Wage & Hour - Development & Highlights : New Jersey Labor and Employment Lawyer & Attorney : Fox Rothschild LLP Law Firm : Serving Essex County, Sussex County, Roseland, New Jersey

In December, I blogged about off-the-clock work in my post Unreported, Off-the-Clock Work.  Off-the-clock work includes meal break time, and issues arise when employees work during these breaks, or claim that they work during these breaks, but are not paid.  Recently, an Ohio federal judge decertified a class of employees who alleged that their employer’s meal break policy violated the FLSA.  The judge decertified the class action suit because the workers’ experiences were too diverse to justify the class. 

The case, Creely v. HCR ManorCare Inc. et al., was filed in the U.S. District Court for the Northern District of Ohio, the case number is 3:09-cv-02879.

The employer, HCR ManorCare Inc., (“HCR”) has more than 44,000 hourly employees.  A class of 318 nurses, licensed practical nurses, certified assistants, and admissions coordinators claimed that employees missed meal breaks and were not properly compensated because HCR failed to  ensure that employees were paid.  Specifically, the plaintiffs claimed that HCR failed to train employees on how to report incidents where they worked during meal breaks, and even in some instances, actively discouraged employees from doing so.  The judge however, decertified the conditional class because the claims presented varying accounts of what instructions these workers received on claiming wages earned while working through meal breaks (since wages were automatically deducted for meal break time). 

Although this class was decertified, this decision demonstrates the overriding importance for employers to maintain reasonable procedures for employees to report ostensible work performed during meal times.  To avoid incidents like this, employers should ensure that employees are properly trained to report their time and managers are keenly aware of their employees working, or seeking to work, through lunch.

• Print
• Comments
• Trackbacks
• Share Link

I often post on and discuss working time issues, e.g. travel time, on-call time, automatic lunch deduction cases, training time and, of late, after-hours employee email/blackberry usage and whether it is "work hours."

On Thursday, January 17, 2013, at 11AM, I am giving a one-hour Webcast on the topic "What Is Working Time and When Is It Compensable?"   The link is http://www.hr.com/stories/1354556504350

This is a gray, gray, confusing topic and grist for the mill of class actions!

Hope you can listen in.

.

• Print
• Comments
• Trackbacks
• Share Link

Affiliated Computers Services, Inc. (“ACS”), a company owned by Xerox, has agreed to settle a wage and hour dispute with call center employees for $4.5 million.  The call center workers claim that ACS failed to record and pay them for their time spent logging onto their computers each day. The employees allege that ACS’ failure to record this time resulted in them being denied their regular pay as well as overtime pay.  The case is entitled Bell v. Affiliated Computer Services and was filed in the District of Oregon.

At first glance, the Bell settlement is mind-boggling considering that the time spent turning on a computer likely only takes a few minutes each day and does not seem like “work.”  However, there has been a significant amount of litigation on this issue over the past year, and in many instances, these cases have resulted in large settlements.

Employers defending these off the clock cases have principally relied on the de minimis exception set forth in the federal regulations.  This exception provides that “ insubstantial or insignificant periods of time outside scheduled working hours may be disregarded in recording time.”  However, the de minimis exception is only applicable where the work involved is for such a short duration that it cannot be precisely recorded for payroll purposes.

The courts have refused to issue a standard amount of time that would automatically qualify as de minimis.  Rather, the United States Supreme Court and several circuit courts of appeal have determined that periods of time ranging from 7 to 10 minutes is considered de minimis.  The federal regulations, however, provide a more conservative view of de minimis work - - less than 5 minutes each day.

Employers can expect more off the clock cases dealing with “preparatory” work duties, such as turning on a computer at the beginning of each shift, in the near future.  Employers should review their time recording policies in an effort to avoid potential liability.  More importantly, employers should carefully scrutinize what, if any, pre-shift or post-shift activities their employees may be engaging in, as those activities may later be claimed to be “work.”
 

• Print
• Comments
• Trackbacks
• Share Link

I just read of a report that notes that a record number of FLSA wage-hour lawsuits were filed in 2012  The report notes that more than seven-thousand FLSA cases were litigated, showing an increase from the year before.  If anyone thought that these kinds of suits were starting to slow down, the truth is they are still abundant, with a knowledgeable plaintiff-side bar looking for them, mostly. I think, on the Internet..

The numbers include both single plaintiff and collective (e.g. class) action cases.  There has been, however, an explosion of class actions, as oftentimes, there are numerous employees performing the same duties or with the same job title, especially if it is a company of size or spread out across the country.  The cases become somewhat formulaic, from a plaintiff’s counsel’s side, coupled with the risk that the employer will have to pay out large attorney fee awards the longer that the case goes on.  That is the reason this (to me) disturbing trend is continuing.

The report cited some reasons for this continuing supply of wage hour/overtime cases, such as the poor economy causing layoffs, sending unhappy workers to lawyers’ offices.  I think that is valid, but I agree more strongly with one of the other listed causes---a general ambiguity and grayness to the FLSA (and state counterparts) that makes it difficult for the most well meaning employer, who wants to comply with the law but makes (reasoned) judgments on exemption and working time issues that are all too easily alleged to be violative of the FLSA.

Coupled with the potential risk of large dollar damage awards and equally large fee applications, employers find it more prudent to settle, especially if there is some real risk and the case has not proceeded that far.

For an employer, the most proactive way to defend against such a lawsuit is to conduct a keen, objective self-audits, scrutinizing job descriptions and matching them up against actual duties, for exemption determinations as well as examining whether, if at all, pre/post shift activities are engaged in as they might be alleged to be “work.”  In this manner, employers can bestow upon themselves some measure of confidence that, although they may have to pay their lawyers to defend a case, they won’t be paying the other side’s!
 

