The vast majority of employees are guaranteed a minimum wage and overtime pay, legal rights established by a federal law called the Fair Labor Standards Act. These rights aren’t always respected, though. In fact, millions of workers become innocent victims every year – falling prey to wage theft. Employers steal from their workers at alarming rates, violating our nation’s wage and hour laws in the process. Wage theft is a huge problem, but there’s a solution: filing an unpaid wage and overtime lawsuit to pursue your back wages.
Federal Overtime Class (Collective) Actions
Many unpaid wage and overtime lawsuits are filed as class actions, rather than individual civil claims. In some cases, this is the only way for a wage and hour case to get off the ground. Think about it this way. If you learned that you were owed $2,000 in back wages, but pursuing a lawsuit would cost a lot more than that, you probably wouldn’t file your claim in the first place. Class action is designed to jump over that problem.
When all of your co-workers have experienced similar pay problems, those small claims for damages can be bundled together in a single lawsuit. Likewise, attorney’s fees and court costs can be shared between the members of the class, rather than carried by a single plaintiff. No more barrier to entry.
Technically, the class-based form of litigation used to pursue overtime complaints is known as “collective action,” a term established in the Fair Labor Standards Act. The process differs from a traditional class action in important ways, but for the purposes of this guide, you can think of the two legal avenues as nearly equivalent.
Employee Misclassification & Stolen Overtime Pay
Employee misclassification is a growing problem, according to the US Department of Labor. Most American employees are entitled to overtime wages for their extra work, but there are specific categories of worker who have been left out. Independent contractors are one example, along with many traditional “white collar” workers.
These employees are “exempt” from overtime pay requirements, but there’s a problem. Employers get to classify their employees for payroll purposes. Some companies make mistakes, unnecessarily depriving their workers of overtime. Other employers do it intentionally. In either case, employee misclassification is illegal.
In fact, misclassification is now a leading driver of wage and hour litigation, which allows workers who have been improperly classified to secure their owed back wages and – in many cases – double their overtime.
How Much Do You Win In An Unpaid Wage Case?
Every overtime lawsuit is filed with a single overarching purpose: to recover a worker’s unpaid wages. That means that any financial damages secured in a successful case will be tied directly to the amount of money that the employee should have been paid under federal and state laws. The point is to make the worker “whole,” effectively erasing the employer’s illegal pay practices.
Liquidated Damages & Attorney’s Fees
The Fair Labor Standards Act, though, takes wage theft very seriously. In order to prevent improper pay practices, the law establishes a number of additional monetary penalties that can be factored into a judgment. After deciding that an employer has failed to pay overtime, most courts will require the company to pay for the plaintiff’s attorneys’ fees. In essence, the entire process of pursuing a wage and hour lawsuit becomes free.
The biggest penalty, however, comes in the form of “liquidated damages” – when an employee is awarded double the amount of their unpaid wages. Think about it. Wage theft doesn’t just steal a few hours of pay from a worker. It also steals the opportunity to use that money: to pay for rent and utilities, put food on the table or make investments. These double damages are meant to make up for those lost opportunities. The requirement for liquidated damages is written into the Fair Labor Standards Act and it’s very hard for employers to get out of.
State Interest Laws
Alternatively, some state laws allow workers to recover interest on their unpaid overtime wages, making up for the amount of time they were forced to live without their earnings. In most cases, interest is used as a substitute for liquidated damages, rather than a supplement. It’s rare to be awarded both liquidated damages and interest in the same case. Some states exact even harsher penalties. California, for example, imposes a “waiting time” fine on employers, which is equivalent to a month of the worker’s unpaid wages.
Active Unpaid Overtime Cases
Our experienced attorneys are currently pursuing three major wage and hour lawsuits on behalf of workers who believe they were paid improperly. All three have been filed as class action lawsuits.
Bluestem Brands – Call Center Employees
In her new wage and hour lawsuit, a former call center employee says that eCommerce company Bluestem Brands has a company policy of failing to pay customer service representatives for off-the-clock work.
The woman worked at a call center in Erie, Pennsylania, handling customer calls for Bluestem’s online apparel company Blair, for almost three years. But the employer violated federal and state law, she claims, by refusing to pay for her pre- and post-shift work. The same thing happened to numerous other Bluestem employees, she says.
Probity Health – In-Home Care Providers
A Certified Nursing Assistant from Baltimore has accused her employer, home health agency Probity Health, of failing to pay hourly care providers their rightfully-earned overtime wages. As the CNA writes in her class action, Probity Health “maintained a policy and practice of paying overtime at less than the proper legal rate.”
In-home health aides gained the right to overtime pay recently, when a 2015 guidance from the Labor Department expanded overtime wages to direct care workers employed by third-party companies. Probity Health, however, hasn’t kept up with these changes in government policy, the class action says.
Brian Center Nursing Care – Hourly Nurses
In her own class action, a Licensed Practical Nurse in North Carolina claims her former employer, Brian Center Nursing Care, has failed to pay hourly nurses for off-the-clock work and overtime. The lawsuit accuses the Brian Center, a nursing facility in Lexington, of forcing nurses to work through their lunch breaks without pay.
Recent Wage & Hour Settlements
Overtime and unpaid wage lawsuits have exploded, both in regularity and magnitude, over recent years. While most forms of labor dispute are actually becoming less common, the number of Fair Labor Standards Act claims has only grown. Workers are winning big, too. Over the last two years, the value of wage and hour settlements tripled, according to an analysis from the Society for Human Resource Management, but it’s not just big corporations that are paying out huge unpaid overtime settlements. Small businesses, from a brewery in Philadelphia to a strip club in Detroit, have also been on the hook.
