Victoria’s Secret Settles On-Call Claims for $12M for 44K Class Members

Late last year, Hon. George H. Wu of the Central District of California granted final approval of a $12 million class action settlement in the action Casas, et al. v. Victoria’s Secret Stores, LLC, et al., No. 2:14-cv-06412 (C.D. Cal., Nov. 21, 2017) (slip op. available here). The settlement came while a decision from the Ninth Circuit Court of Appeals was still pending, regarding whether the plaintiffs’ allegations about Victoria’s Secret’s call-in scheduling policy were sufficient to state a claim for failure to provide reporting time pay. It resolves a more than three-year-long journey of litigation on behalf of a class of nearly 44,000 non-exempt employees in California from July 9, 2010, to August 11, 2017.

Although the settlement releases several other wage-and-hour claims, one of the core claims at issue was the plaintiffs’ allegation that Victoria’s Secret’s call-in scheduling practices violated California law. Specifically, the plaintiffs alleged that the retailer’s policy and practice of requiring its store employees to call in to work two hours before the start of their scheduled shifts to see if they would need to come in resulted in, among other things, a failure to pay minimum wages, applicable overtime wages, and reporting time pay. The plaintiffs further alleged that employees would be disciplined if they did not call when they were scheduled to do so.

At the pleading stage, the district court dismissed the plaintiffs’ reporting time claim based on an analysis of the plain meaning of Wage Order 7-2001’s reporting time requirements and legislative history, finding that Victoria’s Secret’s call-in policy did not violate the Wage Order. The applicable section of the Wage Order provides:

Each workday an employee is required to report for work and does report, but is not put to work or is furnished less than half said employee’s usual or scheduled day’s work, the employee shall be paid for half the usual or scheduled day’s work, but in no event for less than two (2) hours not more than four (4) hours, at the employee’s regular rate of pay, which shall not be less that the minimum wage.

Cal. Code Regs., tit. 8, § 11070(5)(A) (emphasis added). The district court had analyzed the meaning of the phrase “report for work and does report” and found that it means to “actually, physically show up at the workplace.” Tentative Order on Defendant’s Motion to Dismissed Plaintiffs’ First Amended Complaint (adopted as final), at 7. However, since Victoria’s Secret’s employees did not have to physically report to work and only had to call-in, the district court determined that the Wage Order did not provide a remedy and dismissed the claim with prejudice, while also noting that the policy was “somewhat unfriendly to employees and disrespects their time.” Id.

After dismissing the reporting time claim, the district court stayed the action to allow the plaintiffs to file an interlocutory appeal of the court’s order. The issue was fully briefed on appeal and, in October 2016, the parties presented oral argument before a Ninth Circuit panel. During oral argument, the panel commented that the issue would be more appropriately decided by the California Supreme Court and suggested that the Ninth Circuit would ultimately decide to certify the question for the California Supreme Court to answer. However, before the Ninth Circuit came to a decision on certification of the issue, the parties settled, leaving the question open for other pending litigation involving call-in scheduling policies.

Authored by:
Brandon Brouillette, Associate
CAPSTONE LAW APC