Market Watch reports that two Dollar Tree employees have brought a collective action under the Fair Labor Standards Act for alleged failure to pay overtime and minimum wages.
To view the full article click here.
If you believe you might be part of a class of employees forced to work off the clock or have othewise been denied overtime pay, DiTommaso Lubin may be able to help your pursue your own overtime class action. For a free consultation on your rights as an employee, contact us today.
The Jacksonville Business Journal Reports: “Overtime lawsuits thrive in Florida’s recession”
The article states:
Like unemployment, home foreclosures and bankruptcies, the number of lawsuits brought by employees alleging unpaid wages is also on the rise.
A Boom in ‘Overtime’ Lawsuits? Blame Technology
The Wall Street Journal reports:
It’s something the world is growing accustomed to, for better or worse: the ever-shrinking divide between work and leisure time. Ubiquitous Internet-access, Blackberrys, cell phones — all sort of technological advances — make it easier to take a “work from home” day when a child is sick. At the same time, the advances give employers the ability to make 24/7 demands, and expect 24/7 responses.
With the blurring of “on” and “off the clock,” lawsuits have arisen. Two recent suits, the WSJ reports on Monday, raise the following question: should hourly workers be paid for time spent responding to work calls or emails while off the clock?
Last month, three current and former employees sued T-Mobile USA Inc., claiming they were required to use company-issued smart phones to respond to work messages after hours without pay. In a March suit, a former CB Richard Ellis Group Inc. maintenance worker seeks pay for time spent after hours receiving and responding to messages on a work-issued cellphone.
The federal Fair Labor Standards Act says employees must be paid for work performed off the clock, even if the work was voluntary. When the law was passed in 1938, “work” was easy to define for hourly employees. As the workplace changed, so did the rules for when workers should be paid.
The article describes the spate of lawsuits filed in New York against high profile restaurants for alleged wage theft for unpaid wages and tips. The increase in lawsuits for unpaid overtime and other wage claims is a trend being seen all around the country. The article which can be read in full by clicking on the link at the start of this post states in part:
Some of the city’s hottest chefs and restaurateurs are increasingly being targeted by lawsuits filed by a handful of attorneys on behalf of small numbers of employees.
This week’s targets include Michael White and Chris Cannon’s restaurant group, which runs three upscale Italian restaurants in Manhattan, and Masaharu Morimoto of “Iron Chef” fame. They come on top of a suit filed in federal court last month against Italian giants Mario Batali and Joe Bastianich that has grown to at least 20 plaintiffs from two.
The suits have similar allegations: that restaurants are depriving low-level employees of due tip wages in violation of state and federal labor laws. Some also allege that restaurants fail to abide by a state law requiring that employees receive an extra hour of pay if they work for 10 or more hours in one day. They seek unpaid wages and tips, interest, liquidated damages and attorney’s fees, and all seek class-action certification.
NPR reports:
Can’t put your BlackBerry down? Your boss may come to dread that if you’re working while you’re off the clock. A police sergeant in Chicago is suing the city. He says he’s due plenty of overtime back pay because he logged in on his BlackBerry to continue working even though his shift was over.
A California wage and hour ruling caught the attention of our Illinois employment rights attorneys because it caused substantial dissent and inspired a replacement decision more than six months after its original opinion was published. Rutti v. Lojack Corporation Inc., No. 07-56599 (9th. Cir. March 2, 2010) concerned whether commute time and time spent at home on work-related tasks should be compensated at work. In its most recent decision, a three-judge panel of the Ninth U.S. Circuit Court of Appeals agreed that commute time is not federally compensable, but split on whether the time is compensable under state law. Similarly, all three agreed that Mike Rutti’s minimal time spent checking assignments for the day from home was not compensable, but disagreed on whether longer evening periods spent transmitting data counted as work time.
Rutti was one of about 450 technicians nationwide for Lojack, Inc. to install alarms in customers’ cars. He spent most of the day on the road traveling between job sites in a company-owned vehicle, but began and ended the day at home, performing administrative tasks for Lojack. Lojack paid him an hourly wage starting when he arrived at the first work site and ending when he left the last one. He file a proposed class action lawsuit seeking compensation under federal and state wage and hour laws for his preliminary and postliminary activities, as well as commute time to and from work sites. The trial court granted Lojack summary judgment dismissing all of the federal claims but upheld a state-law claim seeking compensation for commuting, before dismissing the remaining state-law claims for lack of subject matter jurisdiction. Rutti appealed to the Ninth Circuit.
