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

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.

California Judge Certifies Class of Kaiser Traveling Nurses

U.S. Magistrate Judge Joseph Spero certified a class of Kaiser Foundation traveling nurses after the caregivers alleged they were shorted on overtime pay, denied required meal breaks and rest periods, etc. The judge granted class certification after the nurses raised valid issues about broad policies that were applicable to all class members.

The judge granted a bid to certify a class of R.N.’s and licensed practical nurses who were all employed by AMN Healthcare Inc. The health care staffing contractor staffed Kaiser Foundation hospitals with nurses in California. The suit included numerous allegations of wage and hour violations of California Labor Law.

The judge concluded that the plaintiffs met the requirements for both commonality and predominance prior to granting class certification. Judge Spero said the nurses’ theories that the defendants in the case discouraged overtime and didn’t adequately prevent underreporting raised a number of common issues that were susceptible to common proof.

In reaching this conclusion, Judge Spero rejected a number of arguments presented by Kaiser, the defendant in the case, who was arguing against class certification: evidence of minor variations in how the company policies were implemented in various facilities and that potentially removed the commonality of issues regarding the nurses’ overtime payment.

When there is evidence of a common business policy that is applicable to all members of a class with concerns to the payment of overtime, and all the class members can be said to share the same core duties that tend to routinely lead to unscheduled overtime, the judge argued that some class members who did not find themselves working unscheduled overtime or who were provided adequate compensation for the overtime hours was not sufficient to defeat predominance. Based on this logic, the court found that the common issues predominate over individualized inquiries in consideration of the overtime claims being presented by the plaintiffs.

The Kaiser nurses’ suit was removed to federal court in early 2016. The original lawsuit alleged that the Defendant suppressed overtime by advising their traveling nurses that it wasn’t permitted and that they further discouraged overtime by keeping an over-difficult overtime approval process in place. The plaintiffs also alleged that they were not provided with the required meal breaks and rest periods. This was accomplished through a number of different policies the company implemented.

In addition to AMN Healthcare, Kaiser Foundation Hospitals, Southern California Permanente Medical Group Inc. and the Permanente Medical Group Inc. were also named as defendants. All are Kaiser entities.

If you have questions regarding proper meal breaks and rest periods or if you need to find out what the legal requirements are for overtime pay, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Kindred Attempts to Settle Wage, Meal Break Claims with $12M Deal

A $12 million settlement is on the table to settle allegations that Kindred Healthcare Operating Inc. and its subsidiary Gentiva Certified Healthcare Corp. violated California labor law. The company allegedly failed to provide workers with minimum wage and required meal breaks. The proposed class of approximately 1,600 workers were employed by the company. The class members asked a California federal judge to grant preliminary approval of the $12 million agreement with the health care company and its subsidiaries. This would result in an average $5,415 recovery per class member after payments were deducted for the state and other associated fees related to the settlement.

The proposed class’ legal counsel seeks $3 million in fees and $125,00 in costs. The lead plaintiff’s incentive award portion of the settlement would total $20,000.

Also pulled from the settlement would be $150,000 payment for the claims under the California Labor Code Private Attorney General Act of 2004 allowing private citizens to sue for civil penalties on their own behalf and on behalf of other employees and the state. 75% of the payment will go to California. The rest would be distributed to appropriate class members.

Employees involved in the suit requested that the federal judge certify them for settlement. Included in the proposed class are: clinicians or piece rate workers employed by the health care company and their subsidiaries after August 24th, 2012 whose job duties included providing skilled home care. The employees argued that certification was appropriate because the proposed class was numerous, and the legal questions involved were common to all included class members.

The original suit was filed in August 2016 with Cashon alleging that Kindred and Gentiva failed to pay appropriate wages and overtime and did not provide required meal breaks, rest periods or wage statements. The companies claim they were involved in no violations and that they were in compliance with labor laws. Early mediation occurred in April 2017 but did not result in resolution. After discovery, parties engaged in a second bout of mediation in November 2017 which resulted in the proposed settlement.