OfficeMax Settles $3.5M Overtime Case
After three years of litigation, office supply giant OfficeMax offered a group of 330 employees more than $3.5 million in compensation, resolving allegations that the company had refused to pay its assistant managers overtime. The lawsuit had been filed as a collective action under the Fair Labor Standards Act, a federal statute that entitles most workers to overtime wages.
In the initial complaint, an assistant manager at OfficeMax told the Court that his employer had misclassified him, along with similar employees, as executive professionals. The Fair Labor Standards Act says that workers who perform “executive” functions aren’t entitled to overtime, but as Jeffrey Heitzenrater pointed out, assistant managers at OfficeMax were required to perform a litany of non-executive tasks. The workers often stocked shelves and ran the store’s cash register, duties that should have garnered them overtime, Heitzenrater explained.
While OfficeMax never admitted liability, the collective action had its intended effect. Each assistant manager received back wages amounting to more than $10,000. Notably, the fact that assistant managers were paid a salary didn’t matter. Overtime wages aren’t just for hourly employees.
Alorica Offers $9.25M Settlement In Call Center Lawsuit
On May 10, 2016, the industry-leading call center operator Alorica agreed to pay $9.25 million to end a litigation begun by the company’s customer service representatives. A collective action of staggering scope, plaintiffs’ attorneys estimated that up to 120,000 current and former employees could be eligible to secure back wages from the settlement, as Law360 reported in 2016.
Legal experts say that wage and hour violations are rampant within call centers nationwide. The allegations against Alorica are particularly emblematic of the industry’s problems. In their lawsuit, customer service representatives accused the employer of failing to pay them for short breaks, along with necessary pre- and post-shift work, including turning their computer stations on and off. Moreover, the collective action claimed that Alorica had improperly paid out overtime, by failing to take earned commissions into account. Commissions and certain bonuses usually need to be factored in to correctly calculate a worker’s overtime wages.
Philly Brewery Offers $1.3M To Resolve Server Tip Claims
The Iron Hill Brewery and Restaurant, a brewpub with locations in Pennsylvania and Delaware, is paying around $1.3 million to settle accusations that the company was running an illegal tip pool. Iron Hill has also agreed to end a company policy that “required employees to share gratuities with workers who would not normally be tipped,” the Courier-Post writes. Around 1,300 current and former servers and bartenders will be receiving compensation, with an average payout of about $925.
When employees regularly receive tips, most employers are allowed to pay an hourly wage lower than the minimum wage, currently set at $7.25 per hour. In technical terms, the employer can take a “tip credit,” subtracting a worker’s hourly tip rate from their minimum wage obligations. While this practice is legal, diverting a portion of tips to compensate employees who don’t normally receive tips isn’t.
Millions Won In Unpaid Overtime Claims
The wage and hour lawyers at WageAdvocates.com fight for the rights of workers in unpaid overtime lawsuits every day. Over more than 60 years of combined trial experience, our lawyers have recovered approximately:
- $8 million for unpaid overtime in the call center industry
- $1.5 million for unpaid overtime in the healthcare industry
- $1.5 million for unpaid overtime in the insurance industry
Here are some of the highlights from our legal careers:
Our Employment Law Experience Can Work For You
If you believe you are the victim of an attempt by your employer to rob you of your hard earned dollars, then contact our unpaid overtime lawyers today for a free consultation on 877-629-9275. Our attorneys will front all the costs of the litigation and you will not owe us anything until we recover for you.
Breaking Unpaid Overtime Lawsuit News
By Tim Becker
September 22, 2017 – TGI Friday’s Agrees To $19.1M Unpaid Wages Settlement
In what has been dubbed the largest wage and hour settlement ever brokered, the casual dining franchise TGI Friday’s has agreed to pay an estimated 28,800 workers $19.1 million in compensation for allegedly unpaid wages. To read our article on the settlement, follow this link.
September 7, 2017 – Texas Federal Judge Strikes Down Efforts To Expand Overtime Rights
A federal judge in Texas last week overturned the Obama-era proposal to expand overtime eligibility to over 4 million salaried workers, saying the Department of Labor had “exceeded its authority” in attempting to double the Fair Labor Standards Act’s salary threshold. Confirming the death of Obama’s ambitious plan, attorneys for the Labor Department withdrew their defense of the rule, saying the agency, under the guidance of President Trump appointees, would not appeal Judge Amos Mazzant’s ruling. Learn more about these recent developments here.
August 22, 2017 – Secret Service Struggles To Settle Agent Overtime Obligations
Secret Service Director Randolph Alles says his agency will not be able to pay overtime wages after September 30, 2017, unless members of Congress can galvanize around a legislative fix to the salary caps established by federal law. Today, federal legislation limits the annual salary of a Secret Service agent to $160,000, a number that includes overtime pay. That cap has already left thousands of agents and uniformed employees with hours and hours of unpaid overtime. To read more, click here.
August 1, 2017 – Trump Administration Moves To Quash Obama-Era Overtime Rule
The Trump Administration’s Department of Labor has taken its first step toward overturning a wage rule, drafted by former President Obama’s labor officials, that would have extended overtime pay to some 4 million workers. As Insurance Journal reports, the Labor Department announced on Tuesday, July 25, 2017 that it would be opening Obama’s proposal up for public comments, a common move before regulations are revised or reversed. In suggestive public statements, the Department has said it’s looking into ways to soften the rule’s effect for business interests, in part by creating different regulations for separate industries and regions of the United States. The Obama Administration’s original scheme would have raised a salary threshold that currently makes workers earning fewer than $23,660 per year ineligible for overtime.
