CBS Moneywatch: Victoria's Secret on-call policy remains under wraps

Originally published by CBS Moneywatch, Kate Gibson
July 1, 2015

Photo by Paul Sakuma/AP

In the face of a legal challenge in California and a probe by the New York State attorney general, underwear purveyor Victoria's Secret is said to have pulled the plug on a controversial labor practice known as on-call scheduling.

BuzzFeed reported the chain informed employees on Monday that it would no longer require its workers be available for shifts that could then be canceled with little notice and zero pay.

Victoria's Secret, one of five brands run by Columbus, Ohio-based L Brands (LB), on Tuesday said it was working on a response to the online publication's story but was not yet ready to do so seven hours after being called for comment.

In addition to Victoria's Secret, L Brands operates Bath and Body Works, La Senza, Victoria's Secret PINK and Henri Bendel. The company rang up $11.5 billion in sales in 2014 and runs nearly 3,000 specialty stores in the U.S.

"It feels like a safe bet to say that Victoria Secret's is feeling pressure," Elianne Farhat, deputy campaign director for the Fair Workweek Initiative at the Center for Popular Democracy, said. "We've seen a growing demand across the country for fair schedules because of the extreme chaos it creates."

Workers and labor activists say on-call scheduling can create havoc for livelihoods and personal lives, with the unpredictable hours making tasks such as taking classes, working another part-time job and covering child care difficult.

The practice of having on-call shifts has historically involved professions including emergency and medical workers, "but they are fairly compensated," Farhat said. "Over the last 10 years, as the retail sector has become the source of many jobs in our economy. It has seen the increased use of on-call scheduling."

If Victoria's Secret is shelving the on-call practice, "they are probably doing it to err on the side of caution, and not spend the time or money litigating the issue," said Los Angeles attorney Laura Reathaford, a partner at Venable who specializes in management-side employment issues. "California is a very employee-friendly state -- it's a very litigious state too."

If the company is indeed discontinuing the system, it would be offering some of what is sought in a lawsuit pending against the retailer in California.

"We're suing to recoup wages, and we're also seeking to put an end to the practice," David Leimbach, an attorney at Marlin & Saltzman, said of the litigation filed on behalf of two former Victoria Secret workers.

The complaint was filed on July 9, 2014, and the proposed class includes all individuals who worked at Victoria's Secret in California from July 9, 2010, to the present. L Brands told the court the proposed class numbered around 20,000, Leimbach said.

The federal judge presiding over the case dismissed the workers' claim that they were entitled to compensation under the state's reporting-time-pay law for on-call shifts for which they did not have to show up for work. But he also granted the two the right to appeal, saying the question of on-call shifts presented a question of law that could go either way.

"I can see the judge's point, no one really showed up, no one took the bus only to turn around and go home," Reathaford said.

"The district court dismissed that one claim, but said it's something the 9th circuit should immediately consider," Leimbach said.

Beyond the pending suit, no-call scheduling is drawing the attention of the New York state attorney general's office, which in April sent letters to 13 retailers, including Victoria's Secret, seeking information about their scheduling practices. A spokesman on Tuesday said the AG's office had no further comment.

And San Francisco next week begins enforcing an ordinance that requires major retailers give at least 24 hours notice to workers when changing or canceling shifts, or give them at least two hours of pay. The measure, which took effect in January, applies to retailers with at least 20 stores worldwide and 20 or more employees in San Francisco.