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.
Earlier this month in Smiley v. E.I. Dupont De Nemours & Co., the Court of Appeals for the Third Circuit ruled that employers cannot offset their obligation to pay overtime pay for hours worked in excess of 40 hours per week by voluntarily paying employees for a bona fide meal break.
In Dupont, employees filed a collective and class action lawsuit against the Company seeking unpaid overtime for pre and post shift work donning and doffing their uniforms and protective gear and performing “shift relief” work in which employees would share information about the status of their work with incoming shift employees. Plaintiffs spent about 30 to 60 minutes per day performing this work without compensation.
Plaintiffs worked 12-hour shifts at Defendants manufacturing plant and received three 30 minute meal breaks, which the Company voluntarily paid for. The Company argued that because it paid for meal breaks even though it was not required to do so under the Fair Labor Standards Act (FLSA), it could use that compensation to offset the money owed for the unpaid time spent donning and doffing and performing “shift relief” work. The lower court held in favor of Dupont and concluded that Plaintiffs were not owed additional compensation because the amount of paid non-work time (meal breaks) exceeded unpaid work time (pre and post shift work). The Third Circuit disagreed. It ruled that Dupont was required to pay employees for pre and post shift work, even though it voluntarily paid for meal breaks, because that meal break pay was already part of the employees’ standard compensation. The Department of Labor, which filed an amicus brief in this case, stated that “there is no authority for the proposition that compensation already paid for the hours of work can be used as an offset and thereby be counted a second time as statutorily required compensation for other hours of work.” The Third Circuit agreed and concluded that paid meal breaks could not offset uncompensated time worked.
This week, New Jersey federal Judge William Martini granted final certification to a collective action against Office Depot on behalf of approximately 300 assistant store managers who claimed to have been denied overtime pay in violation of state and federal law. Judge Martini also allowed the case to proceed as Rule 23 class action in three states, namely, Colorado, Maryland and Washington.
Plaintiffs worked as assistant store managers for Office Depot and alleged they were not paid the proper overtime compensation for hours worked in excess of 40 hours per week from the years 2005 to 2012. The Company argued that Plaintiffs were paid overtime pay at the correct rate based on a fluctuating workweek plan which allowed overtime to be paid at the employee’s regular hourly rate, instead of the time-and-a-half rate. Plaintiffs contended that the elements needed for the application of the fluctuating workweek plan were not met, such as the requirement of receiving a fixed weekly salary regardless of how many hours they worked. The Court agreed. The Company also argued that Plaintiffs were not “similarly situated” and explained that the degree in which assistant store managers disciplined and reviewed employees and participated in the hiring process varied greatly. However, Judge Martini ruled that these differences were outweighed by consistent testimony showing that the ultimate decision to hire employees was made by store managers, not assistant store managers, and rejected the Company’s claim that certification should not be granted due to variations in the amount of supervisory authority.
The Court concluded that the differences the Company highlighted are “not sufficiently material to preclude final certification” and ruled that assistant store managers are similarly situated for purposes of final certification under the Fair Labor Standards Act. This ruling will allow Plaintiffs’ to proceed as a group in seeking unpaid overtime and Office Depot will have to decide whether to proceed to trial or settle the case.
This Firm will continue to monitor the developments in this case.
On August 18, 2016, this law firm along with Pechman Law Group PLLC filed a wage and hour class action lawsuit involving over 100 employees in federal court against Wahlburgers restaurant chain located in Coney Island, New York. Wahlburgers is owned by Mark, Donnie and Paul Wahlberg, celebrity actors and chef. A&E also has a TV series which follows the brothers as they run their restaurant chain.
The lawsuit alleges that the restaurant violated the Fair Labor Standards Act and New York Labor Law by shaving hours of compensable time from the weekly hours of employees, failing to pay its workers minimum wage and overtime, stealing tips from employees and illegally requiring servers to share their tips with non-tipped, back-of-house kitchen staff.
We will be prosecuting these claims and hope to get the employees a recovery.
The Third Circuit recently affirmed the decision of the district court which found that defendants, Fast Rig Support, LLC and First Americans Shipping and Trucking, Inc., did not prove that its truck drivers were exempt from overtime compensation under the FLSA and Pennsylvania state law.
