By Michael Kun

Several years ago, employees in California began filing class action lawsuits against their employers alleging violations of the “suitable seating” provision buried in the state’s Wage Orders.  The unique provision requires some employers to provide “suitable seating” to some employees when the “nature of their work” would “reasonably permit it.” 

The use of multiple sets of quotation marks in the previous sentence should give readers a good idea just how little guidance employers have about the obscure law.  

The California Supreme Court is now poised to explain what that obscure law means for those employers who do business in California.  And the Court’s ruling could mean that restaurants in California will have to provide seats to hosts, hostesses and line cooks, or that hotels and other institutions will have to provide seats to their front desk staffs.

A little history: The “suitable seating” provision was written to cover employees who normally worked in a seated position with equipment, machinery or other tools.  For decades, it had been the subject of little litigation and even less discussion.  But after a court of appeal decision brought the obscure law to the attention of plaintiffs’ lawyers in California, employers in a wide variety of industries have been hit with class actions alleging that they have not provided seats to their employees.  Like many class actions, those cases have typically been brought by a single plaintiff who was well aware that the employer expected him or her to be standing while performing the job at the time he or she applied for a job.  Just as typically, those employees have not even requested a seat before filing suit and seek recovery of millions of dollars.

To date, the parties and courts dealing with these lawsuits have done so largely in the dark.  Simply put, there is little case law or legislative history explaining what the provision’s various terms mean or how they are to be applied or analyze.  Which employees are covered by the law?  What is a “suitable seat”?  What does the “nature of their work” mean?  What does “reasonably permit” mean?  What should be considered?  What should not be considered?

Earlier this year, the Ninth Circuit Court of Appeals threw up its hands and asked the California Supreme Court to clarify the law.  It asked the California Supreme Court whether the term “nature of the work” refers to individual tasks that an employee performs during the day, or whether it should be read “holistically” to cover a full range of duties.  It also asked the California Supreme Court to clarify whether an employer’s business judgment should be considered in determining whether the nature of the work “reasonably permits” the use of a seat, as well as the physical layout of the workplace and the employee’s physical characteristics.  Finally, it asked the California Supreme Court to clarify whether the employee must prove what would constitute a “suitable seat” to prevail.

After some speculation that the California Supreme Court might decline to answer these questions, it agreed to do so.  While the process will take time, employers in California should finally have much-needed guidance on this obscure law, allowing them to alter their practices as necessary and avoid these class actions.

Depending on what the California Supreme Court says, its opinion could have a great impact upon the hospitality industry. 

A few examples:

Hosts and hostesses at restaurants and clubs often stand behind a desk or podium when greeting customers.  Such employees (or their lawyers) might argue that they could perform their jobs just as effectively from a high stool or a half-seat. 

What about line cooks?  The thought of line cooks working while seated is an unusual one.  But, again, such employees (or their lawyers) might argue that they could do their jobs while seated.  Can an employer consider the layout of the kitchen?  Can it consider whether seats would block the often-tight passageways in the kitchen?  Can it consider the safety and health implications?  How about whether placing seats in the kitchen would violate local fire ordinances?

Like hosts and hostesses in restaurants, the staffs at the reception desks at hotels, spas and other institutions typically are standing while greeting and assisting customers.  Could they do their jobs while seated on a high stool or a half-seat?  Can a hotel take the position that the physical layout of the reception area would not allow chairs at the reception desk?

While the California Supreme Court’s decision is unlikely to address any of these hospitality-based questions specifically – the cases before it do not involve the hospitality industry – hospitality employers will need to review the decision carefully to determine whether the Court’s opinion suggests that some of its employees must be provided with seats.

By Michael Kun

We have written previously in this blog about California’s obscure “suitable seating” law, which requires that some employers provide “suitable seating” to some employees.

In short, the plaintiffs’ bar recently discovered a provision buried in California’s Wage Orders requiring employers to provide “suitable seating” to employees when the nature of their jobs would reasonably permit it. The provision was not designed to cover employees in the hospitality industry who often stand to show that they are ready to assist customers. Instead, it was written to cover employees who normally worked in a seated position with equipment, machinery or other tools. Nonetheless, employers in a variety of industries have been hit with class actions alleging that they have violated those provisions – and those cases are typically brought by a single plaintiff who was well aware that the employer expected him or her to be standing while performing the job at the time he or she applied. Just as typically, those employees have not even requested a seat before filing suit.

