Collective and Class Action Lawsuit Filed against Moe’s Southwest Grill Franchise for Alleged Unpaid Overtime and Unlawful Tip Retention under the Federal and New Jersey Wage and Hour Laws

On September 13, 2018, the lead Plaintiff Marco Gonzalez filed a collective and class action complaint in the United States District Court for the District of New Jersey, alleging that Defendants Fast Casual Partners, LLC and its owner Lee DiPrizito, who operate a number of franchised stores of Moe’s Southwest Grill restaurant in the States of New Jersey and New York, violated the federal Fair Labor Standards Act (“FLSA”) and the New Jersey Wage and Hour Laws and Regulations (“NJWHLR”), by failing to compensate its hourly-paid restaurant workers proper overtime wages and by unlawfully keeping tips.

The complaint alleges that to the extent Defendants paid the restaurant workers for hours in excess of forty (40) in a workweek, Defendants paid them straight time for overtime, that is, such payments were made at their regular hourly rates, rather than time and one-half (1.5) of their regular rates of pay as required by the FLSA and NJWHLR.  The complaint also alleges that Defendants unlawfully kept the credit card tips and catering tips without distributing them to the restaurant workers.

The complaint seeks to represent the following putative FLSA collective members with respect to the federal claims:

All hourly-paid restaurant workers employed by Defendants at any time from three (3) years prior to the filing of this Complaint through the date of judgment.

The complaint also seeks to represent the following putative Rule 23 class members with respect to the New Jersey claims:

All hourly-paid restaurant workers employed by Defendants in the State of New Jersey at any time from two (2) years prior to the filing of this Complaint through the date of judgment

Mr. Gonzalez brings this collective and class action on behalf of himself and all other similarly situated hourly-paid restaurant workers to recover unpaid overtime wages, unlawfully kept tips, liquidated damages, pre- and post- judgment interest, and reasonable attorneys’ fees and costs.

The case is Gonzalez v. Fast Causal Partners, LLC d/b/a Moe’s Southwest Grill, et al., Case No.: 2:18-cv-13840-SRC-CLW.

The plaintiff is represented by Brown, LLC (formerly the JTB Law Group).

If you have any questions or information to provide about the above article, you may contact the following attorneys:

Nicholas Conlon; nicholasconlon@jtblawgroup.com; (877) 561-0000
Ching-Yuan (“Tony”) Teng; tonyteng@jtblawgroup.com; (877) 561-0000

Dynamex is Dynamite

An explosive legal opinion was issued by the California Supreme Court in April of this year, as they weighed in on a landmark land mined issue that is sure to impact and proliferate more California Wage & Hour Lawsuits.  A question that has always plagued companies is what constitutes an employer/employee relationship versus an employer/independent contractor relationship.  The California Supreme Court answered a few questions that people ponder such as:

“Am I an independent contractor or an employee?”

“In California how can I tell if I’m an employee or an independent contractor?”

“Am I entitled to overtime in California?”

The California Independent Contractor vs. Employee test is called the ABC Test, although some would argue there is nothing ABC about it.

The first and most important facet of the way the California Supreme Court addressed the issue is to view it from the prism that by default workers are employees, not independent contractors, and the employer has the burden to show otherwise.  In furtherance of illustrating that a worker is indeed an independent contractor and not an employee, the employer must establish all three prongs of the ABCs:

(A) The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; and

(B) The worker performs work that is outside the usual course of the hiring entity’s business; and

(C) The worker is customarily engaged in an independently established trade, occupation or business of the same nature as the work performed.

Another fascinating aspect of the ruling is its retroactivity, meaning the Court’s ruling is applicable to past situations, not just issues moving forward.

This case has massive implications to various different industries from exotic dancers to construction workers, from mechanics to temp workers.  Almost anyone can be viewed as an employee versus an independent contractor under the California standard and may be owed significant amounts of overtime and damages.

In recent years, class actions have been stymied by the use of arbitration clauses.  However, California also has a law called the Private Attorney General Act, also known as PAGA, which essentially deputizes the individual to bring an action through the government, and since the government can not be hamstrung by arbitration, then the case can proceed in court.

Forward thinking individuals may also anticipate a wave of Tax Qui Tam actions, also known as IRS whistleblower actions, as for larger companies that avoided paying millions in taxes there may be tax consequences.  This is a complicated issue as there may also be back taxes owed by the employee who was formerly considered an independent contractor.  Also, one should not forget if they are in the health care or defense contractor industry, the False Claims Act (FCA) and California False Claims Act may kick in if there is other ways in which the company is defrauding the government.

Dynamex has tilted the playing field to allow workers to receive rights and protections as workers, not just being able to summarily cast them out when someone is inconvenient to the company without consequences.  In order to see how Dynamex affects you or to learn more about your California overtime rights, whether you’re an independent contractor or an employee, call our wage and hour lawyers at (877) 561-0000. For wage and hour lawsuits and consultations, there is no money up front, the conversation is confidential, and the firm is only paid if we win your case.

Survey.com: The Latest Gig Economy Company Sued in California for Independent Contractor Misclassification

Like many companies in the “gig economy,” Survey.com promotes itself as merely a mobile app company. Its app allows people to sign up for on-demand merchandising projects such as:

Stocking, facing, and rotating products

Setting up end caps, promotional fixtures, and point-of-sale displays

Affixing stickers and instantly redeemable coupons to your items

Retail Audits

Individuals who complete projects generally receive a payment from Survey.com based on the size of the project. Since Survey.com classifies the workers that perform merchandising projects for them as independent contractors, they are not paid as w-2 employees or given any employee benefits.

A recent lawsuit filed on August 6th, 2018 in the United States District Court for the Northern District of California contends that Survey.com misclassifies its Merchandisers as independent contractors and as a result, violated their rights under the Fair Credit Reporting Act, the Fair Labor Standards Act, and the California Labor Code.

Survey.com is the latest gig economy company to be sued for labor violations in the wake of the California Supreme Court’s April 30, 2018 decision Dynamex Operations West, Inc. v. Superior Court. The Dynamex decision rejected the longstanding test for whether a work was an employee or contractor (which had led many company to misclassify their workers as independent contractors), and replaced it with the so-called “ABC Test” which is far more favorable to the worker.

Under the ABC Test, the burden is on the company (in this case Survey.com) to demonstrate that every worker is not an employee by proving all three of these elements:

  • the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact;
  • the worker performs work that is outside the usual course of the hiring entity’s business; and
  • the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.

Shortly after the Dynamex decision, Lyft and Postmates were both hit with class action lawsuits alleging their drivers should have been classified as employees. Similar to the lawsuits against Lyft and Postmates, the lawsuit against Survey.com argues that Merchandisers should have been classified as employees because they were not free from Survey.com’s control or directions in connection with the performance of their work, they work they performed was not outside the usual course of Survey.com’s business, and they were not customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for Survey.com.

The Dynamex opinion is a massive victory for California workers who have been misclassified as independent contractors. If you are a contractor for Survey.com or another gig economy company whose entire platform is built on the work of its contractors, it is very likely that are owed wages and potential penalties under California law. Although the Dynamex decision was issued in April 2018, it has been held to apply retroactively, meaning you may be eligible to recover wages earned in prior years, subject to the applicable statutes of limitations. For further guidance, please contact our office.

Overtime Lawsuit Filed Against Gerrard Excavating, Inc. for Alleged Violations of the Federal and Colorado Wage and Hour Laws

On June 8, 2018, the lead Plaintiff Michael Perez filed a collective and class action complaint in the United States District Court for the District of Colorado, alleging that Gerrard Excavating, Inc., one of the largest infrastructure/site development contractors in the northern region of Colorado, violated the federal Fair Labor Standards Act (“FLSA”) as well as the Colorado Wage Act (“CWA”) and Colorado Minimum Wage Order (“CMWO”) by failing to pay its Heavy Equipment Operators their rightfully hard-earned overtime wages for work they performed off-the-clock.

The complaint alleges that as hourly-paid Heavy Equipment Operators, Mr. Perez and the putative collective and class members were required to regularly work over forty (40) hours per week including time spent performing pre-shift work-related activities such as checking and warning up the machine and equipment, but the company did not pay them for such pre-shift work and therefore deprived them of overtime compensation, in contravention of the FLSA, CWA and CMWO.

The complaint seeks to represent the following putative FLSA collective members with respect to overtime claims under the FLSA:

All Heavy Equipment Operators employed by Defendant at any time from 3 years prior to the filing of this complaint through the date of judgment.

The complaint also seeks to represent the following putative Rule 23 class members with respect to overtime claims under the CWA and CMWO:

All Heavy Equipment Operators employed by Defendant in the State of Colorado at any time from 3 years prior to the filing of this complaint through the date of judgment.

Mr. Perez brings this collective and class action on behalf of himself and all other similarly situated Heavy Equipment Operators to recover unpaid overtime wages, liquidated damages, penalties, and reasonable attorneys’ fees and costs.

The case is Perez v. Gerrard Excavating, Inc., Case No.: 1:18-cv-01429-MEH.  The plaintiff is represented by JTB Law Group, LLC.

If you have any questions or information to provide about the above article, you may contact the following attorneys:

Nicholas Conlon;  (877) 561-0000
Ching-Yuan (“Tony”) Teng; (877) 561-0000

Call Center Workers’ Overtime Lawsuit Against Southwest Gas Corporation Heating Up

A former Dispatcher who worked at a call center in Las Vegas, Nevada commenced a wage and hour lawsuit against her former employer over alleged unpaid overtime wages. The complaint was commenced on June 7, 2018 against Southwest Gas Corporation over failure to incorporate shift differentials into their regular rates of pay and unpaid overtime wages for work performed outside their scheduled shifts. Plaintiff is asking for relief and damages under the Fair Labor Standards Act (FLSA) and Nev. Rev. Stat. Ann. (hereinafter “N.R.S.”) §§ 608.016 and 608.018.

Southwest Gas Corporation has and continues to employ a staff of hourly-paid Dispatchers, whose principal job duty is to provide customer support to homeowners by addressing any gas issues and effectively dispatching technicians to resolves these issues. Dispatchers must communicate with homeowners and technicians by way of phone and computer.

