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Judge: call center workers owed Sunday premium pay

Statute applies to customer service reps

Customer service representatives at the call center of a company that sells internet-based home security systems were entitled to Sunday “premium pay” under state wage and hour law, a Massachusetts Superior Court judge in the Business Litigation Session has ruled.

The defendant employer, SimpliSafe, argued that it had no obligation to pay Sunday premium wages because the plaintiffs in the putative class action did not work in a “store or shop” that sold “goods” within the meaning of the Sunday pay statute, G.L.c. 136, §6.

But Judge Brian A. Davis rejected the notion that the statute applies only to employees working in traditional “brick-and-mortar” retail establishments.

“Nothing in the Sunday Pay Statute … mandates that a ‘store or shop’ possess a ‘storefront’ or a ‘physical space open to the general public’ in order to be subject to its requirements, nor would it be logical in this technology-driven day and age to imply such a mandate,” Davis wrote in denying the employer’s motion for summary judgment and in granting the plaintiffs’ motion for summary judgment.

The 16-page decision is Galloway, et al. v. SimpliSafe, Inc., et al.

Expansive interpretation?

Plaintiffs’ attorney Rachel Smit of Boston said in an email that her clients performed the type of work entitling them to premium pay as contemplated by the state law.

smit“Our clients were doing the same work that retail workers in brick-and-mortar stores routinely perform.”

— Rachel Smit, Boston

“Our clients were doing the same work that retail workers in brick-and-mortar stores routinely perform,” Smit said. “Judge Davis properly interpreted the Sunday pay statute in light of its remedial purpose and recognized that the rights of retail workers do not change even though the internet and new technologies may change the ways in which they interact with customers.”

Springfield employment attorney Jeffrey S. Morneau said he agreed with Davis’ decision.

“It seems clear that a store, shop, retail or service establishment doesn’t necessarily require a physical location that the public is using to shop,” Morneau said. “The judge recognized the change in the ways businesses do business and the ways people shop.”

The judge’s expansive interpretation of the Sunday pay statute was in line with precedent instructing courts to interpret the state’s wage laws broadly to protect workers, according to Adam M. Hamel, who represents employers in wage and hour litigation.

However, the Woburn attorney noted that Davis took pains to go as far as he could in interpreting the statute.

“A lot of employers are going to look at this and say the court did go well beyond what people typically think of when they think of a store or a shop,” he said.

The “silver lining” for employers, Hamel added, is that Sunday premium pay will be phased out over the next several years under the “grand bargain” reached by legislators in order to enact the Paid Family and Medical Leave Act. Effective Jan. 1, 2019, the Massachusetts Legislature began reducing Sunday pay by annually reducing the premium owed by 10 percent of the employee’s regular rate. By statute, an employer’s Sunday pay obligation ceases entirely on Jan. 1, 2023.

John S. Gannon, a management-side employment attorney in Springfield, said Galloway becomes more understandable when considering SimpliSafe was not operating a “call center” as most people would define the term.

“In my mind, you call a call center if you have issues with a product order or you need technical support,” Gannon said. “In this case, you had [a customer service team] that was really dedicated to selling products. If you look at it through that lens, how is it any different from a brick-and-mortar store?”

But while Gannon said he could see why the Sunday pay law would be extended to those customer service representatives who primarily deal with sales, he considered it a stretch for the judge to extend the statute to customer service reps whose sales responsibilities are merely incidental to their core technical support duties.

“Those are not the type of employees that would be in a traditional store or shop,” he said.

Gannon noted that Davis did rule in favor of the employer on the plaintiffs’ claim for compensation for pre-employment “growth sessions” required by the company as part of its hiring process.

“This was a win for employers,” Gannon said. “We got some clarity that [these growth sessions] were akin to filling out a job application and meeting with supervisors.”

Boston attorney Kevin M. McGinty, counsel for the defendant, did not respond to a request for comment.

Call center wage dispute

Defendant SimpliSafe designs, manufactures and sells wireless home security systems.

According to court records, the defendant sells 90 percent of its home security systems through its website. The company also sells its products through third-party retailers such as Best Buy and through SimpliSafe’s call center.

Customer service representatives working in the call center are divided into sales and technical support teams.

However, individual CSRs typically have significant overlap in terms of performing both sales and technical support duties. For example, it was undisputed that the three named plaintiffs in the case made more than 400 sales of SimpliSafe products worth more than $32,000 while working as members of the technical support team.

The plaintiffs were paid $15 an hour as full-time technical support CSRs at the Boston call center. The company did not pay them sales commissions.

All CSRs worked approximately 40 hours a week. With the company’s call center open seven days a week, employees frequently worked Sundays. SimpliSafe did not pay its CSRs Sunday premium pay. While it did in the past, the company eliminated the practice when it had trouble staffing the call center on Saturdays.

The plaintiffs filed their lawsuit in Suffolk Superior Court in November 2017. The class action alleged that SimpliSafe violated the Wage Act by failing to pay the call center CSRs Sunday pay required under G.L.c. 136, §6. In addition, the plaintiffs alleged that the employer violated the Wage Act by failing to pay incoming employees for attendance at mandatory growth sessions conducted during the hiring process and by not compensating current employees for attendance at “volunteer day” events.

The parties filed cross-motions for summary judgment on the plaintiffs’ claims.

Sunday pay granted

The Sunday pay statute exempts from the general statutory ban on Sunday business activities the “keeping open of a store or shop and the sale at retail of goods therein.” Under G.L.c. 136, §6(50), “[a]ny store or shop which qualifies for exemption … and which employs more than a total of seven persons” must pay Sunday premium pay to its employees. Until the recent amendments, Sunday premium pay traditionally had been one and a half times the employee’s regular rate.

As a threshold issue, the defendant argued that the plaintiffs had no private right of action under the Wage Act for Sunday premium pay required under G.L.c. 136, §6. According to the defendant, the Attorney General’s Office had exclusive authority to enforce Sunday pay violations.

Davis found that argument unavailing in light of a string of Supreme Judicial Court decisions recognizing an employee’s right to bring claims for lost wages and benefits, even when vindicating employment rights established under provisions other than the Wage Act.

Next, the judge found without merit the defendant’s contention that SimpliSafe’s call center was not a “store or shop” within the meaning of the Sunday pay statute. The defendant cited a 2018 Superior Court decision, Bassett v. Triton Technologies, Inc., for the proposition that a call center is not a “store or shop” engaged in the “sale at retail of goods” under G.L.c. 136 §6(50).

But Davis found Triton distinguishable in that the workers in that case did not “sell” anything, merely taking orders as a ministerial function. Moreover, unlike the employer in Triton, SimpliSafe paid state sales tax on each of its call center transactions.

“Thus, [SimpliSafe] Call Center personnel undeniably engage in ‘the sale of retail     goods,’ which employees at Triton’s call-in center did not,” the judge wrote.

While ruling against SimpliSafe on the plaintiffs’ Sunday pay claim, Davis granted a defense motion for summary judgment on the plaintiffs’ claim that the company was required to compensate prospective employees for attending growth sessions conducted during the hiring process.

Davis wrote that “it is neither unreasonable, nor unlawful for SimpliSafe to not compensate job candidates who attend one of its growth sessions because they simply are not ‘employees’ of the Company.”

Finally, he concluded that genuine issues of material fact precluded a decision on summary judgment as to whether SimpliSafe had a legal obligation to pay any employees for attending team-building events.

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