Now, reversing a district court decision that dismissed a “suitable seating” class action on the grounds that there had been no request for a seat, the Ninth Circuit has held that an employee need not request a seat to be entitled to one.

The Ninth Circuit explained that the district court had read into the Wage Orders something that was not there – a requirement that employees affirmatively request seats. Importantly, the Ninth Circuit expressly declined to comment on whether the nature of the work would reasonably permit seats in the case at issue. As before, it appears that will be the dispute in most “suitable seating” cases.
 

By Michael Kun

             As we have written before in this space,  the latest wave of class actions in California is one alleging that employers have not complied with obscure requirements requiring the provision of “suitable seating” to emploees – and that employees are entitled to significant penalties as a result.

               The “suitable seating” provisions are buried so deep in Wage Orders that most plaintiffs’ attorneys were not even aware of them until recently.  Importantly, they do not require all employers to provide seats to all employees.  Instead, they provide that employers shall provide “suitable seats when the nature of the work reasonably permits the use of seats.” 

               Because the “suitable seating” provisions were so obscure, there is scant case law or other analysis for employers to refer to in determining whether, when and how to provide seats to particular employees.  Among other things, the most important phrases in the provisions – “suitable seats” and “nature of the work” – are nowhere defined.  While those terms would seem to suggest that an employer’s goals and expectations must be taken into consideration – including efficiency, effectiveness and the image the employer wishes to project – plaintiffs’ counsel have not unexpectedly argued that such issues are irrelevant.  They have argued that if a job can be done while seated, a seat must be provided. 

               The first “suitable seating” case has gone to finally gone to trial in United States District Court for the Northern District of California.  The decision issued after a bench trial in Garvey v. Kmart Corporation is a victory for Kmart Corporation on claims that it unlawfully failed to provide seats to its cashiers at one of its California stores.  The decision sheds some light on the scope and meaning of the “suitable seating” provisions.  But it also may provide some guidance to plaintiffs’ counsel on arguments to make in future cases. 

               Addressing the “suitable seating” issue at Kmart’s Tulare, California store, the court rejected plaintiffs’ counsel’s arguments that Kmart was required to redesign its cashier and bagging areas in order to provide seats.  Importantly, the court recognized that Kmart has a “genuine customer-service rationale for requiring its cashiers to stand”:  “Kmart has every right to be concerned with efficiency – and the appearance of efficiency – of its checkout service.”  That concern is one likely shared by many employers. 

In reaching its decision, the court expressed concern not only about safety, but also about the cashiers’ ability to project a “ready-to-assist attitude”: “Each time the cashier were to rise or sit, the adjustment exercise itself would telegraph a message to those in line, namely a message that the convenience of employees comes first.”  The court further explained, “In order to avoid inconviencing a seated cashier, moreover, customers might themselves feel obligated to move larger and bulkier merchandise along the counter, a task Kmart wants its cashiers to do in the interest of good customer service.” 

While recognizing that image, customer service and efficiency goals must all be taken into consideration in determining whether seating must be provided, the court then appeared to provide some guidance to plaintiffs.  The court addressed the possibility that these issues could be addressed through the use of “lean-stools.”  Acknowledging that the use of “lean-stools” had not been developed at trial, the court invited arguments about them at the trial of “suitable seating” claims for the next Kmart store.  Thus, while expressly refusing to decide whether Kmart employees should have been provide “lean-stools,” the court may have provided plaintiffs’ counsel with an important argument to make in future trials.

And, as a result, employers in California – particularly in the hospitality and retail industries – should now be expected to address whether they could or should be providing “lean-stools” to employees whom they expect to stand during their jobs.  

By Michael Kun and Aaron Olsen

Following up on the California Supreme Court’s recent decision in See’s Candy v. Superior Court, a California federal court has now dismissed a time-rounding class action against H.J. Heinz Company. And, once again, the court has relied upon the decision in our case Alonzo v. Maximus.

This, of course, is more good news for employers with operations in California. Between See’s Candy and Maximus, it will be exceedingly hard for plaintiffs to proceed with time-rounding class actions against employers who have even-handed time-rounding policies, i.e. policies that round time both up and down.

