days' notice "of any audit or investigation at the stores."

The inspector general's office found "serious breakdowns" in the department's "negotiating, developing and approving" such agreements. As we reported when it happened, the agreement between Wal-Mart and the Wage and Hour Division "was significantly different from other agreements," and "the Wal-Mart agreement had the most far-reaching restrictions" on the department's authority to conduct investigations and assess penalties. The report notes that the 15-day advance notice is "inconsistent" with the department's guidelines and that Wal-Mart could avoid penalties or a formal citation if it brings a facility into compliance within 10 days of a notice of violation. Several significant parts of the agreement were authored by Wal-Mart's attorneys and were "never challenged by" the Department of Labor.

As always, representative George Miller spoke out quickly. "The Bush Labor Department chose to do an unprecedented favor for Wal-Mart, despite the fact it is well known for violating labor laws, including child labor laws." He went on to point out that Wal-Mart's special deal would allow the company to cover up evidence of a violation, which could discourage employees from filing complaints in the first place.

The company issued a brief response, noting that the inspector general's office did find that the agreement "is in compliance with federal law" and that the company believes that "the agreement was the appropriate course of action."

That's true. There is nothing illegal about taking all you can from an anti-worker administration. But that doesn't make it right.

Over at the UCL Practitioner, Kimberly A. Kralowec is beginning a series of posts analyzing Prop 64 and the "statutory repeal rule." It is great reading if you have any cases where Prop 64 retroactivity is an issue, especially since every single published case on the subject remains unciteable while the Supreme Court ponders in several pending cases and leaves others in the "grant review and hold" purgatory of appellate procedure.

We like to read the UCL Practitioner, because that blog is like a treatise, and the UCL is an important part of the California wage and hour law. It is the UCL that extends the statute of limitations to four years in wage cases. And, although we can't see an intellectually honest court doing so, if the Supreme Court eventually rules that meal and rest period pay is a penalty, the UCL and its restitutionary remedy will be the only remedy available against employers who robbed their workers of ten minutes of paid rest more than a year ago.

Arnold Schwarzenegger thought that he needed to rebuild a broken California, and that the Democratic legislature was standing between his plans for a better, pro-business, California, and an eager population who wanted to see Arnold's plans come to fruition. So he took his most important ideas directly to the people in a $50 million special election. And last night the people gave Schwarzenegger a resounding "No, thanks."

Voters overwhelmingly defeated Proposition 76, the crown jewel of the special election, which would have restricted the growth of state spending. Proposition 77, which would have redrawn legislative districts, lost by an equally large margin. Closer, but also failing, were Propositions 74 (delaying teacher tenure) and 73 (restricting political spending by public employee unions).

In addition to the $50 million the state spent on this election, ballot proponents and opponents spent another $300 million or more. That's quite a bit of wasted money from a governor whose number one goal, allegedly, is to eliminate fiscal waste.

After calling his own election an expression of the people's will, one might think Schwarzenegger would view these election results as a statement of the people's will, and a criticism of the way he has run his administration. In fact, a poll released Monday, a solid majority of Californians said they would not be inclined to reelect Schwarzenegger, But Schwarzenegger says he is undaunted. "Tomorrow, we begin anew. ... I feel the same tonight as that night two years ago ... You know with all my heart, I want to do the right thing for the people of California." And by the right thing, he means, among other things, accepting huge money from business lobbyists, restricting employees' rights, and limiting the rights of individuals so that large corporations can make greater profits.

If you would like concrete examples, check out some of the bills the governor vetoed on one day just last month, according to CBS news:

Today on his website, Schwarzenegger.com, there is no mention of the election or its results.

