Wage Law

The California Supreme Court has granted review in Mendiola v. CPS Security Solutions (2013) 159 Cal.Rptr.3d 159 on the following issues:

Petition for review after the Court of Appeal affirmed in part and reversed in part an order granting a preliminary injunction in a civil action. This case presents the following issue: Are the guards that defendants provide for construction site security entitled to compensation for all nighttime "on call" hours, or may defendants deduct sleep time depending on the structure of the guards' work shifts?

The original opinion can be read here. The Court of Appeal held that

CPS must compensate the trailer guards for the nighttime hours spent on the jobsites during the week, as the trial court ruled. However, in accordance with settled principles of California law, we conclude that CPS is permitted to deduct eight hours for sleep time on those weekend days when the trailer guards are on duty for 24 hours.

The docket can be followed here.

© Walsh & Walsh, P.C., wage & hour, California Supreme Court published opinions, on call hours, off-the-clock claims

In October, the 4th District Court of Appeal issued its published opinion in See’s Candy Shops, Inc. v. Superior Court (Silva) (2012) __ Cal.App.4th __, permitting employers to round employees' time to the nearest tenth of an hour, provided that the rounding method "will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked." The employee petitioned the California Supreme Court for review, and alternatively sought to depublish the opinion. The Supreme Court has denied both petitions. See’s Candy Shops, Inc. will remain good law in California.

You can download the original opinion from the Court of Appeal here in PDF or Word format. Here is the background:

Pamela Silva brought a wage - and - hour class action complaint against her former employer, See' s Candy Shops, Inc. After certifying a class of current and former California employees, the trial court granted Silva' s summary adjudication motion on four of See' s Candy's affirmative defenses and entered an order dismissing the four defense . In a writ petition, See's Candy challenged the dismissal of two of the affirmative defenses. These defenses pertained to See's Candy's timekeeping policy that rounds employee punch in/out times to the nearest one-tenth of an hour.

After the Court of Appeal denied the petition, the California Supreme Court granted See's Candy's petition for review and ordered the Court of Appeal to vacate its prior order and issue an order to show cause and hear the matter. After briefing (including several amicus briefs) and argument, the Court of Appeal concluded that the trial court had erred in granting summary adjudication on the two affirmative defenses pertaining to the rounding policy:

Relying on the DOL rounding standard, we have concluded that the rule in California is that an employer is entitled to use the nearest-tenth rounding policy if the rounding policy is fair and neutral on its face and "it is used in such a manner that it will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked." (29 C.F.R. § 785.48; see DLSE Manual, supra, §§ 47.1, 47.2.) Applying this legal standard, we turn to address whether the parties met their summary adjudication burdens with respect to the 39th and 40th affirmative defenses alleging that See's Candy's nearest-tenth rounding policy was consistent with California law.

The ruling leaves open the issue of which party will prevail on these issues at trial. If the rounding policy can be proven to have resulted in a loss to employees, the workers will prevail. If not, the employer will prevail.

The FLSA and the California Labor Code require that non-exempt employees must be paid for all hours actually worked. Therefore, an employee who works the 2 o'clock hour on Daylight Saving Time, and then again works the 2 o'clock hour on Standard Time has worked two hours and is entitled to payment for both. See, e.g., DOL Advisement on Daylight Savings [sic] Time.

To our surprise, there are some employers who believe that someone who worked from 10:00 p.m. on Saturday to 6:00 a.m. on Sunday is entitled to be paid for no more than 8 hours. Such an employee actually worked nine hours and is entitled to 8 hours of regular pay and 1 hour of overtime.

"They'll make it up in March when they get paid 8 hours of pay for 7 hours of work" is not a defense.

The Second District Court of Appeal has reversed Los Angeles County Superior Court Judge Michael L. Stern's order denying certification of a class action brought by a limousine driver against his employer for wage and hour violations arising from on-call time and related claims. In Ghazaryan v. Diva Limousine, Ltd. (2009) __ Cal.App.4th __,  the court held that a proposed class of all drivers employed by the company during a specific period was ascertainable; a sufficient community of interest existed for class certification; and that a class action was the superior method for resolving the dispute.

