Did a Federal Court Block the DOL’s 2025 Overtime Salary Threshold Increase Nationwide?

For employers and salaried workers alike, the Department of Labor’s 2024 overtime rule promised a major shift in who would qualify for overtime pay starting January 1, 2025. But a federal court in Texas ultimately set aside and vacated the rule nationwide, preventing the planned 2025 salary-threshold increase from taking effect and resetting compliance expectations across the country. Below is a case-study summary of State of Texas v. U.S. Department of Labor, the decision frequently described as a “national vacatur” because it did more than block enforcement for a single plaintiff; it invalidated the rule nationwide.

Case: State of Texas v. U.S. Department of Labor

Court: United States District Court, Eastern District of Texas (Sherman Division)

Case No.: Civil No. 4:24-cv-499-SDJ (lead case), consolidated with 4:24-cv-468-SDJ

Decision Date: November 15, 2024

Judge: District Judge Sean D. Jordan

Outcome: The “2024 Rule” was set aside and vacated

The Plaintiff in the Case: The State of Texas

The lead plaintiff was the State of Texas, joined in the consolidated litigation by a coalition of employer and trade-organization plaintiffs challenging the Department of Labor’s overtime rule as exceeding the agency’s statutory authority.

Get to Know the Defendant in the Case: U.S. Department of Labor

The defendant was the U.S. Department of Labor and agency officials responsible for implementing and enforcing the overtime rule (including the Department's leadership and the Wage and Hour Division).

A Brief Case History: State of Texas v. U.S. DOL

In April 2024, the U.S. Department of Labor finalized a rule that revised the salary thresholds for “white-collar” FLSA exemptions for executive, administrative, and professional employees. Under the new rule, a two-step salary threshold increase was implemented alongside an automatic updating mechanism:

On July 1, 2024, salary thresholds increased from $684/week ($35,568/year) to $844/week ($43,888/year)

On January 1, 2025, salary thresholds were scheduled to increase to $1,128/week ($58,656/year)

In addition, highly compensated employees (HCE) were also going to see an increase; with the salary threshold scheduled to rise to $151,164/year on January 1, 2025, and undergo automatic updates beginning in 2027.

Challenging the Rule in Court: Texas v. U.S. DOL

Responding to the new rule affecting salary thresholds for white-collar exemptions under FLSA, Texas filed a lawsuit attempting to stop it before it went into effect. In June 2024, the court issued an injunction preventing the Department from enforcing the rule against Texas as an employer. However, the July 1, 2024 increase continued to apply to other employers nationwide.

The cases were consolidated and proceeded on cross-motions for summary judgment. On November 15, 2024, Judge Jordan granted summary judgment for the plaintiffs and issued a memorandum opinion and order that set aside and vacated the 2024 Rule.

The federal government appealed the ruling to the Fifth Circuit. The dispute remained active into 2025.

What is the Main Question in the Case?

The main question in the case was whether the U.S. Department of Labor exceeded its authority to define and “delimit” the FLSA executive, administrative, and professional exemptions when it issued the 2024 rule raising salary thresholds and adding an automatic updating mechanism.

What Were the Allegations and Arguments in the Case?

The plaintiffs argued that the 2024 rule exceeded the FLSA's limits because it raised the salary level so significantly that it would override the duties-based inquiry Congress wrote into the statute, effectively making exemption status turn primarily on pay level rather than job duties for millions of workers. Additionally, the court had to consider the automatic updating mechanism and arguments that it would unlawfully allow future salary threshold increases without undergoing the notice-and-comment rulemaking process that generally governs such major regulatory changes.

The Court’s Decision: Texas v. U.S. DOL

The court ruled for Texas and the other plaintiffs and held that the Department’s rule exceeded its statutory authority, granting summary judgment and ordering that the 2024 Rule be “set aside and vacated.” Since the rule was vacated, the planned salary threshold for January 1, 2025 did not take effect. The ruling also nullified the prior July 1, 2024 increase, so thresholds reverted to pre-rule status.

What Makes this Wage-and-Hour Decision a Landmark Case?

Although the order was issued in late 2024, its practical impact landed squarely in 2025. The DOL’s rule was designed around a major January 1, 2025, increase in the salary threshold and a new standard for recurring updates. By vacating the rule nationwide, the Court changed the compliance landscape overnight, particularly for employers that had prepared for (or already completed) reclassifications and pay adjustments in anticipation of the 2025 increase scheduled under the 2024 rule.

Just as importantly, the decision is frequently cited for its remedy: rather than limiting relief to the plaintiffs, the court vacated the rule itself—functionally removing it from the books nationwide, at least unless and until it is revived through appellate review or future rulemaking.

FAQ: Texas v. U.S. DOL

Q: What did the DOL’s 2024 overtime rule try to change?

A: It raised the minimum salary level for the executive, administrative, and professional exemptions from $684/week to $844/week (July 1, 2024), then planned to raise it again to $1,128/week on January 1, 2025, and also increased the HCE threshold—plus it added automatic updates beginning in 2027.

