Ward v. Tilly’s Inc.

Employment class action

2nd District Court of Appeal

Justice Lee Smalley Edmon

Appellants' attorneys: Frank Sims & Stolper LLP, Scott H. Sims; McNicholas & McNicholas LLP, J. Patrick McNicholas, Michael J. Kent; Bridgford, Gleason & Artinian, Richard K. Bridgford and Michael H. Artinian; Esner Chang & Boyer, Andrew N. Chang, Holly N. Boyer

Appellee's attorneys: O'Melveny & Myers LLP, Apalla U. Chopra, Adam J. Karr, Ryan W. Rutledge, Briana N. LaBriola

The 2nd District Court of Appeal reversed and remanded a Los Angeles County Superior Court decision to throw out a case on demurrer alleging wage order violations.

Attorneys for named plaintiff Skylar Ward filed and certified a class alleging Irvine-based retail clothing company Tilly's violated wage order No. 7-2001 by requiring employees to contact the stores two hours before the start of their on-call shift to determine if they had to come into work.

Workers alleged the company also disciplined employees if they a) failed to contact their stores before on-call shifts, b) were late calling in or c) refused to call, court documents show.

Patrick McNicholas

Attorneys led by Patrick NcNicholas of McNicholas & McNicholas, LLP argued workers calling in counted as "reporting for work" within the language of the wage order and were owed time-reporting pay.

Tilly's demurred the complaint, arguing "reporting to work" meant physically appearing at the workplace, which Los Angeles County Superior Court Judge Elihu M. Berle sustained.

"This is clearly an issue of first impression under California employment law," said Scott H. Sims of Frank, Sims & Stolper LLP in Irvine. Sims said he was approached by McNicholas to joint venture on the case and argued both the demurrer and the appeal. "When someone calls in, it falls within the wage order."

The 2nd District agreed, concluding 2-1 the on-call scheduling system does trigger the wage orders reporting time pay requirements. Ward v. Tilly's, Inc., 31 Cal. App. 5th 1167 (Cal. App. 2nd Dist., Feb. 4, 2019).

"On-call shifts employees who cannot take other jobs, go to school, or make pans during on-call shifts -- but who nonetheless receive no compensation from Tilly's unless they are ultimately called in to work," Justice Lee Smalley Edmon wrote in the opinion. "This is precisely the kind of abuse that reporting time pay was designed to discourage."

McNicholas, a longtime consumer trial attorney, took on the case after hearing about Tilly's on-call reporting practices from associate Michael J. Kent.

"He came to me one day and said, 'You know, this is a real issue and it's a real problem for employees,'" McNicholas said. "My initial reaction was that I didn't want to do the case, but he lobbied hard for it and he convinced me on the law and the righteousness of the case."

That righteousness stems from the practice, developed in the early 20th century when communication channels were limited and the system was necessary to inform employees if they were needed. When the Industrial Welfare Commission adopted the term "report for work" in the 1940s, it assumed that meant physically going to the workplace, not communicating telephonically, court documents show.

But advances in technology, in particular the cell phone, have rendered such practices both moot and time-consuming for workers, McNicholas said, an argument the panel acknowledged.

"It's robbing them of their pay and their time because it forces them to block out a day or half their day, and then be told at the last minute that they're not needed," he said. "And some of these people, for example, had to hire daycare or forego other employment opportunities. So given all that, it was only fair that they be compensated as the law was intended."

Attorneys for the O'Melveny & Myers, LLP team representing Tilly's declined comment through a spokesman.

No new trial date has been set.

-- Glenn Jeffers