The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10. Presenting a live 90-minute webinar with interactive Q&A Overtime Pay Claims for After-Hours Use of Electronic Devices: Navigating Latest DOL and Case Law Developments Defining Working Time, Leveraging Defense Strategies, Defeating Class Certification, Proactively Avoiding Claims Today’s faculty features: 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific THURSDAY, OCTOBER 27, 2016 Clifford L. Hammond, Senior Attorney, Foster Swift Collins & Smith, Southfield, Mich. Mark E. Tabakman, Partner, Fox Rothschild, Roseland, N.J.
Transcript
The audio portion of the conference may be accessed via the telephone or by using your computer's
speakers. Please refer to the instructions emailed to registrants for additional information. If you
have any questions, please contact Customer Service at 1-800-926-7926 ext. 10.
Presenting a live 90-minute webinar with interactive Q&A
Overtime Pay Claims for After-Hours Use
of Electronic Devices: Navigating Latest
DOL and Case Law Developments Defining Working Time, Leveraging Defense Strategies,
Defeating Class Certification, Proactively Avoiding Claims
• In recent years, the work day has become increasingly longer and longer and has more and more intruded into employees’ personal time and lives. The blurring of the work day and personal time has allowed employers, perhaps without intending to do so or unwittingly, to demand more of their employees to “keep up” even if these increased demands mean that employees are performing work-related tasks at home or at night or, even, on the beach while on vacation.
7
Overview Continued
• Against this backdrop is the advance of technology, which, for many employees, has become a wireless balls and chain. For example, Blackberrys make it much easier to contact a worker’s colleagues, but it also makes it very hard to “ignore” e-mails and messages sent. One study shows that 50% of employed e-mail users check their e-mails over the weekend. One quarter of these employees are expected to check their e-mails. Almost one-half of Blackberry users are expected/required to respond to after-hours/weekend messages. We are at a point in today’s society where employees are under an almost “electronic siege.”
8
Overview Continued
• Why do employees put up with this or allow themselves to never be disconnected from their work? Perhaps the answer is as simple as the fear of losing one’s job. In a poor economy, where unemployment is at record numbers and as white collar jobs start (quickly) to follow blue-collar jobs overseas, white-collar workers are finding themselves under greater pressure to justify their jobs and keep them.
9
Overview Continued
• These circumstances have now resulted in a new kind of wage-hour claims (usually in the context of a collective or class action suits) being asserted by employees. These claims involve demands for compensation (usually overtime) for work performed, work that consists of the checking of e-mails and the responding to messages and e-mails, etc. This is the newest danger confronting employers and a situation that they must be able to monitor and control, whether with policies and/or explicit directives to employees.
10
The Legal Framework
11
The Legal Framework:
Unintegrated Incidental Time
• Incidental time spent by employees before or after their workday on activities other than those integrated with their principal duties is compensable if compensation is called for by a contract between the employer and the employee or his union, or by the employer’s custom or practice. If, however, there is no contract and there is no employer custom or practice calling for compensation, then the incidental time is not compensable.
12
The Legal Framework:
Integrated Incidental Time
• Incidental time spent by employees before or after their workday on activities, so-called preliminary and postliminary work, if sufficiently integrated with the principal duties is compensable.
• For example, a cashier balancing cash drawer before/after shift.
• In other words, if the employee cannot perform his principal job without first undertaking the preliminary activity and then, at day’s end, the postliminary activity, the likelihood is that the time is compensable.
13
The Legal Framework:
Other Factors
• The other key factor is whether there is any employer compulsion to engage in the activity or come in early to accomplish the task(s).
• If an employer requires the employee to engage in the activity before their shift begins, then it is likely that the time is compensable.
14
The Legal Framework:
De Minimis
• The last issue for determining the compensability of such time is whether the “extra time” falls under the FLSA de minimis doctrine.
• Insubstantial or insignificant periods of time, which cannot as a practical administrative matter be precisely recorded for payroll purposes, may be disregarded as de minimis.
15
The Legal Framework:
De Minimis
• For time worked to be considered de minimis, it must be an uncertain and indefinite time, a few seconds, a few moments.
• An employer cannot disregard the time if it is a fixed and regular part of the employee’s work and is regularly required to spend on the duties.
16
The Legal Framework:
De Minimis Cases
• Early case held that $1 of additional compensation per week was not de minimis.
• No clear understanding of what exactly qualifies as de minimis.
• Time spent receiving, prioritizing, and mapping assignments before commuting to work is de minimis. Rutti v. Lojack Corp. Inc., 596 F.3d 1046 (9th Cir. 2010).
• But see Brubach v. City of Albuquerque, 893 F. Supp. 2d 1216 (D.N.M. 2012) (five minute pre-shift meeting not de minimis because mandatory meeting does not constitute time “beyond scheduled working hours.”)
17
The Legal Framework: Other
Exclusions
Union Contract Can Exclude
Compensable Time From Hours
Worked
• Even though time spent by the employees in changing clothes or washing at the beginning or end of a workday would be compensable hours worked under FLSA, such time can be excluded from hours worked if the union consents to having such a provision within the contract.
