A former server filed an action under the California Labor Code Private Attorneys General Act of 2004 (PAGA), seeking civil penalties on behalf of herself and other “aggrieved employees” for California Labor Code violations, including the failure to reimburse the cost of slip-resistant shoes.  Plaintiff alleged a violation of Labor Code section 2802, which requires an employer to reimburse employees for all necessary expenditures incurred by the employee in direct consequence of the discharge of their duties.

Plaintiff argued that, because the restaurant required employees to wear slip-resistant, black, closed-toes shoes for safety reasons, such shoes should be provided free of cost or employees should be reimbursed for their cost.

The Court of Appeal, persuaded by the reasoning in an unpublished Ninth Circuit Court of Appeals decision, Lemus v. Denny’s, Inc., and guidance from the California’s Division of Labor Standards Enforcement (DLSE), held that section 2802 did not require the restaurant employer to reimburse its employees for the cost of slip-resistant shoes.  Specifically, the Court held that the cost of shoes does not qualify as a “necessary expenditure” under section 2802.

In reaching its decision, the Court followed the reasoning in Lemus, citing a DLSE opinion letter, “The definition and [DLSE] enforcement policy is sufficiently flexible to allow the employer to specify basic wardrobe items which are usual and generally usable in the occupation, such as white shirts, dark pants and black shoes and belts, all of unspecified design, without requiring the employer to furnish such items.  If a required black or white uniform or accessory does not meet the test of being generally usable in the occupation the [employee] may not be required to pay for it.”

Here, the plaintiff did not argue that the slip-resistant shoes were part of a “uniform” or were not usual and generally usable in the restaurant occupation.  The restaurant did not require employees to purchase a specific brand, style, or design of shoes and did not prohibit employees from wearing their shoes outside of work.

Under California law, a restaurant employer must pay for its employees’ work clothing if the clothing is a “uniform” or if the clothing qualifies as certain protective apparel regulated by OSHA or California’s Division of Occupational Safety and Health (Cal/OSHA).  Labor Code and Industrial Welfare Commission Wage Order No. 5-2001, governs the public housekeeping industry, including restaurants.  Under Wage Order No. 5, uniforms must be provided and maintained by the employer when the uniforms are required by the employer to be worn by the employee as a condition of employment.  “Uniform” includes “wearing apparel and accessories of distinctive design or color.”  This section of the wage order specifically does not apply to protective equipment and safety devices regulated by the Occupational Safety and Health Standards Board.

On appeal, the plaintiff abandoned her alternative theory of liability that reimbursement was owed under provisions of Cal/OSHA, Labor Code sections 6401 and 6403, which require employers to furnish and provide safety equipment to employees.

The trial court had held that OSHA and Cal/OSHA provide than an employer is not required to reimburse employees for the cost of non-specialty shoes that offer slip-resistant characteristics, but are otherwise ordinary clothing in nature.  However, the Court of Appeal ultimately did not decide the applicability of OSHA or Cal/OSHA.  Likewise, the Ninth Circuit in Lemus v. Denny’s, Inc. did not address whether Cal/OSHA requires reimbursement of slip-resistant footwear.

After the decision in Townley, there remains a question of whether reimbursement for the cost of slip-resistant shoes could be required under Cal/OSHA for safety reasons.  Under Federal OSHA regulations, employers must generally provide personal protective equipment at no cost to the employee.  The regulation specifically includes an exemption for non-specialty safety-toe protective footwear, which the employer permits to be worn off the job-site.  Employers are also not required to pay for everyday clothing, including street shoes and normal work boots.  Under California law, if protective equipment is required by Cal/OSHA, the employer is responsible for paying for the safety equipment.  There is no Cal/OSHA regulation equivalent to the Federal exemption for generic non-specialty shoes.  While California employers have argued (and the trial court in Townley concluded) that the Federal exemption should control in California, the California Court of Appeal and Ninth Circuit have so far left that question unanswered.

Takeaways

Although we now have clarity that California Labor Code section 2802 does not require reimbursement of the cost of slip-resistant footwear, there remains the question of whether such footwear could constitute reimbursable protective equipment under Cal/OSHA safety standards.  Although Townley and the Federal OSHA exemption provide some guidance for California employers, they are reminded that neither are necessarily binding or precedential.  As such, it will be important for employers to track California caselaw in this area, as well as look out for Cal/OSHA guidance.  In the meantime, employers are encouraged to periodically review their policies and practices for reimbursing employee business expenses to ensure compliance with California law, including Cal/OSHA regulations.