On appeal, the Ninth separated the case into three issues: whether the commute time was compensable; whether his off-the-clock activities were substantial enough to be compensable; and when Rutti’s work day started under the “continuous work day” doctrine adopted by the Department of Labor. On the commute time issue, the appeals court agreed with the trial court, but only as to Rutti’s Fair Labor Standards Act claims. A 1996 federal law called the Employee Commuter Flexibility Act says employees need not be compensated for travel time, preliminary activities or postliminary activities that take place outside of a normal work day. That’s true even when the vehicle used is the employer’s vehicle and is subject to restrictions on its use, as long as it’s subject to an agreement between the parties.
Rutti had more luck on the issue of off-the-clock activities performed at home before and after work. These are also subject to the ECFA, the Ninth wrote, but only if they are not “principal activities.” In addition, caselaw says they must not be minimal activities. The activity at the beginning of the day included receiving job orders, mapping them and planning his route for the day. This is related to his commute, the court found, and commuting is not compensable. They are also relatively minimal, taking no more than a few minutes. Thus, the Ninth upheld the trial court on the preliminary activities. However, it reversed the trial court as to Rutti’s postliminary activities, which it said were more time-consuming. This included connecting with Lojack’s servers to upload data about his work for the day. This was part of Rutti’s regular work and necessary to Lojack’s business, the court wrote, making it part of the company’s “principal business activities.” The court also found that it was not minimal, citing evidence that it could take more than 10 to 15 minutes because of frequent failures, and that it was a regular part of the work. Thus, it may very well have been compensable time under federal law and should not have been dismissed at the summary judgment stage.
Finally, the court ruled that Rutti may have a case under the “continuous work day” doctrine set forth in Dooley v. Liberty Mutual Ins. Co., 307 F. Supp. 2d 234 (D. Mass. 2004), which held that automobile damage appraisers who worked from home were entitled to compensation for commutes because activities they performed at home were “principal activities” that formed part of a continuous work day. Because the court had already determined that Rutti’s preliminary activities were not compensable, it wrote, the morning commute is not part of a continuous workday. The evening commute might be, the Ninth said, except that 29 C.F.R. § 785.16 says employers may not be compelled to compensate workers for periods when they are relieved from duty so long that they can use the time for their own purposes. This was the case with the postliminary upload time, the court said, because Lojack gave technicians 12 hours in which to upload.
Using all of that reasoning, the majority upheld most of the trial court’s rulings, but vacated rulings as to state-law claims for compensation and postliminary claims for the data upload. A separate concurring opinion by Judge Silverman and joined by Judge Hall agreed as to the California state-law claims for commuting. California requires employers to compensate their workers for all time “during which an employee is subject to the control of an employer, the judges wrote, citing Morillion v. Royal Packing Co., 22 Cal. 4th 575, 578 (2000). Because Rutti was subject to multiple rules governing his behavior with the company truck, he was clearly under Lojack’s control, they wrote. Another concurrence authored by Judge Hall alone said the panel should have upheld the trial court on the postliminary data upload as well, because they were minimal. Finally, Judge Callahan dissented from the majority’s opinion on the state-law claims, arguing that Morillion did not apply because Rutti was not required to commute by company bus, as in that case.
A recent California state appeals court decision caught the eyes of our Chicago employment class action attorneys because it addressed fine distinctions in class certification. In Jaimez v. Daiohs USA, 2010 Cal. App. LEXIS 156 (Feb. 8, 2010), California’s Second District Court of Appeal ruled that a trial court improperly denied class certification when it relied on individual testimony to establish the existence of a uniform employer policy. It agreed, however, that plaintiff Alex Jaimez was an inappropriate class representative.
From 2001 to 2007, Jaimez was a route sales representative for DAIOHS First Choice Services, which provides refreshments and vending-machine products to offices. From 2003 to 2007, all of them were reclassified from overtime-exempt to non-exempt, receiving an hourly wage plus overtime when applicable. In 2007, Jaimez filed this action in Los Angeles Superior Court, seeking to certify four classes of employees who were allegedly denied overtime; meal breaks; rest breaks; or pay stubs.
The plaintiffs argued that First Choice had improperly classified RSRs as exempt before the change, illegally denying overtime, meal breaks and rest breaks. After the change, the company continued not paying overtime, the plaintiffs claimed, but pressured RSRs to finish their routes in eight hours even when the routes were long. The plaintiffs also claimed that they were not informed that they were entitled to another meal break if they worked more than 10 hours. Before 2006, they said, meal breaks were automatically removed from time records regardless of whether they were taken; after 2006, employees were pressured to sign a statement that they took the break, even when they didn’t. These were the result of consistent, uniform corporate policies, the motion said, making class certification appropriate. The proposed class sought back wages and penalties under state law.
