Ward v. Tilly’s, Inc.

Facts

The governing text is subdivision 5 of Wage Order 7, which regulates the mercantile industry. Subdivision 5(A) requires that “[e]ach workday an employee is required to report for work and does report, but is not put to work or is furnished less than half said employee’s usual or scheduled day’s work, the employee shall be paid for half the usual or scheduled day’s work, but in no event for less than two (2) hours nor more than four (4) hours, at the employee’s regular rate of pay.” Subdivision 5(B) adds a two-hour guarantee for a second required reporting in one workday; subdivision 5(C) excuses reporting-time pay when operations cannot commence for reasons outside the employer’s control; and subdivision 5(D) exempts employees on paid standby. (Ward v. Tilly’s, Inc. (2019) 31 Cal.App.5th 1167, 1176, quoting Cal. Code Regs., tit. 8, § 11070, subd. 5.) The phrase that decided the case — “report for work” — appears in the wage order but is nowhere defined. (Id. at pp. 1176–1177.)

Skylar Ward worked in 2012 as a sales clerk at a Tilly’s store in Torrance. Tilly’s scheduled its employees for a combination of regular and “on-call” (or “call-in”) shifts, each with “a designated beginning time and quitting time.” Employees had to contact their stores two hours before the start of an on-call shift — or by 9:00 p.m. the night before, for shifts starting before 10:00 a.m. — to learn whether they were needed; Tilly’s told employees to “consider an on-call shift a definite thing until they are actually told they do not need to come in.” (Ward, supra, 31 Cal.App.5th at pp. 1171–1172.) The shifts came in three forms: an on-call shift appended to the end of a regular shift (with the answer delivered mid-shift), an on-call shift preceding a regular shift, and stand-alone on-call shifts on otherwise unscheduled days. (Id. at p. 1172.) Discipline enforced the system: employees who failed to call, called late, or refused on-call shifts faced written reprimands and, after three violations, possible termination. Yet Tilly’s paid nothing for an on-call shift unless the employee was told to work it, and did not treat the pre-shift call as “report[ing] for work.” (Ibid.) The complaint alleged what these shifts cost workers: contingent childcare and elder-care arrangements, obstacles to schooling and second jobs, financial insecurity, and “stress and strain on their family life.” (Id. at pp. 1172–1173.)

Procedural history

Ward filed a putative class action in September 2015; the operative first amended complaint alleged that Tilly’s on-call system violated Wage Order 7’s reporting-time provision (Cal. Code Regs., tit. 8, § 11070, subd. 5(A), (B)), with derivative claims under Labor Code sections 200 through 203, 226, and 226.3 and Business and Professions Code section 17200. (Ward, supra, 31 Cal.App.5th at p. 1173.) The trial court sustained Tilly’s demurrer without leave to amend, adopting the employer’s reading: “by merely calling in to learn whether an employee will work a call-in shift, Plaintiff and other employees do not report to work as contemplated by Wage Order 7.” (Id. at pp. 1173–1174.) On de novo review of the dismissal (id. at p. 1174), the Court of Appeal reversed and remanded, awarding Ward her appellate costs (id. at p. 1190). Justice Egerton concurred in the reversal only as to one theory and otherwise dissented. (Id. at pp. 1190–1191 (conc. & dis. opn. of Egerton, J.).) The Supreme Court denied review on May 15, 2019. (Id. at p. 1200.)

Issue

Does an employee “report for work” within the meaning of Wage Order 7’s reporting-time provision only by physically appearing at the worksite at the start of a shift — or also by presenting herself in whatever manner the employer directs, including a mandatory telephone call two hours before an on-call shift? Tilly’s and its amicus urged a “bright-line” physical-presence rule; Ward argued the order’s text contains no such spatial element. (Ward, supra, 31 Cal.App.5th at p. 1177.)

Holding

Reasoning

The text alone does not answer the question. Both sides claimed the plain meaning; the court found the dictionaries split. Some definitions of “report” carry a spatial element — “to go to a place or a person and say that you are there” — but “[m]any other definitions … focus on the reporter’s intent, rather than his or her location,” including Random House’s “to present oneself as ordered.” (Ward, supra, 31 Cal.App.5th at pp. 1177–1178.) “In our view, the text of Wage Order 7, alone, is not determinative.” (Id. at p. 1177.) That candor matters: the majority’s ultimate formulation is the intent-focused dictionary definition, adopted after the interpretive tools pointed the same way.

