Wage and Hour Class Action
The Ninth Circuit has suggested it might upset longstanding “on call” practices by making California employers liable for “reporting time” pay to employees who phone in ahead of their schedule, only to find that they are not needed for the day.
In August of 2014, California resident Mayra Casas, a former Victoria's Secret sales clerk, filed a wage and hour class action lawsuit against the retailer for allegedly scheduling employees for work hours only for those individuals to arrive at the store location and discover that these “call-in” shifts were revoked or cancelled.
The $37 million wage and hour class action lawsuit alleges that Victoria's Secret violated several Fair Labor Standards Act statutes and California Labor Laws by failing to pay employee's reported working time on regular scheduled shifts, “call-in” shifts, and by committing unfair business practices, such as locking employees in the store against their will.
According to the unpaid overtime class action lawsuit, “employees who work a closing shift routinely find themselves locked in the store at the end of daily operational hours and must await a manager to permit them to leave the store. Because this occurs after the employees have clocked out for the day, they are not compensated for the time spent under their employer's control[.]” Casas similarly alleged in her wage and hour lawsuit that employees scheduled for morning shifts are forced to wait outside the store until the manager opens the doors and allows them to clock in for the day.
At the heart of Casas is a common on-call scheduling practice where employees call in a few hours before the scheduled start time to see if they need to appear for work. Plaintiffs argued that this required act of picking up the phone amounts to “reporting” for work under Wage Order 7's Reporting Time Pay provision. The rules on reporting pay generally provide that an employee who reports for work, but who is not put to work or is furnished less than one-half the usual or scheduled day's work, is entitled to at least two hours and up to four hours of reporting-time pay.
District Court Decision
In December 2014, Judge Wu rejected this “call-in” claim. Judge Wu relied on both the common meaning of “report” and the legislative history of Wage Order 7 to hold that to “report for work” plainly means to physically appear at the work site. Thus, contrary to Plaintiffs, simply lifting a receiver or tapping a touchscreen does not require the employer to pay reporting time when the on-call employee never actually shows up for work.
Then in February of 2015, a California federal judge rejected Victoria's Secret Stores LLC's bid to trim a putative class action alleging the retailer owes sales clerks $37 million for not providing scheduled shifts, ruling the company should have raised its arguments in an earlier dismissal motion.
Interlocutory Appeal to the Ninth Circuit
On October 5, 2016, a panel of Ninth Circuit judges indicated that it might place Judge Wu's decision on hold and call on the California Supreme Court to answer whether “calling in” to work amounts to “reporting for work” under California's Wage Order 7-2001. Pregerson, Noonan, and Paez—the three circuit court judges who took the line from Judge Wu—expressed skepticism that federal court is the appropriate venue to decide the on-call issue.
Both Judges Paez and Pregerson repeatedly suggested transferring the call to the California Supreme Court. Judge Paez went so far as to iterate the statutory certification standard—that federal courts should certify important questions of state law to the state supreme court—and concluded that “this in my view, it seems to me, like a very important question that affects a lot of people.” These statements suggest that it is possible, if not likely, that the panel will call on the California Supreme Court for its guidance as to what California law is on this topic.
It is unknown whether the Supreme Court will accept this transfer. As Judge Paez recognized, even though the Ninth Circuit might put in a call for help, nothing requires the California Supreme Court to answer affirmatively. The experienced employment lawyers at Kingsley & Kingsley will continue to monitor this case among others concerning wages and overtime pay. In the meantime, if you have any questions about California's existing employment laws, don't hesitate to call us toll free at (888) 500-8469 or contact us via email.