First Choice opposed the class certification motion by submitting testimony from 25 current RSRs who said they had no such problem. All of them said they were able to take rest and meal breaks when they wished, are encouraged to do so and have time to do so. Relying on these declarations, the trial court denied class certification, saying Jaimez was not typical enough an the proposed class did not have common questions of law and fact. It also said Jaimez was not a good representative, because pretrial testimony showed that he’d lied about a previous criminal conviction for petty theft when he was hired. Plaintiffs then asked for leave to file a First Amended Complaint with new class representative, but was denied. They appealed both orders.
On appeal, the Second District said the trial court misapplied state class certification standards by considering conflicting issues of fact rather than evaluating whether the plaintiffs’ theory of recovery was appropriate for class treatment. In this case, the plaintiff’s “theory of recovery” includes questions of fact and law that predominate over all RSRs in the class, including questions about First Choice’s policies, record-keeping and misclassification of employees. When the trial court used the RSR declarations submitted by First Choice to deny this, the appeals court said, it incorrectly reached the merits of the claim rather than the question of predominance. In fact, the appeals court said the declarations actually support to some extent the allegations made by the plaintiffs about policies and practices. That RSRs may have different damages does not mean they don’t have common questions of law and fact to try.
The appeals court further found that Jaimez was a sufficiently typical representative of the class, noting that he had submitted nine declarations from others that were substantially similar. However, it also found that he was not an adequate representative because of his dishonesty about his criminal conviction. Thus, the appeals court upheld the trial court’s class certification ruling on that issue, but reversed on all other issues. It also reversed the denial of leave to file a First Amended Complaint, noting that the trial court itself invited Jaimez to file such a complaint and that First Choice did not oppose it. The case was remanded to trial court with instructions to certify subclasses after a new class representative is appointed.
Our Naperville wage and hour rights attorneys noted a recent ruling out of Massachusetts that could be important for police officers and firefighters around the United States. In Calvao et al. v. Town of Framingham, No. 09-1648 (1st.Cir. March 17, 2010), the First U.S. Circuit Court of Appeals ruled that employers don’t have to notify their public safety workers when they take advantage of a special provision in the Fair Labor Standards Act that exempts them from the ordinary 40-hour work week. Instead, these employers are permitted to establish “work periods” of seven to 28 days, after which the employees must be paid overtime. The plaintiffs, a class of about 100 Framingham, Mass. police officers, believed that the Town of Framingham was not eligible for this exemption because it never “established” the work period by notifying them of its existence.
The FLSA was amended in 1966 and 1974 to apply to state and municipal workers. This triggered concerns about costs from local governments, which ended partially with Congress enacting the section of law at issue in this case, which allows a longer period before overtime is triggered, to account for the unpredictable nature of public safety work. The Town of Framingham circulated a memo in 1986 declaring that the work period for police and fire personnel was 24 days. This worked out to about 43 hours in a seven-day period before overtime was triggered. Fourteen years later, in 2000, the police officers’ union negotiated a change in schedule from four days on and two off to five days on and three off. Both fit into the 24-day schedule. In 2005, the officers brought the instant action, suing for a declaratory judgment that they had been denied overtime because the work period had never been “established” as required by federal law. The trial court granted partial summary judgment to the defendants on this issue, and the officers appealed.
They had no better luck at the First Circuit, which found no evidence for their argument in the text of the statute, its legislative history or Department of Labor guidelines. The text of the law at issue does not require notice, the court wrote, or even suggest how an employer might establish its work period. The statute doesn’t explicitly prohibit giving notice, but Congress did explicitly give responsibility for enforcing FLSA regulations to the Secretary of Labor. Regulations enacted by people in that role “make it clear the Secretary rejected a notice requirement,” the court wrote. In fact, the Secretary in office at the time reviewed and rejected a proposed notice requirement, noting that the Act does not require one. In addition, legislative history shows that Congress expressly rejected a proposal to require employee agreement before the work period could be established.
Finally, the court rejected the officers’ argument that a Department of Labor letter ruling mandates a notice requirement. The issue was never brought up in district court and would be waved in any case, it wrote, but is also inappropriate for three reasons. One is that the letter never mentioned a notice requirement, instead saying that “”[a]n employer must designate or otherwise objectively establish the work period . . . and pay the affected employees in accordance with its provisions.” The letter was also responding to a specific court case raising issues not relevant in the instant action. And opinion letters don’t have the force of rulings, the court said, especially since the Secretary of Labor has already reached the opposite conclusion from the one the officers sought here. Thus, the summary judgment ruling by the district court was affirmed.
