Overtime Pay Claims for After-Hours Use of Electronic Devices: Avoiding and Defending Litigation

Transcription

1 Presenting a live 90-minute webinar with interactive Q&A Overtime Pay Claims for After-Hours Use of Electronic Devices: Avoiding and Defending Litigation Defining Working Time, Leveraging Defense Tactics, Defeating Class Certification, Proactively Avoiding Claims TUESDAY, OCTOBER 31, pm Eastern 12pm Central 11am Mountain 10am Pacific Today s faculty features: Peter J. Gillespie, Of Counsel, Laner Muchin, Chicago Alfred B. Robinson, Jr., Shareholder, Ogletree Deakins Nash Smoak & Stewart, Washington, D.C. The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions ed to registrants for additional information. If you have any questions, please contact Customer Service at ext. 10.

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4 Overtime Pay Claims for After- Hours Use of Electronic Devices: Will This Day Ever End? Presented by: Pete Gillespie Laner Muchin, Ltd. October 31, 2017

5 Do I Have An Agenda? What s the big deal about sending texts or s at night? Primer on the Fair Labor Standards Act Understand what time is compensable and what time is not 5

6 Why Do We Think These Phones Are So Smart? Working days are becoming longer and longer Increased connectivity makes it easier to work remotely Personal time and the work day overlapping more and more How often do we perform work-related tasks at home, at night, or even on vacation? 6

7 Blackberry Addiction Electronic devices make it easier to keep in touch with co-workers and to remain available for work Harder to ignore s and texts when everyone knows that the device is in your pocket at all times Many employees are expected to check during off-duty hours, at nights or on weekends Employees want to be cooperative and part of the team 7

8 So What s The Problem? In the 2016 Fiscal Year, the U.S. Department of Labor Wage and Hour Division found overtime violations in 10,884 cases, with $171,917,225 in back wages owed In 2015, WHD determined that employers owed back wages of $137,701,703 Claims for unpaid wages and overtime are showing little signs of slowing down 8

9 Relax, Responding To An Takes Like 30 Seconds Claims for unpaid wages or overtime are increasingly including claims that employees were required to check for s or texts during non-working hours and were not getting paid for the time Employees who check messages may claim their work day began before their employer thought it did Employees might first be telling management about all these long hours through a lawsuit And it s not going to be a one-off problem to fix! 9

10 Can We Stop Talking About The s? Employee claims for unpaid wages include issues relating to logging in, booting computers, security checks and other delays Claims also include policies involving downloading files, updating devices, and other remote electronic activities What if the employee is tweeting? 10

11 Can I Catch A Break? Employees who eat at their desk may have a claim for unpaid breaks or automatically deducted lunch times, if they respond to or otherwise keep working while taking lunch 11

12 Applicable Wage and Hour Laws Federal and State laws governing payment of overtime and hours worked: Fair Labor Standards Act ( FLSA ) Portal-to-Portal Act State law counterparts 12

13 Overtime Basics All non-exempt employees must be paid overtime at a rate of one and one-half times their regular rate of pay for all hours worked over 40 in workweek. Breakdown: Non-exempt employees Hours Worked Workweek Regular Rate of Pay 13

14 Hours Worked Generally, hours worked includes all time an employee must be on duty, or on our premises or at any other prescribed place of work, from the beginning of the first principal activity of the work day to the end of the last principal activity of the work day. Also included in hours worked is any additional time that you are allowed to work (i.e., suffered or permitted), even if not approved (i.e., overtime). 14

15 Hours Worked (cont d) The following is generally considered hours worked and is compensable time: Hours on duty on the premises; Work not requested or approved, but suffered or permitted; Rest periods (less than 30 minutes); Mandatory training; Medical care on the job or at the employer s request during work hours; Breakdown time; Preparation, changing and washing time if required by custom, practice or by the nature of the work; Travel time for business (in some cases). 15

16 Hours Worked (cont d) The following time is generally not considered hours worked and is not compensable time: Absences; Holidays; Medical attention by a personal physician or outside working hours; On-call time; unless the employee is prevented from effectively using the time for personal pursuits; Portal-to-Portal activities (i.e., commuting to and from work); Meal periods of 30 minutes or more where an employee is completely relieved of duty (and not working). 16

17 Hours Worked (cont d) Waiting time - whether waiting time is hours worked depends on the particular circumstances. Engaged to wait (compensable) vs. waiting to be engaged (not compensable). On-call time on-call time on the employer s premises is compensable time, but an employee who is on call at home and not working is not compensable time (in most cases). Additional constraint s on the employee s freedom during on-call time could make it compensable time. 17