• Print
• Comments
• Trackbacks
• Share Link

The issue of claims for alleged working time is on a disturbing trend upwards.  There seems to be no end to the frequency and variety of these claims.  Although the latest case is not in the context of a judicial proceeding, but rather an administrative investigation, the result, and the issues, remain the same.  The US Department of Labor and Norwegian Cruise Line have just entered into a settlement where the Company will pay $526,602 in allegedly owed wages more than two-thousand employees working for the Pride of America cruise ship, based in Hawaii.

The investigation showed that the Company paid straight time for certain work activities, i.e. mandatory weekly emergency drills, without regard for whether these hours brought the employees beyond forty for that week, thereby triggering an overtime obligation.  This included all of the time spent conducting and participating in the emergency drills conducted every Saturday.  Further, as the employer had taken meal and lodging credits against the minimum wage, there were also minimum wage violations.  Other working time included hours spent cleaning cabins between cruises and for chunks of time spent (allegedly) in performing vital preliminary duties, before employees commenced their assigned shifts.

The US DOL District Director (the top DOL official in Honolulu) stated that “employees in many jobs on U.S.-flagged vessels are entitled to the federal minimum wage and overtime protections under U.S. law.”  He continued by complimenting the employer for coming “ into compliance once the issues were identified.”  This means that the Company evidenced that it was ready to now fully comply with wage-hour laws, thus garnering some “good faith” in the settlement discussions with the DOL.

I just posted on another working tine case this week and normally would have looked for another topic.  The veritable explosion of these working time cases, however, has given me much concern and I feel I must trumpet this caution to the business community.  Where an employer compels (in any way, shape or form) employees to perform tasks and treats that time as either wholly uncompensated time or simply “straight time,” liability is sure to be the result.

• Print
• Comments
• Trackbacks
• Share Link

I have written many times about class actions for claimed working time and the great danger of these “subtle” kinds of violations that then explode on the employer.  Call centers gave been especially hard hit with this new wave of collective actions.  Another example.  A class of customer service representatives has been conditionally certified in Virginia.  Their theory is that their employer refused to pay for extra hours worked “off-the-clock.”  The case is entitled Hargrove v. Ryla Teleservices Inc., and was filed in the Eastern District of Virginia.

The employees claim that they were required to report early, before their shifts and engage in necessary work-related activities, which were not paid for.  They claimed that had to boot up the computers, plan schedules and review and respond to work-related e-mails.  If these preparatory tasks are "integrally related” to performance of the employee’s principal job duty, the tasks may be compensable, especially if the employees are “ordered” to perform these preliminary (or postliminary) duties.

Evidence of the widespread nature of this problem is that this is the seventh class action against this company, with conditional certification already granted in four cases.  The magistrate had originally recommended conditional certification be ordered; the Company appealed to the District Judge, who found the ruling was not clearly erroneous and allowed it to stand.

The Complaint has alleged that “supervisors explained to the employees that performing unpaid work activities was required because it was expected and was part of the job.”  The Complaint also estimates the amount of extra work performed as 10-20 minutes each day.  However, the workers allege that the overtime hours were not recorded or paid for.  The Complaint also maintains that the employees faced poor performance evaluation if they were not ready to take calls when their shifts started, meaning that they had to perform the preliminary work.

The key (again) is the amount of employer compulsion.  It is concerning to me, as a management side advocate, that the employees would allegedly suffer poor performance evaluations if not at their desks, ready to take calls, at their assigned start times.  This would enhance their argument that they were required to perform preliminary tasks that were tied to their main job and were mandated by their employer.  That combination equals (in all likelihood) significant liability.
 

• Print
• Comments
• Trackbacks
• Share Link

On December 1, 2011, the United States Department of Labor (“DOL”) announced that it will be conducting an “enforcement initiative” focused on the residential care industry in North Carolina. The residential care industry consists of group homes, long term care facilities, and other businesses that provide care for individuals who are incapable of caring for themselves.

As part of the initiative, the DOL plans on visiting residential care facilities to interview employees and review their pay practices and records.  The DOL stated that that since 2006, it has investigated 120 residential care facilities and recovered more than $980,6000 in back pay for 1,077 employees.

According to the DOL, businesses in the residential care industry have, among other violations of the Fair Labor Standards Act, failed to pay workers for attending required staff meetings and training.  This practice contradicts the general rule that time spent attending employer sponsored meetings and training is compensable.  Additionally, the DOL claims that residential care employers have consistently deducted 8 hour sleeping periods for employees who work fewer than 24 hours.  The federal regulations are clear that an employee who is on duty for less than a 24 hour period must be paid for all of his or her time, including sleeping time.

Another area of concern not specifically addressed in the press release is whether such facilities, as is often standard practice, automatically deduct a set period of time for lunch periods (e.g. 30 minutes or an hour).  In such instances, employees have successfully filed complaints that they worked through these automatically deducted lunch periods and are entitled to compensation.

Employers in the residential care industry should review their pay practices in anticipation of heightened scrutiny by the DOL.  In particular, businesses within this industry need to carefully examine whether they are paying employees for all time worked in a given day.

• Print
• Comments
• Trackbacks
• Share Link

In recent years, there has been a veritable explosion of class actions in which the theory is that the employer has failed to pay for preliminary or postliminary “working time.”  These can be exceedingly difficult cases to defend because if the workers can establish that the activity is integral to the primary job, the violation is essentially proven and all that remains is to calculate damages. A new case (again) highlights this danger for employers.

A federal judge has granted conditional certification to a class of production workers at the wind tower manufacturing plant of a company; the workers allege that they had to perform certain off-the-clock tasks for which they were not compensated and should have been under the Fair Labor Standards Act.  The case is entitled Etter v. Trinity Structural Towers, Inc. and was filed in federal court in Iowa.

Now, notices will be sent out to the potential class members who have the ability to opt in to the case.  Although the Company has agreed to the conditional certification, it maintains that the employees are in fact not similarly situated and a class action is not appropriate.  With the recent Supreme Court holding that has enhanced the “individuality” defense that I have often preached about, the Company may have a better chance to de-certify the class at a subsequent juncture in the litigation.