July 24, 2017 – Burberry Settles Retail Overtime Class Action For $2.54 Million
After hearing for years that “Burberry doesn’t pay overtime,” workers at the upscale fashion retailer’s locations in New York State have won $2.54 million in back wages. The apparel giant’s settlement, reported in the New York Post, will go to compensate salespeople and shipping employees who say they were often forced to work “off-the-clock” without pay.
July 3, 2017 – St. Louis Workers Win – Then Lose – $10 Minimum Wage
After two years of legal battle, low-wage workers in St. Louis, Missouri secured the right to a $10 per hour minimum wage. Just as quickly, that hard-won raise was taken away, according to HuffPost. In a rare example of legislative efficiency, Missouri’s legislature passed a bill on June 30th that will force all municipalities in the state to stick with the State’s minimum wage of $7.70.
As many observers have noted, the Missouri Governor’s decision to overturn locally-made decisions appears to conflict with traditional conservative principles. Republicans tend to support delegating authority to municipalities, rather than concentrating power in state-level bureaucracies.
June 20, 2017 – New Jersey Lifeguard Says Ocean City Doesn’t Pay Overtime
A veteran lifeguard in Ocean City has filed a class action lawsuit, accusing the municipality of failing to pay members of the beach patrol overtime, the Gazette of Ocean City reports. Douglas Schmitt, who has worked as a lifeguard in New Jersey for the last 24 years, estimates in his new lawsuit that lifeguards for Ocean City may be owed up to $75,000 a piece in back wages. About 100 lifeguards have worked on an hourly basis for Ocean City since April 25, 2015, the date on which the lawsuit’s claims begin.
June 9, 2017 – Chipotle Overtime Lawsuit Could Impact Wages For Millions Of Workers
A new class action overtime lawsuit has been filed against Chipotle, a chain of “fast casual” restaurants with more than 2,000 locations. Carmen Alvarez, the class action’s lead plaintiff, served as an apprentice at a Chipotle restaurant in New Jersey, according to CNN. While Alvarez frequently worked more than 40 hours every week, her earnings initially exceeded the threshold established by federal overtime law.
That all changed in 2016, when the US Department of Labor revised the nation’s overtime laws, raising the threshold and making Alvarez, along with millions of other workers, eligible to receive overtime pay. Chipotle started paying overtime, but soon stopped, “reversing course” after a federal judge in Texas issued an injunction that prevented the Labor Department’s rule change from going into effect.
A similar scenario played out in workplaces across the country, as employers began doling out overtime wages – and then just as quickly took them away. The crux of the class action, however, is whether or not the Texas judge’s decision should have any effect on workers in other states. Its fate could have a major impact for millions of workers, with shock waves felt in industries far from food service.
May 16, 2017 – DNC Field Organizers Say Democratic Party Refused To Pay Overtime, Minimum Wage
A new class action says the Democratic National Committee neglected to pay earned overtime wages to around fifty national field organizers, the Washington Free Beacon reports. In the lawsuit, Democratic Party field organizers, who worked all over the country in the run-up to the election, accuse the National Committee, along with the Pennsylvania Democratic Party, of paying sub-minimum wages and refusing to shell out overtime, despite workweeks that could amount to 80 hours. The irony, of course, is exquisite, since the Democrats made a $15 minimum wage one of their primary campaign planks this election cycle.
May 3, 2017 – AT&T Training Specialists Win Right To Continue Overtime Class Action
A San Francisco federal judge has denied AT&T’s attempt to have a wage and hour class action dismissed, Reuters reports, allowing the allegations of unpaid overtime leveled by training specialists to proceed.
AT&T argues that the training specialists should be classified as “administrative professionals,” a category of workers who are not usually entitled to overtime pay. Judge Vince Chhabria of the US District Court for the Northern District of California says that question should be decided by a jury. In a ruling issued on April 28, 2017, Judge Chabbria denied AT&T’s petition to dismiss the class action, ruling that a jury must weigh in on the lawsuit’s central question: whether or not the employees used “independent judgment” to decide significant business matters.
April 13, 2017 – PNC Bank Agrees To $16 Million Settlement In Loan Officer Overtime Class Action
Thousands of current and former mortgage loan officers have won a huge settlement in their class action lawsuit against PNC Bank. On Tuesday, April 11, 2017, Pennsylvania District Judge Arthur Schwab approved the bank’s $16 million settlement offer, resolving allegations that the company had advised workers to under-report their overtime hours and incorrectly calculated their wages.
The class of loan officers implicated in the suit covers employees who worked for PNC since August 7, 2012 at locations nationwide, Trib Live reports. The plaintiffs founded their allegations on the Fair Labor Standards Act, a federal law that requires employers to pay most employees an overtime wage for hours worked over 40 in a week.
April 4, 2017 – Disney To Pay $3.8 Million In Back Wages To Florida Resort Workers
The Walt Disney Company has agreed to a blockbuster wage and hour settlement, saying it will pay $3.8 million to reimburse over 16,300 workers in Florida for unpaid wages. Employees of two Disney-owned divisions – Disney Vacation Club Management Corp. and Walt Disney Parks and Resorts US – will be compensated thanks to an investigation conducted by the US Department of Labor.
As Variety reports, federal regulators discovered evidence that resort workers at Florida Disney locations had been subjected to a number of wage violations. Employees’ wages had been reduced to pay for uniform and costume expenses, Labor Department officials say, which often brought their hourly rates below the federal minimum wage. In addition, the Disney resorts failed to compensate workers for tasks performed before and after their officially-scheduled shifts.
