 Motion to Decertify Collective Action Comprised of Over 300 Cable Installation Technicians Denied
February 18th, 2011 United States District Judge Bernice Bouie Donald from the Western District of Tennessee recently issued an opinion in Monroe v. FTS USA, LLC, No. 2:08-cv-2100, wherein she held that 300 cable installation technicians could continue pursuing their claims for overtime compensation as a collective action under the Fair Labor Standards Act (FLSA). Judge Donald denied Defendant’s motions for summary judgment and for decertification. The case involved over 300 current and former employees of FTS USA, LLC and UniTek USA, LLC – both with offices in Blue Bell, Pennsylvania. The Plaintiffs alleged that they were not paid proper overtime compensation of one and one-half times their regular hourly rate for all hours worked over forty within a single workweek pursuant to the FLSA. Plaintiffs alleged that they were directed by their managers to understate the amount of hours worked and that they would have a lunch break automatically deducted from their timesheets regardless of whether they actually took a lunch. Moreover, Plaintiffs alleged that managers altered their timesheets to reduce or remove overtime hours worked. Plaintiffs were compensated on a “piece-rate” system, meaning they were paid a set percentage of the overall billing and revenue produced. After discovery had been conducted as to 50 Plaintiffs, Defendants argued within their motion for decertification that damages could not be determined on a classwide basis as the amount of damages for each employee would obviously differ among the 300 plus opt-ins. The Court dismissed this argument stating that representative testimony is completely sufficient and adequate in a case brought pursuant to Section 216(b). Thus, individual testimony from numerous Plaintiffs as to how much time overtime they worked can form the basis for determining the amount owed to other Plaintiffs. “Evidence from every member of the plaintiff class is not required for this task and, if required, would be so burdensome as to make trial of this case, or any other large collective action under § 216(b), impracticable.” Further, the Court noted that because Plaintiffs allege that Defendants’ records are inaccurate, Plaintiffs’ burden of proof is relaxed and the individual Plaintiffs can rely upon their memory in determining the amount of overtime owed. Further, whether Defendants’ failure to pay proper overtime compensation to Plaintiff was wilful, a factor under the FLSA, is itself “clearly amenable to classwide determination,” Judge Donald held, as testimony at trial could show that Defendants had a policy of denying such overtime to its employees. Lastly, the Court rejected Defendants’ argument that individual determinations would have to be made as to whether Defendant had knowledge regarding each individual Plaintiff’s FLSA violation: “The Court squarely rejects this contention. So long as Defendants were generally aware-either actually or constructively-of the types of practices that Plaintiffs allege were used to deny them overtime, there is no requirement in the law to compel each member of the plaintiff class to establish that he or she individually complained of the FLSA violation.” Interestingly, the Court made the acute observation that Defendants’ arguments within their summary judgment motion were at odds with arguments set forth in their motion for decertification: “The Court agrees with Plaintiffs that Defendants’ motion for summary judgment is in tension with their motion to decertify since one seeks to conclude the case on a classwide basis while the other argues that classwide adjudication is improper.” Tags: Blue Bell, collective action, Fair Labor Standards Act, FLSA, FLSA violation, Motion for Decertification, overtime attorney, overtime compensation, PA overtime attorney, piece-rate system, representative testimony ---------------------------------------------------------------------------------------- January is a Good Month for Conditional Certification of Independent Contractor Cases February 1st, 2011 It appears that January is a good month for convincing federal judges to conditional certify FLSA cases alleging that the boss misclassified his employees as independent contractors. The other day, I came accross the following cases, all decided this January. First, in Williams v. XE Services, LLC, 2011 U.S. Dist LEXIS 669 (E.D.N.C. Jan. 4, 2011), the district court conditionally certified a case alleging that a government contractor that provides training to military and law enforcement personnel misclassified its trainers as independent contractors and thereby deprived them of overtime pay. Next, in Edwards v. Multiband Corporation, 2011 U.S. Dist LEXIS 3460 (D. Minn. Jan. 13, 2011), the court conditionally certified a case in which technicians