Q: What did the court do in State of Texas v. U.S. Department of Labor?

A: The court granted summary judgment for the plaintiffs and ordered that the 2024 Rule be set aside and vacated.

Q: Did the decision only apply in Texas?

A: No. The earlier injunction was limited to Texas as an employer, but the November 15, 2024 order vacated the rule, and it has since been widely understood to apply nationwide.

Q: What salary threshold applied after the rule was vacated?

A: The salary level reverted to $684/week ($35,568/year) for the standard salary threshold, and the HCE threshold reverted to $107,432/year.

Q: Was the decision appealed?

A: Yes. The federal government appealed the ruling to the Fifth Circuit, and the litigation remained active into 2025.

If you believe you were misclassified as exempt, denied overtime, or not paid for all hours worked, the wage-and-hour attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP can help assess your potential claims and explain your options under federal and state law. Contact the firm’s offices in Los Angeles, San Diego, San Francisco, Sacramento, Riverside, or Chicago to discuss how you may be able to pursue unpaid wages and accountability.

The E.M.D. Suit: A Misclassification Complaint that Reshaped Overtime Exemption Disputes

The E.M.D Sales, Inc. v. Carrera case went all the way to the U.S. Supreme Court, where the Court's 2025 decision reshaped how overtime exemption disputes are proven under the FLSA (Fair Labor Standards Act). At the center of the case is whether workers classified as “outside sales” were improperly denied overtime, and what level of proof employers must meet to defend an exemption.

The Supreme Court case, E.M.D. Sales Inc. v. Carrera arose from an FLSA overtime lawsuit originally filed in Maryland (U.S. District Court for the District of Maryland).

Case: Carrera v. E.M.D. Sales, Inc.

Court: U.S. District Court, District of Maryland

Case No.: 1:17-cv-03066-JKB

Where the Case Started: District Court

The case began as an overtime lawsuit filed in 2017 in the U.S. District Court for the District of Maryland: Carrera et al. v. E.M.D. Sales, Inc. et al., Civil No. JKB-17-3066 (1:17-cv-03066). The plaintiffs, Faustino Sanchez Carrera, Magdaleno Gervacio, and Jesus David Muro, worked as sales representatives. The group sued their employer and its CEO, claiming they failed to pay overtime wages (violating the Fair Labor Standards Act (FLSA)). However, E.M.D. argued the workers were exempt as “outside salesmen.”

The Two Parties in the Case: Carrera v. E.M.D. Sales, Inc.

The plaintiffs who originally filed the suit are Faustino Sanchez Carrera, Jesus David Muro, and Magdaleno Gervacio, who worked as sales representatives for E.M.D. Sales. The plaintiffs alleged they regularly worked more than 40 hours in one week but were denied overtime pay, a practice that violates the Fair Labor Standards Act (FLSA). The defendants are E.M.D. Sales, Inc., a food-products distributor, and its CEO, Elda M. Devarie. The company maintained that the plaintiffs were properly treated as exempt “outside sales” employees and therefore not entitled to overtime under the FLSA.

After the Bench Trial: Circuit Court

After the bench trial in March 2021, the district court ruled in favor of the employees, finding that E.M.D. failed to meet the clear-and-convincing standard for the outside sales exemption under that circuit's law. Both parties appealed to the U.S. Court of Appeals for the Fourth Circuit. The Fourth Circuit affirmed and maintained the heightened proof standard (U.S. Court of Appeals for the Fourth Circuit, Case Nos.: 21-1897 and 21-1924).

Petitioning the U.S. Supreme Court:

After the Fourth Circuit affirmed and maintained the District Court’s decision in E.M.D. Sales, Inc. v. Carrera, E.M.D. petitioned the U.S. Supreme Court, which granted certiorari (June 17, 2024), heard argument (November 5, 2024), and decided the case (January 15, 2025). In doing so, the U.S. Supreme Court held that employers need only prove FLSA exemptions by a preponderance of the evidence.

The Main Question in the Case:

The central legal question was what burden of proof an employer must meet to establish that an employee falls within an exemption to the Fair Labor Standards Act (FLSA). Here, the “outside sales” exemption is used to deny overtime pay. Specifically, the Supreme Court addressed whether an employer must prove an exemption by clear and convincing evidence (a heightened standard applied by the Fourth Circuit) or by the ordinary civil standard, preponderance of the evidence.

A Summary of the Allegations in the Case:

The plaintiffs—three sales representatives—alleged that E.M.D. Sales denied them overtime pay required by the Fair Labor Standards Act (FLSA), even though they routinely worked more than 40 hours per week. They contended their day-to-day work did not fit the “outside sales” exemption because much of their time was spent on non-exempt tasks tied to servicing existing accounts (rather than primarily making sales away from the employer’s place of business).

E.M.D. Sales disputed the claim and maintained the workers were properly classified as exempt outside sales employees, meaning the company argued overtime was not owed under the FLSA.

