On March 3, 2010, Judge Harold Baer, Jr. of the United States District Court for the Southern District of New York granted class action status to a suit brought against a construction company for violations of the Fair Labor Standards Act.  The suit, filed by current and former employees of Raines & Welsh & Sons, Inc., claims the company did not pay its employees for all hours worked and failed to pay them one and a half times their regular rate for overtime.  The plaintiffs also allege that the company failed to pay prevailing wages to employees working on government contracts, as required by state and federal law.  The action applies to individuals who worked for the company as far back as July 8, 2006, and covers at least 60 employees.  The case is Ferrer et al. v. Raines & Welch & Sons Inc., et al., and a copy of the certifying order is available here.

For more information on The Employment Law Group® law firm’s Non-Payment of Wages Practice, click here.

Staples has agreed to a $42 million settlement to resolve 12 wage-and-hour class action lawsuits related to its misclassification of assistant store managers.  The settlement comes after several years of litigation, and the claims of unpaid overtime go back to 2002.  The settlement includes an agreement that Staples will not appeal a February 2009 jury decision awarding $4.9 million to 343 Sales Mangers.  It also resolves a pending case in Massachusetts state court, as well as 10 other cases previously centralized in the District of New Jersey under by the United States Judicial Panel on Multidistrict Litigation.  The settlement is subject to court approval.

For information on The Employment Law Group® law firm’s Non-Payment of Wages Practice, click here.

Late last week a class action suit brought by UPS delivery drivers against their employer was settled for $12.8 million.  The suit alleges that the drivers were misclassified as independent contractors and wrongfully denied benefits and overtime as a result.  At least 83% of the $12.8 million is to go to the approximately 660 employees.  The plaintiffs are expected to request about $2.02 million in costs and fees.  A copy of the complaint is available here.

For information on The Employment Law Group® law firm’s Unpaid Overtime Practice, click here.

The settlement was reached in a putative class action suit originally filed on April 17, 2008.  The suit, Danieli et al. v. IBM Corp., alleged that IBM misclassified thousands of employees as exempt from the Fair Labor Standard Act’s (“FLSA”) overtime pay requirements.  The plaintiffs claim that as a result of this misclassification, they were underpaid and failed to receive credit for overtime compensation for their retirement plan as required by the Employee Retirement Income Security Act.  The settlement provides $7.5 million including up to $2.5 million going towards attorney’s fees and $150,000 for litigation expenses.  The settlement also stipulated that employees in California will receive a higher share due to the stronger claims made under California state law.

According to the settlement agreement, the motivation for the settlement on both sides included the uncertainty in the duration of future litigation as well as amount recovered.  Excess costs predicted and accounted for but not spent as well as un-cashed settlement checks will be donated to the Habitat for Humanity.

A copy the Settlement is available here.  For information on The Employment Law Group® law firm’s Overtime Practice, click here.

This week the Supreme Court denied writ of certiorari in Morgan v. Family Dollar Stores, Inc., thereby allowing the 2006 jury verdict in favor of 1,424 store managers for unpaid overtime to stand.  Among the issues raised on appeal was whether store managers were correctly classified as exempt employees under the Fair Labor Standards Act (FLSA).  The plaintiffs, current and former store managers, alleged that Family Dollar failed to pay its store managers overtime in violation of the FLSA.  Family Dollar claimed that as store managers, the employees were exempt from overtime pay.  The Eleventh Circuit affirmed the district court’s finding that the store managers were misclassified as exempt since they spent 80-90% of their time performing non-managerial tasks such as stocking shelves, running cash registers, unloading trucks, and performing janitorial duties.  The store managers were managers in title only and therefore not exempt from overtime wages prescribed under the FLSA.

The Eleventh Circuit also held that the district court was within its discretion in denying Family Dollar’s motions to decertify the plaintiffs’ class action status because the court carefully followed the two-stage process for evaluating a collective action and found that the evidence demonstrated that the 1,424 managers in the class were similarly situated in at least 14 key areas.

That the Supreme Court denied review is important to potential plaintiffs in unpaid overtime class action suits.  It lets stand the important lenient standard for initial certifications of class action status and ensures that employers cannot take advantage of employees by granting them a greater title than their position deserves.  This protects employees from being deprived of the important rights granted to them under the FLSA.

For more information on the FLSA and The Employment Law Group® law firm’s Overtime Practice, click here.

Maryland’s Workplace Fraud Act of 2009 will go into effect on October 1, 2009.   Under the new law, employers in the landscaping and construction industries that knowingly misclassify employees may be subject to a civil penalty of up to $5,000 per misclassified employee.  An employer that misclassifies an employee three or more times can be assessed an administrative penalty of up to $20,000 for each misclassified employee.  Additionally, employers who fail to produce requested records may be subject to a fine of up to $500 per day for each day the records are not produced.  Although the Act is limited to the landscaping and construction industries, employees in other industries can still seek damages for improper classification under the Fair Labor Standards Act.

