Unit 8 Discussions - HRM308 & HRM341

CASE STUDY 18.3 DINGES V. SACRED HEART ST. MARY’S HOSPITALS, INC.

U.S. COURT OF APPEALS, 164 F.3D 1056 (7TH CIR. 1999).

[Sacred Heart St. Mary’s Hospitals operate a hospital in rural Tomahawk, Wisconsin. The hospital’s ambulance department has two emergency medical technicians (EMTs) in-house during the day, but after hours the hospital relies on standby crews. Two EMTs serve as the “first-out” crew and two more as the “second- out” crew. An EMT on first-out status must arrive at the hospital within seven minutes of receiving a page. Members of the first-out crew receive $2.25 per hour of on-call time, plus pay at time-and-a-half for all hours devoted to handling a medical emergency. The hospital credits them with at least two hours’ work for each emergency call even if they are back home in less time, as they usually are. Garret Dinges and Christine Foster asked for and were assigned first- out status. Now, in this suit, they contend that the rewards should have been even greater than those the hospital promised and delivered—that the entire 14 to 16-hour on-call period should be treated as working time, so it would produce 21 to 24 hours’ wages even if they did not receive an emergency call. Both Dinges and Foster live within seven minutes’ drive from the hospital; indeed, the entire city of Tomahawk is within the seven-minute radius, so they can and do pass the on-call time at home or at other activities in or near the city. Mr. Dinges and Ms. Foster cannot travel outside Tomahawk. Each has spent holidays at home rather than with relatives and has been unable to attend weddings, family reunions, parties, and other events. While on call, Dinges cannot assist in operation of the family business, located 20 miles from the hospital. Hunting, fishing, boating, camping, and other recreational activities are restricted to what is possible near the hospital.

The hospital responds by emphasizing what EMTs can do during on-call hours: cook; eat; sleep; read; exercise; watch TV and movies; do housework; and care for pets, family, and loved ones at home. Many things in the vicinity of home also are compatible with first-out status. For exam- ple, Foster watches her children participate in sports, attends dance recitals, and goes to restaurants and parties. From a judgment for the hospital, the plain- tiffs appealed.]

EASTERBROOK, C. J....

Working more than 40 hours per week draws pre- mium pay under the Fair Labor Standards Act, 29 U.S.C. sec. 207. Should hours spent “on call” be treated as work? According to the Supreme Court, the answer depends on whether one has been “engaged to wait” or is “waiting to be engaged.” Compare Armour & Co. v. Wantock, 323 U.S. 126 (1944), with Skidmore v. Swift & Co., 323 U.S. 134 (1944). That evocative distinction rarely decides a concrete case; on-call time readily can be characterized either way. For most purposes it is best to ask what the employee can do during on-call periods. Can the time be devoted to the ordinary activities of private life? If so, it is not “work.” Even a functional approach produces close calls, however; this is one.

An employee who is not required to remain on the employer’s premises but is merely required to leave word at home or with company officials where he or she may be reached is not working while on call. Time spent at home on call may or may not be compensable depending on whether the restrictions placed on the employee preclude using the time for personal pursuits. Where, for example, a firefighter has returned home after the shift, with the understanding that he or she is expected to return to work in the event of an emergency in the night, such time spent at home is normally not compensable. On the other hand, where the conditions placed on the employee’s activities are so restrictive that the employee cannot use the time effectively for personal pursuits, such time spent on call is compensable.

29 C.F.R. sec. 553.221 (d). See Auer v. Robbins, 117 S. Ct. 905 (1997) (courts should defer to the Secretary’s definitions of terms). The regulatory question is whether the employee can “use the time effectively for personal pursuits”—not for all personal pursuits, but for many. But then there is that weasel word “effectively.” An employee who can remain at home while on call, but is called away every few hours, can’t use the time “effectively” for sleeping, and probably not for many other activities. Plaintiffs, however, experience less than a 50% chance that there will be any call in a 14- to 16-hour period, so their time may be used effectively for sleeping, eating, and many other activities at home and around Tomahawk. (Over 338 on-call periods, Dinges had 184 pass without a call. Thus Dinges responded to at least one call only 46% of the time. Foster’s experience was similar.)....

