Class-Action

New York Times Reports: “Judge Allows Redlining Suits to Proceed”

May 12, 2011 | Peter S. Lubin and James V. DiTommaso

Judge Allows Redlining Suits to Proceed
Two cases, one stemming from practices in Memphis and another in Baltimore, accuse Wells Fargo of steering black clients to expensive subprime loans.

The Article reports:

“The City of Memphis and Shelby County have not alleged that Wells Fargo lending practices resulted in a host of social and political ills plaguing entire sections of the community,” Judge Anderson wrote in a 32-page order. “Rather plaintiffs contend that defendants have targeted individual property owners with specific lending practices (reverse redlining), resulting in specific effects (foreclosures and vacancies) at specific properties, which in turn created specific costs (services and tax revenue) for local government.”
Judge Anderson’s ruling came two weeks after Judge J. Frederick Motz, of Federal District Court in Maryland denied Wells Fargo’s attempt to dismiss a similar lawsuit brought by the mayor and city council of Baltimore. Two previous versions of that lawsuit, claiming reverse redlining, in which the bank steered African-Americans toward more predatory loans, had been dismissed by the court

New York Times Reports: “Star Chef, Facing a Suit, Files for Bankruptcy” to Shut Down Wage and Overtime Class-Action

May 5, 2011 | Peter S. Lubin and James V. DiTommaso

Star Chef, Facing a Suit, Files for Bankruptcy
By NICK FOX
Published: April 26, 2011
The Chapter 7 petition by the celebrity chef Geoffrey Zakarian may help him to fend off more than $1 million in legal claims from his former kitchen staff at Country.

Many restaurants around the country are being sued in class-actions and collective actions for failing to pay overtime and other violations of federal and state wage laws. The New York Times has reported a very interesting story regarding one such lawsuit against celebrity chef Geoffrey Zakarian. The story explains how Zakarian’s former partners have taken the unsual step of filing affidavits in favor of the class after paying a $200,000 settlement. Zakarian and his partners are involved in litigation where they allege his used the restaurant Country as his personal piggy bank and breached fiduciary duties to them. To avoid the cook staff’s class action lawsuit and the high cost of defending it Zakarian has filed for bankruptcy.

The article states:

Of the 179 creditors listed in the Chapter 7 bankruptcy petition he filed on April 6 in federal court in Bridgeport, Conn., 152 are former cooks at Country. They are part of a class action lawsuit against Mr. Zakarian and his management firm that claims that when he was an owner of the restaurant and its chef, he failed to pay the workers time and a half for overtime, falsified pay records to shortchange them and deducted from their paychecks for staff meals they were not given. They are seeking $1 million in damages and $250,000 in penalties.

Neither legal action has been widely reported in the news media, nor has the bitterness between Mr. Zakarian and two former partners that has led those two men to take the workers’ side and face off in court against him.

The article goes on to provide many more interesting facts regarding Zakarian’s alleged mistreatment of his employees and partners. You can read the full article by clicking here where you can also conenct to links to the Complaint and various affidavits filed in the lawsuit. The affidavit by one former line cook describes how the workers were forced to work many unpaid hours. You can view it by clicking here.

Overtime Class-Action Certified in Northern District of Illinois Federal Court

May 4, 2011 | Peter S. Lubin and James V. DiTommaso

Every man and woman who goes to work each day has the right to be paid for his or her labor, but sometimes the companies for whom they work either fail to do so, or miscalculate the wages that they owe their employees. Those miscalculations may be intentional or they may be by mistake, but that does not change the fact that they must pay for the errors. At DiTommaso Lubin, we represent many workers who were not paid the regular and overtime wages they are owed, and our Barrington class-action overtime attorneys are always tracking new court cases in the field of wage and hour law.