The plaintiffs charge that the alleged working time was work performed prior to the start of the shifts, so-called preliminary work time.  The allegation is that the workers had to prepare for their work so they could start their shifts at the correct time, so the preliminary time is so connected to the regular job as to render that time compensable.

The Complaint charges that the Company knew its employees routinely worked more than their scheduled time or ore than 40 hours per work week because its agents and employees directed plaintiffs to arrive at least 15 minutes prior to their scheduled shift start time.”

The element of employer compulsion (if proven) is the most dangerous threat in defending this case.  Once employer compulsion is shown, the alleged work almost always becomes “real” work and then liability follows.
 

• Print
• Comments
• Trackbacks
• Share Link

On May 9, 2011, the United States Department of Labor (“DOL”) announced the launch of an application for the iPhone and iPod Touch that will record the hours worked by employees and the wages they are owed.  The application will be available in English and Spanish and will allow users to record their regular work hours, break time, and overtime hours for more than one employer.  The application will also enable users to view a summary of their work hours and email the summary of work hours and pay as an attachment.

According to the DOL, “this new technology is significant because, instead of relying on their employers’ records, workers now can keep their own records.”  The DOL has further provided that “this information could prove invaluable during a Wage and Hour Division investigation when an employer has failed to maintain accurate employment records.”

The DOL is currently exploring making the application available for other smartphones such as BlackBerry and Android.  Additionally, the DOL has stated that it intends to update the application to include wage and hour issues not currently provided for, such as tips, commissions, bonuses, deductions, holiday pay, pay for weekends, shift differentials and pay for regular days of rest.

The DOL’s launch of this application only further highlights the need for employers to keep accurate time and payroll records for employees.  Up to now, employees typically contested the records maintained by employers with nothing more than their opinion and recollection of events. This application, however, should enable employees to challenge the calculation of their pay with detailed records and notes.
 

• Print
• Comments
• Trackbacks
• Share Link

This past week, Asurion Inc. settled a class action brought under the Fair Labor Standards Act in which employees alleged that the company improperly failed to pay them for time spent turning on and shutting down their computers each day.  According to the complaint, Asurion allegedly maintained a policy and practice of requiring employees to arrive at their work stations before their scheduled start times and perform “critical tasks.”  The alleged tasks, for the most part, consisted of turning on their computers and logging into the company’s network.  Plaintiffs allege that Asurion did not compensate them for this time.  The case is entitled Benson et al. v. Asurion LLC et al. and was filed in the District Court for the Middle District of Tennessee.

There has been significant litigation over the past several years regarding the payment of wages for “preparatory” work duties.  Most of these lawsuits arose in connection with the putting on and taking off of protective gear prior to the start of an employee’s shift.  The courts, including the United States Supreme Court, have consistently found such time to be compensable.

With that being said, employers would face a logistical nightmare if they were required to pay employees for the 2 to 3 minutes spent each day turning on their computers and logging into the network.  Luckily, the regulations provide for a de minimis exception. This exception provides that    “ insubstantial or insignificant periods of time outside scheduled working hours may be disregarded in recording time.”  However, the de minimis exception is only applicable where the work involved is for such a short duration that it cannot be precisely recorded for payroll purposes.

The courts have refused to issue a standard amount of time that would automatically qualify as de minimis.  Rather, the United States Supreme Court and several circuit courts of appeal have determined that periods of time ranging from 7 to 10 minutes is considered de minimis.  The federal regulations, however, provide a more conservative view of de minimis work - - less than 5 minutes each day.
 

• Print
• Comments
• Trackbacks
• Share Link

A North Carolina-based employee has filed a FLSA collective action and a state law class action alleging, among other things, breach of contract, against Foot Locker Incorporated.  The Complaint alleges that the Company essentially deprived sales associates, cashiers and stockers from properly due wages and overtime through a systemwide policy and practice of managers altering and changing time records.  The case is entitled Kennedy v. Foot Locker Inc., and was filed in the Western District of North Carolina.

As evidence of the necessary commonality, the plaintiffs allege that the employment terms are found in the employees’ written employment offers, the Employee Handbooks disseminated by the Company, its corporate policies as well as other documents.  The gravamen of the plaintiffs’ theory is that they were ostensibly required to log work hours into the computer system, but they allege they were prevented from doing so, whether by accident or otherwise.

The Complaint’s most serious allegation is that “managers ... with the knowledge and/or complicity of the company, regularly altered the computerized records .... to reflect a lower number of hours worked by the retail employees.”  This was done because managers are under constant pressure to meet labor costs budgets and if they manipulated the time records to show that no overtime was worked and/or fewer hours were worked, they would be within budgetary constraints.

There may be hundreds of employees, current and former, involved in this matter.  In a similar case, in which a class was certified in September 2009, approximately 5,200 current or former Foot Locker workers have opted into the action.

The Company’s best defense is to show that this was not a widespread or systemic practice, but, at worst, involved but a few “rogue” managers.  The case does highlight, however, the increasing pressure on managers in every industry, but particularly in chain store/franchise situations to stay within imposed labor budgets and what some managers will resort to in order to accomplish that often difficult chore.
 

• Print
• Comments
• Trackbacks
• Share Link

A federal judge has conditionally certified a class action which was instituted by a group of production line workers in a turkey processing plant.  They claim they are owed compensation for donning and duffing activities as well as other activities that they claim were “working time.”  They claim compensation for changing into protective gear (the donning and doffing component) washing their tools and time spent in travel to and waiting at their production lines.  The case is entitled McLaurin v. Prestage Foods Inc and was filed in the District of North Carolina.

