Fair Labor Standards Act (FLSA)

7th Circuit Court of Appeals Rules Employees Entitled to Compensation for Time Spent Donning Safety Gear Under State Law

August 24, 2011 | Peter S. Lubin and Patrick Austermuehle

The federal government passed the Fair Labor Standards Act (FLSA) to ensure that American workers would be paid appropriately for the work they provide. While some people may think of the FLSA as a statute that is concerned only with getting workers their unpaid overtime, the language of the law is broad enough to ensure that employees are paid for all of their time spent working, regardless of whether that time is overtime or not. Our Downers Grove wage and hour class-action attorneys found a case in the Seventh Circuit Court of Appeals involving employees who were not paid for the time they spent donning safety gear and wanted to share it with our readers.

In Spoerle vs. Kraft Foods Global, Plaintiffs were employed in Defendant’s plant in Madison, Wisconsin preparing meat products as hourly workers and spent several minutes at the outset of each work day putting on steel-toed boots, hard hats, and other safety gear required to perform the job. Plaintiffs filed suit to challenge a trade-off — struck in a collective bargaining agreement between Plaintiffs’ union and Defendant — where Plaintiffs would not be paid for their time spent donning this protective gear in exchange for a higher base pay rate. The FLSA permits such a tradeoff under §203(o), but Plaintiffs argued that Wisconsin law has no equivalent exception, and therefore state law requires payment for time spent donning such gear. Defendant argued that the FLSA and federal labor laws pre-empt the state law, so the CBA agreement should be honored and the time spent dressing in safety gear should remain noncompensable. The district court found in favor of the Plaintiffs, and Defendant appealed.

On appeal, defendant argued that §203(o) was the federal government’s decision to “permit a collectively bargained resolution to supersede the rules otherwise applicable to determining the number of hours worked.” The Court of Appeals did not find this argument persuasive, however, because nothing placed in a CBA exempts an employer from state laws of general application. Therefore, the Court found that the district court did not err in ruling that Plaintiffs were entitled to be paid for their time spent equipping themselves with safety gear.

Northern District of Illinois Federal Court Grants Conditional Class Certification for Lawsuit for Unpaid Overtime

August 10, 2011 | Peter S. Lubin and Patrick Austermuehle

One of the most important issues at the outset of every class-action lawsuit is determining the size of the class itself. In some instances, making such a determination can be accomplished through preliminary investigations by the named plaintiff in the suit. However, the true size and scope of the class can only be confirmed by documentation obtained from the defendant company. Our Berwyn overtime class-action attorneys recently encountered a case involving a dispute over the potential members of the class, and wanted to share it with our readers.

In Smallwood v. Illinois Bell Telephone, Plaintiffs held multiple different positions, but were all classified as Outside Plant Engineers (OSPs) at Defendant’s facilities in Elgin and Des Plains, Illinois. Plaintiffs generally performed design and analysis of Defendants plant facilities and Defendant’s network and were classified as exempt employees until 2009, when Defendant reclassified all OSP engineers as non-exempt employees, which entitled them to overtime. After this reclassification, Plaintiffs filed suit for unpaid overtime wages in violation of the Fair Labor Standards Act (FLSA) because they had regularly worked in excess of forty hours per week during the entirety of their employment and had never been paid overtime previously. Plaintiffs then filed a motion requesting conditional collective action certification under §216(b) of the FLSA for all persons who were employed by Defendant as OSPs during the previous three years. Plaintiffs also requested approval of a 90-day opt-in period and a 7-day time period for Defendant to supply them with a list of putative claimants.

Defendants argued that Plaintiffs were not similarly situated because the Plaintiffs had separate and distinct job duties despite being generally referred to OSPs, and provided job descriptions as evidence of these differences. The Court found that Defendant’s arguments regarding the day-to-day work activities of the individual Plaintiffs were premature at this early stage of the case, and because the case was not “clearly beyond the first tier” of FLSA class certification. Therefore, applying a stricter standard of review was inappropriate. The Court then granted the motion for conditional certification, finding that Plaintiffs – through their individual declarations — had met the statutorily required modest factual showing that Plaintiffs were the subject to the Defendant’s common policy or plan to violate the FLSA by failing to pay OSPs overtime wages. Defendants also requested that the notice period be limited to 30 days, but the Court found that an opt-in period of 60 days was appropriate, and gave Defendants two weeks to supply the putative member list, so that collective action notices could be mailed in a timely manner.