FAQ: E.M.D. Sales Inc. v. Carrera

Q: What is the “outside sales” exemption under the FLSA?

A: It is an overtime exemption that can apply when an employee’s primary duty is making sales (or obtaining orders/contracts), and the employee is customarily and regularly working away from the employer’s place of business.

Q: In E.M.D.Sales, Inc. v. Carrera: What was the Supreme Court’s decision?

A: The Court held that employers must prove exemptions under FLSA using the ordinary civil standard (preponderance of the evidence) rather than a heightened clear and convincing standard.

Q: Did the decision in this case result in a change to the definition of “outside sales exemption?”

A: No, the definition of “outside sales exemption” remained the same. However, the Court’s decision addressed the strength of evidence the employer must provide to establish that an exemption applies.

Q: What is the practical meaning of “preponderance of the evidence”?

A: This phrase means the employer must show it is more likely than not that the exemption applies based on the evidence presented in the case.

Q: What should employees and employers take away from this case?

A: Employees should understand that exemption disputes are heavily fact-driven (what the job actually requires day-to-day). Employers should ensure that job duties, supervision, and documentation align with any exemption they rely on, because they still bear the burden of proving it.

If you believe you were misclassified as exempt and denied overtime pay, or you were not paid for all hours worked, the employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP can evaluate your wage-and-hour claims and explain your options. Contact the firm’s offices in Los Angeles, San Diego, San Francisco, Sacramento, Riverside, or Chicago to discuss how you may be able to recover unpaid wages and pursue accountability under the law.

Did Home Depot Use a “Midnight Workday” to Short Overnight Workers on Overtime?

In Bell v. Home Depot U.S.A., Inc., two employees brought a class action alleging Home Depot designed its defined “workday” to reduce overtime owed to workers on overnight shifts.

Case: Bell v. Home Depot U.S.A., Inc.

Court: Sacramento County Superior Court

Case No.: 2:12-cv-02499-JAM-CKD

The Plaintiff: Bell v. Home Depot

Sandy Bell and Martin Gama are the named plaintiffs who filed this class action against Home Depot. The plaintiffs are former Home Depot employees who worked overnight shifts in California. Both workers were hourly, non-exempt Home Depot employees alleging that when their shifts crossed midnight and exceeded eight total hours, Home Depot’s timekeeping system treated the shift as split into two workdays, resulting in overtime they claim they should have received but did not.

Who Are the Defendants in the Case?

Home Depot U.S.A., Inc. is the defendant in the lawsuit.

Home Depot is a national home improvement retailer with stores throughout California and the United States. In this case, the plaintiffs alleged that Home Depot controlled the payroll and timekeeping policies that defined the “workday” and that those policies affected overtime calculations for overnight employees when their shifts crossed midnight.

A Brief History of the Bell v. Home Depot Case

The lawsuit was filed in 2012 in the California state court. It was later moved to federal court and consolidated with a related case, Henry v. Home Depot U.S.A., Inc., which raised similar overtime concerns for employees working shifts that extended past midnight.

The plaintiffs’ claims ultimately hinged on the central allegation that Home Depot’s policies resulted in inadequate overtime compensation for overnight shifts.

The Main Question in the Case

Can an employer avoid overtime pay obligations by defining a “workday” to split a continuous shift into two consecutive calendar days? When employees work a single overnight shift that crosses midnight and the total hours exceed eight, splitting the shift into separate parts reduces overtime pay. The court must consider whether this practice violates California wage-and-hour laws and related protections.

The Allegations: Bell v. Home Depot

Home Depot faces numerous allegations in the recent overtime pay lawsuit. Generally speaking, the plaintiffs argue that Home Depot’s time-keeping system’s definition of a “workday” as the period between 12 am and 11:59 pm on a given calendar day violated labor laws.

Home Depot’s Definition of a “Workday:” Plaintiffs argue that Home Depot applied that definition in a way that reduced or avoided overtime owed for overnight shifts.

Overnight Shift Splitting: The plaintiffs claimed that when employees worked a continuous overnight shift (crossing midnight), Home Depot allegedly treated the hours after midnight as belonging to a new workday, even though the shift remained an uninterrupted work period.

Company Avoided Overtime Pay for Single Shifts Exceeding Eight Hours: California law generally requires overtime pay (time-and-a-half) for hours worked beyond eight in a single workday (and double time for hours exceeding twelve in a workday). Plaintiffs in the case alleged Home Depot’s workday definition allowed the company to pay straight time for hours that, in the context of one continuous shift, should have triggered overtime pay.

Class-wide Impact Supported by Centralized Time Records: The plaintiffs alleged that Home Depot’s timekeeping data could be used to identify class members and evaluate claims in accordance with uniform policies and consistent records.

Why Overnight Overtime Cases Often Focus on the “Workday”

Overtime claims are not always about what an employee did. Sometimes they’re about how the employer counted their time on the clock. When a company’s timekeeping system breaks one continuous overnight shift into two shifts, workers will see a decrease in the number of overtime-eligible hours.

