Articles Posted in Wage & Hour Violations

A federal court has just held that putting on work clothes and walking from the locker room to the workstation is not compensable time under the overtime and other provisions of the Fair Labor Standards Act. The Seventh Circuit, in an opinion last month by Judge Richard Posner, found that the Portal-to-Portal Act, which amended the Fair Labor Standards Act, did not require companies to compensate workers for the time they spent putting on and removing required protective work gear and walking to and from their lockers and workstations. This ruling in Sandifer v. U.S. Steel Corp. contradicts a 2010 decision by the Sixth Circuit that held that both activities were compensable under the law. As overtime pay issues continue to heat up the courts after the Supreme Court’s decision this week in ‪Christopher v. SmithKline Beecham Corp.‬, the Seventh Circuit’s ruling creates an inter-circuit split on an overtime pay issue ripe for another Supreme Court decision.

Sandifer v. U.S. Steel Corp. concerned workers at an 800-employee United States Steel plant in Gary, Indiana, who complained about not being compensated for their time putting on and taking off required work clothes and walking from the locker room to their work stations and back. This time went beyond their 40 hours per week work schedule, and as such also involved an issue of unpaid overtime. The plaintiffs argued that under the Fair Labor Standards Act, as amended by the 1947 Portal-to-Portal Act, this time was not excluded as non-compensable time spent putting on “clothes.” Under § 203(o) of the Fair Labor Standards Act, time spent putting on clothes and washing before and after a shift is excluded as compensable time under the overtime and minimum wage provisions if it is part of custom for such time to be excluded or is excluded by the collective bargaining agreement. The question in this case was whether the work clothes plaintiffs were required to wear were properly “clothes” under §203(o). As the Fair Labor Standards Act does not define what “clothes” are under the provision, the Seventh Circuit here undertook an analysis of the work clothes plaintiffs had to wear to determine whether they were properly “clothes.”

In determining whether plaintiffs’ required work clothes were properly “clothes” under §203(o), the court included a photograph of what plaintiffs were required to wear. Plaintiffs were required to put on flame retardant pants and jackets, work gloves, steel boots, earplugs, a hood, safety glasses and a hard hat at work every day. The court found that while the safety glasses, earplugs and hardhat were not “clothes” under §203(o), as the time spent putting them on was de minimis they were not an issue in this case. The court then turned to consider whether the other required clothing were “clothes” under §203(o) and rejected the plaintiffs’ arguments that because they were used to protect plaintiffs from workplace hazards that they were not. The court found that assuming that any clothes that protected the wearer were not “clothes” under §203(o) and instead protective work gear would be too narrow a view of the statute, as almost all clothes except waiter or bellboy uniforms would be excluded. The court found instead that the clothes that the steel workers were required to wear were more clothes than protective gear, and as such were covered by §203(o) of the Fair Labor Standards Act.

The Supreme Court held today in its long-anticipated decision in Christopher v. SmithKline Beecham Corporation that pharmaceutical sales representatives are not entitled to overtime pay under the Fair Labor Standards Act, as reported by the Wall Street Journal.

The 5-4 decision, penned by Justice Samuel Alito, was a relief for pharmaceutical giant defendant, GlaxoSmithKline, allowing it to avert massive retroactive liability from its thousands of pharmaceutical sales representatives. This case also resolves a Circuit split on the issue, which had left drug companies around the country unsure of their responsibilities under the Act. For the pharmaceutical sales representative plaintiffs, as well as those in the industry as a whole, this decision dealt a massive blow however. Oftentimes working up to 60 hours a week, pharmaceutical sales representatives have often been expected to work almost non-stop in a role that many commentators and the Department of Labor have argued did not deserve exemption under the FLSA. This case as such stands as a step back for employee rights across the nation on the very contentious issue of employer liability for overtime pay.

Christopher v. SmithKline Beecham Corporation involved the case of two pharmaceutical sales representatives for GlaxoSmithKline who filed suit for overtime compensation they had not been paid under the Federal Labor Standards Act. These representatives had worked upwards of 50 to 60 hours a week calling on doctors to encourage them to prescribe GlaxoSmithKline prescription drugs whenever appropriate. Called “detailing” this promotion of pharmaceutical products has become a billion-dollar industry, with over 90,000 pharmaceutical representatives working nationwide. Plaintiffs were paid on a salary basis, did not punch in and out and had minimal supervision. GlaxoSmithKline did not dispute that plaintiffs and their other pharmaceutical sales representatives worked over 40 hours a week and were not paid overtime at time and a half over the 40 hours as required for most workers under the Fair Labor Standards Act. Instead, the company claimed an exemption from the FLSA, arguing that the two plaintiffs and its other pharmaceutical sales representative employees were exempted salesmen under the Act. Under § 213(a)(1) of the Fair Labor Standards Act, those who work “in the capacity of outside salesman” are exempted from the overtime requirements of the Fair Labor Standards Act. The Supreme Court facing differing rulings from the Second and Ninth Circuits finally resolved the split of authority in finding that pharmaceutical sales representatives like the plaintiffs in this case did indeed qualify under this exemption.

