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Today’s Labor Updates, March 8, 2017

California Corner: Let There Be Rest: California Supreme Court Rejects “On-Duty” or “On-Call” Rest Periods.

Vedder Price PCBrittany A. Sachs

USA March 7 2017

Over the past several years there has been a good deal of attention paid to meal and rest break obligations under California law. Just when employers thought it was safe to exhale (perhaps during a rest break?), the California Supreme Court’s opinion in Augustus v. ABM Security Services, Inc., No. S224853 (Dec. 22, 2016), appears to have imposed a heightened standard for employer compliance in “single operator” workplace environments. Following Augustus, employers that require employees to remain on-call during rest breaks (even if they are not interrupted or called back to work) will be deemed as not having afforded those employees a valid break.

The Decision 

The Augustus plaintiffs filed a putative class action against ABM on behalf of the Company’s security guards, claiming that ABM failed to properly provide rest breaks. Plaintiffs argued that ABM policy required security guards to keep pagers and radios on during rest breaks, respond when necessary (such as escorting tenants to parking lots, notifying building managers of mechanical issues and responding to emergency circumstances), and to remain vigilant. The trial court granted plaintiffs’ motion for summary judgment on the underlying issue as well as on damages, awarding approximately $90 million in statutory damages, penalties and interest. After the Court of Appeal reversed, the California Supreme Court granted review to consider the Court of Appeal’s decision.

The ABM security guards were governed by IWC Wage Order 4 (which regulates wages, hours and working conditions for professional, technical, clerical, mechanical and similar occupations). This Wage Order applies to a great many categories of employees, so the Augustus decision reaches far beyond the security industry. In evaluating the plaintiffs’ claims in the context of California Labor Code Section 226.7 (which establishes the meal and rest break rules), the Supreme Court considered two issues: (1) whether California law requires employers to proactively authorize off-duty rest periods; and (2) whether requiring employees to remain on-call satisfies an employer’s rest break obligation. As to the first question, the Court held that employers must “permit and authorize” employees to take off-duty rest periods, meaning employees must be relieved of their job duties and the employer must relinquish control over the way employees spend their time during rest breaks. As to the second issue, the Court held that on-call rest periods do not relieve an employee of job-related duties or employer control. Accordingly, the Supreme Court reversed the decision of the Court of Appeal and agreed with the guards that requiring them to “remain vigilant” did not empower them to take a true rest break.

How Will This Decision Impact Your Business?

The Supreme Court’s ruling is significant for at least three reasons. First, it limits employer flexibility in administering rest periods. Augustus likely invalidates many company policies that require employees to maintain possession of company radios or cell phones during rest breaks or to respond to phone calls or e-mails during that time. Second, the number of rest break lawsuits, including class actions, will likely increase. Third, based on the Court’s rationale, employees will likely cite the opinion to show a likelihood of success at litigation if they can demonstrate the employer requires them to potentially respond to work-related issues during a rest break. Given the language in Augustus, this will be the case even if employees do not actually perform any work-related duties during the majority of their breaks.

How Can You Manage the Risk and Alleviate the Burden? 

Despite imposing stringent requirements, the Court offered three ways to alleviate the burdens of relieving employees of all duties, including on-call duties, as follows:

  1. Provide employees with another rest break to replace an interrupted break;
  2. Pay the one-hour premium payment required for a noncompliant rest break;
  3. Request from the Division of Labor Standards Enforcement that it be exempt from the obligation to provide duty-free rest breaks.

It is worth noting, however, that while the Court offered these alternatives, the opinion also warned that replacing rest breaks and/or paying the penalty should be exceptions rather than a rule, hinting that a suit for failure to comply with the statutory obligations still might lie even where the employer had mitigated all damages by providing new breaks or paying the applicable premiums.

In light of the significant impact of the decision, employers should carefully examine their rest period policies and “on-call” practices related to paid or unpaid break time. Even if a policy is facially compliant with California law, actual practices for administering rest breaks can lead to liability if the employee is not truly afforded the opportunity to be relieved of all work-related obligations.

Unions Are Losing Their Decades-Long ‘Right-to-Work’ Fight

Mandatory fees are endangered at the Supreme Court, statehouses, and Congress.

by Josh Eidelson ‎February‎ ‎16‎, ‎2017‎ ‎5‎:‎00‎ ‎AM‎ ‎CST

Last year the total share of U.S. workers who belong to a union fell to 10.7 percent, a record low. That number could go a lot lower in the next few years. Following decades of declining membership, unions face an existential crisis as right-to-work laws being pushed at state and federal levels would ban their ability to collect mandatory fees from the workers they represent, a key source of revenue for organized labor.

