California Labor and Employment Law Review

From California Labor and Employment Law Review, Vol. 28, No. 3, May 2014

Wage and Hour Update

By Steven G. Pearl

Steven G. Pearl

Steven G. Pearl is a Super Lawyer™ mediator and attorney in Los Angeles. He is the principal of The Pearl Law Firm, a co-author of CEB's California Wage and Hour Law and Litigation, and author of the "California Wage and Hour Law Blog" (www.CAWageandHourLaw.

U.S. Supreme Court Clarifies FLSA Donning and Doffing Rules

Sandifer v. United States Steel Corp., 134 S. Ct. 870 (2014)

In Sandifer, the Supreme Court of the United States considered the meaning of the phrase "changing clothes" in the Fair Labor Standards Act (FLSA) (29 U.S.C. §§ 201 et seq.).

Clifton Sandifer sued U.S. Steel under the FLSA for time spent donning and doffing various pieces of protective gear. U.S. Steel argued that the time was not compensable under the parties' collective bargaining agreement (CBA) and under § 203(o) of the FLSA, which allows parties to agree, as part of a CBA, that "time spent in changing clothes . . . at the beginning or end of each workday" is not compensable.s

The district court granted summary judgment on those grounds and also on grounds that any time spent in donning and doffing non-clothing protective gear was de minimis. The Seventh Circuit Court of Appeals affirmed, as did the Supreme Court, holding:

  1. The term "clothes" is given its ordinary meaning in the FLSA: "Items that are both designed and used to cover the body and are commonly regarded as articles of dress;" and "[c]overing for the human body; dress; vestments; vesture." "Clothes" does not include items such as tools and accessories, which would include necklaces and knapsacks.
  2. The term "changing clothes" is not given the "usual meaning" of substituting certain clothing items for others, but has a broader meaning that includes "time spent in altering dress."
  3. As a result, donning and doffing certain items, such as a flame-retardant jacket, pants, and hood, a hardhat, a snood, wristlets, work gloves, leggings, and metatarsal boots constitutes "changing clothes." Donning and doffing other items, such as safety glasses, earplugs, and a respirator, does not.

The Court declined to apply the de minimis doctrine to the compensable time spent donning and doffing non-clothing items. Instead, the Court held:

If an employee devotes the vast majority of the time in question to putting on and off equipment or other non-clothes items (perhaps a diver's suit and tank) the entire period would not qualify as "time spent in changing clothes" under § 203(o), even if some clothes items were donned and doffed as well. But if the vast majority of the time is spent in donning and doffing "clothes" as we have defined that term, the entire period qualifies, and the time spent putting on and off other items need not be subtracted.

Note: On March 3, 2104, the Supreme Court accepted certiorari in another FLSA case to consider the Ninth Circuit's holding that the time Amazon employees spent in security checks could be compensable. Busk v. Integrity Staffing Solutions, Inc., 713 F.3d 525 (9th Cir. 2013), cert. granted, 188 L. Ed. 2d 374 (Mar. 3, 2014) (No. 13-433).

Court Explores Limits of Expense Reimbursement Liability

Vasquez v. Franklin Mgm't Real Estate Fund, Inc., 222 Cal. App. 4th 819 (2013)

The plaintiff, a $10-per-hour employee, alleged that his employer required him to use his own vehicle for work, but refused to reimburse him for gas and mileage. He filed suit, alleging constructive wrongful termination in violation of public policy (constructive discharge) and intentional infliction of emotional distress (IIED).

The trial court sustained demurrers without leave to amend, and the plaintiff appealed. The court of appeal reversed in part and affirmed in part, holding:

  1. To establish constructive discharge, an employee must plead and prove that the employer "either intentionally created or knowingly permitted working conditions that were so intolerable or aggravated at the time of the employee's resignation that a reasonable employer would realize that a reasonable person in the employee's position would be compelled to resign." Whether conditions were so intolerable as to justify a reasonable employee's decision to resign is normally a question of fact.
  2. Although deprivations of salary or other economic benefits generally do not support a constructive discharge claim, the plaintiff here could allege constructive discharge because the expenses incurred were such a large percentage of the plaintiff's earnings that they caused him to earn less than the minimum wage. The plaintiff's wage claims implicated fundamental public policies, and the trial court abused its discretion in sustaining the demurrer without leave to amend.
  3. The trial court did not abuse its discretion in sustaining the demurrer to the IIED claim. Severe emotional distress arising from outrageous conduct in the workplace in the normal course of the employer-employee relationship is "the type of injury that falls within the exclusive province of workers' compensation."