Plaintiff alleged that Dispatchers were told to report to work fifteen minutes prior to their scheduled shifts in order to be ready to immediately begin calls once their shift started. Defendant required Dispatchers to submit timesheets that did not include the time spent working pre-shift and post-shift. As a result, Plaintiff and the putative collective and class members were required to regularly work over forty (40) hours a week and were not compensated for the time spent working before and after their scheduled shifts.

The complaint is asking for a jury trial. Plaintiff is seeking to maintain the case as an FLSA collective action and N.R.S. class action, and asks for Southwest Gas Corporation to pay Dispatchers their alleged unpaid overtime wages, as well as liquidated damages, attorneys’ fees and costs, and any other FLSA damages.

This was filed in the United States District Court for the District of Nevada, as Case No. 2:18-cv-01035-JAD-VCF. The Plaintiff is being represented by JTB Law Group, LLC.

If you worked as a Dispatcher at Southwest Gas Corporation, or otherwise have knowledge or interest regarding the overtime claims at issue in the lawsuit, please contact the JTB Law Group at (877) 561-0000.

What to Do If You’re Being Sexually Harassed at Work

Sexual harassment continues to be a serious issue in the workplace. When a person has to put up with catcalls, crass jokes and sexual advances, it can make his or her job absolutely miserable. If you are being sexually harassed at your job, know that you do not have to stand for the kind of treatment. Here are the steps you should take to make it stop:

Know That You’re Not Alone

Getting sexually harassed can make you feel absolutely powerless. You may wonder why the offender is doing this in the first place and if you can ever make it stop. It is important to know that you are not alone. Many people experience sexual harassment, even in the workplace. Recognize that this is a society issue and it’s not your fault.

Tell the Offender to Stop

If you feel comfortable, let the offender know that you find his or her behavior offensive and you want it to stop. Sometimes people do not realize that their behavior is wrong and need to be told that it is. If you feel nervous about talking to the harasser, you should speak to his or her supervisor.

Document Everything

It is important to document every incident of sexual harassment at work. Write down the date, time, name of the offender, what he or she said and if there were witnesses present. If you ever have to pursue legal action, you can use the journal as evidence.

Follow Your Employer’s Procedure

If the harasser refuses to stop, you should follow your employer’s procedure for dealing with sexual harassment claims. If your employer does not have such a procedure, you should tell your immediate supervisor about what has been going on.

File an Administrative Charge

If the harasser is still bothering you after you have followed your employer’s procedure, it’s time for you to file an administrative file with the proper governmental agency. They will thoroughly look into your claim and attempt to resolve it with your employer.

File a Lawsuit

If the government agency is not able to resolve your complaint, you have the right to file a lawsuit against the offender and your employer. If you win the lawsuit, you may receive back pay for any time you had to take off work, damages for emotional distress and reimbursement for attorney fees. You may also require your employer to implement new policies to stop sexual harassment.

Navigating a sexual harassment lawsuit can be quite difficult on your own, so it may be in your best interest to hire an employment lawyer. He or she may help you build a strong case and gather necessary evidence. With an experienced lawyer on your side, you may feel a lot better about your situation.

Schedule a free consultation with a sexual assault lawyer VA residents use today to talk about your case in detail. You deserve justice for what you have been through.

Thanks to our friends and contributors from Cohen & Cohen, P.C., for their insight into sexual harassment laws.

New FLSA Tip Credit Provisions Let Employees Keep Their Tips

On March 23, 2018, Congress amended the provisions in the Fair Labor Standards Act (“FLSA”) governing tipped employees.

Background: Minimum Wage and Tip Pooling

The FLSA allows an employer to pay a reduced hourly wage of at least $2.13 per hour to tipped employees, provided the tipped employees receive enough tips to bring their hourly rate to the prevailing minimum wage. The employees’ tips include those they receive directly, as well as tips distributed from a valid tip pool.

The FLSA has two perquisites for an employer to pay employees a reduced tip credit rate.

First, the employer must have informed the employee of the requirements for tipped employees under the FLSA;

Second, the employee must be permitted to keep all of his or her tips, except for tips that are shared with other tipped employees under a valid tip pool.

Traditionally, these requirements only applied to employees making less than the standard federal minimum wage (currently $7.25 per hour). An employer who violated either of these prerequisites could be held liable for the different between the rate paid to the employee and the standard minimum wage.

2011 Department of Labor Regulations

In 2011, the Department of Labor passed regulations regarding the FLSA tip credit provisions. The regulations provided that all tipped employees—not just those paid a rate less than $7.25 per hour—were entitled to keep all of their tips and could not be required to share tips with management of with non-tipped employees. This expanded the tip credit provisions to a significant number of employees who receive tips but still receive more than $7.25 per hour.

Recent Changes to the Law

The March 23, 2018 amendments changed the FLSA’s tip credit provisions in three ways.

First, under the current law, employees who make over $7.25 per hour can be required to share tips with non-tipped employees who did not interact with customers, whereas employees who make less than $7.25 per hour cannot be required to share tips with non-tipped employees who did not interact with customers;

Second, no employees, regardless of how much they are paid per hour, can be required to share tips with their managers or their employer.

Third, employees who are unlawfully required to share their tips with other employees who do not engage in customer service, or with management/ their employer, can recover the amount of tips taken from them, in addition to the difference between their actual pay rate and the standard minimum wage of $7.25 per hour.

The new tip-credit provisions clarify the long-standing requirement that only employees who engage in customer interaction may participate in employee tip pools. The recent amendments are particularly strict on the practice of management retaining tips, which is now prohibited for all tipped employees regardless of whether their wages are subject to a tip credit.

Having represented many tipped employees, the JTB Law Group knows that you work hard for your tips, and should be allowed to keep them. If you are not, you should contact us immediately.

Overtime for Production-Based Workers – Common Labor Violations

Federal law mandates a minimum hourly wage plus 1.5 of the wage for hours over 40 in a 7-day workweek. But many workers are not paid by the hour, but based on how quickly they complete tasks and assignments.

For example:

Commercial painters paid by jobs completed
Phlebotomists paid by tests completed
• Telemarketers paid with bonuses per call or sale completed.
• Seamstresses paid per dress completed.
• Carpet cleaners paid per room.

Overtime for “Piece-Rate” Workers

Pursuant to the Fair Labor Standards Act (FLSA), The United States Department of Labor regulations provide that an employer who pays employees on a “piece-rate basis” must pay them “one-half th[eir] regular rate of pay.” By requiring employers to pay an additional premium for each and every hour worked over 40, the law deters employers from overworking their employees.

However, many employees paid by production are not paid any additional rates for work completed over 40 hours in a week. Rather, they earn the same fixed rate for each unit of production regardless of how many hours it takes the employee to complete. Common examples include mechanics paid based on how many repair jobs they complete, and cable installers paid based on each cable set-up they install.

The justification employers use for this practice is that some production-based payments may qualify as “commissions,” even if the payments are not described as such to the employee or on the paystub.

The Commission Exemption

The “commission exemption” to federal overtime law provides that employers need not pay premium rates for hours worked over 40 in a workweek if:

1) the employee’s pay averages out to at least $10.88 per hour (1.5 times the federal minimum wage); and

2) more than half of the employee’s total pay (considered over a “representative period” of at least one month) consists of commissions.

In order for an employee to be exempt under the commission exemption, he or she must be employed in a “retail or service establishment,” which the Department of Labor has described as a business that:

• sells goods or services to the general public;
• serves the everyday needs of the community in which it is located; and
• performs a function which is at the very end of the stream of distribution, disposing in small quantities of the products and skills of such organization and does not take part in the manufacturing process.

While “commissions” are typically associated with employees directly engaged in sales, courts have found employees exempt under this exemption even where their duties are focused on production and they do not directly engage in sales.

When Does Production-Based Pay Qualify as a “Commission”?

As employers rely on increasingly broad understandings of the commission exemption, courts have grappled with how to differentiate true commission-based systems from piece-rate pay, which as noted above, must include overtime pay.

Generally, production-based pay can qualify as a commission if 4 factors apply:

• First, a commission is either a percentage or proportion of the ultimate price passed on to the consumer;
• Second, a commission is decoupled from actual time worked, so that there is an incentive for the employee to work more efficiently and effectively;
• Third, the type of work is such that its “peculiar nature” does not lend itself to a standard eight-hour work day.
• Fourth, the compensation system must not offend the purposes of the federal overtime laws, i.e. if the workers’ pay is close to the minimum wage and/or the employer requires consistent overtime work.

Where any of these factors do not apply, the employer’s failure to pay overtime may be in violation of federal overtime law, entitling you to recover your wages, potentially in a “collective action” lawsuit in which other workers challenge the same violation.

The commission exemption has been found inapplicable in the following sorts of cases:

Where work assignments were not given out based on speed of production;
• installers who were paid a flat fee per installation;
• a compensation scheme under which the employee was guaranteed that he would be compensated each pay period for a set number of “flag hours” at a certain rate, with any additional hours being compensated at a sharply decreased rate.
• “spiffs” offered to encourage their salespeople to push particular products, which were set based on the Defendants goals, and not related to the value of the products.

Various states, like New York, Illinois and California have wage and hour rights that may extend additional protections beyond what the Fair Labor Standards Act provides. If you are paid by your production, rather than by the hour, you should check your paystubs to see if you are paid overtime. If not, your employer may be wrongfully claiming you as a commission-exempt employee, and you should consult the experienced wage-and-hour attorneys at the JTB Law Group.

Non-Cash Benefits Should be Included in the Regular Rate of Pay

Most employees understand that overtime, or hours worked over forty (40) in a workweek, must be paid at a higher rate of pay than non-overtime hours.  Many employees even know that the proper overtime rate is supposed to one and a half times their regular rate of pay.  But, did you know that “regular rate of pay” is often not the same as an employee’s hourly rate?  For example, just because an employer pays an employee ten dollars per hour ($10/hour) for hours 1 to 40 in a workweek does not automatically mean that hours over 40 will be paid at fifteen dollars per hour ($15/hour).