Once largely confined to the conservative South, right-to-work is encroaching on unions’ longtime strongholds in the North and Midwest and, pending a U.S. Supreme Court ruling, could soon cover a majority of the unionized workforce in the U.S. Following a 47-year lull, six states in five years have passed right-to-work laws. “The South is clearly winning this particular civil war,” says University of California at Santa Barbara historian Nelson Lichtenstein.

Data: National Right to Work Committee

In their first weeks in office, the new Republican governors of Kentucky and Missouri have already signed right-to-work laws, making them the 27th and 28th states, respectively, to ban mandatory union fees. By Feb. 16, New Hampshire’s House of Representatives will vote on a proposal, endorsed by the state’s Republican governor and already approved by its Senate, to become the first right-to-work state in the Northeast. In Iowa, where right-to-work is already the law, Republicans are looking to further curb unions’ power with a bill restricting public employees’ collective bargaining rights.

Data: National Right to Work Committee

“Organized labor—it’s really the man behind the curtain in The Wizard of Oz,” says Matt Patterson, who directs Americans for Tax Reform’s Center for Worker Freedom, an anti-union nonprofit. “People aren’t scared of them the way they used to be.” Right-to-work is now the law in almost every state where Republicans control the governorship and the state legislature. The only exception other than New Hampshire is Ohio, where a sweeping anti-union law was successfully overturned by a referendum in 2011.

The most expansive change is likely to come from the Supreme Court, whose 5-4 conservative majority will be restored if the Senate confirms Neil Gorsuch to fill Justice Antonin Scalia’s seat. Before Scalia’s death last year, unions were bracing for a likely defeat in Friedrichs v. California Teachers Association, a case brought by teachers and conservative groups who argued that mandatory union fees violate government employees’ constitutional rights. Without Scalia, that case deadlocked at 4-4, but several similar suits are pending in lower courts.

Labor leaders expect the issue could reach the Supreme Court in time for a ruling this year, making right-to-work the law of the land for the entire public sector, which employs about half the 14.6 million U.S. union members. “There’s not a doubt in my mind that the clock is ticking on that one,” says Greg Junemann, president of the International Federation of Professional & Technical Engineers. Service Employees International Union President Mary Kay Henry, who before Scalia’s death said her union was preemptively “preparing to become a voluntary organization,” sent staff a memo after Donald Trump’s election win announcing that the union would plan for a 30 percent cut in its budget, almost all of which comes from dues and fees.

Unions have been trying to get ahead of the challenge. Since 2013 staff members and activists from the 1.6 million-strong American Federation of State, County, and Municipal Employees have conducted 600,000 one-on-one conversations with workers covered by AFSCME contracts. AFSCME officials say they reached a sobering conclusion in 2015 about how the workers it represents might behave under right-to-work: While roughly 35 percent would likely pay dues no matter what, about half could be “on the fence.” The remaining 15 percent or so would likely not pay dues under right-to-work. “We’ve found that at times we were treating all of our 1.6 million members as if they were activists, and they aren’t,” says AFSCME President Lee Saunders. “We were taking some things for granted.”

AFSCME says it’s overhauled how it communicates with workers, including targeting its e-mails and Facebook ads so those who are lukewarm on the union are more likely to get information about obtaining a free associate’s degree through the union than to see a call to action with an upraised fist.

Data: Bureau of Labor Statistics

The unionization rate in right-to-work states is less than half the rest of the country’s. Organizers say letting workers decline to pay fees defunds unions, diverts staff resources that could otherwise be devoted to growth, and divides workers—just as Congress intended when it passed the 1947 Taft-Hartley Act allowing states to pass right-to-work laws. By 1964, 20 states had banned mandatory fees. After that the map stayed nearly static for almost half a century, with just three more states passing right-to-work and one repealing it.

Then, after the 2010 midterm elections, unions’ flagging political clout and Republicans’ newfound dominance in state government ushered in a surge of right-to-work laws, beginning in 2012 in Indiana and spreading to onetime union bastions Michigan and Wisconsin. Each new law lets conservatives in neighboring states claim they need to follow suit to compete for business. And labor’s failure to deliver on promises to oust right-to-work backers has helped embolden Republicans elsewhere.

Republicans in Congress have introduced a bill to make the nation’s entire private sector right-to-work. Although it’s unlikely to pass unless Republicans abolish the filibuster, private-sector unions like the Communications Workers of America say they’re preparing for the potential loss of mandatory fees. Mark Mix, president of the nonprofit National Right to Work Committee, says he jokes with his staff members about updating their résumés. Once right-to-work is a nationwide policy, he says, the 62-year-old organization will have completed its mission. “As soon as we pass this bill,” says Mix, “we’re clearing house.”

The bottom line: Right-to-work laws are encroaching on unions’ longtime strongholds in the North and Midwest.

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