March 14, 2017 – IT Worker Class Action Certified In Missouri, Accuses Cerner Of Wage Violations
A Missouri state judge has certified a class action against healthcare IT giant Cerner, filed in 2015 over allegations of blatant employee misclassification and withheld overtime wages. In her class action lawsuit, employee Laura Scott accuses Cerner of classifiying entry-level workers out of the Fair Labor Standards Act’s labor protections under an obscure exemption for high-level systems analysts, KCUR reports. Although “delivery consultants” and “systems analysts” at Cerner have impressive job titles, Scott says their true duties are far more mundane. In fact, the positions require little to no training in systems analysis, software engineering or computer programming, the class action claims.
Scott believes that up to 750 employees at Cerner, headquartered in Kansas City, Missouri, may be eligible to receive back wages from their employer. On February 28, 2017, Jackson County Circuit Judge W. Brent Powell allowed the claim to proceed based on Scott’s side of the story, although he admitted that further discovery may ultimately substantiate Cerner’s contentions. Additional Cerner employees will now be able to join the action. The company has already settled three previous lawsuits filed by computer workers over allegations of unpaid overtime.
March 1, 2017 – Hertz Rent A Car Faces Unpaid Overtime Collective Action
A former manager at Hertz Rent A Car has filed a collective action in the US District Court for the Middle District of Florida, saying her old employer “willfully refused to pay overtime wages.” In her complaint, the plaintiff says that she worked at two Hertz locations, in Clearwater and Clearwater Beach, ending her tenure with the company in 2015. During her employment, she claims that her supervisors forced her to perform off-the-clock work, thus depriving her of earned overtime wages.
This practice, however, is systemic at Hertz Rent A Car, the plaintiff says. Court records analyzed by the Naples Daily News show that the plaintiff has also filed a separate lawsuit, in the same court, alleging that she enduring sexual harassment and retaliation in the workplace. When she complained of inappropriate behavior to her superiors, the plaintiffs says that she was first ignored, and then fired in retaliation. Hertz has denied these allegations in court documents, but refrained from speaking with reporters about pending litigation.
February 16, 2017 – No Double Liquidated Damages In Wage & Hour Lawsuits, Second Circuit Appeals Court Rules
When workers win wage and hour lawsuits, the federal Fair Labor Standards Act (FLSA) allows them to secure “liquidated damages.” Instead of winning only their unpaid back wages, the FLSA can double that compensation. New York State law has a similar provision, allowing damages awarded in wage and hour lawsuits to be doubled.
But what happens when an employer violates both the FLSA and New York State labor laws. Is an employee entitled to triple the damages, by stacking liquidated damages on top of one another? “No” seems to be the answer to that question, according to JD Supra. The US 2nd Circuit of Appeals just ruled on an unpaid overtime lawsuit, deciding that employees are only entitled to one round of liquidated damages and cannot secure liquidated damages under both federal and state laws.
February 3, 2017 – Trump White House Hints At Decrease In Labor Enforcement, Increase In Private Wage & Hour Litigation
Most legal observers believe that, if President Trump keeps good on his word to cut labor regulations, wage and hour lawsuits will only increase during his tenure in the White House. The number of lawsuits based on wage and hour provisions in the federal Fair Labor Standards Act peaked in 2015, at 8,900. While case filings dropped the next year, to 8,300 in 2016, that was still a 329% jump from the amount filed in 2000, Law360 reports. Moreover, the amount of money companies are paying to settle wage and hour class actions has skyrocketed over the last two years, from around $215.3 million in 2014 to over $695.5 million.
Virtually all of these lawsuits are filed as class actions, thanks in large part to a number of recent Supreme Court cases favoring low-wage workers.
January 26, 2017 – New Mexico Labor Department Sued Over Refusing To Investigate Unpaid Wage Claims
New Mexico’s Department of Workforce Solutions has been sued in a proposed class action by three workers and a number of labor advocacy groups that claim the Department has failed to enforce minimum wage and overtime laws.
In a lawsuit filed on January 18, 2017, attorneys from the New Mexico Center on Law and Poverty accuse the State’s labor department of refusing to investigate unpaid wage claims in excess of $10,000, instructing low-wage workers, many of whom cannot afford their own legal counsel, to hire private attorneys. As the complaint states, New Mexico’s Department of Workforce Solutions has admitted in the past that it has the authority to investigate larger unpaid wage claims.
“Despite strong bipartisan for these legal protections, this administration chooses to ignore the law and side with the wage thieves,” Marcela Díaz told the Santa Fe New Mexican. Díaz is executive director for the immigrant rights group Somos Un Pueblo Unido, which was instrumental in campaigning for a 2009 bill that effectively doubled the penalties assessed against wage violators in New Mexico. These strengthened protections, however, are not being honored, according to the new class action.
January 3, 2017 – 21 States Raise Minimum Wage For 2017
An estimated 11.8 million workers will see their wages increase in 2017, according to a new report from the National Employment Law Project. 21 states, including California, New York and Arizona, have minimum wage increases taking effect, as do 29 cities and counties.
To learn more about these changes, click here.
December 15, 2016 – Flowers Foods, Owner Of Wonder Bread, Settles $9 Million Wage & Hour Lawsuit
Flowers Foods, owner of well-known baking brands Sunbeam, Nature’s Own and Wonder, has agreed to pay out $9 million to resolve a lawsuit alleging Fair Labor Standards Act violations. The story was first picked up by the Atlanta Business Chronicle.
Like most commercial baking conglomerates, including Pepperidge Farm, Flowers Foods relies on “independent distributors” to bring its baked goods to market, selling them the exclusive right to distribute Flowers Foods products within a given region.
Flowers Foods has long classified these distributors as “independent contractors,” who aren’t normally entitled to things like the minimum wage, overtime pay and reimbursed business expenses.
In 2012, a group of distributors filed suit against Flowers, claiming that the company had misclassified them under federal law. Despite their nominal “independence,” distributors are in fact employees, the complaint argued, and should thus receive the benefits. Alongside $9 million in back wages, the company’s settlement includes terms that will “strengthen the role of distributors as independent contractors,” HR Dive reports.
