United States: Ninth Circuit Poised To Say "Call Me, Maybe"

(with apologies to the song artist)

Seyfarth Synopsis: The Ninth Circuit has suggested it might upset longstanding "on call" practices by making California employers liable for "reporting time" pay to employees who phone in ahead of their schedule, only to find that they are not needed for the day.

On October 5, 2016, a Ninth Circuit panel indicated that it might call on the California Supreme Court to answer whether "calling in" to work amounts to "reporting for work" under California's Wage Order 7-2001. The panel, in Case No. 15-56162 (9th Cir.), considered an interlocutory appeal from a decision by federal district court judge George H. Wu in the case Casas v. Victoria's Secret Stores, LLC, CV 14-6412 (C.D. Cal).

Casas involves an on-call scheduling practice common among retailers: "on-call" employees call in a few hours before the scheduled start time to see if they need to appear for work.  Plaintiffs argued that this required act of picking up the phone amounts to "reporting" for work under Wage Order 7's Reporting Time Pay provision. To Plaintiffs, this means that employers who fail to use call-in employees must pay reporting-time pay (subject to some exceptions). The rules on reporting pay generally provide that an employee who reports for work, but who is not put to work or is furnished less than one-half the usual or scheduled day's work, is entitled to at least two hours and up to four hours of reporting-time pay.

In December 2014, Judge Wu rejected this "call-in" claim. Judge Wu relied on both the common meaning of "report" and the legislative history of Wage Order 7 to hold that to "report for work" plainly means to physically appear at the work site. Thus, contrary to Plaintiffs, simply lifting a receiver or tapping a touchscreen does not require the employer to pay reporting time when the on-call employee never actually shows up for work.

The Plaintiffs took an interlocutory appeal to the Ninth Circuit.

Will the Ninth Circuit put the call on hold? At oral argument, a panel of Ninth Circuit judges indicated that the panel might, for all practical purposes, place Judge Wu's decision on hold. Pregerson, Noonan, and Paez—the three circuit court judges who took the line from Judge Wu—expressed skepticism that federal court is the appropriate venue to decide the on-call issue. Both Judges Paez and Pregerson repeatedly suggested transferring the call to the California Supreme Court. Judge Paez went so far as to iterate the statutory certification standard—that federal courts should certify important questions of state law to the state supreme court—and concluded that "this in my view, it seems to me, like a very important question that affects a lot of people." These statements suggest that it is possible, if not likely, that the panel will call on the California Supreme Court for its guidance as to what California law is on this topic.

But will the Supreme Court accept a transfer? As Judge Paez recognized, even though the Ninth Circuit might put in a call for help, nothing requires the California Supreme Court to answer. Nonetheless, Judge Paez seems confident the Supreme Court will take the call since it has accepted other related employment cases from the Ninth Circuit in the past (including, for example, Oracle and Kilby).

Legislatures, could you help them place the call? Regardless of the Ninth Circuit's actions, the switchboards of legislative bodies could light up in the coming year with calls to regulate on-call scheduling. As reported in this blog, just last year San Francisco became the first jurisdiction to penalize employers for not using employees scheduled for "on-call" shifts. Under the so-called Workers Bill of Rights, when employers require employees to be available for work but do not actually engage the employee, employers must pay the employee between two and four hours of pay, depending on the duration of the on-call shift.

The California Legislature considered similar legislation in its most recent session. Like the San Francisco ordinance, subject to certain exceptions, it would have required employers to pay on-call employees who were not ultimately called in to work their shifts.  The legislation did not pass,  but it seems likely that the legislative initiatives—at both the municipal and state level—will not end the matter.

Call me (call me) on the line, Call me (call me) any, anytime. The bottom line is that at least for now, Judge Wu's well-reasoned decision is good law. But be sure to dial up this blog in the coming months to see if that number remains in good working order. We'll be holding on the line to monitor the messages that courts and legislative bodies leave for employers wishing to continue the time-honored tradition of on-call scheduling.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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