By Kara Maciel and Aaron Olsen

After five years of litigation, a Los Angeles Superior Court has denied class certification of a class action against Joe’s Crab Shack Restaurants on claims that its managers were misclassified as exempt and denied meal and rest periods in violation of California law.  The court found that the plaintiffs had not established adequacy of class representatives, typicality, commonality or superiority, and emphasized a defendant’s due process right to provide individualized defenses to class members’ claims.

Because the case was handled by our colleagues in our Los Angeles office, we think it best not to comment on the decision other than to say that it highlights the need for creative strategies in defending against wage-hour class actions.   

By Michael Kun

This morning, the California Supreme Court has just issued its long-awaited decision in the Brinker case regarding meal and rest period requirements.   It is largely, but not entirely, a victory for employers.  A copy of the decision is here.

A few highlights of the decision:

On rest periods, the Court confirmed the certification of a rest period class because Brinker’s written policy arguably did not comply with the law as to the second rest period in a day.  In so doing, it clarified when employees are entitled to rest periods:

  • Employees are entitled to 10 minutes’ rest for shifts from three and one-half to six hours in length, 20 minutes for shifts of more than six hours up to 10 hours, 30 minutes for shifts of more than 10 hours up to 14 hours, and so on. (page 20)

On meal periods, the Court confirmed that meal periods need not be “ensured,” and that employers have no obligation to “police” them:

  • An employer’s duty with respect to meal breaks under both section 512, subdivision (a) and Wage Order No. 5 is an obligation to provide a meal period to its employees. The employer satisfies this obligation if it relieves its employees of all duty, relinquishes control over their activities and permits them a reasonable opportunity to take an uninterrupted 30-minute break, and does not impede or discourage them from doing so….. On the other hand, the employer is not obligated to police meal breaks and ensure no work thereafter is performed. Bona fide relief from duty and the relinquishing of control satisfies the employer’s obligations, and work by a relieved employee during a meal break does not thereby place the employer in violation of its obligations and create liability for premium pay under Wage Order No. 5, subdivision 11(B) and Labor Code section 226.7, subdivision (b). (page 36)

The Court also rejected the plaintiffs’ argument in favor of “rolling” meal periods (i.e., the argument that an employee who takes an early meal period is entitled to another meal period within the next five hours, even if he or she works less than 10 hours):

  • We conclude that, absent waiver, section 512 requires a first meal period no later than the end of an employee’s fifth hour of work, and a second meal period no later than the end of an employee’s 10th hour of work. (page 37)

Unfortunately, confirming that meal period claims will continue to be litigated in California for years to come, the Court added the following caveat:

  • What will suffice may vary from industry to industry, and we cannot in the context of this class certification proceeding delineate the full range of approaches that in each instance might be sufficient to satisfy the law.   (page 36)

A more comprehensive analysis of the decision and its impact upon California employers – and the meal and rest period class actions that have besieged California employers – will be forthcoming. 

by David D. Green, Frank C. Morris, Jr., Allen B. Roberts

Two recent decisions on arbitration, one from the National Labor Relations Board ("NLRB" or "Board") and one from the Supreme Court of the United States, present an interesting question: Can employers limit employees from launching potentially costly class actions? Some employers have applicants or new employees sign a separate agreement, or include a clause in application forms or in the employee handbook (which employees acknowledge), requiring employees to bring future disputes to arbitration and to agree that the arbitration will be individual only – not a class or collective action. These companies apparently hope that arbitration, and the avoidance of a jury trial, will be less costly than defending a court action if a dispute arises. They also hope to eliminate the attraction and risk of class and collective actions, which often are seen as providing undue leverage and a larger total payday to claimants and their attorneys.

Read the full advisory online

 

 by Michael Kun

 Some were beginning to wonder whether it would ever happen.  After more than two years, the California Supreme Court has announced a hearing date in the much-awaited Brinker v. Superior Court case — November 8, 2011.

Unless the Court takes a detour, California employers should finally know the answer to a question that has long driven California’s billion dollar wage-hour class action industry — must an employer "ensure" that employers take meal and rest periods, or are they only required to make them "available" to employees.

Should the Supreme Court rule that employers need only make them "available," wage-hour class actions will not grind to a halt.  Plaintiffs’ counsel will merely change their allegations to allege that meal and rest breaks were not made “available.”  But most employers should have valid defenses to such claims, and, perhaps just as importantly, they will not need to revise the way they operate.

