Employees Claim California Nail Salon Regularly Stole Wages

A recent lawsuit claims that nail salon owners make a habit of mistreating their employees; specifically the suit claims that nail salons are stealing their employee’s wages. The suit was filed by four nail salon employees: Tuyet Mai Nguyen, Thu Hang Pham, Jenny Hoang, and Trinh Truong. The women sued the Tustin Nailspa in Orange, California claiming the company withheld their wages, deducted money from their paychecks for the use of salon supplies and equipment, and other labor code violations.

The plaintiffs have been employed at Tustin Nailspa for the last ten years. Over that course of time, the salon has had several different owners. The women claim the problems started when additional chairs were added in 2005. The owners wanted to recoup their investment and see the increased profits more quickly so they allegedly took it out on the employees. The employees’ hours were allegedly increased, they were underpaid, not compensated for overtime worked, forced to skip lunch, and did not receive any type of extra compensation for their additional work.

Tustin Nailspa has faced lawsuits before. In 2013, a former employee sued citing similar allegations. In response, an investigation was opened into the salon by the California Department of Industrial Relations, a Division of Labor Standard Enforcement. The investigation resulted in $28,000 in fines against the salon owners.

Allegations in the current suit were made against multiple owners as the malpractices are claimed to have spanned a time period during which ownership changed hands. Plaintiffs are seeking recompense from both current and former owners involved in the alleged violations. The owners, through legal representation have denied the allegations and claim the plaintiffs are simply disgruntled former employees.

The plaintiffs have experienced some trouble in their attempts to get the case to court. Their first attorney was removed due to a conflict and their second attorney was not fluent in Vietnamese so the women struggled to communicate their needs. The case is generating awareness of the challenges faced by immigrants attempting to navigate the American legal system as well as the potential for mistreatment of employees in nail salons across the country.

If you have questions about filing a lawsuit, California labor law or how to obtain overtime compensation, please get in touch with one of the experienced southern California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.

$16 Million PNC Settlement to Settle Wage Suit

In response to a collection of Fair Labor Standards Act claims alleged by a group of mortgage loan officers, PNC Bank NA has agreed to offer a $16 million settlement. Plaintiffs in the wage suit claimed that the company denied them overtime wages and proper commission payments. 17 PNC BANK mortgage loan officers, some former and some currently employed, brought the collective action. The loan officers claim that PNC used an improper process for the calculation of commissions and that the company did not allow the employees to report overtime hours even though work in addition to what would be recognized as full time was required of them to fulfill their job duties.

According to the documentation, the settlement agreement will apply to mortgage loan officers employed by PNC in California from August 7th, 2011 through January 4th, 2017, New York from April 4th, 2011 through January 4th, 2017 and any other state from August 7th, 2012 through January 4th, 2017. PNC also noted that the settlement agreement is not an admission of liability or damages, but a move to avoid the burdens of further litigation.

Key Developments in the Case:

December: It was recommended that plaintiffs’ motion for class certification regarding commission recapture claims be granted.

Mid-November: Plaintiffs’ motion to strike PNC’s exemption defense was granted. The motion argued that former employees were exempt according to FLSA.

November: Conditional certification of the collective action was granted by Judge Schwab due to indications of uniform, nationwide employment policies in place at PNC.

The lawsuit alleged that during the hiring process, the company offered a salary of $24,000 per year based on a 40-hour workweek. Once hired, many of the officers worked more than 40 hours in a week and sometimes took work home with them in order to “catch up.” The “overtime” was allegedly not compensated. The workers allege that PNC offered bonuses to managers who refused, reduced or prevented workers from accurately reporting their overtime hours. In fact, it is alleged that the Branch Managers’ own pay was reduced in direct relation to the amount of overtime wages that was paid out to mortgage loan officers at the branch.

Plaintiffs also claimed that PNC did not accurately track and record the hours worked by mortgage loan officers, mortgage loan officers were not compensated for all the hours they worked, the company did not accurately calculate overtime (by NOT applying a “weighted average” including salaries, commissions, etc.), that PNC illegally deducted overtime pay from commissions, and that PNC was in violation of minimum wage requirements.

If you have questions about minimum wage requirements, or the calculation of overtime pay in compliance with California Labor Law, please get in touch with one of the experienced southern California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik. 

Halliburton Bid to Dismiss Claims Made in Wage Suit

A former employee of Halliburton Energy Services, Inc. (an oil and gas provider out of California) filed a proposed class action lawsuit alleging wage violations (Guerrero v. Halliburton Energy Services Inc. et al., case number 1:16-cv-01300, in the U.S. District Court for the Eastern District of California.) In response to Halliburton Energy Services’ request for dismissal of the amended complaint, the Plaintiff accused the energy giant of copying bids for dismissal in other cases with similarities to the current suit.