who install of DirectTV equipment allege that they are misclassified as independent contractors. Finally, in Coats v. Nashville Limo Bus, LLC, 2011 U.S. Dist LEXIS 8104 (M.D. Tenn. Jan. 27, 2011), the court conditionally certified a case alleging that certain drivers were misclassified as independent contractors. All of these decisions, reaffirm the notion that conditional certification must be liberally granted so that workers will not be deprived of their right to receive notice of FLSA litigation. Tags: FLSA overtime; independent contraction overtime; 1099 employee overtime; independent contractor misclassification; 1099 employee misclassification; North Carolina overtime lawter; North Carolina overt ---------------------------------------------------------------------------------------- Some Good Language to Fight Off Subpoenas in Overtime Misclassification Cases February 1st, 2011 Here is some good language that I came accross, drafted by a New York overtime rights lawyer, in an attempt to prohibit the employer in a store manager misclassification case from issuing subpoenas that seek information pertaining to the plaintiff’s job search. This might be helpful to you in fighting off similar supboenas in your misclassification cases: The Federal Rules permit a subpoena to be quashed to protect the person affected by the subpoena from unnecessary or unduly harmful disclosures of confidential information. Rule 45(c)(3)(A) provides that, “[o]n timely motion, the issuing court must quash or modify a subpoena that: . . . (iii) requires disclosure of privileged or other protected matter, if not exception or waiver applies; or (iv) subjects a person to undue burden.” FED. R. CIV. P. 45(c)(3)(A). Courts have found that a party has a constitutionally protected privacy interest in his or her personal records, which may provide a basis for standing to challenge subpoenas served on non-parties. See, e.g., Koch v. Greenberg, 2009 WL 2143634 (S.D.N.Y. July 14, 2009) (finding that the defendant has standing to challenge a subpoena served on a non-party because it is likely to divulge personal and confidential financial information); Arias-Zeballos v. Tan, 2007 WL 210112 (S.D.N.Y. Jan. 24, 2007) (finding that defendant has standing to quash plaintiff’s subpoena to a non-party of defendant’s personal checks and documents that involved the defendant). The scope of a subpoena is tempered by the relevancy standard of Rule 26, which provides that parties may obtain, through discovery, information that is relevant to the subject matter involved in the pending action or reasonably calculated to lead to the discovery of admissible evidence. Although the contours of discovery are broad under the Federal Rules, parties should not be permitted to roam, in what are referred to as the “shadow zones” of relevance, to explore matters that are not pertinent, merely on the theory that it might become so. In re Surety Assoc. of America, 388 F.2d 412 (2d Cir. 1967). When the relevance of a particular discovery is questionable, discovery will generally be denied when the party seeking discovery has made no showing of relevance. Payne v. Howard, 75 F.R.D. 465 (D.D.C. 1997). Any records obtained from these subpoenaed non-parties here will not provide any additional materially relevant evidence. Moreover, there is a distance between whatever indicia of relevance these records may have and anything likely to be determinative of what constitutes an exempt employee within the meaning of the New York Labor Law. When courts consider exemption issues, the “appropriate inquiry . . . is into [plaintiffs’] actual job duties and not into what [they] list[] on [their] resume.” Boring v. World Gym- Bishop, Inc., 2009 U.S. Dist. LEXIS 21061, at *42 (N.D. Ill. 2009). “The key to determination of whether an employee is covered by an exemption . . . does not depend on an employee’s general characterization of his or her job in a resume designed to enhance the employee’s duties and responsibilities to obtain a job . . . . What is important is what an employee actually does on a day-to-day basis.” Ale v. TVA, 269 F.3d 680, 688 (6th Cir. 2001); Perkins v. S. New. Eng. Tel. Co., 669 F. Supp. 2d 212, 219 n.3 (D. Conn. 2009). Tags: Overtime Misclassification; Store Manager Overtime; Assistant Manager Overtime; Subpoena; New York Overtime Lawyer; New York Overtime Ayyotney; New York Store Manager ---------------------------------------------------------------------------------------- “Self-Critical Analysis Privilege” Not Recognized in Rite Aid Assistant Store Manager Overtime Compensation Case January 26th, 2011 Magistrate Judge Carlson recently entered a Memorandum Order wherein he refused to recognize the purported “self-critical analysis privilege” in a case in which over 1,000 Rite Aid assistant store managers allege that they were misclassified as exempt