Labor & Employment Law

Motor Carrier Exemption FLSA Class Action Defeated On Interstate Commerce Issue

Posted on November 11, 2009
The federal motor carrier exemption from overtime, 29 USC 213(b)(1), which applies to safety workers (e.g. drivers) engaged in interstate commerce, has been found to exempt Ray's Trash Service, Inc. drivers from their right to overtime under the Fair Labor Standards Act even though the drivers do not cross state lines...

Mere Conclusions as to Employer Status will Result in Dismissal

Posted on November 09, 2009
In Chen et al. v. Domino's Pizza Inc. et al., the U.S. District Court for the District of New Jersey dismissed Domino's Pizza Inc. from a proposed class action. The action alleged that the company, and a select number of New Jersey franchisees, failed to pay delivery drivers proper overtime wages in violation of the Fair Labor Standards Act and the New Jersey Wage and Hour Laws...

Court Strikes Claims In US Steel/Steelworkers FLSA Class Action

Posted on October 27, 2009
In a case entitled Clifton Sandifer et al. v. U.S. Steel Corp. a federal judge has cut out some claims from a work time class action suit, but has allowed one major allegation to remain in the case. That cause of action involves whether the employees should be paid for the time spent in walking from their locker room to their work stations...

Affirming that Mere Speculation is not Enough to Sustain FLSA Claim

Posted on October 22, 2009
In Bailey et al. v. Border Foods Inc., the U.S. District Court for the District of Minnesota dismissed with prejudice a proposed collective and class action against a Pizza Hut franchisee after finding that the lead plaintiffs failed to adequately plead that their wages fell below the required minimum wage...

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The Department of Redundancy Department: Class Action Style

Posted on October 22, 2009
In an unusual move, Rite Aid Corp. is seeking dismissal of an overtime class action filed by a former drugstore employee, asserting it is identical to another class action that had been previously filed and is still working its way through the courts...

The Employer Beats The Class To The Punch With A Dramatic Result!

Posted on October 08, 2009
In a ground-breaking decision, the Ninth Circuit Court of Appeals has set a path down for defendant-employers in Fair Labor Standards Act ('FLSA') class actions that is breathtaking in its simplicity and conclusive effect. In Vinole v. Countrywide Home Loans, the Court ruled that an employer need not wait until the close of discovery (which is very expensive and time-consuming) to file a motion seeking to deny class certification before the plaintiff moves to have the class certified...

Lock and Unload!: De Minimis Plus Failure to Mention Equals Dismissal of Class Action

Posted on September 30, 2009
In Albrecht et al. v. Wackenhut Corp., the U.S. District Court for the Western District of New York has dismissed a lawsuit in which approximately 115 security guards accused their employer, Wackenhut Corp., of violating the Fair Labor Standards Act and New York State Labor Law by not paying them for time spent arming up, checking through security and arming down...

I Told You So: The Offer Of Judgment Works!

Posted on September 23, 2009
A few weeks ago, I posted about a procedure that could be used to defeat FLSA collective actions before they got started. That was the Offer of Judgment procedure under Federal Rule of Civil Procedure 68. Although there were cases previously approving that dismissal process, there seems to be the beginning of a tide...

The Misclassification "Flu" Is Going Around: Is Your Company Sick?

Posted on September 16, 2009
It appears that the U.S. Department of Labor and the Internal Revenue Service are planning to escalate their efforts, i.e. audits/inspections, focusing on (some might say, targeting) employers for their allegedly improper classification of individuals as independent contractors rather than employees...

Commission Class Action As Big A Threat As Misclassification Class Action

Posted on September 11, 2009
I have often written of the dangers from class actions based on misclassification theories, e.g. administrative exemption. There are working time actions, alleging illegal policies of making employees work off-the-clock as well. In a case entitled Clara Seamands et al...

You Can't Win For Losing: Even If Proper Classification Would Have Resulted in Lower Pay, Plaintiffs Still Get Damages!

Posted on September 10, 2009
In Somers v. Converged Access Inc., Massachusetts' highest court ruled that an employee misclassified as an independent contractor can seek damages from an employer even if the employer can show that the employee would have been paid less if properly classified...

In Hard Economic Times, The "Salary" Basis For Exempt Employees Is Evolving

Posted on September 04, 2009
  In order to be exempt, an employee must perform certain duties and be paid a 'salary' as that term of art is defined. Employers/clients have been calling and inquiring whether they can reduce exempt employee salary, without jeopardizing the exemption...

Lojack Accused of Stealing Time From Employees: A New Twist On De Minimis

Posted on August 31, 2009
The Ninth Circuit has largely upheld a lower court's grant of summary judgment to the defendant employer in Rutti et al. v. Lojack Corp., Inc.   This case involved an alleged Fair Labor Standards Act violation that accused the defendant of failing to compensate its technicians for off-the-clock work...

Topless or Not, They're Employees, Not Independent Contractors

Posted on August 31, 2009
The reach of wage hour laws extends even into topless go-go bars, as a recent case has, perhaps humorously, demonstrated. In a case entitled Chaves v. King Arthur's Lounge Inc. a Massachusetts court has ruled that so-called exotic dancers who performed in a local strip club were employees, not independent contractors...

Class Action Focuses On Unpaid On-Call Time: A Sleeping Giant?

Posted on August 19, 2009
The issue of what constitutes working time is a gray one for employers.  Especially murky is the question of when on-call time, i.e. waiting time, should be compensated.  In a significant development, in a class action case entitled Green v ATT, filed in the Southern District of California ATT has been charged with depriving its information technology staff of overtime wages for on call hours, which are now claimed as working time...

They're Onto You

Posted on August 17, 2009
  In these economic times, employers are classifying more workers as independent contractors in an effort to save costs, but employers should be warned that companies adopting this strategy may be abusing classification rules-and State and Federal entities are noticing...

Financial Employees Shot Down In Effort For Class Action

Posted on August 07, 2009
In a relatively rare occurrence, but one of special interest to financial services employers a federal judge has rejected an effort by a putative class of Citibank NA employees whose job duties focused on the recruiting of businesses to participate in the company's Bank at Work program...

Tipped Employees - Delegate with Caution

Posted on July 29, 2009
This week, Judge Ronald Guzman of the U.S. District Court for the Northern District of Illinois granted class certification in Ervin et al. v. OS Restaurant Services, Inc., a Fair Labor Standards Act suit accusing Outback Steakhouse of failing to pay minimum wage to employees at one of its locations...

The Commission Exemption: Are You A Retail Employer?

Posted on July 24, 2009
There is an exemption under the Fair Labor Standards Act for individuals who earn at least 50% of their compensation from commission, earn at least time and one-half of the federal minimum wage for all hours worked and who work in a 'retail' establishment...

The Russians Are Coming! The Russians Are Coming! (Into Court on FLSA Class Action)

Posted on July 16, 2009
In the 1960's, a movie came out entitled 'The Russians Are Coming! The Russians Are Coming!' It was about a Russian invasion of the United States. Well, a different kind of Russian invasion has hit our shores, but it takes the form of a class wage-hour action filed by Russian performers in a Las Vegas ice-skating revue, the 'Moscow Ice Circus...

Use Of Offer Of Judgment in FLSA Collective Actions To Dismiss Case

Posted on July 10, 2009
A FLSA litigation can drag on for an interminable time, drain legal and company resources and ultimately end up in settlement discussions where the biggest issue for negotiations are the plaintiffs' attorneys legal fees. There is an effective, tried and true manner to bring a FLSA collective action to a dispositive and less costly favorable resolution for a defendant...

Loan Officers Seek Bailout In Another Financial Services Industry Class Action

Posted on June 26, 2009
In a case entitled Sexton v. Franklin First Financial, Ltd, a federal judge has granted conditional certification to a FLSA collective action alleging Franklin First Financial Ltd. failed to pay overtime to a class of loan officers. This is the latest (and surely not the last) of a host of class actions filed under federal and state wage-hour laws, targeted at securing overtime for employees allegedly misclassified as exempt...

Salary Deductions Can Make Workers Lose Exempt Status

Posted on June 08, 2009
Employers cannot only think of job duties when it comes to ensuring that exemptions are maintained. Improper deductions from salary can undermine exempt status and, even with the revised FLSA regulations in place, which allow for corrections to be made without jeopardizing exempt status, mistakes can still be made...

Court Deals Blow to Employees' Proposed Class Action

Posted on May 26, 2009
In a proposed overtime class action against mortgage lender Ocwen Loan Servicing LLC, the United States District Court for the Southern District of Florida denied the plaintiffs' request to conditionally certify a lawsuit as a collective action and notify potential class members...

Classes and Sub-Classes: The Fun Never Ends For FedEx

Posted on May 11, 2009
A federal judge in California has certified five sub-classes of drivers alleging FedEx Corp. bilked them of pay for missed meal periods, off-the-clock work and working split shifts. The Judge found that common issues, a requirement of class-action certification, predominated in the five sub-classes of workers...

Truck Drivers Take Arbitration Highway To Overtime Class Action

Posted on May 06, 2009
As I have written, employees need not file class actions in a court in order to band together to seek overtime monies. Arbitration is a distinct possibility. In the recent case of Franco v Athens Disposal Company, Inc., a California appeals court has held that a trial court erred when it held that a class-action waiver in a company's arbitration agreement was enforceable...

The EEOC Does Not Trump The FLSA: Arbitrator Finds Overtime Violations

Posted on April 08, 2009
Not every allegation of FLSA violation or class action must weave its way through the courts for a resolution. Union members who feel aggrieved may challenge alleged improper pay practices through arbitration. In these settings, the Arbitrator will apply and incorporate federal laws, such as the FLSA, in order to render a decision on the alleged labor contract violations...

Ground Control to Major Tom: DOL Issues "Opinion" on Exempt Status of Pilots

Posted on March 26, 2009
I have often addressed the issue of Department of Labor Opinion Letters and how they provide very good guidance on the myriad wage-hour issues that employers must deal with. They are useful because they highlight the DOL's thinking on any given issue, which, if then followed by an employer, gives that employer a 'safe harbor' from any allegation that it has violated the Fair Labor Standards Act...

Is Training Time Working Time?

Posted on March 18, 2009
A federal court has ruled that an airline was not required under the Fair Labor Standards Act to compensate a prospective flight attendant for the periods of time that she attended a full-time training program that lasted five weeks. Interestingly, during this period, the trainee received free housing and an allowance for meals...

Timber! Loggers File FLSA Class Action

Posted on March 04, 2009

Exemptions Issues At The Heart Of Latest Drug Giant FLSA Class Action

Posted on February 18, 2009
Sales representatives of Novartis Pharmaceutical Corporation who brought a class action have been determined to be exempt employees under the Fair Labor Standards Act, thus bringing an abrupt end (for the plaintiffs) to the litigation. Federal district court Judge Paul Crotty, sitting in the Southern District of New York, has ruled that these employees were “outside salespersons” and exempt under that provision...

Starbucks Hit Again With FLSA Class Action: A Bitter Brew

Posted on February 06, 2009
A former Assistant Manager at a Starbucks has filed a collective action under the Fair Labor Standards Act (“FLSA”). The suit is for overtime on behalf of himself and a class of Assistant Managers who worked more than 40 hours per week but were not paid overtime compensation...

Start Printing The Money: United States Mint Sued in Class Action

Posted on January 16, 2009
The United States Mint failed in a bid to dismiss a wage-hour class action brought by a group of supervisors who allege they were misclassified as exempt. The government had argued that the Court lacked subject matter jurisdiction. The case was filed in March 2008...

Federal Judge Cuts Down Class of Pharmacy Technicians Suing CVS: A First? (Almost)

Posted on December 02, 2008
I have often observed that when a class is certified in a FLSA action, it is very difficult to cut that class down, or, in legalese, to de-certify that class. In a recent FLSA collective action involving CVS pharmacy technicians, entitled King v. CVS Caremark Corp, Dkt No...

Getting Paid For Waiting For Ice To Melt? Nice Work If You Can Get It

Posted on October 22, 2008
In a recent case entitled Gonzalez v. Tanimura & Antle Inc., a federal court in Arizona ruled that farm workers who waited in their employer’s parking lot until the ice melted from the crops they were going to pick were “engaged to be waiting,” rather than “waiting to be engaged” and therefore entitled to compensation for the time they spent waiting...

The Financial Services Industry: An Easy Target for Overtime Class Actions

Posted on October 15, 2008
A collective/class action lawsuit against Merrill Lynch, which is just getting under way in the US District Court for the Southern District of New York (sitting in Manhattan) has been temporarily placed in limbo while the litigants wait for the decision of an Oregon court, which may approve a $43...

Go-Go Dancers Claim They Are Employees, Not Independent Contractors, Want Overtime

Posted on September 22, 2008
In a lawsuit entitled Newark v Executive’s Den, filed in federal court in the Northern District of Ohio, dancers at a go-go bar, so-called exotic dancers, are suing their employer in a class action for failing to pay them the minimum wage and for, allegedly illegally, taking a portion of their nightly tips...

Delivery Workers Want Their Overtime Delivered: The Perils of Too Much Control Over a Contractor's Employees

Posted on September 15, 2008
A class action has been filed against DHL Express Inc., the well-known package delivery company, its contractor, Sky Land Express, Inc., and the individual owner of the contractor. The complaint was brought by a delivery worker, who was an employee of the contractor, alleging a failure to pay overtime...

Don't Hang Up: Nokia Independent Contractor Lawsui Settled

Posted on August 22, 2008
Nokia has agreed to settle a Fair Labor Standards Act suit action in which the workers charged they were misclassified as independent contractors and not paid proper overtime. In this suit, filed in federal court in Texas, the plaintiffs had tried to recover unpaid back wages, attorneys’ fees and costs, based on a theory that they consistently worked in excess of forty hours per week...

Lunch Time Can Be Work Time: Employers Beware!

Posted on August 15, 2008
I have encountered a number of cases where employees do not, whether unintentionally or otherwise, work through their lunch hours (or half-hours) and then later claim they are owed wages or overtime for that work.  It is crucial to understand that it is not enough to simply, merely have a policy that requires employees to take lunch...

New Proposed Regulations Affect Overtime Issues

Posted on August 04, 2008
The federal regulations are always being updated, even if some of the revisions move at seemingly glacial speed.  Recently, the United States Department of Labor has proposed to revise regulations addressing the so-called tip credit, the use of the fluctuating work-week method of paying overtime and compensatory time off...

Salute Me And Then Pay Me Overtime

Posted on July 23, 2008
The Court of Appeals for the Tenth Circuit has held that civilian military recruiters were non-exempt employees and therefore entitled to overtime pay. As they were salaried, their back due overtime will be computed under the so-called “fluctuating workweek” method, which generates a lower recovery than traditional time and one-half...

Predators, Physicals and Working Time

Posted on July 16, 2008
As I have written about, many activities may be deemed compensable working time, under the right circumstances.  Some of these activities might not appear immediately visible as working time. For example, a class of almost 200 employees who worked at a facility for sexually violent predators on McNeil Island, Washington State and had to ride a ferry to and from the facility were not entitled to overtime pay for the travel time on the ferry, held an appellate court...

Snake Eyes Comes Up For Plaintiffs In Casino Exemption/Overtime Case

Posted on June 30, 2008
A class of table games supervisors sued Harrah's, claiming they were non-exempt and entitled to overtime.  The casino defended by asserting that they were exempt under the administrative exemption.  This exemption remains (even after the August 2004 revisions to the FLSA regulations) the grayest and most difficult (for an employer) to prevail upon in an overtime claim...

Judge Rules a Proposed Class Is Exempt As A Matter of Law: All Good Things Come To Those Who Wait!

Posted on June 23, 2008
A federal judge has ruled that a class of information technology workers in California was exempt from overtime and has granted the employer summary judgment on the overtime claims.  That this occurred in California is fairly significant as that State has been a breeding ground for numerous class actions, many of them involving computer workers...

The Courts May Hang Up on AT&T In Novel Class Action

Posted on June 02, 2008
Workers have filed a serious class action against the cell phone division of AT&T.  The workers, who received overtime pay at first, have claimed that the Company's supervisors changed the data base so employees could not enter more than 40 hours of working time in a week...

Don't Hedge Your Bets: This Billion Dollar Industry Is Subject to Class Actions

Posted on May 09, 2008
Another financial services industry class action.  It seems like there is one every week.  The same themes predominate.  In this latest JP Morgan suit, the hedge fund accountants are claiming they were improperly classified.  They also claimed  they worked 5-6 days per week and worked many hours more than forty...

Three Strikes And You're Out (Or, In, The Class Action)e

Posted on April 30, 2008
Food vendors at Fenway Park in Boston have filed a class action against Aramark Sports LLC, their employer, alleging that the company assessed service charges and then did not pay the service charges out to the employees.  The suit also claims improper payment of overtime...

Tyson Seeks Supreme Court Review of Working Time Definition

Posted on April 11, 2008
Lawyers for Tyson Foods Inc. have petitioned the United States Supreme Court to hear the case involving the issue of whether "work" must involve some physical exertion.  The Third Circuit Court of Appeals ruled that  the need to put on safety/protective clothing constituted work although no real physical effort was involved...

Starbucks Really Hits The Grinds

Posted on April 04, 2008
A state court judge in California has ordered Starbucks to pay more than 105 million dollars in back wages to servers and other employees because the tip pool included managers, which is a clear-cut  violation of the law.There are 120,000 people covered in the case...

Maintaing Parallel Federal And State Overtime Class Actions: You Can't Do It (Maybe)

Posted on March 14, 2008
Many times when an employee or group of employees files a FLSA class action, the plaintiffs will file a state action, making the same allegations, i.e. unpaid overtime, but under a state wage-hour statute.  There have been a host of cases exploring the issue of whether these parallel actions can be maintained simultaneously...

Blackwater May Mean Deepwater: Independent Contractor Controversy Erupts

Posted on March 11, 2008
We all know Blackwater as the company that has been given one billion dollars in federal contracts to do work in Iraq.  There have already been numerous allegations concerning the activities of Blackwater agents and their tactics.  Now, it appears that this company may have, on a widespread scale, been violating labor law by classifying individuals as independent contractors when they should have been deemed employees...

Glory Be The Day! A Federal Court Denies Class Certification

Posted on March 05, 2008
A federal court in California declined to certify a class action under the FLSA, an action that was filed by financial sales representatives of US Bancorp in a case entitled Guess v US Bancorp.  The plaintiffs wanted a nationwide class action, as many of these suits hope for and seek...

The Financial Services Industry: Easy Target For Class Actions

Posted on February 29, 2008
The financial services industry has been and will continue to be, in my view, hard hit by wage-hour class actions.  The attack will be and has been that these employees are non-exempt and therefore entitled to overtime.  These employees also, typically, work much more than forty hours in a week...

Workplace Policies Prohibitng Unauthorized Overtime Are Denied Enforcement: A Boondoggle for Employees

Posted on February 26, 2008
How does an employer control overtime costs and ensure that the employees do not take it upon themselves to work overtime when there is no need for it or, more to the point, it has not been authorized.  I have counseled clients for years that they should implement a policy that requires employees to get prior authorization before they work overtime and if they do not, the overtime is unauthorized and will not be paid...

Interstate Commerce and The Exemption Issue

Posted on February 21, 2008
There are more than twenty (20) exemptions from overtime enumerated in the Fair Labor Standards Act.  Mostly, employers only are concerned with the three so-called white-collar exemptions (executive, administrative, professional).  There is, however, an exemption for truck drivers, bus drivers and other individuals who drive for a living and who cross state lines...

Another Working Time Class Action: The More Things Change...

Posted on February 18, 2008
A group of San Francisco police officers has filed a class action, seeking compensation for time they allege was working time that occurred before their shifts.  They claim that they should be paid for putting on their uniforms and taking care of their equipment...

Decertification of Class Not An Easy task

Posted on February 11, 2008
When a FLSA class is certified, the defendants then have the opportunity to decertify the class at a later date.  The employer argues that the people who opted in to the class are dissimilar to those who started the suit and should be eliminated...

