Mil­lions of dol­lars are at stake as Cal­i­for­nia’s high court de­cides whether tell­ers and cashiers should have a seat

▶ Cal­i­for­nia jus­tices con­sider the mean­ing of an ob­scure 1913 or­der ▶ “No­body cared much about suit­able seat­ing be­fore”

Bloomberg Businessweek (North America) - - Contents -

In Cal­i­for­nia a 1913 reg­u­la­tory or­der re­quires em­ploy­ers to pro­vide a chair when “the na­ture of the work rea­son­ably per­mits the use of seats.” Af­ter a six-year le­gal bat­tle, the state’s high­est court is con­sid­er­ing whether that means Bank of Amer­ica, CVS Health, Jpmor­gan Chase, and oth­ers must pro­vide seats for tell­ers and cashiers. A loss for the com­pa­nies would mean tens of mil­lions of dol­lars in penal­ties, as well as the costs as­so­ci­ated with chang­ing their seat­ing ar­range­ments. “It would sim­ply not work in the real world, as ap­plied to real jobs,” the U.S. Cham­ber of Com­merce said in a friendof-the-court fil­ing.

The seat­ing suits are part of a le­gal phe­nom­e­non made pos­si­ble by Cal­i­for­nia’s Pri­vate At­tor­neys Gen­eral Act of 2004. PAGA gives em­ploy­ees the right to step into the shoes of the state la­bor com­mis­sioner and sue over al­leged la­bor vi­o­la­tions, in­clud­ing con­di­tions for which there’s no rem­edy un­der ex­ist­ing law. Unique in the U.S., the state law was in­tended to guar­an­tee work­ers’ rights where the state lacked re­sources to en­force the law.

PAGA has since be­come a fa­vorite tool of plain­tiffs’ lawyers, who’ve mined pro­gres­sively more ob­scure cor­ners of state law to find fresh in­frac­tions. State records show that claims have quadru­pled, from 759 in 2005 to more than 3,000 in 2013. Work­ers have suc­cess­fully used the law to sue over ev­ery­thing in­clud­ing un­paid meal breaks and pay stubs that failed to list an em­ployer’s le­gal ad­dress. Un­der PAGA, work­ers keep 25 per­cent of any penal­ties won and the rest goes into state cof­fers, not in­clud­ing fees for the lawyers, which can ex­ceed the to­tal paid to work­ers and the state.

Lawyers rep­re­sent­ing work­ers say it’s been a cost-ef­fec­tive tool for im­prov­ing work­ing con­di­tions in Cal­i­for­nia. “Busi­nesses were cheat­ing work­ers out of a dol­lar here, a dol­lar there,” says Michael Rubin, who rep­re­sents Jpmor­gan Chase tell­ers and CVS cashiers. Those rep­re­sent­ing busi­nesses say it’s cre­ated more prob­lems than it’s solved by low­er­ing the bur­den to sue over rel­a­tively mi­nor is­sues. “No­body cared much about suit­able seat­ing be­fore there was a statute that in­cen­tivized plain­tiff lawyers to bring th­ese cases,” says Trip­per Ort­man, a lawyer with Sey­farth Shaw in San Fran­cisco.

At least three seat­ing cases are pend­ing be­fore the fed­eral court of ap­peals in San Fran­cisco. At the re­quest of the ap­peals court, Cal­i­for­nia’s supreme court heard ar­gu­ments on Jan. 5 about how to de­fine “the na­ture of the work,” a con­cept left vague in the orig­i­nal 1913 or­der by the state’s In­dus­trial Wel­fare Com­mis­sion. A lawyer for CVS ar­gued that stand­ing is crit­i­cal to the drug­store chain’s cus­tomer ser­vice. “What did we all do when court be­gan?” at­tor­ney Tim Long asked the jus­tices. “We rose. It’s a sign of re­spect.” Jus­tice Carol Cor­ri­gan had a quick re­tort: “Yes, but you didn’t stay stand­ing all af­ter­noon.” �Ed­vard Pet­ters­son, with Kar­tikay Mehro­tra

The bot­tom line Un­der a 2004 law that lets em­ploy­ees sue over mi­nor code in­frac­tions, banks and drug­stores are at risk of mil­lions in penal­ties.

Edited by Al­li­son Hoff­man

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