In their never-ending quest to beat down FLSA opt-in rates, corporate defendants sometimes argue that opt-in consent forms should require the employee to fill-in various employement information (such as dates of employment) and then swear, under penalty of perjury, that such information is correct. Our firm recently encountered this tactic in a case involving the overtime rights of assistant store managers. Of course, these requirements serve no purpose other than to discourage opt-in patricipation. Here’s some cases that Pennsylvania overtime lawyers (and other overtime attorneys) can cite to in opposing the company’s insistance that opt-in forms must be sworn out under oath: Delaney v. Geisha NYC, LLC, 261 F.R.D. 55, 59-60 (S.D.N.Y. 2009); Romero v. Flaum Appetizing Corp., 2009 U.S. Dist. LEXIS 80498, *19-21 (S.D.N.Y. Aug. 17, 2009); Gieskeke v. First Horizon Home Loan Corp., 2006 U.S. Dist. LEXIS 76732, *6 (D. Kan. Oct. 11, 2006).

Defendants opposing FLSA collective litigation often argue that collective litigation us unwarranted because (i) low employee participation rates demonstrate that all is well in the workplace and (ii) the case is just too big and complicated to proceed as a collective action. I recently reread a great opinion – Falcon v. Starbucks Corp., 580 F. Supp. 2d 528 (S.D. Tx. 2008) – in which Judge Keith Ellison cogently addressed each of these arguments. Here’s what the Judge had to say about low opt-in rates: “Nor is the Court persuaded by Defendants’ argument that the relatively small response to Plaintiff’s notice justifies decertification because it suggests that there is no general policy or plan. Individuals may have myriad reasons for not wishing to opt-in to a lawsuit against their employer ranging from fear of retaliation to sheer inertia, and the Court declines to draw any particular inference from the response size.” Id. at 538. And here is what he said about the “bigness” argument: “there is no indication that Congress intended section 216 to only allow small collective actions involving unpaid overtime to proceed.” Id. at 540; See also Donahue v. Francis Services, Inc., 2004 U.S. Dist. LEXIS 11525 (E.D. La. June 22, 2004) (“[a]dopting defendants’ reasoning would lead to the absurd result that employers could escape FLSA liability by making sure to underpay vast numbers (rather than smaller numbers) of their employees.”). Some helpful references from Texas for all us overtime rights lawyers!

Our law firm, working with co-counsel from the Saltz Mongeluzzi Barrett & Bendesky law firm in Philadelphia, recently obtained an important decision from Eastern District of Pennsylvania Judge Eduardo Robreno. The decision, entitled Glatts v. Crozer-Keystone Health System, 645 F. Supp. 2d 446 (E.D. Pa. 2009), addresses the circumstances under which a company can remove state wage and overtime lawsuits to federal court on grounds that such claims are preempted by the Labor Management Relations Act (“LMRA”). In Glatts, we represent a proposed class of Chester County hospital workers who allege that the hospital has improperly denied them overtime pay by offesetting “long” workweeks (in which overtime hours are accrued) against “short” workweeks (in which fewer than 40 hours are worked). Our clients allege that, under the Pennsylvania Minimum Wage Act (“PMWA”), overtime must be independently calculated each 7-day workweek. The complaint was filed in the Philadelphia Court of Common Pleas The hospital removed the case to federal court, asserting that the hospital workers’ claims are somehow related to their union contract and, therefore, are preempted under the LMRA. Judge Robreno flatly rejected the hospital’s argument and remanded the case to state court. The Judge explained that state law claims are preempted by the LMRA only if their resolution turns on the interpretation of the union contract. Because the hospital out clients’ lawsuit involved an interpretation of the PMWA, rather than the union contract, preemption (and removal to federal court) was improper. You should keep this case in mind the next time a corporate defendant tries to use the LMRA as a excuse to rob you client of his/her right to pursue litigation in state court.

Just read a great opinion reversing a district judge’s summary judgment dismissal of an overtime lawsuit in which who repaired telecommunications and cable lines in the wake of the Katrina disaster alleged that they were misclassified as independent contractors.  The opinion is entitled Cromwell v. Driftwood Electrical Contractors, Inc., 2009 U.S. App. LEXIS 22389 (5th Cir. Oct. 12, 1009).  Applying the “economic realities” test, the Circuit Court emphasized that the cable workers worked full-time and exclusively for the defendant employer and, as such, were economically dependent on the defendant employer and did not have any meaningful opportunity to operate their own businesses.

