Supreme Court Rules in Favor of Car Dealerships in Overtime Suit

A recent Supreme Court ruling found service advisers at car dealerships to be exempt under federal law from overtime pay requirements – much like car salesmen and mechanics. The ruling came down 5-4 that service advisers are sales people (even though they also fulfill additional duties such as greeting customers, and proposing various repair service, etc.) The ruling will affect more than 18,000 dealerships across the nation that together as a whole employ over 100,000 service advisers alone.

The case involved a Mercedes Benz dealership out of Encino, California and several of their current and former service advisers. Each side in the case interpreted the Fair Labor Standards Act differently…”any salesman…primarily engaged in selling or servicing automobiles” doesn’t have to provided overtime compensation.

The dealership’s arguments were based on their interpretation that the definition of salesman clearly included the service advisers. Their range of duties includes helping to diagnose mechanical issues, preparing price estimates for vehicle repairs, etc. Service advisers argued that they were not included in the definition of “salesman” as intended by the Fair Labor Standards Act.

In a majority opinion, Justice Clarence Thomas wrote that the “ordinary meaning of ‘salesman’ is someone who sells goods or services.” According to this ordinary meaning of the word, service advisers are, in fact, salesmen. Justice Ruth Bader Ginsburg dissented arguing that because the service advisers do not sell or repair vehicles, they should not be exempt from overtime.

The Department of Labor changed its interpretation of the Fair Labor Standards Act in 2011; which led the issue to the high court. For decades prior to the 2011 change, the department operated under the assumption that employers were not required to provide service advisers with overtime compensation.

This decision was the second time the court has ruled on this case. The earlier litigation resulted in the U.S. Court of Appeals for the 9th Circuit ruling that service advisers were entitled to overtime. In 2016, after the death of Justice Antonin Scalia, the overtime question was sidestepped by an eight-member Supreme Court; advising the appeals court to take another look at the case. The appeals court again ruled in favor of service advisers.

The Supreme Court ruling in favor of car dealerships will have affect dealerships and service advisers nationwide.

If you have questions about overtime eligibility or overtime compensation as required by employment law, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Years-Long Fight Between Billionaire Siebel and Former Salesman Receives Jury Verdict

Tech billionaire Thomas Siebel’s legal battle with a former Massachusetts salesman nears an end with jury’s verdict after four years of litigation. The highly contentious and long legal battle resulted in a jury that found Siebel did not owe Gregg Carman, former salesman, additional pay.

The San Jose jury delivered their verdict against former salesman for C3 loT, Gregg Carman. Carman filed suit claiming that he was shortchanged on commissions. The company was able to convince a majority of the jury that Carman did not have a reasonable expectation of receiving additional commissions totaling several hundred thousand dollars. The claim was defeated under “quantum meruit,” a legal theory presented by Siebel’s legal counsel.

Counterclaims the company made against Carman alleging that he misrepresented the nature of deals with a couple utility companies he closed while on the job and actually owed Siebel’s company around $120,000 were also unanimously rejected by the jury. While the jury did agree that Carman was fired either for complaining about his pay or so the company could avoid paying him additional commissions, they did not agree that he had been wrongfully terminated according to California labor law.

Many companies would have quickly settled this type of claim outside of court or in mediation, but Siebel fought the case vigorously after refusing to pay the compromise amount of $360,000 suggested by Carman. In fact, Siebel has a record of aggressively litigating in his defense. His legal representation stated that it was about the principle for Siebel. He does not settle illegitimate claims for compensation.

Under fiscal year 2014, Carman stood to be provided over $1 million in commissions according to the company’s policy. The deals with the two utility companies were actually closed in FY 2015. Carman was not informed of change to the commission policy for FY 2015 until after the deals closed. The policy change left him with approximately ¼ of what he would have received if the deals closed during the previous fiscal year.

The Defendant convinced the jury that this type of policy change (even their retroactive nature) is standard practice in the industry and that Carman, as an experienced salesman in the industry, should have been understood the situation. Wrongful termination damages are trebled under California law so C3 faced a potential $8 million in damages and attorney fees at trial. The plaintiff and his legal representation did not deny the possibility of an appeal.

