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Costly Job Interviews
A California judge has ruled that temporary employees of Kelly Services must be compensated for time spent in job-placement interviews. Staffing firms should ensure policies are modified to avoid paying the same sort of price -- but the biggest losers might be the temp workers.
Can you put a price on the time employees spend interviewing for jobs? Apparently you can, says a judge in California. On Oct. 16, Judge Claudia Ann Wilken of the U.S. District Court for the Northern District of California issued a summary judgment holding that Catherine Sullivan and other temporary Kelly Services employees were owed overtime pay for time spent in job-placement interviews. Sullivan, whose employment relationship with the staffing firm began on March 16, 2006 -- the first day of her first temporary assignment with Kelly client Managed Health Network -- claimed in the suit that she was not compensated for the time she spent preparing for, traveling to and from, and attending four interviews with three Kelly Services clients. Wilken's decision notes that the Troy, Mich.-based staffing company arranged interviews for its temporary employees, helped them prepare for the interviews and debriefed them afterward. While the court ruled that travel and debriefing time were not compensable, it found that Kelly exercised great control over the process -- setting up interviews, negotiating salaries, accepting employment offers -- and must compensate its employees for their time spent interviewing. The judge rejected the company's argument that the applicants attended the interviews voluntarily and for their own benefit. The ruling's implications for the staffing industry as a whole "are not clear at this point," says Ed Lenz, senior vice president of public affairs and general counsel with the Alexandria, Va.-based American Staffing Association. But he advises staffing firms -- and their HR departments -- to take pre-emptive measures to ensure they don't end up fighting similar, costly court battles. "One step staffing firms might consider taking right away would be to encourage clients to reconsider the need to interview temporary job applicants," he says, "since it potentially could involve additional cost to the staffing firm and charges to the client." Staffing companies should indeed be mindful of how much help applicants are provided, "because a court might find that assistance to be [construed as] 'control,' " says David Barron, a Houston-based attorney in the labor and employment practice of Epstein Becker Green Wickliff & Hall. "The net effect of this ruling will probably be to discourage temporary staffing agencies from supporting applicants and helping them obtain jobs," he says, "out of a fear that such assistance will be deemed the type of 'control' which triggers a duty to pay for job interviews." The Kelly case may very well trigger a rash of similar suits, says Barron. "California is a trendsetter in employment litigation. Although courts tend to be more conservative in other jurisdictions, the case was brought under federal law, and can be cited elsewhere in federal courts across the country. "With the increase in wage and hour litigation, and the large number of plaintiffs' attorneys looking for the next 'big idea' to support lawsuits, there is no question that copycat lawsuits will spring up around the country," Barron says. "Prudent agencies will review their policies to make clear that applicants are not subject to the control of the agency, and [that] interviews are purely voluntary," he says. "HR is, of course, the gatekeeper in these types of wage-and-hour cases, and must make sure that any policies in this area are followed," he continues. "This case is a good example of how important it is for HR managers to keep up with trends in their industries and modify policies to avoid emerging risks." If other courts base their rulings on this decision, it could signal a significant change in the way temporary employees are treated, he says. That said, it's important to note this ruling has limited impact at this point, says John T. Anthony III, attorney in the Los Angeles office of labor and employment law firm Carlton, DiSante & Freudenberger. "This is a United States district court, meaning that this case does not have what we call 'mandatory' authority, which other courts might be persuaded by, but do not have to follow," Anthony says. "Many in the HR world might remember another U.S. District Court case called White vs. Starbucks, [which] ruled that employees only had to be 'offered' meal and rest breaks," he says. "As many know, that issue is not technically the law of the land and is before the California Supreme Court now." Nevertheless, staffing agencies have been put on notice that they may be liable for employees' interview time, and can choose to react in a few different ways, Anthony says. "There are several things staffing agencies could do: 1) ignore the ruling; 2) pay minimum wage for the time employees spend in interviews; or 3) pay minimum wage for the interview time and offset further wages to make up the costs. "At this point it is unclear what the best course might be. It would depend on the particular staffing agency's financial status and risk aversion," he concludes. "However, a couple of things are clear: this issue will continue to be litigated and plaintiffs' lawyers will surely seize on this issue and more lawsuits will ensue."
November 4, 2009 Copyright 2009© LRP Publications |
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