Category Archives: California Wage and Hour Laws

Home Depot to Pay $1.6 Million to Resolve Allegations it Failed to Pay Accrued Vacation Time to Terminated Workers

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Last week, Home Depot USA Inc. agreed to pay $1.6 million to settle a class action lawsuit alleging that the company failed to compensate employees for their vacation pay after terminating them.

According to the motion filed in the U.S. District Court for the Central District of California seeking preliminary  approval of the settlement, the former workers are to receive compensation for the unpaid vacation time, “as well as additional payment for interest and waiting time penalties.” The plaintiff class includes more than 1300 former Home Depot employees terminated since August 2006.

The lawsuit was lodged as a proposed class action in August 2010 in California Superior Court and was removed to federal court in September 2010. The former workers alleged that Home Depot maintained a policy according to which employees were allowed to carryover an unlimited amount of vacation time from year-to-year and, upon separation from the company, Home Depot would then pay employees all accrued vacation time. The plaintiffs, however, allege that Home Depot often failed to fully compensate employees for their accrued vacation time.

For example, two of the lawsuit’s named plaintiffs – Martin Henshaw and Vern Souza – alleged that Home Depot only paid them a fraction of their accrued vacation hours upon their termination from employments, with Mr. Henshaw claiming that the company only paid him 35% of an accumulated 528 hours’ vacation, and Mr. Souza claiming he only received 45% of an accumulated 1210 hours’ vacation pay.

Despite agreeing to settle the lawsuit for $1.6 million – an amount reached after mediation between the parties last year – Home Depot denies all claims of liability or wrongdoing.

The Employment Law Group® law firm has an extensive nationwide wage and hour practice representing employees whose rights have been violated, including nonpayment of wages and denial of overtime pay.

California Car Washes to Pay $1 Million to Settle Lawsuit Alleging Underpayment of Workers

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On January 10, 2012, California Attorney General Kamala Harris announced that the California Department of Justice had reached a $1 million settlement agreement with eight car washes that were accused of underpaying workers and violating state employment laws.

In 2010, the California Attorney General’s office filed a lawsuit in the Superior Court for the State of California in Los Angeles against eight car washes across the state alleging that the businesses frequently denied employees minimum wage and overtime, denied employees adequate meal and rest breaks, and failed to pay wages owed to workers who quit or were terminated. The plaintiffs sought compensation for lost wages, civil penalties, and injunctive relief to prevent the car washes from engaging in further violations.

According to the allegations, the car washes required the workers to report to work early but did not pay the workers until several hours later when business began to pick up during the day. Additionally, the lawsuit claims that many of the car wash employees received bad checks that could not be cashed due to insufficient funds.

California Attorney General Harris stated that she is “pleased that the resolution of this case will allow workers to receive the pay they are owed” because the “workers at these car washes were taken advantage of by unscrupulous employers who illegally denied them the pay and benefits they earned.”

In addition to the $1 million of unpaid wages and civil penalties, the settlement requires the car washes to pay $50,000 in various employment taxes.

The Employment Law Group® law firm has an extensive nationwide wage and hour practice representing employees whose rights have been violated.

 

GE Osmonics Agrees to $1 Million Settlement of Class Action Lawsuit Alleging that Company Underpaid Employees in California

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Last week U.S. District Judge Jeffrey T. Miller approved a $1 million settlement agreement in a class action lawsuit which alleged that GE Osmonics Inc. (GEO) denied its workers wages and breaks to which they were entitled under state law. As part of the settlement, Judge Miller certified the class of 156 former and current employees and named plaintiff Silvia Morales as the class representative.

The suit was originally filed in a state court in California in February 2010 and later transferred to the U.S. District Court for the Southern District of California in May 2010. The suit alleged that GEO’s pay policies disfavored nonexempt workers and that such workers were routinely paid less than what they earned. According to the complaint, the company attempted to “increase profitability by creating and implementing a system that fails to properly compensate its California employees for off-the-clock work and overtime and for missed and/or interrupted meal and rest breaks and vacation pay.”

The settlement agreement also provides $250,000 in attorneys’ fees to the plaintiffs, $13,500 in claims administration fees and an additional $10,000 as a service award for Ms. Morales. Approval of the settlement is not a finding of wrongdoing nor is it an admission of any wrongdoing by GEO.

GEO was acquired by General Electric Company in 2002 and is manufacturer of equipment used in water filtration and treatment systems.

 

Ninth Circuit and California Supreme Court Hold California Labor Code Applies to Nonresidents Working in California

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In Sullivan v. Oracle, the United States Court of Appeals for the Ninth Circuit reversed the granting of summary judgment by the district court, holding that the California Labor Code appliesy to nonresidents who perform work in California.  California wage and hour laws are generally provide more protection for workers than federal laws; for instance, the minimum wage in California is $8.00 per hour while the national minimum wage is $7.25 per hour.

Oracle is a Delaware corporation with its primary place of business in California, best known for its database management software.  The three plaintiffs are “instructors” – to use Oracle’s term – who lived outside of California but trained customers in California and other states on how to use Oracle software.  They allege Oracle misclassified them as “teachers,” a class of workers exempt from the generous overtime provisions of the California Labor Code.

The Ninth Circuit initially held in favor of the plaintiffs, but ultimately sought the opinion of the California Supreme Court in answering the following question of state law:

Does the California Labor Code apply to overtime work performed in California for a California-based employer by out-of-state plaintiffs in the circumstances of this case, such that overtime pay is required for work in excess of eight hours per day or in excess of forty hours per week?

Concurring with the Ninth Circuit, the California Supreme Court answered yes, holding that nonresidents who work in California are entitled to overtime pay pursuant to the California Labor Code.

Panera to Settle California Class Actions for $5 Million

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Panera Bread Company has agreed to pay $5 million in order to settle two putative class action lawsuits filed by former restaurant workers who allege that the company failed to pay them overtime and forced them to work without pay during their meal breaks.

According to regulatory filings with the Securities and Exchange Commission (SEC), Panera has allocated funds to be used for the settlement agreement after reaching a deal with the former employees last week. Panera denies any wrongdoing or liability in the lawsuits.

The first of the legal actions was brought by Nick Sotoudeh who filed suit against Panera in California Superior Court in 2009. Sotoudeh claims that Panera refused to pay him overtime, failed to provide meal and rest breaks and further alleged that Panera violated state labor and unfair competition laws. Another former employee, Gabriela Brizuela, was added to Sotoudeh’s amended complaint later that year.

Ms. Brizuela claims that she routinely worked more than 8 hours daily and 40 hours weekly and did not receive appropriate overtime compensation. Additionally, Ms. Brizuela alleges that Panera forced her to work during her meal and rest breaks to which she and other employees are entitled under California state law. Prior to the settlement with Panera, Ms. Brizuela sought to form a class action lawsuit comprised of employees who worked at Panera restaurants in California since 2007.

The second suit addressed by the recent settlement agreement was brought by two former employees against Panera in San Bernadino County Superior court in July 2011 and made similar allegations.

The California Superior Court would have to approve the settlement before it would go into effect, but according to Panera’s filings with the SEC, the company has reserved $5 million for the claims.