from the Fair Labor Standard Act’s (FLSA) overtime compensation mandates. Rite Aid argued that the self-critical analysis privilege should shield from discovery any documents concerning its voluntary internal assessment of its compliance with the FLSA. Judge Carlson refused to recognize the self-critical analysis privilege as valid within the Third Circuit. Indeed, the Third Circuit in Alaska Elec. Pension Fund v. Pharmacia Corp., 554 F.3d 342, 351 n.12 (3d Cir. 2009) was clear about the validity of the self-critical analysis privilege in the Third Circuit (comprised of Pennsylvania, New Jersey, and Delaware) stating that it “never been recognized by this Court and we see no reason to recognize it now.” Moreover, Judge Carlson pointed out that in the limited circumstances where courts have applied such a privilege, it was in the context of where a defendant had prepared mandatory reports at the direction of the government. Further, Judge Carlson declined to recognize that the self-critical analysis privilege should exist under federal common law. Thus, Judge Carlson held that the privilege would not apply in this case. In an FLSA action where liquidated damages are being sought, it is imperative that plaintiffs are able to request documents concerning whether a defendant’s violations of the FLSA were “willful” – a necessary requirement for a recovery of liquidated damages. Of course, a defendant will argue that even if it did violate the FLSA, its conduct was not willful; but this defense admits the potent relevance of documents concerning a defendant’s willful violations of the FLSA . Accordingly, this is why courts have often opined that a defendant cannot assert the use of a “privilege as both a sword and a shield” to prevent the production of documents. See Nguyen v. Excel Corporation, 197 F.3d 200, 207 n. 18 (5th Cir. 1999). In this case, Plaintiffs allege that despite their job titles at Rite Aid of “Assistant Store Manager,” their primary duty did not involve management of the store and that they did not otherwise meet any of the overtime exemptions under federal law. As such, the Rite Aid Assistant Store Managers in this case allege that they were not properly compensated for overtime hours worked over forty within a single workweek. Tags: Assistant Store Manager Misclassified, Fair Labor Standards Act, FLSA, misclassified as exempt, New Jersey Wage and Hour Attorney, Pennsylvania Wage and Hour Attorney, Rite Aid Assistant Store Manager, Rite Aid Assistant Store Manager Overtime, salaried employees misclassified, Self-Critical Analysis Privilege ---------------------------------------------------------------------------------------- SUPPORT THE EMPLOYEE MISCLASSIFICATION PREVENTION ACT January 25th, 2011 Some of the troubles discussed in this Newsletter can be fixed by passage of the Employee Misclassification Prevention Act (the “Act”), which was introduced in April 2010 in the United States Senate. The Act currently sits in the Senate’s Committee on Health, Education, Labor, and Pensions. Pennsylvania Senator Robert is one of the Act’s co-sponsors. If passed, the Act will amend the FLSA to require companies to, among other things, keep records of all individuals (regardless of their IC classification) who perform labor or services for the company and notify all individuals of their employment classification and their rights under the law. The Act also contains other important provisions, such as making it unlawful for a company to discharge or otherwise discriminate against any individual who complains about his/her IC classification and doubling the amount of liquidated damages a misclassified IC can recover in court. Senator Tom Harkin (D-Iowa), who chairs the Senate Committee and supports the Act’s passage, has correctly observed that IC misclassification “cheats workers out of important labor protections, like the right to overtime pay and worker’s compensation, and robs federal and state governments of desperately needed tax revenues.” Chairman Harkin believes the Act will “level the playing field for responsible employers who play by the rules.” Let’s hope he’s right. Please contact your Senators and Congressperson and tell them that you support the Employee Misclassification Prevention Act!!! Tags: Employee Misclassification, FLSA, Independent Contractor mislcassification, overtime rights of independent contractors ---------------------------------------------------------------------------------------- YO, WORKERS’ COMPENSATION LAWYERS: WHAT ARE YOU WAITING FOR? January 25th, 2011 A worker’s compensation lawyer calls our firm and proudly explains that the WC Judge just deemed his injured client to be illegally classified as an “independent contractor.” Due to the lawyer’s skill, diligence, and persistence the client finally will receive the worker’s compensation benefits he deserves. Now