BLOGS: Fair Labor Standards Act Law

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Tuesday, September 30, 2008, 3:56 PM

Turkey Processors Seek Gravy: Allegations in FLSA Include Donning and Doffing Claims

Two current Colorado workers at Butterball, LLC's turkey processing plant have filed a complaint alleging various FLSA and wage and hour act violations, including a claim that they were not paid for the time that they spent donning and doffing protective gear needed for their turkey processing jobs. The complaint seeks relief on a putative class and collective-wide basis for Butterball employees, who the plaintiffs allege have been subject to systematic practices and policies of not fully compensating employees for time worked at the plant.

Employees' sanitizing required gear and equipment includes as boots, hair nets, ear plugs, smocks, safety glasses, liners, gloves, bump caps and hard hats. This equipment must be donned at the start of each shift and removed at the end of each shift. Plaintiffs also assert that employees were not compensated for sanitizing or walking to and from the production lines at the plants. The plaintiffs assert these allegations under both the federal FLSA and the Colorado wage and hour law.

The complaint seeks damages and injunctive relief for an estimated 700 potential class members of the Colorado plant, including current and former employees. The Defendant Butterball is facing similar lawsuits in Arkansas and in North Carolina. The Arkansas suit requests a nationwide class to address similar claims, but the court has not decided that issue to date. If a nationwide class is certified, then some of these other lawsuits may be amended to reflect only state law issues.

To read this complaint in Salazar v. Butterball, LLC, number 08-cv-02071, in the U.S. District Court for the District of Colorado, please click here.

Thursday, September 25, 2008, 10:27 AM

IBM Seeks to Move Overtime Class Action to Federal Court

IBM Corporation has filed a notice of removal seeking to transfer an overtime class action lawsuit pending in a California Superior Court to the United States District Court for the Southern District of California. In the notice, IBM states that the suit should be transferred to federal court under the Class Action Fairness Act based upon the diversity of citizenship of the parties and the amount in controversy. IBM argues that diversity of citizenship exists in the case because it is a New York-based corporation and the plaintiff, Jose Silva, is a citizen of California. Mr. Silva seeks to represent a class of individuals employed by IBM in California as operations analysts, infrastructure specialists, computer operators, technical support professionals, systems management specialists, and other employees performing similar functions. In addition, the class Mr. Silva wishes to represent includes more than 2,300 individuals and he seeks more than $5 million in back wages for those individuals.

Monday, September 22, 2008, 11:39 AM

Charlie Edwards on Panel for Wage and Hour Collective and Class Claims Strategies for Pursuing, Defending and Settling FLSA Actions

FLSA Teleconference - October 8

Employment lawsuits, particularly class and collective actions, have exploded in the last few years exposing employers to expensive and time consuming litigation. During 2007, the 10 largest class action wage and hour settlements totaled $319.3 million. In 2006, Citigroup settled a wage and hour case for $98 million, UBS Financial Services for $89 million, and UPS for $87 million.

The increase in collective and class claims alleging Fair Labor Standards Act (FLSA) violations has forced employers to develop creative strategies to defend against the suits. Employers and employees should also develop effective settlement strategies to minimize the time and expense of litigation.

Listen and participate from your telephone on October 8, 2008 as a panel of employment law attorneys (including Womble Carlyle's Charlie Edwards) — both plaintiff and defense — provides effective strategies for pursuing and defending against FLSA claims and best practices for reaching settlements.

Event Details
Wednesday, October 8, 2008
1:00–2:30pm Eastern
Register by Friday, September 12 and save $50
Mention Program Code ESTZZ2 to get the special rate.
CLE credit processing available for an additional fee

Click here for more information or register online.

The live 90-Minute CLE Teleconference with Interactive Q&A is presented by Legal Publishing Group of Strafford Publications.

Friday, September 12, 2008, 11:36 AM

How's This for a Shocker?

A jarring message comes from Williams v. New Hope Foundation, a decision of the NC Court of Appeals. In a state law wage-hour case tried in Hertford County (Northeastern NC, north of Greenville), the jury awarded the plaintiff unpaid wages in the grand sum of $72.00, and the judge cut the plaintiff's attorneys' fee request by more than half - to $25,000.00, plus $2534.14 in costs. The costs-and-fees award was affirmed on appeal. A fee award is discretionary, but the appeals court said that the "obvious purpose" of the state statutory language (G.S. 95-22(d)) "is to provide relief for a person who has sustained damage in an amount so small that, if he must pay his attorney out of the recovery, he may well conclude that it is not economically feasible to bring suit on his claim. In such a situation the legislature apparently concluded that the defendant, though at fault, would have an unjustly superior bargaining power in settlement negotiations." Therefore, the trial court did not abuse its discretion.

The jury accepted the defenses raised by the employer, and still gave the plaintiff a tiny consolation prize. So the employer, which sustained a mosquito bite from the jury, has the privilege of (a) paying the $75, (b) paying its attorney for defending the case through trial and on appeal, and (c) paying the plaintiff's attorney. New Hope Foundation is a home care agency in Aulander NC; a nearby community is known as "Poor Town." Need I say more?

Click here to read the case...

Tuesday, September 9, 2008, 12:33 PM

Another Construction Nightmare

Employees in the construction industry tend to be nonexempt, except for professionals (some but not all engineers, for example), administrators, and supervisors/managers. The "executive" classification depends heavily upon both the nature of the duties performed and the payment of a salary which does not vary with the amount of time spent on the job or away from it. With these exceptions, there is a strong presumption that all others engaged in the construction trades are paid on an hourly basis and are eligible for overtime compensation.

