Connecticut judge allows Family Dollar store managers to go to trial!

A judge in Connecticut today denied a motion by Family Dollar Stores to dismiss an overtime lawsuit against it brought by store managers.  The store managers claim that they are not primarily managers – a requirement to deny them overtime.  Instead, they claim that they are primarily engaged in non-exempt work such as unloading trucks, stocking shelves and ringing the cash register.

Family Dollar filed a motion arguing that their status as managers made the managers despite how they spent their time.  The judge rejected this argument and ruled that a jury gets to decide the facts.  

This ruling could have repercussions around the country since there are many more store manager lawsuits like this one in other states including Pennsylvania, Colorado, Missouri and Massachusetts.  Recently, Family Dollar settled a similar lawsuit in New York for $15,000,000.  

The Connecticut store managers are represented by the Hayber Law FIrm in Hartford, Connecticut.  

Office Depot’s Overtime Scheme violates Federal Law!

A federal judge in New Jersey recently ruled that Office Depot’s overtime scheme, modeled after the federal “fluctuating work week” method of overtime pay, violates the federal Fair Labor Standards Act.  I know, you are probably saying, “what does that mean?”  Let me explain.

As most of you know, we have had a law in this country since 1938 that requires overtime pay at “one and a half times the regular rate” to be paid to workers who work more than 40 hours in a week.  Usually, employers assign these “non-exempt” workers a regular hourly rate of pay (say $10 per hour) and then pay them time and a half ($15) for all hours worked beyond 40 in a week.

Few people realize that there is an alternative method of calculating overtime pay called the Fluctuating Work Week method.  It derives from a 1942 U.S. Supreme Court case called Missel.  Some people call it the “half time” overtime method.  Still others call it “Chinese Overtime.” (although I have no idea why).  Here is how it works.

First, the employees have to be paid a fixed weekly salary, say $800 per week.  This salary must be paid even if the employee works less than 40 hours.  So, if the  employee works only 30, she still gets her $800.

Next, when the employee works more than 40, say 50, overtime is calculated by dividing $800 by 50 ($16), then paying hours 41-50 at one and a half times $16 or $24.  Well, since this employee already got $16 for hours 41-50, she is only due another $8 for those hours or an $80 premium.   She will get $880 instead of $1,100 (the amount she’d be paid if her hourly rate was $20).

There are obvious pitfalls to this method for employees.  The most obvious is that if the employee never or rarely works less than 40, she will not receive the benefit of this scheme and only suffer its downside – half time overtime.  Because of this, most employers who use this scheme neglect to tell their employees that they will get their full pay if they work fewer than 40 hours.

The fixed weekly salary component is not only violated if the weekly pay is too little, it is also violated if it is too much.  If an employer pays $850 for our employees work during a holiday week, they’ve paid too much and the weekly salary won’t be “fixed” for FWW purposes.

Judges in Connecticut have been reluctant to allow employers to use this calculation when they mis-classify an employee as exempt.  See Dan Schwartz blog post on this issue.

A federal judge in New Jersey ruled on February 22, 2013 that Office Depot’s overtime scheme, which it was using for its Assistant Managers, violates the Fluctuating Work Week. In that case, Office Depot’s pay scheme paid Holiday pay on national holidays.  The case is called Gibbons v. Office Depot, Inc. and Gibbons is represented by Seth Lesser from New York.

The problem was that if the Assistant Manager worked 40, she got 8 hours of holiday pay for a total of 48.  If she worked 35, she’d be paid 43 (with the 8 hours of Holiday Pay).  If she worked 31, she still get 40 salary, but no holiday pay.

These fluctuations in salary defeated Office Depot’s claim that it paid a “fixed weekly salary.”  The citation is 2013 U.S. Dist. LEXIS 25169.

Another component of the FWW is that the employer must show that its employees had a “clear mutual understanding” of the way overtime would be paid.  The fact that it did not explain this holiday pay system in writing defeated this requirement.

The take away is that the FWW is a strictly construed exception to the normal “hourly” way of paying workers and that courts hold employers’ feet to the fire when employees challenge it. There is already a case pending in Connecticut for assistant managers at Save a Lot Food Stores challenging a similar practice.  If you are an assistant manager paid on this FWW or “coefficient overtime” scheme, you could have a claim.  If you are an attorney litigating this issue, this ruling can help you.  Good luck.

Genesis Healthcare Corp. v. Symczyk: A ruling that will never be used?

I don’t often enjoy reading Supreme Court rulings, but this one was fun.  I especially enjoyed Justice Kagan’s dissent, and I think she has it exactly right.