18
The Growing Trend,
The Growing Danger
19
The Growing Trend, The
Growing Danger
• Determining the legitimacy of an overtime claim under the Fair Labor Standards Act (“FLSA”) will depend on whether the employee’s use of a home computer, lap top, PDA, blackberry, smart phone and similar devices fits into the FLSA’s broad definition of work.
• The FLSA does not explicitly define “work,” but the Supreme Court has broadly defined it as “physical or mental exertion (whether burdensome or not) controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer and his business.” Tenn. Coal, Iron & R.R. v. Muscoda Local No. 123, 321 U.S. 590, 598 (1944).
20
The Growing Trend, The
Growing Danger
• Work” need not be an activity specifically directed or ordered by the employer, but includes productive activity that is “suffered or permitted” by the employer. Id.
• Naturally, any implicit “pressure” to perform these activities will be deemed to show sufficient employer compulsion to convert the activity into compensable work time.
21
Early Cases
22
The Early Cases: Ritter
Ritter v. The Ready Set Companies
1:06-cv-06605 (N.D.III 2006).
• Plaintiff filed suit pursuant to the FLSA and Illinois Minimum Wage Law to recover unpaid overtime wages for unpaid overtime. Plaintiff alleged that defendant owed him for fifteen minutes of overtime wages for a period of one year and seven months for every day worked. Plaintiff alleged in the Complaint that Defendant required service agents to carry a PDA and required them to upload information to a centralized database maintained by Defendant from their homes every day. Similarly, defendant required Service Agents to download and review information on their PDAs during their off hours.
23
The Early Cases: Ritter
Continued
• The plaintiffs alleged that they could not perform these duties in their stores as there was no internet service available to them there.
• The parties reached a confidential settlement agreement in May 29, 2007.
24
The Early Cases: Braniff
Braniff v. DirectSat USA, LLC, 0:09-cv-02168-DWF-SRN (D.Minn 2009).
• Plaintiffs filed suit pursuant to the FLSA and the Minnesota Fair Labor Standards Act to recover unpaid overtime wages for unpaid overtime for the statutorily period permitted. Plaintiffs alleged that they and similarly situated employees were required to check their employer issued PDAs each morning; acknowledge jobs by logging in; send acknowledgements to their employer; and, notify the employer of their approximate arrival times at customer locations.
• The parties entered into a stipulation for dismissal without prejudice on November 25, 2009 after a confidential settlement.
25
The Early Cases: Augi
Agui v. T-Mobile USA, Inc.,
1:09-cv-02955-RJD-RML (E.D.N.Y. 2009).
• Plaintiffs filed suit pursuant to the FLSA, New York Labor Law Sec. 650, and California Labor Code to recover unpaid overtime wages for unpaid overtime. Plaintiffs, several fonder and current employees sued T-Mobile, claiming that they were “required to use company issued smart phones to respond to work messages after hours without pay.”
26
The Early Cases: Augi
Continued
• Plaintiffs alleged that they and the 36,000 similarly situated employees nationwide were entitled to overtime wages for the ten to fifteen hours they spent every week “reviewing and responding to emails, texts, and phone calls.”
• The parties reached a confidential settlement agreement in May 5, 2010.
27
The Early Cases: Prescott
Prescott v. Prudential Insurance Co.,
2:09-cv-00322- DBH (D. Me. 2009).
• Plaintiffs filed suit pursuant to the FLSA and the Maine Wage and Hour Laws to recover unpaid overtime wages for unpaid overtime. Plaintiffs, several former and current similarly situated employees have joined suit to sue Prudential for approximately twelve hours of overtime per week for the statutory period that they were not compensated for, but worked off the clock on their home personal computers.
28
The Early Cases: Prescott
Continued
• Significantly, the class was certified, notwithstanding the existence of a policy that forbade overtime work without prior authorization. The Court determined that the employer had a practice of allowing off-the-clock work to be performed and that the employer essentially “suffered and permitted” the work to be done.
• The Plaintiff received a conditional certification of the class and additional parties continue to join the collective action suit under an Order allowing for late filing.
29
The Early Cases: Rulli
Rulli v. CB Richard Ellis, Inc.,
2:09-cv-00289-PJG (E.D.Wis. 2009).
• Plaintiffs filed suit pursuant to the FLSA to recover unpaid overtime wages for unpaid overtime. Plaintiff and similarly situated employees in the collective action, allege that they were required to use PDAs and Blackberries beyond normal working hours to respond to emails and text messages from supervisors. The class is expected to include perhaps thousands of employees.
30
The Early Cases: Rulli
Continued
• Another allegation is that the plaintiffs had to respond to incoming e-mail messages (and phone calls) within fifteen minutes of receiving the message or phone call.
• Another allegation is that this work is “suffered and permitted” to be done and also that the time records which were kept did not allow for the recording of all time allegedly worked.
31
Recent Cases
32
Recent Cases: Allen v. City of
Chicago
Allen v. City of Chicago,
1:10-cv-03183 (N.D.III 2010).
• Plaintiffs filed suit pursuant to the FLSA to recover unpaid overtime wages. Plaintiff and similarly situated employees in the collective action allege that they were required to use PDAs and Blackberries beyond normal working hours as they were on call 24 hours a day and seven days per week. Plaintiffs would receive phone calls, emails, and work orders while of the clock and were not compensated for responding to these communications, which occurred throughout the night and into the early morning hours (according to the Complaint).