The company’s bid to dismiss Geurrero’s claim came last month after an amended complaint was filed. U.S. Chief District Judge Lawrence J. O’Neill permitted the amended filing when the judge dismissed the suit that includes allegations of California labor law violations due to a failure to provide rest breaks and pay wages for all hours worked, etc. The plaintiff responded to the dismissal bid submitted by Halliburton by pointing out that the dismissal motion filed was almost identical to that filed in every case with similar claims that Guerrero listed in his first amended complaint.

Guerrero claims that his former employer has no evidentiary support or analysis for claims that Guerrero and the putative class are exempt from California’s overtime laws. Allegations Halliburton faces in the suit include claims that Halliburton policy requires workers to work through meal periods, the company fails to comply with California labor law by providing employees with first meal periods within the first five hours of a work shift, claims for missed rest periods, etc.

Halliburton insists that Guerrero’s overtime claims included in the amended complaint are not legally supported because his hours were regulated by the U.S. Department of Transportation and this makes him exempt from overtime eligibility. The company also insists that Guerrero failed to provide factual support for claims that the company denied him legally compliant meal and rest periods. Halliburton also urged the court to strike Guerrero’s allegations regarding their alleged failure to maintain accurate records in violation of California Industrial Welfare Commission’s Wage Orders due to irrelevance since Guerrero cannot allege a viable claim for the violation.

Guerrero’s proposed class action includes allegations that he worked as a nonexempt truck driver as well as industrial worker for Halliburton, but failed to receive proper compensation in accordance with employment law. The suit was first filed in state court, but was later moved to federal court.

Halliburton’s responding dismissal bid claimed Guerrero’s lawsuit failed as a matter of law as there were no alleged facts included as support of a cognizable legal theory and because the various claims included were riddled with substantive defects that left too many questions. Judge O’Neill was inclined to agree and on November 2nd, 2016, he did so officially – stating that facts were missing from the complaint, specifically noting the need for dates as to when the alleged failures to pay straight time and overtime wages occurred. He also agreed with Halliburton that Guerrero failed to satisfy the requirements of Rule 9 in claims that the company failed to pay wages at the time of his termination.

If you have questions regarding overtime or overtime wage calculation, please get in touch with one of the experienced southern California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik. 

Time Warner Cable Allegedly Misclassified California Installation Techs

California installation techs involved in a suit against Time Warner Cable won collective action certification and partial class certification in California federal court. Plaintiffs allege Time Warner Cable misclassified California installation techs as contract workers to avoid paying overtime wages and provide benefits. California District Judge Beverly Reid O’Connell rules that the installation techs (employed by Multi Cable, Inc. under a partnership with Time Warner Cable) were eligible for class certification for claims that they were paid as “faux independent contractors” from 2011 through 2015. 

The class in this case is represented by Luis Luviano, installation technician. As a group, the class claims that Time Warner Cable and MCI (California company contractually obligated to supply IT services for the cable company), regularly required techs to work overtime without appropriate overtime pay. Employees were also allegedly required to purchase tools and equipment without reimbursement due to erroneous classification as contract workers. The classification was in spite of control over duties and job completion exercised by the company that was allegedly indicative of an employee/employer relationship.

The technicians in the class described control exercised over them as “contractors” to include every aspect of the job from mandatory uniforms to the hours worked to the tools and materials used for the job to decals applied on workers’ vehicles. IT workers also allege that the compensation scheme used by the company was unnecessarily complicated with pay based on both the number of installations completed and the customer satisfaction ratings received based on their performance. Techs claim that the pay system resulted in an inability to predict how much pay they could expect to receive for their work as well as making it close to impossible to verify the accuracy of pay received.

Time Warner Cable attempted to argue against the validity of the suit claiming that workers making allegations failed to establish that there was, in fact, a co-employer relationship between Time Warner and MCI, but the judge ruled that there was sufficient cause to merit further argument at trial.

Both companies involved (Time Warner and MCI) attempted to quash class certification claiming that Luviano was not a reliable representative. The companies claimed that Luviano obtained his position using a false name and social security number and that he lied about his arrest record during his application process and during depositions. O’Connell ruled that Luviano could represent the class, but allowed it on the condition that a replacement be named in the event he was eventually disqualified. The matter does raise well founded credibility issues, and could negatively impact the chances of the class prevailing on its claims, but the court does not find that one plaintiff’s (even if he is the class representative) inadequacy renders the representation as a whole inadequate as one inadequate representative plaintiff is replaceable.