In Genesis Healthcare Corp. v. Symczyk, the Supreme Court of the United States ruled that a plaintiff whose claim was admittedly moot had no ongoing interest in continuing the litigation for the sole purpose of certifying a class of other similar employees who had similar overtime claims.  This opinion was much anticipated, but in the end, if Justice Kagan is correct, it will have no effect whatsoever on the Wage / Hour practice in this country.

Symczyk worked for Genesis Healthcare Corp. and brought a lawsuit under the Fair Labor Standards Act alleging that she and others like here were illegally denied overtime pay.  Genesis filed an offer of judgment under Rule 68 for the full value of her claim, but Symczyk did not accept it.  The case continued, but Genesis filed a motion to dismiss, arguing that her case was moot in light of the full value offer of judgment.

The trial court denied the motion and the 3d Circuit affirmed.  Their rulings, however, were not rejections of the claim that Symzcyk’s claims were moot, but instead were holdings that a Defendant cannot “pick off” a lead plaintiff in and FLSA collective action case by the use of the Rule 68 offer of judgment.  It already black letter law that such offers do not moot the claims of a Rule 23 class action representative and those courts held that FLSA collective actions are no different.

The majority, lead by Clarence Thomas, held that an FLSA representative plaintiff has no interest in the claims of the class (like a Rule 23 plaintiff), and reversed, ordering the dismissal of her claim.

Not so fast, wrote Kagan.  In a dissent that simply must be read, she wrote that the majority skipped over the threshold question of the case:  whether in fact the lead plaintiff’s claims were moot.  She wrote that they were not and I think she is right.

Mootness, we all learned, exists when a person’s claim does not exist anymore.  In a claim for unpaid wages, this can only occur when the wages are paid – not simply when an offer to pay is made.  Accordingly, Kagan would have held that the claim of the lead plaintiff simply wasn’t moot and that the motion to dismiss should have been denied on those grounds.  She then criticized the majority for skipping this question (which it did allegedly because Symczyk waived it).

Kagan wrote:

“The Court today resolves an imaginary question, based on a mistake the courts below made about this case and others like it.”

What she means is that no trial court should ever rule that a plaintiff who rejects a Rule 68 offer of judgment should have their case dismissed.  I think she is right.  In such a case, the plaintiff in fact never gets paid.  Her claim is dismissed.  How is that moot?  Rule 68 is designed to encourage litigants to accept offers, not to dismiss their claims when they don’t!  In fact, Genesis didn’t file a motion for judgment under Rule 68 because there is no such thing.  The risk a plaintiff takes when rejecting such an offer is the imposition of costs – not dismissal!

If Kagan is right, and District Courts follow her instructions, all future motions to dismiss based on mootness will be denied.  This issue will never arise again.

To me, the question is – will District Courts follow her dissent?  Well, the majority didn’t write about this issue at all.  That opinion assumed mootness based on alleged waivers below.  So, 4 of the 9 justices at the moment seem to agree that any such motions should be denied.  If this mootness question is ever presented to SCOTUS and one more joins Kagan, the rule will be that a rejection of a Rule 68 offer does not moot your case.

The practice tip for plaintiff’s lawyers is to never (and I mean never) admit that your client’s claim is moot.  Good luck!

When you were a kid, you may have heard threats about bad behavior going on your “permanent record.”

When you were a kid, you may have heard threats about bad behavior going on your “permanent record.”  Turns out, you may actually have a permanent record and it could be affecting your ability to get a job.

Some employers have started using third party database services that keep and distribute data about individuals’ employment history, such as a history of shoplifting.  The problem is that there aren’t the kind of checks on this reporting that there are in the criminal justice system, such as protection against coerced confessions.  According to the New York Times  many employees claim that they felt pressured into admitting that they stole merchandise even if they did not.  Instead of trained police officers, these “confessions” are often taken by store security personnel who may intimidate or trick an employee into stating that he or she committed some type of misconduct, even if it isn’t true.

It can be difficult for employees to challenge the information in one of these databases once it has been reported.  The Fair Credit Reporting Act mandates that individuals be told if information is being used against them and provided a copy of this information.  These databases also must provide people with the opportunity to contest false information and have it removed from their files.  An information sheet is provided here.

The problem is, many of these situations are essentially he said/she said.  If an employer reports false information, but the employee felt pressured into signing a confession (without due process protections such as being read his or her Miranda rights, for example), it’s going to be hard for the employee to get that information out of his or her file.  The Federal Trade Commission recently settled a case against one of these reporting companies. Click here to read more about this case. 