33
Recent Cases: Allen
Continued
• Plaintiffs allege that it was mandated department policy to respond to the messages or calls within a short period of time of receiving the message.
• Plaintiffs also allege that the work performed by the Chicago Police Department would be less efficient and not as successful, without this routine off-duty work. The class could conceivably include many of city of Chicago’s 37,000 employees. The Court granted conditional certification.
34
Recent Cases: Allen
Continued
Allen v. City of Chicago,
No. 10 C 3183, (N.D. Ill. Dec. 10, 2015) • The federal district court judge rules that police officers who
sought overtime pay for their off-duty use of City-issued BlackBerrys failed to demonstrate that there was an unwritten policy to the effect that they would not be compensated for the work.
• The Judge agrees that the officers had proven that they did, in fact, perform off-duty work on their BlackBerrys, but concluded that they failed to show that the City “suffered and permitted” the work to be done, specifically that the city knew about it but then refused to compensate the officers for that work.
35
Recent Cases: Allen
Continued
• The court finds that there was no evidence indicating that the officers’ supervisors knew that they were working on their BlackBerrys off-duty without submitting time slips to be paid for the work. The plaintiffs also did not show that the superiors pressured line officers not to submit slips for this off-duty work. Rather, the City presented evidence of numerous instances of officers requesting and, significantly, receiving overtime pay for off-duty use of their BlackBerrys.
• An appeal has been filed in response.
36
Recent Cases: Zivali
Zivali v. AT & T Mobility, LLC,
784 F. Supp. 2d 456 (S.D.N.Y. 2011)
• Plaintiffs filed suit under FLSA for failure to pay wages and overtime compensation for time spent checking emails off the clock, as well as other off-duty activities.
• The Class was granted conditional class certification in 2009 and then in 2011 the court granted Defendant’s motion to decertify the class.
37
Recent Cases: Zivali
Continued
• The court granted decertification because the class was not similarly situated.
• A randomized study of 25 of the over 4,000 plus plaintiff class showed differences in factual and employment settings as well as individualized defenses available to Mobility.
38
Recent Cases: Zivali
Continued
• These differences included ‒ the frequency that plaintiffs received off duty
communications,
‒ plaintiffs’ understanding of management’s expectations regarding working after hours,
‒ whether the off duty time was reported and compensated
‒ individual plaintiff’s knowledge of time keeping features meant to capture extra worked time
‒ whether the off duty work was for the employee or employer’s benefit
‒ whether supervisors knew plaintiffs were working after hours
‒ whether the work of each plaintiff was de minimis
39
Recent Cases: Butler
Butler v. DirectSAT USA, LLC,
No. CIV.A. DKC 10-2747, (D. Md. Oct. 16, 2014).
• Time that a technician spent reading e-mails, looking up his work assignments, mapping out directions to his assignments, and prioritizing his routes was not compensable under the Fair Labor Standards Act (FLSA) because these tasks were related to technician’s commute.
40
Recent Cases: Butler
Continued
• Summary Judgment was granted because Butler’s preliminary and postliminary activities were not an “integral and indispensable part of [his] principal activities.”
• Specifically, the court looked to the Portal-to-Portal Act, 29 U.S.C. §§ 251-62, which amended the FLSA.
41
Butler and the Portal-to-Portal
Act
• The Portal-to-Portal Act relieves employers of the obligation to compensate an employee for:
• (1) walking, riding, or traveling to and from the
actual place of performance of the principal activity or activities which such employee is employed to perform, and
42
Butler and the Portal-to-Portal
Act
• (2) activities which are preliminary to or postliminary to [the] principal activity or activities, which occur either prior to the time on any particular workday at which such employee commences, or subsequent to the time on any particular workday at which he ceases, such principal activity or activities. For purposes of this subsection, the use of an employer's vehicle for travel by an employee and activities performed by an employee which are incidental to the use of such vehicle for commuting shall not be considered part of the employee's principal activities if the use of such vehicle for travel is within the normal commuting area for the employer's business or establishment and the use of the employer's vehicle is subject to an agreement on the part of the employer and the employee or representative of such employee.
43
Recent Cases: Butler
Continued
• The court found that time spent by Butler reading emails regarding his next day's appointments, was not compensable under the FLSA because these activities were not integral to his principal activities, but rather, were related to his commute.
• The court held that the activities' relation to his commute barred recover under the Portal-to-Portal act.
44
Recent Cases: Bustinllos
Bustillos v. Bd. of Cnty. Comm'rs,
CV 13-0971(D.N.M. 2015)
• Plaintiff Correctional Officers filed suit under FLSA for failure to pay wages and overtime compensation for time spent logging into and out of computers before and after their shift, as well as other off-duty activities.
• The court granted conditional class certification because plaintiffs were sufficiently similarly situated in all ways but damages.
45
Recent Cases: Bustinllos
Continued
• However, later that year, the defendant’s motion for summary judgment against plaintiff’s FLSA claims was granted.
• The court found that only some of the pre-shift activities were compensable because there was no policy that plaintiffs had to perform these duties before their shift, and most activities were not integral or indispensable. Of those activities that were compensable, they were only de minimis. Bustillos v. Bd. of Cnty. Comm'rs, No2015 U.S. Dist. LEXIS 162697, at *59 (D.N.M. Oct. 20, 2015).
