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Nancy Cooper, member of our Labor and Employment group and Hospitality, Travel and Tourism practice team, discusses how the recent Supreme Court ruling, Integrity Staffing Solutions v. Busk, may impact potential employee wage and hour claims for hourly employees in the future.  Thank you for today’s post, Nancy! – Greg

The Supreme Court ruled recently that employers did not need to pay employees for the time the employees spend waiting to go through a security screening to make sure they were not stealing from the company.  The case is Integrity Staffing Solutions v. Busk.  While many employers applauded this ruling they were also confused because it is initially difficult to determine how going through the security clearance is different than the requirement that you must pay certain employees for the time it takes to change in and out of uniforms or special apparel, also known as donning and doffing time.  This article will explore those differences and attempt to make some sense in the distinctions.

First, the history behind the law.  The Fair Labor Standards Act (FLSA) and its regulations require that employees are paid for all hours worked.  The courts immediately started to broadly interpret this obligation and Congress was concerned about the financial impact on the businesses of the country.  As a result, Congress passed the Portal-to-Portal Act to more clearly define what time was actually considered to be work time.

The portion of the Portal-to-Portal Act that is implicated by this opinion is the portion that discusses what activities before (preliminary) and after (postliminary) must be paid.  Generally, those activities that are preliminary or postliminary to the performance of the principal activities that an employee is hired to perform must be compensated.  “Principal activities” includes all activities which are an “integral and indispensible part of the principal activities.”[1]  In order to be considered an “integral and indispensible” activity, it must be one that is intrinsic to the employee’s duties and one which he cannot dispense if he is to perform his principal activities.

Now that the law and terms have been defined, let’s turn to the facts of the case.  The employees were hired by Integrity Staffing Solutions to work in a warehouse fulfillment center that filled orders for Amazon.  The employees were responsible for receiving an order and picking the items from the proper locations within the warehouse to fulfill the orders.  Integrity Staffing Solutions required the employees to clock out from work and then stand in a line to go through security clearance – essentially a metal detector similar to those at an airport – as they left work for the day.  This allowed Integrity Staffing Solutions to control the loss of merchandise through employee theft.  The lines for these clearances were often long and would take as long as thirty minutes to get through.  The employees sued on the basis this 30 minute wait time was actual work time and they should be paid for waiting in line.  The Supreme Court disagreed.

In order to be paid for such preliminary or postliminary activity the activity must be so related to the employee’s duties that the job could not be performed if the preliminary or postliminary activity did not occur.  The Court decided the focus should not be on whether or not the activity was required by the employer.  Instead, the focus should be whether not the activity was actually tied to the work the employee was hired to perform. For example, employees required to wear protective clothing due to the nature of their work, such as dealing with chemicals used in the battery making process, could not perform the work they were hired to do without putting on the protective clothes.[2]  The same is true of the time that meat packers spend sharpening their knives.[3]

So, what does all this mean to the hospitality industry?  Does it really change the rules on donning and doffing?  The short answer is no, it doesn’t change the rules.  What it does do is make sure that employers really look at the activity and determine just how integral to the job the activity is.  For example, the employer who puts a lot of emphasis on uniforms as a part of the brand (including defining the level and quality of customer service associated with the uniform) may have to pay for the time it takes to don and doff the uniform.  This is true if the employer places a lot of emphasis on the public face of the uniform and the associated internal expectations of customer service created by the identity.  In short, the uniform becomes a part of the job since it defines the customer service portion of the job.

In contrast, a server who wears a uniform simply as a uniform, but not as a part of the customer service brand and standards may not have to be paid for the time spent changing clothes.  The server can still perform the integral functions of the position (serving food and beverages) without the uniform.  It is somewhat removed from the position, unless of course the policies of the employer indicate otherwise as discussed above.

What is the takeaway?  If there is a question about preliminary and postliminary requirements, take the time to look at the relationship between the activity and the job the employee was hired to perform.  Be critical of the situation and candid with yourself as you analyze the situation.  If there is any question, reach out to your legal counsel.  Be sure that you understand the risks and benefits so that you are not facing a potential wage and hour claim.

If you have any questions or for more information regarding this ruling, please feel free to contact me or Nancy, directly.

[1] Steiner v. Mitchell, 350 US 247, 252-253.

[2] Steiner v. Mitchell, 350 US 247, 249, 251.

[3] Mitchell v. King Packing Co., 350 US 260, 262.