it’s time to go after all that unpaid overtime. This will be a “slam dunk.” WRONG!!! Under federal and Pennsylvania overtime laws, workers’ claims for unpaid overtime can only extend back three years. So if you’ve waited for you injured client’s case to work its way through the worker’s compensation system, you’ve waited too long. Most of your client’s unpaid overtime recovery will be time-barred. So don’t wait. Get that overtime case filed immediately upon learning of the “independent contractor” misclassification. The workers’ compensation case and the overtime case can proceed on parallel tracks. Moreover, a favorable finding in the overtime case will enhance the wage entitlement in the workers’ compensation case. Tags: misclassified as independent contractor, Pennsylvania Wage and Hour Law, Pennsylvania wage attorneys, Pennsylvania wage lawyers, wage and hour ---------------------------------------------------------------------------------------- EXPLORING THE SCOPE OF THE “INDEPENDENT CONTRACTOR” RIP-OFF January 25th, 2011 When the Boss misclassifies a worker as an “independent contractor” (“IC”), he does so at the expense of the worker, the worker’s family, American taxpayers, and competing companies. Here’s how:
In view of the above, IC abuse is nothing short of tragic for the American worker and for us as a society. How can we allow millions of American families to be improperly and unnecessarily denied our Nation’s most basic workplace rights? Tags: family medical leave, FMLA, independent contractor, misclassified as independent contractor, overtime pay, overtime rights of independent contractors ---------------------------------------------------------------------------------------- IT’S TIME TO TAKE A STAND AGAINST THE MISCLASSIFICATION OF EMPLOYEES AS “INDEPENDENT CONTRACTORS” January 25th, 2011 This edition of the Wage and Hour Quarterly is dedicated entirely to an illegal practice that costs America’s taxpayers and working families billions of dollars every year: The misclassification of employees as “independent contractors.” Tens of millions of workers are classified as “independent contractors.” So it’s no surprise that Trial Lawyers and workplace justice advocates regularly encounter this huge segment of the American workforce. Unfortunately, we often fail to evaluate whether these purported “independent contractors” have been misclassified. For example, a workers compensation lawyer might end her case evaluation upon determining than an independent contractor’s injury was not work related. This is unfortunate, since the individual might be entitled to thousands of dollars in unpaid wages and benefits due to the Boss’s misclassification of her employment status. Regardless of your practice area, common sense enables you to identify potential independent contractor misclassification cases. In a nutshell, if it seems like the Boss is exerting significant control over the worker’s day-to-day work activities, the potential for misclassification exists. At this point, you can either: (i) analyze the worker’s circumstances in more detail (applying some of the principles described in this Newsletter) or (ii) refer the client to The Winebrake Law Firm, knowing that we always treat workers with dignity and respect and always pay a fair referral fee. As explained below, the Boss has many reasons to misclassify his workers as independent contractors. One of the most significant reasons is to avoid paying time-and-one-half overtime compensation for work performed in excess of 40 hours during the workweek. The Fair Labor Standards Act (“FLSA”), which is the federal overtime law, does not cover independent contractors. However, a worker does not lose his overtime rights just because the Boss labels him an “independent contractor. The FLSA is a law of “striking breadth,” and company labels mean almost nothing. As one appellate court has observed, the FLSA contains “the broadest definition [of employment] that has ever been included in any one act.” Whether an employer truly is an independent contractor under the FLSA depends on the “economic realities” of her work experience, not the language of her employment contract. The Third Circuit Court of Appeals has instructed Pennsylvania district courts to apply a six-factor test to determine whether a worker has been properly classified as an independent contractor. The six factors include:
Applying factors such as those listed above, federal courts frequently invalidate the Boss’s abuse of the “independent contractor” classification. For example, in one recent case, New Orleans workers who repaired telecommunications and cable lines in the wake of the Hurricane Katrina disaster alleged that they were misclassified as independent contractors. The Fifth Circuit Court of Appeals held that the workers were employees entitled to FLSA overtime benefits. The Court emphasized that the workers were employed full-time and exclusively for the defendant employer, were economically dependent on the defendant employer, and did not have any meaningful opportunity to operate their own businesses. This is just one of the hundreds of independent contractor misclassification cases that have been successfully litigated in the federal courts. The Winebrake Law Firm has successfully litigated FLSA independent contractor cases. For example, we recently obtained a settlement on behalf of 13 satellite dish installers who sought overtime pay, alleging that they were misclassified as independent contractors. In another case, we obtained a settlement for over 20 janitors who were classified as contractors. We currently are pursuing a lawsuit in a Texas federal court on behalf of over 25 medical product sales representatives who were classified as independent contractors. And we represent over 30 allegedly misclassified delivery drivers in another case pending in a Pennsylvania federal court. If you represent workers who you believe may have been misclassified as independent contractors, don’t hesitate to give is a call. Tags: FLSA, independent contractor, misclassified as independent contractor, overtime compensation, overtime rights of independent contractors, Pennsylvania wage lawyers, satellite dish installers overtime ---------------------------------------------------------------------------------------- FLSA MYTHBUSTER: UNDERSTAND THE LIMITS OF NON-PROFIT GROUPS IN PROTECTING WORKERS’ WAGE AND OVERTIME RIGHTS January 25th, 2011 The FLSA Mythbuster (identity and whereabouts unknown) usually dedicates this column to “busting” commonly accepted workplace rules that, in fact, violate federal and state overtime law. In this quarter’s edition, however, we digress to address a myth that is gaining traction among certain commentators. The myth I speak of is the notion that companies that blatantly violate this Nation’s overtime laws can be brought to justice by non-lawyers who lack the resources and bar admissions necessary to vindicate the rights of workers in the United States District Courts. Make no mistake about it: this Nation is blessed with many individuals and non-profit groups that play crucial roles in organizing, educating, and protecting workers. Indeed, President Obama exemplifies how “community activists” can change the world. History has proven, however, that lawsuits handled by skilled lawyers from private law firms or the United States Department of Labor are the most efficient and effective way to bring justice to workers whose overtime rights are violated. In enacting the FLSA, Congress recognized the central role to be played by private lawyers and lawsuits in vindicating workers’ overtime rights. Congress placed in the FLSA a provision allowing workers to file private lawsuits and allowing workers who prevail in court to recover attorney’s fees in addition to unpaid wages and liquidated damages. Congress also provided that workers are not bound by private agreements that are not subjected to judicial scrutiny. Entering into “conciliation discussions” with overtime violators without a meaningful threat of litigation seems a lot like bringing a slingshot to a gunfight. The FLSA exists so that workers can vindicate their rights in the United States District Courts. Tags: FLSA, Non-profit groups, overtime attorney, overtime lawyer, wage and hour lawyer ---------------------------------------------------------------------------------------- ABUSES OF THE “EXECUTIVE” EMPLOYEE EXEMPTION TO OVERTIME COVERAGE CONTINUE TO FLOURISH. WHAT YOU CAN DO TO FIGHT BACK. January 25th, 2011 The Boss has found so many ways to violate federal and state overtime law that it’s not really possible to say which violation is most pervasive. In this edition of The Wage and Overtime Quarterly, however, we explore a violation that certainly ranks near the top of the list of overtime rip-offs: Misclassifying salaried employees as “executives” who are exempt from overtime coverage. This is an important topic for all you Trial Lawyers, advocates, and Winebrake Law Firm clients who receive this newsletter. Government investigators cannot possibly clean up America’s wasteland of wage and overtime violations. So it is up to Trial Lawyers and Workers to recognize workplace abuses and refer the abuses to lawyers who are dedicated to wage and overtime litigation. History has proven that lawsuits are the most effective way to vindicate the rights of American workers. The “Executive” Employee Exemption from Overtime Coverage The Fair Labor Standards Act (“FLSA”) and state laws such as the Pennsylvania Minimum Wage Act (“PMWA”) generally require that employees receive overtime pay equaling one-and-one-half-times their regular rate of pay for hours worked over 40 during the workweek. Under these