Diva operates a limousine service in the Greater Los Angeles area. At the time Ghazaryan filed his class certification motion in May 2006, Diva indicated it had employed approximately 190 drivers during the previous four years; approximately 100 still worked for the company. On any given day Diva places between 40 to 45 drivers in the field, and those drivers are dispatched on 140 to 150 trips or runs. However, the number of trips can fluctuate between 100 on a slow day and more than 200 on days when special events occur (for example, the Academy Awards). Typically, Diva notifies drivers of their first few assignments before their shift begins in part to allow them to plan their gap time. Approximately 75 percent of Diva's drivers have permission to take their Diva vehicles home and commute to their first run using their Diva vehicles. After these initial runs have been completed, drivers are assigned by the dispatcher to additional trips according to location, availability and fairness among drivers. On a busy day a driver may receive six to eight assignments. On a slow day that number often falls below five trips. Drivers have no way of predicting the length of any particular period of gap time although, on occasion, dispatchers may accommodate requests to schedule assignments around the drivers' personal appointments. According to anecdotal and statistical estimates submitted by both sides, it is clear drivers were placed on-call daily for substantial periods of time.
...
Ghazaryan filed his lawsuit in May 2006 alleging Diva by its practice of paying drivers by the job, not by the hour, had failed to pay earned wages and overtime or to provide required rest breaks and meal periods in violation of multiple provisions of the Labor Code and implementing administrative regulations. He further also alleged Diva had engaged in unlawful business practices under Business and Professions Code section 17200 et seq. Although Ghazaryan's complaint originally identified one broad class with four subclasses, his motion sought to certify only two overlapping subclasses: (1) based on Diva's alleged failure to pay earned overtime and straight time, “All current and former employees of Defendant who worked as Limousine Drivers during the period of May 10, 2002 to the present”; and (2) targeting Diva's failure to provide mandatory rest breaks, “All current and former employees of Defendant who work as Limousine Drivers at any time during the period of May 10, 2002 to the present, worked one or more four-hour increments of time without being given a rest break for each such increment and who were not properly compensated therefor[ ].”
...
Diva opposed class certification principally because of the purported difficulties in identifying eligible members of the class and assessing the validity of Diva's compensation policy as applied to different drivers who may or may not have used their gap time for personal pursuits. Diva explained it has several categories of drivers, some of whom are paid for gap time. Thus, dedicated event drivers, L'Ermitage Hotel drivers and organ transplant drivers are paid on a strictly hourly basis including any on-call time. Diva also submitted declarations from a number of drivers who typically use unpaid gap time for their own purposes, such as working out at the gym, napping or eating at home or running personal errands. Several of those drivers stated they are not in favor of Ghazaryan's lawsuit and do not want Diva to change the way it compensates its drivers.

The trial court found these declarations convincing and denied the motion on the ground certification would raise too many individualized issues.

Held: the trial court utilized improper criteria in analyzing the class certification request by evaluating class suitability as dependent on determination of the merits rather than evaluating whether the theory advanced by plaintiff was amenable to class treatment; and plaintiff proposed two classes which satisfied the ascertainability, community of interest and superiority of class treatment requirements. Reversed and remanded.

The court spent considerable time discussing the interpretation of the term “hours worked” under IWC Wage Order No. 9, which defined it as "time during which an employee is subject to the control of an employer, and includes all the time the employee is suffered or permitted to work, whether or not required to do so.” The court also considered two opinion letters from the Division of Labor Standards Enforcement ("DLSE").

The letter dated March 31, 1993, acknowledges the inquiry is “highly fact-driven,” but “[t]he bottom line consideration is the amount of ‘control’ exercised by the employer over the activities of the worker.... [I]mmediate control by the employer which is for the benefit of the employer must be compensated.” In a subsequent advisory letter dated December 28, 1998,, the DLSE summarized the factors relevant to this inquiry: “1. Whether there are excessive geographic restrictions on the employee's movements[;][¶] 2. Whether the frequency of calls is unduly restrictive[;][¶] 3. Whether a fixed time limit for response is unduly restrictive[;][¶] 4. Whether the on-call employee can easily trade his or her on-call responsibilities with another employee[;] and [¶] 5. Whether and to what extent the employee engages in personal activities during on-call periods.”