If you are struggling to get your employer to fulfill agreed upon payment arrangements or if you have been wrongfully terminated, please get in touch with one of the experienced employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

AT&T Faces Sales Representative Overtime Lawsuit

An AT&T/Charter retail store employee, Andrew Prizler, filed a lawsuit (Prizler v. Charter Commc’n, Inc., S.D. Cal., No. 3:18-cv-01724) alleging that his overtime pay was miscalculated because the sales commissions and bonuses were not accurately included in the calculations. 20 of Charter’s appearances in federal court in the past 5 years (3.3%) were for wage and hour cases. For AT&T, it’s 216 cases (10.9%).

When a company calculates an employee’s overtime pay rate, federal law requires that commissions and bonuses be counted in as part of their regular rate of pay. The regular rate of pay is multiplied by one-and-a-half. When an employer does not include amounts that should be included in the “regular rate of pay,” it can significantly decrease their overtime pay rate.

Prizler, the plaintiff, filed suit on July 27th in the U.S. District Court for the Southern District of California. The proposed class action was filed on behalf of all other retail employees with AT&T/Charter who earn commissions and/or bonuses. (The lawsuit also named two Charter subsidiaries: Spectrum and Time Warner Cable).

When asked about the lawsuit, an AT&T spokesperson responded that the defendant was reviewing the complaint and the allegations claimed by the plaintiffs in the case. They also stated that their policy is to always follow the law – including wage and hour laws. Charter did not respond when asked for comments regarding the suit.

If you have questions about overtime pay calculation or if you feel you aren’t being paid the overtime you deserve, please get in touch with one of the experienced employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Southern California Car Wash Company Allegedly Cheated 800 Workers Out of Overtime Pa

A southern California car wash mogul, Vahid David Delrahim, will pay back $4.2 million in back wages and penalties after allegedly cheating 800 workers out of overtime pay and destroying evidence. The decision followed a two-year court battle with federal authorities.

The Los Angeles native failed to provide workers at a dozen different California locations with minimum wage or overtime payment. The car washes were located in Orange, Los Angeles, San Bernardino, and Ventura counties. The consent decree was approved by the U.S. District Court Judge Fernando Olguin ordering Delrahim to pay:

·      $1.9 million in back wages

·      $1.9 million in damages to workers

·      $400,000 in civil penalties

The case is being called a landmark case as it sends a powerful message to employers that the Department of Labor will use powerful law enforcement and litigation tools to protect employees and level the playing field for law-abiding employers. According to the judgment, Delrahim ordered his employees (many of whom are Spanish speakers unfamiliar with U.S. and/or California labor law) to work off the clock at the start of each shift. He also ordered them to clock out when business was slow but remain at the car wash for when business picked back up. This resulted in many hours on site without payment.

The back wages ordered by the court cover a period from 2013 to the present. It’s possible that more workers will be added to the case resulting in more money as the identity of all workers at all 12 car washes is not currently known. Delrahim was told to provide more names, addresses and workplace records within 30 days. The info was originally requested by the prosecutors in the case in 2016. The judgment will result in the employees receiving over $10,000 in back wages.

If you have questions about off the clock work or overtime payment, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Changes to a $2M Settlement Between Costco and Class of Drivers

A California federal judge, U.S. District Judge Cathy Ann Bencivengo, granted preliminary approval after changes to the $2 million settlement between Costco and the proposed class of truck drivers while holding on to lingering concerns about the class counsel’s representation. The class of truck drivers originally alleged they were denied proper meal breaks and overtime pay.

The updated settlement agreement made adjustments to accommodate most of the issues that led to it being denied preliminary approval to the deal twice, but the judge still questioned whether or not the proposed class counsel was acting in the best interest of the drivers and whether or not the $2 million settlement amount/deal was a fair one.

One reason the judge first denied approval to the deal was that members of the class were required to release their FLSA claims. Proposed class counsel William Turley responded that is was okay that the drivers’ FLSA claims were dropped because they were basically worthless. In the updated settlement deal the drivers are split into a Rule 23 class and an FLSA collective that any drivers who wish to can opt in to. The Rule 23 settlement is estimated at $1,320,750. The FLSA settlement is estimated at $146,750. The settlement amounts clearly show that Turley’s argument that the FLSA claims were basically worthless was wrong. This situation led the judge to question Mr. Turley’s motivation for the false statement and the potential that he may have sought to keep the funds himself through an excessive attorney fee request. The judge also questioned Turley’s credibility in identifying the settlement amount as “fair.”

