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.

Petaluma Poultry Facing Lawsuit

The Petaluma Poultry lawsuit seeks class action status. The lawsuit was filed against Petaluma Poultry and its parent company based on allegations the company violated a number of different wage and labor laws throughout the previous four years of their business practices.

The original complaint was filed June 9, 2017 in Sonoma County Superior Court on behalf of employees, both former and current, asserting that they were not paid overtime wages. Plaintiffs assert that the company, Petaluma Poultry, failed to pay overtime and compensate their workforce for the time they spent changing out of protective gear when their shifts were completed. Additional claims allege that the poultry company did not provide their employees with the required 30-minute meal breaks. They also claim that when required meal breaks were missed (or not provided) that the company did not provide the employees with compensation.

Each individual violation can be considered “small” on its own. But when taken as a whole and applied across the entire population of Petaluma Poultry workers, they had a significant effect over time. Plaintiffs’ legal counsel notes that this is the exact situation that is well suited for class action procedure.

The original complaint was filed on behalf of Angelica Gutierrez. Gutierrez worked in Petaluma’s production department at the processing plant from 2011 through 2016. During that time, 200 or more workers may have been impacted by the alleged violations.

The lawsuit seeks unpaid compensation on behalf of employees who worked overtime and missed meal breaks, etc. It also seeks penalties, damages and attorneys’ fees as is standard. The plaintiff brought the suit against the poultry company in order to protect her rights as an employee as well as to protect the rights of her co-workers in accordance with the California labor code.

In addition to Petaluma Poultry, the lawsuit also names Delaware-based Coleman Natural Foods and Maryland-based Perdue Foods, owner of both Petaluma and Coleman. The spokesman for the companies declined to comment, as litigation is pending. Although the spokesman did reference Perdue Foods’ statement on wages and working conditions posted on the company website.

The statement posted on the company’s website reads, “We continue to comply with all applicable wage and hour laws and regulations, including those related to minimum wage, overtime compensation, piece rates, and any/all legally mandated benefits. Further we ensure all associates work within the limits of regular and overtime hours. Where overtime is required, those associates are normally granted at least one day off in every seven-day period.”

There are 563 workers employed by Petaluma Poultry. The majority of the workers are hourly and unionized.

If you have trouble obtaining your overtime compensation or if you work overtime without receiving overtime compensation, please get in touch with one of the experienced California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.

Lamar Dawson’s Lawsuit Against the NCAA, Pac-12 is Dismissed

Lamar Dawson, ex-USC football player, filed a California lawsuit against the NCAA and Pac-12 that was dismissed earlier this month by a federal judge, Judge Richard Seeborg. Dawson’s class action was filed in September 2016 seeking minimum wage and overtime pay as well as additional compensation as a result of alleged NCAA and Pac-12 Fair Labor Standards Act and California Labor Code violations.

Lamar Dawson started out at USC as a linebacker his freshman year in 2011, but was injured. His injuries disrupted his football career and he lost his shot at the NFL – mostly due to a torn ACL that occurred in 2013. He redshirted in 2014 and played in 8 games throughout the 2015 season, finishing with 31 tackles.

This decision to dismiss was reminiscent of a similar case last year involving former track and field athletes from the University of Pennsylvania. The three-judge panel in the 7th U.S. Circuit Court of Appeals in that case ruled former student-athletes at NCAA Division I schools are not technically considered employees under the rules set down by the Fair Labor Standards Act.

Dawson contended during the course of the case that his specific situation was different than the case of University of Pennsylvania’s track and field athletes because football is a revenue-generating sport (in comparison to track). The judge ruled that revenue generation as a determination of employment status is not supported legally. Seeborg set aside the policy question of how Division I FBS college football players should be compensated for what he considered a more fundamental issue determining the direction of the case and his eventual ruling: legal basis for finding them employees under the FLSA. He found none.

The NCAA and Pac-12 were not surprised by the ruling. Both had previously stated similar opinions regarding the validity of Dawson’s claim dating back to the original filing. The NCAA is pleased with the outcome and reiterated their stance that there is no legal support for college athletics participation constituting “employment” with the university. They went on to specify that playing college sports is an opportunity for students to obtain a quality education and build skills that prepare them for educational success at the college level. They concluded their thoughts on the matter by regretting the wasted funds and resources that are spent on cases such as this that will eventually be dismissed. The Pac-12 was also pleased with the ruling finding that it reaffirmed their conviction that college athletes are students – not employees.

If you have questions regarding employment status or whether or not you are misclassified on the job, please get in touch with one of the experienced California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.

Minimum Wage Lawsuit Vs. California Club Filed by Exotic Dancers

Two former exotic dancers out of San Francisco recently joined the growing ranks of dancers who are pursuing litigation against California clubs allegedly in violation of labor law. Elena Pera and Sarah Murphy filed their California minimum wage lawsuit on January 11, 2017 listing S.A.W. Entertainment LTD as the defendant in the case. In this case, the company, doing business as Condor Gentleman’s Club, allegedly filed to provide legal minimum wage to exotic dancers as a result of misclassification as independent contractors rather than employees.

Pera and Murphy seek damages and restitution on behalf of themselves and other exotic dancers in similar positions. The plaintiffs filed the minimum wage lawsuit in the U.S. District Court for the Northern District of California. Legal counsel involved in the case stated that dozens of cases have been handled with similar claims and circumstances in the last four years, that there is currently a nationwide push for this type of case, and that virtually ever court that has decided similar cases held that the exotic dancers were employees – not independent contractors.

2011: Courts handed down a decision favoring a group of exotic dancers out of Georgia claiming they should be classified as employees and not independent contractors (Clincy v. Galardi South Enterprises operating as Club Onyx). This ruling was designated as a “road map” for cases involving dancers and clubs. It included a number of definitions of factors determining if a worker is, in fact, an employee in accordance with the Fair Labor Standards Act (FLSA).

Legal trends indicate that the law will support the argument that the girls are employees rather than independent contactors. Categorization as employees would entitle them to minimum wage, overtime payment, and liquidated damages due to the misclassification.

Due to the legal trend, more dancers are coming forward with lawsuits against their clubs and dancing establishments across the country mainly citing misclassification as well as other general labor-law violations.

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

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.