One recent case from the US District Court in the Northern District of Illinois is Chavez v. Don Stoltzner Mason Contractor, Inc. The action was filed by Plaintiffs, who were former employees of Defendant and provided masonry installation services to Defendant. Plaintiffs claimed that Defendant illegally adjusted their time records downward to avoid paying them the required time-and-a-half rate for the overtime that they worked. Plaintiffs also alleged that they were required to work on Saturdays without pay for an extended period as well. Eventually, Plaintiffs filed a class-action in Illinois state court alleging violations of the Fair Labor Standards Act (FLSA) and Illinois Minimum Wage Law (IMWL) for unpaid overtime wages. Defendant subsequently removed the case to federal court. Plaintiffs then sought to certify an IMWL class-action under Federal Rule of Civil Procedure 23 and pursue their FLSA claims individually.

The Court granted class certification under Rule 23(b)(3), holding that the numerosity requirement was met because there were between seventy and 130 potential plaintiffs, and joinder of that many actions would be impracticable. Next, the Court found Rule 23’s commonality requirement was met because Defendant had a common practice of underpaying its employees’ overtime wages, and the typicality requirement was satisfied because all potential plaintiffs’ claims were based upon the same violations of the IMWL. Because there was no evidence the named Plaintiffs had a conflict of interest with the remaining class members and their counsel was deemed competent to pursue their claims, the Court found that the class was adequately represented. Finally, in granting class certification, the Court held that there was a single common issue (Defendant’s policy of not compensating employees for overtime) overriding the litigation, and that a class-action was the superior method for resolving the claims.

Northern District of Illinois Rules that Arbitration Clause in Employee Handbook is Enforceable

May 2, 2011 | Peter S. Lubin and James V. DiTommaso

More and more businesses are utilizing employment agreements with new hires, and often those agreements contain arbitration dispute resolution clauses. As experienced wage and hour class action attorneys, DiTommaso Lubin is familiar with such agreements and our attorneys are always mindful of court rulings that affect this area of the law. The Northern District of Illinois, Eastern Division federal court rendered a decision affecting employment arbitration agreements recently, and we wanted to make our readers and clients aware of the court’s ruling.

Brown v. Luxottica Retail North America Inc. pits a class of salaried retail, lab, and general managers against their employer Lenscrafters. Plaintiffs argued that they were non-exempt employees, and therefore were entitled to overtime compensation. The employees filed suit alleging violations of the Fair Labor Standards Act (FLSA), Illinois Minimum Wage Law (IMWL), and Illinois Wage Payment and Collection Act (IWPCA) for unpaid overtime wages. In response, Defendant moved to compel one of the named plaintiffs to arbitrate her claims and stay the proceedings with respect to that plaintiff. Defendant so moved pursuant to a dispute resolution agreement contained within the employee handbook Plaintiff was given while still employed by Defendant. Defendant required Plaintiff to accept the terms of the handbook in order to continue her employment. The agreement contained a form to allow the employee to opt-out of the arbitration clause and instructions how to fill it out, but Plaintiff had failed to sign the form. Plaintiff objected to Defendant’s motion on the grounds that it was unconscionable and unenforceable.

In considering Plaintiff’s arguments, the Court evaluated the procedural and substantial unconscionability of the agreement. The Court found no procedural unconscionability because the arbitration language was “clearly set off” from the rest of the employee handbook and was easy to find by those who actually read the entire handbook. Next, the Northern District held that there was no substantive unconscionability due to the existence of the opt-out clause and the fact that the Plaintiff chose not to exercise her right to opt-out even though she signed a document stating she had read and accepted the terms of the handbook. Finally, the Court ruled that nothing in the FLSA precludes an agreement to arbitrate an FLSA claim, and granted Defendant’s motion to compel arbitration.

New York Times Reports on Class-Action Lawsuit Which Alleges that Kaba Push Button Locks Are Susceptible to a Magnet Opening Them

March 28, 2011 | Peter S. Lubin and James V. DiTommaso

To Get In, Push Buttons, or Maybe Swipe a Magnet
By JOHN SCHWARTZ
Published: March 26, 2011
A lawsuit argues that push-button locks are easily, and discreetly, foiled, accuse Kaba of deceptive trade practices, common-law fraud, negligence and product liability.

To read the full article click here.

You can link to a video showing how easily Kaba locks allegedly can be by-passed with a magent at this blog site by clicking here.