December 1, 2016 – Federal Judge Moves To Delay Implementation Of Overtime Rule
A federal judge in Texas has ruled to postpone the implementation of a new Labor Department rule that would see overtime eligibility expanded to an additional 4 to 5 million salaried workers. The overtime rule, which would have doubled the minimum salary threshold for overtime pay, was scheduled to take effect today, December 1, 2016.
The decision, handed down by District Judge Amos L. Mazzant on November 22, 2016, will allow the Court more time to consider the new labor rule’s legality, which has been challenged by over a dozen state governments and several major business organizations. The Court’s next steps, however, will depend in part on the Department of Labor’s reaction to the recent injunction. The federal agency says that it is “considering all of its legal options,” according to the Washington Post.
November 22, 2016 – Texas Judge Considers Request To Postpone New Overtime Rule
Workers across the country are still waiting for a federal district judge in Texas to decide on whether the Department of Labor’s new overtime rules will go into effect as expected on December 1, 2016. Judge Amos Mazzant is currently considering two federal lawsuits, filed by more than a dozen US States and the Chamber of Commerce, that seek to have the Obama Administration’s proposed increase of the overtime salary threshold stopped entirely or postponed.
Most legal pundits say it’s unlikely that Judge Mazzant will prevent the rule from taking effect, Politico reports. He is expected to announce his decision today, November 22, 2016, but no word has yet emerged from the US District Court for the Eastern District of Texas.
A major pillar in the Obama Administration’s labor agenda, the new rule would see overtime rights extended to between 4 and 5 million mid-wage salaried workers. Business advocates, however, have come out against the proposal with strong disapproval. Many state governments say that Obama’s rule change would create significant financial strain as well.
November 8, 2016 – New York, Chicago & Florida Lead Nation In Pending Wage & Hour Lawsuits
New York, Miami, Orlando, Tampa and Chicago see the highest numbers of wage and hour lawsuits in the country, according to reporting from Crain’s Chicago Business.
Lawsuits invoking the Fair Labor Standards Act, a federal law governing minimum wage and overtime requirements, have soared in recent years, thanks in large part to a changing labor landscape. Larger companies are increasingly willing to partner with smaller staffing firms, leaving many employees misclassified as independent contractors. The most popular jurisdictions for these lawsuits, including New York, Chicago and three Florida metro areas, sit at crossroads between large employers and smaller companies that provide labor.
October 24, 2016 – Bankrupt ITT Tech Hit With $20.2M Claim For Back Wages
ITT Tech filed for bankruptcy in September, but the end of the now-disgraced for-profit college’s legal troubles are nowhere in sight. On September 29, 2016, ex-instructors sought leave to file a claim for $20.2 million in back wages in the college’s bankruptcy case, according to Law360. The lawsuit, initially filed in July in a California state court, is currently seeking class certification.
During its lifetime, ITT Tech charged one of the highest tuition fees in the for-profit academic industry. The institute also issued more loans that ultimately went into default than any other for-profit technical school. In 2014, ITT Tech was ranked at number 2 on Time Magazine‘s list of “The 5 Colleges That Leave the Most Students Crippled By Debt.” Only the University of Phoenix saw more federal student loan recipients default.
In August, the US Department of Education cut off ITT Tech’s federal funding. Soon after, the institute abruptly shuttered operations, putting over 8,000 employees out of work on a single day, September 6, 2016. In a slew of other lawsuits, ex-employees accuse ITT Tech of violating the federal Worker Adjustment Retraining and Notification Act, which requires at least 60 days advance notice if large companies plan mass layoffs.
At its height, the for-profit educational institution operated upwards of 130 campuses in 38 different states.
October 7, 2016 – Amazon Sued Over Employment Status In New Wage & Hour Lawsuit
Three drivers who deliver products for Amazon Flex, the digital commerce giant’s new Uber-style delivery program, believe they should be classified as employees, not independent contractors.
In a lawsuit filed on October 4, 2016, the drivers argue that delivery is an essential component of Amazon’s business. Moreover, the company “exerts control over drivers’ schedules and training,” The Seattle Times reports. Those considerations, the drivers claim, indicates that they should be classified as employees of Amazon. Currently, Amazon Flex drivers are categorized as independent contractors – and have to pay their own vehicle expenses and phone bills. With those work-related costs factored in, wages can actually fall below the legally-required minimum wage, the drivers say.
The lawsuit accuses Amazon of violating federal and state wage and hour laws, which guarantee most employees a minimum wage and overtime pay. Their complaint was filed in the US District Court of Western Washington.
September 22, 2016 – 21 States Sue Department Of Labor Over New Overtime Rule
Authorities from 21 states have filed a lawsuit against the Department of Labor, according to Time, challenging the Obama Administration’s proposed change to federal overtime rules. The rule change seeks to extend mandatory overtime rights to over 4 million workers, which the states say will strain already cash-strapped budgets further.
Set to begin on December 1, 2016, the Department of Labor’s plan would have employers pay overtime wages to all salaried workers making less than $47,500 per year. The current salary threshold is $23,660. But the change will lead to “disastrous consequences for our economy,” says Ken Paxton, the Attorney General for Texas.
Legal observers believe the lawsuit will be largely ineffective, but say the states have a chance of blocking an aspect of the Obama Administration’s scheme, which would see the salary threshold increased automatically on an annual basis.