Appellate Court Overturns Dismissal of Chicago Paramedics Unpaid Overtime Class-Action

July 15, 2011 | Peter S. Lubin and Patrick Austermuehle

Every day there are hard working people who are denied the overtime wages that they have rightfully earned. At Lubin Austermuehle, we have much experience representing those with unpaid overtime claims in class-action litigation. As such, we track the changes in the wage laws and are always looking out for new court decisions in the field.

Alvarez v. City of Chicago is a recent class-action case brought by paramedics in the city of Chicago for the systematic miscalculation of their overtime wages. In so doing, Plaintiffs alleged that Defendant willfully violated the Fair Labor Standards Act (FLSA) when it failed to properly compensate the Plaintiffs. The parties each filed motions for summary judgment, and the trial court ruled in favor of Defendant. In making the ruling, the trial court found that the Plaintiffs were not similarly situated and they could not be “readily divided into homogenous subgroups.” The lower court then dismissed the claims and directed the parties to arbitrate the dispute.

On appeal, the Appellate Court disagreed with the trial court’s decision, and held that the case could proceed by using sub-claims if the Plaintiffs were similarly situated and common questions predominated. The Court also held that the case should not have been dismissed; instead the Plaintiffs should be allowed to proceed individually if class certification is inappropriate. The Court then remanded the case with instructions for the district court to consider which form of judicial resolution would be most efficient.

Northern District of Illinois Federal Court Grants Motion to Send Notice to Expanded Class in Unpaid Overtime Class-Action Litigation

July 10, 2011 | Peter S. Lubin and Patrick Austermuehle

Large corporations are often built upon the labor of many hard-working hourly employees. Unfortunately, such companies do not always pay their employees the wages that they have earned, and when such mistakes are made, those employees must do what they can to get what they are owed. When enough employees have been denied their earned wages, a class-action lawsuit may be the most efficient means to get everyone their unpaid wages, and our Naperville overtime class-action attorneys recently discovered another such lawsuit in the Northern District of Illinois federal court.

In Hundt v. DirectSat USA, Plaintiffs were employed by Defendant as warehouse managers who regularly worked more than forty hours per week, but were not paid any overtime because Defendant classified them as exempt employees. Plaintiffs believed that they were misclassified because their job duties did not meet the overtime exemption requirements under the Fair Labor Standards Act (FLSA) and the Illinois Minimum Wage Act (IMWA), and filed a class action lawsuit for the unpaid overtime. After sending out opt-in notices to the potential class members, Plaintiffs discovered that the class should not be limited to just those employees with the title of warehouse manager. Plaintiffs therefore amended the complaint to broaden the class to include warehouse supervisors and other workers in similar positions, and filed a motion to send notice to these additional putative class members.

Defendants opposed the motion, stating that there were significant differences between warehouse managers and supervisors and claimed that Plaintiffs failed to sufficiently allege the existence of a common decision, policy, or plan to deprive them of overtime wages. The Court disagreed with Defendants, holding that all of the putative plaintiffs were similarly situated despite their varied job titles. In making its decision, the Court cited several internal communication emails that indicated the titles were interchangeable, and that was enough to meet the minimal burden required. Thus, the Court granted the motion to send notice to the additional class members.

Crain’s Chicago Business’s Expose and Investigative Report on the Problem of Wage Theft in the Chicago Area

June 19, 2011 | Peter S. Lubin and Patrick Austermuehle

Crain’s Chicago Business published an insightful investigative report on the problem of wage theft in the Chicago area.