46
Other Cases
• Off duty use of electronic devices for work purposes can also overlap with FLSA legal issues such as being “on-call,” meal time/automatic meal deductions, and telecommuting.
• O'Neill v. Mermaid Touring, Inc., 968 F. Supp. 2d 572, 587 (S.D.N.Y. 2013) (finding that a celebrity’s personal assistant who was expected to always be available by her cell phone was “on-call” and may be entitled to overtime.)
• Abbey v. United States, 99 Fed. Cl. 430 (2011) (finding that off duty on-line scheduling “bidding” was not for the employer’s benefit and therefore not compensable.”)
47
Other Cases Continued
• Bendus v. Donley, No. 3:10cv464-WS, 2013 U.S. Dist. LEXIS 17945, at *19 (N.D. Fla. Feb. 11, 2013) (finding that federal police officers were not entitled to compensation for time they were off-duty but had to be reachable and could not consume alcohol because, other than those restrictions, the time could be used entirely for their own benefit.)
48
Related Issue:
On-Call Employees
49
Control Defined
• The issue of compensability depends on how much control employer has over employee and whether the employee can effectively use on-call time for personal activities.
• An employee who is required to remain on call on an employer's premises or so close thereto that the employee cannot use the time effectively for his own purposes is "working."
‒ Note: There may be an exception for an employee who resides on premises.
50
Personal Pursuits
• An employee who is not required to remain on premises, but is merely required to leave word where he/she can be reached generally is not deemed to be working while on call.
• Time spent at home on call may or may not be compensable depending on whether the restrictions placed on the employee preclude using the time for personal pursuits.
51
Factors
• Factors considered include:
‒ Geographical restrictions
‒ Required response time
‒ Frequency of calls during the period
‒ Use of a pager
‒ Extent personal activities are actually engaged in during on-call time
‒ Provisions of any employment agreement as to treatment of on-call work
‒ Length of time employee is on call
‒ Degree to which employees can trade on-call responsibilities
‒ Whether the nature of the work precludes the employee from engaging in certain activities, such as drinking alcohol, while on call
• Court decisions not entirely consistent in applying these factors. They are very fact sensitive.
52
Compensable Time – Personal
Time
• Employees do not usually have to be compensated for on-call time if an employee is:
‒ on call whether by beeper or pager
‒ required to be able to report for duty in a sober state within a reasonable response period (e.g. 30 minutes minimum)
‒ not called so frequently as to significantly interfere with personal use of the entire band of time
‒ given periodic relief from on-call duty
53
Opinion Letters to Support
Compensability
• USDOL, which enforces and interprets FLSA has, in a number of
Opinion Letters, reinforced and reaffirmed these principles:
– Wage-Hour Opinion Letter No. 2169 (July 12, 1999)
• On-call time not compensable where employees carried pagers and were
required to stay within the geographic range of the pager
– Wage-Hour Opinion Letter No. 2027 (March 11, 1997)
• On-call time not compensable where employee carried pager, even though
required response time was only ten minutes
– Wage-Hour Opinion Letter No. 1939 (May 28, 1998)
• Employees who carried beepers and were required to respond within 20
minutes not entitled to compensation for on-call hours
• Note: Whether the employee has volunteered for the on-call
assignment and/or has the right to refuse an assignment once
called does not impact on the above analysis.
54
Voluntariness
• Wage Hour Opinion Letter No. 2169 (July 12, 1999):
‒ Employees voluntarily signed up to be on-call and had the right not to respond to calls when they were in an on-call status.
‒ DOL did not focus at all on the voluntariness aspect of the matter, but simply examined whether the conditions relating to the on-call arrangement were unduly restrictive, concluded they were not, and ruled that the on-call hours were not compensable.
‒ In these circumstances, the normal rule applies, meaning that compensable work time begins when the employee gets the call and responds to it.
55
On Duty Shifts – Permanency
• Emergency medical technicians, who primarily transported convalescent home patients, were engaged to wait, rather than waiting to be engaged, because, although they had down time during 24-hour shifts, they were not allowed to leave premises and were required to respond on short notice. Felker v. Southwest Emergency Med. Servs., 581 F. Supp. 2d 1006, 1011 (S.D. Ind. 2008).
56
Off Duty – Staffing Agencies With
Workers Who Did Not Work
• Temporary staffing company employees who waited at a staffing facility for assignments were told such time was not compensable, and were not required or asked to wait on site;
• Although those present were preferred for assignment, employees were free to spend the time as they wished and were free to work only when they wanted to work and only on the types of jobs they wanted to accept. Bernal v. Trueblue, Inc., 730 F. Supp.2d 736 (W.D. Mich. 2010).
57
Flexible Conditions Render
Time Non- Compensable
• On-call time not compensable where
employees were on-call for one-week periods
every eight weeks, could exchange on-call
weeks, had 45 to 60 minutes to respond, and
calls averaged five per month and required
only 10 to 30 minutes of travel. WH Admin.
Opinion Letter FLSA 2009-17 (January 16,
2009).