The 1940s understanding does not freeze the order’s reach. The court agreed with Tilly’s and the dissent that “‘at least in 1947, the phrase “report [for] work” meant physically showing up’” — that is simply how reporting happened in the 1940s. (Ward, supra, 31 Cal.App.5th at p. 1178.) But under Apple Inc. v. Superior Court (2013) 56 Cal.4th 128, 137, courts applying older texts to new practices do not rely on “wooden construction”; they ask how the drafters “‘would have handled the problem’” had they anticipated it. (Ward, at pp. 1178–1179.) Neither on-call scheduling nor the cell-phone technology enabling it existed when the reporting-time requirement was adopted — and as late as 1960 more than one in five households lacked a telephone. (Id. at pp. 1179–1180 & fn. 5.) The question, then, was whether an IWC “prescient enough to anticipate” telephonic call-in systems would have applied reporting-time pay to them. (Id. at p. 1180.)

The history reveals twin purposes — and on-call shifts offend both. The reporting-time requirement entered the wage orders in 1942–1943 as a response to a named abuse: “[a]llowing a large number of workers to come to the plant when there is little or no work for them is serious abuse,” and the remedy was “a penalty which will make the employers careful to see that there is work and some compensation for the time and expense of the employee in reporting.” (Ward, supra, 31 Cal.App.5th at pp. 1180–1181.) In 1979 the IWC reiterated that the provision exists so employees are “notified in advance when changes in their starting time must be made” and to “encourage proper notice and scheduling.” (Id. at pp. 1181–1182.) The purposes are thus twofold — “to ‘compensate employees’ and ‘“encourag[e] proper notice and scheduling.”’” (Id. at p. 1182, quoting Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1111.) Unpaid on-call shifts replicate the 1942 abuse in modern form: they give employers a costless pool of contingent labor and no incentive to forecast staffing, while employees forgo other work, classes, childcare arrangements, and even sleep — the two-hour call window itself constrains the two hours before the shift. (Id. at pp. 1182–1184.) Requiring reporting-time pay “requires employers to internalize some of the costs of overscheduling.” (Id. at p. 1183.)

The transportation-costs objection reads half the purpose out of the history. Tilly’s argued the IWC meant only to compensate commute time and expense, which a phone call does not involve. The court identified “several problems” with that account: it erases the notice-and-scheduling purpose; reporting-time pay is keyed to the length of the expected shift, not distance traveled; it runs up to four hours, far beyond commute time; the IWC expressly refused to reduce it for employees who lived at the worksite; long-commute employees must start traveling before the two-hour call anyway; and the exception for cancellations beyond the employer’s control “makes sense only if reporting time pay was intended to impose a penalty for overscheduling.” (Ward, supra, 31 Cal.App.5th at pp. 1184–1185.)

Augustus supplies the analogy. In Augustus v. ABM Security Services, Inc. (2016) 2 Cal.5th 257, the Supreme Court held on-call rest periods are no rest periods, because employees “tethered by time and policy to particular locations or communications devices” are not relieved of employer control. (Ward, supra, 31 Cal.App.5th at pp. 1186–1187.) Augustus does not control — it construed rest breaks, not reporting-time pay — but its logic “plainly has resonance”: Tilly’s call-in requirement limits what employees can do for hours before and during on-call shifts, and “the call-in requirement is inconsistent with being off duty.” (Id. at p. 1187.)

The parade of horribles is answered by the employer-direction principle. The employee who calls in, is told to work, and then no-shows gets nothing — reporting-time pay is owed “only if upon reporting for work, she is denied the opportunity to work.” (Ward, supra, 31 Cal.App.5th at p. 1188.) Merely checking a posted schedule triggers nothing; Tilly’s regime was different because calling in late or not at all was “an independent disciplinary offense.” (Id. at pp. 1188–1189.) And the objection that employees might “report” days in advance “attacks a straw man because it is the employer, not the employee, who directs how employees report for work.” (Id. at p. 1189.) The court acknowledged, without resolving, the “difficult line-drawing challenges” lurking in other notice windows, and gave the unpassed predictive-scheduling bills (AB 357, SB 878) no interpretive weight. (Id. at pp. 1189–1190.)