The plaintiffs claim that the Company paid them only for time that the production lines were supposed to be operating.  The plaintiffs estimate 300-1000 members in the class and wanted individuals who worked “on or near” the processing line to be part of the class.  The Company is contending that the class definition proposed was too broad because employees working “near” the line were paid differently than those who actually worked on the line.

Naturally, the plaintiffs wanted the broader definition to apply, contending that the true parameters could be worked out “later.”  The defendants also contended that there were factual differences in the kinds of protective gear worn by the workers, which hearkens to the individual scrutiny defense, but the judge rejected this contention.  The court held that if there was a common policy or practice that applied to all of the workers, the fact that there might be individual differences from worker to worker would not detract from the validity of the class.

There will be probably considerably more discover in this matter.  The case will likely be settled sometime in the future, as these working time cases are different than and harder to win than an exemption misclassification issues.  In the exemption case, if the employer has strategized correctly and preemptively and is proved correct on the exemption question, the entire class evaporates in a flash.  With working time cases, where there lies any modicum of employer compulsion or compulsion by an outside government agency that operates through the employer (e.g. FDA, Health Department) then there likely will be recovery by the plaintiffs and attorneys fees for their counsel.
 

• Print
• Comments
• Trackbacks
• Share Link

When employers are compelling employees or “suggesting” to employees that they engage in work-related activities before or after they go on and off the clock, trouble is brewing.  In the latest of these working time class actions, a group of employees working for Lululemon Athletica Inc. have sued the company under the Fair Labor Standards Act ("FLSA"), claiming pay for time worked beyond their normal shifts.  The “work time” at issue is the watching of inspirational DVDs and the taking of exercise classes.  The case is entitled Brown v. Lululemon Athletica Inc. and was filed in the District Court for Northern District of Illinois.

The plaintiffs claim that the company had a system-wide policy on this issue, so the papers filed in court seek a class that may extend to at least three states.  These employees, dubbed “educators,” have alleged that the company, whose primary line of business is yoga-inspired athletic gear/clothing has compelled them to work a number of extra hours each week, which would take all of them into overtime situations and generating considerable liability.

The employees claim that they were required to view inspirational DVDs in their homes and attend mandatory staff meeting on a monthly basis, which took two hours.  They seek compensation for this alleged work time as well.

The employees have filed an amended complaint, where they specify that the possible class encompasses 1,400 current/former Lululemon employees who worked at least two overtime hours per week.  In frightening fashion, the complaint hypothesizes that damages may top five million dollars.

If the employer actually compelled these employees to engage in these activities and the activities can be demonstrated to have some integral connection to their work, there may be liability.  The flip side also applies---if the employees’ positions and their employment would be in jeopardy if they did not partake in these activities, or they reasonably feared their jobs would be in jeopardy, liability might also lie.

The underlying “moral” is for employers to self-audit their compensation practices, particularly as applied to these sideline-type activities, which are often hidden in the compensation radar.
 

• Print
• Comments
• Trackbacks
• Share Link

In a recent posting in the Wage Hour Defense Blog, Kara Maciel brought attention to the new, intensified focus by the federal Department of Labor in auditing and inspecting health care facilities.  I represent a number of such facilities and have also noticed an uptick in such investigations, especially as concerns lunch breaks and rounding.  That post is at www.wagehourblog.com/2010/08/articles/wage-and-hour-policies/hospitals and nursing homes

As I have written about before, many health care employers (as well as others) have smart time clocks that automatically deduct thirty minutes every day for lunch.  As Kara notes, if the employee does any work during that otherwise automatically deducted period, the lunch period(s) may then be claimed to be working time.  Since patient care is a top priority and patients may and do need assistance and care at all times of the day, it is possible that employees may be interrupted during their lunch or claim that they are, even if the interruption is only for a moment, e.g. answering a question.

The difficulty of defending these claims is evident, as Kara notes.  Unless employers have built in fail-safe mechanisms to allow for the reporting and concomitant investigation of interrupted lunch claims, it will be virtually impossible to try to prove or disprove whether a certain employee actually took their full thirty minute lunch break on a day or days in the last two years.  I have advised creating a form for this contingency, placing it in boxes or containers by nursing stations or other central points and giving employees either in-service training on the procedure or otherwise documenting that employees are aware of the reporting procedure.  In that manner, employees can be properly compensated and the employer can adequately defend itself against years-later claims of unpaid working time.

The key is to be proactive.  Internal audits of compensation practices, especially those relating to exemption classification issues and working time issues, are essential. If a policy is problematic (or out rightly illegal) it should be changed immediately, so that any applicable statutes of limitations can start being eroded away.

“Eternal vigilance is the price of liberty,” said Thomas Jefferson.  It is also the price to pay for not being caught unawares in a FLSA collective and/or state law class action on issues that with careful planning and foresight could have been completely avoided.

 

• Print
• Comments
• Trackbacks
• Share Link

Under the proposed Workforce Empowerment Act (S. 3696), introduced in the Senate on August 3,  2010, in-home direct care workers who work more than twenty hours per week will be covered by the minimum wage and overtime provisions of the Fair Labor Standards Act (FLSA).  The bill would amend the FLSA, which currently exempts from its minimum wage/overtime protections individuals who work on a “casual basis in domestic service. 29 USC 213(a)(15).  A companion bill has also been introduced in the House of Representatives.  These workers typically provide assistance to their clients with such activities as bathing and eating.

The proposed bill’s Findings state that in the direct industry “working conditions are often difficult and turnover is high because of low pay, access to health insurance and other benefits, strenuous conditions…”  The Findings also report that 13,000,000 Americans are currently receiving such services and that “two-thirds of older adults will need some form of long-term care at some point in their lives.”

The proposed amendment defines “casual employment” as employment which is irregular or intermittent and which is not performed by an individual whose vocation is the provision of babysitting or companionship services.  Employment will not be considered “casual” if the hours worked in a week, for whatever number of employers, exceeds twenty (20).

