On-call is Being Called Off: Attorneys General Inquiry Leads Several Retailers to End On-Call Scheduling

By Rachel Deitch

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In 2016, eight state attorneys general, including the attorney general for the District of Columbia, launched an inquiry into several retailers’ “on-call” scheduling practices.[1] When retail workers are assigned to on-call shifts, they must call their employer an hour or two before a potential shift to learn if they should appear for work.[2] The attorneys general sent letters to the companies, and requested information and documents.[3] Several news outlets covered the investigation, highlighting the negative effects on-call scheduling has on employees.[4] In response, six companies, including Disney and Aeropostale, agreed to stop using on-call scheduling.[5]

On-call scheduling can have a negative impact on employees despite its popularity among employers. Retailers use on-call scheduling because they can adjust their staffing based on the amount of store traffic, [6] and address unexpected staff absences.[7] However, the attorneys general argue that on-call scheduling has a negative financial impact on employees because it creates unpredictable work schedules. If employees are not assigned to work, they receive no compensation and may have already paid for unnecessary childcare.[8] Employees who keep their days open are also unlikely to obtain other work to make up for the shortfall.[9]

The attorneys general notified employers that they were seeking to protect employees by ensuring compliance with state regulations mandating that employees be given partial pay when they report for work.[10] For example, if a District of Columbia employee reports for work for an eight-hour shift but does not receive work, he or she must receive four hours of pay at the minimum wage.[11] This compensation would help prevent financial hardship.

However, it is not certain whether the attorneys general would be able to win in court. The main legal issue hinges on whether employees “report for work” when they are on-call, a necessary requirement to receive partial pay pursuant to the regulations. In Casas v. Victoria’s Secret Stores LLC, the United States District Court for the Central District of California held that calling an employer before an on-call shift is not reporting for work under California’s regulation, so employers do not have to pay employees.[12] In reaching its decision, the court considered a dictionary definition of the word “report” as “to present oneself at a place.”[13] It also considered an earlier version of the California regulation and legislative history describing how employees use transportation to report for work.[14] It concluded that employees only report for work when they physically show up at their workplace.[15] Therefore, Victoria’s Secret employees who called before an on-call shift were not “reporting” for work because they did not physically arrive at the retailer, and they were not entitled to receive any compensation.[16]

Despite the California ruling, several retail companies voluntarily agreed to stop using on-call scheduling. One of the primary reasons for their decision may be that courts in other jurisdictions could disagree with Casas and decide that on-call employees must be paid because they are reporting for work. Even the court in Casas acknowledged that reasonable judges could come to a different decision.[17] Companies may be hesitant to take a risk on a decision that could leave them owing millions of dollars in back pay to on-call employees who had not received compensation. Victoria’s Secret estimated that back pay for on-call employees and penalties for violating the regulation could have totaled $37 million.[18] Finally, employers may simply want to avoid negative press and the expense of producing documents to state officials. For now, the prevalence of on-call scheduling among retailers has become more limited. This multistate government initiative had a positive outcome for an estimated 50,000 workers nationwide.[19]

 

 

 

 

[1] Press Release, New York State Office of the Attorney General, A.G. Schneiderman And Eight Other State Attorneys General Probe Retailers Over Use Of On-Call Shifts (Apr. 13, 2016), https://ag.ny.gov/press-release/ag-schneiderman-and-eight-other-state-attorneys-general-probe-retailers-over-use-call.

[2] Press Release, District of Columbia Office of the Attorney General, Attorney General Racine Announces Agreements with Major Retailers to Stop On-Call Shift Scheduling (Dec. 21, 2016), https://oag.dc.gov/release/attorney-general-racine-announces-agreements-major-retailers-stop-call-shift-scheduling.

[3] A.G. Schneiderman And Eight Other State Attorneys General Probe Retailers Over Use Of On-Call Shifts, supra note 1.

[4] See, e.g., Lauren Zumbach, State attorneys general looking at on-call shifts – Madigan among 9 sending letters to national retailers, CHI. TRIB., Apr. 15, 2016 (Business).

[5] Attorney General Racine Announces Agreements with Major Retailers to Stop On-Call Shift Scheduling, supra note 2.

[6] Krystina Gustafson, On-call Scheduling Debate: Where Retailers Stand, CNBC (Feb. 4, 2016, 10:03 AM), http://www.cnbc.com/2016/02/04/on-call-scheduling-debate-where-retailers-stand.html.

[7] Attorney General Racine Announces Agreements with Major Retailers to Stop On-Call Shift Scheduling, supra note 2.

[8] Letter to Aeropostale Inc. (Apr. 13, 2016), https://ag.ny.gov/pdfs/final_letters.pdf.

[9] A.G. Schneiderman And Eight Other State Attorneys General Probe Retailers Over Use Of On-Call Shifts, supra note 1.

[10] See, e.g., Letter to Aeropostale Inc. (Apr. 13, 2016), https://ag.ny.gov/pdfs/final_letters.pdf.

[11] Attorney General Racine Announces Agreements with Major Retailers to Stop On-Call Shift Scheduling, supra note 2.

[12] Casas v. Victoria’s Secret Stores, LLC, No. 2:14-cv-06412-GW-VBK, at 6 (C.D. Cal. Dec. 1, 2014) (Bloomberg Law).

[13] Id. at 3.

[14] Id. at 4.

[15] Id. at 6.

[16] Id.

[17] Casas v. Victoria’s Secret Stores, LLC, No. 2:14-cv-06412-GW-VBK at 3 (C.D. Cal. Apr. 9, 2015) (Bloomberg Law).

[18] Id. at 4.

[19] Attorney General Racine Announces Agreements with Major Retailers to Stop On-Call Shift Scheduling, supra note 2.