The Fair Labor Standards Act (FLSA) and many related state laws define the “regular rate of pay” to include all remuneration paid to an employee in a given week.  This means that an employee may be required to modify the employee’s hourly rate when calculating the regular rate to account for bonuses, shift differentials, commissions, or other cash payments made to the employee.  The FLSA also requires that certain non-cash payments be included in the regular rate of pay.

People often ask questions like:

What are non-cash payments?

How do I compute my proper overtime rate?

How can I tell if I’m being shorted wages?

Do overtime lawyers charge money up front?

Starting with the first questions –  Some common examples of common non-cash payments are lodging, such as providing the employee with an apartment or other living space at a free or discounted rate, meals, and other goods.  The FLSA asks whether the furnishing of these non-cash benefits are customarily provided by the employer to the employee in determining whether it counts as a wage for purposes of calculating the regular rate of pay.  For example, an employer buying pizza on an occasional Friday likely is not a non-cash payment, but an employer providing employees with meals every day may rise to constituting a non-cash payment.

The FLSA requires that the fair value or reasonable cost of these non-cash payments be considered as part of the overall payment to the employee and thus increase the regular rate and the resulting overtime rate.

Experienced wage and hour attorneys can help you evaluate your pay and whether you are entitled to a higher overtime rate than you currently receive. Also, there are various state wage and hour laws that may afford even greater protections or calculation of rates.  For example, New York State has a spread of hours law, and for hourly employees who work over 10 hours in a day, they must be paid an additional hour of pay.  That is why it’s a good practice to speak with an employment law firm who can advise you whether you’re paid properly, and most FLSA lawyers will do so on a contingency basis, meaning they’re only paid if they win your overtime lawsuit.

Carmaker Volvo to pay $70,000 over work discrimination against disabled laborer

Volvo  Group North America will pay $70,000 and provide other relief to settle a disability discrimination suit, said the U.S. Equal Employment Opportunity Commission (EEOC) in a statement January 19. Last year the EEOC filed a suit against Volvo over the case of an applicant laborer whom the carmaker accepted but did not allow to start on the job because he was taking certain prescribed drugs.

The EEOC said Volvo offered the laborer applicant the job. But he was a recovering drug addict under a supervised medication-assisted treatment program. During his physical examination with Volvo the laborer said he was taking prescribed suboxone. At the time, Volvo failed to assess the likely effect, if any, of the said drug on the laborer’s performance on the job. When later the laborer reported to work on his first day, Volvo reportedly told him he would not be hired after all due to his suboxone use.

Such action by Volvo violates the Americans with Disabilities Act (ADA), the EEOC said. ADA prohibits discrimination based on disability. “Employers should make hiring decisions based on the qualifications of an applicant, not his disability or participation in a medically supervised treatment program,” said EEOC Philadelphia District Office Director Jamie R. Williamson.

The federal agency tried to arrive at a settlement with the carmaker through the conciliation process before it filed the lawsuit, which is recorded as EEOC v. Volvo Group North America, LLC, Civil Action No. 1:17-cv-02889) in U.S. District Court for the District of Maryland, Northern Division.

On top of paying $70,000, the Volvo Group North America, LLC, is cautioned against further violations of the ADA. The carmaker is expected to amend its policy on post-offer medical and drug evaluations to explain how it will assess whether an employee’s or applicant’s lawful use of prescription medication poses a direct threat as defined by the ADA, including providing a reasonable accommodation as required by the ADA. Volvo will also provide ADA training, including on how the law relates to drug screening and the use of lawfully prescribed medications. The EEOC said Volvo will report to them on how it handles any complaints of disability discrimination and post a notice regarding the settlement.

The Volvo Group employs more than 14,000 people in North America, the source of some 27 percent of its sales. It has nine manufacturing facilities in six U.S. states, as well as three plants in Canada and one in Mexico. The EEOC praised the group for cooperating with the agency in resolving this case of discrimination on the job.

Discrimination cases are often time sensitive. Many employees may face a situation at work that they are unsure if it is illegal and what their options and remedies are. Laws protect employees from experiencing discrimination and harassment because of race, gender, ethnicity,  religion, sexual orientation,  disability and  pregnancy.  If you are facing an issue involving possible employment discrimination, you can call (877) 561-0000 for a free confidential consultation.

“Outside Sales” Employees Frequently Misclassified as Exempt from Overtime Pay

Many overtime lawsuits involve employees who perform “outside sales,” i.e. whose job is to facilitate sales prospective clients and customers by making visits, attending events, and otherwise engaging in face-to-face sales activities. Positions like “Outside Sales Representative” are staffed in many large companies, such as Comcast, Sam’s Club, Xerox, and Manpower.

It is common for employees in this industry to work significant amounts of overtime in order to keep up with demanding sales quotas and frequent customer contact. While the Fair Labor Standards Act requires overtime pay calculated at 1.5 for hours worked over 40, the law has an exemption for Outside Sales Employees. The exemption is based on the understanding that an outside salesman’s extra compensation comes in the form of commissions, not overtime, and because most of the salesman’s work is performed away from the employer’s place of business, the employer often has no way of knowing how many hours an outside salesman works.

Like many exemptions to overtime pay, the outside sales exemption is often misconstrued by employers and relied on to withhold overtime pay from employees who are not truly engaged in outside sales.

The Outside Sales Exemption

Under federal law, an outside salesperson is exempt from overtime where the employee: (1) makes sales or “obtain[s] orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer,” and (2) is customarily and regularly engaged away from the employer’s place of business.

Additional factors that may be relevant include (1) whether the job was advertised as a sales position and the worker recruited based on sales experience; (2) whether the employee received specialized sales training; (3) whether compensation was based on commissions; (4) whether the employee independently solicits new business; and (5) the level of supervision.

Primary Duty

In order for an employee to be properly classified as an exempt outside sales employee, engaging in outside sales must be his or her “primary duty.” The DOL defines “primary duty” as meaning “the principal, main, major or most important duty that the employee performs.” Thus, employees whose outside sales activities comprise only a minor or infrequent part of their job should not be classified as exempt from overtime pay under the outside sales exemption.

For example, one of the DOL’s regulations regarding the outside sales exemption provides that the outside sales exemption would not apply to “a company representative who visits chain stores, arranges the merchandise on shelves, replenishes stock by replacing old with new merchandise, sets up displays and consults with the store manager when inventory runs low, but does not obtain a commitment for additional purchases.”

Sales v. Promotions

In assessing whether your primary duty is sales, it is important to distinguish between engaging in direct sales, and engaging in promotion work, such as advertising and holding events in hopes of obtaining a sale. DOL regulations provide that promotional work in this context is exempt only if it is “incidental to and in conjunction with an employee’s own outside sales.” However, “Promotional activities designed to stimulate sales that will be made by someone else are not exempt outside sales work.” Thus, if a significant amount of your sales-related activity in fact consists of promotional work enabling others to make sales, you may not fall within the outside sales exemption.

Away From the Employer’s Place of Business

The DOL defines “Away from the employer’s place of business” as making sales at the “customer’s place of business or, if selling door to door, at the customer’s home.” Further, “any fixed site, home or office, used by a salesperson as a headquarters . . . is considered one of the employer’s place of business, even though the employer is not in any formal sense the owner or tenant of the property.”

Outside sales does not include sales made by mail, telephone or the Internet unless such contact is used merely as an adjunct to personal calls.

Thus, even if you work out of your home, instead of at your employer’s office, you do not qualify as outside sales exempt unless you at least occasionally meet and visits with potential clients and customers.

Example Cases

Case brought on behalf of Territory Managers and Retail Store Representatives employed by Kellogg Company who claimed they were misclassified as exempt under the outside sales exemption. Kellogg recently agreed to settle the case for $16,750,000.

In 2017, a large grill manufacturer agreed to a $2.85 million settlement in a case brought on behalf of Direct Sales Demonstrators who alleged they were misclassified as exempt under the outside sales exempt.

In 2013, Frito-Lay agreed pay $1.6 million to settle wage-and-hour claims filed on behalf of current and former employees who deliver its products to stores and arrange the store displays.

If you’re wondering “Am I properly classified as outside sales?” or if you worked or work in a position that was classified as outside sales exempt you should call the JTB Law Group to see if you may be entitled to overtime pay.

Commercial Painters Paid Per Job Commence FLSA Lawsuit

Two former employees of United Painting, Inc. are seeking compensation and damages from their former employer over alleged unpaid overtime wages. The former employees filed a complaint against United Painting, Inc. alleging it violated the Fair Labor Standards Act (FLSA) and the Missouri Minimum Wage Law (“MMWL”).

They first filed the complaint in January 2018 in the United States District Court for the Eastern District of Missouri saying that Defendant 1) improperly used a piece rate to compensate some of their overtime hours; 2) failed to include piece rate payments in determining their regular rate; and 3) failed to pay them for time spent traveling between job sites. The case is asking for collective action treatment under the FLSA 216(b) and Class Action status under Rule 23 for violations of the MMWL.

The FLSA requires that overtime be paid at one a half times an employee’s regular rate of pay and defines regular rate of pay to include all forms of remuneration in a workweek. Utilizing different payment methods in a workweek does not mitigate an employer’s obligation to properly pay overtime.

The former employees requested full FLSA damages as well as MMWL damages, which include paying all Commercial Painters their unpaid wages, proper overtime wages, liquidated damages, and reasonable attorney’s fees and costs.

This was filed at the District Court, Eastern District of Missouri as Case No. 4:18-cv-00064-JAR. The former employee is represented by the JTB Law Group, LLC.

If you believe you have information about the referenced FLSA lawsuit or may have been shorted wages, please contact the JTB Law Group at (877) 561-0000.

Pay at Different Rates—How to Calculate Overtime?

Employees often are paid different hourly rates during a workweek.  There are lots of benign reasons for this behavior.  Perhaps the employer wishes to pay different rates for different tasks.  Perhaps the employer wishes to pay a shift differential for different shifts.  Perhaps even the employee works at different locations in the same week and those locations are paid at different rates.  While many of these reasons are benign, some employers use different pay rates to nefariously mask improper overtime payments.

