Ice Cream Shop’s CAFA Removal Rejected by California Federal Court

In recent news, a California district court remanded a wage and hour class action (Hayes v. Salt & Straw, LLC) back to state court after rejecting evidence and arguments supporting its removal under the Class Action Fairness Act (CAFA).

History of the Case: Hayes v. Salt & Straw, LLC 

The plaintiff in the case filed a workplace class action alleging nine California labor code violations and one claim under California’s Unfair Competition Law. The lawsuit includes broad allegations. Allegedly, the defendant failed to provide employees with appropriate wages, failed to provide employees with mandatory rest breaks and meal periods, failed to keep accurate records, failed to include non-discretionary bonuses in the employees’ regular rate of pay when calculating overtime pay rate, and failed to provide employees with accurate overtime pay based on their alternative workweek schedule.

The Defendant in the Case Removed to Federal Court:

The ice cream shop listed as the defendant in the case removed to federal court under CAFA. The plaintiff sought to remand by arguing that CAFA’s $5 million threshold had not been established. The district court heard the plaintiff’s argument and agreed, remanding the case back to California state court and finding that the defendant’s estimate of the amount in controversy was based on unreasonable assumptions.

More About the Class Action Fairness Act (CAFA):

Congress provides jurisdiction over class actions to federal courts when they involve at least 100 class members, there is minimal diversity, and the amount in controversy is more than $5 million. Defendants seeking to remove under CAFA must include a plausible allegation that the amount in controversy exceeds the designated jurisdictional threshold. When the plaintiff in the case disagrees with the amount in controversy the defendant identifies, both parties submit their argument and evidence to the court. The defendant bears the burden of proof. The removing defendant is allowed to make assumptions regarding the amount in controversy. As the court explained in this case, those assumptions must be reasonable and appropriate considering any actual evidence submitted by the other party.

Evidence Submitted by Defendant in Support of Removal to Federal Court:

The defendant in the case submitted a declaration from counsel and a declaration from a human resources manager based on a review of regularly kept payroll records, but they did not submit the actual payroll records. The plaintiff argued that the payroll records were necessary, but the court disagreed, finding that the declarations were well-supported evidence for CAFA removal purposes. The court also pointed out that the plaintiff did not submit any evidence in competition with the declarations, so there was no evidence that they were unreliable or inaccurate.

The Court’s Eventual Rejection of Defendant’s Assumptions:

The court did agree with the plaintiff’s argument that the defendant’s estimates were based on unreasonable assumptions for four of the claims in the suit. The court criticized the defendant’s argument for assuming a 100% violation rate for the overtime wage estimate, waiting time penalty estimate, wage statement claim estimate, and off the clock estimate.

If you need to talk about employment law violations, or if you need to file a California employment law claim, we can help. Get in contact with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

California Wage Theft Lawsuit: Papa John’s Settles for $3.4 Million

Papa John’s requested approval of a $3.4 million settlement to end a wage theft lawsuit in the Central District of California. According to the lawsuit, Papa John’s allegedly failed to pay workers for mandatory training time. Required training without pay, as described in this lawsuit, violates the Fair Labor Standards Act and California labor law. 

As the case proceeds towards settlement, some are left wondering about issues left unresolved in the case.

Should Companies Be Held Liable for Franchise Wage Violations? 

Should Papa John’s International, Inc. be held liable for wage violations of company franchises? In 2019, about 8.43 million Americans worked for franchises across the nation, many of which were earning minimum wage. As minimum wage workers, as a general rule, they could not afford unpaid training hours. While required on the job training is against the law (this is not in question), it is less clear who is responsible for the wage violation. 

The Avalos v. Papa John’s International, Inc. Case:

Sofia Avalos, along with other California Papa John’s delivery drivers, and a proposed class of hourly employees were all allegedly required to complete online training modules to teach them their job duties and provide the level of service necessary for the position. These required training modules needed to be completed before clocking in or after clocking out for their shift. While they were required to spend time completing the training on Papa John’s corporate site, they were not paid for the time necessary to complete the modules. Workers involved in the suit claim this was a common practice for Papa John’s facilities across the nation. The method of logging the training as complete indicates that Papa John’s International was aware or had reason to be aware that it was being completed “off the clock.” Since the employees’ total number of hours were miscounted, calculations of minimum wage, overtime pay, and final wage statements were also incorrect.

