No Closed Lid on this Class Action

Lids, a store selling jerseys, hats, and t-shirts, is facing a class-action lawsuit for failing to pay overtime to store managers.  Lids’ managers were paid under a fluctuating work week (“FWW”) method of payment. Under this method of payment, employees are paid a fixed salary amount whether or not they work more or less than 40 hours a week. The FWW method further permits hours worked in excess of 40 hours a week to be compensated at a minimum of one-half time the worker’s regular rate. However, the lawsuit alleges that Lids store managers were not fully compensated for all of the overtime hours they worked and were instead paid a bonus based on meeting sales quotas.

On January 2, 2018, the District Court for the Southern District of Indiana denied Lids’ motion to dismiss the case and granted the managers’ motion for conditional certification of an opt-in class of current and former store managers. The judge ruled that the lead plaintiff in the case “has made a modest factual showing that she and the potential opt-in plaintiffs were victims of a common policy that violated the FLSA.”

The judge ordered Lids to provide a spreadsheet listing the names and last known addresses of non-exempt store managers who were entitled to overtime pay since Feb. 2, 2014.

The lawsuit was filed in the U.S. District Court for the Southern District of Indiana and is titled Julia Shumate, on behalf of all others similarly situated v. Genesco, Inc., Hat World Inc., d/b/a Lids Sports Group, 1:17-cv-3574.

 

Pizza Chain Owes

A pizza restaurant chain in Manchester, Connecticut was held liable for violating the Fair Labor Standards Act (FLSA). An investigation conducted by the U.S. Department of Labor’s Wage and Hour Division found that the pizza restaurant chain had violated the FLSA’s minimum wage, overtime, and record-keeping requirements between February 2013 and November 2015. The restaurant did not pay one-and-one-half their regular rates of pay to three employees who worked overtime hours up to seventy-five hours per week. Additionally, the restaurant took payroll deductions for cash register shortages that resulted in one employee receiving less than minimum wage. The investigation also found that the restaurant maintained and supplied false time and payroll records and statements to investigators during the current investigation and a prior investigation in 2015.

Additionally, the investigation found that between December 2015 and April 2016, the owner of the restaurant continually pressured one employee to make false statements to investigators, leading the employee to believe he had no choice but to resign. The Department of Labor charged that the owner’s behavior resulted in the worker’s constructive discharge, in violation of the FLSA’s anti-retaliation provisions.

Therefore, on November 16, 2017, a United States District Court in Connecticut issued a judgment against Chemro LLC d/b/a People’s Choice, and Defendant Robert Y. Mercier II for back pay in the amount of $67,151.14, which includes minimum wage and overtime payments due, as well as liquidated damages, compensatory damages, punitive damages, civil money penalties, and interest. The Court also ordered that the company and its owner comply with the FLSA and “refrain from discharging or discriminating against employees who initiate or cooperate with an FLSA investigation.”

The FLSA requires that most employees receive one-and-one-half times their regular rate of pay when they work more than 40 hours in a work week and that employers maintain adequate and accurate records of employees’ wages and work hours. If you feel that you are not being properly paid wages you have earned, you should call our unpaid wages lawyer for a free consultation. You may have a viable claim and we can help you determine the best course of action after thorough consideration of your situation. We can be reached at 800-274-5927.

(Advertising Material: This Notice is for informational purposes and should not be construed as legal advice).

Baklava Not Creative?

A Brooklyn federal judge has ruled that baklava chefs’ jobs were not “creative” to meet the Fair Labor Standards Act’s creative professional exemption from overtime pay. The judge held that this exemption requires “innovation and imagination,” not the “consistency and precision” displayed by the Turkish baklava and baked goods chefs when making their tasty treats.

In a decision denying summary judgment to the defendants, the court held that the exemption defense failed because “although defendants adequately demonstrate that plaintiffs were experienced and talented [chefs], defendants [did] not demonstrate how plaintiffs’ experience and talent were applied to an innovative and imaginative task.”
The defendants, Gulluoglu, an entity that sells Turkish food at multiple locations, and its manager, failed to shoulder their burden of proving that its employees fell within the exemption. According to the court, “[d]efendants did not sell their baklava and other baked goods in five-star or gourmet establishments, and plaintiffs, tasked with preparing baklava and other enumerated Turkish baked goods to be sold by third parties, did not have the autonomy to design unique dishes and menu items.”

The plaintiffs, both former baked goods chefs for Gulluoglu, frequently worked 60 hour weeks, but were only paid a fixed weekly salary of $700. Although the plaintiffs’ skills and training were brought up in court, such as a plaintiff serving as an apprentice to a baklava maker in Turkey for seven years, deposition testimony showed that the baklava chef never prepared baklava from scratch. Rather, plaintiff would heat and apply a “sweet syrup” to frozen baklava imported from Turkey. Starting in 2010, however, the baklava was imported pre-cooked, with the syrup glaze already applied. Additionally, the pastry chef’s cakes were not made from scratch, but imported and defrosted.