58
Flexible Conditions Renders
Work Non- Compensable
The Wage-Hour Administrator has issued Opinion Letters concerning on-call pay for firefighters and EMT workers:
1. On-call time ruled not compensable where the firefighters wore a beeper, had a seven minute response requirement, and were not required to report in uniform. They lived in a small town "easily traversed" in seven minutes, and were also required to live within 3.5 miles of the station. Wage Hour Opinion Letter No. 1699, (September 8, 1988).
59
Conditions Not Flexible-On Call
Work Deemed Compensable
2. Emergency medical technicians required to respond within five minutes of being paged by beeper should be paid for their on-call time. The five minute response time was deemed "too restrictive for employees to effectively use on-call time for their own purposes." Wage Hour Opinion Letter No.1695, (November 15, 1988).
• This letter makes no reference to the earlier opinion, and does not specify why seven minutes is permissible but five minutes is not.
• It may be that the later letter involved a larger city so that the response time was not only shorter, but as a practical matter more restrictive of personal pursuits.
60
Response Time
• In an old opinion letter, the Wage-Hour
Administrator indicated that 20 minutes would
generally be an acceptable non-restrictive
response time, although in some situations
such as a rural area it might not be sufficient.
Wage Hour Opinion Letter No. 856 (August
14, 1968).
61
Flexible Work Conditions:
Not Compensable
• Similarly, technicians employed by a hospital located
in a rural area who did not remain on the premises but
were required to leave phone numbers and report to
work within 20 minutes after receiving a call were not
entitled to overtime compensation for on-call time.
The 20-minute requirement allowed them to engage in
leisure activities primarily for their own benefit.
Pilkenton v. Appalachian Regional Hospitals, Inc. 336
F. Supp. 334 (D. Va. 1971).
62
Fact Intensive
Inquiry – Timing is Key
• In Wage Hour Opinion Letter No. 1609
(December 11, 1985), the DOL ruled that
ambulance personnel, who were required to
respond from their home within three minutes,
were determined to be working the entire time
they were on-call.
63
Fact Intensive
Inquiry – Timing is Key
• Similarly, in Renfro v. City of Emporia, 948 F.2d 1259 (10th Cir. 1991), the plaintiff firemen were required to carry pagers and return to work within 20 minutes of being called. The Court, placing heavy emphasis on the undisputed fact that the employer called back each fire fighter an average of 3-5 times per 24 hour period, concluded that the fire fighters could not use the time effectively for their personal pursuits.
64
The Bright Case: 365 Days On
Call/24-7: Non-Compensable
• Bright v. Houston Northwest Medical Center, 934 F.2d 671 (5th Cir. 1991) a technician whose job duties required the repair of complicated bio-medical equipment was given an electronic pager to wear at all times, told he had to be available twenty-four hours a day, three hundred sixty-five days a year. He was also required to be at the hospital within 20 minutes of the time that he was paged.
• The Court found that Bright was not only able to carry on his normal personal activities at his own home, but he could also do normal shopping, eating at restaurants and other similar activities. Id. The fact that Bright remained “on-call” for one year as opposed to a weekend or seven-day period, which was deemed crucial in the earlier ruling, was not found to be determinative.
65
Reversing Argument that All On-
Call Time Compensable Where
There Was Time for Personal Use
• The Fifth Circuit reversed a lower court decision holding that all of the on-call time was working time.
‒ Court found significant that the employee did not have to remain on or about his employer’s premises, but was free to be at his home or any other place that he chose to be, without advising his employer, subject only to the restriction that he be reachable by beeper and arrive at the hospital in approximately 20 minutes.
66
The Threat of FLSA
Class Actions
67
The Explosion in Wage and Hour
Class Actions: The Attractiveness
of Wage and Hour Class Actions to
Plaintiff
• Almost every employer is committing some kind of wage and hour violation under either the federal Fair Labor Standards Act ("FLSA") or corresponding state law.
– Many wage and hour laws are "black and white" and easy to prove.
• Examples — minimum wage / overtime claims are often simply a matter of mathematical calculations.
– Many wage and hour laws create difficult standards for compliance.
– Many wage and hour laws are difficult to police. • Examples — "Doffing and donning" actions, time-shaving incidents,
rest/meal breaks, etc.
– Many wage and hour laws are simply unknown by employers. • Examples - New York's "spread of hours" rules.
68
The Explosion in Wage and Hour Class
Actions: The Attractiveness of Wage
and Hour Class Actions to Plaintiff
• Wage and hour violations are more susceptible to class action status.
• Violations more likely to involve policies applicable to all employees in a particular group (e.g., no overtime paid to all employees if not authorized in advance, no wages paid for time spent loading computer, etc.).
69
The Explosion in Wage and Hour Class
Actions: The Attractiveness of Wage
and Hour Class Actions to Plaintiff
• Large damage awards
– Under the FLSA, employees may receive, among other
damages: (1) all unpaid wages/overtime; (2) 100%
liquidated damages (unless employer can establish
“good faith” efforts to comply with the law); (3) pre- and
post-judgment interest, and (4) attorneys’ fees.
– FLSA’s statute of limitations is two years (three if the
violation is “willful”), but many states have longer
statutes in limitations periods for similar violations (e.g.,
New York - 6 years).