The Settlement Agreement for Papa John’s Wage Theft Suit:

Choosing discretion to a big legal battle, Papa John’s International decided to settle. The settlement agreement designates 30% of the gross fund for worker’s attorney fees and $80,000 for legal costs. $185,000 is to administer the settlement. Corporate-owned store employees who submit a claim will receive a payment up to $166, and franchise employees will receive $50 gift cards.

The Risk of Joint Employment in Avalos v. Papa John’s International, Inc.:

One of the reasons Papa John’s International turned to settlement, in this case, is most likely the risk that the court could decide that Papa John’s, the corporate parent in this scenario, is a joint employer of franchise pizza delivery drivers. Turning to the settlement agreement allows them to avoid this issue as settlements do not create a precedent. Setting aside the $50 “gift card” provision, the lack of a precedent is a victory for the defendant in this case.

If you need to talk to someone about wage theft or if you need to file a wage and hour lawsuit, get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

LA’s Genwa Korean BBQ Faces $2.1 Million in Files for Labor Violations

Popular LA Korean barbecue restaurant, Genwa, faces $2.1 million in fines due to labor law violations like failing to keep proper time records, failure to pay overtime, and failure to provide mandatory meal breaks. 

LA’s Popular Genwa Korean Barbecue Restaurant Allegedly Violated Numerous Labor Laws:

Alleged violations at Genwa affected 325 dishwashers, servers, and cooks at two different restaurant locations in Los Angeles, one in Beverly Hills and the other in Mid-Wilshire. The owners of Genwa Korean BBQ were cited for violations by the California Labor Commissioner’s Office in late January and fined $2.1 million. The company allegedly failed to pay workers minimum wage, provide overtime pay, and provide mandatory meal breaks and rest periods. 

Other Genwa Locations Not Included in the Lawsuit:

Genwa, an upscale Korean BBQ restaurant with numerous locations, caters to a mix of Korean and non-Korean clientele. All three locations are distinctly outside of Koreatown, but only two of the three sites were listed in the lawsuit. The Downtown South Park location was not included. Typical for a Korean barbecue restaurant, a lot of the cooking takes place on a tabletop grill in front of the customers, a practice that puts more labor focus on service-oriented staff. Similar issues seem to riddle the Korean barbecue world as a whole, as illustrated by the wage theft and labor issue-focused feature in a Los Angeles Times article published in 2019.

Investigations Uncovered Multiple Labor Law Violations: 

After an investigation based on Genwa worker complaints, numerous violations were discovered. 

• Genwa required their full-time staff to clock out multiple times a day (during an 11-hour shift).

• Genwa refused to allow workers to take legally mandated rest and meal breaks.

• More than 50% of Genwa workers were paid less than minimum wage.

• 50% of Genwa workers were not provided full overtime pay or required itemized wage statements.

• Genwa servers were required to attend quarterly meetings without compensation, regardless of scheduled days off.

Fines, Damages, and Penalties for Labor Law Violations:

Due to the numerous labor law violations, J.B.K. Wilshire Corporation, Genwa, Inc. and Genwa’s corporate officers, Jay and Jin Kwon are required to pay $1,428,759. The payment is intended to cover unpaid wages, missed meal periods and rest breaks, split shift premiums, overtime, liquidated damages, and waiting time penalties for any affected Genwa employees. The corporation, the restaurant, and its officers were fined an additional $633,800 in civil penalties. Genwa workers affected by the labor law violations will receive damages, missing wages, and interest. The employers have appealed.

If you need to discuss employment law violations or if you need to file an overtime lawsuit, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

$1.1M Settlement for Western Express California Driver Wage Lawsuit

Western Express agreed to pay $1.1 million to settle a class-action lawsuit filed by allegedly underpaid California drivers. The lawsuit also claimed the company violated labor law by failing to provide rest and meal breaks. 

Plaintiffs Requested Preliminary Approval:

The plaintiffs requested a California federal judge grant preliminary approval of the settlement on February 26, 2020. The settlement agreement with Tennessee based Western Express results in about 2,000 California drivers that worked approximately 20,000 weeks receiving a portion of the $1.1 million. The California Western Express truck drivers filed a civil complaint in May 2018 alleging their per-mile rate of pay fell below the state and federal minimum wage rate. Western Express allegedly failed to provide mandated meal and rest periods and also failed to pay for “other time” the drivers spent working.

