On January 5, 2016, the California Supreme Court, at the request of the Ninth Circuit United States Court of Appeals, heard oral argument in two cases alleging that the employers failed to provide seating to their employees as required by California law. Kilby v. CVS Pharmacy, Inc., No. 12-56130 (S.D. Cal. May 31, 2012, D.C. No. 09-cv-2051-MMA-KSC) and Henderson v. JPMorgan Chase Bank NA, No. 13-56095 (C.D. Cal March 4, 2013, D.C. No. 2:11-cv-03428-PSG-PLA). The order from the Ninth Circuit is available here. These cases involve the proper interpretation of California Wage Orders that require that an employer provide “suitable seats” to employees “when the nature of the work reasonably permits the use of seats.” IWC Wage Order 4-2001 § 14(A); IWC Wage Order 7-2001 § 14(A).
In the Kilby case, Plaintiff Nykeya Kilby sued on behalf of Clerk/Cashier employees of CVS. The plaintiff worked for CVS as a Clerk/Cashier where she spent 90% of her time operating a cash register and the balance of her time moving throughout the store gathering shopping carts and restocking display cases. The district court found that the “‘nature of the work’ performed by an employee must be considered in light of that individual’s entire range of assigned duties” and that “courts should consider an employer’s ‘business judgment’ when attempting to discern the nature of an employee’s work.” Order at 5-6. Using this interpretation, the court denied class certification because the duties of Clerks/Cashiers varied from day-to-day, shift-to-shift, and employee-to-employee. The lower court also granted summary judgment in favor of CVS, because many of the plaintiff’s duties required her to stand, CVS expected its Clerk/Cashiers to stand, and CVS informed Kilby of that expectation.
The second case, Henderson v. JPMorgan, was brought by former tellers of JPMorgan Chase who spent the majority of their time at their stations accepting deposits, cashing checks, and handling withdrawals. Bank tellers also had additional duties, such as escorting customers to safety deposit boxes, working the drive-up teller window, or checking if ATMs are working properly, and some of JPMorgan’s banks had physically different layouts. Thus, the district court denied class certification, finding that a teller’s work could change based on the tasks he/she performs while away from the teller station, the bank at which the teller works, and which shift the teller works.
In both cases, the district courts adopted a “holistic” approach proposed by the defendants, by asking whether “the majority of an employee’s assigned duties must physically be performed while standing and if the answer is yes, then “the ‘nature of the work’ requires standing.” Order at 8. Under the holistic approach, the entire range of duties must be considered along with the layout of the workplace and the employer’s job description and expectations. On the other hand, the plaintiffs in Kilby and Henderson contend that Section 14 of the Wage Order refers to discrete tasks performed by employees. In their view, if an employee is engaged in a task that can objectively be performed while seated, the employer must provide the employee with a suitable seat. Under this interpretation, neither the employee’s other tasks nor the employer’s business judgment would affect whether the nature of the work reasonably permits the use of seats.
The Ninth Circuit noted that the Wage Orders do not define “nature of the work,” “reasonably permits,” or “suitable seats,” and while the different approaches advocated by the parties would produce drastically different results, “the text of the regulation precludes neither.” Given the dearth of cases interpreting the Wage Orders, the Ninth Circuit asked the California Supreme Court for guidance. The California Supreme Court, in turn, sought input from the Department of Labor Standards Enforcement (DLSE) which stated a position that seemed to combine the parties’ two approaches (DLSE amicus brief available here).
At oral argument, the plaintiffs argued that the seating requirement is a minimum labor standard, akin to overtime or minimum wages, that must have an objective measure and asserted that an employer’s business judgment should have no part in the analysis of whether to provide seating. If the state Supreme Court adopts this objective measure and limits the inquiry to whether an employee is engaged in a task that can objectively be performed while seated, class certification of these claims will be much easier. The defendants again advocated the holistic approach based on the totality of the circumstances and which considers the employer’s business judgment. The holistic approach would make class certification more difficult because a court would be required to assess a variety of factors that could vary day-to-day and location-by-location. Most of the questions from the justices concerned the phrase “nature of the work” and whether the proper unit of analysis was the job as a whole or the discrete duties of each job. Some justices appeared to favor the plaintiffs’ interpretation, such as Justice Corrigan, who solely posed questions to the employers (the substance of her questions indicating she may favor the plaintiffs’ position), while others’ comments seemed to favor the defendants, with Justice Liu stating that it is not unreasonable that the defendants want their employees to demonstrate a certain presence with respect to customer service.
The California Supreme Court’s opinion will have a dramatic impact on employers and employees and will likely influence whether seating claims can be certified as class actions. However, even if seating claims ultimately cannot easily be certified, aggregate liability for seating violations still may be imposed via the Private Attorneys General Act of 2004 (PAGA), which need not be certified to impose aggregate liability, pursuant to Arias v. Superior Court, 46 Cal.4th 969 (2009). PAGA civil liability can be quite substantial, as the statute provides $100 for each aggrieved employee per pay period for the initial violation and $200 for each aggrieved employee per pay period for each subsequent violation. See California Labor Code §2699(f)(2).
Robert Drexler, Senior Counsel
CAPSTONE LAW APC