70
Key Strategies in Defending
Wage and Hour Class Actions
• Determine liability/exposure as early as possible
• Take immediate corrective action if the
determination is made that violations are
occurring, or are potentially occurring
– Take “corrective action,” even if you have a good faith
belief that your company is in compliance with the law
simply to avoid any future liability or additional lawsuits
(e.g., reclassifying certain exempt employees as “non-
exempt)
– Immediately cuts off liability, which would otherwise
continue until day of judgment/settlement
71
Key Strategies in Defending
Wage and Hour Class Actions
• Collect and preserve all applicable wage and hour records
‒ Often the key to any defense.
‒ Without supporting records, employee testimony generally gets credited by the courts
‒ Try to avoid producing names and contact information of putative class members (i.e., redacting payroll records in discovery) until after plaintiffs have established class certification
72
Key Strategies in Defending
Wage and Hour Class Actions
• Explore settlement options early.
– Cheapest settlements are often obtained early in
litigation (e.g., before the plaintiffs know the “full
story,” have invested heavily in litigation, etc.)
– Plaintiffs’ attorneys (working on contingency fees)
are generally looking to make quick dollars without
a lot of effort
– Offer of Judgment Issue: Campbell-Ewald v.
Gomez
73
Avoiding and Managing
Risk: Employer Defense
Strategies
74
How to Avoid Risk
• To avoid this risk entirely, employers can refuse to issue smartphones or grant access to the company’s email to non-exempt employees outside of regular work hours.
• However, this approach may not be practical, or desired, by many employers.
75
How to Manage Risk: Policy
• Alternatively, a comprehensive written policy can help mitigate the risk.
• An employer should establish a policy that: ‒ defines the parameters for the employee’s use of
company-issued or personal devices to access work email systems
‒ requires that non-exempt employees document and report all of their hours worked, including any time that they spend reviewing and responding to work-related emails and working remotely from home
‒ communicates a clear process for employees to report such after-hours work
76
How to Manage Risk: Training
• But distributing this policy is not enough.
• Employers must train their staff, both exempt and non-exempt employees alike, on:
‒ the pertinent policies
‒ the proper and permitted off duty use of mobile or home devices for business purposes
‒ how to report any extra time worked
• Supervising employees should be trained on when and how to communicate with non-exempt employees who are off duty.
77
How to Manage Risk:
Enforcement
• To effectivity minimize risk, any policy regarding remote access must be consistently enforced.
• Employee Violations: ‒ If a non-exempt employee violates the policy by
working remotely during non-working hours, she should be disciplined.
‒ However, keep in mind that she still must receive the proper pay for her actual hours worked.
78
How to Manage Risk:
Enforcement
• Supervisor Violations ‒ Similarly, if a supervisor violates the policy by
engaging or requiring a subordinate non-exempt employee to respond to emails during non-work hours, then the supervisor must also be disciplined.
79
Best Practices
• Enhance Time-keeping practices
• Prohibit non-exempt employees from engaging in any off-the-clock work
‒ Give examples stating that checking and responding to company emails, text messages and phone calls during off hours is specifically prohibited.
• Reiterate that all work time must be recorded and will be paid
• Restrict Access to company emails and phones
• If an employee fails to comply with the policy, enforce it by imposing discipline. But remember that you cannot withhold pay as a consequence of the policy violation
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Administration and
Enforcement of the FLSA
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Administration and Enforcement
of the FLSA: Investigation
• The FLSA provides that authorized representatives of the Secretary of Labor, usually from the Department of Labor (“DOL”) Wage and Hour Division, may investigate and gather data regarding an employer’s wages, hours, and other conditions and practices of employment. The investigators may enter and inspect an employer’s premises, examine records, and question employees.
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Administration and Enforcement
of the FLSA: Investigation Cont’d
• Employers must allow investigators onto their premises to serve an administrative subpoena to bring records for Wage and Hour Division compliance officers to review, even when the investigators do not have a warrant. If an employer feels a subpoena is not sufficiently limited in scope, relevancy, or purpose so that compliance is unreasonable burdensome, the employer can question the reasonableness of the subpoena by raising objections in an action in district court before suffering any penalties for refusing to comply with it. Complaints, records, and other information obtained from employers and employees are treated confidentially.
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Administration and Enforcement
of the FLSA: Investigation Cont’d
• The Wage and Hour Division initiates investigations: when complaints are field; when particular industries are targeted for investigation because of widespread improper practices; on a re-audit of establishments with prior violations; or pursuant to a general plan to review as many covered employers as possible. When complaints are filed, the agency assigns compliance officers to investigate, but actual investigations may be considerably delayed if investigators have heavy caseloads.
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Administration and Enforcement
of the FLSA: Investigation Cont’d
• When targeted industry investigations are commence, enforcement officials from an area office decide which particular local businesses will be examined, taking into account factors such as available recourses, the employer’s track record, etc. In general, investigators will not inform employer of whether investigations are triggered by complaints or are a part of routine examination.
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Administration and Enforcement
of FLSA: DOL Investigative
Procedures
The United States Department of Labor has identified the following investigative procedures for compliance officers:
• Identify himself and show official credentials.
• Confer with the employer, making any necessary explanations about the records needing to be seen and the approach to be taken. Ask permission to conduct private interviews with some employees.
• Ask to make space available for his use and to designate staff members to help with questions about your records and payroll system.
