Wage & Hour - Development & Highlights : New Jersey Labor and Employment Lawyer & Attorney : Fox Rothschild LLP Law Firm : Serving Essex County, Sussex County, Roseland, New Jersey

In a proposed overtime class action against mortgage lender Ocwen Loan Servicing LLC, the United States District Court for the Southern District of Florida denied the plaintiffs' request to conditionally certify a lawsuit as a collective action and notify potential class members. The court denied the request on the grounds that the plaintiffs failed to sufficiently show that other similarly situated employees exist.

The suit accused the residential mortgage loan provider of failing to pay its inside sales representatives overtime wages in violation of the federal Fair Labor Standards Act.

According to plaintiffs, the case should have been certified because three opt-in plaintiffs had demonstrated that their job requirements were similar and that they were subject to similar pay provisions and they had indicated that other individuals might also want to opt-in on the action.

The court disagreed with this reasoning. Indeed, the court found that the affidavits filed by two of the opt-in plaintiffs were too vague and too speculative to show that other similarly situated employees actually existed. The affidavits were vague in that no individuals were named and their statements were noncommittal. The court found this to be insufficient. Judge Zloch, who rendered the decision, stated “it gives the court nothing to make a finding upon but the fact that plaintiffs are aware of others. Who these others are, whether they are similarly situated and whether they are actually interested in joining in this suit is all left to guess-work.” If other similarly situated employees did exist but were too scared to come forward, the plaintiffs' counsel could have ensured their names were not disclosed through “a myriad of different devices,” such as filing under seal or asking for a protective order, Judge Zloch said.

The decision reflects the court's aggravation with these cases that are brought so frequently as attempted class actions without evidence, or indication from other employees, that they have also suffered they same. 

• Email This
• Print
• Comments
• Trackbacks

A federal judge in California has certified five sub-classes of drivers alleging FedEx Corp. bilked them of pay for missed meal periods, off-the-clock work and working split shifts. The Judge found that common issues, a requirement of class-action certification, predominated in the five sub-classes of workers.

Three of the sub-classes relate to meal periods. The first sub-class consists of workers not paid for meal periods lasting less than 30 minutes. The second sub-class consists of workers alleging they were not’t paid for missed or untimely meal periods between April 14, 2006, and March 25, 2007. The third meal-period sub-class, meanwhile, consists of drivers alleging FedEx did not’t pay them for meal breaks taken after four and a half hours of work but before five and a half hours of work between March 6, 2007, and the present. The fourth sub-class approved by the judge alleges they never received the extra hour of pay that was due to them for working a split shift. The final approved sub-class consists of workers claiming they performed approved preliminary and postliminary work (i.e. before and after the shift) without pay.

The FedEx drivers’ meal claims relate to a California statute currently in dispute. The law requires employers who fail to provide a meal or rest period to pay the worker for an additional hour of work at their regular rate of pay. California’s wage law also requires employers who fail to provide meal or rest breaks in accordance with certain procedures – such as giving employees a 30-minute meal period for every five hours worked – also must compensate workers for their time.

Two California courts of appeal have ruled that “provide” only means employers must make meal breaks available and not ensure workers take them. However, the California Supreme Court has recently granted review of the two cases.

The point is that one large class can be broken down into component parts. In such an instance, workers are deemed similarly situated to other workers within the overall class, but need be similar to all of the workers in the class.
 

• Email This
• Print
• Comments
• Trackbacks

As I have written, employees need not file class actions in a court in order to band together to seek overtime monies. Arbitration is a distinct possibility. In the recent case of Franco v Athens Disposal Company, Inc., a California appeals court has held that a trial court erred when it held that a class-action waiver in a company’s arbitration agreement was enforceable. The Company had initially defended by asserting that the employee, a truck driver, was exempt from overtime under the motor carrier exemption, but the Court ruled that this was also for the arbitrator to decide.

The trial court also misinterpreted a decision of the California Supreme Court finding that a class-arbitration waiver was unconscionable when prohibition of relief for all of the putative class members would undermine vindication of the employees’ statutory rights to overtime, which they could not legally waive. The trial court had held that this holding did not apply to a driver’s state-law claims against his employer for not providing meal and rest periods or pay additional compensation for missed meal/rest periods.

The employer had contended the meal and rest period “rights” were subject to waiver. The appeals court held that, as state law required employers to comply with provisions of state Wage Orders, which mandated meal and rest breaks and since the law stated that no provision of law could be set aside by a private agreement, the statutory right to meal and rest periods could not be waived.

In sum, the court ruled that the class-arbitration waiver in the company’s arbitration agreement was unenforceable, where the driver (and other employees) alleged violations of California law regarding meal and rest periods. The court believed that class arbitration would be a more effective way of vindicating the employees’ statutory rights than individual arbitrations, given that the size of the potential individual recovery was small. Finally, the court held that a possible award of attorneys’ fees would not provide a sufficient incentive for an attorney to take an individual case, especially since the allegation was that all hourly employees were subject to the same unlawful conduct.

The lesson is that simply because an employer builds into arbitration agreements (whether found in employee handbooks or freestanding) a waiver of wage-hour (or other) class actions, there is a good chance they will be found unenforceable.
 

• Email This
• Print
• Comments
• Trackbacks