However, that's not the end of the wage-hour analysis. Recording time worked is usually an informal process, a combination of the honor system and the oversight of management. Potential pitfalls in this arrangement include those claimed to exist in a West Texas assembly-line operation which is the subject of a new federal court complaint. In Arosemena v. Toyota Motor Engineering & Mfg. North America, the plaintiffs claim they were forced to work "off the clock" before and after their scheduled shifts, and the queue at the group leaders' stations was long and slow, with time in and out being logged as the same whether the employee was at the front or rear of the line. Although Arosemena isn't a construction industry case, the issues presented are typical of those which are being alleged in the ever-growing list of newly-filed FLSA complaints against contractors and subcontractors engaged in construction. (One possible defense for the employer is that waiting time to "check in or out" is generally not counted in hours worked; see 29 CFR 790(7)(g).)

Another hot topic in construction is the extent to which getting ready for work and winding up the day constitute compensable time. The Department of Labor takes the position that meal periods which involve no duties and last at least 30 minutes aren't "time worked," but the converse is true for shorter breaks from duties, including waiting for a task to begin or resume; if the time is not the employee's own to spend as he or she pleases, it's likely to be counted as compensable. If critical equipment breaks down and causes work to stop, the lost time must be paid unless employees are free to leave. Travel time is usually unpaid unless the employee is traveling from one jobsite to another during the working day. Required meetings for safety or planning are compensable. All these generalities yield to specific facts, and careful planning can reduce, if not eliminate, the potential for wage claims.

The real concentration of new construction-industry filings comes in two specific areas, which frequently merge: Smaller employers with informal timekeeping systems are often targeted, and the problems increase exponentially where there are communications and cultural issues. cases brought by Hispanic plaintiffs, acting either through private counsel or through organizations, make up a significant percentage of the FLSA litigation explosion in the industry.

The final area of concern for the industry is the most straightforward: The minimum hourly wage is now $6.55 and will increase to $7.25 on July 24. 2009. Attention to all these details may serve to remove one headache from the construction employer's concerns.

Wednesday, September 3, 2008, 3:51 PM

Cableworkers Add New Twist for Comcast

Cableworkers employed as independent contractors by Comcast filed a proposed class action lawsuit alleging that the cable giant employed these individuals as independent contractors instead of employees in an effort to avoid complying with applicable federal and state employment laws. With regard to the federal claims, the plaintiff, Adriano Queiroz, seeks to represent all similarly situated individuals throughout the country. He also seeks to represent all similarly situated employees throughout Maryland and New Mexico on the state law claims alleging violations of those state labor codes.

Mr. Queiroz alleges that the plaintiffs performed manual labor on behalf of Comcast seven (7) days per week and usually at least ten (10) hours per day. The tasks performed included installing fiber optic cable, removing cable, repairing cable connections and other others services in relation to Comcast's business. Queiroz alleges that the individuals do not qualify as independent contractors under applicable laws because they do not exercise sufficient control over their work, do not exercise the skill and initiative of a person in business for themselves, make relatively minor investments in their businesses as compared to Comcast, and do not control the key determinants of profit and loss of a successful enterprise.

In support of his allegations, Queiroz cites comments from an investigation conducted by the U.S. Government Accountability Office ("GAO") indicating that the Department of Labor has not effectively enforced the nation's wage and hour laws. The GAO concluded that the Department of Labor "does not sufficiently leverage its existing tools to increase compliance" and has in too many cases "simply dropped the ball in pursuing employers that cheat workers out of their hard earned wages."

If Queiroz is correct and Comcast has improperly classified these individuals as independent contractors, Comcast may be liable for significant amounts of overtime wages, employment taxes, and other penalties.

To read more of the allegations made by Queiroz against Comcast, click here.

Tuesday, September 2, 2008, 12:58 PM

No Longer Super Sized, Federal Judge Shrinks Potential FLSA Claims against McDonald's

McDonald's Corp. has successfully put a plaintiff's FLSA suit against it on a diet with two court victories in the past couple of days. First, a federal judge granted McDonald's motion to deny certification in Kimoto v. McDonald's Corp., 2:06-cv-03032 in the U.S.D.C. for the Central District of California. Next, further persuaded by McDonald's arguments, the judge granted partial summary judgment on some of the claims of the plaintiff.

With respect to class certification, the judge noted in his ruling the discretionary nature of certification and cited numerous ways in which plaintiff failed to meet the standards required by Rule 23, not the least of which was the plaintiff's failure to move for certification at "an early practicable time." Once again, the Brinker decision was persuasive and a "good indication of how the California Supreme Court" would rule against class certification in this case. The judge rejects plaintiff's attempts to redefine the class to include only those employees like herself who had to take late breaks and otherwise.

In terms of partial summary judgment, the judge eliminated plaintiff's argument that McDonald's didn't comply with the record-keeping requirements, but allowed the plaintiff's assertions that McDonald's refused to give her a break during her first four hours of work and forced her to group her remaining breaks until the end of the day. Likewise, the judge allowed the plaintiff's assertions that McDonald's failed to provide accurate wage statements, denied her a meal period during her shift, and did not pay proper overtime. So while partial summary judgment was granted in favor of McDonald's, this restaurant giant still has to defend itself against some serious allegations raised by Ms. Kimoto. At least the defense of these allegations will not be in a class action lawsuit.

For the ruling denying class certification, in Kimoto, click here.

For the ruling granting partial summary judgment in Kimoto, click here.
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