Part I
Wage and Hour Concerns for Non-Exempt Employees
There has been a lot of coverage recently about employee access to and use of social networking sites while at work and outside of the workplace. In fact, at a recent International Association of Defense Counsel Meeting, several presenters discussed the potential uses and abuses of social media by employees. However, the reverse scenario – employees using their computers or wireless communication devices while at home to do office work – deserves equal, if not more, attention.
Blackberries and other wireless devices provide immediate access to employees. That helps because employers, customers and clients often expect or even demand instant access to, and immediate responses, from employees. But while providing constant, quick access may be a business necessity, it may also have unintended consequences for companies – including overtime claims by non-exempt employees as well as liability to third parties for irresponsible, if not dangerous, behavior by employees using wireless devices while driving.
The Fair Labor Standards Act of 1938 ("FLSA"), establishes minimum wage, overtime and record-keeping requirements for covered private employers and for federal, state and local governments. Specifically, the FLSA requires most employers to pay each of their employees at least minimum wage for all hours worked. Additionally, for employees who are not otherwise exempt, the FLSA requires those employees receive overtime wages for each hour worked over 40 hours in a workweek. Many states also have specific wage and hour statutes addressing compensation requirements, including overtime wages, which may be stricter than the requirements of the FLSA.
Under federal and state laws, disputes often arise about whether particular activities engaged in by an employee constitute "hours worked" that should be compensated under the provisions of the FLSA or applicable state laws. Under the FLSA, the general rule is that all time spent in physical or mental exertion on behalf of the employer counts towards hours worked and must be compensated.
Accordingly, the time a non-exempt employee spends using a home computer or wireless communication device on behalf of an employer or in furtherance of his or her job constitutes compensable working time under state and federal wage and hour laws. Regardless of whether employers encourage it, employees will inevitably use a computer or wireless device for work outside of their normal working hours. To the extent they do, they must be paid appropriately.
For example, many employees spend time at home responding to e-mails, either through remote access via their home computer or on a Blackberry or similar device. If the employee is non-exempt under the provisions of the Fair Labor Standards Act (FLSA), then the time spent responding to e-mails is compensable. An employer who does not account for and pay the employee for this time is subjecting itself to a minimum or hourly wage claim and possibly an overtime claim, depending on the number of hours the employee has already worked during the applicable workweek.
Class actions against AT&T and T-Mobile, among others, highlight the dangers of nonexempt employees using technological devises after work hours. As of June of 2010, AT&T continued to litigate claims by employees in its support and maintenance department that it failed to pay them for off-duty blackberry and cell phone use. And, in early 2010, T-Mobile settled for an undisclosed amount, a class action by its technical services employees relating to failure to compensate for off-duty work.
An employee who brings a lawsuit under the FLSA for unpaid minimum wages or unpaid overtime compensation has the burden of proving that he or she performed work for which he or she was not properly compensation. Generally, the employee's "proof" may be nothing more than his or her credible sworn testimony. However, computers and Blackberries generally create a reliable record of the amount of time an employee has used them, providing additional supporting evidence for an employee who is making a wage or overtime claim.
Perhaps the greatest concern about Blackberries and smart phones pertains to tort liability to third parties. That comes from employees who e-mail, text or talk on a cell phone while driving. An examination of those risks will come in part two of this series....
Part Two
E-Communication! E-Accountability! Egads!
Liability Concerns For Employers in a Wired World
Part II: Tort Liability Concerns for All Employees
Blackberries and other wireless devices can be very beneficial for employers and employees because of the immediate access they provide. But, in addition to unintended consequences for companies such as overtime claims by non-exempt employees, there is great potential for liability if employees are irresponsible in using wireless devices while driving.
More than thirty-eight states have passed laws banning texting while driving, either by all drivers or younger or novice drivers. Many more states have laws that ban talking on a cell phone while driving, at least without a "hands-free" mechanism. State legislators across the country have proposed at least 200 "distracted driving" bills, many of which encompass texting or cell phone use.
Most of these laws provide for criminal, rather than civil penalties. However, many of the statutes may create a presumption, at least a rebuttable one, of negligence in a civil case. Thus, the laws restricting distracted driving can increase an employer's risk of vicarious liability in civil tort cases arising from accidents involving their employees who are texting or talking on a cell phone while driving.
Even without specific laws limiting these practices, however, employees who are engaging in business activities while driving are exposing their employers to increased potential liability. In the case of an individual injured in an accident by an employee who was driving and distracted by the use of a wireless device, the injured party is likely to pursue not only the employee driver but also the employer as liable, particularly where the employer provided the device. However, an employer may not be liable for accidents involving an employee's personal texting with his or her own phone, in his or her own car during commutes to and from work. The key focuses or concerns for employer liability will be whether the employee was using companyprovided devices and whether the employee was engaging in activities related to his or her work or otherwise within the scope of employment.
An employer may be liable for its own negligence in failing to train or warn employees on the risks of testing while driving or to otherwise take measures to reduce the risks of distracted driving by its employees. An example, a stockbroker for an investment-banking firm, was talking on his personal cell phone to a potential client, when he struck and killed a motorcyclist. Although the stockbroker was using his personal cell phone, the plaintiff argued, among other things, that the firm should be liable for not providing proper training to employees on cell phone safety issues. The wrongful death suit settled for $500,000.
In light of these concerns, some employers may decide not to provide Blackberries, other wireless devices or even laptops, particularly to non-exempt employees. However, a company's business needs may necessitate otherwise. Moreover, even if an employer does not provide the wireless communication device, an employee may opt to use his or her own. If an employee uses a personal cell phone or computer to do work outside of normal working hours or while driving a car, the time is still compensable under wage and hour laws and there are still thirdparty liability concerns.
Prudent employers should implement policies and procedures, as well as train their employees on them, regardless of whether wireless communication devices are provided by the company.
With respect to wage and hour laws, employers should consider a policy that prohibits non-exempt employees from performing any work outside of their normal schedule unless expressly authorized to do so. Moreover, employers should require employees who, for emergency reasons or otherwise, perform work outside of their normal working hours to immediately record and report such work as soon as possible. This requirement helps reduce the likelihood that employees would claim they were encouraged, even if tacitly, to work "off the clock" and that the employer failed to pay them for the work.
Additionally, regardless of any local, state or federal law, employers should establish policies or safety procedures stating that using a cell phone, text messaging device or other wireless communication device for company business at any time while driving is prohibited. This may require employers to modify any existing policies or practices requiring employees to answer phones or text messages immediately. Moreover, employers should provide guidance to employees who receive a telephone call while driving, such as finding the closest safe location to stop the vehicle and then return a call or message, and mandate that activities such as checking messages, returning calls and text messaging must only be done while the car is stopped in a safe location.
The benefits to Blackberries and wireless communication devices are obvious, and employers must weigh those benefits against the risks when deciding whether to permit employees' use of them. Creating and implementing sound policies and procedures to address the use of wireless communication devices can help minimize those risks.
Molly Hughes Cherry is a Certified Specialist in Employment and Labor Law by the South Carolina Supreme Court and serves on the SC Bar's Employment & Labor Law Specialization Advisory Board. She is a member of Nexsen Pruet and practices in the firm's Charleston office. Jennifer S. Cluverius is an Employment and Labor Law associate in Nexsen Pruet's Columbia office. She serves on the Thompson Publishing Group's Family Medical Leave Act Editorial Board.
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.