Is this an initiative of the Obama Administration?  Any proposed expansion of the coverage of the FLSA is more likely to come from a Democratic Administration in any event.  I know this---there will certainly be record keeping, timekeeping issues if this law goes into effect because many of these workers have significant “down time” during the day, when they are able (?) to have free time to follow their own pursuits.

Are they engaged to be waiting or waiting to be engaged when these “chunks” of down time pop up?  Who knows?  Working time issues are amongst the grayest under the FLSA.  I guess we will see.
 

• Print
• Comments
• Trackbacks
• Share Link

In a rather new twist on the working time class action trend, Southwestern Bell Telephone Co. is being sued in a Fair Labor Standards Act (“FLSA”) collective action, where the underlying theory is that the company has denied union representatives compensation for their time performing union-related duties.  The case is entitled Kayser et al. v. Southwestern Bell Telephone Company and was filed in the U.S. District Court for the Eastern District of Missouri.

The workers allege that their time spent representing union members at labor-management meetings are hours worked and they are not being paid, in violation of the FLSA.  The Complaint alleges that shop stewards and other functionaries of the Communications Workers of America (“CWA”) discharge a number of duties, among them the representation of union members at disciplinary, investigatory and grievance meetings.  At all of these proceedings, there is a right to union representation under the National Labor Relations Act (as well as most union contracts).

The investigatory meetings, from which discipline might be imposed, are held by the company during the “accused” employee’s work time.  Such meetings are for the ostensible benefit of the company so it can determine whether employee misconduct has occurred, claim the plaintiffs.  On those occasions when the employee asks for union representation, the Union provides the representative.  An analogous procedure is utilized when the meeting is to impose discipline on a member, hear a grievance presentation, or any other labor-management purpose.  Again, the common denominator, according to the plaintiffs, is that the meetings are held on employee work time.

The employee/representative plaintiffs seek overtime, based on a theory that these hours would take them beyond the statutory threshold for overtime, i.e., 40.  As a “side issue,” the complaint alleges that employees are chilled and deterred from seeking to become union functionaries because they know their compensation will suffer.  The employees seek an injunction, as well as liquidated (i.e. double) damages and attorneys’ fees.  The class purports to cover current/former union representatives in Missouri, Kansas, Oklahoma, Arkansas and Texas.

There is a specific FLSA regulation addressing the issue of whether time spent in union matters is working time. 29 CFR 785.42.  The regulation leaves that determination to “the process of collective bargaining or to the custom and practice under the collective bargaining agreement.” I daresay that the employer will defend by asserting that if this matter is not specifically addressed in the labor contract, it means the parties never intended for the time to be compensable.  The case is interesting because it highlights the interplay or, some might say, the tension, between federal labor law and the FLSA.
 

• Print
• Comments
• Trackbacks
• Share Link

I have posted numerous times on the issues of preliminary and postliminary work and whether these activities are compensable.  Part and parcel of this issue is whether such time is compensable.  A recent case highlights (again) this issue and the confusion that well-intending employers face when determining whether or not to pay employees for alleged working time.

A federal judge has granted conditional certification to what could be a class of 8,000 workers employed at Huhtamaki Inc.  The suit alleged that this company, which does consumer packaging, did not pay employees for so-called “off-the-clock” work that it mandated they do.  The case is entitled Shockey v. Huhtamaki, Inc. and was filed in the District of Kansas.

The theory is that the company improperly rounded the time of the workers to reflect their scheduled shift times, when they actually (according to the allegations) engaged in tasks before their shift and after their shifts had ended.  Although the judge found that rounding policies varied amongst the company facilities, which are situate in ten states, there was sufficient similarity to make a granting of conditional certification appropriate.  At a later stage in the case, the employer-defendant will be able to (possibly) make a showing of sufficient dissimilarity as to reverse the designation of the matter as a class action

A serious allegation is that the company erased or wiped out time that was recorded on time cards.  Such a deliberate policy, if proven true, could have serious consequences for this company.  The gravamen of this allegation is that the non-exempt employees were compelled to arrive early and stay late to perform productive work, but the company intentionally erased that extra, what seems like, working time.

The company has defended by asserting that the plaintiffs did not sufficiently set forth the precise tasks they were engaged in.  The company also denied that an overall policy or plan that was intended to preclude employees from getting their rightly due compensation, contending that in numerous instances, the company did in fact compensate employees for working additional time.
 

• Print
• Comments
• Trackbacks
• Share Link

In Florida, an Assistant Manager has filed a class action against RadioShack Corporation, alleging that the company has misclassified these managers as exempt executives and has not paid them overtime.  The case is Truax v. RadioShack Corp. and was filed in the U.S. District Court for the Southern District of Florida.

The plaintiff is also claiming that Radio Shack “knowingly and willfully” violated the Fair Labor Standards Act; this is an attempt to extend the otherwise two-year statute to three years and to recover liquidated (i.e. double) damages.  The plaintiff is claiming that the company failed to pay time and one-half for the overtime hours.  The named plaintiff claimed he regularly worked 55 hours every week but was only paid straight pay for the hours, rather than time-and-a-half that is mandated by the FLSA.

In another case, RadioShack is alleged not to have paid workers for attending store meetings. In that case, Kamar et al. v. RadioShack Corp., the U.S. Court of Appeals for the Ninth Circuit has affirmed a lower federal court ruling that granted class certification to the plaintiffs.  That case involved mandatory meetings (on Saturday) that non-exempt employees attended and were not paid for.

On the Assistant Manager issue, the best defense is that these workers are truly exempt. The second best defense is that the class certification motion must fail because individualized assessment of each Assistant Manager is needed because some might have exercised more managerial duties than others.  The need for individual scrutiny is the antithesis of a class action .

As far as the mandatory meetings, this is basic FLSA law.  Non-exempt employees compelled to attend meetings or trainings are on the clock. 
 