The Fair Labor Standards Act (“FLSA”) and many state laws regulate how overtime must be calculated when an employee is paid multiple pay rates in the same week.  Normally, overtime is calculated as one and a half, also known as time and a half, an employee’s regular rate.  When an employee works at multiple hourly rates in the same week though, the regular rate becomes a weighted average of the different hourly rates in most cases.  The weighted average is done by adding up all non-overtime pay and dividing it by the total number of hours worked.  For example, if an employee spends twenty-five hours making $8/hour and another twenty-five hours making $10/hour then that employee’s regular rate that week is $9/hr. ((25*8+25*10)/50 hours=$9/hr).  That regular rate is then used to calculate the proper overtime rate.

Like any rule, there are exceptions.  Most of these exceptions though require that the employer and the employee agree ahead of time that the exception will apply.  For example, if an employer is paid different rates for different tasks, the employer can pay one and a half times the hourly rate of the tasks that are completed after forty hours.  Using the prior example, if the employee spends the first twenty-five hours in the week performing tasks that are paid at $10/hour and the second twenty-five hours in the week performing the tasks paid at $8/hour then the employer may, only on a prior agreement with the employee, pay the employee overtime at time and a half of $8/hour.

While these exceptions do exist, the Fair Labor Standards Act is designed to benefit employees.  Thus, whenever an employer is using an exception there is always a risk that the exception is incorrectly applied or merely a pretext to avoid paying the employee properly.

If you work for an employer who pays multiple pay rates in the same week, you should consult with an FLSA Lawyer or overtime lawyer who can educate you about your employment rights.

Northshore University Healthsystem Hit with Class Action Lawsuit Alleging Call Center Representatives were Not Paid for Pre-shift Time, Overtime

A former Patient Access Representative who worked at a medical Support Call Center in Skokie, Illinois commenced a wage and hour lawsuit against her former employer over alleged unpaid and overtime wages. The complaint was commenced in December 2017 against Northshore University Healthsystem, alleging that the company violated the Fair Labor Standards Act (FLSA), the Illinois Minimum Wage Law, §§ 820 ILCS 105/1 et seq. (“IMWL”), and the Illinois Wage Payment and Collection Act, §§ 820 ILCS 115/1 et seq. (“IWPCA”).

The Plaintiff alleges that Northshore has a common practice and policy that deprived Representatives of wages owed for the pre-shift activities they were require to perform on a daily basis. The FLSA complaint alleges Northshore’s policies and practices also failed to pay Plaintiff and the Collective Class overtime pay at a rate of 1.5 times their regular rate of pay because Plaintiff and the Collective Class worked forty hours or more in a workweek.

The lead plaintiff is now asking the court to hear the case with a jury. She is pursuing this action on behalf of other Patient Access Representatives as a FLSA collective action and IMWL and IWPCA class action and is requesting the Federal District Court in Illinois to direct Defendants to pay Representatives their unpaid wages and overtime, as well as liquidated damages, attorneys’ fees and costs, and any other remedies she and fellow employees may be entitled.

This was filed at the District Court of Northern District of Illinois, Eastern Division as Case No. 1:17-cv-09088-ARW. District Honorable Judge Andrea R. Wood is handling the case. The former employee is being represented by JTB Law Group, LLC and Sommers Schwartz, PC.

If you worked as a Representatives at Northshore University Healthsystem or otherwise have knowledge or interest regarding the overtime claims at issue in the lawsuit, please contact the JTB Law Group at (877) 561-0000.

 

TCA returns what MCA denies: Some truck drivers must receive an overtime pay

Interstate truck drivers working with vehicles weighing 10,000 pounds or less are definitely entitled to an overtime pay. This is a change from the past norm which all drivers should know by now to ensure they are actually enjoying it.

The Motor Carrier Act (MCA) generally exempts from the Fair Labor Standards Act’s required overtime pay the truck drivers, or similar employees, who are under the Secretary of Transportation’s power to establish qualifications and maximum hours of service. But since 2008, it has been changed or amended after Congress injected ‘corrections’ through the Technical Corrections Act (TCA).

The TCA removed from MCA’s list of exempt workers the individuals employed by a motor carrier or motor private carrier whose work, “in whole or in part,” affects the safe operation of motor vehicles weighing 10,000 pounds or less on public highways in interstate commerce.

Last November 16, the Fourth Circuit Court of Appeals ruled in favor of such truck drivers being entitled to an overtime pay. The Fourth Circuit has jurisdiction over Maryland, North Carolina, South Carolina, Virginia and West Virginia. Its decision reversed the earlier district court dismissal of the drivers’ complaint. The lower court had cited the MCA.

“Professional motor carriers, like Schmidt Baking Company, generally are exempt from the FLSA’s requirement that employers pay “overtime” wages for hours worked in excess of 40 hours per week.   However, Congress recently waived this exemption for motor carrier employees whose work, in whole or in part, affects the safety of vehicles weighing 10,000 pounds or less,” wrote Judge Barbara Milano Keenan.

Having reviewed the truck drivers’ case, the Fourth Circuit Court concluded that the complaining drivers did in fact fell under the group of employees protected by TCA and thus are entitled to overtime wages for hours worked in excess  of  40 hours per week.

Since 2008, truck drivers or other motor employees and the courts have had to work with a legally undefined phrase “in whole or in part.” Just how much is “in part” for employees to seek an overtime pay? That question has proved tricky among employees of interstate trucking with a mixed fleet of vehicles.

Contributing to the truck drivers’ difficulty in getting their overtime pay was the influential questioning posed by the Seventh Circuit of the Court of Appeals on the wisdom of dividing jurisdiction over drivers of trucks based on weight. This questioning seemed to have a sway in some district courts’ decisions against truck drivers. But in 2015, the TCA started to gain traction as drivers increasingly began winning their cases for an overtime pay. The Third Circuit Court of Appeals (covering Pennsylvania, New Jersey, Delaware and the Virgin Islands) in 2015 veered away from the Seventh Circuit’s questioning.

Judge Fuentes from the Third Circuit noted in a decision on a similar case of truckers that regardless of what the phrase means as the minimum, it, of course, covers drivers who spend half of their time driving smaller vehicles.

Last November, the Fourth Circuit agreed with the Third Circuit Court and ruled in favor of the truckers despite the lower court’s decision to apply the MCA exemption on them.

“In McMaster v. Eastern Armored Services, Inc., 780 F.3d 167 (3d Cir. 2015), the Third Circuit held that a driver employed by a motor carrier was entitled to overtime compensation under the FLSA because she spent part of her work week driving a vehicle weighing less than 10,000 pounds,” Judge Keenan of the Fourth Circuit said.

In the case brought to the Fourth Circuit, drivers Ronald Schilling, Russell Dolan, and Jonathan Hecker allegedly spent 70% to 90% of their time driving smaller vehicles. The court concluded that the TCA exception would apply and so, the drivers are entitled to an overtime pay.

“The text of the TCA plainly provides that employees working on mixed fleet vehicles are covered by the TCA exception,” the Fourth Circuit said.

The Department of Labor had also issued a guidance saying a driver is entitled to overtime for any week in which he spends any time driving a vehicle weighing 10,000 or less pounds.

 

If you or a person close to you are in a similar situation as truck driver Ronald Schilling, don’t hesitate to pursue your proper pay. Click here for advice or consult with us. Call Main: 1(877) 561-0000, Fax: 1 (855) JTB-LAWS.

Jury deals blow against sex discrimination at work in landmark case of Oklahoma Professor

A recent decision by an Oklahoma federal jury gives an inspiration to employees who suffer discrimination at work because of their gender.

In a verdict on December 4, the jury awarded a professor $1.16 million in damages after they found out during the trial that (1) she was denied tenure in 2009-10 because of her gender, (2) she was denied opportunity to apply for tenure in the 2010-11 academic year because of her gender, and (3) the university retaliated against her after she protested the workplace discrimination.

The case was filed in 2015 by the DOJ and later that year joined by the involved person herself, Dr. Rachel Tudor.

Tudor worked as a tenure track Assistant Professor with Southeastern Oklahoma State University from 2004 until her termination in 2011.She presented as a man and carried a traditionally male name when she began teaching at the school.

In the academic year 2007 or 2008, Dr. Tudor notified and started presenting herself at school as a woman, “wearing women’s clothing, styling her hair in a feminine manner, and going by the traditionally female name Rachel,” the case complaint said.

The change in Dr Tudor had an adverse impact on her application for tenure in the following academic year. The authorities in the school denied Tudor’s application, despite the positive recommendation of the school’s review committee. Parents and students reportedly rated her ok. She also received threats directly related to her gender preference. In her complaint, she said, she was told that “she should take safety precautions because some people were openly hostile towards transgender people.”

Dr Tudor named the school authorities who went against the same school review committee’s recommendation. It was at first just the school dean and the vice-president. The two denied her tenure, rejecting the committee’s recommendation without explaining why. Dr. Tudor appealed the decision. But efforts to correct it through grievance and an appeal failed as Dr Tudor said the school failed to follow normal appeal procedures. In 2010, the school president denied Tudor’s request for tenure.

After that, the school barred her from re-applying for promotion and tenure saying that doing so was not in the “best interests of the university.”

The following year, in 2011, the university fired Dr. Rachel Tudor. In 2015, the U.S. Department of Justice’s (DOJ) Civil Rights Division filed a complaint against Southeastern Oklahoma State University alleging that the school had engaged in gender-based discrimination in denying Dr. Tudor tenure.

Eventually, the school tried to explain that Dr. Tudor did not receive tenure because she was supposedly deficient in the areas of “research/scholarship” and “university service.” But in the complaint, Dr. Tudor’s qualifications were cited as “comparable, if not superior to, the qualifications of at least three other similarly-situated, non-transgender English professors who were considered for, and received, tenure during Dr. Tudor’s time” at the school.

