The next wave of California wage-and-hour lawsuits is hitting California employers. The issue this time: alleged failure to provide suitable seats to non-exempt employees. More than 100 lawsuits have been filed in the past year or so by workers who claim that their employer violated Section 14 of California Wage Order 7-2001, which applies to the mercantile industry.
The spate of litigation was prompted by two recent state appeals court decisions holding that Plaintiffs could bring such suits under PAGA: Home Depot U.S.A., Inc. v. Superior Court, 191 Cal. App. 4th 210 (2010) and Bright v. 99¢ Only Stores, 189 Cal. App. 4th 1472 (2010). These cases hold that employees may collect penalties of up to $100 for each aggrieved employee per pay period for the first violation, and $200 per employee per pay period for each subsequent violation. The potential exposure for some companies is in the multi-millions of dollars.
But what constitutes a "violation"? There are no published opinions and very little guidance. Section 14(A) of Wage Order 7-2001 provides that all non-exempt employees must be provided with "suitable seats when the nature of the work reasonably permits the use of seats." Section 14(B) provides that: "When employees are not engaged in the active duties of their employment and the nature of the 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." The regulations are vaguely written indeed.
But there is a glimmer of hope for employers. In July, U.S. District Court Judge Manuel Real dismissed with prejudice a suitable seats class action on the grounds that the plaintiffs never actually requested seats at work. See Green, et al. v. Bank of America, N.A., et al., Case No. CV-11-4571-R. (C.D. Cal. July 18, 2011). While the language of the Wage Order states that "working employees shall be provided with suitable seats when the nature of the work reasonably permits the use of seats," Judge Real pointed to an opinion letter of the Division of Labor Standards Enforcement, the agency responsible for enforcement, suggesting that the Wage Order is not intended to require a seat for all employees. Judge Real's order has been appealed to the Ninth Circuit.
Notwithstanding Judge Real's decision, California employers should brace for more suitable seats litigation and seek appropriate advice on potential compliance measures.