Tuesday, February 5, 2019
Court of Appeal:
By a MetNews Staff Writer
The Court of Appeal for this district yesterday said that a clothing retailer who requires its employees to call in two hours prior to a potential shift to find out whether they must report to work that day must pay those employees, under the applicable wage order, for being “on-call”
Presiding Justice Lee S. Edmon of Div. Three wrote the opinion. Justice Anne H. Egerton, in a concurring and dissenting opinion, maintained that an employee is only on-call if he or she physically reports to the place of employment.
The plaintiff in the putative class action, Skylar Ward, sued her employer, Tilly’s, Inc., over its scheduling policy. Los Angeles Superior Court Judge Elihu Berle sustained the defendant’s demurrer without leave to amend, ordering the case dismissed.
Berle found that the call-in policy did not qualify as compensable “reporting time” under the Industrial Welfare Commission’s wage order 7, governing mercantile industry employees.
“[O]n-call shifts burden employees, who cannot take other jobs, go to school, or make social plans during on-call shifts—but who nonetheless receive no compensation from Tilly’s unless they ultimately are called in to work. This is precisely the kind of abuse that reporting time pay was designed to discourage.”
Wage order 7 sets forth in relevant part:
“Each workday an employee is required to report for work and does report, but is not put to work or is furnished less than half said employee’s usual or scheduled day’s work, the employee shall be paid for half the usual or scheduled day’s work, but in no event for less than two (2) hours nor more than four (4) hours, at the employee’s regular rate of pay, which shall not be less than the minimum wage.”
Edmon noted that despite both parties’ insistence that the phrase “report for work”—which the wage order does not define—is unambiguous, each offered differing interpretations of the term. Tilly’s argued that reporting for work means physically appearing at the place of employment, while Ward contended it means any manner of “reporting,” be it physically or remotely.
The jurist responded by saying that “the text of Wage Order 7, alone, is not determinative of the question before us.”
She turned instead to the legislative history behind the order, which was adopted in the 1940s. She said:
“Telephonic reporting requirements appear to be of recent vintage, and, indeed, the cell phone technology that makes such telephonic reporting feasible did not exist until many decades after the reporting time pay requirement was enacted. We therefore agree with Tilly’s and the dissent that ‘at least in 1947, the phrase report [for] work meant physically showing up.’…Put simply, that is how an employee reported for work in the 1940’s.”
Edmon noted, however, “that the IWC’s purpose in adopting reporting time pay requirements was two-fold: to ‘compensate employees’ and ‘encourag[e] proper notice and scheduling.’ ”
“We conclude that had the IWC confronted the issue, it would have determined, as we do, that the telephonic call-in requirements alleged in the operative complaint trigger reporting time pay. We note as an initial matter that the on-call practices plaintiff alleges have much in common with the specific abuse the IWC sought to combat by enacting a reporting time pay requirement in 1942….This permits employers to keep their labor costs low when business is slow, while having workers at the ready when business picks up. It thus creates no incentive for employers to competently anticipate their labor needs and to schedule accordingly.”
Egerton relied on an opinion by U.S. District Judge George Wu of the Central District of California, who in 2014 examined wage order 7’s legislative history in a class action brought against Victoria’s Secret by Mayra Casas. (Despite Wu’s reading of the wage order, that lawsuit resulted in a $12 settlement for the plaintiffs, who had been subject to a similar call-in shift scheme.)
Wu had relied on a prior version of the wage order that barred employers from requiring a female employee to report to work between 10 p.m. and 6 a.m. unless suitable transportation was available for her, using the same “report for work” phraseology. He opined that such usage required a reading of the term to mean physically going to work, saying:
“Nothing in the legislative history indicates that the IWC ever altered this meaning. Indeed, the phrase ‘[e]ach day an employee is required to report for work and does report’ has remained unchanged throughout later versions of the Wage Order. This consistency strongly suggests that the IWC intended the phrase ‘report for work’ to have the same meaning as in prior orders.”
“There is more, much more. The legislative history consumes some 18,000 pages. But discussions of legislative history can waterlog the most buoyant reader. Suffice it to say here that no objective reader can study this complete legislative history and disagree with Judge Wu.”
The case is Ward v. Tilly’s, Inc., B280151.
Ward was represented by Patrick McNicholas and Michael J. Kent of McNicholas & McNicholas in Los Angeles; Scott H. Sims of Frank Sims & Stolper in Newport Beach; Michael A. Artinian of Bridgfor, Gleason & Artinian in Newport Beach; and Andrew N. Chang, Holly N. Boyer and Steffi A. Jose of Esner, Chang & Boyer in Pasadena. Counsel for Tilly’s were Apalla U. Chopra, Adam J. Karr, Ryan Rutledge and Briana LaBriola of O’Melveny & Meyers’s Los Angeles and Newport Beach offices.
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