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

I happily note that a positive trend, in my view, is continuing.  That is to say, the defeating of FLSA collective actions by defendants asserting that there is not enough similarity in the putative plaintiffs to warrant their conditional certification into a class.  A federal judge has just rejected a motion for conditional certification, in which 65,000 employees, nationwide, tried to sue Steak N Shake, for overtime.  The case is entitled Beecher v. Steak N Shake Operations Incorporated and was filed in federal court in the Northern District of Georgia.

This was another of these off-the-clock cases, where hourly employees charge that they were not paid for all time worked.  The suit also charged that managers altered time records in order to “save” the overtime that would have otherwise been due.  Parenthetically, I should note that in these chain-store cases, so-called Burger King cases, the individual stores run on tight labor budgets and managers are judged by whether they adhere to these budgets, so there is intense pressure to stay within budget, sometimes resulting in off-the-clock work being done, or allegedly being done.

With that said, the Court concluded that that the plaintiffs had not shown that they were similarly situated to each other or that there was not a commonality, a system wide policy or company practice that could be the “glue” to hold the action together.  This was particularly applicable to the contention that a nationwide practice to falsify and alter records existed.

The court concluded that “even assuming, arguendo, that there exists a nationwide practice of reviewing and sometimes revising hours clocked in and out, and tips received, that is not enough glue to hold this proposed class together; neither is the fact that defendant generally discourages managers from allowing overtime work.”

Thus, the court found that the plaintiffs’ allegations required individual scrutiny because to adjudge the claims would mean to be to call numerous supervisors to testify to their particular practices on these matters.  Merely showing that the putative class members all utilized the same reporting system (and that all of the stores used the same internal reporting system) would not answer the key question of whether the employees were similarly situated or treated.  Thus, given the size of the class and the individualized nature of the allegations, there would have to be several thousand mini-trials, which would make the case unmanageable.  Thus, dismissal was warranted.

What I take away from this is that when faced with a nationwide class action, with thousands (or hundreds of thousands) of possible plaintiffs, the opportunity to argue no commonality/need for individual scrutiny may be actually enhanced.  Instead of being the terrifying specter that such a suit initially raises, it could actually be the salvation of the defendant-employer.
 

• Print
• Comments
• Trackbacks
• Share Link

I have often written that conditional certification in a FLSA collective action is fairly easy to get and de-certifying a class is difficult, once that conditional certification has been achieved.  Well, every rule has its exceptions.  A federal district court judge has recently de-certified a class of IBM call center employees who were claiming compensation for preliminary work.  The case is entitled Seward v. IBM Corp. and was filed in federal court in the Southern District of New York.

The court concluded that too much individual assessment was warranted, thus destroying the needed commonality for the class to exist.  The court stated that the “plaintiff did not show he shares common factual and employment settings with all of the opt-in plaintiffs due to the existence of a sufficiently uniform and pervasive policy requiring off-the-clock work.”

The plaintiffs had requested that the judge assign them to sub-classes as opposed to a single “large” class, but as they had not raised that issue before the Magistrate Judge (who had issued a report recommending de-certification) the Judge refused to consider that request.  The response from the plaintiffs is that they will file individual suits.  Their lawyer asserted that they "intend to file dozens of individual cases to protect our clients' rights."

This case is similar to others I have posted on and is typical of this new wave of class action suits based on off-the-clock working time that is allegedly not being paid.  The lead plaintiff claimed that he (and the others) were not compensated for their time booting up their computers and the computer programs that were necessary for them to do their work.  Thus, their theory is that these preliminary activities were integral to the performance of their primary job.

The company seized upon the “individual” defense.  It argued that the workers worked on a number of different teams, in different departments and also their work procedures differed as well.  The Magistrate Judge agreed, finding that there was not the requisite commonality or overall practice that required off-the-clock work.  The Magistrate found that as there were differences in their job duties, as well as management expectations of the various teams, commonality was lacking.

I applaud this result.  I emphasize again that the first line of defense in collective actions is the individuality theory.  A caveat----don’t wish for something because you may just get it. If the defense succeeds in destroying the class, the employer, as here, may be faced with and left to defend dozens (or hundreds) of individual lawsuits.
 

• Print
• Comments
• Trackbacks
• Share Link

I have written many times about class actions for claimed working time and the great danger of these “subtle” kinds of violations that then explode on the employer.  Call centers gave been especially hard hit with this new wave of collective actions.  Another example.  A class of customer service representatives has been conditionally certified in Virginia.  Their theory is that their employer refused to pay for extra hours worked “off-the-clock.”  The case is entitled Hargrove v. Ryla Teleservices Inc., and was filed in the Eastern District of Virginia.