There is no question class treatment constitutes the superior mode of resolving Ghazaryan's claims in this action. Based on the evidence submitted by Diva in opposition to the motion, its compensation policy has been carefully drafted; and Diva very well may find its policy upheld as reasonable under the existing DLSE standard. We see no advantage to either party to resolution of this question on a piecemeal basis and agree with Ghazaryan such a prospect would jeopardize the ability of employees to find competent representation if restricted to their own individual claims. (See Harper v. 24 Hour Fitness (2008)167 Cal.App.4th 966, 976, 84 Cal.Rptr.3d 532.) In light of this conclusion, we need not accept Ghazaryan's invitation to decide whether a trial court has a duty to modify the class definition put forth by counsel for the putative class.

You can download the full text of Ghazaryan here in Word or PDF. Perhaps in the next appeal, we will get an interesting ruling on the merits, answering the question of whether an employer is obligated to pay an employee for such on-call time.

A police officer's activity of donning and doffing protective equipment constitutes an integral and indispensable part of officer's principal activities; it is not preliminary or postliminary within meaning of Portal-to-Portal Act, as required to support officer's claim for compensation for such activity. Because the equipment allowed police department to insure that officers were kept safe, allowed officers to complete their principal duties, was required to be worn, and, for all practical purposes, had to be donned and doffed at assigned station, the time spent donning and doffing that equipment is compensable under the FLSA. Maciel v. City of Los Angeles (C.D. Cal. 2008) 569 F.Supp.2d 1038.

However, several recent District Court cases have come down with widely varied holdings in the past two years, e.g.,

• In Martin v. City of Richmond (2007) 504 F.Supp.2d 766, the employer won a motion for summary judgment regarding the donning & doffing of uniforms, but denied the motion as to time spent donning & doffing protective gear which was ‘integral and indispensable’ to the work performed.
• In Abbe v. City of San Diego (S.D. Cal. 2007) 2007 WL 4146696), the court denied pay for the donning & doffing of both the uniform and protective gear.
• In Lemmon v. City of San Leandro (N.D. Cal. 2007) 538 F.Supp.2d 1200, 1204-06, the court held that donning and doffing of both the police officer’s uniform and special protective gear was compensable under the FLSA.

There will be more to come in 2009 or 2010, including possibly a decision by the 9th Circuit on these issues.

You have to have a subcription to read the entire thing, but the National Law Journal has a very interesting article written by Tresa Baldas, entitled: Is Booting Up a Computer Work, or a Work Break? More Companies Fending Off Suits on the Issue.

Lawyers are noting a new type of lawsuit, in which employees are suing over time spent booting [up] their computers. ... During the past year, several companies, including AT&T Inc., UnitedHealth Group Inc. and Cigna Corp., have been hit with lawsuits in which employees claimed that they were not paid for the 15- to 30-minute task of booting their computers at the start of each day and logging out at the end. Add those minutes up over a week, and hourly employees are losing some serious pay, argues plaintiffs' lawyer Mark Thierman, a Las Vegas solo practitioner who has filed a handful of computer-booting lawsuits in recent years. ...

We aren't sure why it takes 15 to 30 minutes to boot your computer, even if you have Vista, but it seems ridiculous to us that an employer would argue that you have to get to your desk and wait while the equipment warms up or boots up on your own time. The absurd defense position is that employees can boot the computer, then engage in nonwork activities, which must remain off the clock. Richard Rosenblatt, of Morgan, Lewis & Bockius, argues:

"They go have a smoke, talk to friends, get coffee — they're not working, and all they've done at that point is press a button to power up their computer, or enter in a key word."

Lawyers face similar situations frequently. We arrive on time for a deposition or a court hearing, only to find that the witness is running late, or the court won't be taking the bench for 20 minutes. Do lawyers like Richard Rosenblatt stop billing during these minutes, since, after all, they can go have a smoke, talk to other lawyers, get coffee or read their newspapers? Or are they on the clock, ready, willing and able to proceed? If the judge tells you to be in court at 8:30 a.m., and you are, but then you sit there for 15 to 30 minutes playing on your iPhone or Blackberry until your case is called, should you be off the clock? We think we know the answer to that question.