Wage and Hour Update. Presented by: Joan B. Tucker Fife Emilie C. Woodhead July 31, 2015

Transcription

1 Wage and Hour Update Presented by: Joan B. Tucker Fife Emilie C. Woodhead July 31, 2015

2 Today s elunch Presenters Joan Fife Partner San Francisco jfife@winston.com Emilie Woodhead Of Counsel Los Angeles ewoodhead@winston.com

3 What We Will Cover FLSA Update on Certification of Class and Collective Actions Overtime Independent Contractors Other Issues Arbitration Wage Theft 3

4 What We Will Cover (cont.) California Update PAGA Arbitration Class Waivers Seating Cases Meal and Rest Breaks Wage Statements On-Call Work Day of Rest Reimbursement for Mobile Devices 4

5 Update on Certification of Class and Collective Actions

6 Federal Certification Issues Bouaphakeo v. Tyson Foods, Inc., 765 F.3d 791 (8th Cir. 2014) cert. granted, 135 S. Ct (2015) Hourly workers at Iowa pork processing plant filed collective action to collect overtime for time spent donning and doffing personal protective gear Plaintiffs won $2,892,378 jury verdict (liquidated damages raised figure to $5,785,757) Tyson appealed, arguing statistical analysis improper because differences in class members and damages Several class members were uninjured and had no legal right to damages Eighth Circuit affirmed Supreme Court granted certiorari on June 8, 2015 Likely to be decided between January and June

7 Federal Decertification Stiller v. Costco Wholesale Corp., 298 F.R.D. 611 (S.D. Cal. 2014) Hourly workers at Costco sued for overtime for time spent allegedly locked in stores, against their will, after clocking out at the end of closing shifts Decertification where there is no discernible method to calculate injury on a class-wide basis Leads to settlement Mathis v. Darden Restaurants, 2014 WL (S.D. Fla. Sept. 1, 2014) Hourly restaurant workers filed suit for overtime for off-the-clock work Mega-class of 218,000 servers and bartenders Decertified for lack of unified treatment 7

8 Overtime

9 Department of Labor s Proposed Regs Issued June 30, 2015 (comments may be submitted up until 60 days after publication in Federal Register) Limits white collar exemptions Salary standard raised to $970/week, $50,440 annually Formerly $445/week, $23,660 annually Last updated in 2004 Highly compensated standard raised to $122,148 annually (formerly $100,000) Solicits comments on duties tests (including California s primary duty standard) Rule may go into effect in early

10 Cases Beauford v. ActionLink, LLC, 781 F.3d 396 (8th Cir. 2015) Brand advocates not covered by outside salesman or administrative exemption Class members who had cashed settlement checks did not waive right to sue Navarro v. Encino Motorcars, LLC, 780 F.3d 1267 (9th Cir. 2015) Service Advisors for automobile dealership were not exempt Lola v. Skadden, Arps, Slate, Meagher & Flom LLP, 2015 WL (2d Cir. 2015) Staff attorneys at Skadden were non-exempt because they were performing work that a machine could do 10

11 Independent Contractor

12 DOL s Administrator s Interpretation Released July 15, 2015 Part of DOL s recent efforts to curtail misclassification Intended to provide guidance on how agency interprets the law as it applies generally Unclear as to the degree of deference it may be given in courts, but clearly outlines FLSA s definition of employer as to suffer or permit to work was designed to ensure as broad of a scope of statutory coverage as possible Encourages use of the economic realities test 12

13 DOL s Administrator s Interpretation (cont.) Economic Realities Test 1. the extent to which the work performed is an integral part of the purported employer s business; 2. the worker s opportunity for profit or loss depending on his or her managerial skill; 3. the extent of the relative investments of the purported employer and the worker; 4. whether the work performed requires special skills and initiative; 5. the permanency of the relationship; and 6. the degree of control exercised or retained by the purported employer. Economic dependency is controlling, not the title given or assumed Control is not to be given undue weight, all factors equal 13

14 Cases Glatt v. Fox Searchlight Pictures, Inc., 2015 WL (2d Cir. 2015) Order granting unpaid interns conditional certification vacated and remanded Primary beneficiary test was appropriate test to determine employment status Not similarly situated enough for collective action 14