But not every article of clothing constitutes a “uniform” under the FLSA. The U.S. Department of Labor (USDOL) has long maintained that certain clothing, although required by the employer, is of such a character that it may be reasonably worn outside the context of work and therefore is not a uniform. Shoes are an interesting case-study.

Does The Shoe Fit?

Many hospitality employers often require employees, such as culinary department workers, to wear a certain type of shoe during work hours. Perhaps the most popular variety is the dark-colored, non-slip shoe—widely used both for their appearance and for safety reasons.

Some employers may be surprised to learn that the USDOL takes the position that these shoes do not constitute a uniform under the FLSA. As a result, employers can impose the cost of such shoes even if the cost results in the employee receiving less than the minimum wage after such deduction.

Before The Other Shoe Drops…

A word of caution before hospitality employers rush out to take advantage of this cost transfer. Experience in USDOL investigations teaches us that the agency does not give employers complete freedom regarding shoe deductions, even when it comes to dark-colored, non-slip shoes. For example, if you require employees to order a specific brand of shoe from a certain vendor when a comparable, less-expensive alternative is available, the USDOL may conclude that the shoe is no longer “basic street clothing.” The agency may reach the same conclusion if the employee already owns a pair of shoes but is told that they must order a new pair. Finally, the USDOL will be on the lookout for any ordering mechanism whereby the employer receives a fee or profit anytime an employee orders shoes through a designated vendor.

Many hospitality employers are familiar with Shoes for Crews, a manufacturer of non-slip shoes and other accessories. Shoes for Crews offers a corporate program to businesses which includes a “warranty” in the form of a $5,000 payment if an employee wearing Shoes for Crews slips at work. The USDOL finds this warranty problematic. The agency has been known to take the position in investigations that this warranty constitutes a benefit to the employer that changes the legal characteristic of the shoe such that it becomes a uniform. Thus, according to USDOL, an employer participating in this Shoes for Crews corporate program may not impose the cost of the shoe on an employee if doing so cuts into the minimum wage or overtime wages. The agency has taken this position even when an employer has never asserted a claim for the Shoes for Crews warranty payment.

Conclusion: Putting Yourself In Your Employees’ Shoes

The cost of purchasing (or cleaning) a uniform can be problematic for employers, when the cost (or part of the cost) is borne by the employee. Setting aside whether there is a legal basis for the USDOL’s position on the shoe warranty program, hospitality employers should carefully review their policies as they relate to the cost of required clothing worn by employees.

For non-slip shoes, if you have decided to pass on the cost of these shoes to employees, consider giving the employee the option of purchasing shoes at a retailer of their choice or wearing already-owned shoes which are compliant with safety requirements. This is particularly true for employers that participate in the Shoes for Crews corporate program.

For more information, contact the authors:

Andria Ryan – Partner, Atlanta office
ALureryan@fisherphillips.com
(404.240.4219)

Ted Boehm – Partner, Atlanta office
TBoehm@fisherphillips.com
(404.240.4286)

(Sesame) Seeds Of Dissension: Fast-Food Employees Want To Wear Their Buttons

After the Burgerville employees refused to remove the buttons, they were sent packing for the day. In a statement responding to the incident, the company cited to its verbal, unwritten policy against “personal buttons,” and subsequently instated a written dress code, banning the politically charged buttons and reiterating its need to protect its public image.

In response to the button incident, the “Burgerville Workers Union” (BVWU)—the first federally recognized fast food union in the United States, and an active one at that—geared up for battle, indicating that it would pursue legal options. Despite the company rescinding the policy the very next day and paying backpay to those employees who were sent home, the union solicited customers to boycott the chain and encouraged its workers to go on strike, picketing three of Burgerville’s locations—which incidentally occurred on National Cheeseburger Day, September 18.

Pinning Down What “Special Circumstances” Justify A Button Ban

Burgerville’s button issue is not the first time that burger-chain employers have faced politically motivated buttons at work. In April 2015, In-N-Out employees in Austin, Texas sported “Fight for Fifteen” buttons on their uniforms, in solidarity with the push for a $15 minimum wage. There, like Burgerville, the employer asked employees to remove the buttons, as they violated In-N-Out’s policy against non-company related pins, buttons, and stickers.

In-N-Out’s button-as-political-protest issue had so much traction that, in May 2017, the National Labor Relations Board (NLRB) weighed in on the issue.

When the agency analyzed In-N-Out’s policy, it rejected the “special circumstances” which authorizes companies to ban union apparel and insignia in order to maintain restaurant consistent image. The NLRB was unconvinced, ruling that any uniform policy forbidding employees from wearing buttons, pins, or stickers on one’s uniform violated Section 8(a)(1) of the National Labor Relations Act (NLRA), which makes it an “unlawful labor practice” to interfere with employees’ exercise of their Section 7 rights (to unionize or collectively bargain) under the NLRA.