The first opinion of the Roberts Supreme Court is in, and it is a unanimous pro-employee decision in a wage and hour class action case. This morning, in IBP, Inc. v. Alvarez, the U.S. Supreme Court ruled that companies must pay plant workers for the time it takes to change into protective clothing and walk to their work stations. The ruling upheld a 9th U.S. Circuit Court of Appeals decision in favor of the workers. The opinion, authored by Justice John Paul Stevens, held that although employers are not ordinarily required to pay workers for time spent changing clothes, if the clothing is "integral" to their job, in this case, protective safety gear, then the time it takes workers to don that attire and then walk to the production area is compensable time.

Under the Portal-to-Portal Act, time spent walking to and from a work area is also normally uncompensable under Federal labor laws. However, in this case, the court found that the walking occurred during the employees' workday, because the workday begins when they have to change into their safety gear, and ends only after they take off the gear at the end of their shift. "The relevant walking in this case occurs after the workday begins and before it ends," said the court.

The Portal-to-Portal Act does not affect the computa­tion of hours within a "workday," 29 CFR §790.6(a), which includes "the period between the commencement and completion" of the "prin­cipal activity or activities," §790.6(b). Principal activities include all activities which are "an integral and indispensable part of the principal activities," which the court has previously found (Steiner v. Mitchell 350 U.S. 247) to include "the donning and doffing of spe­cialized protective gear "before or after the regular work shift, on or off the production line."

The court did throw a small bone to employers, however, finding that the time em­ployees spend waiting to don the first piece of protective gear is not compensable, because it is a "preliminary" activity similar to the excluded tasks, such as walking to the worksite, that are within the scope of the Portal-to-Portal Act. The fact that cer­tain preshift activities are necessary for employees to engage in their principal activities does not mean that those preshift activities are "integral and indispensable" to the "principal activity" of the worker's job.

The full text of the case can be read here: IBP, INC. v. ALVAREZ, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, ET AL., CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT, No. 03-1238, argued October 3, 2005, decided November 8, 2005.

The case concerns a food processing plant in Washington owned by Tyson Fresh Meats Inc. The opinion also decided the case of Tum v. Barber Foods, Inc., dba Bar­ber Foods, on appeal from the 1st Circuit, which pertained to identical issues affecting workers at a chicken processing plant in Maine. For now, the case can be cited as 546 U. S. ____ (2005).

The 4th District Court of Appeal, Division 3 (Orange County) has requested an informal opposition to a writ petition filed in the Norm's Restaurants case, Ayala v. Norm's Restaurants, dealing with statutes of limitation and wage/penalty issues in a meal and rest period class action. This is from the same panel that denied a writ petition in one of our cases against Dollar Tree Stores a year or two ago. We are familiar with the attorneys for both sides. Roger Carter, our co-counsel in the El Torito case, represents Ayala. Greg Labate of Sheppard Mullin represents Norm's. We've been across the table from Greg once or twice, and we are familiar with many of his colleagues at Sheppard Mullin. We'll be watching this case with interest, since we have many cases dealing with this issue in Orange County.

The Home Depot class certification we discussed earlier this year has been reversed and the remanded for further consideration. A writ petition was summarily granted by the 4th District Court of Appeal on September 13, 2005 in a unanimous opinion authored by Justice Gaut (whose son, Kevin Gaut is an employment class action defense lawyer who defends, among other companies, J. Jill the Store).

Riverside Superior Court Judge Roger Luebs had granted certification of an assistant manager misclassification case, but he is now assigned to criminal cases, so the matter is now before Judge Edward D. Webster. The plaintiffs now have until December to file new certification briefs, taking into account certain factors specified in the court's summary order (we are still trying to get a copy of the order.) The new certification hearing will be January 9, 2006.

George Bush's job approval rating reached a low of 35 percent in a CBS News poll published today. Reasons cited for the decline include Iraq, the CIA leak, Harriet Miers and Hurricane Katrina.

Vice President Dick Cheney's favorable rating is down 9 points this year to 19 percent.

Congress, meanwhile, enjoys a 34 percent approval rating.