The plaintiffs were truck drivers that transported water to hydraulic fracking sites within Pennsylvania and were paid overtime for work performed in excess of 45 hours per week. Plaintiffs argued that this practice violated federal and state wage and hours laws because they were not paid overtime for work over 40 hours per week. Defendants argued that plaintiffs were exempt from overtime under the motor carrier exemption, which exempts certain truck drivers from receiving overtime pay if certain criterion is met. One such criterion is that the driver must transport property through interstate commerce, that is, across state or international lines. Even when transportation takes places within one single state, however, the interstate commerce requirement may still be met if the employee’s work involves a practical continuity of movement across state lines.
In this case, defendants argued that the after fracking is completed, they are occasionally hired to transport the water used in the fracking process to injection wells for disposal. The Third Circuit, however, ruled that defendants did not meet their burden to prove that the drivers’ transportation of water involved a continuous stream of interstate travel. Although defendants produced three pieces of evidence, the court did not find it adequate because it did not show whether drivers actually drove across state lines or whether the water drivers actually transported was out of state. The court explained that “the relationship between defendants, the fracking companies, and the movement of wastewater out of the state could theoretically be one involving a practical continuity of movement in interstate commerce, depending on…the intent of the shipper at the time shipment commenced, the role defendants’ drivers played, whether the water is altered during the fracking process, and the steps for water removal and outgoing transportation,” but defendants produced no evidence concerning these matters. Thus, the court held that defendants did not meet their burden to show that the motor carrier exemption applies, and affirmed the judgment of the district court.
Three former employees of a 7-Eleven convenience store located in Princeton, New Jersey filed a proposed class action alleging that the franchise failed to pay them minimum wage and overtime pay when they worked beyond 40 hours per week and also fired them when they complained to management. The plaintiffs seek to represent 90 potential class members of 7-11 stores, either independently owned and operated, or directly owned and controlled by the Texas-based corporation, within the same market.
Plaintiffs contend that they performed tasks such as stocking shelves, cleaning the bathroom and parking lot, serving customers and operating food preparation machines and were paid $6.00-$6.50 per hour in cash, with no overtime pay. Two workers claim that they were retaliated against for complaining to management about their compensation and the third worker was fired after an attorney representing the two other plaintiffs notified the store of the workers’ claims. Plaintiffs also claim that defendants failed to provide them with statements regarding their gross and net wages and an itemization of the deductions made from gross wages.
The case is Lopez et al. v. 7-Eleven Inc. et al., case number MER-L-418-16, and was filed in New Jersey state court, County of Mercer.
Last week, New York Attorney General Eric Schneiderman sued Domino’s Pizza Inc. and three New York franchisees for wage and hour violations. The lawsuit alleges that that from July 2008 to the present, Domino’s franchisees did not pay its delivery drivers minimum wage and failed to adequately pay overtime, due to an in-house payroll software system that undercounted hours worked by employees. Unlike many other lawsuits, this lawsuit is the first one filed by the Attorney General’s office to claim that the corporate franchisor is liable for the violations of its franchisees under a joint employer theory. It accuses the company, Domino’s Pizza LLC, of requiring its franchisees to use a computer software system that it knew was flawed and claims that it was heavily involved in individual store operations. If the state wins, it will make it harder for corporations that run franchises to avoid responsibility for the unlawful actions taken by its franchisees.
Since 2014, the New York Attorney General’s office has settled cases with many other Domino’s franchisees for wage and hour violations, including securing a $446,000 settlement for delivery workers for unpaid minimum wage and overtime, as we previously reported. And since 2011, Schneiderman has obtained more than $26 million for nearly 20,000 workers who were shorted wages.
On May 18, 2016, President Obama announced that the U.S. Department of Labor published its final rule updating overtime regulations affecting white collar, salaried workers. The new rule focuses on increasing the salary and compensation levels triggering the executive, administrative and professional workers exemption. Under the Fair Labor Standards Act, employees are required to be paid minimum wage and overtime at the rate of one-and-one-half times their regular rate of pay for every hour worked in excess of 40 hours per workweek. However, employees employed as bona fide executive, administrative and professional employees are exempt from both minimum wage and overtime pay. In order to qualify for the exemption, employees must meet certain tests regarding their job duties, and prior to this new rule, also be paid a salary of not less than $455.00 per week ($23,660 per year). For example, if an employee met the “duties” requirement to qualify for the exemption, but made more than $455.00 per week, they would not be entitled to overtime pay. This new rule, however, increases the salary threshold to $913.00 per week ($47,476 annually).
This update extends overtime protection to over 4 million workers. This means that workers will either gain new overtime protections or an employer may raise their salary to the new salary threshold in order to maintain their exempt status. The effective date of the final rule is December 1, 2016.
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.