18 Hours Worked (cont d) Travel Time Basics Home to work travel = not compensable. Home to work travel on a special one day assignment in another city = compensable (but we can deduct the time it would normally take the employee to travel to their regular work site). Travel that is all in a day s work (i.e., site-to-site) = compensable. Overnight travel = compensable for time during the employee s normal work hours, but, according to the U.S. Department of Labor, travel time on an airplane, train, boat, bus or automobile outside the employee s normal work hours is not compensable. 18

19 Hours Worked (cont d) Other Travel Time Considerations: If an employee performs work while traveling outside of regular work hours (i.e., reading a memo on the airplane or talking to a manager about work while on the airplane), then this is compensable time at the employee s normal rate of pay (and the time is counted towards overtime hours for that workweek). The following is not compensable time: stopping for food, sleeping, sightseeing while away, other exclusively personal time. Travel time during an employee s non-working days (i.e., Saturday/Sunday) is compensable when it occurs during hours that correspond with the employee s normal working hours (i.e., travel time between 8 a.m. and 5 p.m. on a Saturday or Sunday). 19

20 Timekeeping You must keep accurate time records. Insubstantial and insignificant periods of time which cannot be practically reported may be considered de minimis and not compensable 20

21 Timekeeping Employers are required to pay employees for time that the employer knew or should have known the employee was working Employers cannot refuse to pay unapproved hours 21

22 Off-Site Work Travel time When reporting directly to a site, travel to and from the first location and last location is not compensable. Travel from the office to a site starts the workday. Travel between sites is compensable. Telecommuting Very important to keep accurate time records. Discuss expectations of when the employee should be working and not working, including responding to calls or outside of normal business hours. 22

23 Hypothetical Hallie (an exempt employee) has an assistant named Tony (a non-exempt employee). Tony is Hallie s right hand man and a very dedicated employee. Tony is so dedicated that he checks his during non-work hours and on weekends. Many times Hallie will Tony during these non-work times, Tony will respond, and even talk to Hallie to discuss work the next week. Is the time Tony spent responding to Hallie s s hours worked? Is Tony considered on call while waiting for Hallie s s? If so, is the on call time considered hours worked? 23

24 Hypothetical John has a meeting at a location away from his office. His meeting starts at 9:00 a.m., so he drives from his home to the location in the morning. Is this compensable? After the first meeting, John goes to a meeting at another location a half-hour away. Is this compensable? 24

25 Hypothetical John goes from home to the office to begin his workday. Is this time compensable? What if he checked his over breakfast? John leaves the office for a meeting outside of the office. Is this time compensable? After the meeting, John goes home. Is this time compensable? What if he checked his one last time before fixing himself a cocktail? 25

26 Hypothetical John is at his kid s basketball game, but checks his every few minutes because there s no scoring and his kid is riding the bench anyway Should John be paid if he doesn t actually send or receive a work-related ? Should John be paid if he sends an to a customer, but forgets to record the time? Can John s manager refuse to pay John to encourage him to be a better parent? 26

27 Hypothetical John gets promoted to a salaried, exempt manager position and celebrates by taking his family on a week-long vacation. He brings his laptop and logs in remotely to work for a few hours each day and checks his religiously between 9 and 5. Is John entitled to his full salary for the week? How much vacation time can his employer deduct for the week? 27

28 Thank You! Peter J. Gillespie Laner Muchin, Ltd. (312)

29 Presented by: Alfred B. Robinson, Jr , Ogletree, Deakins, Nash, Smoak & Stewart, P.C. ogletree.com

30 Overtime Claims for After-Hours Use of Electronic Devices Regulatory Casualty of 2016 Elections US DOL/WHD planned Request for Information (RFI): To collect information on employee s use of electronic devices to perform work during off-hours To gauge impact of use of devices to make last minute scheduling changes Objective? 30

31 Overtime Claims for After-Hours Use of Electronic Devices Regulatory Casualty of 2016 Elections (cont.) US DOL/WHD RFI on electronic devices use: Included in Fall 2016 Regulatory Agenda (Dec. 2016); Omitted from Spring 2017 Regulatory Agenda (July 2017); but Caveat.could be resurrected in a different administration 31

32 Overtime Claims for After-Hours Use of Electronic Devices Employer Defenses to Claims that Use is Compensable Timekeeping policies that: Prohibit off-the-clock work Communicate process for recording hours worked Establishes process for employee to report uncompensated work time Prohibit performance of unauthorized work 32

33 Overtime Claims for After-Hours Use of Electronic Devices Employer Defenses to Claims that Use is Compensable Training on timekeeping policies for both non-exempt and supervisory employees Communicate consequences for failing to comply with timekeeping policies 33