The poll was conducted nationwide by telephone from a random sample of 936 adults Oct. 30-Nov. 1. The poll has a 3-percentage-point margin of error. What strikes us about these numbers is that they indicate a substantial disapproval rating from Republicans. Perhaps these numbers will motivate the ruling party to pursue policies that ordinary Americans favor, but we aren't holding our breath.

A hat tip goes to Facing South, which spotted a curious phenomenon originating here in Wage Law's home town of Irvine, California.

What do this newspaper editorial, this one, this one, and this one all have in common? All of them are unsigned editorials, which makes it look like they're original opinion pieces for each paper. (The Colorado Springs Gazette even says it's "our view.") And they all happen to say exactly the same thing, beginning with this paragraph:

One of the smartest things President Bush did to reduce recovery costs in the aftermath of hurricanes Katrina and Rita was to suspend Davis-Bacon Act rules in the hardest hit states. But Congress is frantically trying to overrule the president, which would add billions of dollars to the already staggering recovery costs.

Amazing that newspapers from California, Colorado, and North Carolina could be channeling, simultaneously and in complete harmony, the Bush administration line for cutting wages for workers rebuilding the Gulf Coast.

The source of this repeating editorial is Freedom Communications, Inc., a media enterprise that is based here in Orange County and which runs, among other things, the Orange County Register. Facing South somehow discovered that the author of the editorial is Sean Paige, editorial page editor of the Colorado Springs Gazette. Paige is well known for his right-wing politics, and used to be the personal aide to former President Bush's Chief of Staff, John Sununu. And there is certainly nothing wrong with a right-leaning media conglomerate picking up an editorial view written by such a person, but this story comes with a delicious twist of irony.

Last month, Mr. Paige also wrote an editorial criticizing MoveOn.org and its members for sending so-called "astroturf" letters to newspapers, wherein each person submits the same canned letter-to-the-editor in their respective locales. Here is what Mr. Paige wrote (again, with full credit going to Facing South):

I began noticing patterns in the e-mails — the same rote phrases or analogies that betray an orchestrated letter writing campaign, rather than a spontaneous outpouring of thoughts and feelings.

Well, you know what they say: If you can't beat 'em, join 'em.

From a press release from Rep. George Miller:

WASHINGTON, DC -- Bowing to pressure from a united Democratic front, a small group of members of his own party, the religious community, and the labor movement, President Bush announced today he would reverse the decision he made in September to remove wage protections for construction workers in the areas affected by Hurricane Katrina. 

After Katrina, the President suspended the 1931 Davis-Bacon Act, which requires federal contractors to pay at least the prevailing wage to construction workers in a local area.  The president’s action, which was widely denounced, followed requests from right-wing activists and Republican members of Congress who exploited Katrina to achieve a long-sought ideological agenda item. 

Representative George Miller (D-CA), the senior Democrat on the House Education and the Workforce Committee, led the effort in the House to force Bush to rescind his Gulf Coast wage cut.   

“President Bush finally realized that his Gulf Coast wage cut was a bad idea that hurt the workers and their families affected by Katrina,” said Miller. “But let me be clear – the President is backing down today only because he had no other choice.

“The President’s wage cut was just another example of his incompetence as a leader in a time of crisis and of his constant need reward the private agenda’s of his special special-interest friends rather than attend to the needs of all the people affected by this storm.”

The President’s wage cut was facing a congressional showdown as early as next week because of a Joint Resolution Miller recently introduced that would have forced the House to vote by early November on whether or not to allow the wage cut to stand. Miller said that Democratic action – coupled with pressure from some members of the President’s own party – left the President no option but to reverse his own mistake.

Miller said that until the President formally issues a proclamation reversing the Gulf Coast wage cut, he will closely monitor the situation, and remains prepared for a vote on his Joint Resolution if necessary.

Miller also said that the Bush Administration has taken other actions that undermine Gulf Coast workers – actions that it should also reverse. These include suspending affirmative action requirements and safety standards for truck drivers.

“Americans deserve a lot better than the failed leadership our President has shown in the Gulf Coast,” Miller said.