If you have been a victim of this type of false reporting, be sure to contest the information.  Ask the employer where it got the report on you, and contact the reporting company immediately and ask for a copy of any and all information it has that is being used against you.  You may have to pay a small fee.  Further, contact the Hayber Law Firm if you need help enforcing your rights!

Domino’s Pizza Drivers Reach $2.5 Million Tentative Settlement for Violations of Fair Credit Reporting Act (“FCRA”)

In Singleton v. Domino’s Pizza, LLC, a case filed in Maryland, the parties recently submitted to the court a motion for preliminary approval of a proposed class action settlement in the amount of $2.5 million dollars. Plaintiffs Adrian Singleton and Justin D’Heilly sued on behalf of Domino’s employees and prospective employees. They claimed that Domino’s willfully violated the FCRA by taking adverse employment actions against employees and prospective employees without first providing them a copy of their background check reports and a reasonable opportunity to respond to any inaccuracies in the reports.  The plaintiffs also claimed that the forms that Domino’s required employees to sign to give permission for the background checks did not meet the requirements of the FCRA because, among other things, the form was part of an employment application form instead of it being a “stand alone” document.

What triggered the suit was that D’Heilly had worked for Domino’s for almost a year without any incident when the store stopped scheduling him for work and subsequently fired him because “something had come up on a background check relating to his motor vehicle history”. Domino’s did not give him any more information, and never provided him with a copy of the background check report that contained the “motor vehicle history”. If those facts had been proven at trial, then they would have constituted violations of the FCRA.

We wish the attorneys At Nichols Kaster luck in getting final approval of the settlement. See http://www.nka.com/case/domino%E2%80%99s-pizza-fair-credit-reporting-act/

For our readers who are employees and want to learn more about their employee rights under the FCRA, we recommend the Federal Trade Commission’s site at http://www.consumer.ftc.gov/articles/0157-employment-background-checks

Connecticut Court Certifies Class Action for Assistant Managers at Ocean State Job Lot!

A federal court recently certified a class action for Assistant Managers at Ocean State Job Lot.  That lawsuit was originally brought in 2009 and alleged that Assistant Managers at Ocean State Job Lot were wrongly classified as exempt from overtime pay.  Ocean State claims that their primary duty is management (a prerequisite for the “executive” exemption) but the Assistant Managers disagree.  They claim that they spend the vast majority of their time performing non-management tasks such as stocking shelves and merchandising.

The plaintiffs filed a motion to certify two classes; one for Assistant Managers in Connecticut and another for Assistant Managers in Massachusetts.  The allowed the Connecticut class to proceed but denied the motion as to the Massachusetts Assistant Managers.  Anyone who has been an Assistant Manager at Ocean State Job Lot in Massachusetts is no longer covered by this lawsuit and must take steps immediately to protect their rights.  Their claims for unpaid overtime wages have begun to expire, now that the court denied the motion to certify the Massachusetts class.

The court also denied Ocean State’s motion to decertify the collective action of 25 Assistant Manager who had opted into the case.  They will be allowed to proceed to trial with their claims under the federal Fair Labor Standards Act.

The plaintiffs are represented by the Hayber Law Firm, in Hartford, Connecticut.

This ruling should help assistant managers at other retailers band together and assert claims for unpaid overtime wages.

TD Bank Underwriter Overtime Case Heads to Mediation!

A few weeks ago I wrote about a case that had recently been filed against TD Bank for its loan underwriters.  That lawsuit sought collective action status for a class of loan underwriters at TD Bank locations around the country.  The law that the plaintiffs invoked is called the Fair Labor Standards Act.  It requires that employers pay one and a half times an employee’s regular rate when they work past 40 hours in a week.  The lawsuit follows a ruling from the Second Circuit Court of Appeals, called Davis v. JP Morgan, in which that court ruled that mortgage loan underwriters get overtime pay and are not exempt.

A recent review of the docket shows that TD Bank has agreed to mediation.  Mediation is an informal process where the parties attempt to settle the case.  It is unclear from the court docket whether the mediation will be on behalf of the named plaintiffs only or whether it is for the entire class.  In the meantime, the case was dismissed, but it looks like an agreement has been reached to toll the statute of limitations.  This probably means that those who would be members of the class will not be affected by the dismissal and their claims won’t expire by the passage of time.  Since we haven’t seen the actual agreement, it is impossible to be sure, however, and mortgage underwriters at TD Bank should take whatever steps that they believe are appropriate to protect their rights.

We wish the plaintiffs and their lawyers well.  This is an important case for mortgage loan underwriters and their fight to be paid overtime wages that they deserve.