Defendants argued that “plaintiffs’ talent alone should trigger the exemption.” Yet, the court held that “[t]he regulatory language makes clear that an employee talented at an unimaginative and unoriginal task does not fall within the exemption.”

If you feel that you are not being properly paid wages, you should call our unpaid wages lawyer for a free consultation.

The lawsuit was filed in the U.S. District Court for the Eastern District of New York, and is titled Eren v. Gulluoglu LLC, Case No. 15-CV-4083.

Virtual Workers and Economic Reality: Independent business owners file FLSA collective action for unpaid wages

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

Great Virtual Works 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 a00ddition to Kentucky and Pennsylvania.

The two plaintiffs claim that Great Virtual Works misclassified them in an attempt to avoid paying employees all the hours they spent actually working for the company.  According to the plaintiffs, Great VirtualWorks’ so-called “business owners” are actually individual employees working from their homes, performing hourly-paid work duties such as telephone-based customer service, sales service, and technical support for Great VirtualWorks’ client companies.

The plaintiffs argue that they and other similarly situated individuals were not business owners or independent contractors as labeled by Great VirtualWorks because they did not make significant investments in equipment or materials, exercise any specific skills, or make a significant profit or loss from their work. The plaintiffs state that Great VirtualWorks has at all times of plaintiffs’ employment been in control of their work schedules and activities, relying 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.

Specifically, the plaintiffs allege Great VirtualWorks failed to pay them for work performed before, during, and after their shifts, including:

  • connecting to the company from their own homes or places of work, opening computer applications for the company’s 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 when disconnected from the company’s network;
  • shutting down computers and applications at the end of a shift;
  • reviewing emails and completing notes when not engaged in calls but clocked in;
  • completing required online training; and
  • attending mandatory meetings or coaching sessions.

As a result of this unpaid work, the compensation plaintiffs actually received averaged less than the federal minimum wage, as well as the Kentucky and Pennsylvania minimum wage.  Additionally, plaintiffs allege that they did not receive proper overtime compensation at a rate of time-and-a-half of their regular rates of pay. The plaintiffs are now seeking unpaid minimum, overtime, and contractually-owed wages, liquidated damages, attorneys fees and costs, and other remedies they may be entitled to under federal or state law.

The lawsuit is currently stayed pending an an upcoming ruling by the United States Supreme Court on a legal issue relevant to the employees’ claims, which is whether Great Virtual Works can require employees to submit their claims to individual arbitration. The amended collective class action complaint is recorded in Kentucky as Case No. 0:17-cv-00063-HRW. The plaintiffs are represented by the law firms of Barkan Meizlish Handelman Goodin DeRose Wentz, 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

The Pitfalls of Employee Misclassification

The misclassification of employees is both against the law and damaging to the employee and employer. Employees lose significant wages when they are misclassified, while employers are confronted with large class action lawsuits and potentially hefty monetary judgments awarded against them. Generally, the Fair Labor Standards Act (“FLSA”) requires an employer to pay employees the federally mandated overtime premium rate of one and one-half times their regular rate of pay for every hour worked in excess of forty (40) hours per workweek. 29 U.S.C. § 207. However, there are exceptions that apply to workers in certain industries, which can require the worker to receive higher wages or be exempt from receiving overtime pay.

Two recent cases demonstrate the difficulty in classifying employees correctly. For example, a service specialist for Ecolab, Inc., a provider of pest elimination services to commercial and non-commercial customers, brought suit against Ecolab, Inc. claiming he and other service specialists were misclassified as exempt from overtime pay. As a result, the service specialists were not paid the overtime rate of not less than one and one-half times their regular rate of pay for all hours worked over 40 hours in a workweek. The employees asked for a class of over 1,000 service specialists to be able to proceed to trial.
Ecolab, Inc. objected, stating certain employees are exempt from overtime pay if they receive “bona fide” commission payments and are paid at least one and one-half times the minimum wage for all hours worked in a week involving overtime hours. Nonetheless, the court certified the class and allowed the jury to decide the following: 1) whether Ecolab correctly classified its employees as exempt; and 2) whether Ecolab’s compensation policy permitted employees to actually earn twice the minimum wage. This case outlines the improper classification of non-exempt employees as exempt employees. Generally, an employee is entitled to overtime when they are not employed in an executive, administrative, or professional capacity, and their true exempt status is determined primarily by their duties. Therefore, exempt employees usually have some type of managerial duties, like hiring, firing, and deciding on employee wages and salaries, as well as creating work policies and procedures. If these duties are not exercised by the worker, then it is likely he or she is non-exempt and should be afforded the protections of the law. Eventually a settlement agreement was reached, whereby Ecolab, Inc. agreed to settle the claims for $7,500,000.

