Many restaurants participate in the Shoes for Crews ("SFC") Corporate Program. Shoes for Crews manufactures and sells non-slip footwear that provides "unmatched slip-resistance outsole technology." Employers in the hospitality industry frequently encourage their employees to wear SFC shoes for two central reasons. First, the wearing of SFC shoes by employees helps prevent slip and fall accidents that can be caused by wet or greasy floor surfaces. Second, Shoes for Crews provides employers with a "warranty" in the form of a payment of up to $5,000 for medical costs arising from an employee slipping while wearing SFC shoes. In order to be eligible for receipt of this warranty, an employer must agree to participate in the Shoes for Crews Corporate Program.
Although most restaurants require employees to wear some type of slip-resistant shoe, employees are rarely reimbursed for the cost of purchasing the required footwear. Despite infrequently reimbursing employees for the purchase price of non-slip shoes, some restaurants have agreed to take part in the Shoes for Crews Corporate Program, which allows an employee to pay for SFC shoes through monthly payroll deductions. As a result of this payroll deduction option, more employees are now choosing to purchase SFC shoes.
As the popularity of SFC shoes has increased, recent court cases have challenged Shoes for Crews Corporate Program on primarily two fronts. First, if an employer requires an employee to purchase slip-resistant footwear, the argument has been made that the employer should be required to reimburse the employee for the cost of the shoes. Second, because an employer may receive a warranty payment for a workers' compensation claim resulting from an employee injury while wearing SFC shoes, the program has been attacked as unfairly forcing an employee to bear some of the expense of the employer’s workers' comp program. Although neither argument has previously received much traction, the latest court decision has raised questions about the viability of the SFC Program.
It is important for employers who utilize the Shoes for Crews Program to be aware of these recent decisions because they may signal future litigation over an employer's legal rights and obligations, while also raising potential concerns about the acceptance of a Shoes for Crews warranty.
Are Restaurants Required to Reimburse Employees for Non-Slip Shoes?
The first question that has been addressed by courts is whether an employer has an obligation to reimburse its employees for the cost of purchasing non-slip shoes, particularly SFC shoes. In Roach v. T.L. Cannon Corp., a New York court held that a restaurant's failure to reimburse employees for the purchase price of non-slip shoes did not constitute a violation of the state's labor laws. Although New York law requires employers to reimburse employees for the cost of a uniform, the court found that non-slip footwear is not a "uniform" because black, non-slip shoes represent an "ordinary wardrobe item[ ] that can be worn as a part of non-work apparel."
In Lemus v. Denny's Inc., a California court arrived at a similar conclusion when it held that a restaurant's decision to not reimburse its employees for the cost of slip-resistant shoes did not constitute a violation of the Occupational Safety and Health Act (OSHA). The court reached this holding by relying on the language of a specific OSHA regulation and by adhering to the following statement provided in an OSHA directive: "The employer is not required to pay for non-specialty shoes that offer some slip-resistant characteristics, but are otherwise ordinary clothing in nature."
In arriving at the conclusion that restaurants do not have to reimburse employees for the cost of non-slip footwear, both courts made a point to note that the non-slip shoes were purchased from retailers open to the general public, the employees could purchase the required footwear from the retailer of their choice, and the restaurants did not limit the choice of shoe to any particular brand, style, or design. These facts were cited as support for finding that non-slip shoes can be worn outside the restaurant employment context and thus do not require employer reimbursement under either OSHA or New York labor law.
One take away from these cases is that an employer should not mandate that employees purchase SFC shoes, but instead should inform employees that Shoes for Crews is one of the brands that an employee may choose to purchase. These cases also suggest that an employer can continue to offer the SFC Program and allow employees the benefit from purchasing SFC shoes via payroll deductions, so long as the employer does not require employee participation in the program.
Can Payroll Deductions for the Payment of Shoes be
Construed as an Improper Deduction of Wages?
In 2013, one court specifically addressed the question of whether a restaurant's deduction of employee wages to cover the cost of SFC shoes can give rise to a claim for improper deduction of earned wages. The court ultimately concluded that the monthly payroll deductions for the cost of the non-slip shoes did not violate the California Labor Code because the employee specifically made the choice to purchase SFC shoes through payroll deductions and each of the deductions were paid in full to Shoes for Crews. Although the restaurant received a potential benefit of $5,000 from the employee’s decision to purchase that particular brand of shoes, the court held that the benefit did not constitute a “kickback” of the employee’s earned wages and thus was not a violation of California’s labor laws. It is always important for employers to remember, however, that any such payroll deduction agreement should be confirmed in writing and signed by the employee.