The Egerton dissent: history, prepositions, and institutional competence. Justice Egerton agreed the case must be remanded on one theory — the employee who physically works her regular shift, is kept waiting for a same-day add-on shift, and is sent home unpaid — noting Tilly’s cited “no authority” for its right to run that system, and distinguishing occasional shift extensions from “a routine practice of requiring employees to work 50 percent more time … with at most a few hours’ notice.” (Ward, supra, 31 Cal.App.5th at pp. 1190–1191, 1198–1199 (conc. & dis. opn. of Egerton, J.).) Otherwise he would have affirmed, on Judge Wu’s reasoning in Casas v. Victoria’s Secret: the 1947 wage order used “report for work” in a transportation clause that necessarily meant physical presence; identical words in the same order bear the same meaning; and nothing in a legislative history that “consumes some 18,000 pages” shows the IWC ever altered it — “no objective reader can study this complete legislative history and disagree with Judge Wu.” (Id. at pp. 1191–1193.) He dismissed the contrary federal decision as “an ipse dixit” (id. at p. 1194), warned that “[t]ens of millions of dollars in potential employer liability should not turn on the difference between the prepositions ‘to’ and ‘for’” (id. at p. 1195), and rejected the technology framing outright: “Nothing turns on whether a cord or a cell tower connects the phone.” (Id. at p. 1196.) Balancing employer flexibility against employee hardship, he argued, “is a task for the Legislature, not this court” (id. at p. 1196), and any judicial reinterpretation of a 70-year-old phrase “should be prospective only” (id. at pp. 1199–1200).

Significance

Ward is the first published California appellate decision on call-in scheduling, and it settled — for state courts — a question that had split the federal district courts (compare Casas with Bernal v. Zumiez and Segal v. Aquent, all discussed at Ward, supra, 31 Cal.App.5th at pp. 1189–1190, fn. 14). Its doctrinal core is bigger than retail scheduling: “report for work” takes its content from the employer’s own directions. That employer-direction principle makes the decision portable — the majority itself instanced remote log-ons, client jobsites, and trucking routes (id. at pp. 1185–1186) — and increasingly consequential as reporting migrates to apps and scheduling software. Because fifteen of California’s eighteen wage orders use the identical phrase (a point the dissent pressed, id. at p. 1198), the construction reaches far beyond the mercantile order. At the same time, the holding is deliberately narrow: it decides only that a mandatory two-hour pre-shift call-in, enforced by discipline, triggers subdivision 5(A); it does not fix the minimum notice window that would avoid the obligation (id. at p. 1189), and the majority expressly left retroactivity open (id. at p. 1171, fn. 1) — the question the dissent would have answered with prospective-only application (id. at pp. 1199–1200). Ward also sits inside a broader arc of California decisions refusing to let employers keep workers “at the ready” for free — Augustus on rest periods, Mendiola v. CPS Security Solutions, Inc. (2015) 60 Cal.4th 833 on on-call hours worked, and, later, the control-based analysis of compensable time in Huerta v. CSI Electrical Contractors (2024) 15 Cal.5th 908 — a line in which employer control, not employee location, does the analytic work.

Key quotes

“[A]n employee need not necessarily physically appear at the workplace to ‘report for work.’ Instead, ‘report[ing] for work’ within the meaning of the wage order is best understood as presenting oneself as ordered.” (Ward, supra, 31 Cal.App.5th at p. 1185.)

“[I]f, as plaintiff alleges in this case, the employer directs employees to present themselves for work by telephoning the store two hours prior to the start of a shift, then the reporting time requirement is triggered by the telephonic contact.” (Id. at pp. 1185–1186, fn. omitted.)

“Reporting time pay requires employers to internalize some of the costs of overscheduling, thus encouraging employers to accurately project their labor needs and to schedule accordingly.” (Id. at pp. 1183–1184.)

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Practice pointer

Open questions

Four, by the opinion’s own terms. First, retroactivity: footnote 1 declines to decide whether the interpretation “applies prospectively only, or retroactively as well” (Ward, supra, 31 Cal.App.5th at p. 1171, fn. 1), while the dissent argued that a 70-year-old phrase, never before so construed and enforced to the contrary by the DLSE’s own guidance, should be applied prospectively only (id. at pp. 1199–1200 (conc. & dis. opn. of Egerton, J.)). Second, the notice window: the majority conceded “difficult line-drawing challenges” and resolved only the two-hour regime before it — how an eight-hour, 24-hour, or day-before call-in fares is undecided (id. at p. 1189; see id. at pp. 1197–1198 (conc. & dis. opn.).) Third, manner-of-reporting boundaries: the employer-direction principle names remote log-ons and client jobsites (id. at pp. 1185–1186), but app-based confirmations, text-message check-ins, and passive schedule-release systems all sit somewhere on the spectrum between disciplinable reporting and mere schedule-checking. Fourth, the add-on-shift theory: the same-day regular-plus-on-call pattern that Justice Egerton would have allowed under subdivision 5(B)’s second-reporting rule (id. at pp. 1198–1199) went back on remand undecided — a distinct, under-litigated route to reporting-time pay that requires no telephonic-reporting holding at all.