2nd District rules that call-in shifts trigger reporting time requirements

An appellate panel has sided with retail workers arguing "call-in" shifts qualify as compensable "reporting time" under state labor law, issuing the most substantive ruling to date on an issue at the center of multiple lawsuits.

According to attorneys for the plaintiffs, who work for retailer Tilly's, the split opinion by the 2nd District Court of Appeal is the first appellate ruling on the legal question.

A call-in shift is one in which a worker must call their employer, often two hours ahead of their start time, to see if they are needed. The relevant regulation, Wage Order 7, requires compensation for employees who report for work only to find none is available.

"We conclude, contrary to the trial court, that an employee need not necessarily physically appear at the workplace to "report for work." Instead, "report[ing] for work" within the meaning of the wage order is best understood as presenting oneself as ordered," wrote Division Three Presiding Justice Lee Smalley Edmon for the majority.

Justice Halim Dhanidina concurred in the published decision, released on Monday.

Edmon also wrote that "on-call shifts burden employees, who cannot take other jobs, go to school, or make social plans during on-call shifts -- but who nonetheless receive no compensation from Tilly's unless they ultimately are called into work," and said the practice is exactly the kind of improper one that Wage Order 7 was designed to counter.

"We feel strongly that we are right on the equities and the law, and it's very gratifying that the Court of Appeal agreed with our position," said Scott H. Sims of Frank Sims & Stolper LLP, who argued for the plaintiffs.

"Tilly's is reviewing the recent decision, which was made in the context of a motion to dismiss before any factual discovery and when all of the plaintiffs' allegations were presumed to be true," said the company in an emailed statement. "Tilly's respectfully disagrees with the two of three judges who decided the appeal in favor of the plaintiffs. Tilly's is confident that its practices will be found fair and lawful, either upon further appellate review of this decision or by the trial court upon remand."

In the underlying case, Los Angeles County Superior Court Judge Elihu M. Berle sustained a demurrer to the lawsuit, agreeing with the defense and past applications of the rule that reporting time meant physical appearance at the workplace.

Justice Anne H. Egerton agreed with that past interpretation in her dissenting opinion, writing that the Wage Order does not apply.

"The legislative history of the phrase "report for work" reflects the drafters' intent that -- to qualify for reporting time pay -- a retail salesperson must physically appear at the workplace: the store," she wrote. Ward v. Tilly's, B280151 (2nd Cal. App. Dist., filed Feb. 4, 2019).

She concluded the plaintiffs should seek a remedy from the state Legislature rather than under the Wage Order.

The plaintiffs also argued the classical interpretation of reporting for work failed to account for technological advances. In the past, employer control did not extend past the physical workplace as it does now with cell phones and social media, they said.

"It's easier now than ever for an employer to reach an employee and tie up these lower-level wage earners in a way that makes it difficult for them to attain other employment or enjoy their free time but without compensating them," said Richard K. Bridgford of Bridgford, Gleason & Artinian, who represented the plaintiffs.

Michael Kent of McNicholas & McNicholas LLP also represented the plaintiffs and called it a "great decision for employees."

The firm has a similar lawsuit going against retailers Abercrombie & Fitch and Hollister Co. The former filed an amicus brief for the defense in the Tilly's case.

A similar case against Victoria's Secret was argued before the 9th U.S. Circuit Court of Appeals but settled in June 2017 before a ruling could be issued.

"The majority opinion really gets at the core of why on-call shifts are so harmful to employees," said Ryan Wu of Capstone Law APC, who was not involved in the case. "In the name of efficient scheduling, companies shift all of the burden to employees."

Tilly's was represented by Adam J. Karr and Apalla U. Chopra of O'Melveny & Myers LLP, who referred comment to the company.