Bloomberg Reports: “AIG, Three Others Will Pay $27 Million in Antitrust Suit”

March 24, 2011 | Peter S. Lubin and James V. DiTommaso

Bloomberg reports that AIG and three other insurance companies settled a class action lawsuit which originally arose out of charges brought by New York Attorney General Elliot Spitzer regarding fake insurance quotes used to steer insurance buyers to certain carriers. The article states:

AIG, Liberty Mutual Holding Co., Travelers Cos., Inc. and XL Group Plc (XL) agreed to settle the case with buyers of insurance policies sold from 1998 through 2004. Five other insurers agreed to settle a related set of claims over non-excess casualty policies.

“We are pleased to have reached an agreement to resolve this matter,” said company spokesman Mark Herr in an e-mailed statement. “Through this settlement, AIG brings an end to another long-standing lawsuit about events from many years ago.”
Zurich Financial Services AG (ZURN), the largest Swiss insurer, and Arthur J. Gallagher & Co., an insurance broker, previously settled the case pending in federal court in Trenton, New Jersey. Zurich, based in the Swiss city of the same name, agreed to pay $121.8 million to clients and $30 million in attorneys’ fees. Gallagher, based in Itasca, Illinois, agreed to pay $28 million to clients and $8.9 million in attorneys’ fees.

To read the full article click here.

Illinois Federal District Court Denies Class Certification for Violations of IMWL and IWPCA Under FRCP 23

March 21, 2011 | Peter S. Lubin and James V. DiTommaso

When large companies fail to properly compensate their employees, a class-action lawsuit is usually the most efficient means to resolve the legal claims between the two parties. At DiTommaso Lubin, our Chicago Fair Labor Standards Act lawyers fight for the rights of those who are due unpaid wages, and our lawyers are always striving to find ways to best serve our clients’ interests. As a firm that focuses on wage and hour class-actions, we are always watching for new court decisions in the area, and our Orland Park overtime lawyers recently found one such case in the federal Northern District of Illinois, Eastern Division Court.

Slayton v. Iowa College Acquisition Corp. is a case brought by a plaintiff who worked for Defendant as an Admissions Advisor for Kaplan University, where she and other putative class members were paid an hourly wage and were frequently required to work more than forty hours a week, but were not paid overtime. Plaintiffs alleged that Defendant required them to arrive at work prior to their shifts in order to perform certain job duties without compensation. Upon filing the putative class-action, the named plaintiff proposed two sub-classes — one for overtime violations of the Illinois Minimum Wage Law (IMWL), and one for unpaid wage violations under the Illinois Wage Payment and Collection Act (IWPCA) — and sought to certify them under Federal Rule of Civil Procedure 23(b)(3). Defendant did not dispute that the proposed class met the numerosity and adequate representation requirements of the rule, but did argue that Plaintiffs could not meet the commonality and typicality requirements.

In denying class certification, the Court found that Plaintiffs did not establish that Defendant engaged in standardized conduct to toward members of the proposed class. While there was evidence that Defendant required Plaintiffs to arrive early, it was unclear that Defendant had a widespread policy to not record that time. The Court also held that typicality was not established because not all the class representative’s claims had the same essential characteristics of the claims of the class at large and consequently, no common questions of law or fact predominated over the individual claims of the class members.

Federal District Court in Illinois Authorizes Class Notice in Warehouse Worker Overtime Litigation

March 6, 2011 | Peter S. Lubin and James V. DiTommaso

The holiday season is a busy time for many corporations and particularly for those tied to the retail industry, increased holiday business usually means that employees have to work longer hours to keep up with consumer demands. Our Aurora overtime attorneys came across a case that illustrates what can happen when employers fail to compensate employees who work extra hours during such times of increased workflow.

In Nunes v. Chicago Import Inc. Plaintiffs worked for Defendant as warehouse laborers responsible for loading and unloading merchandise from delivery trucks and keeping the warehouse organized. In performing these duties, Plaintiffs routinely worked over forty hours per week, and worked seven days a week during the month of December. Plaintiffs were paid a flat rate of $300.00 per week for the first three weeks of the month, and were paid $400.00 for the fourth week. They were paid an additional $50.00 per week in December, but never received hourly or overtime wages for their services. Plaintiffs then filed suit alleging violations of the Fair Labor Standards Act (FLSA) and the Illinois Minimum Wage Law (IMWL), and asked the Court to issue an Order to Authorize Notice to Similarly Situated Persons under FLSA Section 216(b).

