Several retailers with operations in California have recently been hit with class action lawsuits claiming that they did not provide their employees with suitable seating while on the job. Whole Foods is the most recent target.
The lawsuit, filed on May 17, 2011 in Los Angeles County Superior Court, alleges that the supermarket chain failed to provide suitable seats in its cashier areas for its employees and seeks civil penalties under the Labor Code Private Attorneys General Act of 2004 (“PAGA”). PAGA provides that an “aggrieved employee” may bring an action to recover civil penalties for violations of the Labor Code “on behalf of himself or herself and other current or former employees ….” In this case, the plaintiff claims that Whole Foods violated Labor Code § 1198 and Industrial Welfare Commission (“IWC”) Wage Order No. 7-2001(14), which mandates that employers provide all working employees with suitable seating.
The Whole Foods suit comes on the heels of two recent California appellate court decisions, Bright v. 99¢ Only Stores, 189 Cal. App. 4th 1472 (Nov. 12, 2010) and Home Depot U.S.A. Inc. v. Super. Ct., 191 Cal. App. 4th 210 (Dec. 22, 2010), where the courts held that PAGA provides employees who allege they have been denied suitable seating with a private right of action to sue for civil penalties of up to $200 per employee, per pay period. In Bright, the plaintiff, a cashier at the discount retail chain 99¢ Only Stores, initiated a class action and argued that by failing to provide suitable seating to its cashiers, her employer violated § 1198 of the Labor Code and Wage Order 7-2001(14), which, until recently, was a rarely used provision covering the retail industry. Section 1198 of the Labor Code provides that the labor conditions set by the IWC shall be the “standard conditions of labor for employees.” While the Wage Orders adopted by the IWC are generally known for establishing minimum wage and overtime requirements, they also establish a number of other standard labor conditions for employees. For example, Wage Order 7-2001 requires that all retail employers in California provide: lockers or closets for safekeeping of employees’ outerwear; facilities for securing hot food and drink for meal periods between 10 p.m. and 6 a.m.; resting facilities for employees in an area separate from the bathroom; and a temperature of not less than 68º in the toilet, changing, and resting rooms. Wage Order 7-2001(14) requires employers to provide all working employees with suitable seats when the nature of the work reasonably permits their use. When the nature of the work reasonably requires standing, employers must provide an adequate number of suitable seats placed in reasonable proximity to the work area for employees to use when they are not engaged in their active duties and use of the seats would not otherwise interfere with the performance of their duties.
Based on the plain meaning of § 1198, the Bright Court held that “[b]y incorporating the suitable seating requirement into section 1198’s required conditions of labor, a violation of the suitable seating requirement is a violation of section 1198.” The Court also addressed whether an employee can recover penalties under § 2699(f) of the Labor Code for the violation of § 1198. It found that PAGA applies to any statutory violation for which there is no specific pre-existing civil penalty. Therefore, because there is no-preexisting civil penalty for a violation of Wage Order 7-2001, PAGA permits employees to recover civil penalties for an employer’s suitable seating violations.
On December 22, 2010, the Second District Court of Appeal issued a similar decision allowing employees to proceed in their suitable seating action against Home Depot. Relying on the decision in Bright, the Court held that because “[t]he seating requirement of Wage Order 7-2001... clearly prohibits employers from failing to provide suitable seating under the conditions specified in the wage order[,]” the employees’ claims could proceed under PAGA.
What This Means For Retailers?
The California Supreme Court denied review in both the Bright and Home Depot cases in early 2011. In light of the Supreme Court’s refusal to review these cases, employers should expect to see similar class actions filed in the near future. Non-compliance with the Labor Code and Wage Orders can now trigger significant PAGA penalties: $100 for each aggrieved employee per pay period for the first violation and $200 for each aggrieved employee for each subsequent violation.
Of particular concern is the potential that Bright and Home Depot have opened the floodgates to claims for PAGA penalties for violations of other basic working-condition requirements of the Wage Orders - e.g., meal periods, resting facilities, changing and locker rooms, workplace temperature, etc. Employers should carefully review their protocols regarding not only the suitable-seating requirements but also all of the standard labor conditions required under the Wage Orders to ensure that they are fully compliant.