If you have questions about overtime laws in California or if you need to know what it takes to gain class certification, please get in touch with the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

$4.2M to End California Food Service Co. Pay Suit

A group of service technicians responsible for handling equipment for an ITW Food Equipment Group division out of California requested that the California federal court offer initial approval of a $4.2 million settlement to resolve allegations that the company did not provide equal pay to their technicians.

The group of technicians make up a class of more than 200. The lead plaintiff is Joseluis Alcantar. Alcantar worked for food equipment service provider, Hobart Service, or over two decades. Allegedly, Hobart Foods did not provide technicians with pay for the transportation of tools to and from home when servicing their first and last customers of each work day. Following seven years of litigation, plaintiffs are currently requesting that the judge approve the preliminary agreement that was reached just before the trial commenced.

Class members in receipt of settlement money would receive a portion based on calculations considering their amount of time as an employee and other relevant factors. The motion filed declares the settlement as fair, reasonable and adequate. The motion cited the reason behind plaintiff support of the settlement as the requirement for defendants to conduct remediation measures clarifying the vehicle usage agreement that should address the commuting options available to service technicians in regard to their work vehicles.

Service technicians in the group are responsible for maintenance of the company’s food service equipment at a number of different customer locations. In order to complete their job duties, techs are required to transport tools and other necessary equipment to the sites. The company calculating time worked with a deduction for “normal commute time” at the start and finish of the work day. Plaintiffs allege this is in violation of California’s labor laws.

The original complaint was filed in 2011. While the court initially sided with the company and refused to grant class certification in 2012, the plaintiffs eventually appealed to the Ninth Circuit and the previous ruling was overturned. In 2016, class certification was granted allowing the overtime claim to move forward. A trial date was set for early 2018.

After a large amount of discovery with 30 depositions and the production of 142,000 documents, and several failed attempts to resolve the suit, an agreement was reached nine days prior to the trial.

If you have concerns regarding California wage and hour law or other California employment law concerns, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Exotic Dancers Wage Row Results in $8.5M Deal

A number of former Spearmint Rhino exotic dancers urged a California federal judge to give final approval to a $8.5 million deal in order to settle their suit alleging that the chain of nightclubs limited their compensation to tips.  Lead plaintiffs in the case, Lauren Byrne, Bambie Bedford, and Jennifer Disla, claimed that the nightclub didn’t pay them overtime wages, provide them with minimum wage or provide them with required meal and rest breaks during their time dancing in the establishment.

Final settlement approval in the class and collective action would resolve the allegations of tip misappropriation. Out of 8,000 class members, 50 chose to opt out and only a few others in the group objected to the settlement proposed as a resolution to the matter.

Dancers included in the suit were located throughout the country. Counsel for the class spoke to them regarding the allegations and disputed facts of the case and considered information pertaining to the case provided by defendants’ counsel including business structure, agreements in place, locations of the club, number of clubs involved in the case, number of dancers and other entertainers working at the various locations, applicable statute of limitations, and the number of days each dancer worked at the establishments. All this research and analyses was completed prior to engaging in settlement discussions.

According to the motion, the final approval of the proposed settlement would end litigation over all claims against the Spearmint Rhino nightclubs brought by the plaintiffs in regard to state wage and hour law violations, and the Federal Fair Labor Standards Act (FLSA). According to the dancers, the deal amount specified was $8.5 million, but could increase to $11 million if certain conditions were met.

A group of exotic dancers currently working the defendants’ clubs came forward the same day that the final settlement approval was requested to ask the court to find that they are not employees. They stated that they could have chosen to work as “employees,” but did not because they wanted to avoid the level of control the nightclubs had over actual employees. They argued that the plaintiffs are all former entertainers who no longer need to consider this aspect of the issue. They have no further interest in preserving their choice to perform without being subject to the rules, regulation, control and scrutiny of an employee.

If you have questions about wage and hour violations or if you are not 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.

Dat Dog Lawsuit Dares to Ask, "How Should Tips Be Divided?"

A recent lawsuit filed by workers at Dat Dog questioning the legality of the restaurant owner’s tip-sharing practices joins a national debate about how gratuities should be shared among co-workers. Who actually owns the tip that a diner leaves behind?