15 Cases (cont.) Meyer v. U.S. Tennis Ass n, 2015 WL (2d Cir. 2015) Class of U.S. Open tennis umpires filed suit to recover unpaid overtime Court used economic realities test to determine that umpires were independent contractors Affirmed grant of summary judgment Gayle v. Harry s Nurses Registry, Inc., 594 F. App x 714 (2d Cir. 2014) Nurses were employees using economic realities test Did not perform companionship services to fall under exemption Affirmed grant of summary judgment 15

16 Other Issues

17 Arbitration Monserrate v. Hartford Fire Ins. Co., 2014 WL (M.D. Fla. 2014) Class of analysts brought suit to recover overtime wages Cost-splitting requirement did not make arbitration agreement unenforceable Court required plaintiffs with arbitration agreements to arbitrate claims 18

18 Arbitration (cont.) Brown v. Citicorp Credit Services Inc., 2015 WL (D. Idaho 2015) Class of customer service employees filed suit to recover overtime for time spent on computers before shift District court initially rejected argument that individual arbitration is only means of settling claim, finding conclusion impermissible under D.R. Horton 9th Circuit releases opinion citing concern with D.R. Horton Granted motion for reconsideration and sent case to arbitration 19

19 Wage Theft Frequently Known As Off-the-Clock In re Foot Locker, Inc. Fair Labor Standards Act (FLSA) & Wage & Hour Litig., 2014 WL (E.D. Pa. 2014) Hourly Foot Locker employees sued for overtime for off-the-clock work Foot Locker Settles with retail associates in NY and IL for $7.1 million Harris v. Chipotle Mexican Grill, Inc., 49 F. Supp. 3d 564 (D. Minn. 2014) Hourly restaurant employees sued for overtime for work off-the-clock work Presented evidence of local policy of requiring off-the-clock work, but not sufficient evidence of a national policy Presented colorable claim sufficient to satisfy conditional certification 20

20 Wage Theft (cont.) Flood v. Carlson Restaurants Inc., 2015 WL (S.D.N.Y. 2015) Hourly Friday s employees sued for off-the-clock work Carlson attempted to settle with plaintiffs Settlement agreement included confidentiality agreement prohibiting plaintiffs from mentioning the agreement Also required employees to pay liquidated damages of 20% of settlement payment in the event of breach of the agreement Court rejected settlement agreement because sweeping confidentiality agreement may stifle pursuit of rights under the FLSA 21

21 Federal Courts in California

22 Day of Rest Mendoza v. Nordstrom (9th Cir. 2015): Ninth Circuit certified three questions to California Supreme Court Is one day of rest in seven calculated by workweek or on a rolling basis for any consecutive seven-day period? Does exemption apply where total hours do not exceed 30/week or six/day apply when employee works less than six hours in any one day of the week, or only where employee works less than six hours each day of the week? What does it mean to say employer may not cause employee to work more than six days in seven? 23

23 Searches Frlekin v. Apple Inc., (N.D. Cal. July 16, 2015) Apple employees filed suit to recover compensation for time spent having their bags searched Supreme Court recently held that time spent during mandatory searches was not compensable in Integrity Staffing Solutions, Inc. v. Busk Under California law, time spent searching bags is compensable if employer has control over employees Court certified class 24

24 California Update

25 California Cases Certification Granted Martinez v. Joe s Crab Shack Holdings (Cal. App. 2014) Managerial employees brought class action alleging misclassification as exempt Trial court denied class certification; Court of Appeal reversed; CA Supreme Court transferred matter back to Court of Appeal for review in light of Duran Court of Appeal said trial court erred in denying certification; plaintiffs claims that they filled in for hourly workers in performing non-exempt tasks were typical of the class and common policies and issues predominated 26

26 California Cases Certification Denied In re Walgreen Co. Overtime Cases (Cal. App. 2014) Employees alleged they were not provided meal breaks; trial court denied class certification; Court of Appeal affirmed Using standard set out in Brinker, employer must make breaks available but need not ensure employees take them Koval v. Pacific Bell Telephone Co. (Cal. App. 2014) Hourly non-exempt employees alleged failure to provide meal breaks; trial court denied certification; Court of Appeal affirmed Under Brinker, although uniform policy regarding breaks existed, policies were not consistently applied 27