As Illinois wage and hour rights attorneys, we were interested in a decision establishing the scope of state courts’ right to enforce judgments obtained in other states under the Constitution’s “full faith and credit” clause. Nazario et al. v. O.J. Thrall Inc., et al., 1996 WL 285541 (Conn.Super. 1996) allowed Puerto Rican farmworkers to enforce their default judgment against a Connecticut farm operator. The Connecticut Superior court found that because the farm operator used Puerto Rican logistic, recruitment and screening services, it had enough “minimum contact” with the territory for the Puerto Rico court to establish personal jurisdiction.
Defendant O.J. Thrall, Inc. grows tobacco in Connecticut. It recruited 51 Puerto Rican workers for its growing season through an interstate clearance system created by the federal Wagner-Peyser Act. That law also regulates working conditions and pay for domestic farmworkers, including the Puerto Rican farmworkers. The workers were in Connecticut between June 12, 1991 and July 19, 1991, when they were discharged. Upon their return, they sued Thrall in Puerto Rico Superior Court for breach of contract and the federal clearance order. That court determined that it had personal jurisdiction in the case because Thrall had done business in Puerto Rico through the Wagner-Peyser job clearance system. Thrall was properly served, but the case ended in a default judgment. The workers were awarded $2,084 each in unpaid wages and $190 each in air travel expenses, plus attorney fees.
The workers then sought to enforce their judgment in Connecticut, where Thrall had its operations. Thrall fought that action, arguing that it didn’t have sufficient minimum contacts with Puerto Rico to establish personal jurisdiction. The Connecticut Superior Court started by noting that this was an issue of first impression in the state, as the only previous Wagner-Peyser Act case had to do with subject matter jurisdiction. The Constitution requires state courts to give one another’s decisions “full faith and credit,” it noted, but also limits their personal jurisdiction over nonresidents through the due process clause of the Fourteenth Amendment.
It first took up Thrall’s argument that the clearance orders it extended under Wagner-Peyser were not offers of employment, as required to establish “minimum contacts” with Puerto Rico. The Connecticut court rejected that argument. Of the 12 cases it found in the United States and Puerto Rico that discussed whether a clearance order is an offer of employment or a contract, only two declined to make such a finding. One declined to make any finding on the subject, while another found that another contract was the controlling contract. Furthermore, the court wrote, the clearance order specifically said it “describes the actual terms and conditions of the employment being offered by me and contains all the material terms and conditions of the job,” followed by the signature of Thrall’s Vice President. For those reasons, the court found that the clearance order was a unilateral contract containing an offer of employment.
The court next addressed Thrall’s argument that the local Department of Labor office in Yauco, Puerto Rico, which recruited the workers, was not Thrall’s agent and had no authority from the company. Under Connecticut caselaw, the court said, it must review whether the Wagner-Peyser Act creates an agency relationship between firms and the federal Department of Labor. This Depression-era law allowed the federal government to establish employment offices giving preference to U.S. and Puerto Rico workers over foreign workers. When hiring the workers, the court wrote, Thrall delegated its hiring authority to the Yauco office, specifically referring workers to that office rather than merely using it as a referral source. This established an agency relationship between the Yauco DOL and Thrall, the court wrote. However, the office was not under Thrall’s control, the court said, citing caselaw from around the U.S. Thus, the agency relationship was implied, not stautory. However, this was still sufficient to establish jurisdiction.
Finally, the court addressed Thrall’s argument that it had transacted no business in Puerto Rico, aside from the clearance order it was required by law to file in order to use the foreign worker program. In support, it cited a dissent from a New York case with similar facts, Rios v. Altamont Farms, Inc., 100 A.D.2d 405, 475 N.Y.S.2d 520 (N.Y.A.D.1984), which allowed Puerto Rico courts personal jurisdiction over a New York apple grower. In that case, the court wrote, the facts satisfied both parts of the two-part test laid down by the Supreme Court in International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). The defendants used Puerto Rico services with certain awareness that their job offers would be extended in the territory, satisfying the “minimum contact” requirement. Jurisdiction was fair because a hearing in Puerto Rico imposed less burden on the defendant than a mainland hearing would impose on plaintiffs, whom the government has an interest in protecting. All of these considerations applied to the instant case as well, the court said. Thus, the judgment may be enforced against Thrall in Connecticut.
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