September 8, 2016 – US Labor Department Settles Unpaid Overtime Lawsuit For $7 Million
Ten years ago, a federal union, the American Federation of Government Employees Local 12, filed an unpaid overtime lawsuit against an unlikely Defendant: the US Department of Labor. The Labor Department, of course, is responsible for enforcing America’s overtime and minimum wage requirements. But in their collective action, filed initially in 2006, federal employees accused the agency of improperly paying overtime and leaving workers uncompensated for “off-the-clock” labor.
On August 12, 2016, the Department of Labor agreed to settle the suit for $7 million, an amount that will likely be split among 2,000 to 3,000 employees, according to Bloomberg’s Bureau of National Affairs. The Department has not admitted any wrongdoing, and denies violating the Fair Labor Standards Act.
The irony has not been lost on legal observers. “Maybe this lawsuit points to the need to clarify the [Fair Labor Standards Act],” said attorney Paul DeCamp. “If the DOL can’t get this right, what chance do other employers have?”
August 24, 2016 – California Judge Rejects $100M Settlement In Alleged Uber Driver Misclassification Lawsuit
In April, the ride-sharing giant Uber finally hammered out a settlement agreement with nearly 400,000 drivers who claimed they were employees of the company, not independent contractors. Along with promising to recognize union-like organizations in California and Massachusetts, the settlement agreement would see Uber pay the drivers $100 million in damages.
But in a major turn of events, the federal judge presiding over the California case has now ruled that the settlement agreement is “not fair, adequate and reasonable,” the New York Times reports. No one seems very happy with Judge Edward M. Chen’s decision. For its part, Uber will have to stay in court, and while some critics considered the settlement’s amount too low, the drivers’ lead attorney says she is disappointed. If the parties aren’t able to reach a revised agreement that seems reasonable to Judge Chen, attorney Shannon Liss-Riordan is prepared to take her case to trial.
August 11, 2016 – Massachusetts Construction Company Will Pay $2.3 Million In Back Wages
A Massachusetts construction company has been ordered to pay more than $2.3 million in back wages and liquidated damages to 478 employees, according to the US Labor Department. The judgement will be shared by Force Corp., a construction business based in Lunenburg, and AB Construction Group, a payroll company set up by the owners of Force Corp.
An investigation by the Department of Labor’s Wage & Hour Division found that Force Corp. and AB Construction Group, as well as the companies’ owners, misclassified the majority of their workers as independent contractors to get around federal laws requiring the payment of overtime and benefits. The agency says both companies also maintained inaccurate time and payroll records.
A civil penalty of $262,900 has also been assessed, since the employers willfully cheated their workers out of wages.
July 28, 2016 – Cafeteria Workers In The Senate Just Won $1M In Back Wages
Wage violations can affect employees in any workplace – even the United States Capitol.
A Labor Department investigation, which touched halls in our nation’s core governmental buildings, discovered that hundreds of cafeteria workers who serve senators and federal employees were being cheated out of pay. Yahoo! Finance reports that the workers, who were employed by two federal contractors, were being misclassified at lower pay rates and forced to work before clock-in. In total, more than 670 cafeteria workers will receive $1,008,302 in back pay.
July 20, 2016 – McDonald’s Class Action Certified
A California judge has certified a class action, potentially extending over 400 workers, filed against five McDonald’s franchises in the Bay Area. While the corporate giant argued that the workers couldn’t prove, on a class-wide basis, that McDonald’s was their employer, district judge James Donato disagreed.
The franchisee against whom the class action was filed has already settled with the workers. Now, the employees are attempting to go one step up the ladder of liability. According to Eater, McDonald’s has long attempted to “shift[…] blame” for alleged wage and hour violations onto its franchisees. Looks like that defense won’t work anymore – at least in this particular case.
June 16, 2016 – New Lawsuit Wants To Hold Parent Company & Franchise Operators Liable For Alleged Wage Theft
Huge corporations are stealing from their workers, according to New York’s Attorney General Eric Schneiderman. Take Domino’s, the national pizza giant, which Schneiderman just sued in a lawsuit that could prove groundbreaking. Like many other companies, especially those in the restaurant business, Domino’s Pizza operates on a franchise model. For years, the legal separation between a parent corporation and its franchises has frustrated government regulators, because parent companies can’t necessarily be held accountable for the illegal behavior of their franchisees.
Schneiderman wants to change that. In his lawsuit, the Attorney General claims that both Domino’s Pizza and its franchises should share equally in the blame for cheating workers out of overtime and tipped wages. The crux of Schneiderman’s argument is Domino’s PULSE software, a payroll program that the pizza empire requires its franchises to use. “Domino’s knew for years that PULSE under-calculated gross wages” but still pushed the software on franchises, the Attorney General writes in court documents.
June 2, 2016 – Obama Administration Raises Salary Threshold, Extending Overtime Rights To 4.2 Million Workers
Every worker making a salary less than $47,476 per year is now entitled to overtime wages, regardless of job duties, under a new wage and hour rule established by President Obama’s Labor Department on May 18, 2016.
For salaried workers, overtime eligibility is based on three factors:
- making a salary, a predetermined amount of money regardless of hours worked,
- the amount of that salary and
- job duties performed
Obama’s new rule, part of his long-standing effort to update the Fair Labor Standards Act’s requirements, raised the so-called “salary threshold” from its previous cut-off of $23,660. An estimated 4.2 million new workers will now be eligible for overtime pay, although critics of the change say many businesses will simply cut existing workers’ hours to avoid the administration’s mandate.
You can learn the details of Obama’s new overtime rule here.
