Law360 recently interviewed Nicholas Woodfield, principal at The Employment Law Group® law firm, following a favorable decision in MacGregor, et al. v. Farmers Insurance Exchange, which will allow a collective action lawsuit alleging overtime violations by Farmers Insurance to proceed.  The decision granted conditional certification to a class of property claims representatives who worked for a particular Farmers Insurance supervisor in the company’s Atlanta zone.

Last week, Judge David C. Norton of the U.S. District Court for the District of South Carolina chose not to apply Supreme Court’s ruling in Dukes v. Walmart in his decision granting the plaintiffs the chance to notify other potential plaintiffs of the opportunity to join in the suit.  In a prior decision, the court used the Dukes case to deny the plaintiff’s request under the Fair Labor and Standards Act (FLSA) to notify other potential plaintiffs of the opportunity to join the suit.

Mr. Woodfield, an attorney for the employees, told Law360 that “[we're] very pleased that the district court apparently no longer thinks that Dukes is relevant in the analysis of whether conditional certification is appropriate. It seems to have fallen out of the equation.”

This most recent decision will permit more insurance adjusters who allege that they were not paid for overtime hours to join the suit against Farmers Insurance.

The article, entitled “Leaner Class Gets Conditional Cert. In Farmers OT Suit”, appeared in the July 20, 2012 edition of Law360.

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

Bankrupt Tribune Co. paid $325,000 to settle an unpaid wages class action lawsuit brought by workers who promoted the amNewYork newspaper for Tribune from 2004 to 2008.  Those workers allege Tribune misclassified them as independent contractors when they were actually employees entitled to minimum wages and overtime payments, among other benefits.  The case is In re: Tribune Co. in the U.S. Bankruptcy Court in the District of Delaware.

The Employment Law Group® law recently lectured on the topic of employer misclassification for the D.C. Bar. Some employers attempt to avoid paying overtime at a rate of time-and-a-half and other costs by misclassifying employees as independent contractors. As a result employees do not receive overtime pay at a rate of time and a half, and they can be precluded from receiving health insurance, workers’ compensation benefits, unemployment benefits, and a host of other benefits deriving from direct employment. Federal and state governments also do not receive payroll taxes and other income deriving from direct employment relationships. As such, courts look upon employers misclassifying employees as independent contractors with disfavor, and the costs of an adverse judicial action can dramatically outweigh the short term benefits of misclassification.

In Randolph v. ADT Security Services, Inc., Judge Chasanow from the District Court of Maryland granted The Employment Law Group® clients and former ADT Security employees’ Motion for Summary Judgment as to liability against their former employer.  ADT had terminated two commissioned salespeople because they complained to the Maryland Department of Labor, Licensing, and Regulation (DLLR) that they believed they should be paid for overtime.

In filing their complaint alleging a violation of the Fair Labor Standards Act (FLSA), the ADT employees complied with requests from the DLLR to attach allegedly employer and client confidential information.  ADT argued that the employees were lawfully fired because they were not authorized to disseminate confidential information.  ADT also argued that the employees should not receive protection under the FLSA on the theory that attachments and supporting documents are not part of FLSA complaints.

Noting it would seem contrary to the purposes of the FLSA to punish employees for complying with the instructions they receive from the DLLR, the court granted Summary Judgment in favor of the employees, stating:

Perversely, ADT’s position would result in a situation wherein employees with the most supporting evidence would also face the greatest risk of dismissal. As a result, enforcement agencies would be less able to undertake early assessments of employees’ claims, as employees could not be expected to provide much evidence on their own (for fear of exposing themselves to termination).  Employers would then have to face greater government intrusions into their business while the complaint was investigated; because of the lack of early information, these investigations would likely last longer. Meanwhile, employers would have an incentive to cull through every document attached to an FLSA complaint, looking for any violation of company policy in an effort to forestall expensive litigation.

