Foley & Lardner Labor and Employment Law Weekly Update (Week of May 31, 2011)

Foley & Lardner Labor and Employment Law Weekly Update (Week of May 31, 2011)

California Employers Should Heed Seating Suits
By Rebecca Hanson

A wave of wage and hour class actions have been filed in California against retail employers over lack of "suitable seating" for their employees. These cases are based on California Industrial Welfare Commission Wage Order 7-2001, section 14, which requires that:

(A) All working employees shall be provided with suitable seats when the nature of the work reasonably permits the use of such seats. (B) When employers are not engaged in the active duties of their employment and the nature of their work requires standing, an adequate number of suitable seats shall be placed in reasonable proximity to the work area and employees shall be permitted to use such seats when it does not interfere with the performance of their duties.

Such cases have been brought against retail grocers, pharmacies, wholesale chains, and clothing stores, among others. The cases all make the same or similar allegations: that the employer did not place a reasonable amount of seats within close proximity to the employees' work area and did not permit the use of seats by employees even when doing so did not interfere with their work duties.

These recent cases follow on the heels of two rulings handed down by a California state appeals court in late 2010. One of those decisions found that a cashier at a discount retail chain could seek civil penalties because a violation of Wage Order 7 constituted a violation of the California Labor Code and thus allowed for penalties under the California Private Attorneys General Act (PAGA). This result is troubling because PAGA allows for civil penalties even when employees have not suffered a monetary harm based on the alleged violation of the Labor Code. In one of the recent appellate decisions, the court specifically found that the PAGA's statutory penalties - $100 for each aggrieved employee per pay period for the first violation and $200 for each additional pay period in which the violation occurred - were not excessive or improper.

The class actions have been mainly limited to retail stores, but other California employers, including restaurants and manufacturers, may be targeted in the future, as Wage Order 7 applies broadly to all industries, businesses, or establishments operated for "the purpose of purchasing, selling, or distributing goods or commodities at wholesale or retail, or for the purpose of renting goods or commodities."

Employees do not need to request seating in order to bring a claim under Wage Order 7, so employers need to be proactive about providing reasonable seating. As a result, such employers should ensure compliance with the California wage orders by analyzing their procedures and job descriptions to determine whether they can make reasonable business determinations about providing seating.

Placement of Production Line in Right-to-Work State Alleged to Violate NLRA
By Michael W. Groebe

On April 20, 2011, the Acting General Counsel of the NLRB issued a complaint against The Boeing Company (Boeing) based on Boeing's decision to place a second production line for one of its aircrafts in South Carolina, a right-to-work state. The acting general counsel claims that Boeing's decision was in retaliation for past strikes by its employees in Washington and was "inherently destructive" of rights guaranteed under Section 7 of the National Labor Relations Act (NLRA). The acting general counsel is seeking a return of the production line to Washington, among other remedies.

In Boeing's answer to the complaint, it contends that "even ascribing an intent to Boeing that it placed the second line in North Charleston so as to mitigate the harmful economic effects of an anticipated future strike would not be evidence that the decision to place the second assembly line in North Charleston was designed to retaliate against the IAM for past strikes." Boeing argues that it would have made the same decision even without considering the impact of future strikes and that its placement of work in South Carolina did not "remove" work from Washington. Additionally, Boeing points to the terms of the parties' collective bargaining agreement that allegedly allows Boeing to place work in any location of its choice without having to bargain with the union.

As the NLRB becomes more aggressive and more creative with its enforcement of the NLRA under the Obama administration, employers need to be cautious in making decisions that impact their unionized workforce. While the NLRB contends that it is concerned with the fact that Boeing employees in Washington have engaged in strikes in the past (five times since 1977) and that the placement of work is in retaliation for these strikes, this complaint likely reflects the increased scrutiny that will be applied to employment decisions involving all unionized work places and right-to-work states.

Additional NLRB enforcement information may be found in previous editions of Legal News: Employment Law Update: