Last month, a class action lawsuit was filed in New York federal court against Bed Bath & Beyond by department managers and assistant managers who claim that the Company failed to pay them overtime compensation pursuant to the Fair Labor Standards Act and New York Labor Law.
Plaintiffs claimed that although their title was that of a manager, they performed routine work of store employees, including, stocking shelves, dusting, cleaning bathrooms, organizing sales floor, building fixtures, preparing orders for pickup and performing cashier duties. The Company paid department managers pursuant to a fluctuating work week model which entitles employees to an overtime premium of 50 percent, instead of the regular 150 percent overtime premium (time-and-a-half), for hours worked in excess of 40 per week. In order to use this method, however, certain pre-requisites must be met, that is, 1) the employee’s hours must fluctuate from week to week, 2) the employee must receive a fixed weekly salary which remains the same regardless of how many hours are worked per week, 2) the employee’s regular rate is at least minimum wage, and 4) the employer and employee have a clear mutual understanding that the employee will be paid a fixed weekly salary regardless of the amount of hours worked. Here, the department managers claimed that the Company was not entitled to use the fluctuating work week model because the conditions to use that method, such as the fluctuation of employees’ work hours, were not met. In this regard, the department managers alleged that they their weekly work hours did not fluctuate in that their number of scheduled work hours and overtime hours were consistent from week to week. Further, the assistant store managers in the lawsuit allege that they were misclassified as exempt employees and were unlawfully denied overtime pay.
An answer to Plaintiffs’ Complaint is expected in the upcoming weeks.
In 2013, former-Bloomberg L.P. employee, Shavez Jackson, commenced a class action suit against the Company for unpaid overtime pursuant to state and federal laws. Jackson worked as Global Customer Service Support Representative at a call center located in New York City. Her primary responsibilities were to answer phone calls and determine where to route the calls within the Company. In her Complaint, she alleged that her and other call center customer service employees worked before and after their scheduled eight-hour shifts and also worked from home or through their lunch period, without being paid overtime compensation for hours worked in excess of 40 in each workweek. Bloomberg originally classified these employees as exempt; however, on April 28, 2013, the Company reclassified them as non-exempt pursuant to an agreement entered into by the Company and the United States Department of Labor.
One month ago, Plaintiffs sought preliminary approval of a class settlement in which Bloomberg agreed to settle the case for $3.2 million for 519 plaintiffs. On April 5, 2016, the Court granted Plaintiffs’ motion. A final fairness hearing is scheduled for July 13, 2016.
Last year, Steven Puente filed suit against his employer, Cantor Fitzgerald, alleging that the Company failed to pay him overtime pay for hours worked in excess of 40 hours per workweek under the Fair Labor Standards Act and misclassified him and others as exempt employees. Puente worked as a Junior Voice Support Analyst, an information technology position.
Prior to the filing of the complaint, Puente submitted records to the Company documenting his unpaid overtime from 2008-2014, which totaled over $100,000. Puente alleged to have made repeated requests to be paid overtime compensation. According to the complaint, the Company advised Puente that it was prepared to pay about half of the overtime pay due to him for the period 2012-2014 and was asked to sign an Acknowledgement of Payment document, which stated that the payment “includes all compensation you believe is outstanding and due to date with respect to the time period the Company classified you as exempt from federal and state overtime laws.” Puente did not sign the agreement since it did not include all the unpaid overtime owed to him during the period of misclassification. Earlier this month, the parties agreed to settle the case for $140,000.
Under the FLSA, an employer cannot require an employee to waive his or her rights to monies due under the law based on a settlement that does not pay the full amount of the money due. If an employee signs such a release, like the agreement proposed by Cantor Fitzgerald above, that release is not enforceable and the employee is entitled to seek the balance of the monies due.
On September 28, 2015, Secretary of the United States Department of Labor, Thomas Perez, filed a lawsuit against A.C.E. Management Group, operator of 17 Houlihan’s restaurants located in New Jersey and New York, and it’s President/Part-Owner, Arnold Runestad, for violations of the minimum wage, overtime and record-keeping requirements of the Fair Labor Standards Act (“FLSA”).
Last month, the Department of Labor issued a press release stating that its investigation revealed that the defendants unlawfully used employee tip pools by retaining a portion of the tips and also used tip pools to compensate non-tipped workers, such as custodians or kitchen workers, failed to pay overtime pay to employees for hours worked in excess of 40 hours per workweek, required employees to work “off-the-clock” and deducted money from employees’ paychecks for their meals during breaks but also charged them for those same meals. Regional Solicitor of Labor, Jeffrey Rogoff, stated, “The severity of these violations and the number of affected workers is such that that restitution, we believe, could amount to millions of dollars.” The Department of Labor seeks reimbursement on behalf of 1,430 current and former Houlihan’s employees.
This Firm will continue to monitor the developments in this case.
In Cheeks v. Freeport Pancakes House, Inc., a server/manager sued his former employer for unpaid overtime wages, liquidated damages and attorneys’ fees under the Fair Labor Standards Act and New York labor laws. After engaging in some discovery, the parties agreed on a private settlement and jointly filed a stipulation to dismiss the case with prejudice. The district court did not accept the stipulation, stating that plaintiff could not agree to a private settlement of his FLSA claims without court approval or the supervision of the Department of Labor. The parties did not wish to disclose the terms of their settlement, thus, asked the Second Circuit Court of Appeals to determine whether parties may settle FLSA claims without court approval or Department of Labor supervision. District courts had previously been split on this issue.