California Drivers Allege Wage and Hour Violations:

The plaintiffs in the case alleged that Western Express paid their drivers by mileage without consideration for all the required pre-trip and post-trip inspection job duties, waiting time (subject to employer control), and additional time performing work duties outside of drive time. Drivers argue that failing to pay for the job duties outside of drive time is a violation of California labor law. In addition to failing to pay for hours worked outside of drive time, the drivers claim the company failed to pay for 10-minute rest periods, which is a violation of California labor law. Truckers were required to remain under company control without pay, which caused low wages that allegedly fall well below the minimum required by law. Truckers are expected to stay on assignment for over 24 hours at a time. And at times, California truckers were confined to the general vicinity of their vehicle for over 24 hours consecutively.

Western Express Has Faced Similar Allegations in the Past:

This isn’t the first time drivers have sued Western Express to protect their rights as employees. And it’s not the first time Western Express settled with a group of drivers filing a trucker wage lawsuit. Last year the company settled a suit in Tennessee federal court for $4 million after five years of litigation. More than 4,000 drivers joined the 2014 lawsuit making several claims including:

• Failure to compensate new drivers for required hours spent in orientation

• Failure to pay drivers for travel time during normal business hours

• Failure to pay new hires for all hours worked while completing the required over-the-road training program

• Failure to pay drivers for all hours worked

Past Western Express Settlement Amount and Distribution:

Each class member in the 2014 Western Express wage and hour suit received a flat $50 payment plus an additional payment amount dependent on weeks worked. On average, drivers received $450 each after fees, costs, and administrative charges were covered. The payment included about 30% of potential damages related to per diem and sleeper berth claims. One-third of the 2014 Western Express settlement amount paid for attorney fees.

The Latest Western Express Settlement Amount and Distribution:

If approved, the latest Western Express driver wage suit settlement of $1.1 million will see about $636,000 distributed to class members. About 30% will cover attorney’s fees. The Labor Workforce and Development Agency will receive $37,500. Expenses related to the administration of the settlement total $30,000. Named plaintiffs will each receive an additional payment of $10,000. The preliminary approval hearing for the settlement is scheduled for March 30, 2020.

If you need to discuss how to file a wage and hour lawsuit, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

Reclassification of Part-Time Professors Cause Increase of Wage Lawsuits

As California film schools reclassify part-time professors, the number of wage lawsuits is increasing. Numerous universities with strong ties to Hollywood have adjunct professors now classified as hourly workers. Some insist the change short-changes students and undercuts the staffers who are underpaid and, in some instances, underused.

Vetoed Bill Results in Reclassification of California Adjunct Professors:

In late fall 2019, California Governor Gavin Newsom vetoed a bill aiming to make most California adjunct professors salaried employees. In response, many part-time or “adjunct” professors in California’s universities became hourly workers effective January 1, 2020. The change keeps the universities compliant with California labor law and, in theory, provides adjunct professors with pay for all the hours they work. The reclassification to hourly wage also came with a bit of a pay bump for many, seen as an incentive while part-time professors dealt with the annoyance of logging their in and out-of-class work hours.

Reclassification for Many Adjunct Professors is Problematic:

In practice, adjunct professors see some problems with the reclassification. For instance, some part-professors saw their hours decrease for the upcoming interterm (the 4-week, short term between fall and spring semesters). They would need to teach their interterm class in half the time and for about 2/3 the pay (including the new “pay increase”). Before the reclassification, the professors would make an entire semester’s salary during interterm, but with the new pay scenario, this was no longer the case.

Problems Quantifying the Work of Professors:

Reclassifying adjunct professors has brought issues with quantifying the work of instructors (especially instructors handling creative projects) into the light. The current solution of reclassifying part-time professors as hourly employees is not a perfect fit for the adjunct professors or the school administration. Adjunct professors have cited poor pay and long hours for years, but recent reclassifications led to a series of wage and hour lawsuits alleging failure to pay for all hours worked, failure to provide meal and rest breaks, etc.

As More Private California Universities Face Wage and Hour Lawsuits:

California Assemblymember Jacqui Irwin introduced bill AB 1466 in response to the volume of lawsuits against universities across California. The bill intended to make many part-time faculty members salaried positions with a minimum salary. The bill passed, but the Governor later vetoed it, claiming there would be unintended consequences for a large number of workers and may create a substandard wage rate for teachers. Irwin and supporters of the bill disagree and plan to introduce a modified version later this year, bill AB 736.

In the meantime, part-time professors at various California universities are left in a tough spot struggling to follow strict guidelines limiting their hours, attendance at extracurricular school events, and a less than worthy pay structure. For example, payment for curriculum planning in the current pay schedule is limited to 1 week before the start of class.

