Does a Recent FLSA Interpretation Limit Worker Wage & Hour Lawsuits?

Does a Recent FLSA Interpretation Limit Worker Wage & Hour Lawsuits.jpg

The Department of Labor recently proposed changes to how the law interprets the “joint employer rule.” The joint employer rule is regularly utilized by workers filing class action wage and hour lawsuits to reach beyond their immediate employer and seek recovery or compensation from a corporate parent, franchisor, or other related entity. If the proposed changes to the joint employer rule interpretation go into effect, it will change how the federal FLSA is applied, but it would not limit wage and hour protections under California state labor law.

The DOL announced the proposed change on April 1, 2019, and received praise from employers and the opposite from employee advocate groups. Those against the change argue that the new interpretation would create an opportunity for employers to avoid liability for meeting FLSA standards by outsourcing labor to third parties or working strictly with contractors. The change could leave millions of workers on unstable ground, potentially vulnerable to federal labor law violations.

The proposal attempts to define the circumstances under which a business could be held jointly responsible for wage and hour violations. A test with four elements would be used to determine if a second business or business entity could be held liable. The four factors would be: 1) if the additional party has the power to hire or fire the employee, 2) if the other party is involved in supervising the employee’s schedule or employment conditions, 3) if the additional party has the power to determine the employee’s rate of pay or method of wage payment, and 4) if the other party handles maintenance of employment records.

According to California labor law, the general rule is that state statutes can be more protective of rights of the individual or entity that the law is intended to benefit, but it cannot be less protective of those rights. Following this general rule, California state labor laws provide more wage and hour protections than the FLSA in numerous ways. The newly proposed interpretation has yet to go into effect and it may not limit the right of California employees since a significant amount of the responsibility to protect workers’ rights depends on state legislators.

If you have questions about California state labor law or if you need to file an employment law suit, please don’t hesitate to get in touch with the experienced employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP. With convenient locations in San Diego, San Francisco, Sacramento, Santa Clara, Los Angeles, Riverside, Orange, and Chicago, we are ready to be your advocate and help you seek justice for unfair working conditions.

Ninth Circuit Confirms Employees Must be Compensated by the “Second”

Ninth Circuit Confirms Employees Must be Compensated by the Second.jpg

The Ninth Circuit Court in San Francisco, California confirmed that even tiny amounts of work time must be counted and compensated (as in seconds on the clock). This opinion (Rodriguez v. Nike) should end the debate following the recent employer-driven campaign to revive the de minimus federal standard when considering California employment law issues and labor lawsuits.

In Rodriguez v. Nike, Isaac Rodriguez filed suit following his employment at a Nike owned California retail store. He worked at the Nike store from November 2011 through January 2012. Employees at the store (and other Nike stores throughout California), employees paid an hourly wage were required to track their hours on the clock using a time clock. As a theft deterrent, Nike required employees to allow exit inspections anytime they left the store (at the end of their shift or for a break). The mandatory checks varied in length depending on the circumstances, but they always occurred while the employee was clocked out, and the time was uncompensated.

Rodriguez filed a California class-action lawsuit against Nike in 2014 alleging violations under numerous sections of the California Labor Code and the Business and Professions Code. The complaint was dismissed in District Court on September 2017 with the court reasoning that the time necessary for the inspection was so brief it did not need to be counted according to the de minimus standard.

Then Troester v. Starbucks changed the landscape for this employment law issue when the court ruled that de minimus did not apply if the lawsuit being considered was brought at a state level under California labor code. The rule for federal lawsuits was not to be used for state lawsuits. After the 2018 ruling, Isaac Rodriguez went back to court amidst the new legal landscape. The Ninth Circuit Court sent Rodriguez's case back to the District Court for a decision consistent with the recent ruling in Troester v. Starbucks. The result was a reaffirmation of the judgment that the federal de minimus rule does not apply to state-level lawsuits, which is good news for wage earners in California. The question went from arguing over how many seconds we were talking about to a discussion of whether or not an employee is legally entitled to payment for work no matter how much time is in question.

An entire series of similar California cases have developed since the Troester v. Starbucks ruling. The ruling will affect all California wage earners, and the precedent provides both employers and employees a firm grasp of how to treat off the clock situations. 

If you have questions about off the clock job duties or if you have experienced California labor law violations in the workplace, the experienced employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP can help. Get in touch with the employment law office nearest you: San Diego, San Francisco, Sacramento, Santa Clara, Los Angeles, Riverside, Orange or Chicago.

Comcast and O.C. Communications Reach Settlement in California Wage and Hour Suit

Comcast and O.C. Communications Reach Settlement in California Wage and Hour Suit.jpg

The $7.5 million settlement presented by Comcast and O.C. Communications for California wage and hour violations was rejected initially. But it was approved in early July 2019 after two years of litigation. The California wage and hour lawsuit involved approximately 4,500 techs. Allegations included in the federal class action stated that O.C. Communications, skilled technician supplier, and Comcast both violated state and federal laws. The companies were accused of numerous wage and hour violations including not paying workers for all the hours they worked, failing to compensate their technicians for piecework and overtime, and failing to provide workers with the required minimum wage.