However, should the Supreme Court rule that employers must "ensure" that meal and rest breaks be taken, virtually every employer that does business in California will be vulnerable to wage-hour actions reaching back four years. 

While it is tempting to do so, employers should not sit back and merely wait for the Brinker ruling.  While employers should hope for the best, they would be wise to prepare for the worst.  Indeed, because the Brinker Court may well rule that meal and rest periods must be "ensured," employers should be prepared to implement new policies and practices the very next day.  Having those new policies and practices drawn up and ready to implement on short notice could help stave off future claims, damages and penalties. 

With any luck, those policies and practices may never be needed.

By:  Kara M. Maciel and Jordan Schwartz

On May 10, 2011, the Southern District of New York conditionally certified a collective action against eight New York metropolitan area restaurants owned by celebrity chef Mario Batali alleging violations of the Fair Labor Standards Act. In the action, restaurant servers argue that the Batali restaurants are paying employees less than minimum wage and unlawfully retaining a portion of their tips.

The primary allegation in the lawsuit is that the restaurants deduct from the employee tip pool a portion of all credit-card tips equal to approximately 4-5% of the nightly wine sales. One plaintiff, a former server at Otto Enoteca Pizzeria, alleges that several managers told him the deducted amount went to the “wine program,” while a general manager told him it went “back to the house.” 

The restaurant owners argued that class certification was improper because there was not sufficient evidence to prove a common policy of withholding tips. The court disagreed, however, finding that there was a reasonable inference “that there was a uniform policy across the eight restaurants.” Consequently, it granted the plaintiffs’ motion for conditional certification so that they can send out notice to other tipped workers at all eight restaurants. 

This lawsuit is just one of the increasing number of nationwide and New York-based class action lawsuits alleging unlawful conduct regarding tips, gratuities and service charges. Just one day prior to the Batali decision, a group of Yankee Stadium food service workers filed a putative class action alleging that the concession operators misappropriated their tips by keeping the service charge added to the cost of food and drinks served to field-level patrons, rather than giving that money to the workers. The suit alleges that, by accepting the service charge, the companies willfully violated New York labor law, which directs that gratuities be provided to the workers who provided the service.

This flood of activity is not surprising. Problems with mandatory service charges and their distribution among waitstaff have plagued the hospitality industry for years. To add to this confusion, as of January 1, 2011, thelaws in New York regarding tips, tip credits and tip pooling, among other things, have been amended. Until restaurants implement policies consistent with these new laws, the trend of increasing lawsuits will only continue. Hotel and restaurant employers in all states, including New York, should make compliance with state and federal wage hour laws regarding tips, gratuities and service charges a top priority.

By:  Michael Kun

Employers who do business in California are already well aware of the wage-hour class actions that have besieged employers in virtually every industry.   Class claims for misclassification of employees as exempt employees or independent contractors first began to be filed more than a decade ago, and continue to be filed on a daily basis.  Claims for alleged work off-the-clock and missed meal and rest periods by non-exempt employees generally began later, but continue to be filed at an alarming rate. 

Now we can add to those cases a new wave of California class actions, alleging that employees have been denied “suitable seating,” as required by various Industrial Welfare Commission Wage Orders.  News of two recent Court of Appeal decisions permitting such claims has spread among the plaintiffs’ bar, which is now filing such claims against retailers throughout the state.  Other industries where employees frequently are on their feet, particularly the hospitality industry, are soon to follow.

Making matters worse, the Wage Orders with which employers are expected to comply only provide generally that “all working employees shall be provided with suitable seats when the nature of the work reasonably permits the use of seats.”  Nowhere in the Wage Orders or elsewhere are the phrases “suitable seats,” “nature of the work” or “reasonably permits” defined. 

Much like the law regarding meal and rest periods (which continues to be uncertain as the California Supreme Court delays in issuing its long-awaited decision whether such breaks must be “ensured” or need only be “made available”), it seems inevitable that the law regarding suitable seating is going to play out in the courts, and just as inevitable that class action after class action will be filed as the law remains vague and confusing.

And those class actions will not be small ones.  Under California’s Private Attorneys General Act, each employee could recover up to $100 for the initial pay period in which there is a violation, and up to $200 for each subsequent pay period. 

Employers would be wise to get ahead of the proverbial curve on this issue, reviewing the working conditions of their employees and making seats available where possible.