If you have questions about misclassification or if you need to file a California overtime lawsuit, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

Did Apple Violate the Law by Not Paying Employees During Mandatory Searches?

In July 2015, the employees suing Apple for not paying hourly wages for the time spent waiting in lines for mandatory, daily security checks got their case certified as a Class Action. And now the California Supreme Court ruled against Apple.

Are Mandatory Searches a California Labor Law Violation?

On February 13, 2020, the California Supreme Court found Apple Inc. in violation of California labor law due to their failure to pay employees for time spent waiting for mandatory bag and iPhone searches after work shifts. The decision is the latest progression in the battle over off-the-clock work payment. This case represents the California Supreme Court’s third wage and hour decision in two years that interprets the state’s employee-protective wage requirements. At the trial level, Apple came out on top with the U.S. District Court for the Northern District of California finding that Cupertino, California Apple employees chose to bring their bags and purses to work and therefore choosing to be subjected to mandatory searches. But on appeal, the U.S. Court of Appeals for the Ninth Circuit turned the question over to the state court for interpretation of California labor law.

Determining Who Holds the Power During the Mandatory Search:

Since compensation depends on whether or not the employee is under the control of the employer, it is crucial to determine if Apple workers are under Apple’s control while they wait in line for mandatory searches, while they are undergoing the mandatory searches, and when they are exiting the mandatory searches. The mandatory searches occur when Apple employees finish their shifts and wish to leave the premises for the day. The exit search is a burden to Apple employees because it prevents them from leaving with their personal belongings until they have completed the thorough (and mandatory) exit search. The mandatory search process can take anywhere from five to twenty minutes. Employees are required to make specific movements and actions during the mandatory search.

Apple Claims Mandatory Searches Benefit Employees:

Apple claims the bag-search policy is justified as providing a benefit to Apple employees. Still, the court finds this far-fetched under the circumstances of the case and in consideration of regular, 21st-century living. The case will return to the Ninth Circuit, the same court that already held that Nike and Converse must face workers’ claims that they should receive payment for time spent in post-shift bag searches.

If you need to discuss employment law violations or if you need to file an off-the-clock work lawsuit, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

Siemens Mobility Sued Over Alleged Missed Breaks and Wage Issues

Siemens Mobility is currently facing a potential class-action lawsuit after one of their material handlers, Dewitt Nunery, sued to allege wage issues, skipped lunch and rest periods, and inaccurate wage statements.

Plaintiff Claims He Was Required to Work Through Breaks:

The plaintiff in the case is a Siemens Mobility warehouse worker and material handler with an hourly pay rate of $16.37. Nunery claims Siemens required him to work through breaks at the Sacramento County train factory. Nunery claims that in addition to not getting a chance to take his breaks, he was not offered accurate overtime payment for missed break time.

Skipping “Paid” Breaks Should Add Time to the End of the Shift

Since rest breaks are "paid time," skipping rest breaks during a work shift should add that time to the end of the shift, but Nunery claims it wasn't. Still working at the train factory, Nunery alleges the company pressured him to work over seven days consecutively without overtime pay. Siemens train factory has been growing significantly throughout the last several years, with numerous large orders coming in from throughout the United States and Canada. The factory fulfills orders for trains, train sets, and light rail vehicles.

Seeking Legal Help to Resolve an Employment Law Violation:

Originally, Acara Solutions Inc., a staffing agency based out of New York, placed Nunery at the Siemens train factory. Later he worked for Siemens directly. Nunery claims he experienced the same payment issues and employment law violations under both Acara Solutions Inc. and Siemens. Nunery seeks penalties under the Private Attorneys General Act and seeks class-action for others in similar situations at the company. Nunery's attorney filed a notice of violations of the California Labor Code in October. In December, they filed a civil suit in Sacramento County Superior Court. Effective February 10, 2020, the case was moved from Sacramento County court to the U.S. District Court for the Eastern District of California.

The Suit Alleges Numerous Employment Law Violations:

Nunery's suit alleges meal break violations, rest break violations, minimum wage violations, and overtime pay violations. Nunery also claims that the company failed to provide accurate and itemized wage statements and failed to provide Nunery with a day off for seven consecutive days on the job.

The Siemens factory, located just south of Sacramento, is the third largest manufacturer in the region employing 1,500 workers.

If you need to talk to someone about violations in the workplace or if you need to file an overtime pay lawsuit, get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.