Employees are Entitled to At Least Two Hours' Compensation for Attending Meetings -- Price v. Starbucks

As we have previously blogged, reporting time pay -- i.e., the requirement to pay a minimum of two to four hours of compensation each time an employee is required to report to work -- is one of the most overlooked requirements of California wage and hour law.   The decision in Price v. Starbucks, while not currently for publication, is therefore significant as perhaps the first opinion to seriously grapple with the calculation of reporting time wages.  

Price was a less-than-stellar barista who was asked to come in to work on his day off to get fired.  Since the employer had required him to come to work to get the bad news he was clearly entitled to some "reporting time pay."  The question was: how much? 

The canned barista didn't have a regularly scheduled shift time but he averaged about six hours per day when he did work.  So he contended that he was entitled to half of this average or about three hours of pay.  The Court, however, focused on the fact that when Price reported to work on his last day he knew he was there only for a brief meeting and had no expectation of being put to work.  As a result, the Court concluded that he was only entitled to the minimum payment of two hours' pay:

Section 5(A) of Wage Order Number 5-2001 states: 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.

The use of the disjunctive “or” in this regulation, is used in the ordinary sense, suggesting alternatives. If an employee is required to work, reports to work, and is not put to work or does not work half of the employees' usual or scheduled day's work, the employee is paid a half-shift reporting wage not to exceed four hours. If an employee is not scheduled to work or does not expect to work his usual shift, but must report to work for a meeting, the employee falls into the regulatory category of those employees called to work on their day off for a scheduled meeting. Price was entitled to the minimum payment, which is what he received.

Thus, the Court seems to have created a bright-line rule that employees are entitled to only two hours of pay when they are called in to work to "attend a meeting for an unspecified number of hours."  




Court Condemns Employer Policies that "Discourage" Meal Breaks -- Tien v. Tenet Healthcare Corporation

The opinion in Tien v. Tenet Healthcare Corporation is a bit of a split decision on meal breaks.  On one hand, the Court upheld the trial court's denial of class certification in a meal break case.  On the other hand, the Court endorsed an interpretation of the meal law in which an employer may be liable merely for creating "a work environment that discourages employees from taking their breaks."

Consistent with the purpose of requiring employers to provide employees with meal breaks, the Labor Code uses mandatory language . . . precluding employers from pressuring employees to skip breaks, declining to schedule breaks, or establishing a work environment that discourages employees from taking their breaks.

While this is hardly a strict liability standard, it does focus attention on the employer's overall "work environment," which would tend to favor class certification in many cases.  Once again, the take-away message for employers is to have an active, good faith compliance program. 


Employees Can Recover At Least Two Hours Per Day For Missed Meal and Rest Breaks -- United Parcel Service v. Superior Court

If anyone were to present an award for the statute that has created the most interpretation issues per word, the meal and rest break provision of Labor Code section 226.7 would have to be a finalist. 

The first big issue was how to characterize the one-hour of additional wages provided by the statute.  This was finally settled by the California Supreme Court's Murphy v. Kenneth Cole decision, holding that this amount was a premium "wage" akin to premium overtime pay.  The next high-profile dispute was the extent to which an employer must take affirmative steps to "provide" breaks in order to avoid the penalty/premium wage payments required by the statue.  This is the subject of the pending Brinker case.

Another long-festering interpretation issue (which is also likely to eventually end up before the Supreme Court), is the number of penalty/premium wage payments that an employee may accrue in a single day under Section 226.7.   The Second District Court of Appeal confronted this damages question head on in United Parcel Service v. Superior Court.  It is probably not worth recounting the blow-by-blow statutory construction analysis used by the Court but the bottom line is that employees may recover two penalties per day:

In short, we conclude, based upon the wording of section 226.7, subdivision (b), the legislative and administrative history of the statute and IWC wage orders, the public policy behind the statute and wage orders, and also the principle that we are to construe section 266.7 broadly in favor of protecting employees, that the employees in this case may recover up to two additional hours of pay on a single work day for meal period and rest period violations-one for failure to provide a meal period and another for failure to provide a rest period.

The take-away for employers is that it more important than ever to have an effective break policy, as the potential liability has now been effectively doubled.

Caution For Employers Regulating Employee's Internet Activity

Recently, the National Labor Relations Board sued American Medical Response of Connecticut Inc. (AMR) on behalf of an employee who was fired for making negative comments about AMR on the Internet. The NLRB argued that the conduct of the employee was protected as free speech under federal labor laws. The NLRB settled the case with AMR.  In addition to paying a confidential settlement to the employee, the company has also agreed to change its blogging and Internet policy so that it no longer prohibits employees from disparaging the company or depicting the company in any way without prior approval from the company. While this case involves federal labor laws, the settlement should be a warning to California employers who have similar Internet prohibitions as California law provides that employers cannot restrict an employee’s legal off-work activities.

First off, in California, Article I, Section I of the California Constitution guarantees citizens a right of privacy:

All people are by nature free and independent and have inalienable rights. Among these are enjoying and defending life and liberty, acquiring, possessing, and protecting property, and pursuing and obtaining safety, happiness, and privacy.

This right to privacy carries over to the workplace, but is even more protected when the employee is conducting personal activities during non-working hours. Furthermore, section 96(k) of the Labor Code provides that the California Labor Commissioner may assert on behalf of employees:

Claims for loss of wages as the result of demotion, suspension, or discharge from employment for lawful conduct occurring during nonworking hours away from the employer’s premises.

For example, in Barbee v. Household Automotive Finance Corp. (2003), a court provided some guidance about the ramifications of section 96(k). Barbee was dating a subordinate at work, which violated the company’s policy and created a conflict of interest. The company gave Barbee and the employee with whom he was involved the option that one of them had to resign or to end the relationship. Barbee refused to resign, and they did not end the relationship, so the company terminated Barbee. Barbee sued, arguing that the company violated Labor Code section 96(k) in that his employer was regulating his lawful conduct during personal time. The court rejected Barbee’s argument in stating:

We conclude that Labor Code section 96, subdivision (k) does not set forth an
independent public policy that provides employees with any substantive rights,
but, rather, merely establishes a procedure by which the Labor Commissioner
may assert, on behalf of employees, recognized constitutional rights. Therefore,
in order to prevail on his wrongful termination claim, Barbee must establish that
his employment was terminated because he asserted civil rights guaranteed by
article I of the California Constitution. We conclude that Barbee cannot make this showing and therefore he cannot establish the first necessary element of his wrongful termination claim.

While the court held that the company’s actions in that case did not violate section 96(k), the facts were very favorable to the employer, and there are other arguments available to employees. For example, an employee may also argue violation of Labor Code Section 98.6 which states in part that “no person shall discharge any employee ... because the employee … engaged in any conduct delineated in this chapter, including the conduct described in subdivision (k) of Section 96 ….” An employer may, however, prohibit an employee from any disclosures on the Internet that would be illegal, disclose confidential information, or violate another individual’s (such as co-workers or customers) right to privacy. But with this recent case making national headlines, it is certain that litigation concerning what employees conduct an employer can and cannot regulate on the Internet will be prevalent over the next few years.