Warehouse Wage Theft Case Results in $21 Million Settlement

Walmart and their most prominent import distribution subcontractor, Schneider Logistics, Inc. will pay an historic $21 million settlement for wage and hour violations (federal and state level) in connection to case Carrillo vs. Schneider Logistics et al. Violations were committed at a warehouse facility in Riverside County, California. According to the terms of the settlement, Schneider is to pay the full settlement awarded for unpaid wages as well as interest and penalties for multiple wage and hour violations that occurred over the process of a decade. The facility was dedicated to Walmart operations, but the settlement agreement doesn’t indicate whether or not Walmart will be contributing to the settlement payment as a part of a behind the scenes agreement. Walmart did receive a complete release alongside Schneider in the settlement.

The settlement will go to over 1800 workers employed between 2001 and 2013 at three different distribution centers in Mira Loma, California. All three facilities were dedicated 100% to Walmart distribution. Together, the three facilities function as the largest Walmart distribution center in the western United States.

Allegations made in the suit included major wage theft over the course of 10 years against “lumpers.” Lumpers are workers who are paid to load and unload boxes by hand from shipment containers arriving on site onto trailers waiting to be loaded for Walmart delivery. Workers often worked double shifts (meaning 16 hours/day), seven days per week. There were no mandated, required breaks and no overtime premiums. The work they completed was often done for wages lower than the federally mandated minimum wage. Payment rates were based on an elaborate piece rate system that was changed quickly after the suit was filed in November 2011. (It was found to be illegal).

For additional information on wage and hour violations and how to identify them in the workplace, contact Blumenthal, Nordrehaug & Bhowmik, the wage and hour theft experts. 

Workers are Filing Wage and Hour Lawsuits at a Record Pace

Experts are noting that federal wage and hour lawsuits were filed at record rates throughout 2013-2014. (According to data collected by the Washington-based Federal Judicial Center, the education and research agency for the federal court system).

While the full range of data is extensive, there are some interesting pieces of information included in the analysis that can provide a clear summary of recent filing activity related to wage and hour allegations:

8,126 federal wage and hour lawsuits were filed between the dates of 4/1/13 and 3/31/14.

This was almost a 5% increase in comparison to the year previous in which only 7,764 cases were filed

Since the year 2000, the number of cases has risen 438%

Many experts predict that the wage and hour litigation epidemic will continue and even expand in the upcoming year. The rise in the number of cases is shocking, but doesn’t even take into account the number of suits filed in state courts regarding state pay practices. The number of cases is expected to continue to accelerate in the coming months as a result of multiple factors: the tightening of federally mandated standards for class certification, the possibility of an increased minimum wage, the President’s directive to the Secretary of Labor to complete revisions for regulations on white-collar exemptions, etc.

Wage and hour issues are a common problem in many workplaces. If you feel pressured to work more hours than you are paid for or if you feel that your pay is inadequate in relation to the federal wage and hour standards, get in touch with the experienced attorneys at Blumenthal, Nordrehaug & Bhowmik. 

Former Goodwill Manager Files Wrongful Termination Suit

Pamela Dietz, former human resources manager for Goodwill Industries in Lorain County recently filed a lawsuit against the agency. She claims wrongful termination after being fired for investigating a suspected theft scheme within the organization. Dietz filed the suit in Lorain County Common Please Court. The suit is detailed, spelling out her discovery of the theft she alleges was occurring as well as the attempts made by Goodwill Industries to cover up the problem. Dietz was employed from Feb. 18, 2013 through October 2013 when CEO Steve Greenwell fired her.

The second defendant named in the suit is Jack Arbogast. He is described in the lawsuit as the director of donated goods. Dietz is seeking compensatory and punitive damages for emotional stress as well as lost wages. The alleged theft scheme is described in the suit. Items donated to Goodwill were resold by Arbogast, a Goodwill employee, and the employee’s husband. The sales were handled through the eBay auction website. Dietz claims she discovered the theft scheme through another employee coming to her with the information in September 2013. Larry Abetya came to her with the request for time off due to “stress and anxiety” in connection with his personal relationship with Arbogast. Abetya advised Dietz that Arbogast took a 1994 Geo Prism from Goodwill and gave it to Abetya. Abetya was involved in a car accident in the Prism in April 2013. The suit alleges that Arbogast regularly took donated goods from Goodwill (i.e. cars, speakers, a boat, a pool table, etc.) There were multiple accounts set up on eBay to sell the items stolen from Goodwill’s donated goods.

Dietz was out of a job by the end of October 2013.

If you are the victim of wrongful termination the experts at Blumenthal, Nordrehaug & Bhowmik can help you. Call us today.

Accusations of Labor Violations at TGI Friday’s

One of the nation’s most popular casual dining spots has been named in a class action lawsuit. TGI Friday’s is accused in the suit of systematically underpaying its tipped employees. Allegations made within the suit filed on April 17, 2014 in New York Federal Court include: TGI Friday’s requires that tipped workers are at work early and say late after closing without minimum wage compensation and/or overtime pay. The suit was filed by four former employees of TGI Friday’s in the New York metro area and Fredericksburg, Virginia. Plaintiffs also indicate that the restaurant management utilized a central time-keeping system that allowed them to cut hours from employee time records – requiring employees to work off the clock doing prep work and clean up before and after their shifts/restaurant hours.

No one has indicated a specific dollar amount for this lawsuit, but speculation puts it in the millions. Allegations of violations of the Federal Fair Standards Act and the New York Law were made against TGI Friday’s and Carlson Restaurants (its parent company).