The article states:

The effects of wage theft bleed out further, robbing the local economy of consumer spending, says Mr. Theodore, the author of the UIC study. Low-income families are more likely to spend their paychecks quickly on goods and services. When they don’t receive their wages, retailers and other merchants lose out. Lost sales also mean lost sales tax revenues for state and local governments. Those same governments are called on to fill the gap when underpaid workers can’t make ends meet. A UIC study released in August found that a quarter of warehouse workers employed in Will County relied on government assistance to cover basic needs. The report concludes that paying low wages to temporary workers—if they’re paid at all—”effectively shifts the burden of supporting families to the public.”
This holiday season, like every year, religious organizations across the country will distribute turkeys and other food to needy families, says Kim Bobo, executive director of Interfaith Worker Justice, a national workers rights group based in Chicago. But if those workers received all their pay, many could buy their own turkeys. People argue that in a time of economic crisis, workers should just be grateful to have a job and that society should do nothing that might burden employers during a recession, Ms. Bobo says. But it’s exactly because times are hard that workers need all the wages they are owed.

You can read the full article by clicking here.

Class Members Don’t Need Identical Claims to Maintain a Class-Action Under the FLSA

June 15, 2011 | Peter S. Lubin and Patrick Austermuehle

Our lawyers are passionate about protecting the rights of workers and are constantly researching new wage and hour decisions rendered by the federal courts here in Illinois. Our Buffalo Grove overtime class-action attorneys recently discovered a case that impacts potential clients seeking to certify wage and hour class actions under the Federal Labor Standards Act (FLSA).

The Plaintiff in Russell v. Illinois Bell Telephone Co. worked at Defendant’s call center in Arlington Heights, Illinois for five years and was paid hourly wages, commissions, and bonuses. Plaintiff and the other purported class members all had scheduled shifts and lunch breaks, but allegedly were required to perform work tasks both before their shifts and during their lunch breaks. Plaintiffs were not paid for the work they performed pre-shift and during lunch breaks, and filed suit for their unpaid wages. The trial court then conditionally certified the class, and additional discovery commenced.

Through discovery, Plaintiffs learned that Defendant has a written policy that hourly employees must obtain permission from a supervisor before working overtime and any employee who works overtime must be compensated accordingly. Defendant’s Code of Business Conduct also explicitly states that “managers are prohibited from requiring nonexempt employees to work off the clock.” However, after deposing 24 individual Plaintiffs, the record showed that the majority of Plaintiffs had to spend time logging into their computer systems prior to the start of their shift because their supervisors had instructed them to be “open and available” at the start of their shift. To be “open and available,” Plaintiffs had to boot up their computers and get several applications up and running. This system start-up process took between three and twenty minutes to complete depending upon the individual computer.

In addition to the pre-shift issues, the record showed that Plaintiffs would often have to work a few minutes past the end of their shifts to finish handling calls already in progress. Because Defendant has a policy that any overtime worked in an amount less than eight minutes is not compensable and many of the post-shift calls are resolved in less than eight minutes after the end of their shift, Plaintiffs were not compensated for the overtime worked while finishing calls at the end of the day.

After more discovery and the deposition of thirty-nine individual Plaintiffs, Defendants moved to decertify the class based upon individual issues embedded in the case and the absence of a company-wide policy that violates the FLSA. The Court found that the class members shared enough of a factual and legal nexus that pursuing a class-action was proper through the use of subclasses where necessary. The Court went on to decertify the individual claims that did not fall into the enumerated subclasses of pre-shift overtime, post-shift overtime, and work performed while on lunch breaks. Finally, the Court stated that due to the large amount of discovery still to be performed, that they reserved the right to revisit the decertification issue should it become apparent that the case was unmanageable as a class-action.

Indiana District Court Certifies Class-Action Under FLSA for Untimely Overtime Payments

June 13, 2011 | Peter S. Lubin and Patrick Austermuehle

Filing a lawsuit requires some legwork up front, but overall is a relatively painless process. Getting a class-action lawsuit certified by a federal court, however, is neither easy nor straightforward. Lubin Austermuehle focuses on getting major wage and hour lawsuits certified as class-actions and getting them resolved. Our Buffalo Grove overtime attorneys unearthed a federal case from the Northern District of Indiana regarding class certification that is of interest to both our present and future wage claim clients.