In order to determine liability, the court focused on Home Depot’s intent. The court had to consider whether Home Depot had a legitimate business purpose for its workday designation, or whether it was a method of avoiding overtime pay.

For employees who clock in and out on the same calendar day, this type of workday definition would not typically pose a problem, but it can be significantly detrimental to workers with overnight shifts that cross midnight. The definition itself can result in hours that would otherwise be eligible for overtime pay no longer qualifying.

In this case, the court focused on the company's intent, emphasizing that Home Depot’s liability turned on whether the workday designation had a legitimate business purpose or was intended to evade overtime obligations. The existence of detailed timekeeping records was also important because it could help determine who fell within the class definitions and how any unpaid overtime might be calculated.

Class definitions and covered time periods:

The case involves certified classes tied to overnight shifts crossing midnight:

Bell certified class (hourly-paid supervisors):

All persons who worked for Home Depot in California as a non-exempt, hourly-paid supervisor from August 14, 2009 through June 1, 2016, who worked at least one overnight shift that crossed midnight of more than eight hours, and who, as a result, were not paid overtime for the hours worked over eight hours during such overnight shift.

Henry certified class (hourly/non-exempt positions):

All persons employed by Home Depot in hourly or non-exempt positions in California from September 18, 2010 through May 3, 2016, who worked a shift past midnight where the total hours for that shift exceeded eight hours.

The class is described as including approximately 20,000 individuals who worked more than eight hours and past midnight.

Settlement: Preliminary Approval Granted

The plaintiffs filed an unopposed motion requesting preliminary approval of the class and PAGA settlements, approval of the class notice, and appointment of a settlement administrator.

Under the settlement agreement described, the parties agreed to a gross settlement amount of $3,350,000. The settlement is described as non-reversionary, meaning that no portion of the settlement returns to Home Depot if it is not paid out. The court reviewed the factors applied to class settlements (under Federal Rule of Civil Procedure 23) before granting the unopposed motion for preliminary approval. This preliminary approval stage typically allows notice to be sent to class members and sets the case on the path toward a final approval request.

FAQ: Bell v. Home Depot

Q: Why does it matter if a shift crosses midnight?

A: When a shift crosses midnight, the beginning of one continuous shift is one “day,” while the second portion is on a different “day.” Depending on which timekeeping system the company uses and how the system defines a “workday,” this could prevent workers from receiving overtime pay for eligible hours simply because, according to the record, the single, continuous shift was split into 2 separate workdays.

Q: What overtime rule are the plaintiffs relying on?

A: The allegations rely on California’s daily overtime requirements, including time-and-a-half after eight hours in a workday and double time after twelve hours in a workday, along with weekly overtime concepts.

Q: What is the main allegation about Home Depot’s “workday” definition?

A: The plaintiffs alleged Home Depot’s midnight-to-midnight workday definition split a single overnight shift into two calendar days in a way that reduced or avoided overtime pay for hours worked beyond eight in a continuous overnight shift.

Q: What are Labor Code sections 203 and 226 generally about?

A: Section 203 is commonly associated with waiting time penalties for certain final pay issues, and Section 226 generally relates to wage statement requirements. In this case, the remaining claims included alleged violations of these provisions along with related wage-and-hour claims.

Q: What does “preliminary approval” of a class settlement mean?

A: Granting preliminary approval occurs in the early stages when the court considers whether or not a proposed settlement agreement is generally fair enough to notify class members. After notice is sent to class members, the court reviews any objections before granting final approval.

If you believe your employer’s timekeeping policies caused you to miss overtime pay, shorted you on wages earned during overnight shifts, or resulted in inaccurate wage statements or final pay issues, the employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP can help. Contact one of our offices in Los Angeles, San Diego, San Francisco, Sacramento, Riverside, or Chicago today to learn how to hold your employer accountable.

Did Wells Fargo Misclassify Senior Premier Bankers and Deny Overtime Pay?

A group of Wells Fargo employees filed a lawsuit alleging the bank misclassified Senior Premier Bankers as exempt from overtime requirements, even though their work largely involved routine customer service and sales tasks.

Case: Sabrina Perez v. Wells Fargo Bank, N.A.

Court: U.S. District Court, Central District of California

Case No.: 2:24-cv-04077

The Plaintiff: Perez v. Wells Fargo

Sabrina Perez is one of the named plaintiffs seeking to represent a broader group of Wells Fargo employees who held Senior Premier Banker-related roles. In the complaint, the plaintiffs describe the Senior Premier Banker position as focused on day-to-day branch banking work. The plaintiffs allege that, despite performing routine, sales-oriented tasks, they were classified as exempt employees and therefore did not qualify for overtime pay.

Who Are the Defendants in the Case?

The defendant in the lawsuit is Wells Fargo Bank, N.A.

Wells Fargo is a national banking institution that operates retail branches nationwide. According to the plaintiffs, Wells Fargo’s handling of staffing levels, job expectations, time demands, and classification decisions for their Senior Premier Bankers roles resulted in unpaid overtime and wage-and-hour violations.