The Court granted Plaintiffs’ motion, holding that it was proper to leniently review the pleadings at this early stage of the litigation. As such, the five sworn declarations submitted by the Plaintiffs established that the representative and pending class members were sufficiently similarly situated to proceed with a class action. Defendants made objections that the proposed notice was too broad, and should not include administrative or executive staff. The Court agreed with Defendant and ordered adjustments to the form of the notice to exclude such employees, but otherwise found in favor of the Plaintiffs and granted their motion to authorize notice.

Northern District of Illinois Rules that State Law Overtime Claims Not Precluded by Prior Dismissal of FLSA Class-Action

February 28, 2011 | Peter S. Lubin and James V. DiTommaso

When dealing with class-action wage and hour disputes, defendants will try to get the court to dismiss claims by any means that they can, and there are a variety of legal defenses that allow them to do so. At DiTommaso Lubin, our overtime lawyers are familiar with all of the tricks of the trade, so to speak, so they were interested to discover a case that illuminates just one of these many tools that is utilized by defendants to escape liability.

In Anyere v. Wells Fargo Co. Inc, Plaintiffs were current and former employees of Defendant and worked as credit managers who provided customers primarily with loan consolidation services. Plaintiffs filed a lawsuit alleging overtime violations under Fair Labor Standards Act (FLSA) because they were required to work during lunch, on weekends, and late into the night on a regular basis. Plaintiffs also alleged that Defendant “verbally disciplined employees for logging more than forty hours per week” and would adjust employees’ time records to stay under the overtime threshold. In response to these allegations, Defendant moved to dismiss the action on the basis of collateral estoppel due to a previous lawsuit filed against Defendant in California for the same overtime violations.

The Court dismissed the FLSA claims for nationwide relief based upon issue preclusion — the California-filed class-action was dismissed because the members of the proposed class were not similarly situated. However, the Court maintained the statewide action because the prior case did not contemplate an Illinois-only class-action and therefore could not have been litigated previously.

Northern District of Illinois Denies FRCP 12(b)(6) Motion to Dismiss Brought Against Dialysis Technicians

February 28, 2011 | Peter S. Lubin and James V. DiTommaso

Because we focus on large-scale overtime class-action lawsuits, the attorneys here at DiTommaso Lubin have helped clients from many different fields recover their unpaid wages. We think it is important for all of our potential clients out there to understand what kinds of issues arise in wage and hour cases, so our Evanston overtime attorneys are always on the look-out for new decisions. In fact, our lawyers discovered a federal case in the Northern District of Illinois that involves workers in the medical industry.

In Howard v. Renal Life Link Inc., Plaintiffs worked for Defendant as dialysis technicians and routinely worked over forty hours each week, but Defendant allegedly deducted any overtime worked and paid Plaintiffs for only forty hours. The named Plaintiff complained to Defendant that she was not being paid properly for all of the time that she had worked, but Defendant allegedly ignored these complaints and continued to deduct any time worked over forty hours each week. Plaintiffs then filed suit alleging that these working hour deductions constituted violations of both the Illinois Minimum Wage Law (IMWL) and the Fair Labor Standards Act (FLSA). In response, Defendants filed a motion to dismiss the action under Federal Rule of Civil Procedure (FRCP) 12(b)(6) alleging that Plaintiff failed to supply sufficient factual evidence in the complaint in order to meet the requirements of FRCP 23.

Defendant’s based their argument that Plaintiff failed to allege enough facts because the complaint contained allegations based “upon information and belief” instead of hard evidence. The Court found this argument unpersuasive, however, because FRCP 8 allows such allegations as long as there is sufficient detail in the complaint to make the claims facially plausible. In denying Defendant’s motion to dismiss, the Court held that the issues brought up by Defendant were properly analyzed at the class certification phase of the case, and were not properly brought in a 12(b)(6) motion to dismiss.