• Print
• Comments
• Trackbacks
• Share Link

The Seventh Circuit Court of Appeals (based in Chicago) has reversed a district court judge who dismissed two Fair Labor Standards Act overtime collective actions instigated by a group of Chicago paramedics because the lower court judge found the claims were “hopelessly heterogeneous.”

Such a finding means that there is not the overall, common pattern, practice or policy that is the hallmark of a collective or class action. Instead, the federal appellate court ruled that the judge should have considered sub-classes, thus allowing the litigation to be maintained.  The case is entitled Alvarez v. Chicago.

The paramedics charge that the City of Chicago did not pay them proper overtime in ten different manners, but not every paramedic was impacted by every one of the allegedly improper pay practices.  Thus, on one hand, the plaintiffs argued that they were “similarly situated “ as to the overall premise of being denied overtime, but also that they each fit into one or more sub-classes. They claimed that once they were properly cubby-holed, the calculation of their individual damages would be relatively easy and a mechanical process.

“If common questions predominate, the [paramedics] may be similarly situated even though the recovery of any given [paramedic] may be determined by only a subset of those common questions,” the Court concluded.  The Court ruled that the federal district court judge erred by not even considering the establishment of sets of sub-classes.

The lower court was also criticized (and reversed) for not determining whether paramedics could proceed as individuals or via a series of separate classes, which would have been an alternative to a single, unified collective action.  There are currently about 300 paramedics involved in the litigation as they have signed the necessary opt-in forms, necessary under a FLSA collective action.

I believe this case presents an important question.  When is there sufficient dissimilarity, or a lack of a common policy, as to warrant a denial of conditional certification or a decertification of the class once certified.  When is there a sufficient overall similarity so as to allow a court to conclude that something is wrong for everybody, but that “something” is different for various groups so that they deserve their own sub-class.  A gray, gray issue, which may have to go beyond the Seventh Circuit to the US Supreme Court.
 

• Print
• Comments
• Trackbacks
• Share Link

A federal judge has thrown a nationwide collective action against Black & Decker out of court.  The suit alleged that the company did not pay employees for time allegedly worked off the clock.  The court found that the plaintiff did not prove that he had worked overtime.  The case is entitled Kuebel v. Black and Decker (U.S.) Inc. and was filed in the federal district court in the Western District of New York.  There could have been more than 200 employees involved.

This is a rare occurrence.  The granting of so-called conditional certification is usually a fairly easy hurdle for a plaintiff to overcome.  A few affidavits, perhaps some deposition testimony and that’s it. The key remains that some showing of similarity must be made, some showing that an overall policy or practice applied to all of the employees potentially involved.  That this plaintiff could not make the showing is significant.

The court found that the plaintiff “has not explained when and for how long he performed the off-the-clock work.”  The court continued and stated that “ because the undisputed facts demonstrate that plaintiff has failed to meet his burden, his claim for off-the-clock work fail as a matter of law.”

What is interesting in the context of this particular case is that the company had stipulated to the conditional certification of a class that was solely confined to the company policy of paying retail specialists for travel time, but only if the employee’s commute was more than sixty miles or sixty minutes.  The judge had found this policy legal in May 2009. (Note: Home-to-work travel is always non-compensable, so a company can legally implement a policy of paying for some component of this travel time if it so desires).

This does not often happen and that is why I write about it when it does.  The lesson for employers, on the merits of the controversy, is that they must never direct employees to do productive work off-the-clock and should have a policy in place relating to that issue.  Also, maintain accurate records of employee working time and, most importantly, have employees self-certify their working time (e.g. sign off on time card) every week.  That is the employer’s fail-safe, best protection against such suits.
 

• Print
• Comments
• Trackbacks
• Share Link

There are employers whose “smart” time clocks automatically make a thirty minute deduction every day for lunch, supposedly and assumedly taken.  I have railed against this practice, advising that the far safer thing is to have employees punch out and then back in for lunch, because someone, somewhere down the line, will assert that they worked through lunch but nevertheless had that half-hour deducted.  That chicken has now come home to roost.

A hospital/nursing home owner, Kindred Healthcare Inc. has been accused, in a proposed class action, of not properly paying employees because this employer has an automatic lunch deduction system, that deducts time for lunch, even if the employee allegedly did not take the lunch.  The case is entitled Samuel v. Kindred Healthcare, Inc. filed in the U.S. District Court for the District of Massachusetts.  It is couched as a collective action under the Fair Labor Standards Act (“FLSA”).

The Complaint alleges that there are “thousands” of potential class members.  This timekeeping system automatically deducts a 30-minute meal period from employees, but the employees contend they often have to work through lunch on patient care issues.

The Complaint also alleges that employees must stay at their desks or posts during their breaks and continue to work.  Work, according to the Complaint, “includes responding to pages, answering the telephones, replying to requests by patients, co-workers and management, and performing all other duties and responsibilities that are required.”

These cases are very tough for the employer to prevail upon, especially in a health care environment, where it is not beyond the realm of possibility that patient tasks and responsibilities might keep a worker (or workers) busy during their lunch.  To the contrary, it is also impossible to imagine that one thousand employees never took lunch for two years.  The worrisome thing is that by making the automatic deduction, without having some “fail-safe” mechanism in place so that employees can report that they worked through lunch, have the claim investigated and, if true, the time paid, then the employer has left itself very little wiggle room and a tough case to defend.

Smart clocks may be silly policy!
 

• Print
• Comments
• Trackbacks
• Share Link

I have posted numerous times on the issue of when preliminary or postliminary job “duties” become compensable.  If the employer is unaware that they might, or missed the mark, the result can be and often is a class action lawsuit, oftentimes seeking overtime compensation, as these “work activities” often bring the hours worked to more than forty in a week.  In Rutti v. Lojack, the Ninth Circuit Court of Appeals dealt with an unique variation on this theme, one which has troublesome ramifications for all employers.