A Brief History of the Perez v. Wells Fargo Case

The Perez v. Wells Fargo case began when five Wells Fargo employees filed suit in the U.S. District Court for the Central District of California, hoping to represent a class of Senior Premier Bankers. The lawsuit listed FLSA claims and related state-law wage-and-hour claims.

On September 4, 2025, the plaintiffs filed a motion seeking preliminary approval of a proposed settlement.

What Is the Main Question in the Case?

Did Wells Fargo improperly classify Senior Premier Bankers and related roles as exempt from overtime requirements? And if so, did the exempt classification, in combination with the working conditions described in the lawsuit, lead to unpaid overtime and related wage-and-hour violations, including meal and rest break violations, and civil penalties under PAGA?

The Allegations: Perez v. Wells Fargo

The lawsuit includes numerous allegations, including:

1. Misclassification as exempt: The plaintiffs allege that Senior Premier Bankers were classified as exempt from overtime requirements, even though their duties allegedly included routine customer service tasks, such as opening and closing accounts and selling banking products, which the plaintiffs claim do not qualify for an exemption.

2. Unpaid overtime: The plaintiffs claim that Wells Fargo allegedly understaffed branches, forcing Senior Premier Bankers to work more than 40 hours per week. Despite the long workweeks, the plaintiffs allege they did not receive overtime pay for those extra hours.

3. Related wage-and-hour violations: In addition to overtime claims, the plaintiffs allege related violations, including failures tied to meal and rest breaks.

4. PAGA penalties claim: A Senior Premier Banker also filed a claim seeking civil penalties under California’s Private Attorneys General Act (PAGA). The lawsuit describes PAGA as a mechanism that allows employees to seek penalties for certain California Labor Code violations on their own behalf, on behalf of other employees, and on behalf of the State of California.

As with any civil case, these are allegations. The court has to evaluate the claims through motion practice, evidence, and applicable legal standards, or through the settlement approval process if the case resolves before trial.

Why Misclassification Cases Can Become High-Stakes Wage-and-Hour Disputes

Overtime exemptions are not based solely on job titles. In many misclassification lawsuits, the key issue becomes what employees actually did in practice during the workday. When an employer classifies a role as exempt, employees generally do not receive overtime even if they regularly work more than 40 hours per week. If a court later determines that the role did not meet the legal tests for exemption, the alleged unpaid overtime can become the central damage claim.

Misclassification cases often involve additional allegations, particularly when plaintiffs assert that the same policies and staffing decisions that led to an unhealthy workload also resulted in meal and rest break violations.

Proposed $48.5 Million Settlement to Resolve Claims

Wells Fargo agreed to resolve the claims with a $48,500,000 settlement. The plaintiffs requested preliminary approval in September 2025. If approved, the settlement would cover payments to approximately 4,230 class members (as well as covering attorneys’ fees, costs, etc.)

The settlement is described as covering certain job titles, including Premier Bankers, Premier Bankers 2, and/or Senior Branch Premier Bankers, who were employed at Wells Fargo during specified time periods.

If preliminary approval is granted, eligible participants would typically receive notice (often by mail and email) explaining what the settlement covers, how payments are calculated, and the options available.

FAQ: Perez v. Wells Fargo

Q: What does it mean to be “misclassified as exempt”?

A: It generally means an employer treated a role as exempt from overtime requirements, even though the employee alleges their pay structure and job duties did not meet the legal standards for an exemption.

Q: What job duties do the plaintiffs say Senior Premier Bankers performed?

A: The lawsuit alleges their work included routine customer service tasks, such as opening and closing accounts, and selling banking products.

Q: Why does understaffing matter in an overtime lawsuit?

A: The plaintiffs allege that understaffing contributed to longer workweeks, which can be important to claims that employees regularly worked more than 40 hours and should have received overtime pay.

Q: What is PAGA, and why is it included here?

A: PAGA refers to California’s Private Attorneys General Act, which the lawsuit describes as allowing employees to pursue civil penalties for certain Labor Code violations on behalf of themselves, other employees, and the State of California.

Q: Does a proposed settlement mean Wells Fargo admitted wrongdoing?

A: Not necessarily. Settlements can resolve claims without an admission of liability, and courts still review proposed class settlements through preliminary and final approval processes.

Q: How will workers know if they’re included in the settlement?

A: If the court grants preliminary approval, eligible participants typically receive notice (often by mail and email) with information about eligibility, estimated payments, deadlines, and options.

If you believe you were misclassified as exempt, worked more than 40 hours without overtime pay, or were denied legally required meal and rest breaks, the employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP can help. Contact one of our offices in Los Angeles, San Diego, San Francisco, Sacramento, Riverside, or Chicago today to learn how to hold your employer accountable.