The dispute in Powers v. Centennial Communications Corp. arises out of claims for unpaid overtime and overtime adjustments for sales commissions for work performed by Plaintiffs in their capacity as a sales representatives for Defendant. Additionally, Plaintiffs claim that when they were paid commission-based overtime, the timing of those payments also violated federal law. The named Plaintiff filed suit as a result, and she alleged violations of the Indiana Wage Payment Satute and the federal Fair Labor Standards Act (FLSA), and sought to certify a class-action on the federal claim under FLSA.

The District Court found that, in spite of the fact that she was not paid owed overtime wages, Plaintiff failed to make FLSA’s required initial showing that she and her putative class members were “victims of a common policy or plan” to do so. Finding fault with the fact that Plaintiff had only shown that one person (the named Plaintiff) had not been paid correctly, the Court declined to certify the class as to the unpaid overtime claim, as it would “have the effect of turning every individual violation of the FLSA into a bulky collective action.”
The Court then turned to the unpaid commissions-bassed overtime claim and determined that it could proceed to the opt-in stage because Defendant had systematically deferred the commission-based payments pursuant to its stated Sales Compensation Plan. Because the applicable statutes allow only for a limited delay in the payment of overtime adjustment payments and Defendant had repeatedly waited weeks to make the required payments after they were earned, the case could proceed as a class-action.

Law 360 reports: “Pa. Appeals Court Upholds $187M Wal-Mart Judgment”

June 11, 2011 | Peter S. Lubin and Patrick Austermuehle

Law 360 reports that a Pennsylvania state appeals court has upheld a $187 million dollar class action judgment for unfair wage and hour practices. Wal-Mart allegedly forced its Pennsylvania employees to work off the clock and skip breaks for meals or rest. “The record reflects testimony and documentary evidence suggesting that because of pressure from the home office to reduce labor costs and the availability of significant bonuses for managers based on store profitability, Wal-Mart’s scheduling program created chronic understaffing, leading to widespread rest-break violations,” the court held in its 211 page opinion.The article states:

The original $78 million verdict was handed down Oct. 13, 2006, following a six-week trial. The jury found Wal-Mart liable for not paying employees for time spent working off the clock. That award was almost doubled in 2007 when the court added $62.2 million in liquidated damages for the class of more than 187,000 Pennsylvania workers. …
Lawyers in the case claimed that Wal-Mart made workers skip more than 33 million breaks and two million meal periods from 1998 to 2001.
In its appeal, Wal-Mart claimed, among other things, that the case should not have been certified as a class action and that it had not breached a contract with its employees because the company’s policies and its employee handbook did not establish a contract.

You can read the full article by clicking here.

Northern District of Illinois Denies Class Certification in an Action to Recover Unpaid Overtime Under FLSA

May 18, 2011 | Peter S. Lubin and Patrick Austermuehle

There are many employees out there who should be getting paid overtime wages, but because they have been misclassified by their employers, those people are being paid on a salary basis instead. We at Lubin Austermuehle know that these things happen, which is why we fight for the rights of employees who have been paid incorrectly. Our Evanston overtime class action attorneys recently discovered one such case regarding the misclassification of employees and wanted to share it with our readers.

In Gromek v. Big Lots, the named Plaintiff worked for Defendant as an assistant store manager, and was never paid for any of the time he worked in excess of forty hours per week. Plaintiff regularly worked over forty hours, and spent most of his time performing non-managerial and non-exempt duties for Defendant, but was paid a salary and never received overtime wages. As such, Plaintiff filed suit to recover his unpaid overtime pursuant to the Fair Labor Standards Act (FLSA), and sought conditional class certification of the action under FLSA §216(b) to include all of his fellow assistant store managers who worked for Defendant.

The Court sought to determine whether Plaintiffs were similarly situated enough to meet the requirements of §216. Plaintiffs provided declarations from fifteen potential class members stating that they had all been misclassified and underpaid due to Defendant’s common policy, which weighed in favor of granting class certification. However, a previous and similar class-action filed by another group of Defendant’s assistant store managers was decertified because many of those Plaintiffs had significantly different job duties, which made the claims unsuitable for resolution by class-action. Due to this earlier case, the Court denied the class certification motion because Plaintiffs had failed to show why their case differed from the prior action, though the Court stated it would be willing to hear any such arguments the Plaintiffs could provide.

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 Patrick Austermuehle

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.