What this means to others suffering discrimination at work

Title VII protection by law is available for those undergoing discrimination related to their gender-identity. Employers cannot lawfully discriminate against LGBT individuals. The discrimination can be prohibited and the employer will pay damages for sex discrimination under Title VII and other federal statutes prohibiting sex discrimination. The message of the law is about tolerating or respecting non-conformity to gender stereotypes.

But the individuals involved do not have to be LGBT to avail of such legal protection against sex stereotyping preventing them from getting the jobs they are qualified for. Straight men or women behaving in ways not commonly stereotyped for their gender can also file for protection, redress and damages. In a 1989 Supreme Court decision, it favored the complaint of a woman lawyer who was barred from being a partner because the firm found her too aggressive, a trait more stereotyped or the accepted norm for men. It is the Price Waterhouse decision and its impact is sweeping against discrimination based on gender stereotyping, both of LGBT and straight supposedly behaving in ways not yet considered as the norm at the time.

The Supreme Court said, “we are beyond the day when an employer could evaluate employees by assuming or insisting that they matched the stereotype associated with their group, for‘ [i]n forbidding employers to discriminate against individuals because of their sex, Congress intended to strike at the entire spectrum of disparate treatment of men and women resulting from sex stereotypes.’” (Los Angeles Dep’t of Water & Power v. Manhart, 435 U.S. 702, 707 n.13 (1978)). 

A simple rule of thumb in evaluating if one is suffering from gender-based discrimination at work is checking to see if the discrimination would not occur but for the person’s sex. (Smith v. City of Salem, 378 F.3d 566, 574 (6th Cir. 2004)


Find out about discrimination at work and what you can do to correct it
here.

Overtime is a Weekly Determination

Employers find all sort of “creative” ways to shirk their legally obligated responsibilities to pay employees overtime at a rate of at least one and a half times their regular rate of pay for hours worked in excess of forty in a workweek.  While the employers may consider their ideas original, the reality is most often another repetitive, run of the mill, and reprehensible attempt to cheat their employees.  One of the most common and banal ways employers attempt to avoid their overtime obligations is to “borrow” those hours from the future.

These schemes may involve more or less complex mathematics to pull off, but the equation always comes out the same way: employees making less money than the law requires.  The simplest of these systems is to pay employees across two weeks and only pay overtime if the employee works more than eighty hours in those two weeks.  If the employee works more than forty hours in the first week then the employer makes the employee work less than forty hours in the second week.  The Fair Labor Standards Act (“FLSA”) expressly prohibits such a pay scheme in almost all circumstances.

How do I know if my employer is paying me correctly?

For Example, if in week one you worked 50 hours and week two you worked 30 hours, the employer may try to say for the two week pay period it’s a total of 80 hours, so no overtime is owed.  In fact, you would be owed 10 hours of overtime for the first week of pay.

The more complex way an employer may try and fail to avoid the FLSA’s liability is to attempt to compensate overtime with promises of additional paid time off in the future.  This is often called comp-time or banked time and is again prohibited by the FLSA in most circumstances.

Not only do the FLSA and many state wage and hour laws expressly prohibit these attempts to short wages, but also when employers make these attempts they frequently commit other overtime violations as well.  Employers may claim to require the employee to work fewer hours in the second week to make up for the overtime hours worked in the first week, but in reality, the employee works just as many hours and is not paid for every hour the employee works.  Alternatively, an employer may promise days off in exchange for overtime, but make it so impossible to use or computes the days off in such a way that the offer become meaningless.  After all, an employer who is unscrupulous in one manner is likely unscrupulous in multiple manners.

If you work for an employer who uses some method to compensate hours worked in excess of forty in a workweek that is different than one and a half times your regular rate for each hour over forty in a week, you should consult with an FLSA Lawyer or overtime lawyer who can educate you about your employment rights.

Medical Assistant at Rutgers University Hospital Commences FLSA Lawsuit

A former medical assistant who worked at Rutgers University Hospital in Newark, NJ commenced a wage and hour lawsuit against her former employer over alleged unpaid regular and overtime wages. The complaint was commenced in December 2017 against Doctors Center Management Corporation and University Physician Associates of New Jersey, Inc., alleging that they jointly employ Rutgers University Hospital’s medical assistants and that they violated the Fair Labor Standards Act (FLSA), New Jersey Wage and Hour Laws and Regulations (“NJWHLR”) and New Jersey Wage Payment Law (“NJWPL”).

The FLSA complaint was filed in the District of New Jersey alleging that Defendants did not pay her for all of the hours she worked depriving her of both regular pay and overtime pay at the legally prescribed rate of 1.5 times her regular pay rate for hours over forty. The case is asking for collective action treatment under the FLSA 216(b) and Class Action status under Rule 23 for violations of NJWHLR and NJWPL.

The Plaintiff alleged that she recorded all of her working hours into Defendants’ timekeeping system, but they failed to pay her for that time. Included in this alleged unpaid time were meal breaks that were deducted from her pay without actually having a free and uninterrupted break.

The lead plaintiff is one of potentially hundreds of Medical Assistants employed at Rutgers University Hospitals. She is pursuing this action on behalf of other Medical Assistants as a FLSA collective and NJWHLR and NJWPL class action and is requesting the Federal District Court in New Jersey to direct Defendants to pay Medical Assistants their unpaid wages, proper overtime wages, liquidated damages, and reasonable attorney’s fees and costs.

This was filed at the District Court, District of New Jersey as Case No. 2:17-cv-12883-ES-JAD. The former employee is represented by the JTB Law Group, LLC.

If you believe you have information about the referenced FLSA lawsuit or may have been shorted wages, please contact the JTB Law Group at (877) 561-0000.

What Is Wage Theft?

Wage theft is an ongoing problem in which businesses illegally underpay their employees. The majority of wage theft violations stem from companies failing to pay the minimum wage, but other examples include employees working off the books, being forced to clock out early but keep working, having their tips stolen, not receiving mandatory meals or rest breaks, being forced to work through required screenings and processes, and having illegal deductions taken out of their paychecks. A 2017 report on wage theft highlights a variety of statistics, as follows.

 

Wage Theft is a $50 Billion Problem

The total value kept from employees due to wage theft is $50 billion. Compare that to the $14 billion in theft from robberies, burglaries, motor vehicle thefts and larcenies combined. This $14 billion is just 1/3 of the estimated wage theft cost in the United States!

Lawyers along with Federal and State Departments of labor recovered about $933 million in wage theft monies in 2012. This was not even 2% of the amount that was estimated to have been stolen.

Further, of employees who win their wage theft cases, 83% never receive a dime of money awarded to them. The average wage theft loss per worker is $51 out of weekly averaged earnings of $339. This means that over the course of a year, an average of $2,634 is stolen out of $17,616 in earnings.

 

Wage Theft is a Widespread Concern

A study reviewing workers in low-wage industries in New York, Los Angeles, and Chicago found that in any given week, 2/3 of employees were the victim of at least 1 pay-related violation

Out of respondents to a query on wage theft, the majority were female and foreign born, with Latinos and African-Americans experiencing the highest incidents of wage theft.

 

Fighting Back against Wage Theft

Attorneys and the government are fighting back. Private lawyers recovered $467 million in wage and hour class action lawsuits while the U.S. Department of Labor recovered $280 million from wage and hour violators.

Stronger government enforcement of labor laws and updated legal standards for a 21st-century workplace necessary to combat and halt wage theft.

Another Company, Another Cover-Up

Uber, the pioneer in ride-sharing may have innovated what gets you from here to there, but there’s nothing innovative about how it handled a hacker who allegedly stole 57 million users information – IT COVERED IT UP!  According to Bloomberg News, in October 2016 hackers stole data from the company that included its users telephone numbers and driver’s license information and Failed to Disclose the data breach to its customers.  Instead, the company paid hackers $100,000 to on their honor delete the compromised data.   It’s not clear if they paid the extortion with bitcoins or some other cryptocurrency, but it is clear they did not do right to their customers whose information may have been compromised and by waiting for over a year for this to be disclosed it suggests deep integrity issues over there.  Further, it’s users still haven’t been properly notified.

The irony of the cover-up is at the same time they were negotiating with regulators from the United States amidst privacy concerns and were smack dab in the middle of litigation with its drivers over Fair Labor Standards Act (FLSA) violations for classifying its drivers as independent contractors rather than employees.  In the thick of discovery for these processes and some very front page news regarding management having issues, the cover up was well on its way.

Oftentimes the cover up is worse than the underlying item they’re worried about, and in this case it might or might not be.  I mean, after all, if you take the hackers at their word, I’m sure they just deleted all the information they stole.  A crime motivated by profit wouldn’t continue to profit by keeping a set of the data would it?

Perhaps, UBER hid behind the fact that it had an arbitration clause and for a period of time that clause which seeks to kill consumer class actions was found unenforceable and they wanted to wait that out with deliberate recklessness towards its customers.  But then how does one hold a major company accountable when an individual may only have a few hundred dollars or a few thousand dollars’ worth of damages, and the cost for admission to arbitrate may be to pay the arbitrator $500 an hour to privately and individually judge that claim? The inequity of arbitration.

It should be interesting to read how this plays out over the coming months. Hopefully, there will be some industrious ways to hold UBER accountable, or perhaps some courageous whistleblower will step forward and blow the whistle on what really went on.

I guess for now UBER which in Latin means abundance doesn’t refer to the fact that you can obtain a ride anywhere, but that thanks to them your data may be everywhere.  And its users who rely on them to safeguard their information through Fides et Justitia (faith and justice), now need UBER to do something for people to regain its trust or else justice will claim another nascent company who is up to old tricks.

 

Wrong Job Title Robs Proper Pay of Port to Port International Corp. Employees

A company making millions in shipping used vehicles to Latino countries is facing a lawsuit over its alleged violation of the Fair Labor Standards Act (FLSA). A former employee led the filing of the case citing the federal statute on paying overtime. According to Suendy Zavala, an employee at Port to Port International  Corporation for more than three years, she was not a seaman while on that job. Neither were her fellow employees. But, the company called them seamen and exempted them from the FLSA-required rate for overtime pay.