34 Overtime Claims for After-Hours Use of Electronic Devices Employer Defenses to Claims that Use is Compensable Pre/post shift use of electronic devices constituted preliminary/postliminary activity Performed for employee s convenience, not required by employer, or not necessary Use of electronic devices was de minimus 34

35 Overtime Claims for After-Hours Use of Electronic Devices Employer Defenses to Claims that Use is Compensable Employer did not have actual or constructive knowledge of after-hours use of electronic devices Employer must exercise control to prevent work from being performed if it is not wanted ( suffer or permit ) Policies against the performance of unauthorized work are helpful but no guarantee 35

36 Overtime Claims for After-Hours Use of Electronic Devices Employer Defenses to Claims that Use is Compensable Actual or constructive knowledge is a function of a duty to inquire and reasonable diligence to acquire knowledge Actual knowledge employee working after scheduled work hours could be based on responding to manager s telephone calls/ s Again, policy against answering telephone calls or s after hours is not a panacea 36

37 Overtime Claims for After-Hours Use of Electronic Devices Employer Defenses to Claims that Use is Compensable Constructive knowledge arises when employer should have acquired knowledge through reasonable diligence For example reasonable diligence could be a policy for employees to use to report unpaid work time Employee misuse of process could defeat constructive knowledge Failure to use procedure prevents employer from acquiring knowledge 37

38 Overtime Claims for After-Hours Use of Electronic Devices Undermining Employer Defenses Employer effectively discourages, prevents, prohibits, or otherwise persuades employees not to comply with its timekeeping policies through its: Conduct Practices Statements, etc. 38

39 Overtime Claims for After-Hours Use of Electronic Devices Employer Defenses to Collective Action Claims 2-Tier process under FLSA: Conditional certification occurs first: Similarly situated plaintiffs opt-in by filing written consents with the court Low threshold: burden on plaintiff to make modest factual showing that they were subject to a common policy or plan in violation of FLSA 39

40 Overtime Claims for After-Hours Use of Electronic Devices Employer Defenses to Collective Action Claims 2-Tier process under FLSA: After conditional certification, court approves a notice of lawsuit and consent form for distribution to potential class members Class members allotted time frame of 30 to 60 depending on the size of the class to return claim forms opting into the case 40

41 Overtime Claims for After-Hours Use of Electronic Devices Employer Defenses to Collective Action Claims 2-Tier process under FLSA (cont.) Second, certification of collective action of similarly situated plaintiffs versus employer decertification challenge Differences would require individualized analysis of each opt-in plaintiff to determine whether each plaintiff was a victim of a FLSA violation 41

42 Overtime Claims for After-Hours Use of Electronic Devices Employer Defenses to Collective Action Claims Certification stage factors to determine whether plaintiffs are similarly situated: Factual and employment settings of individual plaintiffs Defenses to which plaintiffs may be subject Considerations of fairness and procedural impact on potential collective action 42

43 Overtime Claims for After-Hours Use of Electronic Devices Employer Defenses to Collective Action Claims At certification stage: Named plaintiffs have burden to prove other employees are similarly situated Similarly situated determination is more stringent than the conditional certification burden showing, but less rigorous than a Rule 23 class action showing of numerosity, typicality, commonality, and representativeness 43

44 Overtime Claims for After-Hours Use of Electronic Devices Zivali v. AT&T Mobility, LLC Non-exempt assistant store managers, retail sale consultants and other sales support staff brought collective action Allegedly performed off-the-clock work by: Reading and responding to Company s and texts Working through lunch breaks Opening/closing stores Attending Company-related activities 44

45 Overtime Claims for After-Hours Use of Electronic Devices Zivali v. AT&T Mobility, LLC (cont.) Timekeeping system computerized but allegedly did not capture off-theclock work time Could only be accessed on a terminal in retail store Supervisors had ability to override system to adjust hours worked Conditionally certified as similarly situated 45

46 Overtime Claims for After-Hours Use of Electronic Devices Zivali v. AT&T Mobility, LLC (cont.) Conditionally certified (646 F.Supp. 2 nd at 658 (S.D.N.Y. 2009)) Computerized timekeeping system used at all retail locations to track hours worked constituted common policy or plan Employees only paid for hours tracked in timekeeping system Statements also alleged that store managers refused to retroactively adjust timekeeping records to include off-the-clock work 46

47 Overtime Claims for After-Hours Use of Electronic Devices Zivali v. AT&T Mobility, LLC (cont.) Conditional certification standard described as relatively permissive since the motion comes before discovery has commenced in earnest. (646 F.Supp. 2 nd at 662) 4,100+ plaintiffs opted in Extensive discovery conducted including 29 randomly selected depositions 47