The employees claim that they were required to report early, before their shifts and engage in necessary work-related activities, which were not paid for.  They claimed that had to boot up the computers, plan schedules and review and respond to work-related e-mails.  If these preparatory tasks are "integrally related” to performance of the employee’s principal job duty, the tasks may be compensable, especially if the employees are “ordered” to perform these preliminary (or postliminary) duties.

Evidence of the widespread nature of this problem is that this is the seventh class action against this company, with conditional certification already granted in four cases.  The magistrate had originally recommended conditional certification be ordered; the Company appealed to the District Judge, who found the ruling was not clearly erroneous and allowed it to stand.

The Complaint has alleged that “supervisors explained to the employees that performing unpaid work activities was required because it was expected and was part of the job.”  The Complaint also estimates the amount of extra work performed as 10-20 minutes each day.  However, the workers allege that the overtime hours were not recorded or paid for.  The Complaint also maintains that the employees faced poor performance evaluation if they were not ready to take calls when their shifts started, meaning that they had to perform the preliminary work.

The key (again) is the amount of employer compulsion.  It is concerning to me, as a management side advocate, that the employees would allegedly suffer poor performance evaluations if not at their desks, ready to take calls, at their assigned start times.  This would enhance their argument that they were required to perform preliminary tasks that were tied to their main job and were mandated by their employer.  That combination equals (in all likelihood) significant liability.
 

• Print
• Comments
• Trackbacks
• Share Link

In recent years, there has been a veritable explosion of class actions in which the theory is that the employer has failed to pay for preliminary or postliminary “working time.”  These can be exceedingly difficult cases to defend because if the workers can establish that the activity is integral to the primary job, the violation is essentially proven and all that remains is to calculate damages. A new case (again) highlights this danger for employers.

A federal judge has granted conditional certification to a class of production workers at the wind tower manufacturing plant of a company; the workers allege that they had to perform certain off-the-clock tasks for which they were not compensated and should have been under the Fair Labor Standards Act.  The case is entitled Etter v. Trinity Structural Towers, Inc. and was filed in federal court in Iowa.

Now, notices will be sent out to the potential class members who have the ability to opt in to the case.  Although the Company has agreed to the conditional certification, it maintains that the employees are in fact not similarly situated and a class action is not appropriate.  With the recent Supreme Court holding that has enhanced the “individuality” defense that I have often preached about, the Company may have a better chance to de-certify the class at a subsequent juncture in the litigation.

The plaintiffs charge that the alleged working time was work performed prior to the start of the shifts, so-called preliminary work time.  The allegation is that the workers had to prepare for their work so they could start their shifts at the correct time, so the preliminary time is so connected to the regular job as to render that time compensable.

The Complaint charges that the Company knew its employees routinely worked more than their scheduled time or ore than 40 hours per work week because its agents and employees directed plaintiffs to arrive at least 15 minutes prior to their scheduled shift start time.”

The element of employer compulsion (if proven) is the most dangerous threat in defending this case.  Once employer compulsion is shown, the alleged work almost always becomes “real” work and then liability follows.
 

• Print
• Comments
• Trackbacks
• Share Link

Just the other day, I posted about an off-the-clock class action that involved field technicians.  In this off-the-clock FLSA collective action, bus drivers claimed that they were not compensated for time that spent driving routes to become familiar with those routes.  They must have had a case because a federal judge has now approved a settlement between the Chicago Transit Authority (“CTA”) and the class of bus operators in which these plaintiffs will realize some recovery.  The case is entitled Reyes v. Chicago Transit Authority and had been filed in federal court in the Northern District of Illinois.

The settlement will compel the CTA to pay out up to $300,000 to resolve the plaintiffs’ claims. The CTA will also pay $350,000 in attorneys fees.  The entire issue involved claims of worked, but unpaid for, time. It appears that the drivers engaged in a practice labeled “cushioning,” which entails their driving various routes that they shifted over to, so they could learn the routes. Therefore, the service would run efficiently and not be impacted.  There were approximately 1100 current/ former bus operators who opted in to join the lawsuit (which was filed in February 2010.)

The Complaint charged that the CTA shut down a garage as part of a restructuring plan to deal with a budget crisis.  Some employees were laid off, others were transferred to different garages which meant that routes had to be changed.  The plaintiffs allege that the drivers who selected a new garage were ordered to learn (i.e. drive) every route operating from that garage and the drivers staying in their existing garage were mandated to train (i.e. drive) any routes transferred to that garage.

