A California district court has decided that a group of former landscaping employees can proceed with their lawsuit against their former employer, Mega Lighting, Inc. (“Mega”) for violations of the Fair Labor Standards Act (“FLSA”) and the Rackateer Influenced and Corrupt Organizations Act (“RICO”). In Aguilar v. Mega Lighting, Inc., former landscaping employees filed a civil complaint against their former employer, alleging that the company violated the FLSA when it deliberately failed to pay the employees minimum wage and overtime. The employees also alleged that the company retaliated against them when they sought legal counsel regarding possible wage and hour claims. Additionally, the employees alleged that individual members of Mega violated RICO by: (1) engaging in mail and wire fraud, (2) fraudulently obtaining public works projects, and (3) failing to pay the requisite prevailing wages to employees who worked on the public works projects. The district court found that the employees sufficiently alleged Mega’s probable impact on interstate commerce and thus satisfied the jurisdictional requirements under both the FLSA and RICO, and it has let both counts proceed against the company. For more information on wage and hour laws and The Employment Law Group® law firm’s Wage and Hour Practice, click here.

On April 8, 2009, a federal judge ordered Martin & Gass, Inc. (“M&G”) to pay back pay and damages to a former employee for violations of the Fair Labor Standards Act (“FLSA”).  The order  follows a March 2009 verdict, where the jury found that M&G failed to pay the plaintiff, Charles Alford, overtime wages for 288 hours during the time period from June 2005 to March 2008.  After the jury returned a verdict in favor of Mr. Alford, M&G argued that it should not be required to pay liquidated or double damages because it did not willfully violate the FLSA.  The district court rejected this argument, finding that a lack of willfulness by itself is insufficient to demonstrate good faith and negate an award of liquidated damages.  According to the court, an employer may avoid liquidated damages if it can show that its failure to obey the statute was in “good faith and predicated upon such reasonable grounds that it would be unfair to impose…more than a compensatory verdict.”  Finding that M&G failed to make any inquiry before misclassifying Alford as an exempt employee, the court concluded that M&G was “at best extremely careless as to [its] obligation under the FLSA” and thus, it was liable for unpaid overtime as well as liquidated damages. 

This case is significant because it rejects the commonly held notion that liquidated damages under the FLSA can be awarded only where the employer’s conduct is willful and affirms the principle that “liquidated damages…are the norm” rather than the exception for violations of the FLSA.
The order and opinion in Alford v. Martin & Gass, Inc., No. 1:08cv595 (E.D. Va. April 8, 2009) is available here. 

Mr. Alford was represented by Scott Oswald and Nicholas Woodfield, Principals at The Employment Law Group® law firm.  For more information about The Employment Law Group® law firm’s Wage and Hour Practice, visit http://www.employmentlawgroup.net/PracticeAreas/Non-Payment-of-Wages.asp.

Last week, in a Fair Labor Standards Act (“FLSA”) case, a federal judge denied summary judgment to a pharmaceutical company after finding that the former sales representatives were non-exempt employees entitled to overtime payment.  In the complaint, the employees alleged that their employer, Schering Corporation (“Schering”) misclassified them as “exempt” employees and as a result, failed to pay them overtime wages in violation of the FLSA.  In response to the allegations, Schering argued that the former employees were pharmaceutical sales representatives and thus, fell within the FLSA’s outside sales exemption.  The district court rejected Schering’s argument, finding that the pharmaceutical sales representatives did not fit within the outside sales exemption because they did not “make sales or obtain contracts or orders,” as required under the regulations.  Moreover, the court noted that the sales representatives did not have the capacity to carry out sales with the physicians that they visited because their employer prohibited them from entering into contracts with physicians for the prescription or purchase of their employer’s product.  Relying on the plain meaning of the statutory and regulatory texts that define the FLSA’s outside sales exemption, the court concluded that the employees did not “sell” or make a “sale” under the FLSA and must receive time-and-a-half for all hours worked in excess of 40 hours a week.

The takeaway from this case is that the standard for determining whether an employee falls within the “outside sales” exemption is not whether the term “sales” is included in her title, but rather whether the employee actually sells something within the scope of her duties. 

The order and opinion in Kuzinski et al, v. Schering Corp., No. 3:07cv233 (D. Conn. March 30, 2009) is available here.  For information on The Employment Law Group® law firm’s Wage and Hour Practice, click here.

A security guard has filed a complaint in the U.S. District Court for the Southern District of Florida against Wackenhut Corporation (“Wackenhut”) for violations of the Fair Labor Standards Act (“FLSA”).  In the complaint, the former employee alleges that the company violated the wage requirements of the FLSA when it paid him and other similarly-situated employees overtime based on “arbitrary lower, and incorrect, hourly wages,”  instead of the time-and-a-half compensation required by law.  Additionally, the complaint alleges that Wackenhut acted “willfully, intentionally and in reckless disregard of the rights of [the employees],” because it refused to pay the security guards the correct overtime payment despite notice and demand on same.  This is not the first time that Wackenhut has been sued for violations of the FLSA.  In October of 2008, a similar class action was filed against Wackenhut in Kansas, alleging that the company violated the overtime provisions of the FLSA by refusing to compensate its security officers with the statutory minimum rates for regular and overtime hours worked.  Under the FLSA, non-exempt employees are entitled to time-and-a-half for all hours worked in excess of 40 hours per week.  Accordingly, employers who fail to compensate their employees according to the regulations of the FLSA, may be liable for unpaid wages, unpaid overtime, liquidated damages, and attorneys’ fees.  For more information about the FLSA and The Employment Law Group® law firm’s Wage and Hour Practice, click here.