The misclassification is being used by Port to Port International Corp. to evade paying the employees their overtime hours at a rate of 1.5 times their regular hourly rate, according to Zavala’s complaint.

Employees are non-exempt from FLSA, no seaman at all

Although Port to Port’s business involves freight forwarding, it does not own or operate any ocean vessels. It merely contracts other companies to transport their freight while employees such as Zavala busied themselves facilitating that. When the ocean vessels set sail, the company does not have employees aboard the vessels.

Zavala’s job is that of “lead specialist.” She did it from the company headquarters in New Castle, Delaware. She took calls from customers, processed shipment orders, and relayed these to shippers of the company.

Her counsel from JTB Law Group said her job and that of the other employees are “of a different character” from the job of the seaman described and exempted from time-and-a-half overtime pay by the FLSA.

Zavala’s regular work in more than three years at Port to Port International Corp. was typically more than 40 hours a week. Her shift lasted from 8:30 a.m. to 5:30 p.m., and on top of that, she occasionally continued working after her shift. She worked for Port to Port from January 2014 to April 2017.

 

Port to Port’s growth

Port to Port International Corp. began in 1998 shipping used cars to other countries. It rapidly gained customers. By now, aside from being regarded as one of the nation’s largest shippers of used cars, Port to Port International is a growing shipper also of new and used construction machinery, forestry equipment and containerized cargoes to Central and South America, the Caribbean, Africa, Middle East, Europe, Asia and other worldwide markets. It is a full-service non-vessel operating common carrier shipping company, international freight forwarder and terminal operator.

Estimates show it has an annual revenue of $12.8 million. It employs a full-time staff of 40 to 50, many of them are reportedly bilingual.

Anabel Panayotti started the company after she saw the need for a one-stop-shop in exporting used cars, mainly to Latino countries. Before that, she had worked for Dole and didn’t feel she was moving up. She hailed from Honduras. She moved up by establishing her own business, packing with used cars the ships departing the US after delivering fruits from Latino countries.

Now her employees are asking for their legally mandated rate of pay for hours they’d worked on overtime, plus damages and reasonable attorney’s fees.

Zavala’s lawyers from the JTB Law Group LLC and Gellert, Scali, Busenkell & Brown LLC said that under the FLSA, an employer must convert an employee’s wages to rate per hour to determine how much overtime pay he or she must receive in compliance with the statute. This applies “No matter how an employee is paid—whether by the hour, by the piece, on a commission, or on a salary.”

Zavala is the first member in a putative FLSA Collective of Port to Port’s employees misclassified as “seaman.” The collective could include up to 100 members who regularly worked more than 40 hours a week but were paid the same hourly rates for all the hours they’ve worked.

Zavala through her lawyers said her former employer knowingly violated the federal statute on paying overtime as it knew its classification of the employees as seamen was precisely only to evade paying them the federally prescribed rate of pay for overtime.

The case is filed in the District Court of Delaware as Case 1:17-cv-01411-UNA. #

“There is no room for misinterpretation in overtime pay and it should be paid even when employees are not aware of the Labor Laws. If an employee gets fired or penalized by his/her employer for bringing up the issue of unpaid pay, then a claim can be filed to get their position reinstated.”

Virtual Workers and Economic Reality: Independent Business Owners Claim they were Employees

Call center service provider Great VirtualWorks is facing a collective action complaint about its alleged violation of the FLSA (Fair Labor Standards Act) and minimum wage/overtime laws of Kentucky and Pennsylvania. The case alleges that Great VirtualWorks misclassified “independent business owners” as independent contractors rather than employees.

However, the so-called business owners are in fact individual employees working from their homes, Burton and Dlhopolsky said. According to the complaint, these employees are performing hourly-paid work duties such as telephone-based customer service, sales service, and technical support for Great VirtualWorks’ client companies.

Great VictualWorks says on its website that it is in the business of providing small and large corporations with the highest quality customer service, sales & support and technical expertise for its client’s consumer base. It mostly takes into its “network of skilled, knowledgeable representatives” those it describes as traditionally underserved. These individuals include the work-at-home moms, college students, retirees, veterans and the minorities. Great VictualWorks proudly says it gives this segment of the population “the vital opportunity to earn an income working part time.”

But two such individuals, Burton and Dlhopolsky, alleged that Great VirtualWorks has been violating the FLSA, mislabeling them to avoid paying them as rightful employees all the hours they spent actually working for the company.

According to the complaint, as provided in the FLSA and in wage and hour laws of  Kentucky and Pennsylvania, Great VirtualWorks has at all times of Burton and Dlhopolsky’s “employment” been in control of their work schedules and activities. There were also times, they added, when Great VirtualWorks required them to work more hours or during specific days like on weekends.

The plaintiffs argued that they and other similarly situated individuals were not business owners or contractors as labeled by Great VirtualWorks because in all the time they worked for the company, they had not been required to make significant investments in equipment or materials,  to exercise any specific skills, or make a significant profit or loss from their work.

The plaintiffs said Great VirtualWorks relied on them and similarly situated employees to perform an integral part of its business of providing telephone-based customer service, sales service and technical support to other companies.

Burton and Dlhopolsky worked for Great VirtualWorks in 2015 and 2016. They are now seeking the unpaid minimum, overtime, and contractually-owed wages, liquidated damages, fees and costs, and other remedies they may be entitled to during this time. The same goes for other similarly situated employees in the putative FLSA collective class.

 

 

Totally employees’ work

Burton and Dlhopolsky said that during the time they worked as “independent business owners”, Great VirtualWorks failed to pay them for work they performed before, during and after shifts, as well as during periods in which they were temporarily disconnected from the company’s timekeeping system.

The work for which Burton and Dlhopolsky seek pay includes connecting to the company from their own homes or places of work, opening computer applications with which to perform the company’s needed telephone-based customer service, sales service and technical support (5-20 minutes); having brief rest breaks (the FLSA says 5-minute to 20-minute breaks must be counted as hours worked); troubleshooting activities in times they got disconnected to the company’s network during their shift; performing post-work duties such as shutting down computers and applications; performing related work such as reviewing emails and completing notes when not engaged in calls but clocked in; taking part in required online training; and attending mandatory meetings or coaching sessions.

As a result, the Complaint alleges, the pay actually received averaged less than $7.25 per hour, which is the minimum wage under federal law as well as in Kentucky and Pennsylvania. On top of this, their overtime was being paid correctly, they allege.

Great VirtualWorks is a  corporation headquartered in Fort Lauderdale, Florida that provides telephone-based customer service, sales service and technical support to customers of client companies such as Great Healthworks, makers of the dietary supplement Omega XL.

The collective claims brought under the FLSA here allegedly apply to similarly situated individuals in other states in addition to Kentucky and Pennsylvania.

Currently the lawsuit is stayed pending an upcoming ruling by the United States Supreme Court on a legal issue relevant to the employees’ claims, which is whether Great VirtualWorks can require them to submit their claims to individual arbitration.

The amended collective class action complaint with jury demand is recorded in Kentucky as  Case No. 0:17-cv-00063-HRW. The plaintiffs are represented by Barkan Meizlish Handelman, Goodin Derose Wenz, LLP and JTB Law Group, LLC.

If you have questions or information to provide, you may contact the following attorneys:

Trent Taylor; ttaylor@barkanmeizlish.com; (800) 274-5297

Robi Baishnab; rbaishnab@barkanmeizlish.com; 800) 274-5297

Nicholas Conlon; nicholasconlon@jtblawgroup.com; (877) 561-0000)

 

Firstsource’s MedAssist faces federal collective action suit over non-payment of overtime

At Firstsource, it’s about more than the work we do. It’s also about the positive outcomes we help to create. “

This is how Firstsrouce introduces its healthcare provider division MedAssist’s edge to prospective clients and employees through its website. But in an FLSA collective action suit recently filed against Firstsource Solutions USA, LLC d/b/a MedAssist in Kentucky, two former employees have alleged that the company has routinely been making its hourly-paid healthcare provider employees including patient service representatives, floaters/trainers, and team leads work longer than their paid hours.

They alleged that MedAssist systematically makes them work off-the-clock and does not pay them any overtime compensation.  The healthcare provider employees are now seeking to recover the allegedly unpaid overtime pay as well as to put a stop to the company’s de facto policy of routinely requiring off-the-clock, unpaid work.

MedAssist is the healthcare provider division of Firstsource Solutions USA, a subsidiary of global outsourcing company Firstsource Solutions Ltd with headquarters in India.  It says on its website that it is servicing over 900 healthcare providers worldwide, helping these providers “maximize reimbursements and increase cash flow.”

In the U.S., Firstsource Solutions USA has published job listings for Patient Service Representative, Floater/Trainer, or Team Lead in at a minimum the following states: Alabama, Florida, Indiana, Maine, North Carolina, Virginia, Georgia, Michigan, Tennessee, Kentucky, Mississippi and Ohio.

Alan Bernardez and Tawanna Pittman, the two lead plaintiffs in the putative collective action, are both former patient service representatives of MedAssist.  At the time they were working for MedAssist in Virginia, they and other similarly situated employees were being given daily and weekly work assignments that cannot be completed in just 40 hours a week.

But the company through its management routinely compelled them not to clock in beyond 40 hours a week.  Bernardez worked for MedAssist for more than 10 years, from April 2006 to November 2016; Pittman worked there for seven years, from October 2010 to May 2017.

The two said that in MedAssist, if the hourly-paid patient service representatives, floaters/trainers and team leads clocked in or out at a time outside of their 8-hour daily work schedule, the time-recording will turn red and would need a manual reset.  The employees further allege that they have been pressured and/or reprimanded by the management for not completing their weekly and daily volume of work assignments.  As a result, the employees, according to Bernardez and Pittman, regularly render unpaid work before and after their shift and even during their lunch breaks.

They are seeking unpaid overtime and liquidated damages for the company’s alleged violation of the Fair Labor Standards Act.  Under the statute, the company is required to pay them overtime compensation at a rate of not less than one and one-half (1.5) times their regular rate of pay, for work performed over forty (40) hours per week.

