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$12M would resolve ‘reporting time’ pay claims for call-in shifts at Victoria’s Secret

By Pamela Wolf, J.D.

Under a proposed settlement agreement, Victoria’s Secret Stores would pay $12 million to settle the claims of nonexempt former and current employees who were required to call in to work two hours prior to a scheduled shift to confirm whether they were required to report to work, but were not paid California “reporting time” pay when they were told they were not required (or permitted) to work. The anticipated $8.1 million net settlement fund would be split among about 40,000 class members.

Call-in scheduling practices. The plaintiffs alleged that it was mandatory under the employer’s policies to phone their manager for call-in shifts. They were subject to discipline if they failed to call in, were late getting to the store when required to work, or were unavailable to work when told to do so. The main issue in the suit was that when employees were advised they did not need to come in to work, and thus were not permitted to work the call-in shifts for which they were scheduled, they did not receive “reporting time” pay under California law.

Moreover, the plaintiffs had to take time out of the day to make the mandatory phone calls to the manager at the slated time, according to the plaintiffs’ unopposed motion for a preliminary class settlement. Because of the scheduling practice, employees were required to mold their lives around the chance that they might have to work more hours, but that often was not the case. Accordingly, employees could not plan any other pursuits during that time, such as scheduling work hours with another job, attending classes, or making plans with friends and family.

The call-in practices at issue were discontinued about a year into the litigation.

Settlement distributions. From the proposed $12 million settlement, class counsel would be permitted to seek $3.6 million (30 percent of the gross settlement amount) in fees, as well as not more than $20,000 in reasonable and actual expenses. Each of the two representatives would be paid $10,000 for their efforts. As to the Private Attorneys General Act (PAGA) portion of the suit, $37,500 would be paid to the California Labor & Workforce Development Agency, and $12,500 would be included in the class fund for distribution to the class members.

The estimated $8.1 million that would comprise the net settlement amount would be distributed to class members on a proportional basis according to the amount of weeks each worked, since the number of call-in shifts worked by each class member is roughly proportional to the total workweeks incurred by each class member. On a “very elementary average payment basis,” prior to reductions for fees and costs, each of the estimated 40,000 class members would receive $300.

The plaintiffs also frame the net settlement amount differently, in a manner that accounts for the large turnover rate typical in large retail environments. They analyze the average payments tied to the number of “full-time equivalent” (FTE) employees. If there had been no turnover whatsoever, there would normally be about 4,204 workers holding the class positions at any given time during the class period. If they had all worked throughout the class period they would all receive a FTE settlement award of about $2,854 per position. Thus, any employees who remained with Victoria’s Secret throughout the class period, as nonexempt retail staff falling within the class definition, would receive a gross settlement allocation of $2,854 each.

Recalculating the numbers to reflect net settlement amounts, each of the 40,000 class members would receive about $202.75. On a FTE basis, the net amount would be about $1,929.12 per position.

Appeal pending. In asserting that the settlement is a fair resolution of the claims presented, the plaintiffs noted that the court had already dismissed the primary reporting time claim, albeit concluding that it was a close call. The plaintiffs brought an interlocutory appeal to the Ninth Circuit. A formal mediation session conducted after oral arguments resulted in a memorandum of understanding that produced the proposed settlement.

“This represents an extraordinary result for a failure to pay reporting time pay, the primary claim in the case,” according to the plaintiffs.

The case, Casas Mayra Casas v. Victoria’s Secret Stores, LLC, was filed in the Central District of California; the case is No. 2:14-cv-06412.