Tip-sharing is a commonplace occurrence in the restaurant industry. Servers frequently share an agreed upon (or at least pre-defined) percentage of their tips at the end of their shift with other staff, i.e. bartenders, bussers, etc. Another method is pooling all tips and distributing the total tips received for the night amongst designated staff. The Dat Dog lawsuit, filed in U.S. District Court in New Orleans, was filed by employees prepared to challenge the tip-pooling system they are required to participate in at work.

The Dat Dog tip-sharing policy requires that bartenders’ tips be split with back-of-the-house employees, i.e. cooks, dishwashers, managers, etc. The suit claims this practice is actually illegal – a claim that Dat Dog rejects claiming that the hot dog industry is not your typical restaurant and that all employees are trained to perform all job functions and to chip in as necessary during their shifts as an equal team.

According to the federal Fair Labor Standards Act two-tier wage system, restaurants are legally allowed to pay tipped employees less than minimum wage as long as an employee brings in enough tips from customers to reach at least minimum wage.  The law restricts tip-pooling to other, similarly tipped employees regularly interacting with customers. The law also bans mandated tip-sharing with back-of-house employees. Employers are required to pay kitchen staff, etc. at least the full minimum wage. 

In the Dat Dog lawsuit, bartenders claim that the managers require them to share their tips with back-of-house employees which creates an illegal tip pool according to the federal Fair Labor Standards Act. The bartenders who filed suit, Zachary Henderson and Kaleigh Thomas, allege that the company deducts 5% of the shift’s gross sales (not including alcohol sales) from the bartenders’ wages. The company then shares that 5% with managers, cooks, dishwashers, etc., all of whom are already being paid $7.25/hour as required. According to the plaintiffs’ allegations, this practice is the equivalent of a forced wage deduction scheme and does not qualify as a legal tip pool.

In support of this theory, Henderson claims that when the required tip deduction amount increased from 3% to 5% in Spring 2017, the manager responded to his complaint by explaining that the back of house employees wanted a raise and they company didn’t have the budget to raise their hourly pay. This line of reasoning supports the theory that the company is taking money from the bartenders in order to fund higher pay for the back of house staff.

If you have questions about wage and hour law or if you feel you are being unfairly treated in the workplace, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Does Johnson & Johnson Pay Proper Wages to their Employees?

In recent news out of Los Angeles, an Orange County woman sued Johnson & Johnson (U.S. District Court for the Central District of California case number 8:17-cv-01608). The California woman, Nhung B. Tran, filed a wage and hour lawsuit on September 15th, 2017 in the U.S. District Court for the Central District of California listing Johnson & Johnson Vision Care Inc. as the Defendant in the case. Tran claims that Johnson & Johnson failed to pay fair wages, which means they are in violation of the Fair Labor Standards Act.

In her complaint, Tran made allegations that she worked for 12 years in the Johnson & Johnson Quality Assurance department where she handled records management. According to Tran she worked more than 40 hours per week, but was not paid overtime wages. Tran alleges that the defendants failed to provide her with any overtime compensation for the hours she worked for the company that exceeded the 40 hours per week that is in violation of FLSA.

Definitions to Know:

Overtime: According to the Fair Labor Standards Act (FLSA), overtime means time worked beyond a prescribed threshold. The threshold prescribed by the FLSA defines the normal work period as a workweek of 7 consecutive days. The normal FLSA regulated overtime threshold is 40 hours per workweek. Some jobs may be governed by a different FLSA overtime threshold.

Allegation: In the legal world, an allegation is a formal claim against another individual, group or institution.

Overtime Compensation: Unless an employee is exempt, the FLSA requires that they be provided with overtime pay for hours worked above and beyond those as identified as “normal.” Overtime pay is required to be at a rate not less than time and one-half of the employee’s regular rate of pay. According to FLSA, there is no limit to the number of hours an employee aged 16+ can work in any workweek as long as they are being paid in accordance to overtime requirements.

Tran wishes to obtain a trial by jury as well as economic damages, general damages, punitive damages, statutory damages, legal fees, double damages, and any other relief that the court deems appropriate in the situation once they consider the facts.

If you have questions about the Fair Labor Standards Act or overtime compensation, please get in touch with one of the experienced California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.