In Kilby v. CVS Pharmacy, the California Supreme Court clarified when employers must provide employees with seating at work. The applicable California state wage orders require employers to provide suitable seats to employees when the “nature of the work reasonably permits the use of seats.” Prior to the Kilby case, there was a lack of controlling precedent about the meaning of the phrase “nature of the work.”

To place the dispute into perspective, the employers argued that the decision whether seating was needed required analysis of an employee’s duties as a whole during a complete shift, as well as the layout of the workplace and the employer’s own business judgment. The employees’ position, by contrast, was that each particular task had to be examined; if any task could be performed while seated, the employer should be required to provide seating.

The Supreme Court adopted a middle ground. It held that the “nature of the work” element referred to the actual tasks performed by an employee at a particular location, rather than the “holistic” analysis urged by the employers. Focusing on the actual work done at a particular location would, according to the Court, enable courts and, presumably, employers, to determine objectively whether the “nature of the work reasonably permits the use of seats” based on a totality of the circumstances test. The circumstances to be considered include the frequency and duration of tasks as well as the feasibility and practicability of providing seating.

What Employers Should Do Given This Ruling

Recognizing the Kilby opinion is riddled with legalese and provides little clear guidance, California employers with employees who may be entitled to seating—particularly if a request has been made—should seek advice from their employment counsel.

Many employers are familiar with the fact that an employee who brings and wins a discrimination case will recover his or her attorney’s fees. In order for a winning employer to recover its attorney’s fees, by contrast, the employer is required to show that the employee’s claims were frivolous, unreasonable or groundless, which is an extremely difficult standard to meet. The policy underlying this distinction is not to discourage employees from bringing discrimination lawsuits out of fear they will, if they lose, be “on the hook” for thousands of dollars in attorney’s fees.

Notwithstanding this limitation on a prevailing employer’s ability to recover attorney’s fees, winning employers have historically been able to claim and obtain a judgment for out-of-pocket litigation costs, without a showing the claims were frivolous, unreasonable and groundless. These costs include filing fees, deposition and court transcript fees and certain witness expenses.

A case now pending before the California Supreme Court, Williams v. Chino Valley Independent Fire District, will resolve a split of authority among California appellate courts whether prevailing employers in discrimination cases will continue to be able to claim litigation costs without being required to meet the frivolous, unreasonable or groundless standard. The plaintiff bar is urging the Supreme Court to resolve the split of authority by holding that prevailing employers seeking to recover attorney’s fees or costs must prove the claim was frivolous, unreasonable or groundless.

The California Supreme Court has ruled that “hours worked” under the California Labor Code and Industrial Wage Commission (“IWC”) Wage Order No. 4-2001 includes all time spent at an employer’s workplace and under the employer’s control, including sleep time.

In Mendiola v. CPS Security Solutions, Inc. (Jan. 8, 2015), a trailer guard required to spend his night at assigned jobsites in residential trailers sued because the employer’s on-call agreement only compensated guards for on-call time spent actually responding to alarms and investigations. The Guard argued that this policy violated IWC Wage Order No. 4-2001, which requires that employers “pay to each employee . . . not less than the applicable minimum wage for all hours worked in the payroll period.”

While the trial and appellate courts agreed with the security guards with respect to weekday on-call, the California Court of Appeal held that weekend on-call time constituted non-compensable sleep time.

The California Supreme Court reversed the holding of the Court of Appeal. It held the trailer guards’ on-call time constituted compensable “hours worked” under the Wage Order because the employer exercised significant control over the guards’ activities. This included the requirement that they live onsite and they were expected to respond promptly, in uniform, to alarms. Additionally, although the guards were allowed to engage in personal activities, including sleeping and watching television, the Court found it significant that the “guards’ mere presence [at the jobsite] was integral” to the employer’s business.

The California Supreme Court will decide whether the terms of a franchise agreement, or the franchisor’s conduct at-odds with that agreement, govern for purposes of whether the franchisor can face liability for (mis-)treatment of a franchisee’s employee.

The issue is simpler than it sounds, but an opinion could have wide-ranging implications for franchisors doing business in California.  In Patterson v. Domino’s Pizza, a 16 year-old employee of a Domino’s franchise sued, not only the franchisee and its manager, but also Domino’s, for alleged sexual harassment, retaliation and constructive wrongful termination.  The franchisee petitioned for bankruptcy protection and Domino’s obtained summary judgment on the grounds that the operative franchise agreement placed sole responsibility for recruiting, hiring, training and supervising employees on the franchisee, such that the franchisee was an independent contractor for liability purposes.

In June, 2012, the California Court of Appeal for the Second District issued and certified for publication an opinion that reversed the summary judgment in Domino’s favor.  In a nutshell, the Court of Appeal looked well outside the terms of the franchise agreement, focusing instead on the course of conduct between Domino’s and its franchisee.  Among the items of evidence cited by the court was Domino’s specific hiring requirements applicable to all franchisees, including rules about qualifications, appearance standards and required training software programs.  The court also pointed to testimony from the franchisee owner about Domino’s practices, including specific direction to fire certain franchisee employees (including the alleged harasser) and tactics, including “mystery shoppers,” designed to exert control over individual franchise stores.  Triable issues remained, the Court of Appeal concluded, whether “there was a lack of local franchisee management independence” which could render Domino’s liable.

Accepting Domino’s petition for review, the Supreme Court has ordered the parties to limit analysis to the question whether Domino’s is entitled to summary judgment on plaintiff’s claim that it is vicariously liable for tortious conduct by a supervising employee of the franchisee.

If the Supreme Court’s opinion is unfavorable to Domino’s, it could change in a very material way the degree of control franchisors maintain over their franchisee’s employment practices.  If it results in a shifting of responsibility to the franchisor, I imagine it will increase franchise purchase costs, trigger different or additional insurance provisions, with corresponding cost increases, and overall make franchise arrangements less appealing in our golden state.