Did Odoo Misclassify Its Sales Representatives? $4.6 Million Settlement Resolves Overtime Allegations

A class action lawsuit against Odoo, Inc., a global business software company, shows how quickly overtime disputes can grow when they affect hundreds of employees across multiple states. In Kayed, Prado, Carr, and Rivas v. Odoo, sales representatives alleged they were improperly classified as exempt from overtime pay. The case has now ended in a $4.6 million settlement, bringing long-awaited relief to nearly 600 workers.

Case: Omar Kayed, Jesus Prado, Spencer Carr, and Alonzo Rivas v. Odoo, Inc.

Court: Northern District Court of California

Case No.: 3:23-cv-03728

The Plaintiffs: Odoo Sales Representatives

Four former Odoo employees—Omar Kayed, Jesus Prado, Spencer Carr, and Alonzo Rivas—filed the original complaint in July 2023, alleging that Odoo had misclassified its sales representatives as exempt from overtime.

The plaintiffs sought to represent a class of employees in California and New York who held titles such as Account Executive, Account Manager, and Customer Success Manager. According to the complaint, these employees primarily engaged in routine sales and customer service duties, including contacting clients, scheduling demos, and closing deals.

Their lawsuit claimed these duties did not meet the criteria for exemption under either federal or state law. The plaintiffs also alleged that Odoo imposed aggressive sales quotas and productivity goals, requiring employees to routinely work more than 40 hours per week without overtime pay.

The Defendant: Odoo, Inc.

Odoo, Inc., the U.S. arm of a global enterprise software company headquartered in Belgium, provides business management solutions to clients worldwide. The plaintiffs accused Odoo of systematically denying overtime pay, failing to provide accurate wage statements, and failing to reimburse California employees for work-related expenses, such as phone and internet costs.

The complaint asserted violations of both the Fair Labor Standards Act (FLSA) and state labor laws, including California’s Labor Code and New York wage and hour statutes. California plaintiffs also pursued civil penalties under the Private Attorneys General Act (PAGA).

What is PAGA? PAGA allows employees to act on behalf of the state to seek penalties for labor law violations.

A History of the Case: From Filing to $4.6 Million Resolution

The class action was filed in the San Francisco federal court in July 2023. The parties' counsel litigated the case for close to two years including extensive discovery and settlement discussions.

On December 12, 2024, Judge Cisneros granted final approval of the $4,647,474.68 settlement to resolve the dispute. Under the agreement, Odoo will provide payments to 599 class members, as well as pay attorneys’ fees, and administrative costs associated with the case.

According to court documents, the average class member payout is approximately $4,850.46, while the highest payment exceeds $24,000. Though Odoo did not admit liability, the settlement represents a meaningful recovery for affected employees who worked long hours under demanding sales targets.

The Main Question Being Considered: Were Odoo’s Sales Reps Exempt or Not?

The main question in the case is if Odoo's sales representatives were correctly classified as exempt or not. Under federal and state labor law, exemptions usually apply to executive, administrative or professional employees whose main job duties require the exercise of discretion and independent judgment regarding significant business matters.

The plaintiffs argued that Odoo’s sales employees were closely supervised, followed standardized scripts, and worked within strict performance metrics—factors that typically characterize non-exempt positions.

Ultimately, while the case ended in settlement rather than trial, the resolution underscores how easily misclassification disputes can expand into multi-state class actions when large groups of employees share similar job structures and claims.

Why Does This Case Matter to California Workers?

California’s wage and hour laws impose some of the nation’s toughest overtime requirements, and they apply even to white-collar professionals in sales and tech. Employers cannot rely solely on job titles or salary levels to deny overtime. The actual day-to-day duties determine exemption status.

This case reinforces that California workers (especially those in high-pressure sales environments) should not assume that “salaried” means “exempt.” If your job requires long hours, detailed oversight, and scripted tasks, you may be entitled to overtime pay even if your employer labels you as a manager or executive.

FAQ: Kayed, Prado, Carr, and Rivas v. Odoo, Inc.

Q: What laws did this case involve?

A: The lawsuit cited violations of the Fair Labor Standards Act (FLSA) and state labor laws in California and New York, including California Labor Code provisions governing overtime pay, accurate wage statements, and reimbursement for business expenses.

Q: What is the value of the settlement?

A: The settlement totals $4,647,474.68, covering payments to 599 class members, with an average payment of about $4,850 and a maximum payment of $24,064.03, subject to court-approved deductions for fees and costs.

Q: What is a PAGA claim?

A: The Private Attorneys General Act (PAGA) allows California employees to act as “private attorneys general” and recover civil penalties for labor law violations on behalf of themselves, other workers, and the State of California.

If you believe your employer has misclassified your position or failed to pay overtime, contact our office today to discuss your potential claim and learn more about your rights under California and federal law. The experienced employment law attorneys at Blumenthal Nordrehaug Bhowmik DeBlouw LLP can help at offices in Los Angeles, San Diego, San Francisco, Sacramento, Riverside, and Chicago.

Did Wells Fargo Misclassify Senior Premier Bankers and Deny Overtime Pay?

