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Macy’s Settles Unpaid Overtime Claims for $3 million

The Fair Labor Standards Act (FLSA) is a federal law that provides various protections for workers in the United States who would otherwise be vulnerable to exploitation by their employers. In order to accomplish this, the FLSA regulates things like minimum wage and overtime, but not everyone is entitled to these protections.

Under the FLSA, independent contractors (those who are self-employed) are exempt from many of these protections. This is because the law assumes independent contractors have greater leverage when negotiating how and when they get paid.

Because they are largely unprotected, the FLSA provides specific requirements workers must fulfill in order to be considered independent contractors. These include the ability to make their own hours, control the environment they work in and decide what they wear to work.

Unfortunately, there are too many companies out there who are always looking for ways around the law. Some of them have been known to misclassify employees as independent contractors to avoid providing things like overtime compensation, health insurance, and social security.

One alleged example of this was a wage and hour class action lawsuit filed against Macy’s West Stores Inc. and Joseph Eletto Transfer Inc. The logistics management company provided truck drivers for Macy’s, then allegedly misclassified the truck drivers as independent contractors.

The lead plaintiffs in the class action lawsuit, Victor Fuentes, Jose Avila, Mario Navarro, and George Garcia Jr., filed the lawsuit in November 2013 in Los Angeles Superior Court. The case was later moved to federal court.

The plaintiffs allege they should have been classified as employees and compensated accordingly because they were allegedly “heavily regulated” by Macy’s. For example, the truck drivers were allegedly hired by Macy’s employees, required to install Macy’s banners on their trucks, wear Macy’s uniforms, and follow a delivery schedule that was set up by Macy’s. Furthermore, the truck drivers were allegedly not allowed to use the trucks for any other purposes than making deliveries when the trucks were bearing the Macy’s banners.

Macy’s and Eletto continue to deny these accusations, but they agreed to settle the lawsuit for $3 million in order to avoid a long and costly trial in the courts. Judge Wright agreed to grant preliminary approval to the settlement, even though the class size dramatically increased between the time the settlement was created and the time of his preliminary approval.

The class, which includes all truck drivers and their helpers who worked for Macy’s during a defined time period, went from 200 class members to 600. Judge Wright expressed concern with keeping the settlement amount the same, even after the number of class members had tripled.

The attorneys representing the plaintiffs assured Judge Wright that, although Eletto had underestimated the number of helpers that had assisted the truck drivers, the number of “work weeks” as defined in the Class Period, had not changed. As a result, keeping the settlement amount was still proper.

Even after the addition of approximately 400 members, some of the members who worked the most “work weeks” for Macy’s may be eligible to collect as much as $12,000 as their share of the settlement.

Our Naperville and Elgin wage and hour attorneys and unpaid overtime lawyers and attorneys are intimately familiar with the issues that arise during wage claim litigation, and we know the laws that govern overtime cases well. Many employers misclassify employees as being exempt from overtime laws and pay workers salaries instead of hourly wages in order to avoid paying them overtime. Some employers mistakenly classify employees as exempt and others intentionally do so in order to circumvent the law. In either case, workers do not receive the wages they should, and a lawsuit may be the only way to recover their earned wages.

Nationwide Consumer Rights is based in Chicago and Oakbrook Terrace. We represent clients throughout the country who have not been paid for the overtime hours that they worked. If you believe that you are owed overtime wages, contact one of our Chicago class action attorneys by phone at (877) 990-4990 or through our online form.