48 Overtime Claims for After-Hours Use of Electronic Devices Zivali v. AT&T Mobility, LLC (cont.) At certification stage, court granted Company s motion to decertify (784 F.Supp. 2d at 456 (S.D.N.Y. 2011)) Concluded an extremely wide variety of factual and employment setting existed and this variety would in effect necessitate over four-thousand mini-trials, a result that is antithetical to collective action treatment (784 F.Supp. 2d at 459) Denied Company s summary judgment motion 48

49 Overtime Claims for After-Hours Use of Electronic Devices Zivali v. AT&T Mobility, LLC, Findings: Company s timekeeping system and related policies complied with FLSA Timekeeping system allowed for complete, accurate recording of time worked Disparate factual and employment settings for individual plaintiffs existed Defenses were inherently individualized for each plaintiff 49

50 Overtime Claims for After-Hours Use of Electronic Devices Zivali v. AT&T Mobility, LLC, Findings: (cont.) Few common issues of fact existed that supported collective action as fair and procedurally efficient way to resolve the case All 3 factors supported decertification there simply was no uniform policy or practice that would result in systematic FLSA violations across the potential 4,000 plus plaintiff class (784 F.Supp. 2d at 469) 50

51 Overtime Claims for After-Hours Use of Electronic Devices West v. Verizon Communications Inc. (Case No. 8:08-cv T-33MAF) (M.D. Fl. Sept. 10, 2009) Personal account managers brought FLSA collective action to recover uncompensated work time spent answering s, texts and telephone calls on Company issued electronic devices and for attending meetings Magistrate did not follow 2-tier analysis in recommending that class certification motion be denied Found that plaintiffs were not similarly situated because plaintiffs engaged in a variety of personal and non-work related activities 51

52 Overtime Claims for After-Hours Use of Electronic Devices West v. Verizon Communications Inc. (Case No. 8:08-cv T-33MAF) (M.D. Fl. Sept. 10, 2009) (cont.) District court overruled plaintiffs objection to magistrate s report because he failed to apply the 2-tier procedure 2-tier approach is discretionary and district courts have broad discretion to decide how to best manage their cases 52

53 Overtime Claims for After-Hours Use of Electronic Devices Allen v. City of Chicago (Case No ) (7 th Cir. Aug. 3, 2017) Plaintiffs were 52 members of Chicago Police Departments (PD) Bureau of Organized Crime (BOC) Chicago PD issued mobile electronic devices to officers Issue was whether use of mobile electronic devices while off-duty was compensable 53

54 Overtime Claims for After-Hours Use of Electronic Devices Allen v. City of Chicago (Case No ) (7 th Cir. Aug. 3, 2017) (Cont.) Lower court conditionally certified class, after discovery denied the PD s motion to decertify, conducted a bench trial, and found: Some plaintiffs used their mobile electronic devices while off-duty for work related activities and such use constituted compensable time Some plaintiffs used the PD s procedures for submitting time slips in order to be paid for off-duty work performed using their mobile electronic devices while other did not 54

55 Overtime Claims for After-Hours Use of Electronic Devices Allen v. City of Chicago (Case No ) (7 th Cir. Aug. 3, 2017) (Cont.) Chicago PD did not maintain illegal unwritten policy or foster improper culture that it would not pay police officers for off-duty work performed using PD-provided mobile electronic devices It did not discourage or maintain a policy that prohibited the submission of time slips to receive compensation for off-duty work performed using PDprovided electronic devices 55

56 Overtime Claims for After-Hours Use of Electronic Devices Allen v. City of Chicago (Case No ) (7 th Cir. Aug. 3, 2017) (Cont.) Plaintiffs failed to show supervisors knew if and when plaintiffs performed off-duty work using their mobile electronic devices and failed to submit time slips for their work Court concluded that plaintiffs did not meet their burden to show that they were not compensated for off-duty work performed on mobile electronic devices 56

57 Overtime Claims for After-Hours Use of Electronic Devices Allen v. City of Chicago (Case No ) (7 th Cir. Aug. 3, 2017) (Cont.) 7 th Circuit affirmed district court s decision Critical conclusion that Chicago PD did not have an unwritten policy not to compensate officers for off-duty work performed on mobile devices Appellate court noted that reasonable diligence standard asks what an employer should have known, not could have known 57

58 Overtime Claims for After-Hours Use of Electronic Devices Best Practices to Avoid Overtime Pay Claims Importance of policies Training employees to understand and follow policies Consequences for failing to follow policies But always pay employees for hours worked even if not requested or authorized Follow policies do not cut corners Verify how your timekeeping practices operate 58

59 Questions? Thank You Alfred B. Robinson, Jr. Ogletree Deakins, Nash, Smoak & Stewart, P.C K Street, N.W., Suite 1000 Washington, DC Phone: (202) alfred.robinson@ogletreedeakins.com 59