California employers are currently scratching their heads over how to interpret “suitable seating” that is required under California Wage Orders.  Nancy Cooper, member of our Labor and Employment Group and Hospitality, Travel and Tourism practice team, discusses how that term is defined will affect your business.  Thank you for today’s post, Nancy! - Greg

Section 1198 of the Labor Code of California states that the “employment of any employee for longer hours than those fixed by the order or under conditions of labor prohibited by the order is unlawful.

References to the “order” refer to California Wage Orders, which are issued from time to time by the California Industrial Welfare Commission and establish wages and working conditions for a number of industries within California. Section 14 of the majority of the California Wage Orders say that an employer must provide “all working employees” with “suitable seats when the nature of the work reasonably permits the use of seats.” What each Wage Order does not say is what this means.

Even though these Wage Orders have been around for decades, they are only now the focus of many lawsuits.  So why now?  Well, that is also hard to answer.  These laws were originally focused on allowing employees who worked on certain equipment or in other jobs that were essentially stationary to sit down as they performed their work.  There used to be many more “suitable seating” laws across the nation.  They appear to have originated in the 1950s and were focused on the increasing number of females in the workplace.  They have either remained on the books (though neutralized to be gender neutral) or taken off the books altogether.  The California laws came to life with the passage of the Private Attorney General Act (PAGA).  Under PAGA (which was deemed to apply to the suitable seating laws) an employee can seek up to a year of civil penalties and attorney fees, including a civil penalty of $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.  So, now there is real money tied to the law.  Where there is real money – lawyers will follow.

Two of the more notable suits involving suitable seating are class actions that are currently on appeal with the Ninth Circuit Court of Appeals.  As the Ninth Circuit was trying to interpret the law and make a ruling in these cases, the Court discovered that there was not clear interpretation of the law in California state court.  There was not sufficient guidance from state courts to inform the Ninth Circuit what was intended under the law.  Thus, the Ninth Circuit said that rather than substitute its own judgment in the interpretation of California law, it asked the Supreme Court of California to clarify three specific questions.

They first asked the California Supreme Court to clarify whether the term “nature of the work” refers to individual tasks that an employee performs during the day, or whether it should be read “holistically” to cover a full range of duties.  As a sub-part to this question, if the courts should construe the “nature of the work” requirement holistically, should they then consider the entire range of an employee’s duties if more than half of the employee’s time is spent performing tasks that reasonably allow the use of a seat?

The second question the California Supreme Court was been asked to clarify is whether an employer's business judgment should be considered in determining whether the nature of the work “reasonably permits” the use of a seat, as well as the physical layout of the workplace and the employee’s physical characteristics.

The third and final question posed to the California Supreme Court was to clarify whether the employee must prove what would constitute a “suitable seat” in order to prevail.

So, what does this mean to the California hospitality industry?  It could change the way in which operations are designed and how job expectations are defined.  What if a sous chef wants a stool as he does prep work?  Can the kitchen design handle the arrangement?  How does that reconcile with the hazards of the kitchen workplace?  Can it be set up in the often narrow passage ways of the kitchen?

How does the hostess position effectively use a seat and still present a welcoming atmosphere to the clientele?  What about the wait staff?  If they are given a seated area for use when the floor is not busy – what happens if someone is sitting down when they really should be tending to tables or cleaning the stations?

What about the reception desks at hotels and the spas?  Do they give the same image if they are sitting down – even if on a high stool?  More importantly, do you now have to change the lay-out of the reception area?  Is there enough room for the employees to be seated or use a stool?  Is a stool even considered “suitable seating”?

If a job or worksite has been modified as an accommodation to an individual in a wheelchair, does that mean that it is now considered to be a job that automatically can be performed when seated – even when it historically has not been?

It is not known when the California Supreme Court will provide answers to the questions posed by the Ninth Circuit.  Any guidance offered by the Court will still be open to interpretation and lead to more suits.  The answers will not be specific to any given industry.  The Court is unlikely to provide guidance on the interplay with other laws (e.g. workplace safety, OSHA, etc.) as well as define who has the burden to prove the violations exist and that the solutions are or are not reasonable.

Some of the early California cases regarding suitable seating suggest that there may be some considerations available to employers.  If a company can demonstrate that there is a genuine customer-service rationale for requiring the employees to stand, the company may have an argument.  Depending on the nature of the service provided by the employee, it is acceptable for a Company right to be concerned with efficiency – and the appearance of efficiency – of the delivered service.  These early cases have expressed concern not only about safety, but also about the employee’s ability to project a “ready-to-assist attitude” to the clientele.  It is not clear that these arguments will survive the California Supreme Court’s analysis.  It is anticipated that the answers will only create more questions, so it is well advised to start looking at your facilities as well as your job descriptions now so you can be prepared to take steps to not become the next lawsuit target.