A group of technicians classified as non-exempt whose job duties included installing cable, tv, phone, security, and internet services to Comcast customers sued the companies as joint employers (Soto, et al. v. O.C. Communications, Inc., et al., No. 17-cv-00251). The plaintiffs claimed the companies failed to pay minimum wages and overtime wages, did not provide appropriate compensation for rest and meal breaks, did not reimburse their employees for business-related expenses, and did not provide required wage statements. All of the above allegations are violations of California’s labor code.

The original rejection of the settlement  April 2019 was due to U.S. District Judge Vince Chhabria’s concerns that the agreement did not address avoiding repeat scenarios. He saw the issues as being systemic. He also felt the settlement was achieved at a discount and wanted assurances that the employment law violations would be unlikely to recur.

According to case documents, Comcast techs sometimes worked 60 hours in a week and were paid on a hybrid hourly/piece-rate basis based on different tasks and jobs. One plaintiff alleged Comcast assigned him 32 jobs to complete instead of the more typical eight jobs in one shift. Comcast workers regularly ate on the job (skipping meal breaks), were required to be on call at all hours, and had to provide their own tools. One plaintiff was allegedly told to under-report his work hours.

If you have experienced injustice in the workplace or if you have been the victim of California labor law violations in the workplace, please get in touch with the experienced employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP can help. Get in touch with the employment law office nearest you: San Diego, San Francisco, Sacramento, Santa Clara, Los Angeles, Riverside, Orange or Chicago.

Ex-Dairy Worker Fights Back After Company Responds to Wage Suit by Trying to Have Him Deported

Ex-Dairy Worker Fights Back After Company Responds to Wage Suit by Trying to Have Him Deported.jpg

Jose Arias, former Northern California dairy worker, recently won a million-dollar settlement against his ex-employer’s attorney. Arias originally filed a lawsuit against the dairy alleging wage theft. According to the plaintiff, Arias, the company’s attorney responded by contacting immigration officials to try to get the ex-dairy worker deported.

The retaliation suit against his former employer, Angelo Dairy of Acampo was already settled when the $1 million settlement was announced in the suit against attorney Anthony Raimondo. The settlement followed a federal court’s decision to reinstate Arias’ case. Representation for the plaintiff see the case as an example showing employers that they can’t game the system by cheating their employees of wages and then responding to complaints with threats to deport them.

The attorney who allegedly made the deportation threat, Raimondo, has 20 years of legal experience representing dairies out of Fresno. He denied retaliating against Arias and claimed that his former insurance company insisted the case be settled. Raimondo insists that he is the only person involved in the case who did not break the law.

Arias, an undocumented immigrant, started work with Angelo Dairy in 1995 as a milker. The dairy was supposed to file documents with federal officials that would verify Arias’ work authorization. Instead the employer used his undocumented status as a weapon to limit Arias’ options and keep him in their employ. In 1997, Arias told a company owner that he had a job offer from another dairy. The owner advised him that he would report the other dairy to immigration authorities if Arias took the offer. Arias stayed in his current position, but sued Angelo Dairy in 2006. He claimed the company’s failure to pay overtime and provide required meal and rest breaks were violations of labor law. In 2011, just prior to going to trial, Arias claims Raimondo, the dairy’s lawyer, contacted immigration agencies to purposefully derail the case.

Arias settled the wage suit and dropped his claims against the dairy farm. He says he did so, in substantial part, to avoid deportation. The court documents state that Raimondo contacted ICE a minimum of five times regarding other employees. He also allegedly confirmed his practice of contacting ICE in a June 2013 email to Legal Services Corp., in which he stated that he had acted in the past to deport workers who were suing his clients. Recent statements from Raimondo describe the events differently, insisting that the idea that he retaliated against Arias is ridiculous.

If you are experiencing retaliation in the workplace or if you need to discuss filing suit against an employer due to employment law violations, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Temecula Nail Salon Faces $1.2M Fine for California Wage Violations

Temecula Nail Salon Faces $1.2M Fine for California Wage Violations.jpg

Employees of a Temecula, California nail salon called Young’s Nail Spa were listed as “independent contractors” so the salon owners could avoid payment of overtime or required meal and rest breaks during longer shifts. The salon faces a file of over $1.2 million for misclassification of workers, violation of wage and hour law, failure to pay overtime and provide required meal and rest breaks.

The salon is located on Margarita Road in Temecula and was under investigation by the California Department of Industrial Relations due to complaints about wage theft and other unlawful practices. In the course of the investigation, numerous irregularities were discovered. One of the most problematic was the shifts that Young’s Nail Spa employees were required to complete. Workers were spending 9 ½ to 10-hour days on the job. They were not provided meal or rest breaks. The Labor Commissioner said this was an attempt to get around overtime obligations through misclassification of employees as independent contractors.