A high-profile overtime case in federal court alleges Wells Fargo misclassified thousands of “Senior Premier Bankers” as exempt from overtime—despite day-to-day duties that looked more like frontline sales and service. The lawsuit has moved toward resolution with a multi-state settlement valued at $48.5 million, signaling the cost of classification mistakes when they scale across a large workforce.

Case: Sabrina Perez v. Wells Fargo

Court: United States District Court, Central District of California

Case No.: 24-cv-4077-SRM

The Plaintiff: Sabrina Perez (on behalf of a class of Senior Premier Bankers)

Senior Premier Banker Sabrina Perez filed a federal complaint in Los Angeles alleging she and other SPBs were misclassified as exempt and denied overtime pay. According to the complaint, SPBs routinely performed non-exempt tasks—opening and closing accounts, assisting customers, and selling banking products—while branches were allegedly understaffed, pushing hours well beyond 40 per week without overtime. Perez sought to represent a class and collective of similarly situated SPBs (including Premier Banker roles with similar titles).

The Defendant: Wells Fargo

Wells Fargo denies liability, but the case evolved quickly. Plaintiffs filed a motion on September 4, 2025, asking the court to give the $48,500,000 class settlement preliminary approval. If approved, the settlement would cover approximately 4,230 class members and related fees and costs, with an estimated average recovery of about $7,137 per person. Plaintiffs also alleged meal and rest break violations and brought a claim for civil penalties under California’s Private Attorneys General Act (PAGA). Reports indicate the company has since reclassified SPBs to hourly, non-exempt status, which, if accurate, means overtime must be paid going forward.

A History of the Case: Allegations, Multi-State Scope, and Settlement

The complaint alleged violations of the Fair Labor Standards Act (FLSA) and parallel state wage laws (including California and Colorado), focusing on two themes:

Misclassification: SPBs were treated as exempt despite primarily providing customer service and sales support—tasks typically non-exempt.

Systemic overtime exposure: Chronic understaffing allegedly led to regular unpaid overtime, along with missed meal and rest breaks.

The proposed settlement covers these job titles during defined periods:

• California: March 27, 2020, through the Release Date*

• Colorado: February 2, 2021, through the Release Date*

• All other states: February 22, 2021, through the Release Date*

*“Release Date” as defined in the settlement papers.

On September 4, 2025, plaintiffs sought preliminary approval. If granted, the court would authorize notice to the class and set a hearing for final approval. According to case updates provided, class members would be notified by mail and email.

The Main Question Being Considered: Were SPBs Exempt—or Entitled to Overtime?

The core legal question is whether Senior Premier Bankers qualify for any white-collar exemption (executive, administrative, or professional). In wage cases, titles don’t decide exemption—actual duties do. Where employees primarily provide customer service, follow scripts, and sell standardized products (instead of exercising substantial discretion on significant business matters), courts frequently find non-exempt status and require overtime for hours worked over 40 in a week (or daily thresholds under California law).

Here, the complaint framed SPB duties as routine and production-oriented—not policy-making or independently discretionary; undercutting exemption defenses and supporting overtime claims under federal and state law.

Why This Matters to California Workers

California has some of the nation’s strictest wage and hour protections, including:

• Daily overtime after 8 hours/day (and after 40 hours/week),

• Meal and rest break requirements, and

• Detailed wage statement obligations.

Misclassification disputes often arise in customer-facing banking, sales, and service roles where job titles sound managerial, but the day-to-day work is standardized and closely directed. This case underscores a practical takeaway for California employees: if your primary duties are sales support and service—and you don’t truly manage people or exercise independent judgment on matters of significance—you may be non-exempt and owed overtime.

FAQ: Sabrina Perez v. Wells Fargo

Q: What laws are at issue in this case?

A: The case alleges violations of the FLSA and state wage laws (including California and Colorado). In California, related claims typically implicate Labor Code sections governing overtime, meal and rest breaks, and wage statements, and may include a PAGA claim for civil penalties.

Q: What is the status of the case?

A: Plaintiffs filed a motion for preliminary approval of a $48.5 million settlement on September 4, 2025. If the court grants preliminary approval, notice will be issued to class members, and a hearing for final approval will follow.

Q: Who is included in the proposed settlement?

A: According to the case updates provided, approximately 4,230 class members in defined SPB/Premier Banker roles are covered for work periods beginning in 2020–2021 through the Release Date (varying by state), with an estimated average payment of $7,137 per person (subject to court approval and settlement administration).

Q: Does reclassifying employees fix past wage issues?

A: Reclassification affects future pay practices. Past claims for unpaid overtime, missed breaks, or penalties are typically addressed through settlements or judgments and are not cured by a forward-looking policy change.

If you believe your employer misclassified your role or failed to pay overtime, the experienced employment law attorneys at Blumenthal Nordrehaug Bhowmik DeBlouw LLP can help at offices in Los Angeles, San Diego, San Francisco, Sacramento, Riverside, and Chicago. Contact our office to discuss your situation and learn about your options for recovering unpaid wages and penalties under California law.

Did Reed Smith Misclassify a Manager to Avoid Paying Overtime?