Does the SFC "Warranty" Constitute an Unfair Business Practice?
The most recent (and troubling) case that pertains to this subject matter focuses on whether the Shoes for Crews "warranty" that comes in the form of a $5,000 payment towards an employee's medical expenses constitutes a violation of state labor laws or whether it can be construed as an unfair business practice. In Lewings v. Chipotle Mexican Grill, Inc., an appellate court held that Chipotle's SFC Program violated a California statute that prohibits employers from accepting any contributions from employees that are used to cover the cost of workers' compensation.
The Shoes for Crews warranty, which is recognized as solely benefitting employers, was identified by the court as being funded by employee purchases of SFC shoes. The court determined that whenever a Chipotle employee purchased SFC shoes, the employee was indirectly contributing to the cost of workers' compensation because SFC would in turn provide the employer with contractual protection against the payment of medical expenses given certain conditions. Upon determining that the SFC warranty was an indirect employee contribution to the employer's workers' compensation plan, the court found that the program violated the California Labor Code. However, the court held that the particular statute at issue did not give rise to a private right of action, which resulted in the claim being dismissed.
Unfortunately, the court did not end its analysis there. The court stated that although no private right of action was available for violation of the Labor Code, the court held that an employee had a viable cause of action under Business and Professions Code section 17200 et seq. ("UCL"). The court explained that the UCL allows a party to seek redress for unlawful business practices, even if the underlying statute is not privately enforceable. Although no further elaboration was provided as to the merits of such claim, the fact that the given situation was identified as giving rise to a potential claim of unlawful business practices indicates that employers may want to reevaluate their approach to the Shoes for Crews warranty, particularly in the State of California. Although this ruling seems suspect and may not be replicated in other jurisdictions, it does provide cause for concern.
Recommendations for Proceeding
A number of practical recommendations can be gleaned from an evaluation of the above case law. First, the decisions discussed above establish that non-slip shoes are unlikely to be viewed as part of a uniform that requires employer reimbursement. Accordingly, restaurants that do not currently reimburse their employees for the cost of non-slip shoes should communicate to their employees that the required shoes can be purchased at the retailer of their choice and that they are not limited to a particular brand, style, or design of shoe. While employers may indicate that they have a preferred shoe vendor such as Shoes for Crews, employers should not require that employees purchase a particular brand of footwear.
If an employer chooses to institute a payroll deduction program for the payment of non-slip shoes, it is important that employees are made aware of their other options for purchasing the required shoes (i.e. buying them directly from a third-party retailer). Additionally, employers should obtain express written authorization from employees opting for the wage deduction in order to avoid any future legal disputes related to the issue.
The most concerning area for food service employers who have relationships with Shoes for Crews is the legality of the employer accepting workers' compensation contributions based on an employee's purchase of SFC shoes. Since this is the area most recently addressed by a California court and little definitive guidance has been provided, employers in California may want to wait until further guidance by the courts on this issue before proceeding with the SFC program. It is worth noting that the reasoning of the California court appears suspect since an employee who voluntarily chooses to purchase SFC shoes is not subject to any prejudice or harm, despite the fact that the employer may receive an indirect benefit in the event that a workers' compensation claim is filed.
In light of the court's analysis in Lewings, restaurants may choose to consider reimbursing employees for the cost of SFC shoes. If an employer pays for an employee’s non-slip shoes, then there would be little opportunity for a court to view the arrangement as unfair. Alternatively, an employer may want to consider instituting a program that provides for reimbursement for the shoes after an employee has worked for the employer for a defined length of time. This program is worth consideration because it would alleviate employers’ concerns regarding purchasing shoes for employees who then might quickly terminate employment, and it may have the secondary benefit of encouraging employees to remain employed for at least a specified period of time. This approach would also allow an employee to benefit from the decision to purchase SFC shoes, which could mitigate a finding by a court that the program constitutes an unlawful business practice with no benefit to the employee.
Employers are cautioned to keep a close eye on the case law in this area as this topic is likely to garner additional litigation in light of theLewings decision.