27 California Cases Certification Denied Warren v. Pacific Bell Telephone Co. (Cal. App. 2015) Employees alleged they were misclassified as exempt outside salespersons; trial court denied certification; Court of Appeal affirmed Court of Appeal found that theories of liability would require individualized assessments into how plaintiffs spent their days Mies v. Sephora U.S.A., Inc. (Cal. App. 2015) Former employee claimed Specialists were misclassified as exempt; trial court determined that central issue was how employees spent their time, not whether a given task was exempt Court of Appeal affirmed, finding trial court did not abuse discretion 28

28 PAGA California Private Attorney General Act (PAGA) Allows employees to bring claims on behalf of other employees Establishes penalties for Labor Code (and Wage Orders) Unclear whether need to satisfy Rule 23 requirements PAGA claims attractive to plaintiff s counsel Attorneys fees available Penalties can accrue quickly $100 for first violation and $200 for each subsequent violation, per employee, per pay period 29

29 Arbitration Waivers U.S. Supreme Court Federal Arbitration Act (FAA) ensures enforcement of arbitration agreements according to terms (AT&T Mobility v. Concepcion; Am. Exp. Co. v. Italian Colors Rest.) Class action waivers in arbitration agreements are enforceable California Supreme Court PAGA representative action claims may not be waived in arbitration agreement (Iskanian v. CLS Transp. Los Angeles) 30

30 Arbitration Waivers Considerations Any distinction between state and federal cases? Federal courts bound by U.S. Supreme Court and FAA; possibly more likely to enforce waivers CA state courts bound by Iskanian Removal where possible Rise of PAGA-only actions Non-removable Supreme Court refused to consider case challenging Iskanian July 2004 April 2013: Labor and Workforce Development Agency (LWDA) received $24.5 million in PAGA penalties After Iskanian, LWDA received $7.9 million between July 2014 and June 1, 2015 (3x average annual amount) Possible Supreme Court decision 31

31 Seating CA Supreme Court asked state Labor Commissioner s Office to submit amicus brief (Kilby v. CVS Pharmacy Inc.; Henderson v. JPMorgan Chase Bank NA) How to interpret nature of work, reasonably permits, and suitable seat Employers argue holistic approach to look at range of tasks performed Employees argue if tasks can be done sitting down, seats must be provided 32

32 Meal and Rest Breaks Wert v. US Bank Smith v. Wells Fargo Bank 33

33 Wage Statements Plaintiffs seek both statutory penalties under Labor Code section 226 and civil penalties under PAGA where required information is missing from paystubs Even technical violations of Labor Code can be basis for PAGA claims New California sick leave law requires amount of accrued sick leave available on paystub If provide unlimited sick leave, may say unlimited on pay stub 34

34 On-Call Work On-call time is compensable hours worked Mendiola v. CPS Sec. Solutions, 340 P.3d 355 (Cal. 2015) Security guards were on-call at construction worksite, required to reside in trailer. Received no compensation for on-call time unless an alarm required investigation or guard requested relief and had to wait or none available No exclusion of sleep time even where agreement to do so existed On-call rest breaks are permissible Augustus v. ABM Sec., 233 Cal. App. 4th 1065 (Cal. App. 2015) Employer required security guards to keep radios and pagers on during rest periods to respond when needed, but class members regularly took uninterrupted breaks Being on call does not constitute work for purposes of providing meal/rest breaks Review granted by CA Supreme Court in May

35 Reimbursement for Mobile Devices Cochran v. Schwan s Home Servs., 228 Cal. App. 4th 1137 (Cal. App. 2014) When employees are required to use personal cell phones for work-related calls, employers must reimburse them Even where the employee has a plan with unlimited minutes, employer must reimburse for a reasonable percentage of cell phone bill Reimbursement is always required for the reasonable use of a personal cell phone, not just where employee incurred an extra expense he/she would not have incurred absent the job 36

36 Thank You Joan Fife Partner San Francisco Emilie Woodhead Of Counsel Los Angeles