Another example is the U.S. Department of Labor’s (“DOL”) investigation into DirecTV’s employment practices of how they paid their cable installers. DirecTV and their installation contractor, Advanced Information Systems, were accused of violating the minimum wage, overtime, and record-keeping laws. DirecTV’s payment practices caused the cable installers to be paid on a piece-rate basis, which caused their hourly rates to fall below the federal minimum wage. The installers were not paid overtime at a rate of one and one-half times for hours worked over 40 per week, nor were they paid for all hours worked. Further, the installers were not paid for unsuccessful installations, time in the office, or travel time, and they were not reimbursed for business expenses.

DirecTV claimed the installers were not their employees, but rather employees of DirecTV’s subcontractor Advanced Information Systems. However, the DOL found the installers only worked on DirecTV installations, drove DirecTV vans, wore DirecTV clothing, and DirecTV specified all conditions of employment. The DOL asserted DirecTV attempted to avoid employer liability by structuring the installers’ employment relationship like they did. However, the court ruled that DirecTV was a joint employer of the installers and responsible for any FLSA violations. Therefore, DirecTV was ordered to pay damages and back wages in the amount of $395,000 to 147 installers.

This case illustrates the misclassification of employees as independent contractors. Generally, to be an independent contractor, one usually has the right to control the manner and means in which they perform their job. Once an employer begins dictating how the work should be accomplished or performed, or in what order the work should be completed, the worker is more likely an employee and not an independent contractor. Independent contractors do not have to be paid minimum wage, overtime, or break time, and they do not have the same protections under the law that an employee has. Thus, classification of a worker as an employee or an independent contractor is a choice that must be made carefully and in compliance with the laws and regulations.

(Advertising Material:  This Notice is for informational purposes and should not be construed as legal advice).

Travel Time Under the FLSA

Under the Fair Labor Standards Act (“FLSA”), there is no black-and-white rule for determining when travel time is compensable—it all depends upon the type of travel and when it occurs.  The regulations interpreting the FLSA don’t provide much clarity either, stating that travel “all in a day’s work” must be counted as compensable hours worked.  29 C.F.R. § 785.38.  Not surprisingly, this vague terminology offers little guidance to most employees.  What if the employee is called back to work after returning home for the day? What constitutes “hours worked?”  As a general rule, the commute between an employee’s worksite and home is a “normal incident of employment” and thus is not compensable “working time” under the FLSA.  But, of course, many exceptions apply, and it is important for employees to be aware of circumstances when such travel is compensable.

Here are a few quick examples:

• Work-related duties while commuting. The travel time between home and work is compensable if an employee is required to perform work during the commute (picking up supplies on the way to work or reporting to a meeting place, for example) that must be counted as hours worked. When that happens, the employee is considered to be “on the clock” when the initial work-related duty begins.  29 C.F.R. § 785.38.

• Emergency jobs. If an employee is required to travel “a substantial distance” to perform an emergency job after the employee has completed the day’s work, the travel time to and from the work site is compensable. 29 C.F.R. § 785.36.

• Out of town travel. Travel time is also compensable when employees are given special one-day assignments in another city.  For example, an employee that regularly works at a fixed location in Columbus will be compensated for travel time if required to make a one-day trip to Cincinnati.  This does not fall under the ordinary home-to-work rule, as the trip is performed the employer’s benefit and at the employer’s request.  However, the time that the employee normally spends commuting to and from their regular worksite can be deducted from the out of town travel.   29 C.F.R. § 785.37.

Source: Ed Zaleqski, When does a commute become paid working time? (Oct. 14, 2014) http://www.bizjournals.com/nashville/blog/2014/10/when-does-a-commute-become-paid-working-time.html

Overtime Exemption – Automobile Dealerships

automobile dealershipsThe Fair Labor Standards Act (“FLSA”), which governs the minimum wage and overtime pay requirements, contains specific exemptions from overtime pay.  In addition to the traditional “white collar” exemptions for certain executive, administrative, and professional employees, the FLSA has some specific, less-known industry exemptions for automobile dealerships. Here’s a quick overview of one exemption under Section 13(b)(10)(A) of the FLSA, which applies to certain service employees of nonmanufacturing establishments.

1. Which employees are covered under this exemption?

• “Salesmen” – includes those employed for the primary purpose of making sales or obtaining orders or contracts for sale. This also includes any work performed incidental to sales (deliveries or collections).

• “Partsmen” – includes those employees primarily engaged in requisitioning, stocking, and dispensing parts.

• “Mechanic” – includes those employees primarily engaged in mechanical work for the automobile’s use and operation, such as wrecker mechanics, automotive implement mechanics, and any mechanical work for safe operation.  This does not include tire changing, installing seat covers, dispatching, or any painting or polishing.