laws, however, “executive” employees are exempt from receiving overtime pay. The Executive Exemption makes good sense. After all, real company “executives” are not the types of employees who need the protections of the FLSA’s overtime provision. That is because real executives have the clout and bargaining power to fend for themselves in negotiating with The Boss for fair pay. Unfortunately, as discussed below, many companies use the Executive Exemption to deny overtime pay to mid-level and low-level employees who lawmakers never intended to exempt from overtime pay protections. Year after year, these abuses of the Executive Exemption illegally deprive working American families of millions of dollars in hard-earned wages. Corporate America’s Abuse of the Executive Exemption The Executive Exemption is a bonanza for American business. And far too many companies abuse the exemption to force supposedly exempt “Managers,” “Assistant Managers,” “Department Managers,” “Office Managers,” and “Team Leaders” (the list of exaggerated job titles is endless) to work absurdly long hours performing routine tasks for free. For sure, there is nothing “executive” about the day-to-day work performed by many of these employees. Working the cash register, completing routine paperwork, stocking the shelves, unloading delivery trucks, taking inventory, cleaning the work area, and performing manual labor are not the types of job duties that are supposed to fall within the Executive Exemption to overtime coverage. Abuse of the Executive Exemption is devastating to America’s working families. I am very sorry to report that The Winebrake Law Firm represents many supposedly exempt “executives” who routinely work 60, 70, and even 80 hours per week. Some of these individuals barely make minimum wage when their weekly salaries are divided by their hours worked. Their classification as exempt from the overtime laws is disgraceful. Recognizing Abuses of the Executive Exemption The Executive Exemption rip-off thrives when employees do not understand their rights. Too many employees believe they are “exempt” from overtime coverage just because they are “salaried.” This belief is simply wrong. Under the law, a salaried employee qualifies as an exempt “executive” only if the employee’s real-life job duties entail work of a truly executive nature. Most overtime misclassification lawsuits turn on whether the employee’s real-life job duties actually entail executive work. Importantly, in determining whether the Executive Exemption applies, the employee’s job title is not particularly relevant. The federal regulations specifically state that “[a] job title alone is insufficient to establish the exempt status of an employee.” 29 C.F.R. § 541.2. Thus, it does not matter whether the supposedly exempt employee has the term “Manager” in his or her job title. To qualify for the Executive Exemption, all of the following requirements must be satisfied:
Moreover, under Pennsylvania law, any employee classified under the Executive Exemption must spend at least 60% (and, sometimes, 80%) of his/her time performing the types of tasks listed above. Application of the above requirements requires a careful analysis of the employee’s actual job experience and a detailed review of federal/state regulations and court decisions. If you have any reason to suspect that you, a co-worker, or a client might have been improperly denied overtime under the Executive Exemption, you should call a law firm that concentrates in wage and overtime law (e.g. The Winebrake Law Firm!!!) for a detailed evaluation. Examples of Salaried Employees who are Commonly Misclassified as Exempt from Overtime Coverage Here are some examples of salaried employees who commonly are misclassified as exempt from overtime coverage under the Executive Exemption and other “white collar” exemptions:
“Only YOU Can Prevent Overtime Abuse” Smokey the Bear used to appear on TV to tell us: “Only You Can Prevent Forest Fires.” Well, the same can be said of overtime abuse. Too many Trial Lawyers, advocates, and workers believe that the overtime laws are too complicated for them to understand, so they leave it to The Boss to interpret the law. But The Boss is under pressure to feed the bottom line, so his interpretation of the overtime law might not be too worker-friendly. If you believe the overtime rights of you or your client are being violated, give us a call. Stop guessing at your overtime rights. Tags: Assistant Manager, executive exemption to overtime, Fair Labor Standards Act, FLSA, misclassification, misclassified as exempt, overtime misclassification, Pennsylvania Minimum Wage Act, Pennsylvania overtime lawyer, Pennsylvania Wage and Hour Attorney, Pennsylvania Wage and Hour Lawyer, PMWA, salaried employees misclassified, salary plus overtime, Store Manager |
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