Too much contact with employees on PDAs could lead to overtime claims
Portable gadgets that keep people connected are all the rage and can come in handy for employers to stay connected with employees. However, having such easy communications access to employees may come at a price.
Employees are connected to the workplace more than any point in the past with the availability of modern technologies such as laptops, cell phones, and personal data assistants (PDAs). Employers, employees, and legal practitioners are growing increasingly aware that the use of these new technologies after hours can create a significant amount of overtime-related exposure, especially if there are no applicable overtime policies in place. While recent developments in the United States and Canada demonstrate there could be a risk, there are a number of practical steps employers can take to address the risk of after-hours overtime claims that might stem from the use of personal communication devices.
Employer liability in the United States
The experience of employers in the U.S. offers valuable lessons and brings a sense of urgency to this issue. In 2006, Mark Thierman, a class-action labour attorney in Nevada, included BlackBerry usage as a ground for advancing the claim of current and past brokers of Citigroup’s Smith Barney brokerage unit. Ultimately, he secured a $108 million settlement. Two years later, three writers of the Writers’ Guild of America refused to sign a waiver for ABC News, stating they would not be compensated for checking their office-issued BlackBerrys outside the workplace for their employer. Eventually, the parties agreed employees would be compensated for using their BlackBerrys after hours for certain work but not for checking e-mails.
At least three new remote access-related claims have been filed since then. In July 2008, Delia West, a personal account manager (PAM) for Verizon Communications and PDS Technical Services, filed a class action overtime claim in Tampa, Fla. West claimed overtime pay for 32 hours per week, some of it spent on her company-issued BlackBerry. She asserted customers can reach PAMs by phone, text or e-mail, and PAMs are instructed to field all incoming calls between 9 a.m. and 9 p.m., Monday to Saturday.
Similarly, in March 2009, John Rulli, a maintenance worker for CB Richard Ellis (CBRE), filed a class action lawsuit in Wisconsin, alleging CBRE’s hourly maintenance employees are given PDAs and are required to use them outside their normal working hours without compensation.
On July 10, 2009, senior sales representatives and supervisors filed a class action lawsuit against T-Mobile U.S.A. They allege, among other claims, that they were provided with company BlackBerrys and other smart devices and were required to review and respond to work-related e-mails and text messages at all hours of the day, amounting to 10 to 15 overtime hours per week.
The situation in Canada
In Canada, while there has not yet been a reported suit focusing on remote-access issues, recent developments demonstrate courts and businesses in Canada may be experiencing the calm before the storm. In what may be seen as a harbinger of things to come, the Public Service Alliance of Canada (PSAC), the largest public sector union for federal government employees, stated in mid-April 2008 it would make the use of pocket-sized electronic devices a bargaining issue in its contract talks. Furthermore, in an effort to curb after-hours use of these technologies, Citizenship and Immigration Canada decided to ban its employees from using their BlackBerrys between 7 p.m. and 7 a.m. and on weekends and holidays.
Canada has already seen a number of class action overtime claims where employers face potential liabilities in the hundreds of millions of dollars. The most recent of these, involving CIBC World Markets, is striking in two respects: It involves highly-paid “white-collar professionals” such as senior analysts and investment bankers; and it is precisely this type and level of employee that will typically be provided with around-the-clock, remote-access technology. This case, and the cases that have preceded it, suggest it is only a matter of time before this new storm of “remote access litigation” arrives in Canada. The key for employers is to act immediately and pre-emptively.
Tips for employers
Determine which staff members are entitled to overtime pay and which are exempt. Overtime cases commonly arise from issues of “misclassification” — the commonly used term in the U.S. — whereby employers classify employees as exempt from overtime compensation when, by law, they are not. Employers accordingly need to examine the exemptions carefully and not apply them too broadly. As a general principle, overtime pay will apply to all employees, salaried or otherwise, unless the individual falls within one of the specific exemptions in the governing legislation — the most common exemption being for employees whose duties are managerial in nature. It is worth noting the Ontario Superior Court of Justice, in its recent decision denying class-action certification for lack of a common element in Fresco v. Canadian Imperial Bank of Commerce, expressly made the point that “this is not a misclassification case.”
Determine which employees actually need modern remote-access tools. The course of action with the lowest risk for remote-access overtime liability is to provide these tools only to exempt employees. However, where this is not realistically possible, consideration of the next step becomes very important.
Create, implement and rigorously enforce a general overtime policy and specifically, a remote-access overtime policy. The policy should set out any limitations on the use of remote access tools — as Citizenship and Immigration Canada has done — as well as requirements for the authorization and prompt reporting of overtime. In Fresco, the court said a “pre-approval” requirement for overtime hours is not illegal on its face, noting that management has the right to require overtime be approved and commenting that employees cannot “foist services on an employer and expect to get paid wages for them.”
Keep accurate records of all hours worked. Employers have a statutory obligation to maintain proper records of all hours worked. In the event of subsequent litigation, such records may be critical in disputing a claim of overtime-hours worked.
Assign employees work targets that are reasonable within an employee’s regular work hours. Overtime work completed under “over-worked” conditions, on a remote-access tool or otherwise, can result in a finding that the employer has “tacitly” approved the overtime hours being claimed. See Fresco v. Canadian Imperial Bank of Commerce, 2009 CarswellOnt 3481 (Ont. S.C.J.).