More problematically, they could simply choose to impair the ability of employees to make claims at all by dubbing all possible supporting documentation “confidential.”  Such a situation would grossly undermine enforcement of the FLSA, which hinges upon “information and complaints received from employees” (citation omitted).  The FLSA antiretaliation is about the free sharing of information and a narrow view of complaint would hamstring that fundamental purpose.

The court held that the common dictionary definition of “complaint” and its use in standard civil litigation “embraces attached supporting documentation.”   The court further ruled that unlike in “opposition” cases (employees oppose wrongdoing) the law controlling “participation” cases (employees participate in an investigation) permits employees to disclose confidential information to investigators even when done unreasonably.

The court concluded:

ADT’s explicit admissions that Plaintiffs lost their jobs because of the filings with the DLLR mandate only one conclusion: ADT retaliated against Plaintiffs because they engaged in a protected activity. Summary judgement must therefore be granted for the Plaintiffs on count one of the complaint on the issue of liability.

Related articles

• Kinder Morgan Employees Receive $830,000 in Unpaid Overtime Settlement (unpaidovertimeblog.com)

On October 26, 2010, Nicholas Woodfield, Principal at The Employment Law Group® law firm, will lecture on the misclassification of employees as independent contractors at the D.C. Bar CLE entitled “Changing Currents in Employment Law 2010: Recent Trends and Developments.” The CLE will focus on the Fair Labor Standards Act, unpaid wage actions, trends in disability litigation under the recently amended Americans with Disabilities Act, new developments in Family and Medical Leave Act litigation, recent decisions on damages in employment law actions, the latest U.S. Supreme Court employment law decisions, and new whistleblower protection laws.  More information is available from the D.C. Bar here.

On March 26, 2010, Law360 reported on U.S. District Court for the District of Maryland Judge Deborah Chasanow’s denial of the defendant’s motion to dismiss in Randolph v. ADT Sec. Servs., Inc., which we discussed here.  The opinion answers a question of first impression in the Fourth Circuit, holding that the Fair Labor Standard Act’s anti-retaliation provision protects disclosures to state labor agencies made in good faith. 

In the article, Mr. Woodfield points out that “under FLSA if you have a good faith belief in your claim, you are protected.”  When reporting violations to a state agency, “you don’t have to be correct, but you have to have a reasonable belief.”  Mr. Woodfield, the plaintiffs’ attorney, is a Principal at The Employment Law Group® law firm.  For more information about Mr. Woodfield and the firm’s Unpaid Overtime Practice, click here.

On March 24, 2010, U.S. District Court for the District of Maryland Judge Deborah Chasanow denied the defendant’s motion to dismiss in Randolph v. ADT Sec. Servs., Inc..  This case presented an important question of first impression for the Fourth Circuit, namely whether employees, who were compensated with commissions based on sales, could complain to a state wage and hour board and be protected under the anti-retaliation provision of the Fair Labor Standards Act (FLSA), 29 U.S.C. § 215(a)(3) even if they were not entitled to overtime if they held a reasonable, good faith belief that they had been misclassified as commissions based employees and that they had been inadequately compensated for overtime work performed for the defendant. 

Plaintiffs Sharon Randolph and Tami Thompson filed a complaint with the Maryland Department of Labor, Licensing and Regulation (DLLR), claiming that ADT failed to pay them overtime.  Randolph and Thompson were paid in commission for sales, however they thought they should have been compensated on an hourly basis and that they were entitled to overtime.  After being notified of the complaint, ADT terminated Randolph and Thompson for violating company policy by disclosing confidential information to the DLLR.  After their termination, the plaintiffs filed the present suit asserting that ADT violated the FLSA’s prohibition against retaliation and that their termination was wrongful under the Maryland public policy exception to at-will employment, known as an Adler tort claim. 

Relying in part on the only U.S. court of appeals case to address the application of § 215(a)(3) to state law, Sapperstein v. Hager, 188 F.3d 852 (7th Cir. 1999), Judge Chasanow sided with the plaintiffs and will allow the case to go to trial.  A copy of the Memorandum Opinion and Order is available here.

For more information about The Employment Law Group® law firm and its Employment Law 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.