Court Dismisses Cal. Lab. Code § 2810 Contractor Claim as Too Speculative

Hawkins v. Taca Int'l Airlines, S.A., 223 Cal. App. 4th 466 (2014)

Arlette Hawkins filed a class action complaint against her former employer (Sereca) and a number of airlines (the airline defendants), alleging that they violated Cal. Lab. Code § 2810, which prohibits labor contracts that fail to "include funds sufficient to allow the contractor to comply with all applicable local, state, and federal laws or regulations governing the labor or services to be provided."

The airline defendants demurred to the § 2810 cause of action, arguing that the plaintiff failed to state any facts to support the allegation that they knew or should have known that their contracts were underfunded. The plaintiffs argued that they had not been able to obtain the contracts, the terms of which were known to the airline defendants. The trial court sustained the demurrer without leave to amend.

The plaintiff appealed, and the court of appeal affirmed, holding:

  1. The record did not demonstrate that the plaintiff had attempted to obtain the contracts from the airline defendants in formal discovery. Had she done so, she would have known whether the contracts complied with § 2810.
  2. To state a cause of action, the plaintiff had to do more than merely "parrot" the language of the statute. Further, the plaintiff's admission that she had not seen the contracts at issue indicated that her claims were merely speculative. Finally, the complaint alleged that Sereca "had the ability to pay all wages" earned by the class members, contradicting the allegation that the contracts violated § 2810.

(Note: This is only the third reported decision construing § 2810.)

Parties to Qualifying CBA May Alter Labor Code Definition of "Overtime Hours"

Vranish v. Exxon Mobil Corp., 223 Cal. App. 4th 103 (2014)

The plaintiffs were Exxon employees covered by a collective bargaining agreement (CBA) who alleged that Exxon owed them overtime compensation.

Under the CBA, Exxon paid the plaintiffs an overtime premium rate of one and one-half times their regular rate of pay for hours worked over forty hours in a workweek or over twelve hours in a workday. The CBA provided that overtime would not be paid for hours worked between eight and twelve in a workday, as normally required by Cal. Lab. Code § 510.

At issue was whether § 510's definition of "overtime" applies to employees covered by a valid CBA under Cal. Lab. Code § 514. More specifically, the question was whether the CBA at issue satisfied the fourth requirement of § 514, in that it provided "premium wage rates for all overtime hours worked."

The court held that § 510's definition of "overtime" did not apply, and the CBA provided premium wage rates for overtime hours worked, thus satisfying § 514.

Section 514 does not incorporate expressly the definition of "overtime" provided in § 510. "When there is a valid collective bargaining agreement, employees and employers are free to bargain over not only the rate of overtime pay, but also when overtime pay will begin." Parties subject to a qualifying CBA may consider all hours over eight in a day to be overtime, or they may agree to a different model, such as considering only hours over forty in a week.

Remand of Class Action to State Court Improper Under Class Action Fairness Act

Rea v. Michaels Stores Inc., 742 F.3d 1234 (9th Cir. 2014)

The plaintiffs filed a wage and hour class action in state court, and the defendant removed to the district court under the Class Action Fairness Act (CAFA). The district court remanded because the plaintiffs waived the right to any recovery of $5 million or more. After the U.S. Supreme Court's decision in Standard Fire Ins. Co. v. Knowles, 133 S. Ct. 1345 (2013), which invalidated such waivers, the defendant again removed, and the district court again remanded, holding that the removal was untimely and that the defendant failed to demonstrate that the amount in controversy met CAFA's $5 million standard.

The defendant appealed, and the Ninth Circuit reversed, holding:

  1. The fact that the state court had certified a class did not bind the class members to the plaintiffs' earlier stipulation, nor did the fact that the certified class was smaller than the one originally contemplated make it impossible that the amount in controversy would be over $5 million.
  2. The defendant's second removal was not untimely. When the defendant removed the first time, the plaintiffs' stipulation regarding the amount in controversy was valid under Ninth Circuit precedent, and the defendant could not remove. Because the defendant removed the second time within thirty days of the Supreme Court's decision in Standard Fire, which held that such a stipulation was improper, the second removal was timely.
  3. Because there was substantial, plausible evidence that the $5 million standard was met and there was no evidence to the contrary, the district court's finding that the standard was not met was clearly erroneous.

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