Plaintiffs filed suit for unpaid overtime, the trial court (Contra Costa Superior Court, Judge Maddock) granted summary judgment for Metson, and plaintiffs appealed. The Court of Appeal reversed in part and affirmed in part.
First, the Court held that Metson "attempted to evade" the overtime laws in the way that it calculated Plaintiffs' workweek:
First, the Court held that Metson "attempted to evade" the overtime laws in the way that it calculated Plaintiffs' workweek:
Although it is undisputed that Metson's employees, including plaintiffs, worked a regular 14-day schedule beginning at noon on Tuesdays and ending at noon two Tuesdays later, Metson calculated overtime pay on the premise that the workweek began at 12:00 a.m. on Monday and ended at 11:59 p.m. the following Sunday. Under Metson's calculations, plaintiffs worked six days in the first workweek, seven days in the second workweek and two days in a third workweek. On that basis, plaintiffs were paid a single seventh day premium at the end of the second workweek.Slip op. at 3, citing In re Wal-Mart Stores, Inc. Wage and Hour Litigation (N.D.Cal.2007) 505 F.Supp.2d 609, 617-618. Addressing the argument that an employer may designate its own workweek, the Court held: "Metson may designate any workweek it wishes, but the workweek it selects and requires its employees to observe is the workweek it must use for the purpose of calculating employee compensation." Slip op. at 4.
The Court next agreed with the plaintiffs that they were entitled to overtime pay for the 12 hours they were on "stand by" each day because the restrictions Metson imposed during that time period subjected them to Metson's continued control. After reviewing the rule that employers must pay for all time during which their employees are within their control (Morillion v. Royal Packing Co.), the Court held:
It is undisputed that Metson allocated eight hours of the twelve hours of off-duty, standby time for sleeping and required plaintiffs to sleep aboard ship during their 14 day hitches. With respect to the remaining four hours of the twelve off-duty standby hours, plaintiffs were subject to a response time requirement that effectively placed a geographic restriction on their activities during that period. “As a practical matter, if an employee is not required to remain on the employer's premises, geographical restrictions are imposed according to the required response time for an employee to return to the employer's premises. [Citations.] In such cases, the employee while on-call may only travel that distance from the employer's premises which can be traveled safely within the required response time.” [Citations.] The undisputed evidence here establishes that if plaintiffs left their ship during their standby time, they needed to be able to return to the ship within at most 45 minutes.
Considering only the four hours not designated as a period for sleep ... plaintiffs were free to pursue whatever activities they chose, so long as they did not consume alcohol and could safely return to the ship within the prescribed time. The required response time (and perhaps the alcohol ban) precluded plaintiffs from going places and pursuing activities in which they might otherwise have engaged. [Citations.] Nonetheless, plaintiffs were free to pursue recreational activities of their choice aboard ship, such as reading, watching television or using the internet, and they could and did leave the ship to exercise and run personal errands. Moreover, the undisputed evidence is that emergencies were rare and that plaintiffs were seldom called back to the ship during their off-duty standby hours.
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Except with respect to certain occupations in which the employee resides on the premises, covered by a different wage order, California courts have consistently held that an employee required to sleep at the work site is subject to the employer's control during sleeping hours. [Citations.]
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Thus, assuming that the restrictions imposed by Metson on its employees, including the on-board sleeping requirement, are in fact reasonable in light of the nature of the services Metson provides, hours during which the employees remain under the substantial control of Metson nonetheless constitute hours worked. Such control unquestionably exists during hours that employees are required to sleep aboard ship.
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Thus, the degree of control exercised by requiring the employees to sleep aboard ship, which is not their residence, renders the eight sleep time hours “hours worked” under California law. The fact that plaintiffs were required to spend their sleeping hours aboard ship also bears on the appropriate characterization of the additional four hours per day of standby time. While the balance of factors specified in Gomez might otherwise lead to the conclusion that those four hours are not under the employer's control, the fact that the employees must under all circumstances return to the ship to sleep tips the balance in the other direction. The on-board sleep requirement significantly affects and limits what the employee can and cannot do during the four non-sleeping hours. [Citations.] Viewing the entire 12-hour off-duty standby period as a whole, the restrictions placed on plaintiffs' whereabouts significantly restricted their ability to pursue activities of their choice. [Citations.]Slip op. at 6-10. The Court thus concluded that all 24 hours of each day was "hours worked." However, the Court held that this did not equate to compensable time.
As noted above, Metson allocated eight hours of unpaid time a day for sleep. The undisputed facts establish that sleeping facilities were provided for employees on the ships, and that it was exceptionally rare for their sleep to be interrupted by an emergency. The undisputed facts also establish an implied agreement between the parties that plaintiffs would not be compensated for eight hours of sleep time so long as their sleep was not interrupted. Prior to their employment, plaintiffs received a handbook that set forth Metson's compensation policies, including that employees would not be compensated for eight hours of “off-duty” sleep time each day. Plaintiffs did not dispute that they were “aware of and worked for [Metson] pursuant to the pay structure set forth in [Metson's] employee handbook.”Thus, while plaintiffs were entitled to be compensated for only four, rather than 12, hours of standby time during each 24-hour working day, the summary judgment in favor of Metson must be reversed also because plaintiffs are entitled to be compensated for those four-hour periods.
The opinion is available here.
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