TGI Friday’s has approximately 540 domestic locations and 17,700 US employees. The suit represents all current and former workers: servers, bartenders, hosts, bussers and any other “tipped” workers at the chain.

Workers are seeking recovery of minimum wages as well as overtime pay, misappropriated tips, unlawful deductions, etc.

Many employers are attempting to maximize profit by minimizing employee costs. If you are being underpaid for hours worked, get in touch with an expert wage and hour attorney at Blumenthal, Nordrehaug & Bhowmik. 

Beau Biden Named in Unpaid Overtime Suit

Three detectives (R. Durnan, G. Christian, and M. Forbes) previously employed by the Delaware Attorney General’s Office have filed charges against their former employer claiming that they were not paid overtime. The federal lawsuit claims that the failure to pay overtime was in violation of federal labor laws and that in response to their demands for overtime pay they were demoted.

The detectives named Delaware Attorney General Beau Biden, Timothy Mullaney (his chief of staff) and the Delaware Department of Justice as defendants. The civil action was filed in U.S. District Court earlier this week.

Christian retired earlier this year and Durnan is set to retire in May 2014. The three were titled “detectives,” but their job duties were almost entirely made up of one task – handling the out-of-state extradition of fugitives who fled the state. The detectives allege that they all worked in excess of 40 hours/week between November 2010 and November 2013, but were never paid overtime due. According to the allegations made in the suit, Mullaney’s response to the detective’s request for overtime compensation was to reassign Durnan and Forbes to different assignments and to leave Christian in his position at a limited capacity with no overnight travel, no flying and a maximum of 37.5 hours allowed per week. The detectives claim the reassignments were retaliation. The plaintiffs seek overtime pay due, reassignment to their old positions, damages and legal fees.

Talk to the experts at Blumenthal, Nordrehaug & Bhowmik to find out if you have cause to worry about your own situation. Are you getting the overtime pay you are due? 

Starbucks Agreed to Pay up to $3M Settlement for Mileage Reimbursement Suit

An agreement is in place for Starbucks to pay up to $3 million to settle the lawsuit based on allegations that the popular coffee house did not reimburse named California employees for mileage related expenses incurred while on the job. Employers who typically incur mileage expenses while on the job include: store managers, assistant managers, and shift supervisors. These employees working at Starbucks stores located in California employed from March 2003 through March 2008 are eligible for payments of $30-75 each.

Attorney’s fees are included in the $3 million settlement as well as an undisclosed amount given to the representative plaintiff as an incentive award and a payment to the California Labor and Workforce Development Agency of $25,000.

In the documentation, Starbucks agreed to class-action status for settlement purposes along – they do not accept liability. Within the settlement paperwork it was agreed that the plaintiff and plaintiff’s attorneys are not to respond to questions from the media. The only exception is to allow them to refer to court documents on file. Jonelle Lewis filed the lawsuit in March 2007. She had worked at Starbucks since December of 2005. She resigned within one month of filing the lawsuit. The lawsuit filed by Lewis claimed that she consistently used her personal vehicle for work purposes (i.e. bank deposits, obtaining supplies, etc.) She also claimed that she attempted to request reimbursement for the mileage, but that Starbucks’ response was not to reimburse as a matter of “policy.”

If you feel you that company “policy” in your workplace is conflicting with your rights as outlined in employment law, get in touch with the experts at Blumenthal, Nordrehaug & Bhowmik.

Arguing the Professional Exemption

The Obama administration recently took a closer look at the Professional Exemption. Their scrutiny was followed by instructions to the Department of Labor to narrow the definition of the exemption. Changes are set to take effect in 2015, but Courts may begin utilizing the new definitions and strictures immediately if recent activity is any indication. 

Court cases that involve the proper classification of employees are generally the most contentious. This makes sense as the stakes are higher than cases involving potential repayment of back wages and/or penalties for overtime. They can also require complete reclassification of employees listed in the case with overtime required from that point forward. In proper classification cases, a ruling against the employer often means a complete change in the way the company runs their business.

Many employers have been cutting corners to save money on overtime. Some say it’s due to the Labor Code coming across as complex. But it’s more likely a combination of complexity allowing for loose interpretations/purposeful misinterpretations embraced during low cash flow points in a troubled economy. Employers feel they need to save the money and many are deciding to do whatever they can (legal or not) to save money on overtime costs.

A recent case involving day rate employees being classified under the labor code as professionals exempt from overtime pay seems to support the idea that the courts will consider changes to the Professional Exemption now rather than waiting until 2015. Workers in the recent case were working 12-hour shifts, sometimes 7 days a week leaving them totaling in excess of 84 hours some weeks. Their work was compensated by a day rate. Some weeks their total pay (if they worked only a couple days) was less than $455/week. Legal representation for the plaintiffs in the case argued that claiming an employee is a salaried professional, but paying them less than $455/week some weeks does not meet the requirements of the Professional Exemption’s first prong.

The case was concluded on March 27, 2014. The Federal Middle District of Pennsylvania court clerk recorded judgment for wage and hour violations in the case (3:14-cv-00042-RDM). Allegations accused the employer of failing to pay workers overtime for their hours that exceeded the full time 40. The court supported the claims. We can most likely expect to see more decisions leaning towards the new understanding of the Professional Exemption.

If you feel that you may be due past overtime or know someone who is in an untenable work environment, get in touch with the experts at Blumenthal, Nordrehaug & Bhowmik today.