The case is Bernardez, et al v. Firstsource Solutions USA, LLC d/b/a MedAssist, Case No. 3:17-cv-00613-DJH ((W.D. Ky.).

TGI Fridays employees take a step closer to $19 M backwages

The allegedly underpaid food servers and cooks at TGI Fridays do not have the luxury yet to exclaim ‘Thank God It’s Friday.’ Through a collective action suit against the company they managed to gain the promise of being paid the amount which was denied them the past few years. But the settlement deal that promises as much as $19.1 million in backwages apparently also carries unacceptable provisions. U.S. District Judge Analisa Torres rejected the settlement saying it has provisions that did “not pass muster”.

Judge Torres found that it included releases of claims other than those being litigated and some confidentiality requirements. On September 28, the parties submitted a revised version addressing those points.

The settlement stands to benefit around 28,000 present and former employees of TGI Fridays. The $19 million settlement is also believed to be one of the largest in recent years.

The wage and hour case arose from TGI Friday’s alleged practice of systematically denying its workers (waitstaff and cooks) their proper wages. In a lawsuit filed early 2014 the workers alleged that TGI Fridays chronically underpaid them by disregarding or not recording a portion of their actual work hours and also forcing the workers to perform jobs not normally part of their paid duties.

As a whole the suit brought nationwide collective action claims under Fair Labor Standards Act (FLSA) and New York labor law class claims on behalf of thousands of employees against TGI Friday’s and its parent company at the time, the Carlson Restaurants Inc.

News reports said there have been efforts of the restaurant owners to dodge responsibility. There have been changes in the registered owner of TGI Fridays. At the same time, there have been separately inked deals with other employees reportedly to prevent them from joining the suit.

The district court of New York certified the workers in January 2015. A year and a half later it also approved what the workers’ described as their “hard-won” demand to include in the case other related wage and hour complaints, despite the TGI Friday’s objections. On June 2016, U.S. District Judge Analisa Torres allowed TGI Friday’s workers to expand their wage-and-hour collective action suit. It permitted additional allegations related to their claims under federal, New York and New Jersey law and under the wage laws of eight other states.

FLSA reminders to other restaurant owners and workers

The restaurant workers’ case sheds light on these group of workers’ unique difficulties at work.  If you think you are also not getting paid properly for all the hours you’ve worked or jobs performed, click here Your action will not only give justice to your case but also to similar employees. #

 

 

Seattle car rental workers to receive $2 M back wages from Hertz, Thrifty

Almost four years since the workers’ hourly minimum wage in Seattle, Washington rose to $15, those working in car rental companies Hertz under DTG Operations Inc. (better known as Thrifty) will finally get back wages corresponding to the hike denied them by their employers. Hertz and Thrifty agreed to pay the nearly $2 million settlement to conclude the workers’ case against them filed with the Department of Labor. https://www.reuters.com/article/employment-seatac/car-rental-companies-settle-seatac-minimum-wage-row-for-2-mln-idUSL2N1LO29Y

The agreement is one of the largest in recent history for the Washington State Department of Labor & Industries. It said that in all of last year when it received more than 5,000 wage payment complaints it restored just about $2.8 million in total to workers. Seattle was the first city in the U.S. to raise its minimum wage to $15 an hour in 2014.

Some employers such as the car rental services Hertz Corp and Thrifty deferred paying the prescribed minimum wage hike. Along with several other businesses such as the Alaska Airlines and the Washington Restaurants Association, they questioned the city ordinance in court. They got the lower court’s nod in December 2013. Shortly before the ordinance was to take effect, the lower court excluded the employers and employees doing business at the Seattle-Tacoma International Airport from coverage of the wage hike ordinance.

But in 2015 the Supreme Court of Washington upheld Seattle’s ordinance, ruling it could be enforced at the airport. Hertz and DTG then began paying the new minimum wage. Its workers sought in 2016 the help of the Washington State Department of Labor & Industries (L&I) to make their employers pay the corresponding minimum wage they denied paying the workers from January 1, 2014 to September 30, 2015. Following its investigation, the Washington State Department of Labor & Industries forged an agreement with Hertz and DTG.

Hertz and DTG Operations Inc. (Thrifty) will pay per employee amounts ranging from a couple of thousand dollars to $30,000, plus interest. The back wages total $1.51 million, with another $458,651 in interest.

“Now that this agreement is in place, we’re moving ahead to get this money into the hands of the people who worked hard for it. The funds will make a real difference for these workers and their families,” said L&I Director Joel Sacks http://lni.wa.gov/News/2017/pr170906a.asp

Seattle’s minimum wage ordinance is just one of three dozen local minimum wage laws across the U.S. Like in the experience of Hertz and Thrifty workers, many more workers may not be receiving the correct amount in minimum wages.

Exotic Dancers Wage Suit Revived by Third Circuit

The Third Circuit Court recently revived a class action and putative collection case alleging that a renowned adult nightclub in New Jersey underpaid its exotic dancers. The Court issued a precedential ruling while specifying that statutory claims fall outside of arbitration agreements unless specifically mentioned in the clauses.

The Third Circuit Courts’ three-judge panel decision was a welcome victory for Ms. Alissa Moon, who previously argued to the New Jersey District Court that her ‘Independent Dancer Rental Agreement’ voided the arbitration provision within and that New Jersey Wage Payment Law, Wage and Hour claims and the federal Fair Labor Standards Act (FLSA) fall outside of its scope.

U.S. District Judge Susan D.Wigenton dismissed the case in July 2016 finding that Ms.Moon is required to arbitrate her claims due to waiving her rights under the nightclubs arbitration agreement.

The Third Circuit Court reversed the ruling on Thursday while analysing three separate Supreme Court rulings that addressed arbitration clauses within the state. The panel trio found solid guidance from Atales and Garfinkel findings, which specified the quoted language within the arbitration clause were only applicable to contract claims.

The panel stated: “As the arbitration clause presented closely resembles in nature the arbitration clause within Garfinkle and Atales claims which were found and upheld by the Supreme Court of New Jersey only were applicable to contract disputes, therefore we hold that the current arbitration clause provided fails to cover Ms. Moons’ statutory claims”

Ms. Moon’s lawsuit made allegations that the nightclub business had deliberately misclassified her as well as other exotic dancers as independent contractors which violated federal Fair Labor Standards Act and New Jersey’s Wage Payment Law and Wage and Hour Laws. Claims were lodged stating that the company failed to pay both minimum and overtime wages, as well as workers compensation premiums and mandatory insurance benefits, unemployment disability and social security taxes.

The court records show that Moon performed as an exotic dancer at Breathless Men’s Club in Rahway, New Jersey from May 2013 to September 2015 and had signed the contract agreement in January 2015.

Moon signed the contract specifying within the agreement that she was an independent contractor and not an actual employee of the Breathless company. The arbitration provision states that Moon and the company’s litigation rights were voluntarily waived and that each party had entitlements to request to resolve conflicts and disputes by binding arbitration procedures.

When Moon challenged the validity of the agreement provisions within the contract, Moon argued that the contract agreement is invalid as the contract incorrectly misclassified her as an independent contractor. Previously, Judge Wigenton had stated “that the challenges to an agreement’s legality that contains arbitration provisions in comparison to challenges to the actual arbitration process are essentially decided by the arbitrator”.

Moon then claimed that the provisions within the agreement failed to be supported with consideration, as Moon had only provided services to the club on a part-time basis for eight months after signing the contract, however the Judge found consideration was sufficient due to Moons continued ability to perform. Moon asserted that the one-sided terms that were designed to only benefit the Breathless company, including terms included within the arbitration procedure, was overall “substantively unconscionable.”

Overall, the Circuit’s finding is of note, as the issue of waiving FLSA rights for arbitration has been a hot topic with the proliferation of wage and hour lawsuits. The Court was troubled with the waiving of statutory rights not specifically enumerated in the contract, the Circuit gave deference to the New Jersey Supreme Court who indicated that an agreement like this could only wave contractual, not statutory rights.

Court Approves $5.95 million Settlement for Ecolab Workers

 

 

 

 

 

 

 

 

 

 

 

California Federal Judge, Phyllis J. Hamilton

A federal judge approved a settlement in the ongoing case of Route Sales Managers and Sales Service Route Managers  of Ecolab Inc. in California who said that they were misclassified as overtime exempt from overtime under the Fair Labor Standards Act (FLSA) and California wage and hour laws. The FLSA case was approved by a California Federal Judge for $5.95 million. The judge also said that she would cut down an amount of $1.48 million for the attorney’s fees. Attorney fees in FLSA actions are born by the defendant if the Plaintiff prevails which is a powerful resolution mechanism.

 

Fair Pay for Ecolab Employees

According to the judge Phyllis J. Hamilton, the settlement was a very good result when weighing it versus the risks of continued litigation since there was an agreement in the service managers’ employment contracts  which purported to waive class action litigation. The  settlement order provided for a substantial and meaningful recovery to the class providing 158 employees a total of $442 per week of work. The FLSA settlement also contained the terms by which an addition of $5000 are to be paid to the representatives of the five classes, which is an incentive award for the lead plaintiffs.

 

Prior Overtime Lawsuits Against Ecolab

The lawsuit stemmed from a prior related case of Ross v. Ecolab. In that particular lawsuit the settlement finalized for $35 million in March 2016. The service managers’ lawsuit was filed in August 2016 and it took 3 months to go to mediation while the prior case took around 7 years of litigation. The prior case also raised the allegation of misclassification of workers hired to service dishwashers as exempt form the law of California. That particular case ended with as settlement paying of $544 to 200 class workers per week of their work for the period of almost ten and a half years.

After the result of the case of Ross v. Ecolab, another case was filed by Juan Campos, asking for similar relief for the workers who were not covered in the lawsuit by Ross. The case was filed in the California federal court which resulted in Campos winning the compensations for half of 2016.

The class counsel stated that the workers in Campos’ lawsuit were the same who should have been in the Ross lawsuit.