May 17, 2016 – New York’s 60,000 Farmworkers May Soon Win Right To Organize Without Fear Of Retaliation
Last week, the New York Civil Liberties Union (NYCLU) filed a lawsuit against the State of New York and Governor Andrew Cuomo, claiming the state’s lack of labor protections for farmworkers violates the state’s constitution. Governor Cuomo agrees, according to Public Radio International. In a statement released on May 10, he wrote:
“Because of a flaw in the state labor relations act, farm workers are not afforded the right to organize without fear of retaliation – which is unacceptable, and appears to violate the New York State Constitution. I agree with the NYCLU that the exclusion of farm workers from the labor relations act is inconsistent with our constitutional principles, and my administration will not be defending the act in court.”
Most American workers are protected by the labor rights guaranteed in the federal Fair Labor Standards Act, granted entitlements like a minimum wage and overtime pay. Farmworkers, who do some of the hardest, most crucial work possible, have long been left out.
While workers on large farms are entitled to the federal minimum wage of $7.25 per hour, workers on small farms aren’t. Farmworkers don’t have to be paid overtime. Nor are they eligible for workers compensation, despite the obvious dangers of farm work, or paid leave. Farmworkers can unionize, but their right to do so isn’t legally protected. Employers aren’t bound by law to recognize a farmer’s union, and if farmworkers do band together, an employer has every right to fire them all without any consequences.
With Cuomo’s promise not to defend the state’s labor relation laws in court, it looks like all that is about to change soon.
April 27, 2016 – In Maine, A Partisan Dispute Over How High Minimum Wage Should Go
Republicans in Maine’s legislature have introduced a bill to raise the state’s minimum wage, from its current level of $7.50 to an eventual $10 per hour, according to the Associated Press. On January 1, 2017, Maine’s minimum wage will rise again, to $9 per hour. The city of Portland is home to an even higher minimum wage, which is expected to increase to $10.68 per hour in 2017.
State Democrats, however, have called the proposed hike a “ploy,” one intended to divert attention from their own, more ambitious plan. Rather than legislating a minimum wage increase, Democrats hope to put a ballot question to Maine’s citizenry in November, asking residents to back an increase to $12.
Earlier, state Republicans had proposed adding their own ballot question, which would have asked voters to support a $10 minimum wage, to compete with the Democrat-sponsored plan. That idea was shot down by Democrats, who say they also intend to defeat the Republicans’ latest project.
April 2, 2016 – Truck Driver Wins “Double” Wage & Hour Victory In Colorado
That an employer would, out of inattention or choice, decide not to respond to a wage and hour lawsuit seems unlikely. But that’s exactly what happened after William Evans, a truck driver from Michigan, filed suit against his employer, Loveland Automotive Investments. Loveland failed to answer Evans’ complaint, which alleged violations of both the Fair Labor Standards Act (FLSA) and Colorado’s Wage Claim Act, so the court handed the driver a default judgment: $7,248.75 in unpaid back wages and $12,685.31 in “liquidated damages” under Colorado’s state wage law. Evans’ request for “liquidated damages” under the FLSA, however, was initially denied.
Liquidated damages compensate employees over-and-above the amount of back wages they lost out on. According to federal law, liquidated damages are intended to compensate workers for the hardship of having their rightfully-earned wages withheld. Under Colorado state law, however, liquidated damages are meant to punish employers who break the law. Granting Evans both, the court reasoned, would be too much.
So Evans appealed his claim up to the Tenth Circuit Court of Appeals. And he won. The appeals court, in an opinion handed down on December 10, 2015, wrote that because liquidated damages are meant to serve two different purposes under federal and Colorado law, Evans is entitled to both. His final award? $27,182.81.
March 18, 2016 – Obama Nominates Merrick Garland, A Moderate Who “Leans Toward Labor,” For Supreme Court
President Obama has selected his nominee for the Supreme Court: Merrick Garland, a moderate currently serving as the chief judge of the United States Court of Appeals for the District of Columbia Circuit. Valedictorian of his undergraduate class at Harvard, and graduate of Harvard Law School, Merrick has been frequently been described as a “genius.” In an official ceremony announcing the nomination, Obama called Merrick “one of America’s sharpest legal minds,” according to the New York Times.
In selecting a centrist, albeit one who clerked for Supreme Court Associate Justice, and noted progressive, William J. Brennan, Jr., Obama has effectively dared a Republican-controlled Congress to block his choice. Senate majority leader Mitch McConnell, however, isn’t biting. Shortly after Obama’s announcement, McConnell took to the Senate floor and delivered a passionate invective against Garland’s nomination. McConnell even called the jurist, telling Garland he would not be welcomed into the senator’s office.
“One consistent thread” in Garland’s decision, writes David Moberg at Working In These Times, “seems to be a deference towards regulatory agencies, letting them make decisions without the Supreme Court always second-guessing or rewriting the law.” If appointed, he may well work to support the National Labor Relations Board, a federal agency promoting workers’ rights to band together (with or without a union) and fight for better working conditions. The NLRB’s power has waned in recent years, due in part to several Supreme Court decisions spearheaded by the late Antonin Scalia. When Merrick has not voted to leave decisions entirely to the National Labor Relations Board, he leans pro-labor, Moberg says.
March 2, 2016 – In Wake Of Scalia’s Death, Supreme Court May Favor Meatpackers Over Corporate Interest
Storm Lake, Iowa is a small, rural town, and over the last two decades, its economy, and the jobs available to its residents, have come to revolve almost entirely around the meatpacking industry. Sara Lee operates a turkey processing plant in Storm Lake, and Tyson Foods, the second-largest meat packaging company in the world, has two factories here.
113,000 people currently work for Tyson in Storm Lake, according to ThinkProgress, more than 10 times the actual population of the town. Most of those workers are paid on a “gang-time” system, compensated only for the hours they spend at their work stations while the production line is moving. One poultry worker is expected to skin up to 14,000 chickens every day, but when the line stops so does pay. Workers at the plant say they’re compensated for only 4 minutes of putting on and taking off their protective clothing. That’s not, however, how long it actually takes, claims Peg Bouaphakeo, who filed a class action lawsuit over alleged wage theft in 2007.