The issue of whether an employer can regulate politically charged apparel and insignia has been festering for years, in and out of the fast-food arena, and a sampling of several recent cases reveals that the issue remains a challenge for employers to resolve:

• Pacific Bell employees were allowed to wear union insignia and buttons that read “WTF Where’s The Fairness,” “Cut the Crap! Not My Healthcare,” because the employer had not demonstrated any justifiable prohibition on the insignia, in spite of their vulgar content.
• However, employees at the W Hotel in San Diego were not allowed to wear buttons that read “Justice NOW! JUSTICIA AHORA! H.E.R.E. LOCAL 30,” as the hotel demonstrated special circumstances that the buttons would not jibe with its “trendy, chic, and alternative” hotel experience.
• Daily Grill employees could not be prohibited from wearing union buttons, as Daily Grill presented no evidence that the small buttons and pins would impede its restaurant’s “ambience” of traditional and classic style.
• Starbucks was able to limit its employees to one union button after successfully arguing that multiple buttons would be disruptive to its image.

What Can Employers Do?

In determining how you should respond should this issue arise in your workplace, the first thing to know is that, regardless of whether an employer is unionized or not, the NLRA applies to almost all private employers. And given the current divisive political climate, displays of political speech in the workplace are not uncommon and could make an appearance at your worksites. So it’s more important than ever for you to understand the rules governing these kinds of situations.

The NLRB has articulated three limited circumstances under which employers may place limits and prohibitions on the clothing choices of their employees while at work. These circumstances are:

• when its display may jeopardize employee safety or damage machinery or products;
• when its display might exacerbate employee dissension; or
• where it unreasonably interferes with a public image which the employer has established as part of its business plan, through nondiscriminatory appearance rules for its employees.

The burden is on the employer to show the special circumstances exist, and that the prohibitions are narrowly tailored to the circumstances at issue. As the aforementioned cases make clear, this is a highly fact-intensive inquiry, and employers must set forth evidence in support of its “special circumstances.”

While you can still regulate what goes on in your workplace, the policies you enforce cannot run afoul of Section 7 of the NLRA. Therefore, best practices would include having a uniformly enforced, well-documented dress code or other policy that articulates your image or particular safety concerns, if relevant. Given the presumption of at-will employment in most states, you can terminate your at-will employees for any lawful reason.

You should be mindful that, while political affiliation is not a federally protected class, states like California provide protections for employees against discrimination based on political activity and affiliation. If an employee is wearing a button, it is also critical that you avoid a harsh rebuke, whether suspending employees, sending them home, or terminating them, as such an overreaction could be evidence of illegal bias. If buttons are unavoidable, it may also be helpful to cap insignia at one pin/button a person, a la Starbucks.

Wrapping Up

While it remains to be seen what will become of the Burgerville button incident, you would be best served to approach any type of insignia with a cautious, pragmatic attitude, and to consult with your labor attorney before proceeding with a new policy or response to a button in the workplace.

For more information, contact the authors:

Setareh Ebrahimian | SEbrahimian@fisherphillips.com (703.682.7096)
Setareh Ebrahimian is an associate in the firm’s Washington D.C. office. She represents employers in a wide range of employment matters in state and federal courts. Setareh defends employers facing claims of race, gender, national origin, age, religion, pregnancy and disability discrimination, harassment and retaliation, purported violations of leave, wage and hour laws, enforcement of non-competes, as well as claims arising under local and state law. She also represents companies facing investigations by the Equal Employment Opportunity Commission and related local and state agencies.

In addition to litigating, Setareh advises and counsels employers on matters involving personnel policies, hiring, training, employee handbooks, discipline, termination, reasonable accommodations, protected leave, reductions in force, employee complaints and internal investigations, as well as regulatory compliance.

Danielle Krauthamer | DKrauthamer@fisherphillips.com (213.330.4472)
Danielle Krauthamer is an associate in the Los Angeles office. In her practice, Danielle advises companies of all sizes in an array of labor and employment matters, including claims of wage and hour violations, retaliation, wrongful termination, and discrimination.

Prior to joining Fisher Phillips, Danielle gained valuable experience as a judicial law clerk for the Honorable Ronald S.W. Lew at the United States District Court for the Central District of California, managing the judge’s docket in one of the busiest districts in the nation. While there, she had significant exposure to civil litigation cases across a wide range of subject matter.