An article today in the Los Angeles Times highlights the difficult working conditions many workers face nationwide, especially in regards to getting adequate time to eat and rest. The article cited a survey that found that 30 percent of food service workers in California didn’t always get a lunch break, even though lunch breaks are required for all workers under the state’s labor & employment laws. Perhaps due to the differing requirements under federal and state laws regarding lunch and other breaks, many workers may be unaware of their rights under the law.

Under federal law, there are no specific requirements for employers to provide lunch or rest breaks to their employees. The only restriction employers must keep in mind under the federal law is that of the overtime provisions of the Federal Law Standards Act. While employers need not offer their employees breaks to eat or rest, they can’t force their employers to work more than 40 hours a week without paying them time and a half. An employer can’t attempt to circumvent this overtime restriction by forcing employees to do work on designated breaks and then try to dock their pay for that time if it brings them over 40 hours a week. If an employee is off the clock, they are off the clock; the employer can’t give them work duties during their breaks and then expect they can escape penalties under the overtime provisions of the Federal Labor Standards Act.

While the federal laws have no specific work or break requirements, state and local laws usually do. In California, state labor laws require that all employers provide breaks for their workers, and a recent decision in April from the California Supreme Court clarified the exact requirements for such breaks. In the decision of Brinker Restaurant v. Superior Court the California Supreme Court, faced with a case brought by Chili’s restaurant and Macaroni Grill workers claiming that they were forced to work through lunch and rest breaks, finally clarified decades-old labor codes to set out the requirements for breaks under California state law. The court set out that all California employers had to provide their employees with at least 30 minutes of break time in a normal work shift for meals, and 10 minutes of rest time for every 3.5 hours a worker was on the job. An employer could not attempt to pressure her workers to forgo breaks through threats of demotion or termination. Any employer who violated these requirements would have to pay one hour of pay per violation as penalty.

The number of wage and hour violation class action claims has surged in the past two years, according to a report by CNN last week. According to CNN, there has been a 400 percent increase from 2000 in the number of wage and hour class action lawsuits filed in federal court. In 2011 the number of such cases topped 7,000, and past years have included major suits against Wal-Mart, IBM, Taco Bell and Oracle. These wage and hour claims are usually brought under the Fair Labor Standards Act as well as state labor laws, which provide protections for workers from being forced to work off the clock, not being paid for working overtime or being paid below the federal minimum wage, among other issues.

Recent national headlines about the case filed against actress Sharon Stone by her former nanny, alleging violations of the Fair Labor Standards Act demonstrates that no one is immune from charges for such violations. This case against Sharon Stone also highlights the increasing importance of the FLSA in protecting increasingly vulnerable employees in the wake of the worst economic crisis since the Great Depression. In this case, Sharon Stone’s former nanny alleged that not only did the Academy Award-nominated actress harass and make derogatory comments about her, but she also fired her for accepting overtime pay for work that she performed during vacations and holidays.

Her case relies on one of the most important provisions of the Fair Labor Standards Act, that relating to overtime pay, which is also covered by the California labor codes. The overtime pay provision of the Fair Labor Standards Act requires that employers pay their workers for any hours worked over 40 hours a week at 1.5 times their hourly wage. California state law has an even stricter requirement in calculating overtime, requiring payment of one and a half the hourly wage for any hours worked over 8 in a day, in addition to the 40 hours a week restriction. These overtime provisions apply to all workers in all industries at all job levels, regardless of salary or job title, unless the position falls under one of a few narrow exceptions. Some of the most important exemptions under federal law are for bona fide administrative, executive, professional, computer, and outside or commissioned sales employees. There are a number of very complex requirements for such positions to be exempt from the overtime provisions, and there has been much litigation over the issue. One major requirement under federal law for most of the exemptions is that the position be salaried and pay over $455 a week. The California labor code has very similar exemption requirements, with the required salary varying depending on the industry. For computer professionals, for example, a court would look carefully at the job duties of the computer professional, the hourly rate and other issues in determining whether a position is exempt from the overtime requirements.