The plaintiff sought to bring a class action on behalf of the employer’s nonexempt technicians who travel each day from worksite to worksite in an employer vehicle installing alarms in customers’ cars.  The plaintiff wanted to be paid for his pre-work activities, his commute time and his post-work activities including completing a required report by modem.

The Ninth Circuit found that most of these activities were not compensable work time.  The court found that the plaintiff’s commute time was not compensable, even though he was provided with a company car.  The court rejected the plaintiff’s argument that the restrictions on use of the car imposed by the employer rendered his commute time an integral part of his workday.  The restrictions had included a prohibition on personal use and transporting passengers, a requirement that the employee drive directly from home to work and from work to home and that the employee keep a cellular phone turned on.

The court also found that his preliminary activities of receiving assignments, mapping his route and prioritizing his jobs were not compensable either because such activities were de minimis. The employer required its technicians to transmit data about their daily activities from home by modem at the end of the workday and this took 10-15 minutes, and required the employees to come back later to verify the transmission was received.  Whether these activities are compensable will depend on: (1) the practical administrative difficulty of recording the additional time; (2) the aggregate amount of compensable time; and, (3) the regularity of additional work.

There are valuable lessons here for employers.  Giving a company car does not render commute time compensable.  Planning your workday before work is not compensable, nor are minor tasks before or after work.  But the real lesson here for employers, and the safest course, is to avoid mandating any specific pre-work or post-work tasks to be done on the employee’s own time.  If the nature of the work requires such tasks, this case provides guidance on how to structure those tasks to keep them non-compensable.
 

• Print
• Comments
• Trackbacks
• Share Link

There is a fine line oftentimes between who is and who is not an employee. This premise especially applies to the issue of “interns.”  As summer approaches, and as jobs may be quite hard for young people to find, there seems to be a rise and we expect to see a sharp rise in companies utilizing unpaid “interns.”  Under the Fair Labor Standards Act (“FLSA”) and state laws, there are definite, specific criteria that a person must fit before they can be deemed an intern and not entitled to (at least) the minimum wage protections of wage-hour laws.

The fear is that employers may view these people as a source of free labor, while using the moniker “intern” to describe them and hopefully not be able to pay them anything.  For example, in New Jersey, there are nine criteria for delineating an intern; the employer must ensure that all nine are met or else the person is an employee.  Under the FLSA, there are six.  Of special note is the requirement that the internship be for the primary benefit of the individual, not the employer.  This may often be a hazy line to draw.

The state DOLs are on to this.  Last year, the New York State DOL investigated many companies’ intern programs to determine compliance with the law.  We are hearing that, on a federal level, there will be more inspections and audits on this issue.  One possible hindrance to these investigations may be the hesitancy of “interns” to come forward and file complaints, as they understand that such complaints might have the untoward effect of endangering future employment opportunities with the company they just turned in.  Although this would be clearly against the law, i.e. retaliation, this is the real world.

Other criteria that probably cut across every state statute/regulation that has addressed this issue are that the internship must be similar to the training given in a vocational school or academic institution and the intern cannot displace any regular, i.e. . paid workers.  Nor can the employer derive any immediate benefit from the “work” of the intern.
 

Remember-if the DOL comes in on this issue, it will not limit itself to an examination of only this issue.  Every other compensation practice will be fair game for scrutiny.

• Print
• Comments
• Trackbacks
• Share Link

A federal judge has dismissed a possible class/collective action concerning an alleged failure by Butterball, the giant poultry company, to pay workers for donning and doffing time.  I have written many times on this subject, but this case is different because the court found that the employees’ union had agreed to the policy of not compensating workers for this time. The case is entitled Salazar et al. v. Butterball, LLC and was filed in federal court in the U.S. District Court for the District of Colorado.

The workers are unionized and represented by the United Food and Commercial Workers, Local 7. The court ruled that, during negotiations, the union had waived or given away the right to be compensated for this time.  The employees in this lawsuit maintained that, notwithstanding this provision, it was illegal to force the workers to negotiate for something that they were already legally entitled to, i.e. compensation for donning and doffing time.

Significantly, the court noted that the union had filed a grievance over the nonpayment of donning and doffing time, but never channeled the grievance to arbitration.  Thus, the company also had the argument that the Union had abandoned the grievance and had “doubly” waived its right to press for compensation, i.e. through collective bargaining and the dropping of the grievance and failure to pursue it to arbitration.

The Company argued that since payment for donning and duffing time concerned wages, it was a so-called mandatory subject of bargaining; the union had never pursued the matter at the bargaining table and therefore the Company contended that these unionized workers could now not come after it through the back door.

The plaintiffs argued that if the federal judge adopted the magistrate judge’s findings, that would, “contrary to law, create a requirement that a union must use its right under federal law to be paid for all time worked as a bargaining chip in collective bargaining or lose that right.”  The court rejected that argument and did in fact adopt the magistrate’s findings.

The lesson to be learned---if an employer is unionized, it can, through collective bargaining, either “win” a provision that such time is non-compensable, or agree with the union that “some” modicum of such time is also compensable.
 

• Print
• Comments
• Trackbacks
• Share Link

The electronic giant, Best Buy, has requested that a judge approve a $900,000 settlement in a New York State wage-hour class action in which the plaintiffs sought payment for time worked “off-the-clock.”  That working time was the minutes spent going through security clearings at the end of the work day, assumedly to ensure that employees did not steal anything during their shifts.  The case is entitled Turner v. Best Buy Company, Inc.

Although the case was filed in state court, the employer had removed the case to federal court under the Class Action Fairness Act of 2005.  After going through a great deal of discovery, the parties decided to settle the action, although they maintained their respective positions.  The company maintained that it properly paid all employees for all time worked, while plaintiffs took the view that going through the security check was an employer instigated “activity” that required compensation.