On November 20, 2009, the Second Circuit decided Davis v. J.P. Morgan Chase & Co., 2009 U.S. App. LEXIS 25481 (2d Cir.  Nov. 20, 2009), wherein it reversed a summary judgment finding against a loan underwriters who allege that they are entitled overtime pay under the FLSA.  The Court flatly rejected the district court’s holding that such employees are covered by the FLSA’s administrative exemption.  This is an important victory for loan underwriters, loan officers, staff accountants, non-licenced accountants, bank tellers, and other financial service employees who are frequently misclassified as FLSA exempt.  The Court emphasized that, to fall within the administrative exemption, employees perform work that is related to the management policies or general business operations.  In other words, true administrative employees are “at the heart of the company’s business operations,” and those “functional” employees who perform day-to-tasks of the business – even if those tasks are comples — are not covered by the exemption.  In sum, this is a big victory for the plaintiffs and their New York overtime lawyers.    

On November 17, 2009, Judge Claudia Wilken of the Northern District of California issued an extraordinarily thoughtful opinion in a case involving the overtime rights of bank employees.  Judge Wilken explained that employers who misclassify employees as exempt from overtime cannot retroactively use the dreaded Fluctuating Workweek Method (“FWM”) of overtime compensation to calculate overtime damages.  After summarizing the legal landscape in great detail, the Judge explained that it is impossible for the employer to retroactively satisfy the FWM’s prerequisites when, in fact, it never paid overtime to the misclassified employees in the first place.  The case is published at Freedman v. Wells Fargo & Co., 2009 U.S. Dist. LEXIS 107044 (N.D. Cal. Nov. 17, 2009), and it is a must-read for any trial lawyer litigating FLSA misclassification cases.

Here are brief summaries of three FLSA cases that were decided on November 25, 2009: 

The Seventh Circuit Court of Appeals affirmed summary against an FLSA class of Wisconsin paper mill employees who brought an overtime lawsuit alleging that the employer failed to pay them for: (1) time spent putting donning and doffing on and their work clothes, safety shoes, and safety glasses before and after each workday; (2) time spent showering after each workday; and (3) time spent shaving.  The court held that such activities were non-compensable preliminary and postliminary activities under the Portal to Portal Act (“PPA”).  Nothing is particularly notable in this straightforward and short opinion, which does contain a concise summary of basis PPA principles.  See Musch v. Domtar Indus., 2009 U.S. App. LEXIS 25809 (7th Cir. Nov. 25, 2009).

A Southern District of Texas judge refused decertify an FLSA collective action, wherein the employees alleged that the company failed to pay them regular and overtime pay for time spent preparing for ant taking “skills-assessment tests.”  The courts also denied most aspects of the company’s summary judgment motion.  The opinion contains a good discussion of when employee training is compensable under 29 C.F.R. § 785.27 and the pertinent caselaw.  There’s also a real good recital of the Fifth Circuit decertification standards, as the judge rejects many of the defense-bar’s standard decertification arguments and tactics, such as emphasizing “individualized” damages theories (even though damages issues are not supposed to be before the court at the decertification stage).  This opinion is worth reading.  See Maynor v. Dow Chemical Co., 2009 U.S. Dist. LEXIS 110031  (S.D. Tx. Nov. 25, 2009).

A Middle District of Florida judge refused to conditionally certify a class of call center employees who seek overtime pay.  See Tussing v. Quality Res., Inc., 2009 U.S. Dist. LEXIS 110190  (M.D. Fla. Nov. 25, 2009).  The judge emphasized that the affidavits submitted by the plaintiffs were “woefully insufficient” and was critical of the plaintiffs’ tactic of trying to certify in the same case employees that were classified as both exempt and non-exempt  from overtime.