If you have questions regarding misclassification or if you feel you have been misclassified in order to denied overtime pay or benefits, please contact one of the experienced southern California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik. 

Augustus v. ABM Security Services: On Duty Rest Breaks Rejected

In the midst of the holidays, the California Supreme Court issued a decision in Augustus v. ABM Security Services, Inc. stating that the law does not allow employers to require their employees to utilize on-duty or on-call rest breaks. The impact of this decision will likely impact thousands of California employment centers with similar policies, particularly in security, hospitality, and retail industries.

California’s Industrial Welfare Commission’s industry-specific Wage Orders require employers in the state to allow non-exempt employees to take a 10 minute rest break for each four hour work period. The law also indicates specifically that the 10 minutes should be consecutive and that, when possible, the break should occur in the middle of the shift. In Augustus v. ABM Security Services, Inc. the question was whether or not this requirement was fulfilled if the “rest break” was on-duty or on-call.

This particular case was based on plaintiffs’ complaints that they were non-exempt security guards working for the company, ABM Security Services, Inc. (ABM) at a variety of work sites (i.e. residential, commercial, retail, office, industrial, etc.) throughout the state of California, and their principal duties providing immediate response to emergency and/or life threatening situations and physical security on site required that they keep their pagers and radios on. There was no exception to the rule for rest breaks. As part of their job duties, security guards were required to keep pagers and radios on during rest breaks and stay vigilant and respond to any calls that occurred regardless of their rest break schedule.

ABM’s policy was based on the urgency or time-sensitive nature of some of the clients’ needs pertaining to the on site security guards in a number of different circumstances. Some such situations included: building tenant who wanted a security escort to the parking lot, the manager of a building that needed notification of a mechanical issue on site, and various “emergencies.”

Security guards working for ABM saw this as a violation of labor law and filed suit complaining that ABM failed to provide employees with compliant rest breaks. The plaintiffs were granted summary judgment and awarded approximately $90 million by the trial court, but the Court of Appeal reversed the decision.

The case presented two issues to be considered by the Supreme Court:

1.     Are employers required to allow employees to take “off-duty” rest breaks?

2.     Can employers require employees to remain “on-call” during rest breaks?

After considering the issue, the California Supreme Court came to a decision. They first noted that California law did not explicitly require employers to provide “off-duty” rest breaks, but they also took into consideration the plain meaning of the word “rest” and other language included in the Wage Order and Labor Code. When they concluded that rest breaks need to be off-duty they noted that California Labor Code section 226.7 prohibits employers from requiring any employee to work during any meal or rest period and that the relevant Wage Order’s wording indicated that rest breaks needed to be considered time worked. The court decided that the language indicating that “rest breaks” be counted as “work time” would not be necessary unless it was the intention of the law for rest breaks to be off-duty. ABM attempted to sway the court’s decision in their favor by pointing to language in the Wage Order discussing the possibility for employers (on rare occasion) to require employees to take on-duty meal breaks. Their argument did not hold as the Court’s opinion was that the absence of language authorizing the same for on-duty rest breaks was more telling than the existence of the exception made for meal breaks. The Court held that rest breaks must be off-duty.

The Court also had to consider whether employers could comply with requirements to provide employees with breaks while also keeping them “on call” during the break. ABM argued that there was a difference between an employer requiring that an employee keep working throughout their rest break and an employer requiring that the employee remain on call. The Court did not agree and noted that the practical realities of a 10-minute rest period must be considered. The time limitation alone already restricted the employees’ options regarding what they could do on break. The Court felt any additional limitations (i.e. requirements for pagers or phones or availability on site, etc.) were not in accordance with the intention of the law to offer employees a small period of “freedom” from the job for rest and to use for their own purposes. Based on these arguments, the Court held that on-call rest breaks were not compliant with the law. 

The Augustus decision will have a significant impact on California employers who utilize on-duty or on-call rest breaks in order to maximize staff productivity and accommodate single-employee shifts. Employers who are unable to comply with the rest break requirement to relieve employees of all duties may have to pay rest break premiums as an alternative. If you have questions regarding how the Augustus decision could affect you, please get in touch with the experienced southern California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.

Chinese Toy Factory Cut Off by Disney for Alleged Labor Violations

Walt Disney Co. recently halted all business dealings with a Chinese toymaker and warned another of pending similar action due to reports of labor violations.  