Juan Campos v. Ecolab Inc. is the case, case number 4:16-cv-04829, in the U.S. District Court for the Northern District of Caifornia.

 

Has Ecolab Learned its Lesson?

After paying millions of dollars in overtime settlements, one might think Ecolab would have learned to pay proper overtime. But recent reports are that the positions of Territory Representatives and Senior Territory Representatives (employees who were not part of the Campos and Ross lawsuits) indicate that future overtime lawsuits may still be in store for Ecolab. Territory Representatives and Senior Territory Representatives used to be salaried, but were ‘reclassified’ to hourly-paid in early 2014. Since then, reports have arisen that Territory Representatives and Senior Territory Representatives are not allowed to enter all of their work hours into Ecolab’s time-keeping system, and that Ecolab does not factor their bonus pay into their “regular rates of pay” for purposes of calculating their overtime.

The attorneys at JTB Law Group are currently interviewing individuals who worked as Ecolab Territory Representatives and Senior Territory Representatives about possible unpaid overtime pay. If you worked for Ecolab in this capacity or have information that can help, please contact us today!

Thumbs Down? Victoria’s Secret Must Stay Secret Employer Justified in Firing Over FB Posts

While the right to free speech is a constitutional right, free speech in the workplace is abridged as the employer can take action.  The Third Circuit found that Victoria’s Secret permissibly fired an employee who publicly sharing pictures on Facebook that the employer found offensive.  The posting allegedly, were supposed to ironically protest against racism, but the Court held divining intent is not a function it would delve into, and if the employer found it distasteful it could negatively reflect upon the company and they were justified in the termination.  Evidently, Victoria’s Secret likes to keep things secret and its employees are functionally on notice that public postings that indirectly link back to the employer will not be tolerated if they deem offensive in their sole discretion.

The first picture in question was captioned “Game 5 in LA is Free Sheet Night… Donald Sterling Bobble head doll night too!” which was a reference to the former owner of the Clipper who was banned for basketball for racism.  The second post, was a picture of an African American woman named “Airwrecka McBride” with the comment that “I’ve been spelling Erica wrong my whole life.”

The U.S. Court of Appeals for the Third Circuit upheld her firing as did the District Court. Caplan v. L Brands/Victoria’s Secret Stores affirmed the ruling from the Western District of Pennsylvania although indicated the opinion may be non-precedential, but it is hard to see how it would not be cited.  The defense Caplan tried to mount that the post was actually a statement against racism and the other post was supposed to be funny so it was protected speech was squarely rejected.  Third Circuit Judge Theodore A. McKee, read the post as “satiriz[ing] the atypical spelling of an African American woman’s name,” and thus Victoria’s Secret could fire Caplan.  “However, even if this post was intended as a protest against racism, and therefore fell under the protective umbrella of the First Amendment, Caplan’s claim still fails given the Airwrecka post.”

The ruling is a bit odd since interpretation of intent is usually an issue of fact for a jury to decide and not an issue for the Court to conclude, but the emerging trend in discrimination cases is for the Court to throw out matters absent smoking gun proof and the Court here was broadcasting a message.  This sharply contrasts with Fair Labor Standards Act (FLSA) actions which involve wage and hour disputes and proper overtime pay which are generally objective questions for a Court to decide whether someone was paid properly.  Also, contrasted are Qui Tam cases, also known as False Claims Act (FCA) which involve whether individuals filed false claims with the government for payment and are on the rise.
In any event, employees beware.  Victoria’s Secret may have seen through lingerie, but things they can see like Facebook posts, may result in discipline.

Those Singles Add Up – Strip dancers enjoy $6.5 million settlement with Déjà Vu for a variety of Alleged wage and hour violations

In billed remarkable settlement valued at $6.5-million settlement, up to 28,000 exotic dancers at adult entertainment clubs run by Deja Vu Services Inc. and related companies stand to get some $200 each in cash award. This followed the decision last June 19 of a federal judge in Detroit approving the settlement deal proposed by Déjà vu.

U.S. District Judge Stephen Murphy wrote in a 25-page opinion that “The proposed settlement offers value to the class in the form of cash, rent credit or dance fee payments, and long-term structural changes to defendants’ business practices, all of which directly benefit class members.”

Murphy reportedly said there is no guarantee the dancers will win the lawsuit if the case went to trial. In approving the deal, he overruled the objections filed last May by several exotic dancers against the Déjà vu-proposed settlement. At least six exotic dancers opposed in court the then $6.5-million proposed settlement of a class action filed against the Déjà vu chain of strip clubs due to its alleged unfair labor practices.

The dancers said the settlement deal was inadequate, unfair and unreasonable.  But reports quoted some lawyers as saying the U.S. District Judge Stephen Murphy can’t modify the proposed settlement – he can only accept it or reject it as is.

Lawyer Jason T. Brown of JTB Group, a wage and hour law office that handles similar FLSA class action suits, commented that, “This is a fair settlement considering the risks involved. When there are widespread allegations of misclassifying exotic dancers as independent contractors and thereby depriving them of their proper wages under the Fair Labor Standards Act (FLSA) then it make dollars and sense to try to resolve this via compromise rather than have to do individualized inquiries regarding which dancer was an employee, and which, if any, potentially actually were an independent contractor. One thing is clear though, all employees are entitled to be paid for their work, and no one should be afraid to come forward.”

Under the settlement, Déjà vu will use an agreed set of criteria to determine whether each dancer is an employee or an independent contractor.

But in the first place, the case (filed as Doe v. Deja Vu Servs., Inc., E.D. Mich., No. 16-10877, preliminary injunction granted 2/9/17), centered on whether the dancers are employees or independent contractors. The classification will decide if the clubs should pay the dancers a minimum hourly wage or if they can charge the dancers for doing business inside the clubs.

The class suit alleges that the dancers are not paid their wages but required to pay rent to the clubs, plus 30% or more of their tips. Monetary penalties also await the dancers who left early or showed up late.

More than just a Lap Dance & Lip Service

Lawyer Jason T. Brown of JTB Law Group says the way the settlement funds are grouped together shows there is a potential benefit to the class of 6.5 million dollars. Much of the  $6.5 million will be like coupons which the dancers can draw from to offset the fees being charged by the club, for those that are indeed independent contractors.

The 6.5 million deal provides just $920,000 in cash payments for  more than 28,000 dancers who worked at 64 different clubs in 18 states, including 11 in Michigan, Bosto. The settlement also provides for more than $1 million in attorney fees.

The dancers who won’t opt for cash and wish to continue as independent contractors will share in a $4.5 million pool of credits to offset the fees the clubs charged them to perform.

Those deemed employees will be paid minimum wage, plus bonuses including commissions of at least 20% on their private dances and drink sales, and receive club support to pay for employment-related expenses such as the purchase and cleaning of costumes and payment of required local license fees.

Notices are now being sent to class members who would opt into the settlement, in which case they stand to get either $100 or credits to pay rent to Déjà vu. They can also choose to opt out or file objections.

 

 

 

Group of Misclassified FAS workers in a Wage and Hour Class Action Suit win $2 Million in damages – More Class Actions to Follow

CALIFORNIA – Eleven workers of Field Asset Services (FAS) won an award of more than $2 million in total damages after the California federal jury decided Monday (July 17, 2017) on the first of multiple class action trials involving 200 workers. Each of the 11 workers will receive between $150,000 and $200,000 on average. The case arose from the property servicing company’s misclassification of these workers as independent contractors, thus it did not reimburse the workers’ expenses and pay their overtime for years. (Bowerman et al. v. Field Asset Services Inc., case number 3:13-cv-00057, in the U.S. District Court for the District of Northern California).

According to attorney Jason T. Brown of the JTB Law Group employers have a prevalent scheme to evade paying workers overtime under the FLSA (Fair Labor Standard Act) and sometimes resort to classifying them as independent contractors to avoid the overtime premium and short the workers in other ways as well. Mr. Brown stated, “This is a tremendous victory for the workers and the Courts look to economic realities to see whether the workers are employees or independent contractors. If classified improperly this can trigger double damages plus attorney fees as well as other remedies.” Mr. Brown went on to indicate that although this case was not handled by his firm, he and the JTB Law Group handle and have handled similar matters in the past.

The award will restore certain benefits to the workers. On top of the awarded amount, it’s also likely that the workers might get additional restitution owing to FAS’ violation of unfair competition laws. The verdict is a reminder that the California laws’ imbue workers with significant protections and employers must comply with these laws.

The class action lawsuit began in January 2013 against FAS, a company that maintains and repairs foreclosed and real-estate-owned properties. The workers alleged that the company failed to pay their overtime and reimburse their work-related expenses simply because FAS misidentified them as independent contractors when actually they were employees.
Two years later, in January 2015, U.S. District Judge William H. Orrick certified a class of FAS independent contractors. It certified those who have worked for the company in California from January 2009 and did not work elsewhere for more than 30 percent of the time.

Against FAS’ bid to decertify the said class, Judge Orrick maintained the certification. He asserted that there was enough information to believe the workers are not independent contractors. Further, In March, he granted the workers a partial summary judgment. He ruled that FAS is liable for having failed to pay the workers overtime and business expenses. However, he left to the jury the decision on how much the workers should get in damages. Instead of proceeding to hold a single trial usually held in class suits, individualized jury trials were decided for this one. Olivier said that FAS objected to holding a single trial citing there would likely be wide discrepancies in the amounts in overtime and business expenses sought by each class member.

The workers agreed to hold individualized jury trials to determine how much money each is entitled to. It’s not a common move but Olivier said it’s safe to say “it’s absolutely an accepted and appropriate procedure.”
The first trial involving 11 workers began July 5. The workers testified before a jury that FAS threatened to cut their work assignments if they will not work for seven days a week. After hearing testimonies for nearly two weeks, the jury issued a verdict awarding each of the 11 workers a specific amount of damages totaling more than $2 million.

With the conclusion of the first trial, Olivier said the parties will return to Judge Orrick. The judge will decide how the rest of the damages trials will proceed. She said the court also hasn’t determined yet if the workers can refer to the $2 million verdict in the upcoming trials.