After the judge granted preliminary approval, she made it clear that doing so would not keep her from revisiting the questions she still had about the case during the hearing seeking final approval.

Unpaid overtime is one of the most common concerns in the American workforce. If you have concerns about unpaid overtime or if you are misclassified as exempt, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

$5M Deal to End California Truck Drivers’ Overtime Suit Against PepsiCo

The proposed class of PepsiCo Inc. truck drivers requested preliminary approval from a California federal court for a $5 million settlement that, if approved, would resolve allegations leveled at PepsiCo by the drivers. Allegations against the soda giant include: failure to pay overtime, failure to provide meal and rest breaks, and failure to reimburse business expenses. All the allegations are in violation of both state and federal labor law.

Lead plaintiff, Nathaniel Helton, argued in the motion for preliminary settlement approval that the settlement is both fair and reasonable. If approved, the settlement would mean $1,988 to each of the approximately 1,800 class members who drove for one of the PepsiCo subsidiaries included in the suit.

If the settlement is approved by the court, it would mean an end to the proposed class action that was filed by Helton in state court against PepsiCo. And subsidiaries in early 2017. According to the lawsuit the drivers were required to monitor their vehicles, have their phones with them during meal break and other breaks, and in doing so, the company denied them legally mandated breaks. This also means that the company failed to pay overtime as required by labor law.

The plaintiffs in the case also claim that the company failed to cover business expenses for the truck drivers. For instance, paying for electricity required to charge phones drivers were required to keep on them, and final wages for drivers who were terminated or quit their position.

The Defendant, PepsiCo, denied the allegations. They also removed the lawsuit to federal court in spring of 2017. When the suit was moved to federal court, Helton, the plaintiff, amended the complaint to include additional claims under the FLSA and Private Attorneys General Act. Following two failed attempts at mediation, the parties involved reached a settlement in May. The deal would mean class counsel would receive $1.25 million (25% of the settlement), and no more than $65,000 in expenses. Helton would receive $7,500 as an incentive payment. The settlement also includes a $100,000 payment to resolve the PAGA claim (75% would go to the California Labor and Workforce Development Agency and 25% would go to the class’ fund).

If you have questions about overtime violations or other violations of California labor law, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

$3.9M Settlement Agreed on in Golden Corral Overtime Lawsuit

In recent news, the Golden Corral Corporation has recently agreed to settle a wage and hour lawsuit. The wage and hour lawsuit was filed by Golden Corral workers who alleged that they were denied overtime pay during mandatory training for the company. The company agreed to settle for $3.9 million. This agreement came after the workers alleged the company was in violation of both state and federal labor law when they denied their workers overtime payment when they completed overtime for training.

Originally, the suit alleged that the Defendant, Golden Corral Corp., failed to provide compensation to their assistant managers for company training. Instead, they were given lump sums. The proposed settlement awaits approval from an Ohio federal judge. The proposed settlement would resolve the alleged FLSA violations against Golden Corral. The claimant is also requesting class certification so workers eligible to join the class can choose whether or not to join. This would allow them to choose whether or not to release their claims.

Robert S., the lead plaintiff, filed the proposed class action wage and hour lawsuit in January 2017. He alleged that Golden Corral wrongfully denied him and other workers in his situation overtime for training. The lump sum they were paid instead was distributed for each training week, even though the training hours amounted to more than 40 hours per week the majority of the time.

Businesses are required to pay their non-exempt employees 1.5 times their hourly rate when they work over 40 hours in one week or over 8 hours in one day. This is regulated by federal labor law. In addition to the regulations set down by federal labor law, each state also has labor policies in place to protect employees from this type of workplace abuse. In the Golden Corral case, plaintiffs claim the company wrongfully denied their employees proper compensation for all hours worked, which is in violation of the FLSA as well as state labor law.  In the aftermath of the legal trouble, Golden Corral adjusted their practices, now paying their managers in training an average of between $628.71 to $5,882 per week – amounts which are determined

Golden Corral reportedly has already changed its ways in wake of the claim, paying their managers in training an average of between $628.71 to $5,882 per week.

If you have questions about mismanagement of your plan’s funds or if you suspect your employer of ERISA violations, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.