Getting Paid For Waiting For Ice To Melt? Nice Work If You Can Get It

In a recent case entitled Gonzalez v. Tanimura & Antle Inc., a federal court in Arizona ruled that farm workers who waited in their employer’s parking lot until the ice melted from the crops they were going to pick were “engaged to be waiting,” rather than “waiting to be engaged” and therefore entitled to compensation for the time they spent waiting.

The court ruled that the named plaintiff and fifty-five other should have been paid for the time they spent waiting in the parking lot. The fact that they could buy coffee, or play cards or even play soccer while they waited for the crops to de-ice did not turn the time into non-compensable time. The judge stated that these “personal activities” were more like time-filling activities, rather than personal pursuits that the workers would engage in if they had not gone to the parking lot to commence their work for the day.

The workers picked lettuce and broccoli. The majority of them lived in Mexico and walked about an hour to arrive at the parking lot. From that meeting place, they rode on company-provided buses to the fields, some 10-40 miles away. Every day during the harvest season (November-March), the workers were told when to report to the parking lot on the next day. If frost was predicted, the workers were told to report later, as the harvest could not commence until the ice melted. On occasion, ice was found on the crops after the workers got to the parking lot. Thus, they were unable to commence work and they stayed in the parking lot, although some bought coffee, or played cards, dice, or soccer. The plaintiffs alleged that they were required to wait for their employer’s convenience and benefit, turning their waiting time into compensable time.

The employer defended by contending that it did not owe any monies because the ice in the fields was an “act of God.” The court rejected this defense, concluding that “the ice actually was foreseeable because it happened quite often in Yuma during the winter months.” The court noted that the supervisors would set later start times for “the next morning based on their belief that ice would form” and that “because of the predictability of the ice, defendant could have set a later start time during the winter months.

This case raises the difficult and gray issue of what constitutes working time. Again, as in so many of these instances, it is the notion of employer compulsion or direction that is at the heart of the matter. The workers were directed to report by the employer at a certain time to a certain place. That conditions outside their (or anyone’s) control delayed the commencement of their “real” work did not render their waiting time non-compensable.

Engaged to be waiting to waiting to be engaged? It depends.
 

The Financial Services Industry: An Easy Target for Overtime Class Actions

A collective/class action lawsuit against Merrill Lynch, which is just getting under way in the US District Court for the Southern District of New York (sitting in Manhattan) has been temporarily placed in limbo while the litigants wait for the decision of an Oregon court, which may approve a $43.5 million settlement in a similar type of a case.

The potential settlement could resolve a number of similar cases involving allegations of misclassification under the exemption rules. In these eleven lawsuits, financial advisers allege that they are due overtime because they are really non-exempt employees who have been erroneously classified as exempt. As a side issue, the plaintiffs also contend that that suffered illegal deductions. Incredibly, these settlements could involve almost 22,000 workers.

Under the terms of the deal, Merrill Lynch would distribute as much as $43.5 million and the majority of this sum would go to the class members. The Company would also hold back some of the monies for unclaimed funds. The settlement would entail, as a starting point, an agreed-upon designation (and certification) of a collective group in connection with the FLSA claims and another designated class for Rule 23 purposes for inclusion in the state claims.

These employees were not earning “minimum wage.” They are likely to be high-end earners and that is why the exposure on these cases is so astronomical. Employees who perform these jobs are likely being classified as exempt under the administrative exemption. This is a problem. This exemption is the toughest one of the three white-collar exemptions to qualify for as the employees must use discretion and independent judgment, which is difficult to define and even more difficult to implement as a job function in this industry. The more regulated an industry is, with significant reliance upon guidelines and procedures manuals and practices, the tougher it is to argue that the requisite amount of discretion is being utilized.

One answer is to ensure, insofar as operationally possible, that the job description and actual operating practice make clear that manuals are used only for guidance and the employee must then use discretion and independent judgment to evaluate courses of action (e.g. financial investments) and then choose from those the best alternative for a particular client.  As is evident, the stakes are dramatically high.