The Second Circuit affirmed the district court’s decision and ruled that due to the unique policy considerations underlying the FLSA, settlement agreements in FLSA suits must be approved by the court or the Department of Labor to take effect. The Second Circuit reasoned that approval in FLSA cases are necessary due to the potential for abuse in settlement agreements, such as the inclusion of overbroad waivers and high attorneys’ fees. The Court described the FLSA as being a uniquely protective statue, with a “…primary remedial purpose: to prevent abuses by unscrupulous employers and remedy the disparate bargaining power between employers and employees.” Now, in light of this decision, settlement agreements in the Second Circuit must be filed in court, for approval.
The full decision can be read here.
Home health care workers provide in-home care for the elderly and disabled. These workers often work long hours under stressful conditions, and for 40 years, have been classified as exempt under the Fair Labor Standards Act’s “companionship” exemption. President Barack Obama has long advocated for the increase in wages as well as minimum wage and overtime protections for these home health care workers. In recent years, the Obama administration drew up regulations to extend these protections to over two million home health care workers, but the regulations were struck down by a lower court earlier this year.
Last Friday, however, a three-judge appellate court in Washington D.C. ruled that the Labor Department has the authority to eliminate the companionship exemption, thus making home health care workers eligible for minimum wage and overtime pay. These protections would expand to home health care workers who are employed by third-party staffing agencies. Home health care industry officials are reportedly reviewing this decision and considering their options, including Supreme Court review.
On March 5, 2015, a delivery driver for Lychee House, a Chinese restaurant located in Midtown Manhattan, filed a lawsuit against the Company for unpaid wages pursuant to the Fair Labor Standards Act and New York Labor Law. Plaintiff, Yong Jie Li, and other drivers alleged that the restaurant failed to pay them and others similarly situated the proper overtime pay and “spread of hours” compensation. Li stated that he worked at least 55 hours per week and received $201.00 per week.
This week, Judge Valerie Caproni of the U.S. District Court for the Southern District of New York, granted a preliminary certification of the class. This allows the plaintiffs to continue to proceed with the case as a group and will also allow other current or former delivery drivers to join the lawsuit.
Delivery workers employed by restaurants frequently work long hours without being properly compensated. Non-exempt delivery workers who work over 40 hours per week are entitled to overtime pay at a rate of one-and-one-half times their regular rate of pay. Also, in New York, if a delivery driver or other non-exempt employee works over 10 hours per day, they are owed additional compensation. It is important to consult with a labor law attorney if you believe you are being denied the proper compensation for your work.
Last week, President Obama announced changes to the overtime pay laws by expanding its protection to almost 5 million workers. Currently, under the Fair Labor Standards Act, workers who earn more than $455 per week, that is, $23,660 per year, cannot make a claim for overtime pay if they work in excess of 40 hours per week. However, President Obama’s proposed rule will raise the threshold from $455 per week to $970 per week ($50,440 per year) as early as next year. Meaning, after the law goes into effect, workers who make as much as $970 per week can claim overtime wages, even if they are classified as a manager or professional. The salary threshold has not been changed since the 1970s.
The U.S. Labor Department reported that over 1,100 gas station attendants in New Jersey have received $5.5 million in back wages and damages over the past five years as a result of the Labor Department’s “multiyear enforcement initiative.” The Labor Department found that attendants employed by various gas stations including Shell, Exxon, BP have been denied basic minimum wage and overtime pay, in violation of the Federal Labor Standards Act. Due to its enforcement efforts, the Labor Department also reported that the industry was positively impacted in that some gas station hired more employees to avoid overtime violations, began to track hours worked, and contacted the Labor Department for help in providing training to managers on wage and hour laws.
The Fair Labor Standards Act requires non-exempt employees to be paid at the least the federal minimum wage of $7.25 per hour and over time pay of one and one-half times their regular rate of pay for hours worked in excess of 40 hours per week. The law also requires employers to maintain accurate time-keeping records and prohibits retaliation against employees who exercise their rights under the law. Most states also have wage and hour laws.
A certified nursing assistant, Carole Guerra, commenced a FLSA collective action alleging that HCR Manor Care, Inc., a nursing home in Philadelphia, failed to pay employees for time spent on maintaining uniforms outside of their regular work hours. Guerra seeks to represent nursing department employees who have worked at any of the company’s 291 facilities dispersed throughout 27 states and have spent off-the-clock time complying with the dress code policy without compensation. The company’s mandatory dress code policy required employees to purchase scrubs from one particular vendor and arrive to work in a clean, wrinkle-free uniform. The facility lacked washers, dryers and other on-site equipment, which resulted in nurses spending off-the-clock time maintaining their uniforms. Guerra alleges that the company could send employees home without pay to change into a uniform that conformed with the dress code policy or even institute progressive disciplinary measures, including termination. As such, Guerra states that she and many other nursing assistants spent two to three hours off-the-clock per week ensuring their uniforms met the company’s requirements, without pay. Guerra accuses the company of knowing that its uniform policies resulted in a significant investment of time by its employees and failed to compensate employees for that overtime.
Guerra names HRC Manor Care’s human resources subsidiary, Heartland Employment Services LLC, as the defendant. This firm will continue to monitor the developments in this case.