New Trend in Employment Law: Unpaid Intern Class Action Suits on the Rise

A New York federal judge, U.S. District Judge Paul G. Gardephe, recently certified a class of approx. 3,000 Warner Music Group Corp. interns claiming misclassification as exempt from minimum wage and overtime requirements. The case is based on a violation of the Fair Labor Standard Act and depends on the allegation that the plaintiffs performed the same tasks as nonexempt employees. Plaintiffs were uncompensated interns working in a variety of Warner Music Group Corp. departments (radio promotions, product development, artists and repertoire, etc.)

Unpaid intern class action lawsuits such as this are a growing trend in wage and hour litigation. Plaintiffs are unpaid interns simply suing for pay under the Federal Fair Labor Standards Act or FLSA. Recent filings by unpaid interns have made allegations against a number of large corporations including: Hearst Corp., Fox Searchlight Inc., the “Charlie Rose” show, etc. In one instance, an intern who was paid a stipend filed a class action lawsuit alleging that the stipend he received was insufficient according to wage and labor laws. When the amount of the stipend was compared to the amount he would have earned for hours worked at federal minimum wage, the number fell short of minimum standards set up by the FLSA as well as New York state law.

Interns are historically underpaid (or not paid) and overworked. The current trend in unpaid intern class action lawsuits seems to indicate that this “accepted practice” may be going out of style.

For more information on identifying whether or not your internship violates wage and hour laws, contact an expert at Blumenthal, Nordrehaug & Bhowmik. 

David Weil: Department of Labor’s New Wage and Hour Head

The Senate confirmed business school professor, David Weil, as the head of the US Department of Labor’s Wage and Hour Division on Monday, April 28, 2014 in a 51-42 Senate vote. Some regard the appointment as long overdue as President Barack Obama’s first two nominees did not make it through the process. David Weil is a professor for Boston University’s School of Management. He also serves as a co-director for Harvard Kennedy School’s Transparency Policy Project.

While David Weil was President Barack Obama’s third nomination for head of the Wage and Hour Division, he was the first to make it through the process and become the Senate-approved administrator. As such, David Weil will be responsible for enforcing the Fair Labor Standards Act and the Family and Medical Leave Act as well as other laws. Lorelie Boylan, President Obama’s first nominee withdrew her name as a result of Republican opposition. The White House pulled the second nominee, Leon Rodriguez, from consideration.

At a Senate HELP Committee on December 10, 2013, Weil stated that one of his priorities would be to make sure that employers skirting or disregarding the law don’t gain an unfair advantage over their competition. Mr. Weil intends to expand the legal liability of companies who employ subcontractors. The issue of liability of holding companies for their franchisees’ wage and hour violations has also been discussed. It can be argued that holding companies (like 7-11 and Subway) that have thousands of franchises to which they dictate the smallest details of day to day functionality (use of certain ingredients, particular menus, employee dress code/uniforms, etc.) should be held more accountable (and liable) for violations due to their intense involvement in day to day franchise activities and policies.

For more information on how David Weil’s priorities as the US Department of Labor’s Wage and Hour Division Head could affect the workplace, get in touch with the experts at Blumenthal, Nordrehaug & Bhowmik today. 

Employer Retaliation and Your Rights

Most people know that there are laws to protect them from harassment and discrimination in the workplace. What many don’t know is that there are also laws to protect them against employer or workplace retaliation. Employers are prohibited from “punishing” or retaliating against employees that make discrimination or harassment complaints, participate in workplace investigations, etc.

Employer retaliation comes in many forms not just the obvious firing or demotion. Employer retaliation can also come in more subtle forms: being denied a raise, being declined for a transfer to a more desirable position or location, being passed over for training or mentoring opportunities, etc.

To put it simply, retaliation is occurring when an employer punishes an employee due to their involvement in a legally protected activity. Retaliation can be defined as any action that negatively affects the employee’s job including: discipline, pay decreases, firing, demotion, reassignment, shift reassignment, etc. In situations where the retaliation is not quite so obvious, the U.S. Supreme Court indicates that the circumstances of the situation must be considered. A certain action, such as job transfer or shift reassignment, may not be an adverse action or employer retaliation in every situation, but in certain situations, for instance, a single parent with young children, something as seemingly harmless as changing their work hours could be deemed retaliation. Any situation in which the action taken by the employer deters a reasonable individual in the situation from making the complaint or cooperating with the investigation, etc. constitutes illegal employer retaliation.

If you need to discuss specifics to determine whether or not you might be the victim of employer retaliation, please call Blumenthal, Nordrehaug & Bhowmik, California employment law specialists, immediately so we can help you determine your legal options.

What are the Protected Classes Under Discrimination Laws?

Many are familiar with the topic of discrimination and would assume they know exactly what the term refers to, but it’s not as easily defined as many think. An employer may dislike an employee. They might feel his or her personality is grating or disruptive to the team efforts and they may, as a result of their dislike, treat that employee differently. You might even say they treat that employee unfairly. Is that enough evidence for a discrimination claim? It may not be. In order to file a valid discrimination claim, the Equal Employment Opportunity Commission (EEOC) needs to see that the discrimination falls within pre-determined categories or protected classes.

The way the courts determine protected groups under discrimination laws today was heavily influenced by the Civil Rights Act of 1964. It prevents discrimination in educational environments as well as public workplaces. Under the Civil Rights Act of 1964, an individual cannot be discriminated against for: age, pregnancy, national origin, race, ethnic background, religion, or sexual orientation.

There are common forms of discrimination that fall under the umbrella of protection held by the EEOC that are easily recognizable:

1. 1.       Discrimination against workers due to their national origin, heritage or country of original citizenship.
2. 2.       Being required to speak English in the workplace (this may only be enforced if speaking English is a requirement to effectively perform job duties in the workplace).
3. 3.       Discrimination against an employee because of a foreign accent.
4. 4.       Hostile workplace environments created by “teasing” or offensive comments or actions aimed at employees due to their sexual orientation.
5. 5.       Employees that are fired due to their sexual orientation have also been victims of discrimination in form of wrongful termination.

If you feel that you need to further discuss any of these issues, please get in touch with Blumenthal, Nordrehaug & Bhowmik. We’d be happy to help you determine what action is necessary to right the situation. 

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.