A California lawsuit against one of the nation's largest law firms highlights a growing problem in white-collar workplaces—misclassifying salaried employees to avoid paying overtime. Medeiros v. Reed Smith LLP shows that even major corporate employers are not exempt from scrutiny under California's strict wage and hour laws.

Case: Medeiros v. Reed Smith LLP

Court: Los Angeles County Superior Court

Case No.: 25STCV04101

Get to Know the Plaintiff in the Case: Medeiros, Former Employee

The plaintiff, Phoebe Medeiros, worked for Reed Smith LLP as a Senior Manager for Business Development and Operations, focusing on the firm's private equity practice. Originally based in New York, Medeiros transferred to Reed Smith's Southern California office in late 2022.

Despite her management title, Medeiros claims that her role functioned more like a traditional employee position. According to her complaint, she worked up to 90 hours per week, often 7 days a week, and occasionally in 36-hour shifts. She alleges that Reed Smith intentionally misclassified her as an exempt manager to avoid paying overtime and other compensation required by California law.

Her lawsuit seeks at least $50,000 in unpaid overtime wages, penalties, and other damages. According to Medeiros, her timesheets were altered to reflect standard eight-hour workdays, even though her actual hours far exceeded that schedule.

The Defendant, Reed Smith Global Law Firm :

The defendant in the case is a global law firm, Reed Smith LLP. Headquartered in Pittsburgh, Pennsylvania, the Firm employs more than 1,500 attorneys and staff members worldwide. The firm's clients include Fortune 500 corporations, major financial institutions, and multinational enterprises.

In this case, Reed Smith has been accused of failing to compensate a non-attorney staff member fairly under California's wage and hour statutes, which are among the most employee-friendly in the country. The lawsuit also names Reed Smith partner Mark Pedretti as a central figure in the events leading to the claim, though he was not listed as a defendant. Medeiros alleges that Pedretti directed most of her daily work, including preparing business pitch materials, attending meetings, taking notes, and managing follow-up communications—duties that fell squarely within an employee's role rather than an executive's.

At the time of filing, Reed Smith had not provided a public statement regarding the allegations.

A History of the Case: From Complaint to Courtroom

Medeiros filed her complaint on February 14, 2025, in Los Angeles County Superior Court. The filing accused Reed Smith of multiple labor law violations, including unpaid overtime, failure to provide meal and rest breaks, and wage misclassification.

The lawsuit details how Medeiros's job title did not reflect her actual responsibilities. While labeled as a "manager," she alleges that she had no authority to hire, fire, or make independent business decisions, key criteria required for an employee to be classified as exempt under California labor law.

Medeiros has since left Reed Smith and currently works as a Senior Business Development Manager at Freshfields Bruckhaus Deringer, another major international law firm.

The Main Question Being Considered: Were "Managers" Denied Overtime Pay?

The core issue in Medeiros v. Reed Smith LLP is whether the law firm wrongly classified a salaried business development manager as exempt from overtime pay.

California labor law requires employers to pay overtime to most employees who work more than eight hours in a day or forty hours in a week—unless those employees truly qualify as exempt under the executive, administrative, or professional exemptions. Titles alone aren't enough; the exemption must match the employee's actual job duties and level of discretion.

If Medeiros's allegations prove accurate, this case could serve as a warning to law firms and corporations that rely heavily on administrative or marketing staff who routinely exceed normal working hours without overtime pay.

Why Does This Case Matter to California Workers?

Labor laws are in place to protect California employees from overwork and underpayment—regardless of job title. Cases like Medeiros v. Reed Smith LLP demonstrate that misclassification is not limited to blue-collar or hourly jobs. White-collar employees in sales, business development, and administrative roles are also vulnerable when employers use inflated titles to skirt wage laws.

For California workers, this case reinforces an important point. If your primary duties don't involve managing people or exercising independent decision-making, you may be entitled to overtime pay, even if your employer calls you a "manager."

FAQ: Medeiros v. Reed Smith LLP

Q: What laws are at issue in this case?

A: The lawsuit cites violations of California Labor Code Sections 510, 512, 226, and 1194, which cover overtime pay, meal and rest breaks, accurate wage statements, and the right to recover unpaid wages.

Q: Why does a worker's job title matter in wage and hour cases?

A: Job titles don't determine exemption status—job duties do. An employee must regularly perform executive or administrative tasks with significant authority to qualify as exempt. Otherwise, the employee must receive overtime pay for extra hours worked.

Q: What can California employees do if they suspect misclassification?

A: Workers who believe they've been wrongly classified can file a complaint or contact an employment law attorney to recover unpaid wages, penalties, and damages for missed breaks.

If you believe your employer has misclassified your position or failed to pay overtime, the experienced employment law attorneys at Blumenthal Nordrehaug Bhowmik DeBlouw LLP can help. Contact our office in Los Angeles, San Diego, San Francisco, Sacramento, Riverside, or Chicago today for a free consultation to learn about your rights and how to recover the pay you've earned.