Call Center Class Actions and what we can learn from them. Subject to the Attorney-Client Privilege and Work Product Privilege

Transcription

1 Call Center Class Actions and what we can learn from them Subject to the Attorney-Client Privilege and Work Product Privilege

2 Reid Bowman, Esq. General Counsel of NAVEX Global. Over 30 years of HR, labor & employment law, and compliance experience, primarily working with multi-state and global employers. Designs strategic ethics, wage & hour, discrimination prevention, and employment law compliance programs.

3 Angelo Spinola, Esq. Shareholder, Littler Mendleson Regularly represents healthcare employers across the country in collective, class, and hybrid actions brought under the Fair Labor Standards Act and various state wage and hour laws.

4 Gina Casias, Esq. Senior Corporate Counsel, Major Telecommunications Company A 15-year in-house Wage and Hour Compliance attorney, providing advice to various business units on exemption classifications, compensable work time, and state wage and hour requirements

5 Agenda Litigation, claim, and settlement data, and potential exposure analysis. Call center operators in the vortex of wage hour class action litigation; pay practices most often challenged. Practical solutions to help insulate your organization. Top 5 wage training compliance best practices

6 Survey Question: How concerned are you about potential wage and hour compliance issues for your call center? A. Not concerned B. A little concerned C. Moderately concerned D. Very concerned E. Extremely concerned

7 Litigation, claim, and settlement data and potential exposure analysis

8 DOL Actions Low Wage Industries Initiative: WHD continues to focus on industries where employees make at or just above the minimum wage Viewed as vulnerable workers

9 9 FLSA Collective Action Litigation Trend In the last two years, % 2000 of all employment class and collective actions have been Wage & Hour cases

10 10 Data on Settlements Publicly-reported data on W&H class and collective action final settlements 2009: Median: $1,500,000 Average: $6,784, : Median: $1,800,000 Average: $5,521,853

11 11 State Law Class Actions State class claims dominant 2011: o Fed court class action filings o State court class action filings State wage payment laws are strengthening o New York Theft of Wages law (2011) o Independent contractor misclassification Hybrid class/collective claims pursued in federal court, especially as courts reject incompatibility argument (Knepper v. Rite Aid Corp., 3rd Cir., Jan. 12, 2012)

12 Why are these claims being brought? To quote Willie Sutton, because that s where the money is.

13 Sample Historic Exposure Model: Representative Call Center - assumptions: 3,000 Full-Time Non-Exempt Hourly Employees Average Hourly Rate = $12.00 Average Overtime Rate = 1.5 (X) $12.00 = $ weeks potentially eligible for overtime per year per employee Conservative number of hours worked off the clock ( hours per week) 3-year Statute of Limitations = 150 weeks potentially eligible per employee Double for liquidated damages

14 Sample Historic Exposure Model: Representative Call Center operation: 3,000 Employees (X) 150 Potentially Eligible Weeks Per Employee = 450,000 Total Potentially Eligible Weeks 450,000 Total Potentially Eligible Weeks (X) Assumed Off-the-Clock Hours = Total Off-the-Clock Hours Total Off-the-Clock Hours (X) Average Overtime Rate ($18.00) = Total Initial Exposure Total Initial Exposure (X) 2 (Liquidated Damages) = Total Potential Exposure

15 Potential Exposure 0.5 hours per week = $60,000 Potential Exposure Per Week 1.0 hours per week = $120,000 Potential Exposure Per Week 2.0 hours per week = $240,000 Potential Exposure Per Week

16 Continuing Violations and Additional Exposure Liability is not limited to damages incurred in the past, the liability continues on a going-forward basis for all those currently employed and to be employed in the future Same basic assumptions: 3,000 Non-Exempt Employees (X) Assumed Off-the-Clock Hours (X) Average Overtime Rate (X) 2 (Liquidated Damages) = Potential Prospective Exposure Per Week

17 Potential Continuing Exposure 0.5 hours per week = $54,000 Potential Exposure Per Week 1.0 hours per week = $108,000 Potential Exposure Per Week 2.0 hours per week = $216,000 Potential Exposure Per Week

18 Recent Significant Call Center Settlements Sprint paid $8.77M to settle three collective actions brought by call center workers in several states alleging failure to pay for pre- and post-shift work, or for work completed during unpaid meal breaks. T-Mobile paid $4.8M for allegedly failing to pay call center employees for pre-shift work activities. Cingular Wireless paid $5.1M to call center customer service representatives who allegedly worked off-the-clock both pre- and post-shift. Aegis paid $5M to call center sales associates for alleged pre- and post-shift work.