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Administration and Enforcement
of FLSA: DOL Investigative
Procedures
• Ask to see certain records to determine what laws apply and what, if any, exemptions are available (for example, records of government contracts, interstate commerce, or annual dollar volume of business).
• Review and copy payroll and time records, often on a spot-check basis. (Information from records will not be revealed to any unauthorized person.)
• Interview employees privately to confirm payroll or time records, to identify workers’ duties in order to determine applicable exemptions, and to determine if minors are illegally employed.
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Administration and Enforcement
of FLSA: DOL Investigative
Procedures
• When fact-finding has been completed, the compliance officer will ask to meet with the employer about the investigative findings. If no violations were discovered, the compliance officer will so advise. If violations were found, he will advise what they are and how to correct them. If back wages are owed, the usual procedure is to ask the employer to compute and pay the amounts due. Note: It is at this “informal conference” level, with the investigating agent and/or his supervisor, that the best possibility for a “good” settlement or result exists.
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Administration and Enforcement
of FLSA: Enforcement Procedures
and Remedies
• Employees can sue their employers to recover back wages, liquidated damages in an amount equal to the back wages, and attorneys’ fees.
• The Secretary of Labor can sue on employees’ behalf to recover back wages and liquidated damages, or for back wages and an injunction prohibiting further violations of the FLSA. If the Secretary seeks an injunction, he cannot seek liquidated damages. The Secretary of Labor cannot recover attorneys’ fees.
• The Department of Justice can criminally prosecute persons who commit willful violations of the FLSA.
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Administration and Enforcement
of FLSA: Enforcement Procedures
and Remedies
• The status of limitations is two years from the date the complaint is filed, except in the case of a willful violation when it is three years. Thus, if a violation is uncovered in an initial governmental investigation and an employer goes into immediate compliance, time will run to the employer’s benefit up to the date of complaint. The United States Supreme Court has ruled that the applicable standard is “reckless disregard” by the employer as to whether its conduct was a willful violation of the FLSA.
• An employer cannot retaliate against an employee for “whistleblowing,” e.g., discharge an employee for filing a complaint or participating in an FLSA proceeding.
Overtime Pay Claims for After-Hours Use of Electronic Devices: Navigating Latest DOL and Caselaw Developments
2016, Foster Swift Collins & Smith PC
Bottom Line -- First
If you want employees to do work out of the office, you have to pay them. If you let employees work out of the office, you have to pay them. If you know or should know employees are doing work out of the office, you have to track it. You need to draft policies telling employees how to report their time worked or limiting their access and ability to do the work out of the office. Managers need to be held accountable for trying to undermine these policies.
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Overtime Pay Claims for After-Hours Use of Electronic Devices: Navigating Latest DOL and Caselaw Developments
2016, Foster Swift Collins & Smith PC
24/7 Availability and the Changes To The Workplace
It’s not the future, and it isn’t just big companies like IBM, Dell, Amazon, Apple, American Express, Adobe Systems, Teletech, and UnitedHealth Group that allow employees to work remotely or from home. Between 1996 and 2016, the Society for Human Resource Management reports the percentage of employers offering telecommuting (flex work) has increased from 20% to 60%. A Gallup survey showed that 37% of workers checked email frequently outside of regular office hours (up from 9% in 1995), but those who did perform an additional 10 hours of work a week.
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Overtime Pay Claims for After-Hours Use of Electronic Devices: Navigating Latest DOL and Caselaw Developments
2016, Foster Swift Collins & Smith PC
WAGE & HOUR
Enforcement
Since 2009 Department of Labor’s Wage and Hour Division states it has assisted 1.7 million employees recover $1.6 billion in back wages.
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Overtime Pay Claims for After-Hours Use of Electronic Devices: Navigating Latest DOL and Caselaw Developments
2016, Foster Swift Collins & Smith PC
WAGE & HOUR
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Overtime Pay Claims for After-Hours Use of Electronic Devices: Navigating Latest DOL and Caselaw Developments
2016, Foster Swift Collins & Smith PC
WAGE & HOUR
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Overtime Pay Claims for After-Hours Use of Electronic Devices: Navigating Latest DOL and Caselaw Developments
2016, Foster Swift Collins & Smith PC
WAGE & HOUR
Since 2009 Wage & Hour reports:
79% of agency initiated investigations found violations.
So when our friends with the DOL come knocking, know that they are looking for something and more than not, they find some violation.
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Overtime Pay Claims for After-Hours Use of Electronic Devices: Navigating Latest DOL and Caselaw Developments
2016, Foster Swift Collins & Smith PC
Litigation
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Overtime Pay Claims for After-Hours Use of Electronic Devices: Navigating Latest DOL and Caselaw Developments
2016, Foster Swift Collins & Smith PC
WAGE & HOUR Salary Level Test
Big Changes and Big Decisions are upon us.
On December 1, 2016, the DOL implements its new rules and the exempt salary level increases to $913/week, $47,476 annually
Currently, $455/week for “white collar” exempt employees, $23,660 annually Is the issue of computer or remote availability and access a significant enough issue (among/along with other factors) to raise the salary of certain employees.