Differences Between Class Members Raise Questions
The class was certified by an Iowa district court, and the case eventually went to trial. Bouaphakeo’s case was built on statistical evidence, which averaged the amount of time workers spent “donning and doffing” their protective clothing to arrive at a total amount of damages.
The sticking point, though, is that workers in the class were required to wear different types of protective equipment, meaning their “donning and doffing” times probably differed, too. Tyson argued that these differences indicate that the class isn’t really a class at all. The workers, according to the company, are in very different situations, and thus shouldn’t be filing a class action at all. Bouaphakeo’s attorneys even conceded that some members of the class had not actually been “injured” by Tyson’s wage practices. Even so, a jury awarded the class members $6 million, which is roughly equivalent to only 2 hours of operating profits for the company.
Tyson appealed that decision, but an appeals court in Iowa upheld the award. Ultimately, the company’s lawyers fought the case all the way to the US Supreme Court, which heard oral arguments on November 10, 2015. The question at issue is whether differences between class members can be ignored, when Plaintiffs use a statistical averaging that implies each class member is identical. Tyson argues that the statistical averaging overestimates how much individual workers actually lost out on. The company also thinks the class itself should be broken up, since some of its members were never underpaid.
Scalia’s Death May Turn Tide
While a decision has not yet been handed down, many pundits believe the recent death of Justice Antonin Scalia may shift the Court’s thinking in favor of the workers. During his career, Scalia repeatedly voted to limit the effectiveness of class action litigation, consistently siding with corporate interests over low-wage workers. His death, and the prospect that President Obama may soon elect a more progressive Justice in his place, has workers around the country hoping for a big win in Tyson Foods, Inc. v. Bouaphakeo.
March 22, 2016 – Supreme Court Rules 6-2 In Favor Of Underpaid Tyson Workers
In a 6 – 2 ruling handed down Tuesday morning, the Supreme Court has upheld a lower court’s decision in the case Tyson Foods, Inc. v. Bouaphakeo. In confirming the $5.8 million verdict against Tyson, who has been accused of failing to pay meat-packing workers for time spent donning and doffing protective equipment, the Court’s most recent decision endorses the use of statistical averages, rather than individual losses, as an adequate foundation for class actions.
The Court’s opinion may have been clinched much earlier, during November’s oral arguments, USA Today writes, when the workers’ argued that an almost 70-year-old Supreme Court precedent applied because Tyson had never kept time records of how long workers spent preparing for their work duties. Without actual numbers, an averaging system could be the only viable way of determining damages, the Court suggested.
February 1, 2016 – New York Jets Settle Cheerleader Wage & Hour Lawsuit For $324,000
Last week, the New York Jets agreed to pay the football team’s cheerleaders a total of $324,000, resolving allegations that the dancers hadn’t been compensated for practices. In their lawsuit, filed in New Jersey, where the team plays, cheerleaders also said they had been forced to pay for their own makeup and haircare.
Speaking with ABC News, attorney Patricia Pierce said: “when you figure all [those out-of-pocket expenses] up, they were making less than minimum wage.” The lawsuit was filed as a class action under the Fair Labor Standards Act, a federal law that affords most US workers the right to overtime pay and a minimum wage of $7.25 per hour. Each plaintiff will receive between $2,559 and $5,913, depending on whether they took part in team calendar photo-shoots and worked more than one season.
Cheerleaders often suffer labor rights abuses, if a spate of recent lawsuits are any indication. In September of 2014, cheerleaders for the Oakland Raiders reached a $1.25 million settlement with the team, over allegations that the organization withheld their pay until the football season ended. In the case, one cheerleader even estimated her hourly wage as $5, after taking into account all of the unpaid practices and out-of-pocket expenses she was forced to bear, according to CBS Sports.
January 4, 2016 – Fourteen States (And One City) Have Raised Their Minimum Wages
While the federal minimum wage hasn’t budged in over 6 years, more than a dozen states have increased their own minimum wages going forward into 2016. One particularly-progressive city, Seattle, has also augmented its lowest legally-acceptable rate. Most of the changes went into effect on January 1st.
Here are the 14 states that have raised the bar for low-wage workers within their borders:
- New York
- Rhode Island
- South Dakota
- West Virginia
In Seattle, minimum wages will now be determined by a sliding scale system that takes a business’ size into account, but with the low-end set at $10.50, the city’s wages are far higher than the federal rate. The federal minimum wage, set forth in the Fair Labor Standards Act, remains at $7.25 per hour.
To learn more about the minimum wage increases for 2016, check out this post.
December 15, 2015 – Tipped Minimum Wage Violates Human Rights Standards, UC Berkeley Researchers Say
The Fair Labor Standards Act establishes two separate minimum wages: one for employees who are regularly tipped and one for workers who aren’t. That “tiered wage system” violates a number of international conventions on basic human rights, labor researchers at the University of California, Berkeley say.
In a new report, Working Below The Line: How the Subminimum Wage for Tipped Restaurant Workers Violates International Human Rights Standards, the researchers show how America’s two-tiered minimum wage system traps low-wage workers “in conditions of economic and social vulnerability and violates their fundamental human rights.”
Critics of tipping say it disadvantages workers in the service industry, who are forced to rely on the generosity of customers to make a living rather than their own employers. Cultures that tip, they say, allow businesses to underpay their workers legally, while placing the burden of wages on customers.
Tipped restaurant workers are more than twice as likely to live in poverty than other employees, according to the study. In restaurants across the country, nearly twice as many workers of color live in poverty than their white counterparts.
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