As the world’s largest entertainment company, Burbank-based Disney felt it was important enough to post a memo on their website stating that it would no longer allow Dongguan Qing Xi Juantiway Plastic Factory to manufacture products that featured Disney characters. Labor violations were flagged by China Labor Watch, which is a New York-based non-profit whose mission is to monitor overseas manufacturing.

The investigation into the practices of Dongguan Qing Xi Juantiway Plastic Factory found that the company failed to remediate hiring and human resources problems that were identified at the facility last year. This was in spite of encouragement from and a contractual obligation to Disney to comply. Disney did not share additional information on their website regarding the specific problems/issues that were identified.

Lam Sun Toy Limited Co. was also noted as failing to meet expectations for accurate record-keeping, health and safety requirements and human resources policies. The Lam Sun company will have a chance to address the issues, but if they do not bring their practices and policies into compliance, Disney plans to discontinue their relationship as well.

Labor standards abroad are a continuing problem for U.S. companies who look to their foreign partners to manufacture goods and products that are then sold around the world. Policing foreign plants is riddled with challenges. In this instance, the challenges of policing a foreign plant are compounded by the sheer size of the Disney company, as they likely license their brands to hundreds of similar foreign vendors who then contract separately with manufacturers. 

Disney continues to maintain their International Labor Standards program (started in 1996) that works with companies and governmental agencies in order to prevent abuse. According to the company’s website, there are 120 people staffed in 12 different countries working to monitor and improve conditions in over 30,000 factories. Approximately 28% of the factories are found in China. Labor violations were listed by China Labor Watch in connection with five Chinese toy plants known to do business with Disney last year (including Dongguan Qing Xi Juantiway Plastic Factory).  A second report was released in June by China Labor Watch indicating that Lam Sun was only hiring women for assembly jobs, lacked of safety equipment and training, and forced overtime work in excess of local limits (90 hours overtime in one month).

If you have questions or concerns on how to handle overtime issues or other employment law violations, please get in touch with one of the experienced southern California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.

Teamsters Object to $27 Million Lyft Deal, but are Rejected

Katie when teamsters’ objected to the proposed $27 million settlement between Lyft and the class of 163,000 California drivers, their objection was rejected by a federal judge. But the same judge also delayed finalizing the proposed deal.

The case has been all over the news and many have heard bits and pieces as the proceedings proceed. To recap, the Uber Lyft Teamsters Ride Share Alliance (known as ULTRA) filed a brief opposing the deal in October. Claims were made that the proposed settlement fails to adequately compensate full-time drivers and also forces workers to waive their right to sue the company due to Fair Labor Standards Act violations. During settlement approval, the U.S. District Judge Vince Chhabria appeared to become frustrated when the objecting attorney did not provide specific information supporting his argument that the deal should be rejected. The attorney argued that doubling compensation for individuals who driver 30+ hours per week for Lyft was not adequate because that would leave part-time drivers with a fairly high compensation for their work in comparison to full-time drivers. Yet could not tell the judge what he suggested an appropriate multiplier should be for full-time workers.

A similar argument occurred when the attorney suggested more data would be necessary in order to come up with such a number and the judge asked what data was necessary only to have the attorney unable to say precisely what data he would need to calculate the needed number.   

Other issues discussed during the proceedings were: the settlement provision shielding Lyft from lawsuits over alleged Fair Labor Standards Act (FLSA) violations and the workers’ right to opt in to waive their rights to sue, the addition of the condition post- Cotter v. Lyft suit, and appropriate (and timely) notification to workers of the settlement terms and their rights to opt out or object to the deal, the inability to access the actual text of the agreement online, and adequate time for class members to object to the motion for attorneys’ fees (13.6% or $3.67 million in fees), objections regarding Lyft policy and procedure being inadequate in the case of a deaf driver,

According to attorney for the plaintiffs in the class action lawsuit against Lyft, 84,000 drivers (or 51% of the class) have filed claims for reimbursement so far. As of mid-November, attorneys estimated that drivers who drove over 2,000 hours for the rideshare service since May 2012 should receive distributions of about $11,000 for vehicle expenses reimbursement and unpaid overtime wages. As part of the settlement, drivers would agree to waive their claims that Lyft misclassified them as independent contractors in order to be denied employment benefits. Drivers may continue to submit claims for a portion of the settlement up until the first distribution is allocated to drivers in the class, which should occur about six months after final approval of the settlement is granted by the judge.

For additional information about overtime pay, overtime pay violations or class action certification, please get in touch with one of the experienced southern California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.