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Overtime Pay Claims for After-Hours Use of Electronic Devices: Navigating Latest DOL and Caselaw Developments
2016, Foster Swift Collins & Smith PC
NEW RULES ON THE USE OF ELECTRONIC
DEVICES
Look for more to come.
The DOL has published requests for information in the past and had said it will do so again, “in order to gather information about employees’ use of electronic devices to perform work outside of regularly scheduled work hours and away from the workplace, as well as information regarding ‘last minute’ scheduling practices being utilized by some employers that are made possible in large part by employees’ use of these devices.”
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Overtime Pay Claims for After-Hours Use of Electronic Devices: Navigating Latest DOL and Caselaw Developments
2016, Foster Swift Collins & Smith PC
What To Expect
Possible Guidance could address these topics:
What the DOL considers to be compensable time when employees engage in activity using portable devices. How the DOL defines “de minimus” time in the context of the performance of work that does not need to be compensated. Whether new and more burdensome recordkeeping obligations will be imposed on employers, based on a recognition that traditional time sheets and punch cards may not work as effectively and reliably for after-hours, remote activities. The extent to which employers should — or even must — have “email curfews,” or are otherwise going to be regulated as to how often and under what specific circumstances employers can require after-hours, offsite work.
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Overtime Pay Claims for After-Hours Use of Electronic Devices: Navigating Latest DOL and Caselaw Developments
2016, Foster Swift Collins & Smith PC
What To Expect
Limits on offsetting damages? In a recent case, a federal appeals court in Pennsylvania overturned a decision permitting the company to offset alleged overtime by applying the time employees were paid for meal breaks.*
More than de minimis but less than substantial time on cell phones, emails, or computing could become more significant if employers are not provided offsets. Conversely, employers may chose not to provide paid breaks.
*Smiley v. E.I. Dupont De Nemours & Co., 2016 U.S. App. LEXIS 18242, *1 (3d Cir. Pa. Oct. 7, 2016)
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Overtime Pay Claims for After-Hours Use of Electronic Devices: Navigating Latest DOL and Caselaw Developments
2016, Foster Swift Collins & Smith PC
Remember to Keep Good
Records All employers subject to the FLSA must make, keep, and preserve certain records. (i.e. basic records)
• Employee's full name and social security number.
• Address, including zip code.
• Birth date, if younger than 19.
• Sex and occupation.
• Time and day of week when employee's workweek begins.
• Hours worked each day.
• Total hours worked each workweek.
• Basis on which employee's wages are paid (e.g., "$9 per hour", "$440 a
week", "piecework")
• Regular hourly pay rate.
• Total daily or weekly straight-time earnings.
• Total overtime earnings for the workweek.
• All additions to or deductions from the employee's wages.
• Total wages paid each pay period.
• Date of payment and the pay period covered by the payment.
Time clocks are not required and records need not be
kept in any particular form.
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Overtime Pay Claims for After-Hours Use of Electronic Devices: Navigating Latest DOL and Caselaw Developments
2016, Foster Swift Collins & Smith PC
Records Continued…
Payroll records, collective bargaining agreements, sales and purchase records = 3 years
Records on which wage computations are based should be retained for 2 years, i.e., time cards and piece work tickets, wage
rate tables, work and time schedules, and records of additions to or deductions from wages.
These records may be kept at the place of employment or in a central records office.
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Overtime Pay Claims for After-Hours Use of Electronic Devices: Navigating Latest DOL and Caselaw Developments
2016, Foster Swift Collins & Smith PC
Common Sense Due Diligence
Conduct and Employee Audit
“White Collar” Exemptions
• Executive
• Administrative
• Professional
• Learned Professional
• Creative Professional
• Highly Compensated Employees
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Overtime Pay Claims for After-Hours Use of Electronic Devices: Navigating Latest DOL and Caselaw Developments
2016, Foster Swift Collins & Smith PC
Common Sense Due Diligence
Who has email access/remote access? Why?
Give serious thought to whether it makes sense to limit the number of employees (and positions) who have company-issued smartphones or can have access to the company’s emails and electronic systems from outside of the office. Perhaps there is a benefit to limiting devices and access only to those truly exempt employees, for whom you have fewer recordkeeping obligations when it comes to hours worked.
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Overtime Pay Claims for After-Hours Use of Electronic Devices: Navigating Latest DOL and Caselaw Developments
2016, Foster Swift Collins & Smith PC
Common Sense Due Diligence
Company Issued Devise or Personal Devise
Some companies prohibit employees from having their email or access to company files or online materials on their personal devise. By limiting access to company issued devices, tracking may be easier. Make sure that supervisors don’t circumvent your efforts by using employees’ personal email addresses and phone numbers to contact employees about work outside of normal work hours.
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Overtime Pay Claims for After-Hours Use of Electronic Devices: Navigating Latest DOL and Caselaw Developments
2016, Foster Swift Collins & Smith PC
Common Sense Due Diligence
If you do not want non-exempt employees performing any work-related duties outside of their normal work schedule, draft policies that explicitly prohibit that.
Provide examples stating that checking and responding to company emails, text messages and phone calls during off hours is specifically prohibited.
Provide opportunities and a clear system for reporting out of office work.
Enforce the policy.
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Overtime Pay Claims for After-Hours Use of Electronic Devices: Navigating Latest DOL and Caselaw Developments
