A recent HR Executive article encouraging human resource leaders to review their on-call policies featured extensive quotes from Ron Taylor, co-chair of the labor and employment practice in Venable's Baltimore office. The March 24, 2009 article recounted a February ruling by a U.S. District Court judge upholding a nearly $16 million arbitration award to on-call employees of a New Jersey utility company.
According to the article, employees of the company were required to be on-call every night and weekend and were subject to disciplinary action (including termination) if they didn't make themselves available to work. The unionized employees filed a dispute in February 2003, citing the on-call policies as a violation of their collective-bargaining agreement with the utility company. In June 2003 an arbitration panel agreed with the workers and awarded them $15.85 million for compensable time.
"Employers should always ensure that on-call policies don't conflict with collective-bargaining agreements they have," said Taylor. He added that employers must also determine whether such policies cause their workers to be "waiting to be engaged" or "engaged to be waiting."
"If an employee who's required to be on-call during nights or weekends is still able to engage in personal pursuits, then he's 'waiting to be engaged' and is therefore not eligible for extra compensation," said Taylor, citing the U.S. Department of Labor's regulations for on-call employees. "But, if the employee is prohibited from engaging in personal activities as a result of being on-call, then that's going to be considered compensable time."
Generally speaking, the greater the restrictions placed on employees who are on call - for example, requiring them to report to a worksite within five minutes of being alerted - the more likely they will be considered to be "engaged to be waiting," says Taylor.
According to Taylor, the U.S. District Court judge's ruling should also serve as a wake-up call to employers that, in most cases, courts tend to uphold the findings of arbitration panels. "In today's economy, so many employers think alternative-dispute resolution is the way to go," he says. "But I think the judge's decision here clearly tells employers that arbitration decisions are often more difficult to undo than a ruling from a lower court. The deference accorded to arbitration by the courts is very substantial."