2. Are the employees “primarily engaged” in selling or servicing automobiles?

• To fall under this exemption, employees must spend at least 50% of their work hours each week selling or servicing automobiles.

3. Is the employer a “nonmanufacturing establishment” that is “primarily engaged” in selling automobiles to the ultimate purchaser?

• For the exemption to apply, over half of the establishment’s annual dollar volume must be derived from sales of the vehicles.

• This exemption applies to employees even if they work in a physically separate building from the principal establishment, so long as they are employed in a department that is “functionally operated as part of the dealership.” 29 C.F.R. 779.372.

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Barkan Meizlish, LLP Files FLSA Collective Action Against S&E Flag Cars, LLC

Barkan Meizlish, LLP

Last week, law firms Barkan Meizlish, LLP and JTB Law Group, LLC filed a class and collective action against S & E Flag Cars, LLC (“S & E”), a Kentucky limited liability company in the race track operations business.  The lawsuit, Perkins et al. v. S & E Flag Cars, LLC et al., was filed in the United States District Court for the Southern District of Ohio as a class and collective action on behalf of all non-exempt current and former employees of S & E over the past three years.  Under Ohio and federal wage and hour law, nonexempt employees must be paid at least the minimum wage for all hours worked, plus overtime pay at a rate of one and one half times the regular rate for hours worked in excess of 40 in a workweek.  The Complaint asserts that S & E violated the Fair Labor Standards Act (“FLSA”) and the Ohio Minimum Fair Wage Standards Act (“Ohio Wage Act”) by failing to pay Plaintiffs overtime compensation at a rate of one and one half (1.5) times their regular rate of pay.  Plaintiffs seek to recover monetary damages, liquidated damages, and costs, including attorney’s fees, for themselves are all others similarly situated.

Barkan Meizlish, LLP focuses on union side labor law, wage and hour litigation, workers’ compensation, Social Security disability, and personal injury/medical malpractice.  Over the past fifty years, Barkan Meizlish, LLP has represented the rights of working people on and off the job through representation of labor unions, individual employees, and the injured and disabled.  The lawsuit was filed by attorney Bob DeRose (bderose@barkanmeizlish.com).  Learn more at www.barkanmeizlish.com, or visit our Facebook page at https://www.facebook.com/pages/Barkan-Meizlish-Handelman-Goodin-DeRose-Wentz-LLP/197862930238456.

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Common Overtime Violation- Oil & Gas Industry

Workers frequently work over 40 hours a week in this rapidly growing industry, sometimes even up to 100 hours per week. With much of the work sub-contracted out to smaller companies, the structure of the oil and gas industry certainly makes it “an industry ripe for noncompliance,” as stated by Dr. David Weil, administrator of the Wage and Hour Division. Investigators for both state and federal government agencies have specifically targeted this industry over the past few years.  By August of last year, the Department of Labor’s investigations resulted in over $13 million in back wages to over 9,100 employees. There are numerous jobs in this industry that may be entitled to overtime pay, including compressor operators, roustabouts, pumpers, directional drillers, service supervisors, oilfield delivery specialists, rig operators, instrument fitters, electricians, mechanics, and truck drivers.

Employers can use many different tactics to avoid paying the required minimum wage and overtime pay to employees.  You should be aware of 3 common violations:

1. Misclassification. One major issue facing oil and gas workers is misclassification—where employers treat full-time nonexempt employees as independent contractors to avoid the overtime obligations under the FLSA. Keep in mind that your day-to-day job duties and actual employment relationship determine whether you are exempt from overtime pay, not your job title.  To make this determination, courts will look to: the degree of control your employer exercises over you, the skill required for your job, whether the services you provide are an integral part of the overall business, and your investment in any materials or equipment.

2. Travel time.  Workers will often travel from drill site to drill site   For example, employees working in the field may be required to report to a central office location at the beginning and end of each shift, but travel to various assignment locations throughout the day. These employees should be compensated for all travel from the time they leave the central office location until they return at the end of their shift.

3. Day-rate plans. Workers paid on a day rate basis receive a flat rate per day, regardless of the number of hours worked.  But this does not eliminate your employer’s obligation to track hours or pay overtime compensation—this common method of payment may still violate the FLSA if nonexempt employees do not receive time-and-a-half for hours worked over 40 a week.

Questions? Learn more at www.barkanmeizlish.com. Unpaid Wages Attorney Columbus Ohio
Source: WHD News Release, US Labor Department helps more than 5,300 Pennsylvania and West Virginia oil and gas workers recover $4.5M in back wages for unpaid overtime (Dec. 9, 2013) http://www.dol.gov/opa/media/press/whd/WHD20141883.htm   

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