Outten & Golden: Empowering Employees in the Workplace

Posts Tagged ‘Gap’

GAP Does Right By Its Workers: Other Corporations Should Take Notice

Monday, February 24th, 2014

seiu-org-logoExecutives at GAP heard President Obama’s State of the Union call for businesses to raise wages loud and clear. The retailer announced today that by next year, all of its workers will be making at least $10 an hour.

While GAP is making the right move and doing right by its 90,000 workers around the country, Congress must follow suit to lift millions out of poverty. There are bills in both the House and the Senate that would raise the federal minimum wage for 16 million workers and lift 900,000 Americans out of poverty. Yet, hardline Republicans in Congress continue using the same tired excuses against giving Americans a raise.

When even Wal-Mart is considering raising wages, when the President increases the minimum wage for federal contracted workers and makes raising wages a cornerstone of his national agenda and when an overwhelming majority of Americans support an increase in the minimum,it is definitely time for Congress to take action.

But government action isn’t the only answer to raising wages. That’s why today’s move by GAP is an example that corporations should follow.

This article was originally printed on SEIU on February 20, 2014.  Reprinted with permission.

Author: Jumoke Balogun

Capturing Wages for Off-The-Clock Work in California Retail Stores

Tuesday, June 15th, 2010

W-F-BlogDuring the past several years, we have represented employees of several clothing retailers, including sales associates working for Polo Ralph Lauren, Gap and Banana Republic, and Chico’s in California-wide class action cases. All of these cases were prosecuted under California labor law. Our most recent employment class action against Polo Ralph Lauren challenged its failure to pay employees for the time they spent waiting for and undergoing “bag checks” or internal theft prevention inspections at the end of their shifts. Our clients alleged they sometimes had to wait for up to a half an hour for managers to perform bag checks and let them leave the stores. They alleged that under California law this off-the-clock time was “work” and that they were entitled to wages for the time they spent in their stores between “clock out and walk out.”

Bag Checks Are Common In the Retail Setting

In the retail store environment, many companies require employees to undergo bag check inspections before they can leave their stores for breaks or at the end of their shifts. According to industry experts, bag checks are a loss prevention tool used by retailers to discourage internal theft. These bag checks are permitted under California law and are generally a mandatory condition of employment for certain types of retail workers. The problem arises when employees are required to wait for their managers or other authorized personnel to perform bag checks on them after they have clocked out and are no longer being paid for their time. Is this waiting time compensable under California, however?

Under California Law, an Employer’s Control Over the Worker Is Key

With certain limited exceptions, hourly employees in California are entitled to be paid for all the time they are “subject to the control of an employer.” Bono Enterprises, Inc. v. Bradshaw (1995) 32 Cal. App. 4th 968. This “includes all the time the employee is suffered or permitted to work, whether or not required to do so.” Industrial Welfare Commission Order 7-2001. In the Polo case, our clients alleged they had been locked inside their stores after they had clocked out at the end of their shifts. From our clients’ perspective, physical confinement plainly satisfied the “control” requirement under California law.

The Federal De Minimis Defense

Polo defended the claims by relying on a federal legal doctrine called the de minimis defense. The de minimis defense arose out of the Portal-to-Portal Act (a 1947 amendment to the federal Fair Labor Standards Act). 29 U.S.C. § 254(a), a provision of the Fair Labor Standards Act, provides that certain activities performed before (preliminary) or after (postliminary) the worker’s principal activities are not compensable.

Under the Fair Labor Standards Act, principle activities include any work of consequence performed for an employer, no matter when the work is performed. If the activity is necessary to the business and is performed by the employees for the primary benefit of the employer, it is generally compensable time, unless it is deemed to be de minimis. It is de minimis when the unpaid time is short, occurs infrequently and is difficult for the employer to track. Lindow v. United States, 738 F. 2d 1057 (9th Cir. 1984)

As the United States Supreme Court explained more than 60 years ago,

When the matter in issue concerns only a few seconds or minutes of work beyond the scheduled working hours, such trifles may be disregarded. Split-second absurdities are not justified by the actualities of working conditions or by the policy of the Fair Labor Standards Act. It is only when an employee is required to give up a substantial measure of his time and effort that compensable working time is involved.

Federal Courts, including the Ninth Circuit, have developed a three-part test to evaluate when unpaid work time can be described as de minimis. In Lindow v. United States, (9th Cir. 1984), the Ninth Circuit Court of Appeals explained that to excuse an employer from its wage obligations under the de minimis defense, the courts must evaluate: “(1) the practical administrative difficulty of recording the additional time; (2) the aggregate amount of compensable time; and (3) the regularity of the additional work.”

Thus, if the work time is short, occurs only on rare occasion and is very hard to track, under federal law the employer can essentially ignore it.

But, Does the De Minimis Defense Apply Under California Law?

One of the central legal issues in the Polo case was whether the federal de minimis exception applied to wage and hour claims under California law. We argued that applying the de minimis defense to our clients’ off-the-clock claims would undermine California’s “subject to the control” test. In other words, if employees under California law are entitled to be paid for all time they are under the employer’s control, it does not matter whether the time is preliminary, postliminary or de minimis. The only thing that matters is whether the worker is under the employer’s control. If control is present, then the worker is entitled to be paid for the time they are under that control.

While the de minimis defense has not been tested by any California appellate court, one thing is clear: “The federal authorities are of little if any assistance in construing state regulations which provide greater protection to workers.” Bono Enterprises, Inc. v. Bradshaw, 32 Cal. App. 4th 968 (1995). This distinction is of great benefit to California workers and is one reason most wage and hour cases in California are prosecuted under California, and not federal, law.

So, does the de minimis defense apply to wage and hour claims under more employee-friendly California law? We still do not know. Just days before the trial court in the Polo class action was scheduled to decide whether to apply the federal de minimis defense to our clients’ claims, the case settled for $4 million.

Eventually, of course, a California appellate court will be asked to decide whether the de minimis defense applies to California off-the-clock claims. For now, California law remains unclear. What if the de minimis defense is deemed to apply to California claims? If workers can establish that the off-the-clock work occurred regularly, amounted to substantial time during the course of employment and that it would have been feasible for the employer to track the time, the de minimis defense should not have a substantial impact on their right to be paid wages for all the time they are subject to their employer’s control.

About the Author: Patrick Kitchin is a labor rights attorney with offices in San Francisco and Alameda, California. He has represented thousands of employees in both individual and class action cases involving violations of California and federal labor laws since founding his firm in 1999. According to retail experts and the media, his wage and hour class actions against Polo Ralph Lauren, Gap, Banana Republic, and Chico’s led to substantial changes in the retail industry’s labor practices in California. Patrick is a 1992 graduate of The University of Michigan Law School and is personally and professionally committed to the protection of workers’ rights everywhere.

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