19 Not limited to Communications companies Other well-known companies whose call center practices have recently been attacked include: American Express Go Daddy Citigroup Convergys Dell Bloomberg IBM National City Bank Shell Oil Wachovia WellPoint, Inc. JP Morgan Chase

20 Survey Question: Are you aware of any wage and hour lawsuits filed against one of your competitors in the last two years? A. Yes B. No

21 Pay Practices that Invite Wage and Hour Class Actions The Targets

22 Call Center Class Actions Call centers are a target for these claims. Likely reasons: Potential for unpaid pre- and post-shift work Potential for off-the-clock work

23 Common types of claims against Call Centers Required but unpaid pre-shift and post-shift work Meal and rest periods Rounding and recordkeeping claims Regular rate claims Misclassification claims

24 Claims regarding required but unpaid pre-shift work Failure to pay time for spent searching for available work stations or obtaining required equipment Failure to pay for time spent booting up and logging onto computer Failure to pay for time spent opening numerous software programs before accepting calls Failure to pay for any activity prior to first phone call (i.e., using phone system as a time clock)

25 Claims regarding required but unpaid pre-shift work Failure to pay for time otherwise spent preparing to take calls (like reviewing to do lists of open cases, etc.) Failure to pay for time spent in training and meetings Failure to pay for performing customer call-backs Failure to pay for review and completion of paperwork Failure to pay for reading daily company s regarding policies, training, meetings, work schedules, and regulatory changes

26 Typical claims regarding post-shift work Failure to pay for time spent: o shutting down computer o closing out of software programs o logging off of telephone system o performing customer call-backs

27 27 A Helpful Case: Keller v. Summit Seating, Inc. (7th Cir. 2011) Seventh Circuit held that the time an employee spends before his or her shift in preparation for the shift is not compensable even if in excess of 10 minutes and to the benefit of the employer but only because the employer does not know or have reason to know that the employee is regularly working this off-the-clock time.

28 Survey Question: How concerned are you about whether the Company has exposure for claims relating to required but unpaid pre-shift and post-shift work? A. Not concerned B. A little concerned C. Moderately concerned D. Very concerned E. Extremely concerned

29 Typical claims regarding misclassification Potential misclassification of certain positions (e.g. Call Center Account Officers and Coach Leaders ) exempt from overtime.

30 Practical Solutions Insulate your organization against wage & hour claims

31 Survey Question: Compared with last year, is your organization allocating more resources to wage and hour compliance? A. More resources B. Fewer resources C. About the same D. Not sure

32 The Good News Despite rising number of claims, there are countless measures employers can take to strengthen defenses and make themselves a less attractive litigation target. Many preventative steps can be quickly implemented with little or no cost. Most employers already have the basic compliance structure in place on which a more elaborate wage and hour compliance model can be built.

33 Response: Forward-thinking preventative measures Manager & employee training Employee certifications at time clock Requiring non-exempt employees to utilize time clocks Pay to the minute Employee confirmation that meal period was taken

34 Building a Good Faith Defense Key problem for call center employers is lack of sufficient evidence to establish proper timekeeping and good faith defense to off-the-clock claims. Compliance model should be targeted toward building evidence of employer s good faith efforts to ensure employees accurately report and are paid for all working time.

35 Elements of a Comprehensive Compliance Plan Adopt and publicize clear timekeeping policies and procedures. Train managers and employees on key FLSA concepts, timekeeping policies, and complaint mechanism. Require employees to review, and, if correct, certify the accuracy of time records. Eliminate certain practices that can be the focus of class litigation Implement a robust complaint mechanism specifically targeted to wage and hour complaints. Audit time records to ensure employees and managers are complying with policies and procedures. Discipline managers and employees for violation of timekeeping policies and procedures. Reinforce timekeeping policies through periodic reminders.

36 Top 5 Wage & Hour Training Best Practices

37 TIP #1: Don t expect employees to know your timekeeping rules and procedures, or that directing them to a policy alone will suffice.

38 TIP #2: Training just your managers, while important, is not enough. To get the maximum legal and compliance benefit, you also have to train your non-exempt Employees.

39 TIP #3: You have to train on both Federal law and the applicable state law where the learner works.

40 TIP #4: In addition to training on legal requirements, you need to train on your organization s specific pay practices and procedures, including training employees where to go, internally, if they have a problem or concern.

41 TIP #5: Compliance training is essentially wasted if learner completion, policy review and acceptance is not tracked, and you can t maintain accurate records of the exact content of the training given.

42 Survey Question: Are you interested in learning more about NAVEX Global s online training and policy management and attestation solutions? A. Yes! B. No thanks

43 Speaker Contact Information Angelo Spinola Shareholder Littler Mendleson (404) Gina Casias Senior Corporate Counsel - HR Legal Support Century Link Gina.caisas@centurylink.com

44 Thank You Questions?