.. Although the FLSA overrides contracts, in close cases it makes sense to let private arrangements endure—for the less flexible statutory approach has the potential to make everyone worse off. Suppose we were to hold that time the EMTs spend on call counts as “work.” That would produce a windfall for Dinges and Foster today, but it would lead the Hospital to modify its practices tomorrow. If the EMTs are “working” 24 hours a day, then the Hos- pital will abolish the on-call system and have EMTs on its premises 24 hours a day, likely hiring addi- tional EMTs so that it can limit the premium pay for overtime. This is what St. Mary’s already has done at its hospital in Rhinelander, Wisconsin. The Hospital will pay more in the process, but EMTs such as Dinges and Foster will receive less, spend more time at the Hospital (and less at home), or both. Ambulatory statutory and regulatory language permits labor and management to structure their reg- ulations so that each side gains. That is what the Hospital has done in Tomahawk, and we do not think the FLSA compels a different arrangement.

Affirmed.

Case Questions

1. What test does the Secretary of Labor’s regulations apply in determining whether on-call status is compensable work time?

2. Explain what the court means when it refers to “that weasel word ‘effectively.’”

3. Does the court speculate on a possible management response should the on-call period be deemed “work” under the FLSA?

SECTION 18:2 PLANT CLOSING LAWS: THE WARN ACT

All areas of the United States have experienced the closing of manufacturing facilities in recent years. Often these closings were the result of decisions made by large corporations, which believed that moving to new facilities in other areas of the country or in foreign countries was more economically advantageous than remaining in their older, unprofitable (or less profitable) facilities. Some argue that such decisions, which were made solely by looking at “private” costs and benefits to the firms, ignored the “external” costs to the community, such as worker unemployment, economic hardships on community businesses and others, decreases in tax revenues of the community, the loss of real estate values in the community, and numerous significant social costs. These individuals advocate laws to restrict plant closings. Others argue that to impose restrictions on plant closings would inhibit the economy’s ability to grow and apply new manufacturing technology and would inhibit businesses’ ability to be efficient producers in today’s worldwide marketplace.

Mass layoffs occur throughout the country when employers decide to eliminate a shift or otherwise cut back production or business activity at a facility for eco- nomic reasons.

In 1978, Congress enacted the Worker Adjustment and Retraining Act (WARN Act) to deal with plant closings and mass layoffs.23 It requires employers that have 100 or more employees to give a 60-day notice of a plant closing if 50 or more workers at one site are to lose their jobs. A mass-layoff provision of the law requires a 60-day notice of layoffs to affected workers if the affected workers make up at least 33 percent of the workforce at the site (with a minimum of 50 affected workers).24 If 500 or more employees are to be laid off, notice is required regardless of the percentage of the workforce to be laid off at the site. In United Food and Commercial Workers v. Brown Shoe Co.,25 the Supreme Court held that a union has standing to bring a WARN Act lawsuit against an employer on behalf of its workers. This decision revived a lawsuit against the shoe company based on the union’s belief that the employer had already begun the layoff of workers at a plant it was closing before giving the union the closing notice required by the Act.

privileges and conditions changed dramatically. Her job position seemed to be in constant jeopardy of elimination. Her performance ratings dropped. Jewell was hired in the Colorado Springs office to take over some of Brown’s communication duties, and he ultimately took over her office space. Brown faced visceral opposition from Gan when she applied for a promotional opportunity in the company.

CASE 18.6 CHAMBER OF COMMERCE OF THE UNITED STATES V. WHITING

SUPREME COURT OF THE UNITED STATES, 131 S. CT. 624 (2011).

[The Legal Arizona Workers Act (LAWA) provides that the licenses of state employers that knowingly or intentionally employ unauthorized aliens may be, and in certain circumstances must be, suspended or revoked. The law also requires that all Arizona employers use E-Verify. The Chamber of Commerce of the United States and various businesses and civil rights organizations filed suit against those charged with administering the Arizona law, arguing that the state law’s license suspension and revocation provisions were preempted by federal immigration law, and that the mandatory use of E-Verify was impliedly preempted. The Immigration Reform and Control Act makes it “unlawful for a person or other entity ... to hire, or to recruit, or to refer for a fee, for employment in the United States an alien knowing the alien is an unauthorized alien.” Employers that violate this prohibition may be subject to federal civil and criminal sanctions. IRCA in Section 1324a(h)(2), also restricts the ability of states to combat employment of unauthorized workers; the Act expressly preempts “any State or local law imposing civil or criminal sanctions (other than through licensing and similar laws) upon those who employ, recruit or refer for a fee for employment, unauthorized aliens.” The district court found that the IRCA did not preempt the Arizona law because the LAWA did no more than impose licensing conditions on businesses operating within the state; also, Congress expressed no intent to prevent states from making E-Verify mandatory. The Ninth Circuit and the Supreme Court granted certiorari.]