Not only were the drivers required to drive the new routes, the Complaint alleges they were supposed to do it outside of their regular shift and working hours.  The plaintiffs allege that the CTA stated that it would not pay any compensation for this extra driving work

Employers must be very wary of such off-the-clock work.  As I have often stated, if there is any element of employer compulsion in the activity, then the employees feel they must comply with the directive, even though they are not paid, or else they will (possibly) lose their jobs.  If the “work” at issue or being directed is at all related to the primary job (as this work obviously was) a court or an agency will certainly find this time to be compensable.  If the work is preliminary or postliminary and directly tied to performance of the main job, it will be compensable.

There is an explosion of such cases in recent years and I expect more.  Careful monitoring of workplace rules and practices is essential.  If an activity is found to be “work,” it is better to deal with that issue sooner rather than later, such as when standing in front of a federal judge (or jury). .
 

• Print
• Comments
• Trackbacks
• Share Link

I have often discussed the issue of lawsuits (usually collective actions) for off-the-clock claims and preliminary and postliminary work claimed to be compensable.  These are usually mundane activities and usually done for only a few minutes, but when the minutes occur every day, every week and there is a large group of employees engaging in the activities, the aggregate exposure can be substantial.  Technician-type employees or field service personnel are a prime breeding ground for such lawsuits. Another example of this phenomenon has now surfaced in the federal courts.

A field representative has launched a class action in federal court in Florida, alleging that he and a large group of similarly situated employees were compelled to work overtime hours, without being properly paid.  The case is entitled Salamanca et al. v. TNC (US) Holdings Inc.

These field representatives performed technical job duties.  They visited customer homes, in their geographic territories, to perform a number of customer-relation as well as technical functions.  For example, they would stay with the customer to show him how to handle and work with the equipment.  They allege they also received nightly error reports, relating to malfunctions in the equipment and they were compelled to remain on call for issues arising for customers in their designated areas.

An interesting twist is that the plaintiffs contend that the company’s GPS records and the Company-issued phones will provide the best evidence of the hours they worked.  This might then be a case where the accuracy of the employer’s records is the “worst” evidence against it for not only would these devices show the actual minutes/hours worked, they would also evidence that there was a fair amount of this “work” and it was necessary for the performance of the plaintiffs’ jobs.

The lesson here is that employers who provide any kind of PDAs or cell phones or any kind of equipment must scrutinize the employees’ usage of those devices and whether any such usage is occurring before or after the “usual” work day ends.  If employees must plan their routes for the next day while at home the evening before, the company may be liable for compensation.  Similarly, any job-related activities that employees are engaging in (e.g. showing customer how to use the equipment after installation) must also be looked at to determine whether the activity is sufficiently related to the primary job to warrant compensation.

• Print
• Comments
• Trackbacks
• Share Link

A federal judge has thrown a nationwide collective action against Black & Decker out of court.  The suit alleged that the company did not pay employees for time allegedly worked off the clock.  The court found that the plaintiff did not prove that he had worked overtime.  The case is entitled Kuebel v. Black and Decker (U.S.) Inc. and was filed in the federal district court in the Western District of New York.  There could have been more than 200 employees involved.

This is a rare occurrence.  The granting of so-called conditional certification is usually a fairly easy hurdle for a plaintiff to overcome.  A few affidavits, perhaps some deposition testimony and that’s it. The key remains that some showing of similarity must be made, some showing that an overall policy or practice applied to all of the employees potentially involved.  That this plaintiff could not make the showing is significant.

The court found that the plaintiff “has not explained when and for how long he performed the off-the-clock work.”  The court continued and stated that “ because the undisputed facts demonstrate that plaintiff has failed to meet his burden, his claim for off-the-clock work fail as a matter of law.”

What is interesting in the context of this particular case is that the company had stipulated to the conditional certification of a class that was solely confined to the company policy of paying retail specialists for travel time, but only if the employee’s commute was more than sixty miles or sixty minutes.  The judge had found this policy legal in May 2009. (Note: Home-to-work travel is always non-compensable, so a company can legally implement a policy of paying for some component of this travel time if it so desires).

This does not often happen and that is why I write about it when it does.  The lesson for employers, on the merits of the controversy, is that they must never direct employees to do productive work off-the-clock and should have a policy in place relating to that issue.  Also, maintain accurate records of employee working time and, most importantly, have employees self-certify their working time (e.g. sign off on time card) every week.  That is the employer’s fail-safe, best protection against such suits.
 

• Print
• Comments
• Trackbacks
• Share Link