In addition to denying workers their rightful pay, misclassification also gives employers an unfair advantage over competing, law-abiding businesses. According to California law, employers who provide their workers with less than minimum wage will be held responsible for paying the wages owed plus an equivalent amount in liquidated damages and interest when they are caught.

During the course of the investigation, auditors from the state went through 40 months of business records before determining that the salon engaged in misclassification and additional forms of wage theft. Citations totaled $670,040 for worker reimbursement and $572,187 in civil penalties.

If you have questions about wage and hour law or if you feel that you have been misclassified on the job, please get in touch with one of the experienced employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

California Contractor Fined $1.9M in Response to Wage Theft Claims

California Contractor Fined $1.9M in Response to Wage Theft Claims.jpg

Fullerton Pacific Interiors Inc., a California drywall contractor, was filed $1.9 million by California’s Division of Labor Standards Enforcement for failing to allow rest periods for workers (and other wage violations). The violations allegedly occurred on 26 different construction projects in different locations throughout Southern California.

The fine was handed down from California’s Division of Labor Standards Enforcement, a.k.a. the Labor Commissioner’s Office – a part of the California Department of Industrial Relations. The fine was processed because the California drywall company failed to properly compensate almost 500 workers for rest periods as required by state and federal labor law. During the course of investigation, the division also found that almost 300 workers were not paid for overtime hours and almost 30 workers were paid less than minimum wage.

From the summer of 2014 through the summer of 2016, Fullerton Pacific Interiors Inc. was under contract to perform drywall work at a number of recreation centers: hotels, casinos, etc. All were located in three California counties: Los Angeles, Orange and San Bernardino. The Labor Commissioner noted that many contractors who embrace unscrupulous methods may try to obscure wage theft by providing workers with pay on a flat rate basis rather than an hourly rate. Yet a daily or any other flat rate system of pay does not override minimum wage and overtime requirements as defined by law.

According to the findings of the investigation, Fullerton workers were completing taping and drywall installation at the work sites. They were paid a daily rate that did not consider their overtime hours on the job. They were offered a 30-minute meal period, but no rest breaks throughout the day.

The fine accounts for:

·      $1,892,279 payable to workers (with $798,664 for rest period violations, $386,685 for unpaid overtime, and $692,500 for wage statement violations)

·      $72,400 civil penalty

·      Workers that were not paid minimum age were owed a total of $14,431 unpaid wages, liquidated damages, and waiting time penalties

If you have questions about unpaid overtime or if you are not receiving meal and rest breaks on the job in accordance with state and federal labor law, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Another Driver Wage and Hour Lawsuit Coming at GrubHub

Another Driver Wage and Hour Lawsuit Coming at GrubHub.jpg

GrubHub is generating headlines again as they face another proposed collective and class action alleging they misclassified delivery drivers as independent contractors in order to get around the legal requirements to pay minimum wage and overtime pay. A pair of workers have filed suit against the company in Illinois federal court. The company, which takes orders for food from customers through a mobile app or online and then has delivery drivers obtain and deliver the items, has dealt with similar accusations in the past.

The two plaintiffs who filed suit, Carmen Wallace and Broderick Bryant, made allegations that the GrubHub Inc. and GrubHub Holdings Inc. violated the Fair Labor Standards Act as well as both Illinois and California labor law when they classify drivers as independent contractors. The plaintiffs claim that the GrubHub delivery service exerts a substantial amount of control over the work performed by their drivers and relies on the completion of their job duties to run the overall business.

According to the complaint, the GrubHub delivery drivers are currently classified as independent contractors but should actually be classified as employees according to standards set down by law as the company directs the drivers’ work in detail, they instruct drivers on where to report for their work shifts, they tell drivers how to dress and where to go to pick up or wait for orders scheduled for delivery.

Virtually identical claims are being made in another Illinois federal court case called Souran v. GrubHub Holdings Inc.

Numerous drivers for the company tried to opt in to the Souran case after the deadline, but GrubHub would not agree to add them so they filed a new case for late-submitted opt-ins. The Souran group was granted conditional certification as a collective action in February 2017, but was stayed by the Seventh Circuit until the U.S. Supreme Court produced a ruling on another case, Epic Systems Corp. v. Lewis et al. The high court ruling came down in May ruling employment agreements barring workers from bringing class actions permissible. As GrubHub drivers sign this type of agreement when they start work with the company, the Seventh Circuit sent Souran back to district court for additional proceedings in accordance with the ruling of the high court.

Raef Lawson also has a similar suit pending against GrubHub before the Ninth Circuit. Lawson is urging the appeals court to revive his action. It was dismissed in February after the lower court found he was an independent contractor in spite of his claims that he should be classified as an employee.

The action filed by Wallace and Bryant raises most of the same claims. The plaintiffs note a number of different work conditions that are indicative of employee status: drivers work scheduled shifts, drivers must remain available to accept assignments during shifts, drivers are subject to termination if they don’t listen to the company’s dispatchers who are advising them where to go and when to be there, etc.

If you have concerns regarding misclassification in the workplace or if you aren’t being paid overtime you are due, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.