Since the 2013 Hospitality Law Conference, we have received many requests for the Garvey Schubert Barer presentations.  Well, here they are.  Roger, Ruth and I are happy to further explain them and other details on the trending topics. Please give us a call or email.  It was a fun and educational conference so it is nice to look back at these slides!

Click on the presentations to view.

Picture of a power point presentation from the Hospitality Law Conference.Picture of a power point presentation from the Hospitality Law Conference.

I am just back from the 5th Annual HR in Hospitality Conference, held in Washington DC last week. The Conference was an information-packed two and one-half days. There were terrific presentations, interesting panel discussions, great audience questions, and many opportunities to informally connect with others in the hospitality industry who focus on human resource issues. I have already marked my calendar for next year’s Conference to be held February 27-29 in San Francisco. 

Earlier this month, Stephen Barth and Hospitalitylawyer.com hosted the most recent installment of their successful hospitality law conference held each February in Houston.  This year’s conference saw attendance return to pre-recession levels with representation from many of the in-house legal departments of the largest national and international hotel operators.  The conference dedicated the first day to three all-day pre-conference boot camps on real estate, privacy / PCI compliance and the unique issues faced by the restaurant and lodging in-house lawyer.  I sat through the real estate presentations, which although a little slow at times (you can only define REVPAR so many times), did a reasonable job of summarizing the variety of issues associated with the development, purchase, sale and management of hospitality properties in one coherent presentation.  Ruth sat through the privacy / PCI discussion and found it very informative.  The second day was filled with a wide variety of topics – from alcohol compliance, to sweepstakes, to franchise negotiations, to receiverships to tips – in one of four breakouts dedicated to food & beverage, lodging, human resources and loss prevention.  The highlight of the third and final day was the annual hospitality case update.

Happy New Year (belated)!  The new year means new opportunities, and in the Hospitality industry that means it’s events time! The calendar of upcoming events is varied, but here are a couple that I plan to attend:

ALIS (America’s Lodging Investment Summit): I will be attending this San Diego event, January 24 through 26. According to the website, ALIS is the “leading and largest hotel investment conference in the world, attracting more than 7,000 delegates from around the globe over the past three years.” If you plan to attend, and you’d like to get together, please email me.

2011 Hospitality Law Conference: Held at the Omni Houston Hotel in Houston, Texas, this event covers the latest trends and issues in hospitality law. This year, I’ll be speaking at the conference on the topic of distribution. I would love to meet up with you in Houston; just send me an email and let’s get together.

Of course, I’ll be providing updates and a thorough follow up after each conference. If there is a topic to be covered at either of these events that you’d like particularly to hear about, please let me know and I’ll do my best to cover it.

In this week’s “late due to Snowmageddon II” post, Diana Shukis, a partner in our Employment law practice group and long-time member of our Hospitality team, discusses the basic elements necessary to minimize your organization’s risk of harassment in the workplace, including a step-by-step approach to avoiding, and what to do in the event it occurs. Of course, the easiest way to ensure you have all the training and assistance you need is to give Diana a call.

Workplace harassment continues to be a serious concern because of its negative business impacts and serious liability risks for employers in all industries, including those in the hospitality community. It is vital for hotel managers and human resources professionals to review their organizations’ policies and practices regarding harassment and make any necessary improvements to avoid negative impacts. Workplace harassment based on race, ethnicity, disability or the perception of disability, sex, sexual orientation (in Washington and some other states), religion or age is prohibited by law.

Given the number of questions I've received recently from clients who've heard rumors about tip pooling becoming legal, I thought it time to update everyone. The short answer is (at least for now) that employers in Washington and Oregon may initiate mandatory tip pools under certain circumstances.

Mike Brunet is an associate working closely with Diana Shukis in our Employment Law Practice Group.  Both Mike and Diana do a lot of work with our hospitality clients in the areas of personnel and management issues - from creating and implementing comprehensive policies and procedures to providing key, timely advice during volatile workplace situations.  Today, Mike tackles the hot topic of employee social networking, from an employer’s perspective:

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Greg Duff, Editor
Greg Duff founded and chairs GSB’s national Hospitality, Travel & Tourism group. His practice largely focuses on operations-oriented matters faced by hospitality industry members, including sales and marketing, distribution and e-commerce, procurement and technology. Greg also serves as counsel and legal advisor to many of the hospitality industry’s associations and trade groups, including AH&LA, HFTP and HSMAI.

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