A recent study reveals that low-wage employees are routinely denied overtime pay, paid less than the minimum wage, forced to work-off-the clock without pay, and have their meal breaks denied, interrupted or shortened.  The study, which was based on a survey of employees in Chicago, Los Angeles, and New York City, demonstrates that employers continue to ignore and violate the current framework of employee protections under the Fair Labor Standards Act (FLSA).  According to the study, more than two-thirds of the employees interviewed have experienced at least one wage and hour violation in the previous work week.  The study also found that among employees who worked more than 40 hours in their previous work week, more than 75 percent were not paid the mandated overtime rate by their employers.  Other findings include:

1. FLSA violations are more prevalent in certain industries such as apparel and textile manufacturing, personal and repair services, and in private households;
2. African-Americans are three times more likely to experience an FLSA violation than white employees; and
3. Employees employed by companies with less than 100 employees are more likely to experience FLSA violations than those employed by larger companies.

In sum, the FLSA is routinely violated by employers in the low-wage labor market.  For more information on the FLSA and The Employment Law Group® law firm’s Wage and Hour Practice, click here.

The Sixth Circuit has issued a significant decision in O’Brien et al. v. Ed Donnelly Enter., resolving several key issues on class certification under the FLSA.  The case was initiated by two employees who alleged that their employer violated the FLSA by requiring employees to work “off the clock” and by altering employees’ payroll reports to reflect fewer hours than what the employees had actually worked.  The district court initially certified the class of plaintiffs but later decertified the class on the grounds that the opt-in plaintiffs were not “similarly situated” to the lead plaintiff because individualized questions predominated.  Finding that the district court “implicitly and improperly applied a Rule-23 type analysis… a more stringent standard than is statutorily required [for FLSA class certification],” the Sixth Circuit found that the employees were similarly situated because the named employees demonstrated that all employees “suffer[ed] from a single, FLSA-violating policy.” In reaching this result, the Sixth Circuit also clarified that when common theories of liability do not exist among all employees, partial decertification and not a denial of certification may be more appropriate. This is a substantial relaxation of the heightened standards previously employed and thus, greatly increases the chance that employees’ FLSA claims will be certified for collective action. 

The Sixth Circuit also established the following standards:

1. Employees’ refusal of an offer of judgment should not result in the dismissal of employees’ claims.  If an employer offers to satisfy the employee’s demand and the employee refuses the offer, the employee’s claim is moot.  However, a district court should not dismiss the employee’s claim outright.  Instead, the court should enter judgment in favor of the employee for the amount offered by the employer.
2. Courts can impose sanctions on an employer for spoliation of evidence even if the requested records were destroyed prior to the initiation of litigation.  The Court clarified that sanctions can be appropriate for the destruction of evidence, even when records are destroyed prior to the initiation of litigation, where an employer “should have known that the evidence may be relevant to future litigation.”
3. Reaffirming the employee-friendly burden of proof for FLSA plaintiffs.  The Court reiterated the principal that an FLSA plaintiff must prove by a “preponderance of the evidence that he or she ‘performed work for which he [or she] was not properly compensated.”  In doing so, the Court reaffirmed the rule that “the [employee’s] burden of proof is relaxed” when an employer maintains inaccurate or inadequate records, and that upon satisfaction of that relaxed burden, the burden shifts to the employer to negate the employee’s inferential damage estimate.

For information on The Employment Law Group® law firm’s Wage and Hour Practice, click here.

A federal judge has conditionally certified a class action suit of potentially 85,000 current and former employees of the University of Pittsburgh Medical Center (UPMC) for violations of the Fair Labor Standards Act (FLSA).  The suit alleges that UPMC violated the FLSA by denying its employees overtime pay and automatically deducting money from their paychecks for meal breaks even though the employees worked during their entire shift.  Under the FLSA, an employer may not automatically deduct meal breaks from an employee’s wages if the employee has not actually taken the break unless the employer identifies special conditions to support such a policy.  Finding that UPMC failed to identify the special conditions necessary to support the practice of deducting meal breaks regardless of whether employees actually took the breaks, the judge granted conditional certification to the FLSA representative action.  Accordingly, plaintiffs can notify all current and former non-exempt employees from the past three years that they can opt in to the lawsuit.  The case is Camesi et al. v. University of Pittsburgh Medical Center et al and is in the U.S. District Court for the Western District of Pennsylvania.  If you have been subjected to similar unfair practices, visit The Employment Law Group® law firm’s Wage and Hour Practice at http://www.employmentlawgroup.net/PracticeAreas/Non-Payment-of-Wages.asp.

Casey’s General Store Inc. has agreed to pay $12 million to settle two class action suits concerning alleged violations of wage and hour laws.  According to two former assistant managers, the company violated the Fair Labor Standards Act by repeatedly failing to pay them overtime for hours worked in excess of 40 hours per week.  Additionally, the assistant managers alleged that the company denied its employees mandatory meal and rest breaks and required them to work before and after their shifts.  The settlement, which remains subject to state court approval, covers a putative class of over 80,000 employees.   A hearing on the preliminary approvals is scheduled for next Monday, May 18, 2009. 

For more information on wage and hour laws, visit The Employment Law Group® law firm’s Wage and Hour Practice at http://www.employmentlawgroup.net/PracticeAreas/Non-Payment-of-Wages.asp