In opposing FLSA conditional certification, defendants often gather affidavits or declarations from the plaintiffs’ co-workers to rebut the allegations in the plaintiffs’ FLSA complaint or to demonstrate that plaintiffs are not similarly situated to the co-workers.  We have faced this litigation tactic on various occasions in our Pennsylvania and New Jersey overtime cases, most recently in a Philadelphia overtime case involving the right of hospital employees to be paid for time spent performing work activities during their meal breaks/lunch breaks.  Here is some caselaw that might help you next time you face this issue:

It’s not too surprising that defendants and their lawyers are able to obtain “happy camper” declarations/affidavits.  As one district court has observed:  “It is, of course, unlikely that potential class members would be unanimously supportive when most potential class members have an interest in maintaining amicable relationships at work.”  Jensen v. Eveleth Taconite Co., 139 F.R.D. 657, 664 (D. Minn. 1991); accord Siddiqi v. Regents of the Univ. of Cal., 2000 U.S. Dist. LEXIS 19930, *24-25 (N.D. Cal. Sept. 6, 2000) (citing cases).  Moreover, common sense dictates that “where the absent class member and the defendant are involved in an ongoing business relationship, such as employer-employee, any communications are more likely to be coercive.”  Belt v. Emcare Inc., 299 F. Supp. 2d 664, 668 (E.D. Tx. 2003); accord Kleiner v. First Nat’l Bank of Atlanta, 751 F.2d 1193, 1201-03 (11th Cir. 1985); see also Shores v. Publix Super Markets, Inc., 1996 U.S. Dist. LEXIS 22396, *9 (M.D. Fla. Nov. 25, 1996) (unlike information “that employees may review and analyze in the privacy of their own home, [an employer's] communications are disseminated at the workplace, by the very managers accused of propagating [illegal] practices”).  Consistent with this common sense notion, district courts handling FLSA conditional certification motions find little or no value in employer-obtained declarations.  See, e.g., Sjoblom v. Charter Comm., 2007 U.S. Dist. LEXIS 94829 (W.D. Wis. Dec. 26, 2007); In re Wells Fargo Home Mortg. Overtime Pay Litig., 527 F. Supp. 2d 1053, 1060-61 (N.D. Cal. 2007); Mevorah v. Wells Fargo Home Mortg., Inc., 2005 U.S. Dist. LEXIS 28615, *12-16 (N.D. Cal. Nov. 17, 2005).

Chief Judge Donetta Ambrose of the Western District of Pennsylvania recently granted conditional certification on behalf of an FLSA class of Pittsburgh, Pennsylvania hospital workers in Kuznyetsov v. West Penn Allegheny Health System, Inc., 2009 U.S. Dist. LEXIS 47163 (W.D. Pa. June 1, 2009).  There, the hospitals made an automatic 30-minute pay deduction for meal breaks.  See id. at *12-14.  The hospitals also required that employees who work during meal breaks report their work to the timekeeper so that the 30-minute deduction could be altered.  See id. at 13.  Based on these policies, Chief Judge Ambrose conditionally certified the FLSA class.  After emphasizing that it is the employer’s duty to affirmatively ensure that work is not performed during meal breaks, see id. at 14, the Court conditionally certified the class on grounds that “[a]rguably, [the hospitals'] policies shift the responsibility to the employees” in violation of the FLSA, id. at 14.  At the conditional certification stage, it did not matter that the hospitals had offered evidence of thousands of instances in which automatic deductions were cancelled.  See id.  Such evidence did not “alter[] the fact that the policies apply to all non-exempt employees and arguably shifts the responsibility to the employees to ensure that the deduction is cancelled.”  Id. at *15-16.Our law firm currently is representing hospital workers who allegedly were denied their full meal breaks in Philadelphia.  Feel free to give us a call if you have any questions or would like to discuss the legal rights of you or your clients.

The full panoply of wage and overtime rip-offs in the landscaping and construction industries are too vast to be covered by this mere Newsletter.  Notwithstanding, when you speak with your clients in the landscaping and construction industries, you should be on the lookout for the Company’s failure to pay for travel between the company headquarters and the work location.

Many landscaping and contracting companies require the workers to report to headquarters at the beginning of the workday.  There, the workers gather equipment and materials needed for the day’s project, load the company vehicle, and travel to the worksite.  Then, at the end of the day, the workers must return to headquarters, unload the vehicle, and perform other end-of-shift duties.

The illegality arises when the Company pays the workers only for the time spent on-site at the work location.  Under such circumstances, workers are cheated out of many hours of compensable work.  Indeed, we have represented clients who have been owed thousands of dollars for of unpaid travel time at the beginning and end of the workday.

The Department of Labor has enacted a regulation that specifically addresses travel during the Read the rest of this entry »