The Fluctuating Work Week Method of Paying Overtime: The Employer's Friend (or Foe)

Posted on December 11, 2007
Under the Fair Labor Standards Act (“FLSA”), the general rule is that employers must pay overtime to non-exempt employees who work in excess of forty (40) hours per week, at the rate of one and one-half times the employee’s regular rate of pay...

Basic Principles For Employer Compliance

Posted on December 04, 2007
The general rule under federal law is that employers must pay overtime to employees who actually work over forty hours a week at a rate of one and one half times the employee's regular rate of pay. The FLSA expressly exempts three major categories of employee from overtime requirements: executive employees, administrative employees and professional employees...

How To "Sell" The Exempt Status Of Sales Representatives To A Court

Posted on November 10, 2007
Amidst a wave of recent cases dealing with the exempt status of sales representatives, one case has shown what employers can do to eliminate liability for such workers as well as potential pitfalls that need to be avoided. In Barnick v. Wyeth, a judge dismissed a proposed class action against the Wyeth company, ruling that the a group of sales representative plaintiffs were exempt under the California statute they sought to bring suit under...

Fed Ex Drivers Look At The Map and Find Their Way To A Class Action

Posted on October 31, 2007
Federal Express is facing a looming legal battle over whether it can classify its drivers as independent contractors or as employees, as the company’s Ground Package division faces a nationwide class action suit by truck drivers, who are suing under the Employment Retirement Income Security Act (ERISA) for allegedly misclassifying the employees as contractors...

Exempt Status and Job Titles: They Do Not Matter

Posted on October 30, 2007
It is important for employers to feel that they have selected the right job title for their employees, but just because the title sounds perfect, that does not mean the chosen title will automatically shield employers from misclassification liability under the exemption rules of the Fair Labor Standards Act (“FLSA”)...

Class Action Liquidated Damages Award of $62 Million Against Wal-Mart

Posted on October 15, 2007
In the continuation of a class action that has been going on for some time, Wal-Mart has recently been ordered by the court to pay a class of 125,304 employees roughly $62 million in liquidated damages for Walmart's violating state wage and break laws by refusing to allow employees to record their hours worked in the computerized pay system...

Preliminary/Postliminary Activities--Compensable Working Time? Maybe, Maybe Not

Posted on October 04, 2007
Everyone knows (all too well) what constitutes “work,” but do we really? Naturally, if we are performing our primary job, we know we are working (and the employer must pay for that time). What about activities that are performed either before the start of the “bell” or following the formal end of a “shift...

A Disease Hits The Pharmaceutical Industry: A "Rash" Of Class Actions

Posted on September 20, 2007
Pursuant to a decision by a federal court judge in Los Angeles, thousands of Ortho McNeil sales representatives will be given the opportunity to opt into a Fair Labor Standards Act class action, which will encompass the entire nation. The issue is whether they have been properly classified as exempt under the “outside salesman” exemption...

On-Call Time: When Is It Compensable

Posted on September 11, 2007
The treatment of on-call time depends on how much control the employer has over the employee and whether the employee can effectively use on-call time for personal activities. An employee who is required to remain on call on an employer's premises or so close thereto that the employee cannot use the time effectively for his own purposes is "working...

Independent Contractors: Lack of Control and Business Ownership Are The Keys

Posted on July 17, 2007
The line between who is an employee and who is an independent contractor is often a difficult one to draw, with significant (adverse) consequences for employers if they err in their designation. Different state and federal agencies have different standards for distinguishing between employees and independent contractors...

The New FLSA Exemption Tests: The Dangers Of Misclassification

Posted on July 17, 2007
The new (e.g. almost three years) Fair Labor Standards Act (“FLSA”) regulations on exempt status differ in some significant aspects from the old, but still leave employers with numerous, problematic decisions as to which employees are/are not overtime eligible...

FLSA Class Actions: The Bane Of The Employer's Existence

Posted on July 17, 2007
It is always possible for one person to sue their employer for wages or alleged back due overtime. What is far more pernicious and what is, regretfully, happening far too often over the last several years, is a so-called “class action.” In a class action, a group of employees, ranging anywhere from a handful to several thousand, sue their employer, sometimes in a class that encompasses the entire nation...