ROBERTS, C. J. ...

I.

…. IRCA expressly preempts States from imposing “civil or criminal sanctions” on those who employ unauthorized aliens, “other than through licensing and similar laws.” The Arizona law, on its face, purports to impose sanctions through licensing laws. The state law authorizes state courts to suspend or revoke an employer’s business licenses if that employer knowingly or intentionally employs an unauthorized alien. The Arizona law defines “license” as “any agency permit, certificate, approval, registration, charter or similar form of authorization that is required by law and that is issued by any agency for the purposes of operating a business in” the State.... IRCA expressly preempts some state powers dealing with the employment of unauthorized aliens and it expressly preserves others. We hold that Arizona’s licensing law falls well within the confines of the authority Congress chose to leave to the States and therefore not expressed preempted.

The Arizona law provides employers with the same affirmative defense for good-faith compliance with the I-9 process as does the federal law.... And both the federal and Arizona law accord employers a rebuttable presumption of compliance with the law when they use E-Verify to validate a finding of employment eligibility....

License suspension and revocation are significant sanctions. But they are typical attributes of a licensing regime. Numerous Arizona laws provide for the suspension or revocation of licenses for failing to comply with specified state laws. Federal laws recognize that the authority to license includes the authority to suspend, revoke, annul or withdraw a license.... It makes little sense to preserve state authority to impose sanctions through licensing, but not allow States to revoke licenses when appropriate as one of those sanctions....

All that is required to avoid sanctions under the Legal Arizona Workers Act is to refrain from knowingly or intentionally violating the employment law. Employers enjoy safe harbors from liability when they use the I-9 system and E-Verify—as Arizona law requires them to do. The most rational path for employers is to obey the law—both the law barring the employment of unauthorized aliens and the law prohibiting discrimination—and there is no reason to suppose that Arizona employers will choose not to do so. As with any piece of legislation, Congress did indeed seek to strike a balance among a variety of interests when it enacted IRCA. Part of that bal- ance, however, involved allocating authority between the Federal Government and the States. The principle that Congress adopted in doing so was not that the Federal Government can impose large sanctions, and the States only small ones. IRCA instead preserved the state authority over a particular category of sanctions—those imposed “through licensing and similar laws.” ...

II.

The Chamber also argues that Arizona’s requirement that employers use the federal E-Verify system to determine whether an employee is authorized to work is impliedly preempted. In the Chamber’s view, “Congress wanted to develop a reliable and non-burdensome system of work-authorization verification” that could serve as an alternative to the I-9 procedures, and the use of mandatory use of E-Verify impedes that purpose”……..

B.

Congress’s objective in authorizing the development of E-Verify was to ensure reliability in employment authorization verification, combat counterfeiting of identity documents, and protect employee privacy. 8 U. S. C. §1324a(d)(2). Arizona’s requirement that employers operating within its borders use E-Verify in no way obstructs achieving those aims.

In fact, the Federal Government has consistently expanded and encouraged the use of E-Verify. When E-Verify was created in 1996, it was meant to last just four years and it was made available in only six States. IIRIRA §401 (b) and (c)(1), 110 Stat. 3009– 655 to 3009–656. Congress since has acted to extend the E-Verify program’s existence on four separate occasions, the most recent of which ensures the pro- gram’s vitality through 2012. And in 2003 Congress directed the Secretary of Homeland Security to make E-Verify available in all 50 States. The Department of Homeland Security has even used “billboard and radio advertisements ... to encourage greater participation” in the E-Verify program.

The Chamber contends that “if the 49 other States followed Arizona’s lead, the state-mandated drain on federal resources would overwhelm the federal system and render it completely ineffective, thereby defeating Congress’s primary objective in establishing E-Verify.” Whatever the legal significance of that argument, the United States does not agree with the factual premise. According to the Department of Homeland Security, “the E-Verify system can accommodate the increased use that the Arizona statute and existing similar laws would create.” And the United States notes that “[t]he government continues to encourage more employers to participate” in E-Verify....

Because Arizona’s unauthorized alien employment law fits within the confines of IRCA’s savings clause and does not conflict with federal immigration law, the judgment of the United States Court of Appeals for the Ninth Circuit is affirmed.

It is so ordered .

Case Questions

1. Does the IRCA expressly preserve some state powers dealing with the employment of unauthorized aliens from federal preemption?

2. What was Congress’s objective in authorizing the development of E-Verify?

3. What must an Arizona employer do to avoid sanctions under the Legal Arizona Workers Act?