Interestingly, and significantly, the employer has agreed to modify its operating procedures to allow all employees to remain on the clock until their manager allows them to leave the store.  Thus, although the employer denied any culpability, the remedial action it took suggests that it knew that there was an issue here.

The key to determining whether preliminary or postliminary activities are compensable is the element of employer compulsion or the lack thereof.  I equate this activity to the employer ordering a retail cashier to report ten minutes early to balance out the cash drawer or to stay ten minutes after the shift ends to do the same.  It is a safe bet that where employer ordering, or direction or compulsion of an activity related to the main job is involved, the activity is working time and compensable.  The other benchmark is how integrally related to the main job is the side activity.

I have often commented on these preliminary and postliminary issues.  They are a real danger to the employer because oftentimes, the employer may not even appreciate that this “little” activity or routine or inconvenience to employees is actually “work,” which can then lead to a single employee filing an action (as was done here) and everybody else coming on board.  The proactive approach is to analyze every non-exempt job and ascertain if there are preliminary or postliminary activities involved or related to it and then apply the above-referenced analysis and make the call on whether it is or is not working time.
 

• Print
• Comments
• Trackbacks
• Share Link

I have posted a few times about Fair Labor Standards Act donning and doffing cases. The general rule is that donning and doffing is compensable if these preliminary and postliminary activities are integral to the performance of the employee’s primary job.

For a rule, there is always an exception. In a case entitled Johnson v. Koch Foods Inc., filed in the Eastern District of Tennessee, a federal judge has ruled that because the parties’ labor contract applicable to covering chicken processors working at a cut and kill plant explicitly excluded compensation for time spent donning and doffing certain sanitary and safety gear, the workers were not entitled to compensation for the time it took to put and remove the gear.

The judge analogized the putting on/taking off of the gear to “changing clothes,” which is not compensable under Section 203(o) of the Fair Labor Standards Act. The court did warn, however, that of a jury determined that such activities were integral and indispensable, they then could be compensable under the “continuous workday rule.”

This result seems anomalous because the workers were required to put on the protective gear prior to reporting to the production line, to begin their primary work, but they were only compensated for the time actually on the line.

There is a divergence in the federal Circuits as to what constitutes “clothes.” The Ninth Circuit has held that the “changing clothes” safe harbor applies only when the items at issue are clearly and unmistakably clothing, as is commonly understood. However, the Eleventh Circuit has held that the term applies to hairnets, gloves and hearing protection equipment. The US Department of Labor has issued an Opinion Letter concluding that the Section 203(o) definition of clothes “includes items worn on the body for covering, protection, or sanitation.”

This issue may ultimately have to be decided by the US Supreme Court. In the meantime, employers need to make assessments of the indispensability of the preliminary activity to the main job and start the analysis of compensability from that vantage point.
 

• Print
• Comments
• Trackbacks
• Share Link

Under the Fair Labor Standards Act, there is no law requiring employees receive a lunch period or break times. However, when the employer gives time for lunch, the employees must receive at least thirty minutes and the time must be uninterrupted. Put differently, the employees must be completely relieved from duty. When employees are not so relieved, they must then be compensated for that time, i.e. the half-hour, which all becomes “converted” into working time.

This is what the DOL found happened in this investigation, which ultimately included 4000 nurses. Some of the nurses answered phones while on lunch and others performed “some” duties. The result, however, is the same---all of the time is converted.

The hospitals also had an automatic deduction policy, by which one-half hour was automatically deducted from the nurses’ time for that day, on the assumption that the lunch was taken. Although the hospitals had a policy about not working during lunch (i.e. not carrying the hospital-provided phones during meal breaks) and also had a policy that allowed nurses to cancel the automatic deduction if they performed actual, productive work. The hospitals claimed that the nurses did not follow the policy. The result was a supervised settlement providing for 1.7 million dollars to be paid to the affected employees.

I have clients who have these automatic deduction systems for lunch time. As this makes clear, the automatic is not so automatic. There must still be supervisory oversight and intervention in issues where employees may have worked through lunch, to ensure that proper payment is made. The employer must have a system where employees can report that they worked through lunch and the employees, in my view, must be given training on the system, so all productive time is paid for and the DOL does not come knocking on the door.

In sum, a policy, a piece of paper, will not provide a defense to claims of uncompensated working time. More is required of the employer.
 

• Print
• Comments
• Trackbacks
• Share Link

In a case entitled Clifton Sandifer et al. v. U.S. Steel Corp. a federal judge has cut out some claims from a work time class action suit, but has allowed one major allegation to remain in the case. That cause of action involves whether the employees should be paid for the time spent in walking from their locker room to their work stations.

The case is in federal court in Indiana; the plaintiffs filed suit in December 2007. Unlike many class actions I have commented upon, this was not a misclassification lawsuit, but rather a work time case. The plaintiffs sought compensation for time spent donning, doffing, walking, showering and laundering personal clothing in excess of the 40-hour workweek. The employees allege that these “work” activities consumed 9-10 hours per week.

The judge threw out the portions of the case pertaining to the donning and doffing of protective clothing, agreeing with US Steel that the compensability of these activities was addressed in the parties’ collective bargaining agreement. The court also found that showering was not required by the company and therefore was a postliminary (i.e. after work) activity for which no compensation was required.

Similarly, even though instructions were provided on how to launder clothing worn under work gear, transporting and laundering clothing was not required by the Company and thus it was not compensable. The judge kept the walking to work station claim, rejecting the company argument that these were non-compensable preliminary and postliminary work. The judge also rejected the de minimis doctrine argument, finding that walking times varied widely throughout the plant.

Judge Miller also did not accept the argument that these claims were preempted under the National Labor Relations Act as they ostensibly involved interpretations of the collective bargaining agreement, rather than statutory violations of the Fair Labor Standards Act.
 

• Print
• Comments
• Trackbacks
• Share Link